EXHIBIT 10.1
SHARE PURCHASE AGREEMENT
for the acquisition of
100 % of the Shares in DBT GmbH
dated
December 16, 2006
2
Table of Contents
1. Certain Defined Terms and Abbreviations ............................... 9
2. Current Status / Cash Pool / Shareholdings in Purchaser ............... 13
3. Sale and Transfer ..................................................... 15
4. Purchase Price; Cash Pool Settlement; Payments ........................ 16
5. Purchase Price Determination Statements ............................... 20
6. Merger Notification; Regulatory Requirements .......................... 23
7. Closing ............................................................... 24
8. Guarantees of the Seller .............................................. 32
9. Remedies for Breach of Guarantees ..................................... 47
10. Indemnities ........................................................... 51
11. Purchaser's Guarantees; Purchaser's Guarantor ......................... 54
12. Environmental Indemnifications ........................................ 56
13. Taxes ................................................................. 63
14. Profit and Loss Transfer Agreement; Guarantees; Derivative Contracts .. 68
15. Covenants ............................................................. 70
16. Non-Compete ........................................................... 74
17. Transition of Business ................................................ 75
18. Confidentiality and Public Announcements .............................. 76
19. Notices ............................................................... 77
20. Costs and Taxes ....................................................... 79
21. Miscellaneous ......................................................... 80
3
Index of Defined Terms and Abbreviations
10.2 Losses ........................................................ 27
Affiliates ......................................................... 11
Agreement .......................................................... 10
AktG ............................................................... 11
Alternative Transaction ............................................ 33
AO ................................................................. 11
Assets and Inventories ............................................. 38
BBodSchG ........................................................... 11
BGB ................................................................ 11
Breach ............................................................. 48
Bucyrus ............................................................ 11
Business ........................................................... 76
Business Days ...................................................... 11
Cash Pool Balance .................................................. 19
CBA Conflict ....................................................... 54
CET ................................................................ 11
Claim .............................................................. 50
Claim Notice ....................................................... 48
Claims ............................................................. 50
Closing ............................................................ 31
Closing Conditions ................................................. 25
Closing Confirmation ............................................... 32
Closing Date ....................................................... 32
Closing Date Net Cash .............................................. 17
Closing Events ..................................................... 31
Collective Agreements .............................................. 42
Collective Bargaining Agreement .................................... 72
Company ............................................................ 14
Company 2006 Financial Statements .................................. 69
Consideration Shares ............................................... 11
Consolidated Closing Date Financial Statements ..................... 22
Control ............................................................ 11
Current Account .................................................... 77
DBS ................................................................ 54
De Minimis Amount .................................................. 50
Deloitte Report .................................................... 27
Directors and Officers ............................................. 11
Disclosure Schedules ............................................... 33
Encumbrances ....................................................... 11
Environmental Claims ............................................... 60
Environmental Contamination ........................................ 58
Environmental De Minimis ........................................... 61
Environmental Law .................................................. 58
Environmental Loss ................................................. 58
Environmental Matter ............................................... 58, 59
4
Environmental Permit ............................................... 59
ERISA .............................................................. 43
EURO Finance Agreement ............................................. 19
Exchange Act ....................................................... 56
Final MAC Determination ............................................ 28
Finance Agreements ................................................. 19
Forward Purchase ................................................... 16
Forward Purchase Closing Date ...................................... 16
GAAP ............................................................... 12
GAAS ............................................................... 12
GmbHG .............................................................. 12
Group Companies .................................................... 15
Group Companies Benefit Plans ...................................... 42
Group Company ...................................................... 15
GWB ................................................................ 12
Hazardous Materials ................................................ 59
HGB ................................................................ 12
HT ................................................................. 12
HT Shares .......................................................... 16
ICC Rules .......................................................... 82
IFRS ............................................................... 12
Indemnifiable Tax .................................................. 64
Information Technology ............................................. 39
Interests .......................................................... 12
Key Employees ...................................................... 41
KStG ............................................................... 12
Labeled Objects .................................................... 72
Lease .............................................................. 12
Leased Real Property ............................................... 12
Leases ............................................................. 39
Legal Entity ....................................................... 12
Legal Terms ........................................................ 81
Loss ............................................................... 48, 54, 75
Losses ............................................................. 48, 54, 75
MAC Determination Notice ........................................... 28
MAC Dispute Notice ................................................. 28
Material Adverse Change ............................................ 13
Material Agreements ................................................ 39
Material Breach .................................................... 13
Neutral Auditor .................................................... 23
Ordinary Course .................................................... 13
Owned Assets and Inventories ....................................... 38
Owned IP Rights .................................................... 36
Owned Real Property ................................................ 38
Owned Real Property ................................................ 13
Parties ............................................................ 10
Party .............................................................. 10
Permits ............................................................ 44
5
Post-Effective Date Tax Period ..................................... 64
Pre-Effective Date Tax Period ...................................... 64
Preliminary Cash Pool Balance ...................................... 20
Preliminary Purchase Price ......................................... 20
Preliminary Purchase Price Determination Statements ................ 22
Professor Xx. Xxxxxxx'x Confirmation ............................... 16
Profit and Loss Transfer Agreement ................................. 15
Public Subsidies ................................................... 45
Purchase Price ..................................................... 17
Purchase Price Determination Statements ............................ 24
Purchaser .......................................................... 10
Purchaser's Bank Guarantee ......................................... 70
Purchaser's Confirmation ........................................... 16
Purchaser's Guarantor .............................................. 10
Purchaser's Obligations ............................................ 57
RAG-Marks .......................................................... 72
RBV ................................................................ 15
RBV Share .......................................................... 15
Real Property ...................................................... 13
Regulations ........................................................ 34
Release ............................................................ 59
Revised Purchase Price Determination Statements .................... 23
SEC ................................................................ 56
SEC Documents ...................................................... 56
Securities Act ..................................................... 47
Seller ............................................................. 10
Seller Share ....................................................... 15
Seller's Group ..................................................... 45
Seller's Guarantees ................................................ 70
Seller's Knowledge ................................................. 48
Shareholders' Agreement ............................................ 15
Shares ............................................................. 15
Signing Date ....................................................... 13
Stand-Alone Financial Statements ................................... 36
Subsidiaries ....................................................... 15
Subsidiary ......................................................... 15
Subsidiary Interests ............................................... 15
Survey ............................................................. 14
Tax ................................................................ 14
Tax Authority ...................................................... 64
Tax Loss ........................................................... 67
Tax Refund ......................................................... 64
Tax Return ......................................................... 64
Tax Saving ......................................................... 64
Termination Costs .................................................. 14
Third Party ........................................................ 14
Third Party Claim .................................................. 49
Threshold .......................................................... 51
6
Transaction ........................................................ 25
UmwG ............................................................... 14
US Dollar Finance Agreement ........................................ 19
UStG ............................................................... 14
ZPO ................................................................ 14
7
List of Exhibits and Disclosure Schedules
Exhibit 2.3 Subsidiaries; Group Companies ................................ 14
Exhibit 2.8 Purchaser's Confirmation ..................................... 15
Exhibit 2.9 Professor Xx. Xxxxxxx'x Confirmation ......................... 15
Exhibit 2.10 Professor Xx. Xxxxxxx'x Confirmation ......................... 15
Exhibit 4.4 IPO Surplus Calculation Method ............................... 20
Exhibit 5.1.2 Accounting Principles ........................................ 21
Exhibit 7.1.1(xiv) Amendment to the Social Charter .............................. 25
Exhibit 7.1.1(xv) Lunen Real Estate ............................................ 25
Exhibit 7.2.3(i) Resignation of Directors and Officers ........................ 30
Exhibit 7.2.3(i) Parent Guarantee ............................................. 30
Exhibit 7.2.3(iv) RBV Guarantee ................................................ 30
Exhibit 00 Assignment of Shares ......................................... 30
Disclosure Schedule 8.4.4 Commercial Register .......................................... 34
Disclosure Schedule 8.4.5 Voting Agreements ............................................ 34
Disclosure Schedule 8.4.6 Complete List of Corporate Bodies ............................ 34
Disclosure Schedule 8.5.2 Other Participations ......................................... 34
Disclosure Schedule 8.6 Pending Business Transactions ................................ 34
Disclosure Schedule 8.7 Stand-Alone Financial Statements ............................. 35
Disclosure Schedule 8.8.1 Owned IP Rights .............................................. 35
Disclosure Schedule 8.8.3 (i) Maintenance of IP Rights ..................................... 35
Disclosure Schedule 8.8.3 (ii) Owned IP Rights licensed ..................................... 35
Disclosure Schedule 8.8.4 Challenges regarding IP Rights ............................... 36
Disclosure Schedule 8.8.5 Licensed Intellectual Property Rights ........................ 36
Disclosure Schedule 8.8.7 Third Party Rights Infringements ............................. 36
Disclosure Schedule 8.8.9 Employee Inventions .......................................... 36
Disclosure Schedule 8.9.2 Encumbrances on Owned Assets and Inventories ................. 37
Disclosure Schedule 8.9.3 (a) Owned Real Property .......................................... 37
Disclosure Schedule 8.9.2(b) Used Real Property ........................................... 38
Disclosure Schedule 8.10.1 Material Agreements .......................................... 38
Disclosure Schedule 8.10.2 Status of the Material Agreements ............................ 39
Disclosure Schedule 8.10.3 Material Agreements with change of control provisions ........ 40
Disclosure Schedule 8.10.4 List of largest customers and suppliers ...................... 40
Disclosure Schedule 8.11.1 Key Employees who terminated Employment ...................... 40
Disclosure Schedule 8.11.2 List of Employees ............................................ 40
Disclosure Schedule 8.11.3 Collective Agreements ........................................ 40
Disclosure Schedule 8.11.4 Labor Disputes ............................................... 40
Disclosure Schedule 8.11.5 Pension Agreements ........................................... 41
Disclosure Schedule 8.11.7 Long Term Incentive Plan ..................................... 42
Disclosure Schedule 8.11.8 Employees' Change of Control Rights .......................... 42
Disclosure Schedule 8.11.9 Personal Injury Claims ....................................... 42
Disclosure Schedule 8.12.1 Permits ...................................................... 42
Disclosure Schedule 8.12.2 Compliance with Permits ...................................... 43
Disclosure Schedule 8.12.4 Subsidies .................................................... 43
Disclosure Schedule 8.13 Product Liability ............................................ 43
Disclosure Schedule 8.14.1 Insurance .................................................... 44
8
Disclosure Schedule 8.14.2 Insurance Claims ............................................. 44
Disclosure Schedule 8.15 Litigation ................................................... 44
Disclosure Schedule 8.16 Conduct of Business .......................................... 44
Exhibit 10.4 Agreements on the Sale or other Disposal of Interests ........ 52
Disclosure Schedule 12.5.1 Environmental Agreements ..................................... 61
Disclosure Schedule 13.2.2 Taxes ........................................................ 64
Exhibit 14.3(a) Assumption of Guarantees ..................................... 69
Exhibit 14.4 Derivative Contracts ......................................... 69
Exhibit 15.1.4 Actions Dependent on Prior Consent ........................... 70
Exhibit 15.2 Collective Bargaining Agreement .............................. 71
Exhibit 17.2 IT Agreements which terminate upon Closing ................... 75
Exhibit 17.3 Insurance Policies which terminate upon Closing .............. 75
Exhibit 17.4 Bank Account of the Company .................................. 76
Exhibit 17.5 Termination of Intra-group Agreements ........................ 76
9
SHARE PURCHASE AGREEMENT
By and between
1. RAG Coal International Aktiengesellschaft, Rellinghauser Stra(beta)e
1 - 11, 45128 Essen, a stock corporation organized under the laws of
Germany, registered with the commercial register of the municipal
court of Essen under HRB 12210;
- "Seller" -
and
2. DBT Holdings GmbH, c/o Freshfields Bruckhaus Xxxxxxxx,
Xxxxxxxxxxxxxx 0, 00000 Xxxxxxxxxx, a limited liability company
organized under German law; registered with the commercial register
of the xxxxxxxxx xxxxx xx Xxxxxxxxxx xxxxx XXX 00000;
- "Purchaser" -
3. Bucyrus International, Inc., 0000 Xxxxxxxxx Xxx, Xxxxx Xxxxxxxxx, XX
00000-0000, XXX; a corporation organized under the laws of Delaware;
- "Purchaser's Guarantor" -
- the Seller, the Purchaser and the Purchaser's Guarantor
each a "Party and collectively "the "Parties" -
Preamble
A. The Seller is the majority shareholder in DBT GmbH, which is active
in the development, the manufacture and distribution of mining
equipment.
B. The Seller intends to divest all shares in DBT GmbH.
C. The Purchaser intends to purchase all shares in DBT GmbH.
Now, therefore, the Parties agree on the following terms and conditions
(collectively together with all related agreements, exhibits and disclosure
schedules the "Agreement") as follows:
1. Certain Defined Terms and Abbreviations
In this Agreement, except where set forth otherwise, the following
terms and abbreviations shall have the following meaning:
10
"Affiliates": any individual person or Legal Entities who or which
are affiliated undertakings (verbundene Unternehmen) within the
meaning of Section 15 AktG (as defined below).
"AktG": the German Stock Corporation Act (Aktiengesetz).
"AO": the German Tax Code (Abgabenordnung).
"BBodSchG": the German Federal Soil Protection Act
(Bundes-Bodenschutzgesetz).
"BGB": the German Civil Code (Burgerliches Gesetzbuch).
"Bucyrus": Bucyrus Holdings GmbH, a German limited liability
company, with its seat at Dusseldorf and registered with the
commercial register of the municipal court (Amtsgericht) Dusseldorf
under HRB 55309.
"Business Days": any days other than Saturdays, Sundays and public
holidays, in each case in Essen, Germany, in Frankfurt am Main,
Germany, in London, UK, the United States of America and the State
of Wisconsin.
"CET": Central European Time.
"Consideration Shares": 471,476 Class A shares of Bucyrus
International, Inc.'s common stock, par value USD.01 per share
(which number shall be adjusted in accordance with and taking into
account any splits, reverse splits, dividends and similar
transactions).
"Control": shall mean, with respect to the Company, the possession,
directly or indirectly, of the power to direct or cause the
direction of the management or policies of the Company, whether
through the ownership of securities or as trustee or executor or by
virtue of a voting, trust or executor agreement.
"Directors and Officers": any managing directors (Geschaftsfuhrer),
members of the management board (Mitglieder des Vorstandes), members
of the supervisory board (Mitglieder des Aufsichtsrats), members of
the board of directors or any other statutory representatives or
members of any other statutory bodies of representation of any Legal
Entity in any jurisdiction.
"Encumbrances": any mortgage, deed of trust, deed to secure debt,
pledge, security interest, encumbrance, charge, claim, condition,
equitable interest, indenture, option, hypothecation, attachment,
restriction on transfer, right-of-way, easement, title defect,
lease, encroachment, servitude, right of first option, right of
first refusal or other lien (whether arising by contract or by
operation of law), other than (i) mechanic's, materialmen's and
similar liens arising or incurred in the Ordinary Course if the
underlying obligations are not yet due and payable, and (ii) liens
for Taxes that arise solely by operation of law but are not yet due
and payable.
11
"GAAP": accounting (including valuation and consolidation)
principles generally accepted in the stated jurisdiction, and the
statutory provisions underlying such principles, as in effect as of
the Signing Date and any other date explicitly referred to herein.
"GAAS": U.S. generally accepted auditing standards.
"GmbHG": the German Act on Limited Liability Companies (Gesetz
betreffend Gesellschaften mit beschrankter Haftung).
"GWB": the German Act against Restraints of Competition (Gesetz
gegen Wettbewerbsbeschrankungen).
"HT": "Ad acta" 676.Vermogensverwaltungsgesellschaft mbH (to be
renamed in HMS Hamburg Trust GmbH), Hamburg, a company with limited
liability organized under German law, registered with the commercial
register of the municipal court of Hamburg under HRB 99129.
"HGB": the German Commercial Code (Handelsgesetzbuch).
"IFRS": International Financial Reporting Standards as set forth by
the International Accounting Standards Board (IASB) in the version
effective on January 1, 2006.
"Interests": any shares, partnership interests or other equity
interests or any voting rights in any Legal Entity in any
jurisdiction.
"IP Rights" (gewerbliche Schutzrechte): all intellectual property
and similar rights, whether registered or unregistered, and
applications for such rights, including, without limitation, patents
(Patente), trademarks (Xxxxxx), utility models (Gebrauchsmuster),
design patents (Geschmacksmuster), domain names, proprietary
business descriptions (geschaftliche Bezeichnungen), geographical
indications of origin (geographische Herkunftsangaben), copyrights
(Urheberrechte) and other ancillary copyrights
(Leistungsschutzrechte) with the exception of standard software and
licences.
"KStG": the German Corporate Income Tax Act
(Korperschaftssteuergesetz).
"Leased Real Property": the real property leased or subleased by the
Company or a Subsidiary leased to the Company or a Subsidiary or
otherwise used or occupied by the Company or a Subsidiary for the
operation of the Business.
"Lease": any lease, lease guaranty, sublease, license, easement or
agreement for the leasing, use or occupancy of, or otherwise
granting a right in or relating to any Leased Real Property,
including all amendments, terminations and modifications thereof.
"Legal Entity": any corporation, company, partnership, association
or other legal entity or undertaking established pursuant to the
laws of any jurisdiction.
12
"Material Adverse Change": any event, situation, circumstance,
effect or adverse change on the business, assets, results, or
operations of any of the Group Companies which individually or
collectively with any other such event, situation, circumstance,
effect or adverse change in the same or another Group Company, has
or would have a negative impact amounting to not less than EUR
30,000,000 (in words Euro thirty million) and which, to the extent
curable, has not been cured until the Closing Date. A Material
Adverse Change shall not include any effect resulting from (i) any
change in general economic, business or industry conditions
(including general developments of capital and financial markets),
or any change in local, regional, national or international
conditions generally affecting the Group Companies or (ii) any
change in the political or social conditions including the
engagement by any country in which a Group Company has a registered
seat or is engaged in business in hostilities (including a terrorist
attack upon any of their respective territories, possessions or
diplomatic or consular offices, military installations, equipments
or personnel) or (iii) any change in applicable laws or
interpretations thereof or (iv) measures or actions taken by or with
the approval of the Purchaser pursuant to Section 15.1.4 or
otherwise expressly agreed by the Purchaser in writing; provided
that in the case of (i) and (iii) such event, situation,
circumstance, effect or adverse change will be deemed a Material
Adverse Change if such event, situation, circumstance effect or
adverse change would have or has a materially disproportionate
adverse effect on the Group Companies taken as a whole.
"Material Breach": a breach causing any change in the assets,
business, liabilities, results, operations of any of the Group
Companies which individually or collectively with all other such
changes has or would have a negative impact on the financial
condition of the affected Group Companies of not less than EUR
10,000,000 (in words: Euro ten million) and which, to the extent
curable, is not cured prior to the Closing Date.
"Ordinary Course": in accordance with (i) arm's length principles or
(ii) the annual budgets of the individual Group Companies and of the
Group Companies as a whole and in each case in accordance with past
practice.
"Owned Real Property": the real property owned by the Company or any
Subsidiary or to which the Company or any Subsidiary has a right
(grundstucksgleiche Rechte) as of the Signing Date, together with
all privileges and appurtenances thereto and all plants, buildings,
structures, installations, fixtures, fittings, improvements,
betterments and additions situated thereon, and together with all
easements and rights-of-way used or useful in connection therewith.
"Real Property": the Owned Real Property and Leased Real Property,
collectively.
"Signing Date": the day, on which this Agreement is notarized by the
Parties.
"Share Value": USD 21,000,000 (in words: US Dollar twenty one
million).
13
"Survey": an up to date ALTA Land Title Survey completed for the
Owned Real Property in the United States of the type reasonably
required by the title company selected by Purchaser.
"Tax": any taxes (Steuern) within the meaning of ss. 3 German Tax
Code (Abgabenordnung) and any corresponding foreign taxes, charges
(Gebuhren), duties (Zolle) and levies (Beitrage) of any kind
including social security contributions
(Sozialversicherungsbeitrage) and other public-law levies
(offentlich-rechtliche Abgaben) of any kind that are imposed by any
governmental authority or other public body or due under any
Regulation. For the purposes of this Agreement, Taxes shall further
include any payments made, or to be made, as the party liable for
taxes (Haftungsschuldner), as well as any interest, additions to tax
or additional amounts and any penalties (Straf- und Bu(beta)gelder)
that are due under any applicable laws or imposed by a Tax
Authority.
"Termination Costs": shall mean the sum of (i) EUR 100,000 for each
employee who has after the Signing Date and prior to the Closing
Date entered into an old age part time agreement
(Altersteilzeitvereinbarung) with the Company and (ii) EUR 150,000
for each employee who has after the Signing Date and prior to the
Closing Date entered into a termination agreement with the Company
to the extent payments have not been made until and including the
Closing Date (up to an aggregate maximum number of 30 employees) and
(iii) to the extent the number of employees who have neither entered
into an old age part time agreement or a termination agreement is
less than 30, EUR 150,000 for each such employee.
"Third Party": any person or Legal Entity other than a Party or an
Affiliate of a Party, including public governmental authorities.
"UmwG": the German Transformation Act (Umwandlungsgesetz).
"UStG": the German VAT Act (Umsatzsteuergesetz).
"ZPO": the German Code of Civil Procedure (Zivilprozessordnung).
2. Current Status / Cash Pool / Shareholdings in Purchaser
2.1 The Company. DBT GmbH (the "Company"), Xxxxxxxxxxxx. 0, 00000 Xxxxx,
Xxxxxxx, is a German limited liability company. The Company has its
registered seat (Sitz) at Lunen and is registered with the
commercial register at the municipal court (Amtsgericht) Dortmund
under HRB 17120. The registered capital (Stammkapital) of the
Company amounts to EUR 21,050,000 (in words: Euro twenty one million
and fifty thousand).
2.2 The Shares. As of the Signing Date, Seller holds a share of the
registered capital of the Company with such nominal value as
follows:
14
Number of Share(s) Nominal Amount in EUR
1 19,974,450
Such share shall be referred to as the "Seller Share".
As of the Signing Date, RBV Verwaltungs-GmbH, formerly known as RB
Verwaltungsgesellschaft fur die Beteiligung an der Rutgerswerke
GmbH, ("RBV"), Rellinghauser Stra(beta)e 1 - 11, 45128 Essen, a
limited liability corporation organized under the laws of Germany
and registered with the commercial register of the municipal court
of Essen under HRB 11118, holds a share of the registered capital of
the Company with such nominal value as follows:
Number of Share(s) Nominal Amount in EUR
1 1,075,550
Such share shall be referred to as the "RBV Share". The Seller Share
and the RBV Share shall collectively be referred to as the "Shares".
2.3 Subsidiaries; Group Companies. The Company holds, directly or
indirectly, Interests in other Legal Entities as shown (in each case
with the aggregate nominal amount, if any, of such Interests) in
Exhibit 2.3 (each a "Subsidiary" and collectively the
"Subsidiaries"). The Company and the Subsidiaries shall be
collectively referred to as the "Group Companies", and each as a
"Group Company", and the Interests of the Company or any Group
Company in any Group Company (with the exception of the Shares)
shall be collectively referred to as the "Subsidiary Interests".
2.4 Cash Pool. As of the Signing Date, Seller has entered into two cash
pool arrangements with the Company which shall be continued until
the Closing Date in accordance with Section 4.2.
2.5 Profit and Loss Transfer Agreement; Control Agreement. Seller and
the Company have entered into a control and profit and loss transfer
agreement (the "Profit and Loss Transfer Agreement") dated December
20 / 22, 1999 which shall be terminated with effect as of December
31, 2006.
2.6 Shareholdings in Purchaser. As of the Signing Date, HT and Bucyrus
are the sole shareholders in the Purchaser. Professor Xx. Xxxxxxxx
X. Xxxxxxx is the sole shareholder of HT and Professor Xx. Xxxxxxxx
X. Xxxxxxx has been appointed as the sole managing director of HT.
HT and Bucyrus have entered into a shareholders' agreement
(notarized under Role of Deeds no. H 4019/ 2006 of notary public Xx.
Xxxxx Xxxxxxxxx in Dusseldorf) which together with the articles of
association of the Purchaser governs the joint shareholding in the
Purchaser (the "Shareholders' Agreement").
2.7 Forward Purchase. On the Signing Date, HT and Bucyrus have entered
into a sale and transfer agreement (Role of Deeds no. H 4019/ 2006
of notary public Xx. Xxxxx Xxxxxxxxx in Dusseldorf) - (the "Forward
Purchase Agreement") by which the shares in Purchaser held by HT
(the "HT Shares") shall be sold and transferred to Bucyrus,
15
at any date in the time period as from January 1, 2008 to December
31, 2009, or earlier upon the occurrence of certain events described
more specifically in such sale and transfer agreement (the "Forward
Purchase"). The date on which the Forward Purchase is consummated in
accordance with the terms and conditions of the Forward Purchase
Agreement, shall be referred to as the "Forward Purchase Closing
Date".
2.8 Purchaser's Confirmation. At the Closing, the Purchaser shall
deliver to the Seller a written statement confirming that (i) as of
the Closing the HT Shares are held by HT and (ii) that the
Shareholders' Agreement is - subject to a termination by HT - in
full force and effect until the consummation of the Forward Purchase
Closing Date (such statement shall be referred to as the
"Purchaser's Confirmation"). A draft of the Purchaser's Confirmation
is attached as Exhibit 2.8.
2.9 Xxxxxxxxx Xxxxxxx'x Confirmation. At the Closing, the Seller shall
deliver to Purchaser a written statement executed by Professor Xx.
Xxxxxxxx X. Xxxxxxx that (i) Professor Xx. Xxxxxxxx X. Xxxxxxx (x)
is the sole shareholder of HT, (y) is able to exercise his rights as
shareholder of HT (which is, for example, not true in case of legal
incapacity - Geschaftsunfahigkeit), (z) personally holds the shares
in HT for his own benefit and account, free of any Third Party
entitlements or rights other than security interests approved and
requested by the Purchaser, (ii) Professor Xx. Xxxxxxxx X. Xxxxxxx
is (x) able to act as managing director of HT and (y) the sole
managing director of HT irrevocably appointed until and including
the Forward Purchase Closing Date with no intention of his dismissal
or resignation and (iii) HT has no operations or assets other than
the HT Shares and has no business purpose other than to hold the HT
Shares (the "Professor Xx. Xxxxxxx'x Confirmation"). A draft of
Professor Xx. Xxxxxxx'x Confirmation is attached hereto as Exhibit
2.9.
2.10 Consent of Shareholders' Meeting of Company. As of the Signing Date,
the shareholders' meeting of the Company has granted its consent to
the sale and transfer of the Shares and the shareholders of the
Company have waived their respective preemptive rights as set forth
in the resolutions and declarations attached hereto as Exhibit 2.10.
3. Sale and Transfer
3.1 Sale of the Shares. The Seller hereby agrees to sell (verkauft) the
Shares as of the Signing Date upon the terms and conditions of this
Agreement, and the Purchaser hereby accepts such sale. For the
avoidance of doubt such sale is not conditional upon fulfillment of
the Closing Conditions (as defined below).
3.2 Ancillary Rights. The Seller shall be entitled to receive all
undistributed dividends with respect to the period ending on
December 31, 2006. With respect to the period commencing on January
1, 2007 the Purchaser shall be entitled to all ancillary rights
pertaining to the Shares including the right to receive dividends,
provided that Seller shall be entitled in accordance with the terms
in Section 4 (Closing Date Net Cash purchase price adjustment) to
the cash generated by the Company in the period commencing on
January 1, 2007 and ending on and including the Closing Date.
16
3.3 Separate Transfer Documents. The Parties agree that the 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 one or more separate transfer deed(s).
4. Purchase Price; Cash Pool Settlement; Payments
4.1.1 Determination of Purchase Price. The purchase price for the Shares
shall be (i) the Consideration Shares plus (ii) an amount to be
determined as follows:
(i) A fixed amount of USD 710,000,000 (in words: US Dollar seven
hundred and ten million) (the "Cash Portion");
(ii) minus / plus the Closing Date Net Cash (as defined below).
Such balance plus an amount equal to the Share Value shall be
referred to as the "Purchase Price".
4.1.2 Definitions; Calculation Basis. "Closing Date Net Cash" shall have
the meaning as set forth below and shall be calculated on the basis
of the Purchase Price Determination Statements (as defined below)
for the period ending on the Closing Date.
"Closing Date Net Cash" shall mean the amount denominating in Euro
equaling the sum of
(i) the amount of all liquid assets, including cash and cash
equivalents, excluding, however, any cash paid by the Seller
to the Company in accordance with Section 4.3.3 (ii) and (v);
(ii) plus the amount of the Cash Pool Balance if such Cash Pool
Balance is a receivable of the Company from the Seller, or
minus the amount of the Cash Pool Balance if such Cash Pool
Balance is a receivable of the Seller from the Company not
taking into account any payment by the Seller to the Company
in accordance with Section 4.3.3 (ii) and (v);
(iii) minus EUR 4,000,000 (in words: Euro four million);
(iv) minus the amount of advance payments on orders received
between January 1, 2007 and the Closing Date, to the extent
these advance payments have not been used to finance work in
progress for such orders, whereby work in progress shall be
accounted for in accordance with the accounting principles
used by the Company for the preparation of the Stand-Alone
Financial Statements;
(v) minus the amount of all borrowings and other indebtedness
which are assumed with the purpose to borrow money by way of
overdraft, acceptance, credit or similar facilities, loan
stocks, debt instruments (other than Seller's Guarantees
17
according to Section 14.3) and including, to the extent called
by the beneficiary but not paid on the Closing Date, letter of
credits, performance bonds and similar instruments;
(vi) minus the amount of the obligations related to finance leases
or sale and lease back arrangements, including, without
limitation, the sale and lease back transaction regarding the
real property in Lunen used by the Company;
(vii) minus any amounts owed by any Group Company to the Seller, RBV
or any of their Affiliates; provided that this shall not
include any amounts due for ordinary trade or rendering of
services (Verbindlichkeiten aus Lieferungen und Leistungen) if
such amounts are outstanding for less than 365 days as of the
date of creation or less than 180 days as of the respective
due date;
(viii) minus any amounts owed by any Group Company to any Directors
and Officers or employee other than in the Ordinary Course of
business including, without limitation, any change of control
or similar payments arising as a result of the consummation of
the Transaction;
(ix) minus any amounts due for any brokerage, accountants,
attorneys, investment banking or similar transaction fees and
expenses of the Company or the Seller (to the extent charged
to the Company) incurred in connection with the preparation,
execution and consummation of the transactions contemplated in
this Agreement;
(x) minus the aggregate amount of any accruals for bonuses or any
other kind of deferred or incentive compensations payable by
any Group Company for the periods prior to and until the
Closing Date;
(xi) minus the amount of the real estate transfer tax incurred by
the acquisition of the Lunen real estate unless paid prior to
the Closing Date;
(xii) minus the amount of the Termination Costs;
(xiii) minus the aggregate amount of any interest, premiums payable,
prepayment penalties, damages or contractual penalties accrued
or any other charges accrued but unpaid as of the Closing Date
in relation to the matters referred to in (v) - (ix) above.
All conversions necessary shall be made in accordance with the
procedures of Section 4.1.3, provided, however, that the conversions
shall be made with exchange rates applicable as of the Closing Date.
For the avoidance of doubt, no item shall be taken into account in
the above calculation more than once.
4.1.3 Foreign Currencies. Any currency conversions shall be determined
using the European Central Bank (ECB)'s Euro foreign reference rates
as published on the ECB's website (xxx.xxx.xxx/xxxxx/xxxxxxxxx/)
shortly after 2.15 p.m. CET, except as otherwise agreed herein, one
Business Day prior to the relevant date. When such rates
18
are not available on such date, Reuters world spot rates
(xxx.xxxxxxxxx.xxxxxxx.xx.xx/xxxxxxxxx/xxxxxxxxxx.xxxx) taken as
close as possible to 2.15 p.m. CET of the Business Day prior to the
relevant date shall be used. All conversions necessary to calculate
the Closing Date Net Cash shall be made in accordance with the
procedure set forth in this Section 4.1.3 as of the Closing Date.
4.2 Cash Pool Settlement.
4.2.1 Termination of Intercompany Finance Agreements. The Seller has
entered into two cash pool agreements with the Company regarding
receivables and payables, one of them denominated in US Dollar (the
"US Dollar Finance Agreement"), the other agreement denominated in
Euro (the "EURO Finance Agreement"). The US Dollar Finance Agreement
and the EURO Finance Agreement shall collectively be referred to as
the "Finance Agreements".
The Seller shall procure that the Finance Agreements are terminated
with economic effect as of the Closing Date without further
liability to any of the Group Companies.
4.2.2 Cash Pool Balance. The Seller shall procure that all receivables as
of the Closing Date under the US Dollar Finance Agreement which the
Company has from the Seller, or which the Seller has from the
Company, will be converted into Euros at the foreign reference rates
(as determined pursuant to Section 4.1.3) as of the Closing Date.
Subsequent to such conversion all receivables the Company may have,
as of the Closing Date, from the Seller under the Finance Agreements
shall be set off against all receivables the Seller may have, as of
the Closing Date, from the Company under the Finance Agreements.
Such amount shall be referred to herein as the "Cash Pool Balance ".
The Cash Pool Balance shall be taken into account in the calculation
of the Closing Date Net Cash. If the Cash Pool Balance is a
receivable of the Company from the Seller, then the Seller shall
discharge such receivable by making a payment equal to the Cash Pool
Balance to the Company. If the Cash Pool Balance is a receivable of
the Seller from the Company, then the Seller shall, against payment
of the Preliminary Cash Pool Balance by the Purchaser, sell and
assign such receivable to the Purchaser on the Closing Date. The
Purchaser and the Seller shall procure that the Company shall agree
to the assignment of the receivable.
4.2.3 Treatment of special kinds of receivables and payables. For the
avoidance of doubt, it is hereby clarified that for purposes of
Section 4.2
(i) receivables and payables resulting from supplies and services
(Forderungen und Verbindlichkeiten aus Lieferungen und
Leistungen) between the Seller on the one hand and the Group
Companies on the other hand shall be settled in the Ordinary
Course of business and, therefore, under no circumstances (not
even in a situation where they are interest bearing
liabilities) be treated as receivables or payables under
Finance Agreements; and
(ii) interest payable on receivables and payables under the Finance
Agreements until (and including) the Closing Date shall be
treated as receivables or payables under the Finance
Agreements.
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4.3 Payments on the Closing and Adjustments.
4.3.1 Preliminary Purchase Price.
On the Closing Purchaser shall pay the Cash Portion and shall cause
the issuance of the Consideration Shares. The Cash Portion shall be
referred to as the "Preliminary Purchase Price".
4.3.2 Final Purchase Price
The Purchase Price shall be considered finally determined once the
Purchase Price Determination Statements have become final and
binding upon the Parties as provided for in Section 5. If the
Purchase Price (reduced by the Share Value) so determined exceeds
the Preliminary Purchase Price, the Purchaser shall pay an amount
equal to such excess within 5 Business Days after the Purchase Price
Determination Statements have become final and binding. If the
Purchase Price (reduced by the Share Value) falls short of the
Preliminary Purchase Price, the Seller shall pay an amount to the
Purchaser equal to the shortfall within 5 Business Days after the
Purchase Price Determination Statements have become final and
binding. The amount so payable shall bear interest at a rate of 5.5
% p.a. for the benefit of the respective creditor from and including
the Closing Date until, but excluding the date of actual payment.
4.3.3 Cash Pool Balance.
(i) Not later than 3 Business Days prior to the expected Closing
Date, the Seller shall estimate in good faith the expected
amount of the Cash Pool Balance as of the expected Closing
Date (the "Preliminary Cash Pool Balance") and shall notify
the Purchaser in writing about the Preliminary Cash Pool
Balance.
(ii) If the Preliminary Cash Pool Balance is a receivable of the
Company from the Seller, the Seller shall pay, on the Closing
Date, to the Company an amount equal to the Preliminary Cash
Pool Balance.
(iii) If the Preliminary Cash Pool Balance is a receivable of the
Seller from the Company, the Purchaser shall pay, on the
Closing Date, to the Seller an amount equal to the Preliminary
Cash Pool Balance against sale and assignment of such
receivable to the Purchaser.
(iv) Within 14 Business Days after the Closing Date, the Purchaser
shall procure that the Company and the Seller determine
jointly the exact Cash Pool Balance as of the Closing Date.
(v) If the Cash Pool Balance is a receivable of the Company from
the Seller, any difference between the Preliminary Cash Pool
Balance and the Cash Pool Balance as determined by the Seller
and the Company shall be paid as follows: If the Cash Pool
Balance exceeds the Preliminary Cash Pool Balance, the
20
Seller shall pay such difference to the Company. If the Cash
Pool Balance is less than the Preliminary Cash Pool Balance,
the Purchaser shall procure that the Company shall pay such
difference to the Seller.
(vi) If the Cash Pool Balance is a receivable of the Seller from
the Company, any difference between the Preliminary Cash Pool
Balance and the Cash Pool Balance as determined by the Seller
and the Company shall be paid as follows: If the Cash Pool
Balance exceeds the Preliminary Cash Pool Balance, the
Purchaser shall pay such difference to the Seller. If the Cash
Pool Balance is less than the Preliminary Cash Pool Balance,
the Seller shall pay such difference to the Purchaser.
(vii) Any such amount to be paid by either the Purchaser or the
Seller or the Company, as the case may be, shall be paid
within ten Business Days after the determination of the Cash
Pool Balance. In case of a dispute concerning the final Cash
Pool Balance, Section 5.2 shall apply accordingly.
4.4 IPO. In the event of an underwritten public offering of shares or
instruments representing an interest in the Company or any of the
Subsidiaries in the 2008 or 2009 calendar year, the Seller shall be
entitled to receive an amount calculated in accordance with the
principles set out in Exhibit 4.4.
4.5 General Rules for Payments
4.5.1 Modes of Payment. Any payments under this Agreement shall be made by
wire transfer in immediately available funds, value as of the
relevant due date set out in this Agreement or otherwise provided by
law, free of bank and / or any other charges.
4.5.2 Bank Accounts. Any payments to the Seller or the Purchaser under
this Agreement shall be made to such bank accounts of which the
Seller or the Purchaser, respectively, have notified the other Party
at least three Business Days prior to the instructions for the
respective wire transfer being given.
4.5.3 Interest. Except as expressly otherwise provided herein, any
payments due under this Agreement shall bear interest from and
including the respective due date to, but not including, the date of
actual payment at 5 % per year based on 360 days.
5. Purchase Price Determination Statements
5.1.1 Preparation of the Consolidated Closing Date Financial Statements.
The Purchaser shall procure that the Company:
(i) delivers interim consolidated financial statements
(konsolidierter Abschlu(beta) zum Monatsende) (consisting of
consolidated balance sheet, consolidated profit and loss
account) (the "Consolidated Closing Date Financial
Statements") for the period from January 1, 2007 until and
including the Closing Date prepared in accordance Section
5.1.2; and
21
(ii) delivers a separate written statement derived from the
Consolidated Closing Date Financial Statements which sets
forth the Closing Date Net Cash and as a calculation of the
Purchase Price taking into account the items referred to in
Section 4.1.1 and 4.1.2. Such written statement shall together
with the Consolidated Closing Date Financial Statements be
referred to as the "Preliminary Purchase Price Determination
Statements" to the extent that they have not yet become
binding pursuant to Section 5.3.
The Purchaser shall procure that the Company delivers the
Preliminary Purchase Price Determination Statements to KPMG, Essen,
for its review as soon as possible after the Company has prepared
the Preliminary Purchase Price Determination Statements, but not
later than 60 days after the Closing Date.
5.1.2 Accounting Principles. The Consolidated Closing Date Financial
Statements shall be prepared by applying (i) the accounting
principles used by the Company for the preparation of the
Stand-Alone Financial Statements and set out in more detail in
Exhibit 5.1.2 or, to the extent that the same give no guidance, (ii)
IFRS. In each case the formal and material balance sheet continuity
(Wahrung xxxxxxxxx und materieller Bilanzkontinuitat) shall be
ensured, the methods of valuation be maintained and all options to
capitalize or to include items on the liabilities side
(Aktivierungs- und Passivierungswahlrechte) shall be exercised
consistently with the Stand-Alone Financial Statements.
5.1.3 Review. The Purchaser shall submit the Preliminary Purchase Price
Determination Statements to the Seller without undue delay after
they have been reviewed by KPMG, Essen. The Seller shall have the
opportunity to review the Preliminary Purchase Price Determination
Statements in accordance with this Section 5. The Purchaser shall
have the opportunity to have the Preliminary Purchase Price
Determination Statements reviewed by Deloitte & Touche in accordance
with this Section 5.
5.1.4 Objections. Any objections of the Seller or the Purchaser (on the
basis of the review by Deloitte & Touche), as the case may be,
against the Preliminary Purchase Price Determination Statements must
be stated within thirty days after delivery of the Preliminary
Purchase Price Determination Statements by providing the Purchaser
or the Seller, respectively, with (i) a written statement of
objections, specifying in reasonable detail the grounds for the
objections and (ii) a revised version of the Preliminary Purchase
Price Determination Statements (both the "Revised Purchase Price
Determination Statements") taking such objections into account. If
and to the extent that neither the Seller nor the Purchaser object
during such period in such manner, the Preliminary Purchase Price
Determination Statements shall be final and binding upon the
Parties, upon the expiration of such period.
5.1.5 Access; Costs. The Purchaser shall procure that the Group Companies
grant the Seller and the Seller's advisors access to the business
properties, the Group Companies' supporting accounting records, the
working papers of KPMG, Essen, and employees during the normal
business hours to enable Seller to review the Preliminary Purchase
Price Statements. The Company shall bear the costs for the
preparation of the
22
Preliminary Purchase Price Determination Statements; the Seller
shall bear the costs for the review of the Preliminary Purchase
Price Determination Statements and the Purchaser the costs for the
review by Deloitte & Touche.
5.2 Resolution of Disputes
5.2.1 Appointment of Neutral Auditor. In the event that any objections of
the Seller and / or the Purchaser, as the case may be, to the
Preliminary Purchase Price Determination Statements are stated by
the Seller and / or the Purchaser, respectively, in the required
manner, the Seller and the Purchaser shall attempt in good faith to
settle the disagreement. If the Seller and the Purchaser cannot
settle the disagreement within thirty days after receipt by the
Respective Party of the other Party's statement of objections and
the Revised Purchase Price Determination Statements, the Seller or
the Purchaser may present the matter to a neutral auditor from BDO
Deutsche Warentreuhand AG Wirtschaftsprufungsgesellschaft,
Dusseldorf branch (the "Neutral Auditor"). If the Neutral Auditor
does not accept this assignment within ten Business Days after the
respective request for such designation or if the Neutral Auditor
resigns from its assignment, the Neutral Auditor shall be appointed
by the German Institute of Chartered Accountants (Institut der
Wirtschaftsprufer in Deutschland e.V.) at the request of either
Party after consideration of the proposals and comments by the
Seller and the Purchaser. The Seller and the Purchaser shall jointly
instruct the Neutral Auditor to decide the issues in dispute in
accordance with the provisions of this Section 5.2 and Section
5.1.2.
5.2.2 Scope of Decisions of Neutral Auditor. Unless instructed otherwise
by the Seller and the Purchaser jointly, the Neutral Auditor shall
limit its decisions to the issues in dispute, but shall on the basis
of such decisions and the undisputed parts of the Preliminary
Purchase Price Determination Statements determine the Purchase Price
Determination Statements in their entirety. In respect of the issues
in dispute the decisions of the Neutral Auditor shall remain within
the positions taken by the Seller and the Purchaser. To the extent
necessary for the decisions the Neutral Auditor shall also be
entitled to decide on the interpretation of this Agreement. The
Neutral Auditor shall act as an expert (Schiedsgutachter) and not as
an arbitrator.
5.2.3 Procedure. The Seller and the Purchaser shall make available to the
Neutral Auditor the Preliminary Purchase Price Determination
Statements and the Revised Purchase Price Determination Statements
and all other documentation and data reasonably required by the
Neutral Auditor to make the required decisions and determination.
Otherwise, Section 427 and 444 ZPO shall apply accordingly. The
Neutral Auditor shall immediately submit copies of all documents and
other data made available by the Seller or the Purchaser to the
respective other Party as well. Before making the decisions the
Neutral Auditor shall grant the Seller and the Purchaser the
opportunity to present their positions, which shall include the
opportunity of at least one oral hearing in the presence of the
Seller and the Purchaser and their professional advisors. The
Neutral Auditor shall use its best efforts to deliver its written
opinion with reasons for the decisions as soon as reasonably
practical, but not later than sixty days after the issues in dispute
have been referred to the Neutral Auditor. The Neutral
23
Auditor's decisions and the Purchase Price Determination Statements
as determined by the Neutral Auditor shall be final and binding upon
the Parties.
5.2.4 Costs. The costs and expenses of the Neutral Auditor shall be borne
by the Seller and the Purchaser pro-rata in proportion to the
amounts by which the Purchase Price as determined (i) by the
Purchaser in the Preliminary Purchase Price Determination Statements
and (ii) by the Seller and the Purchaser, respectively, in the
Revised Purchase Price Determination Statements deviates from the
Purchase Price Determination Statements determined by the Neutral
Auditor.
5.3 Definition of Purchase Price Determination Statements. (i) The
Preliminary Purchase Price Determination Statements, absent any
objections by Seller and the Purchaser, or (ii) the Revised Purchase
Price Determination Statements, absent any objections by Purchaser
or the Seller, as the case may be, or (iii) the determination of the
Purchase Price as agreed between the Parties, or (iv) the
determination of the Purchase Price by the Neutral Auditor shall be
referred to as the "Purchase Price Determination Statements".
6. Merger Notification; Regulatory Requirements
6.1 Preparation. The Purchaser shall ensure that the transactions
contemplated by this Agreement will be notified to the German
Federal Cartel Office (Bundeskartellamt - BKartA), the Antitrust
Division of the United States Department of Justice and the
authorities competent in China, Russia and South Africa until
January 17, 2006. The notification shall be filed by the Purchaser
on behalf of the Seller and the Purchaser to the extent the
applicable laws do not require separate filings of the Seller and
the Purchaser. The Parties shall closely cooperate in the
preparation of such filings. The Seller shall, and shall cause the
Group Companies to, submit to the Purchaser, as soon as practical
after the Signing Date, all documents, data and other information
which in the reasonable judgment of the Purchaser may be necessary
for the purposes of preparing, amending or supplementing the
notification. Prior to the filings, the Purchaser shall give the
Seller the reasonable opportunity to review the documentation to be
filed pursuant to sentence one, and vice versa in case the
applicable laws require separate filings of the Seller and the
Purchaser. Furthermore, the Purchaser shall hold harmless and
indemnify the Seller from all fines, charges, fees (with the
exception of anti trust filing fees which are shared between Seller
and Purchaser in accordance with Section 20.2) or similar payments,
which are imposed by any anti-trust authority in connection with the
notification or the omission of such notification. To the extent
permissible under applicable laws the Parties shall inform each
other about any meetings (including telephone or video conferences)
with cartel authorities and either may request from the other that
it participate in such meetings.
6.2 Refusal of Approval. If on the Closing Date (i) any anti-trust
approval or any other governmental consent, approval or waiver
required under applicable law in any jurisdiction in order to effect
the Closing may not be obtained or (ii) the consummation of the
Closing is prohibited under any enforceable law, or any enforceable
judgment, injunction, order or decree by any court or governmental
24
authority, the Parties shall cooperate in good faith to obtain any
approval, provided, however, that the Purchaser and the Purchaser's
Affiliates shall not be obliged to accept any condition to be
imposed by any anti-trust authority.
7. Closing
7.1 Closing Conditions, Change of Control in Purchaser
7.1.1 Closing Conditions. The obligation of the Parties to perform the
Closing Events shall be subject to each of the following conditions
(the "Closing Conditions") being either fulfilled or waived by the
Party entitled to such waiver pursuant to Section 7.1.2:
(i) The Federal Cartel Office (Bundeskartellamt) has notified
Seller or Purchaser in writing that the transactions
contemplated by this agreement (the "Transaction") does not
fulfill the prohibition prerequisites of Section 36 para. (1)
GWB, or
the one month period pursuant to Section 40 para. (1) sentence
1 GWB has expired, unless the Federal Cartel Office has stated
to enter into an examination of the Transaction in accordance
with Section 40 para. (1) sentence 1 GWB, or
the Federal Cartel Office has cleared the Transaction pursuant
to Section 40 para. (2) sentence 1 GWB, or
the examination period set forth in Section 40 para. (2)
sentences 2 and 3 GWB and the agreed extension period, if any,
has expired, unless the Federal Cartel Office has issued a
decision to prohibit the Transaction;
Provided that neither Party shall grant its consent and
approval to any extension of the examination period without
the prior written consent of the respective other Party.
(ii) The transactions contemplated by this Agreement may be
lawfully consummated pursuant to the Xxxx-Xxxxx-Xxxxxx
Antitrust Improvements Act of 1976 (as amended) and further
antitrust approvals required for the transactions contemplated
by this Agreement including in Russia and South Africa;
(iii) There is no injunction or other court or governmental order or
litigation (to the extent not initiated by the Purchaser)
prohibiting the Parties from consummation of this Agreement or
the transactions contemplated herein, and no application for
such order and no such litigation is pending or threatened by
or on behalf of a governmental authority including any court
or regulatory body;
25
(iv) The government of the Federal Republic of Germany and the
government of the State of North Rhine-Westphalia have
unconditionally approved of the transactions contemplated by
this Agreement;
(v) [intentionally left blank];
(vi) Neither the Purchaser nor the Purchaser's Guarantor are in
Material Breach of the guarantees given in Section 11;
(vii) The Seller is not in Material Breach of the covenants set
forth in Section 15 or the guarantees given by Seller in
Sections 8, 12.2 and 13.2;
(viii) No Material Adverse Change has occurred since October 1,
2006;
(ix) [intentionally left blank];
(x) The Seller has delivered to the Purchaser the Stand-Alone
Financial Statements (as defined in Section 8.7 below) and the
Stand-Alone Financial Statements and those other financial
statements to be delivered in accordance with Section 15.6
reconciled to US GAAP in accordance with the provisions of
this Agreement, including Section 15.6 below;
(xi) The Company 2006 Financial Statements (as defined below) have
been adopted (festgestellt) by the Company in accordance with
the applicable rules;
(xii) The Seller has provided the Purchaser with a copy of the
termination of the Profit and Loss Transfer Agreement with
effect as of December 31, 2006 and with a copy of the
respective filing with the commercial register, and if
available, an excerpt of the commercial register to that
effect and the Seller has provided a statement that the profit
has been transferred to the Seller;
(xiii) The Finance Agreements have been terminated with effect as of
the Closing Date;
(xiv) The amendment to the Social Charter as attached hereto as
Exhibit 7.1.1(xiv) has been executed by the relevant parties;
(xv) The Company has entered into a real estate purchase agreement
substantially in the form as attached hereto as Exhibit
7.1.1(xv)(a) and taking into account the changes set out in
Exhibit 7.1.1(xv) (b), which are subject to the approval by
the seller of the real property, by which the real property in
Lunen as marked in red on the plan attached hereto as Exhibit
7.1.1(xv) (c) will be purchased by the Company;
(xvi) The Forward Purchase Agreement has been entered into by the
parties thereto;
(xvii) No later than by February 15, 2007, the Seller shall have
delivered to the Purchaser that certain written report
prepared by Deloitte & Touche related to
26
the matters referred to in Section 10.2 (the "Deloitte
Report") and the substance, findings, results and
recommendations of such written report shall not disclose any
matters (other than matters related to Belarus, Russia and
Kazakhstan as disclosed to the Purchaser's Guarantor and
Purchaser's advisors in Washington, D.C., on December 6, 2007)
that individually or in the aggregate result in or can
reasonably be expected to result in Losses (as defined in
Sections 10.2 and 10.5 third and fourth sentence - the "10.2
Losses") of any Group Company, the Purchaser or the Purchaser'
Guarantor in excess of EUR 3,000,000 (in words: Euro three
million);
(xviii) The Seller and the Purchaser have reached an agreement in
accordance with Section 7.1.8(iii).
Any Closing Condition pursuant to subpara. 7.1.1(i) and 7.1.1(ii)
shall be deemed to be fulfilled upon delivery of a notice by the
Purchaser to the Seller confirming the fulfillment of such
condition.
7.1.2 Waiver of Closing Conditions. The Purchaser may waive the
satisfaction of the Closing Conditions set forth in Section
7.1.1(vii) through (xv), (xvii) and (xviii) by written notice to the
Seller. The Seller may waive the satisfaction of the Closing
Condition set forth in Section 7.1.1(vi) by written notice to the
Purchaser. The effect of a waiver shall be limited to eliminating
the respective Closing Condition and shall not prejudice any claims
either Party may have on the basis of any circumstances relating to
the non-fulfillment of such Closing Condition.
7.1.3 Efforts to Fulfill Closing Conditions. Each Party shall use best
efforts to ensure that those of the Closing Conditions which cannot
be waived by such Party will be fulfilled as soon as possible.
7.1.4 Notification. As soon as all Closing Conditions have been either
fulfilled or waived, the Seller and the Purchaser shall mutually
notify each other thereof.
7.1.5 MAC Determination. In the event that, prior to the Closing, the
Purchaser determines that the conditions set forth in Section
7.1.1(vii) or (viii) have not been satisfied, or the Seller
determines that the condition set forth in Section 7.1.1(vi) has not
been satisfied, the Party which is entitled to waive such condition
shall promptly notify the other Party of such determination and
provide the other Party with a written statement setting forth the
basis of such determination (the "MAC Determination Notice").
In the event that the other Party disagrees with such determination,
it shall within five Business Days of the receipt of the MAC
Determination Notice notify the informing Party of such disagreement
and provide the informing Party with the statement setting forth the
basis of such disagreement (the "MAC Dispute Notice").
The MAC Dispute Notice shall promptly be submitted by the Seller or
the Purchaser for resolution to Professor Xx. Xxxxx Xxxxxxxxxxx,
Munich and finally determined within fifteen Business Days after
submission whether the conditions set forth in Section 7.1.1(vii) or
(viii) or Section 7.1.1(vi) have been satisfied or not and which
27
determination shall be final and binding upon the Parties (the
"Final MAC Determination"). In the event that Professor Xx. Xxxxx
Xxxxxxxxxxx is not able or willing to decide on the MAC Dispute
Notice Section 5.2.1 third sentence shall apply mutatis mutandis. In
the event the MAC Dispute Notice has been delivered the conditions
set forth in Sections 7.1.1(vii) and 7.1.1(viii) and Section
7.1.1(vi) respectively, shall not be deemed to have been satisfied
until the delivery of the Final MAC Determination unless the Parties
have agreed otherwise. The costs of Professor Xx. Xxxxxxxxxxx shall
be allocated in accordance with Section 91 ZPO, applied mutatis
mutandis.
7.1.6 Withdrawal. In the event that the Closing Conditions - other than
the conditions set forth in Section 7.1.1(vi) and, only in case the
lack of execution of the Forward Purchase is due to a fault of
Bucyrus, (xvi) - have not been fulfilled or waived (if capable of
being waived) prior to or on September 30, 2007 the Purchaser may
withdraw (zurucktreten) from this Agreement. In the event that the
Closing Conditions pursuant to Sections 7.1.1(vi) or, only in case
the lack of execution of the Forward Purchase is due to a fault of
Bucyrus, 7.1.1(xvi) have not been fulfilled or waived prior to or on
September 30, 2007 the Seller may withdraw (zurucktreten) from this
Agreement. In the event that any Closing Condition set forth in
Section 7.1.1(i) through 7.1.1(iv) has not been fulfilled or waived
(if capable of being waived) prior to or on September 30, 2007
either Party may withdraw from this Agreement. The withdrawal must
be stated by written notice to the respective other Party. The
effect of a withdrawal shall be limited to eliminating the
obligations of the Party to consummate this Agreement and shall not
prejudice any claims the withdrawing Party may have on the basis of
any circumstances relating to the non-fulfillment of any Closing
Condition.
7.1.7 Change of Control in Purchaser. If at any time after the Signing
Date and until the beginning of the Closing, (i) the HT Shares are
no longer held personally by HT, (ii) Professor Xx. Xxxxxxxx X.
Xxxxxxx is (x) no longer able to exercise his rights as shareholder
(e.g. in case of legal incapacity - Geschaftsunfahigkeit) or (y) no
longer the sole shareholder of HT or (z) no longer holds the shares
in HT for his own benefit and account free of any Third Party
entitlements or rights other than security interests approved and
requested by the Purchaser or (iii) Professor Xx. Xxxxxxxx X.
Xxxxxxx is (y) no longer able to act as managing director of HT or
(z) not longer acting as the sole managing director of HT,
irrevocably appointed until and including the Forward Purchase
Closing Date with no intention of his dismissal or resignation or
(iv) HT has any further operations or assets other than the HT
Shares or has any further business purpose than to hold the HT
Shares, either Party which becomes aware of those changes shall
inform the other Party in writing without undue delay. Upon receipt
of such information, the Parties shall undertake the following:
(i) Upon request of the Seller, Purchaser's Guarantor shall advise
Bucyrus to exercise its right under the Shareholders'
Agreement and request the sale and transfer of the HT Shares
to a third party designated by the Seller and the Purchaser
jointly; or
28
(ii) if such third party could not be jointly designated within 30
Business Days after Seller's request, the Purchaser and the
Seller shall take all actions necessary so that Seller or an
Affiliate of Seller shall replace HT as the owner of the HT
Shares and Seller or Sellers' Affiliate shall become a party
to the Shareholders' Agreement and the Forward Purchase
Agreement.
7.1.8 Disclosures in the Deloitte Report.
(i) If the Deloitte Report contains matters other than matters
related to Belarus, Russia and Kazakhstan (as disclosed to the
Purchaser's Guarantor and Purchaser's advisors in Washington,
D.C., on December 6, 2007) that individually or in the
aggregate result or can reasonably be expected to result in
10.2 Losses of any Group Company, the Purchaser or the
Purchaser's Guarantor of up to EUR 3,000,000 (in words: Euro
three million), the Purchaser shall have the following rights:
(y) the Purchaser may request from the Seller that, subject to
the fulfillment or the waiver of the other Closing Conditions,
the Transaction is consummated in accordance with Section 7.2,
and the Purchaser may claim from the Seller the compensation
of the 10.2 Losses; or (z) prior to Closing the Purchaser may
request from the Seller that, subject to the fulfillment or
the waiver of the other Closing Conditions, the Transaction is
consummated in accordance with Section 7.2 and the Purchaser
may claim from the Seller the payment of the 10.2 Losses
multiplied by 6 (in words: six), provided that nothing in this
Section 7.1.8 shall limit Purchaser's and Purchaser
Guarantor's rights pursuant to Section 10.2. In this event,
notwithstanding anything else in this Agreement to the
contrary, neither the Purchaser nor the Seller shall be
entitled to withdraw from this Agreement pursuant to this
clause. If the Closing Condition in Section 7.1.1(xviii) has
been waived by the Purchaser, Purchaser's claims are governed
by Section 10.2 without applying the factor 6.
(ii) If the Deloitte Report contains matters other than matters
related to Belarus, Russia and Kazakhstan (as disclosed to the
Purchaser's Guarantor and Purchaser's advisors in Washington,
D.C., on December 6, 2007) that individually or in the
aggregate result or can reasonably be expected to result in
10.2 Losses of any Group Company, the Purchaser or the
Purchaser's Guarantor in excess of EUR 3,000,000 (in words:
Euro three million), the Purchaser and the Seller shall have
the following rights: (x) the Purchaser may request from the
Seller that, subject to the fulfillment or the waiver of the
other Closing Conditions, the Transaction be consummated in
accordance with Section 7.2 and the Purchaser may claim the
compensation of the 10.2 Losses; or (y) prior to Closing the
Purchaser may claim from the Seller the compensation of the
10.2 Losses multiplied by 6 (in words: six) in which case the
Seller shall have the right to (A) withdraw from this
Agreement in accordance with Section 7.1.6 and, for the
avoidance of doubt, neither the Purchaser nor the Purchaser's
Guarantor shall be entitled to any claims, compensation or
payments (other than the break up fee in accordance with the
requirements set forth in detail in Section 7.3) under this
Agreement or in accordance with applicable law, or (B)
acknowledge the claim in full made by
29
the Purchaser in writing and request, subject to the
fulfillment of the other Closing Conditions, the consummation
of the Transaction in accordance with Section 7.2 and effect
payment on the Closing Date to Purchaser of an aggregate
amount equal to the acknowledged 10.2 Losses multiplied by 6,
provided that nothing in this Section 7.1.8 shall limit
Purchaser's and Purchaser Guarantor's rights pursuant to
Section 10.2.
(iii) The Seller and the Purchaser shall negotiate in good faith in
order to agree on the amount to be paid in accordance with
Section 7.1.8(i) which shall, if not otherwise agreed, be paid
on the Closing Date.
7.2 Closing
7.2.1 Closing Events. The Closing (as defined below) shall take place on
the last Business Day (in Frankfurt am Main, Germany) of the month
in which the Closing Conditions provided for in Section 7.1.1(i),
7.1.1(ii), 7.1.1(iv), 7.1.1(x) through 7.1.1(xviii) have been
fulfilled or their satisfaction has been waived (if capable of a
waiver) provided that (a) Closing shall in no event occur earlier
than (x) 5 days after the Stand-Alone Financial Statements and, as
applicable, those other financial statements to be delivered in
accordance with Section 15.6 reconciled to US GAAP as further
described in Section 15.6, first sentence, below have been delivered
to the Purchaser and (y) March 30, 2007, and (b) if the final
Closing Condition listed in Section 7.1.1(i), 7.1.1(ii), 7.1.1(iv),
7.1.1(x) through 7.1.1(xviii) is fulfilled or waived within three
Business Days before the last Business Day (in Frankfurt am Main,
Germany) of a month, the Purchaser shall have the right to postpone
the Closing to the last Business Day (in Frankfurt am Main, Germany)
of the following month or such other date as mutually agreed upon by
the Parties, and further provided in each case that on such date the
other Closing Conditions have been and continue to be fulfilled or
waived as well. On such date, the Parties shall meet at the offices
of Skadden, Arps, Slate, Xxxxxxx & Xxxx LLP in Frankfurt am Main, or
at such other location as mutually agreed upon by the Parties, where
the events mentioned below (the "Closing Events"; the occurrence of
which in their entirety shall constitute the "Closing") shall take
place. The Closing Events pursuant to Section 7.2.2 through 7.2.4
shall occur simultaneously (Zug-um-Zug).
7.2.2 Closing Events to be performed by the Purchaser: The Purchaser shall
(i) deliver the Purchaser's Confirmation; and
(ii) pay the Preliminary Purchase Price to the Seller pursuant to
Section 4.3.1; and
(iii) cause the issuance of the Consideration Shares; and
(iv) deliver the Purchaser's Bank Guarantee (as defined below) to
the extent that the Seller's Group has not been released by
the Purchaser in accordance with Section 14.3; and
30
(v) deliver certified copies of the notarized agreements set forth
in Exhibits 2.6 and 2.7; and
(vi) pay the Preliminary Cash Pool Balance to the Seller, if the
Cash Pool Balance shows a receivable of the Seller against the
Company.
7.2.3 Closing Events to be performed by the Seller: The Seller shall
(i) procure that the Directors and Officers of the Group Companies
set forth in Exhibit 7.2.3(i) have stated in writing their
resignation or absent such resignation dismiss such Directors
and Officers, effective as of the Closing Date; and
(ii) deliver the Professor Xx. Xxxxxxx Confirmation; and
(iii) deliver a guarantee by RAG Beteiligungs AG, substantially in
the form as attached in Exhibit 7.2.3(iii) by which RAG
Beteiligungs AG agrees to join as a party to this Agreement
and guarantees the fulfillment of Seller's obligations under
this Agreement as a primary obligor; and
(iv) deliver to the Purchaser an acknowledgment by RBV with respect
to the form and substance of the guarantees set forth in
Sections 8.1 through 8.3 as they relate to RBV, substantially
in the form set out in Exhibit 7.2.3(iv) ; and
(v) pay the Preliminary Cash Pool Balance to the Company, if the
Cash Pool Balance is a receivable of the Company against the
Seller; and
(vi) assign the receivable against the Company in the amount of the
Preliminary Cash Pool Balance to the Purchaser.
7.2.4 Closing Events to be performed by both the Purchaser and the Seller:
Both the Purchaser and the Seller shall and, with respect to the RBV
Share only the Seller shall procure that RBV will execute one or
more notarial deeds by which the Seller Share and the RBV Share are
assigned (abtreten) to the Purchaser and a draft of which is
attached as Exhibit 7.2.4 (i).
The date on which all Closing Events have been performed shall be
the "Closing Date". The Parties agree that the Consolidated Closing
Date Financial Statements shall be drawn up as of the last day of
the relevant month, if the Closing Date has occurred on the last
Business Day of such month, unless events occurring after the last
Business Day (in Frankfurt am Main) and on or before the last
calendar day of the relevant month would affect the Consolidated
Closing Date Financial Statements, in which case these shall be
established as of the Closing Date.
7.2.5 Waiver of Closing Events. The Seller may waive each of the Closing
Events set forth in Section 7.2.2 by written notice to the
Purchaser, and the Purchaser may waive each of the Closing Events
set forth in Section 7.2.3 by written notice to the Seller. The
effect of a waiver shall be limited to eliminating the need that the
respective Closing
31
Event is being performed at the Closing and shall not prejudice any
claims the Seller or, as the case may be, the Purchaser may have on
the basis of any circumstances relating to the non-performance of
such Closing Event.
7.2.6 Closing Confirmation. After all Closing Events have been performed
or waived, the Seller and the Purchaser shall confirm in a written
document to be jointly executed by the Seller and the Purchaser (the
"Closing Confirmation") that all Closing Events have been performed
or waived and that the Closing has occurred. For the avoidance of
doubt, unless specifically set forth otherwise in the Closing
Confirmation, the legal effect of such statement shall be limited to
serve as evidence that all Closing Events have been performed or
waived and that the Closing has occurred, but shall not limit or
prejudice in any manner the rights of the Seller or the Purchaser
arising under this Agreement or under applicable law.
7.2.7 Withdrawal. In the event that any Closing Event has not been
performed or waived within 15 (fifteen) Business Days from the date
the Closing should take place in accordance with Section 7.2.1, (i)
the Seller may withdraw from this Agreement by written notice to the
Purchaser, unless the non-performance of the Closing Events is
within the control of or the responsibility of the Seller stating
the withdrawal and (ii) the Purchaser may withdraw from this
Agreement by written notice to the Seller, unless the
non-performance of the Closing Events is within the control of or
the responsibility of the Purchaser, stating the withdrawal, in each
case provided that the withdrawal shall be deemed void and shall not
have any effect if at the time when the notice is received by the
other Party all Closing Events have been performed.
7.3 No shop; Breakup Fee. As from the Signing Date until beginning of
the Closing, the Seller and RBV shall not, and shall not permit any
Group Company or any of the directors, managers, officers,
employees, agents or advisors thereof to, initiate, solicit, pursue
or encourage (by way of furnishing information or otherwise) any
inquiries or proposals, or enter into any discussions, negotiations
or agreements (whether preliminary or definitive) with any Person,
contemplating or providing for any merger, acquisition, purchase or
sale of equity or all or substantially all of the assets or any
business combination or change in control of any Group Company or
the Business, or providing any business or financial information to
any Person. In the event that the Closing is not consummated since
(i) the Seller has not complied with its obligation in Sections
7.1.1(x) through 7.1.1(xv), 7.1.1(xvii), 7.2.3 or 7.4, or due to a
Material Breach pursuant to Section 7.1.1(vii), and (ii) the
Purchaser or Seller pursuant to Section 7.1.8(ii)(A) withdraws from
this Agreement in accordance with its terms and (iii) the Seller
enters, prior to September 30, 2007, into any agreement with any
other person regarding the sale, lease, pledge or other disposition
of all or substantially all of the assets of the Company or the
Seller, or the sale of any capital stock of the Company or the
Seller, or a merger, consolidation or other acquisition proposal or
any other event or transaction resulting in a change of control
(directly or indirectly) of any Group Company (other than any of
such transactions due to a restructuring solely within the RAG
Aktiengesellschaft Affiliates (each an "Alternative Transaction"),
the Seller shall pay to the Purchaser a breakup fee equal to the
amount of EUR 10,000,000 (in words: ten million Euro). Such payment
shall become due concurrent to the closing of such Alternative
Transaction. The Seller
32
shall without undue delay notify the Purchaser of the execution of a
definitive agreement relating to any Alternative Transaction and the
consideration it is entitled to receive in connection therewith.
8. Guarantees of the Seller
The Seller hereby guarantees (garantiert) to the Purchaser by way of
an independent guarantee within the meaning of Section 311 BGB that,
except as specifically disclosed or cross referenced in any schedule
enclosed to this Section 8 (herein collectively referred to as
"Disclosure Schedules") or any Exhibit of this Agreement, the
following statements are complete and correct as of the Signing Date
and the Closing Date, unless it is specifically provided for that a
guarantee shall be made as of a different date, whereby it is
understood by the Parties that the Seller shall be liable for any
breaches of the representations in this Section 8 irrespective of
any fault of the Seller (verschuldensunabhangig), the Seller's
liability shall be subject to the modalities and limitations,
including de minimis amounts, thresholds and maximum amounts, set
forth in Section 9, and in view of these modalities and limitations
the guarantees in this Section 8 shall not constitute a warranty of
the condition (Beschaffenheitsgarantie) within the meaning of
Section 444 BGB. The guarantees contained in this Section 8 do not
apply to any Environmental Matters, Environmental Permits or
Environmental Laws as defined in Section 12 of this Agreement, which
are dealt with exclusively in Section 12 and Tax matters which are
exclusively dealt with in Section 13.
8.1 Shares. The Seller and RBV have free and clear title to the Seller
Share and RBV Share respectively. The Shares are validly issued,
fully paid, not repaid and non-assessable. The Shares constitute the
entire registered share capital of the Company. The Shares are free
and clear of any security interests, liens, pledges, or other
encumbrances or Third Party rights or right of any Affiliate of the
Seller and are not subject to any transfer restrictions or
pre-emption or similar acquisition rights except as set out in the
articles of association of the Company. There are no outstanding
subscriptions, options, warrants, subscription rights, conversion or
exchange rights or other contracts or commitments that could require
any Group Company to issue, sell or otherwise cause to become
outstanding any capital stock other than to any Group Company. There
are no outstanding subscriptions, options, warrants, subscription
rights, conversion or exchange rights or other contracts or
commitments that could require any Group Company to issue, sell or
otherwise cause to become outstanding any capital stock. There are
no outstanding or authorized stock appreciation, phantom stock,
profit participation, or similar rights with respect to the Company
or any Subsidiary.
8.2 Status of the Seller and RBV. The Seller and RBV are duly
incorporated and validly existing under the laws of Germany. The
execution and performance of this Agreement and any other
transactions contemplated by this Agreement by both the Seller and
RBV are within each of their respective corporate and individual
powers, do not violate the articles of association of the Seller and
RBV and, subject to Section 7.1.1(iv), have been duly authorized by
all necessary corporate and
33
shareholder actions. As of the Signing Date, neither bankruptcy,
insolvency nor similar proceedings have been applied for or opened
over the assets of the Seller or RBV or denied due to lack of
sufficient assets. The Seller and RBV are neither illiquid
(zahlungsunfahig) nor over-indebted (uberschuldet). This Agreement
constitutes legal, valid and binding obligations of the Seller
enforceable in accordance with its terms.
8.3 Absence of Violations. The execution and delivery of, and the
performance by the Seller and RBV of their obligations under this
Agreement and any other transactions contemplated by this Agreement
(i) will not result in a breach of any provision of their articles
of association or equivalent constitutional documents, (ii) will not
result in a breach of or constitute a default under any instrument
to which the Seller or RBV are a party or by which the Seller or RBV
are bound and which is material in the context of the transactions
contemplated by this Agreement, (iii) do not require any approval by
any governmental authority (other than those referred to in Section
7.1.1) or any corporate or shareholders action and (iv) do not
result in a breach of any law, statute, regulation, directive
(including such of the European Union), ordinance, administrative
regulation, order, judgment, decision, notice, decree, permits,
awards or other legal norms of any court or governmental agency or
any other public body or arbitration tribunal or institution
("Regulations"), by which the Seller, RBV or any of the Group
Companies, are bound.
34
8.4 Corporate Status of Group Companies.
8.4.1 The statements made in Sections 2.1 through 2.3 (including the
Exhibits thereto) are correct. The Group Companies are duly
incorporated and validly existing under the laws of their respective
jurisdiction.
8.4.2 No bankruptcy, insolvency or similar proceedings have been applied
for or opened over any of the Group Companies or denied due to lack
of sufficient assets. To the Seller's Knowledge there exist no
circumstances that would justify the opening of such proceedings; in
particular none of the Group Companies is illiquid (zahlungsunfahig)
or over-indebted (uberschuldet).
8.4.3 The Seller has prior to the Signing Date submitted to the Purchaser
complete and correct copies of the current articles of association
and of any shareholders' agreement of the Group Companies as in form
as of the Signing Date.
8.4.4 Except as disclosed in Disclosure Schedule 8.4.4 there are no
resolutions or other actions which have to be registered in a
Commercial Register or at a comparable authority or competent body
or person prior to the Signing Date.
8.4.5 Except as set forth in Disclosure Schedule 8.4.5, or contemplated by
this Agreement, no Group Company is party to any voting trust,
proxy, or other agreement or understanding with respect to the
voting of its Interest and other capital stock.
8.4.6 Disclosure Schedule 8.4.6 contains, as of the Signing Date, a
complete and correct list (including all current members) of any
supervisory board, advisory board, shareholder' or partners'
committees and any similar corporate body established in any Group
Company.
8.5 Interests in the Subsidiaries.
8.5.1 The Company holds, directly or indirectly, the Subsidiary Interests
as described in Section 2.3. The Subsidiary Interests are free and
clear of any liens and encumbrances or third party rights, except
for rights created under statutory law or articles of associations.
8.5.2 Other than the Interest in the Subsidiaries, the Group Companies do
not hold - either directly, indirectly or in trust - any shares,
interests or equity (including, without limitation, silent
partnerships and sub-participations) in, and have not entered into
any agreement to hold any shares, interests or equity in or to
establish, any other entity. None of the Group Companies is party to
any joint venture, consortium, partnership or other syndicate other
than those listed in Disclosure Schedule 8.5.2.
8.6 No Pending Business Transactions. As of the Closing Date, except as
set forth in Disclosure Schedule 8.6, no Group Company is a party to
any agreement relating to the acquisition or sale of or a similar
transaction involving any Interests in other Legal Entities or any
material asset or business (Betrieb) or parts thereof
(Betriebsteile), other than agreements which have already been fully
performed by all parties thereto.
35
8.7 Stand-Alone Financial Statements. Attached in Disclosure Schedule
8.7 are the unqualified audited, consolidated financial statements
of the Company as of December 31, 2005 (including prior year figures
for the financial year 2004) and the unaudited interim condensed
consolidated financial statements of the Company for the nine-month
period ended September 30, 2006, consisting of consolidated balance
sheets, consolidated income statements, statements of cash-flow and
statements of changes in the shareholders' equity respectively (in
each case except for the financial statements as of December 31,
2004, together with footnotes) which have been prepared on a
stand-alone basis using the cost-of-sales and completed contract
method and in accordance with IFRS, as adopted by the EU, applied on
a stand-alone basis at the Company. The Seller will submit on or
before the Closing Date to the Purchaser unqualified audited
consolidated financial statements of the Company as of December 31,
2006; the Seller and the Purchaser shall prior to the Closing
notarize such financial statements for the period ending on December
31, 2006 to make those an integral part of this Agreement. Such
financial statements as of December 31, 2004, December 31, 2005,
September 30, 2006 and December 31, 2006 are hereinafter referred to
as the "Stand-Alone Financial Statements"). The Stand-Alone
Financial Statements comply with IFRS, as adopted by the EU and give
a true and fair view of the net assets, financial position and
results of the operations of the Company on a consolidated basis as
at the respective dates and for the respective periods to which they
relate in accordance with requirements of IFRS as adopted by the EU.
8.8 IP Rights
8.8.1 Owned IP Rights. Disclosure Schedule 8.8.1 contains a complete and
correct list of all IP Rights (other than know-how) owned or
co-owned by any Group Company as of the Signing Date and which are
necessary and used for the manufacturing of the products by the
Group Companies or otherwise material for the respective business of
the Group Companies (the "Owned IP Rights"). Disclosure Schedule
8.8.1 correctly states for each such Owned IP Right (if applicable)
the type, applicable register, application or other identification
data in the respective jurisdiction and owner or applicant. With
respect to patents, utility models and design rights, Disclosure
Schedule 8.8.1 also sets out the maximum remaining term of
protection available.
8.8.2 No Encumbrances. Each Group Company is the unrestricted legal and
beneficial owner of the Owned IP Rights and no Owned IP Right is
encumbered with any rights of any Third Party, including the Seller
and the Seller's Affiliates, other than any other Group Company,
subject to the disclosure in Disclosure Schedule 8.8.4.
8.8.3 Maintenance. Except as disclosed in Disclosure Schedule 8.8.3 (i)
the Group Companies have duly maintained all Owned IP Rights and
have paid when due all registration and renewal fees to maintain all
registrations with any regulatory authority with respect to the
Owned IP Rights and with respect to trademarks have complied with
the applicable use requirements (Benutzungspflichten), if deemed
commercially reasonable by management of the Group Companies. Except
as disclosed in Disclosure Schedule 8.8.3 (ii) no Group Company has
granted a license
36
with respect to any Owned IP Rights to any Third Party other than
any other Group Company.
8.8.4 No Challenges. Except as disclosed in Disclosure Schedule 8.8.4, as
of the Signing Date the validity of the Owned IP Rights has not been
challenged or disputed in any way by any Third Party (including,
without limitation, by any registration authorities), and there are,
to the Seller's Knowledge, no circumstances on which any such
challenge or dispute could be based. To Seller's Knowledge as of the
Signing Date, none of the Owned IP Rights are being violated by any
third party.
8.8.5 Licensed Intellectual Property Rights. Disclosure Schedule 8.8.5
contains a complete and correct list of all licenses to IP Rights
(including IP Rights based on the employees' invention legislation)
other than licenses for standard software which have been granted by
Third Parties or the Seller or Seller's Affiliates to the Group
Companies (hereinafter collectively referred to as the "Licenses").
Unless explicitly indicated otherwise in Disclosure Schedule 8.8.5,
the Group Companies have the full and unencumbered right to the
Licenses and all Licenses are in full force and effect. The Group
Companies have complied with all material terms of the Licenses and
have paid all license fees under the Licenses as and when due. To
Seller's Knowledge as of the Signing Date, there are presently no
circumstances under any License which could result in a right of
termination, revocation or cancellation by the relevant licensor.
The Group Companies have not been notified in writing, that the
validity nor the use of the Licenses is or is threatened to be
challenged or disputed in any way by any Third Party (including,
without limitation, by any registration authorities).
8.8.6 No Further Rights Required. The Owned IP Rights and the Licenses
constitute the entire rights and licenses with respect to IP Rights
which the Group Companies need in order to carry on their business
as presently conducted.
8.8.7 Third Party Rights Infringements. Except as disclosed in Disclosure
Schedule 8.8.7 none of the Group Companies presently violates or has
been notified in the last two (2) years to have infringed any IP
Rights of any Third Party.
8.8.8 Know How. To Seller's Knowledge, the Group Companies are able to use
the know-how which the Group Companies need in order to carry on
their business as conducted on the Closing Date.
8.8.9 Employee Inventions and Right to Inventions. Except as set forth in
Disclosure Schedule 8.8.9, the Group Companies have full, exclusive
and unencumbered rights to all inventions which have been made by
their employees or contractors within the scope of the relevant
employment or contract to the extent such rights have been obtained
from the respective employees or contractors. To the extent specific
employees' invention legislation applies (including, without
limitation, the German Employees' Inventions Act
(Arbeitnehmererfindergesetz)), the Group Companies have asserted all
rights, and complied with all obligations (including, without
limitation, all payment obligations) arising under the relevant
legislation with respect
37
to the inventions, if the management of the respective Group Company
has deemed it beneficial for the business of the respective Group
Company. Since January 1, 2005 no employee of the Group Companies
has raised in writing claims with respect to employee inventions and
to Seller's Knowledge there are no circumstances which may
reasonably be expected to give a right to any such claims.
8.9 Assets, Inventories and Receivables; Information Technology.
8.9.1 Owned Assets and Inventories. The Group Companies are the legal and
beneficial owner of all assets (Anlagevermogen) (other than real
estate or IP Rights) and of all inventories (Umlaufvermogen)
(collectively "Assets and Inventories") which have been reflected in
the Stand-Alone Financial Statements (the "Owned Assets and
Inventories"), except for Assets and Inventories (i) which have been
disposed of in the Ordinary Course of business since the cut-off
date of the respective Stand-Alone Financial Statements, or (ii)
which are subject to customary retention of title arrangements
(branchenubliche Eigentumsvorbehalte und Zessionen) of suppliers.
The owned Assets and Inventories are in sound and usable condition
subject to normal wear and tear.
8.9.2 Ownership; No Encumbrances. Except as disclosed in Disclosure
Schedule 8.9.2, the Owned Assets and Inventories are not encumbered
with any Encumbrances in favor of any Third Party, including,
without limitation, Seller or Seller's Affiliates except for (i)
retention of title rights, liens, pledges or security rights in
favor of landlords, suppliers, mechanics, workmen, carriers and the
like created by statutory law or contractual obligations (to the
extent that the creation of such Lien or Encumbrance is not the
primary purpose of such contract), (ii) security rights granted to
banks and other financial institutions under their general terms and
conditions (Allgemeine Geschaftsbedingungen) over cash, and other
assets deposited with such banks or financial institutions or rights
of third parties created by operation of law, including pledges and
other security rights in favor of tax authorities or other
governmental entities, and (iii) easements and similar rights in
real property which do not materially impair the respective Group
Company's ability to conduct its business on the relevant real
property as presently conducted.
8.9.3 Real Property.
(i) Disclosure Schedule 8.9.3 (a) includes for each Group Company
a correct and complete list of all Owned Real Property and
there are no declarations that have to be registered with such
registers and which registrations have not been affected as of
the Signing Date. The Seller has made available to the
Purchaser copies of the deeds and other instruments (as
recorded) by which the Company or a Subsidiary acquired the
Owned Real Property and copies of all title insurance
policies, opinions, abstracts and surveys in the possession of
the Company or such Subsidiary and relating to such Owned Real
Property. Except as set forth on Disclosure Schedule 8.9.3(a):
(i) the Company and the Subsidiaries have good, valid and
marketable title to the Owned Real Property, free and clear of
all Encumbrances other than those with respect to the Owned
Real Property in Germany shown in the land register
(Grundbuch);
38
(ii) other than, with respect to Owned Real Property located
in Germany, as shown in the land register (Grundbuch), neither
the Company nor any Subsidiary has assigned, transferred,
conveyed, mortgaged, leased, deeded in trust or encumbered any
interest in the Owned Real Property.
(ii) Disclosure Schedule 8.9.3(b) contains a complete and correct
list of all Leased Real Property used by the Group Companies
for the operation of their primary business operations or for
which the Group Companies pay rent, (collectively the
"Leases") and Seller has made available to Purchaser complete
copies (if available at the respective Group Companies) of
such Leases prior to the Signing Date. With respect to each
such Lease: (i) the Company or a Subsidiary has a valid and
assignable interest or estate in such Lease, free and clear of
all Encumbrances, (ii) such Lease is in full force and effect,
valid and enforceable against the Company or a Subsidiary in
accordance with its terms; and (iii) neither the Company nor
the Subsidiary, as applicable, has assigned, sublet,
transferred, conveyed, mortgaged, deeded in trust or
encumbered any interest in the Lease.
(iii) There are no claims, litigation or proceedings which are
pending against the Real Property or the Company or any
Subsidiary with respect to the Real Property. The applicable
zoning of each parcel of Real Property permits the operation
of the business presently being conducted on such parcel.
8.9.4 Information Technology. Except as described in Section 17.2 each
Group Company either owns or the Group Company has a valid right or
license to use three months after the Closing Date (unless a shorter
period stipulated in the contractual arrangements) the computer
hardware, software, networks and other information technology other
than standard office software (collectively "Information
Technology") which is necessary for such Group Company to conduct
its current business.
8.10 Material Agreements, Largest Customers and Largest Suppliers,
Change-of-Control.
8.10.1 Material Agreements. Disclosure Schedule 8.10.1 includes for the
Group Companies a correct and complete list of all of the following
agreements under which, as of the Signing Date, any primary
contractual obligation (Hauptleistungspflicht) of any party has not
yet been fulfilled (the "Material Agreements"). Seller has made
available copies of the Material Agreements to Purchaser prior to
the Signing Date.
(i) Agreements for the sale of goods manufactured, or for services
rendered, by any Group Company and agreements for the supply
with goods and services, in each case with a value in excess
of EUR 10,000,000;
(ii) agreements for or relating to joint ventures, strategic
alliances, joint development of products or other forms of
cooperation relating to the conduct of a part of the business
of the Group Companies;
39
(iii) credit agreements with any Group Company (other than relating
to any intercompany debt towards any Group Company) as
borrower or a lender (other than under the Finance Agreement),
bonds, notes or other instruments evidencing financial
indebtedness of any Group Company other than relating to any
intercompany debt towards any Group Company, in each case with
a principal amount (including interests) in excess of EUR
100,000;
(iv) guarantees, suretyships (Burgschaften), letters of comfort
(Patronatserklarungen), performance or warranty bonds and
similar instruments issued (i) by any Group Company for any
debt of third parties for an amount of EUR 100,000 or more per
item, (ii) or issued by any Third Party as security for
obligations of any of the Group Companies (other than the
Seller's Guarantees as defined below);
(v) agreements to sell, otherwise dispose of or purchase any
assets (excluding inventories), including the sale of
Interests in other undertakings, businesses or real estate
entered into since December 31, 2005 other than in the
Ordinary Course;
(vi) sale and lease back transactions;
(vii) agreements with authorized dealers (Vertragshandler) or
commercial agents (Handelsvertreter) or consultancy
agreements;
(viii) Licenses which provide for annual royalties in excess of EUR
20,000;
(ix) Leases which provide for an annual rent in excess of EUR
250,000 or a fixed term longer than one year;
(x) service agreements (including framework agreements) or other
agreements containing continuing obligations
(Dauerschuldverhaltnisse) (except for agreements listed
elsewhere in this Section or utilities, mail and
telecommunication services and employment agreements) which
(i) provide for an annual remuneration of EUR 250,000 or a one
time payment of EUR 250,000 or more in the individual case and
(ii) has a fixed term or a notice period of more than 1 year;
(xi) agreements prohibiting or limiting the ability of a Group
Company to engage in any business activity or to compete with
any person (including any exclusive purchasing or sales
agreements).
8.10.2 Status of the Material Agreements. As of the Signing Date, except as
disclosed in Disclosure Schedule 8.10.2, (i) the Material Agreements
are in full force and effect, (ii) no party to a Material Agreement
has given a written notice of termination, (iii) none of the Group
Companies which is a party to a Material Agreement is in breach of
any material provisions of the Material Agreement, and (iv) the
Group Companies have not been notified in writing by the
counterparty to the Material Agreement that the respective Group
Company is in breach of the term of such Material Agreement or
40
that the counterparty to the Material Agreements wishes to terminate
or otherwise cancel the Material Agreement, and (v) to Seller's
Knowledge as of the Signing Date no counterparty is in breach of the
Material Agreements.
8.10.3 Material Agreements with change of control provisions. Disclosure
Schedule 8.10.3 contains a list of such Material Agreements which
provide for the other party a right to terminate or materially
supplement or amend the respective Material Agreement due to the
execution or the consummation of this Agreement.
8.10.4 Largest Customers and Largest Suppliers. Disclosure Schedule 8.10.4
contains a complete and correct list of the 10 largest customers and
the 10 largest suppliers of the Group Companies taken as a whole as
measured by the business volume for the period starting January 1,
2005 and ending on December 31, 2005 and the period starting January
1, 2006 and ending on October 31, 2006.
8.11 Employees
8.11.1 List of Key Employees. Prior to the Signing Date, the Seller has
submitted to the Purchaser a correct and complete list as of
December 7, 2006 of the Group Companies' (i) Directors and Officers
and (ii) individuals listed in Disclosure Schedule 8.11.1(i)
(collectively the "Key Employees") whose contracts have been
disclosed to the Purchaser if so indicated therein, including
relevant information on (i) the respective position/occupation and
(ii) the gross annual salary. Except as set forth in Disclosure
Schedule 8.11.1 (ii) as of the Signing Date, none of the Key
Employees has given or received written notice of termination of his
or her employment or has entered into a cancellation agreement
(Aufhebungsvereinbarung). None of the Key Employees has indicated
that he or she will terminate its employment due to the consummation
of this Agreement.
8.11.2 List of Employees. Disclosure Schedule 8.11.2 includes as of the
Signing Date a correct and complete list setting out for each Group
Company the total number of employees and their split by function
(production and administration).
8.11.3 Collective Agreements. Disclosure Schedule 8.11.3 includes a correct
and complete list, as of the Signing Date, of all material (i)
reconciliation of interest agreements (Interessenausgleiche) and
social plans (Sozialplane), and (ii) collective arrangements,
whether in the form of general commitments (Gesamtzusagen), standard
terms of employment (vertragliche Einheitsregelungen), works
agreements (Betriebsvereinbarungen), company works agreements
(Gesamtbetriebs- vereinbarungen) or group works agreements
(Konzernvereinabrungen), collective bargaining agreements
(Tarifvertrage) or in any other legal form including past practice
(betriebliche Ubung) to which any Group Company is bound (the
"Collective Agreements"), with the exception of the pension schemes
and arrangements referred to in Section 8.11.5 below.
8.11.4 Labor Disputes. Except as disclosed in Disclosure Schedule 8.11.4
hereto as of the Signing Date, no Group Company is experiencing any
strike or lockout of their employees, dispute with unions, works
councils or other bodies of employee
41
representatives before any court, governmental authority or
arbitrator (including any proceedings pending before any
conciliation committee (Einigungsstellenverfahren)) and relating to
labor relations or employment matters of a general nature (including
lay-offs, restructurings, general working conditions or
discrimination), except, in each case, for matters which could not
reasonably be expected to result in losses in excess of EUR 100,000
and except for individual proceedings regarding unfair dismissal
(Kundigungsschutzverfahren).
8.11.5 Pension Agreements. Disclosure Schedule 8.11.5 lists all plans or
arrangements to which the Group Companies are bound with respect to
pensions, indicating the relevant benefits and indicating the
relevant total number of active, retired and other former employees
or former managing directors being covered by the relevant pension
plan or pension arrangement. Further, Disclosure Schedule 8.11.5
lists all plans or arrangements to which the Group Companies are
bound with respect to any other retirement, death, sickness,
medical, disability, severance, bonus or incentive pay, deferred
compensation or welfare or long service awards (Jubilaumszusagen)
benefit in respect of any of their employees, Key Employees, former
employees or former managing directors (or any dependant thereof),
other than (i) employers' contributions to statutory pension
schemes, health and unemployment insurance and other statutory
employee benefit schemes, (ii) benefits provided by the agreements
referred to in Section 8.11.3 or the employment contracts of the Key
Employees, (iii) vacation or sick pay, (iv) or any insurance
policies funding the benefit of employees (including workers'
compensation or accident insurance) or (v) any funded benefit
schemes (including defined benefit or contribution schemes and
payments to life insurance companies) financed by way of salary
deductions (Gehaltsumwandlung) (all of the above, including the
schemes referred to under (i) to (v), collectively the "Group
Companies Benefit Plans"). All contributions and other payments,
whether arising by operation or law or by agreement, due and payable
from the Group Companies with respect to employees, Key employees
and former employees or former managing directors under the terms of
the Group Companies Benefit Plans have been duly paid and will be
duly paid until Closing Date, or, if this reflects Ordinary Course,
have been accrued and will until Closing Date be accrued in
accordance with the respective Stand Alone Financial Statements. To
the extent applicable contributions to the Pension Guarantee Fund
(Pensionssicherungsverein) or to external pension vehicles such as
pension funds (Pensionskassen), life insurance companies or support
funds (Unterstutzungskasse) have been duly made in the past in
accordance with the respective applicable local GAAP regulations and
will be duly made until the Closing Date. The pension payments of
the Company were in the last five years prior to the Closing Date in
accordance with Section 16 German Act on Company Pension. Since 2001
onwards any closures, freeze, changes or terminations of pension
plans or arrangements have been carried out in accordance with the
applicable Regulations. There are no assets related to the Group
Companies Benefit Plans and designed to fund the corresponding
obligations that are held by RAG Aktiengesellschaft or its
Affiliates which would have to be transferred in order to continue
to be available to the beneficiaries.
8.11.6 All Group Companies Benefit Plans are in substantial compliance with
their terms and all applicable laws. None of the Group Companies
Benefit Plans maintained in the US
42
is or has been subject to Title IV of the U.S. Employee Retirement
Income Security Act of 1974, as amended ("ERISA") within the past 5
years. None of the Group Companies contributes or has in the past 5
years contributed to a multiemployer plan (as defined in Section
3(37) of ERISA). Each of the Group Companies Benefit Plans
maintained in the United States and intended to be "qualified"
within the meaning of Section 401(a) of the U.S. Internal Revenue
Code of 1986, as amended, has received a favorable determination
letter as to such qualification from the U.S. Internal Revenue
Service. None of the Group Companies has any obligations for retiree
health and life benefits under any Group Companies Benefit Plans.
There are no claims or other proceedings pending or to Seller's
Knowledge threatened with respect to the assets of any Group
Companies Benefit Plans (other than routine claims for benefits)
that would give rise to a material liability against any Group
Companies Benefit Plan. The execution of this Agreement or the
transactions contemplated thereby will not (i) entitle any employees
of the Group Companies who are employed in the United States to
severance pay or any increase in severance pay upon any termination
of employment after the date hereof or (ii) accelerate the time of
payment or vesting or result in any payment or funding (through a
grantor trust or otherwise) of compensation or benefits under, or
increase the amount payable or result in any other material
obligation pursuant to, any of the Group Companies Benefit Plans.
8.11.7 The Group Companies have a long term incentive program in place, the
description of which has been provided to Purchaser prior to the
Signing Date. The principles are attached in Disclosure Schedule
8.11.7. No further plans of such nature exist which would bind any
Group Company or would entitle any Directors or Officers or any
employee of the Group Companies to claims against the Group
Companies.
8.11.8 Except as disclosed in Disclosure Schedule 8.11.8 no term in any
employment contract or service agreement provides that the
consummation of this transaction entitles any Key Employee to treat
the change of control as a breach of the contract or entitles them
to any payment or additional notice period or to treat themselves as
redundant or otherwise dismissed or released from any obligation.
8.11.9 Except as disclosed in Disclosure Schedule 8.11.9, there exist no
claims of the employees, Key Employees, former employees or former
managing directors or dependants thereof vis-a-vis the Group
Companies in relation to personal injury which were brought against
the Group Companies during the last six months prior to the Signing
Date and/or which are still pending.
8.12 Permits; Compliance; Public Subsidies
8.12.1 Permits. Except as disclosed in Disclosure Schedule 8.12.1 (i) each
Group Company holds or has filed for all governmental permits,
licenses and other public law approvals (offentlich-rechtliche
Genehmigungen) which are required by the applicable Regulations to
conduct its business as currently conducted in all material
respects, except for Environmental Permits which are exclusively
reflected in Section 12 (the "Permits"). To the Seller's Knowledge
no such Permit has been cancelled, withdrawn or revoked by a
competent authority and no Group Company has received any written
43
notice by any such authority that it intends to cancel, withdraw or
revoke any such Permit.
8.12.2 Compliance with Permits. Except as disclosed in Disclosure Schedule
8.12.2, each Group Company is and, to the extent that on or after
the Closing Date a Third Party could raise a claim, has been in all
material respects in compliance with the Permits in the respective
jurisdictions of the Group Companies. To the Seller's Knowledge, no
Group Company has received any notice from a governmental authority
of any failure to comply with the terms of any Permit except as
disclosed in Disclosure Schedule 8.12.2. The representations
contained in this Section 8.12.2 shall not apply to any laws or
Permits relating to intellectual property rights or Environmental
Matters and Environmental Laws or Tax matters which shall be
exclusively provided for in Sections 8.8, 12.2 and 13.2
respectively.
8.12.3 Compliance with Laws. The Group Companies are and, to the extent
that on or after the Closing Date a Third Party could raise a claim,
have been operated in compliance with all material binding and
mandatory applicable Regulations. The guarantee contained in this
Section 8.12.3 shall not apply to any laws or Permits relating to
intellectual property rights, or Environmental Matters and
Environmental Laws or Tax matters which shall be exclusively
provided for in Sections 8.8, 12.2 and 13.2 respectively. No product
or service manufactured, sold, distributed or delivered by the Group
Companies does or, to the extent that on or after the Closing Date a
Third Party could raise a claim, did contravene or violate any
Regulations. Without limiting the foregoing none of the Group
Companies (including any of their officers, directors or employees)
has, directly or indirectly, used any corporate funds for unlawful
contributions, gifts, entertainment or other unlawful expenses
relating to political activity, made, offered or authorized any
unlawful payment to foreign or domestic government officials or
governmental employees, whether directly or indirectly, or made,
offered or authorized any unlawful bribe, rebate, payoff, influence
payment, kickback or other similar unlawful payment, whether
directly or indirectly, in order to obtain or retain any businesses
for the Group Companies except for any of the foregoing which is no
longer subject to potential claims of violation as a result of the
expiration of the applicable statute of limitations. Each of the
Group Companies has established the internal controls and procedures
intended to ensure the compliance with applicable Regulations.
8.12.4 Subsidies. Except as disclosed in Disclosure Schedule 8.12.4, no
Group Company has received or applied for public grants (Zuschusse),
allowances, aids (including tax benefits) or other subsidies
(Subventionen) during a period of three years prior to the Signing
Date (collectively the "Public Subsidies"). Except as disclosed in
Disclosure Schedule 8.12.4, no competent governmental authority has
notified any Group Company that it is obliged to repay in full or
part any of the Public Subsidies received by it as a result of any
failure by it to comply with the terms and conditions of any such
subsidy.
8.13 Product Liability. Except as disclosed in Disclosure Schedule 8.13,
there are no product or service warranty (including claims due to
late delivery), product liability (Produkthaftung) or similar claims
pending or, to Seller's Knowledge, threatened
44
against any Group Company and no Group Company has received any
pending written order from any competent governmental authority or
other organization to recall any of the products manufactured and
delivered by it.
8.14 Insurance.
8.14.1 Disclosure Schedule 8.14.1 includes a correct and complete list of
all insurance policies maintained relating to the assets, businesses
or operations of the Group Companies. All such policies are in full
force and effect and there are no claims by any Group Company
pending under any of such policies as to which coverage has been
questioned, denied or disputed by the insurer. The Purchaser is
aware of the fact that such policies as far as they have been
provided under RAG Aktiengesellschaft group insurance agreements
will not be continued after the Closing Date.
8.14.2 Disclosure Schedule 0 includes a list as of December 12, 2006 of all
claims that have arisen since 2004 exceeding an amount of EUR
100,000 against any insurance company in the past 3 years prior to
the Signing Date.
8.15 Litigation. Except as disclosed in Disclosure Schedule 8.15 hereto,
there is no claim, action, suit, litigation, arbitration, pending
(nor, to the Seller's Knowledge, is any Third Party pursuing an
inquiry, proceeding or investigation) and to Seller's Knowledge,
none have been threatened, either before court, arbitration tribunal
or any governmental authority (gerichtliche Rechtsstreitigkeiten und
Schiedsverfahren), including administrative proceedings or
investigations (Verwaltungsgerichts- oder Verwaltungsverfahren) or
criminal proceedings or investigations (i) involving an amount in
excess of EUR 200,000 (excluding costs and fees) (ii) or which has
or would have a material negative impact on the business of the
respective Group Company.
8.16 Conduct Of Business. Except as disclosed in Disclosure Schedule 8.16
and except for any transaction contemplated by or any facts or
events disclosed in this Agreement since December 31, 2005 until the
Signing Date,
(i) the Company did not pay or declare any dividend or made a
hidden distribution to the Seller and / or its Affiliates
(excluding the Group Companies) (the "Seller's Group)"; and
no Group Company
(ii) unless agreed by Purchaser, materially changed its accounting
(including valuation and consolidation) policies or
procedures, except as required due to a concurrent change in
generally accepted accounting principles;
(iii) made any borrowings (Darlehensaufnahme) other than from the
Seller's Group or in excess of EUR 5,000,000;
(iv) issued any guarantees for borrowed money other than borrowing
from the Seller's Group or exceeding EUR 5,000,000;
45
(v) sold any shareholding or business;
(vi) made an investment in any other undertaking other than a Group
Company;
(vii) increased or committed to increase or otherwise promised to
increase the remuneration, bonuses or other incentives payable
(in each case in cash) to any Key Employee or established any
new or increased benefits under or otherwise amended and
existing Group Companies Benefit Plan;
(viii) entered into any transaction outside the Ordinary Course;
(ix) suffered any damage, destruction or other casualty loss
(whether or not covered by insurance) in an amount of EUR
1,000,000 or more or which otherwise adversely affects the
business or assets of the Group Companies as a whole;
(x) has been subject to or threatened by any strikes, walkouts,
work stoppages, slow-downs or lockouts, or had any material
change in its relations with third parties including its
employees, customers, suppliers or any governmental
authorities or other public bodies;
(xi) increased or reduced its share capital or issued, sold,
transferred or agreed to issue, sell or transfer any Interest
or other securities, or issued, granted or sold, or agreed to
issue, grant or sell, any options, rights or warrants with
respect thereto;
(xii) made or agreed to make, any capital expenditures with respect
to fixed assets in excess of an aggregate amount of EUR
30,000,000 (the Group Companies made, however, all capital
expenditures on fixed assets at least in a manner and at a
time consistent with its prior practice); or
(xiii) made any material change in its research and development,
manufacturing, purchasing, selling, pricing, marketing or
personnel practices.
8.17 Finders' Fees. No Group Company has any obligation or liability to
pay any fees or commissions to any broker, finder or agent with
respect to this Agreement and the consummation of the transactions
contemplated hereby.
8.18 Private Placement. The Seller (a) is an "accredited investor" as
defined in Rule 501(a) of Regulation D promulgated under the
Securities Act of 1933, as amended (the "Securities Act"), (b) is
able to bear the economic risk of losing its entire investment in
the Consideration Shares, and (c) has knowledge and experience in
financial and business matters such that it is capable of evaluating
the risks and merits of this investment. The Seller acknowledges
that it is acquiring the Consideration Shares for its own account,
and not with a view to any distribution, resale, subdivision, or
fractionalization thereof in violation of the Securities Act or any
other applicable securities law, and the Seller has no present plans
to enter into any contract,
46
undertaking, agreement or arrangement for any such distribution,
resale, subdivision, or fractionalization of the Consideration
Shares. The Seller acknowledges and agrees that, based in part upon
its guarantees contained herein and in reliance upon applicable
exemptions, the issuance of the Consideration Shares will not as of
the Closing Date be registered under the Securities Act or the
securities laws of any jurisdiction and that accordingly, the
Consideration Shares may not be offered for sale, sold, or otherwise
transferred in whole or in part, except in compliance with all
applicable laws, including securities laws.
The certificate(s) representing the Consideration Shares shall bear
a legend stating in substance:
THE OFFERING AND SALE OF THE SECURITIES REPRESENTED BY THIS
CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF
1933, AS AMENDED, OR THE SECURITIES LAWS OF ANY STATE. ANY TRANSFER
OF SUCH SECURITIES WILL BE INVALID UNLESS AND UNTIL REGISTERED UNDER
SAID ACT OR SUCH TRANSFER IS EXEMPT FROM REGISTRATION. THE
SECURITIES REPRESENTED BY THIS CERTIFICATE ARE ALSO SUBJECT TO
LIMITATIONS ON TRANSFER SET FORTH IN THE SHARE PURCHASE AGREEMENT
DATED DECEMBER 16, 2006, A COPY OF WHICH CAN BE OBTAINED FROM THE
ISSUER.
Any subsequent certificates issued in respect of the Consideration
Shares shall bear a similar legend until removed as set forth below
or otherwise removed in accordance with law. Upon request of a
holder of Consideration Shares in connection with a public sale of
such securities in compliance with applicable Regulations (including
the Securities Act) or a sale permitted pursuant to Rule 144(k)
promulgated under the Securities Act, the Purchaser shall remove the
first sentence of the legend set forth above from the certificates
evidencing such securities or issue to such holder new certificates
therefore free of such legend. Upon any transfer of Consideration
Shares in compliance with Section 15.4(ii) hereof, the Purchaser
shall remove the second sentence of the legend set forth above from
this certificate evidencing such securities or issue to such
transferee new certificates therefore free of such legend.
8.19 Accuracy of Information. The Seller has not failed to disclose to
the Purchaser any material facts relating to the Group Companies
which are reasonably likely to have prevented a prudent business man
from entering into this Agreement as notarized.
8.20 Seller's Knowledge. If and to the extent this Agreement makes
reference to "Seller's Knowledge" Seller shall be deemed to have
knowledge of any facts or circumstances which the present members of
the management board (Vorstand) of the Seller, the present members
of the management board of the Company and the persons listed in
Schedule 8.20 actually have as of the Signing Date after reasonable
inquiries or do not have due to gross negligence (xxxx fahrlassige
Unkenntnis).
8.21 Materiality. For the purposes of calculating any Breach or Losses
(as defined below) the qualification to materiality as contained in
Section 8.12.3 and Section 12.2 shall be disregarded.
47
9. Remedies for Breach of Guarantees
9.1 Breaches. In the event that any of the statements made in Section 8
is incorrect (a "Breach"), the Seller shall put the Purchaser or at
the Purchaser's own and free discretion any of the Group Companies
into the position that it would have been in if the Breach had not
occurred (Naturalrestitution). If and to the extent the Seller has
not cured the Breach within a reasonable time period, but no later
than two months after receipt of a Claim Notice (as defined
hereinafter) from the Purchaser, or such restitution is impossible,
or the Seller finally refuses (verweigert ernsthaft und endgultig)
to make restitution in kind, the Seller shall pay to the Purchaser
the amount of any Losses which the Purchaser or any of the Group
Companies has incurred or suffered as a result of the Breach. "Loss"
or "Losses" are all damages according to Section 249 et seqq. BGB,
excluding - except where specifically set forth otherwise in this
Agreement - with respect to all claims other than Third Party
Claims, however, consequential or indirect damages (Folgeschaden,
mittelbare Schaden) and loss of profits (entgangener Gewinn). Except
where specifically set forth otherwise in this Agreement, a Loss or
Losses relating to all claims the Purchaser may have under this
Agreement (including Third Party Claims) shall in no event encompass
income taxes payable as a result of any indemnity or other payment
or other compensation, loss of prospective business, loss of or
damage to reputation, frustrated expenses (vergebliche Aufwendungen)
within the meaning of Section 284 BGB, internal administration and
overhead costs or any losses based on the argument that the purchase
price for the Shares was calculated on the basis of incorrect
assumptions or information. Any Losses shall be computed net of any
related present or future advantages and benefits (including avoided
losses, tax benefits and savings directly related to the relevant
matter (Vorteilsausgleich)).
9.2 Notification, Investigation and Cooperation. The Purchaser shall
notify the Seller in writing of any Breach within twenty Business
Days after it becomes aware of the facts believed to constitute a
Breach, stating in reasonable detail the nature thereof and the
estimated amount involved (the "Claim Notice"); provided, however,
that the failure or delay of the Purchaser to provide any such
written notice shall not limit the Purchaser's right to recover
Losses except to the extent such failure or delay is prejudicial to
the defense of such claim. The Purchaser shall give the Seller such
information and assistance, as the Seller or its advisors request
for the purpose of investigating the matter or circumstance giving
rise to such Breach. The Purchaser shall take and shall cause the
respective Group Company to take all steps which the Seller requests
from the Purchaser for the purpose of any remedial action. If and to
the extent a claim under Section 8 exists, all reasonable costs and
expenses incurred by the Purchaser shall be borne by the Seller; if
and to the extent a claim under Section 8 does not exist, all costs
and expenses incurred by the Seller shall be borne by the Purchaser.
9.3 Third Party Claims. If the Purchaser discovers that any Third Party
including any governmental authority takes or threatens by
notification in writing to take any action which may give rise to a
claim under Section 8 (the "Third Party Claim"), the
48
Purchaser shall notify the Seller within 20 Business Days after it
becomes aware thereof about any such Third Party Claim; provided,
however, that the failure or delay of the Purchaser to provide any
such written notice shall not limit the Purchaser's right to recover
Losses except if such failure or delay is prejudicial to the defense
of such Third Party Claim.
9.3.1 Seller shall have the right to defend and control the defense of the
Third Party Claim with counsel of its own choice; in such case the
Purchaser shall have the right to be represented by counsel of its
choice and to attend the defense of the Third Party Claim for which
it seeks indemnity from the Seller at its own expense. The Purchaser
shall not, and shall cause the Group Companies not to, compromise,
dispose of or settle any Third Party Claim or assume any liability
in connection with any Third Party Claim without the Seller's prior
written consent (which may not unreasonably be withheld). No action
by the Seller or its representatives in connection with the defense
shall be construed as an acknowledgment (whether express or implied)
of the Purchaser's Claim (as defined below) or of any facts
underlying or related to such claim. If the Seller elects to defend
and control the defense of the Third Party Claim the Seller shall
indemnify the Purchaser, or at Purchaser's discretion, the Group
Companies accordingly pursuant to this Section 9 for the Loss
suffered by the Group Companies and shall hold harmless the
Purchaser or, at Purchaser's discretion, the Group Companies from
any Third Party Claim. The Seller shall not compromise, dispose of
or settle any Third Party Claim without Purchaser's prior written
consent (which may not unreasonably be withheld), if such
compromise, disposition or settlement would provide any remedy
against Purchaser or Purchaser's Affiliates other than the payment
of monetary damages.
9.3.2 If Seller does not assume the defense of such Third Party Claim,
Purchaser may assume such defense with counsel of its own choice; in
such case the Seller may elect to participate in the defense of any
such Third Party Claim for which indemnity is sought with counsel of
its choice at its own expense. The Purchaser shall not, and shall
cause the Group Companies not to, compromise, dispose of or settle
any Third Party Claim or assume any liability in connection with any
Third Party Claim without the Seller's prior written consent (which
may not unreasonably be withheld).
9.3.3 In the event the Seller elects to assume or participate in the
defense of a Third Party Claim, the Purchaser shall, and shall cause
Group Companies to fully cooperate with the Seller in the defense of
any Third Party Claim. The Purchaser in particular shall provide,
and shall cause the Group Companies to provide, the Seller with such
information and assistance as the Seller or its advisors may
reasonably request to investigate or to defend the Third Party
Claim.
9.3.4 If and to the extent a claim under Section 8 exists and Purchaser
assumes the defense thereof as provided above, all reasonable costs
and expenses incurred by the Purchaser in such defense shall be
borne by the Seller.
9.4 Exclusion of Liability. The Seller shall not be liable for any
Breach, and the Purchaser shall not be entitled to bring any claim
under Section 8 against the Seller (individually a "Claim" or
collectively "Claims"), if and to the extent that:
49
9.4.1 the underlying facts, circumstances, and events forming the basis of
a Claim (anspruchsbegrundende Umstande xxxx(beta) ss. 199 Abs. 1 Nr.
2 BGB) have been specifically disclosed in Section 8 and its
Disclosure Schedules or in the Exhibits to this Agreement, or
appropriately cross referenced in the Disclosure Schedules or
Exhibits. Section 442 BGB and Section 377 HGB shall be excluded with
respect to any facts not so disclosed;
9.4.2 the amount of the Claim has been reimbursed from a Third Party or
under any insurance policy. Provided, however, the Purchaser and the
Seller shall discuss in good faith whether it is commercially
reasonable to seek reimbursement under any insurance policy of the
Purchaser or any Group Company taking into account the compensation
for Losses by Seller and the eventual increase in insurance premiums
caused by such reimbursement; or
9.4.3 the Purchaser or any of its Affiliates including Purchaser's
Guarantor and, after the Closing Date, the Group Companies (but
excluding HT or any other Affiliates of HT, but including for the
avoidance of doubt Purchaser's Guarantor), or after the Closing any
of the Group Companies, has caused (verursacht oder mitverursacht)
such Claim or failed to mitigate damages pursuant to Section 254
BGB; or
9.4.4 the matter to which the Claim relates has been taken into account in
the calculation of the Closing Date Net Cash.
9.5 De Minimis and Threshold. The Seller shall only be liable for Claims
if (i) the actual individual Claim exceeds EUR 150,000 (in words:
Euro one hundred fifty thousand) (the "De Minimis Amount"), and (ii)
the aggregate amount with respect to all actual Claims (excluding
claims which do not exceed the De Minimis Amount in the individual
case) exceeds EUR 3,000,000 (in words: Euro three million) (the
"Threshold") in which case the Seller shall be liable for the entire
amount (Freigrenze). Serial or related claims shall be deemed one
individual Claim.
9.6 Maximum Liability. Subject to claims under the Tax indemnity
pursuant to Section 13 below which shall be uncapped and shall not
be applied against the liability cap stated in this Section 9.6, the
maximum liability of the Seller for all claims Purchaser may have
under this Agreement shall be limited to USD 250,000,000 (in words:
US Dollars two hundred fifty million) except for Claims resulting
from a Breach of Seller pursuant to Section 8.1 and 8.2 for which
the maximum liability of the Seller (including all other Claims)
shall be limited to the Purchase Price to the extent it has been
received by the Seller.
9.7 Limitation Period. If not otherwise set forth in this Agreement, all
Claims shall be time-barred (verjahren) after the lapse of 24 months
from and including the Closing Date except for Claims pursuant to
Section 8.1 and 8.5 which shall be time-barred 5 years after the
Closing Date and Claims pursuant to Section 8.12.3 which shall be
time-barred 3 years after the Closing Date.
50
9.8 Suspension of Limitation. The limitation period for each individual
Claim shall only be suspended (gehemmt) in accordance with Section
209 BGB by a timely notification of the Seller for such individual
claim pursuant to Section 9.2, provided that the Purchaser initiates
a court proceeding within three months after receipt of the
notification by the Seller. Section 203 BGB shall not apply.
9.9 No further Rights or other Guarantees. The Parties agree that the
rights and remedies which the Purchaser may have against the Seller
for a Breach or any other breach of any obligation under this
Agreement shall be exclusively governed by this Agreement. Except
for claims for specific performance (primare Erfullungspflichten),
all rights, claims and remedies of any legal nature which the
Parties may otherwise have against each other in connection with
this Agreement or the transaction contemplated by this Agreement
shall be excluded to the extent such exclusion is possible under
applicable mandatory laws, provided, however, that Purchaser may
seek the monetary compensation of Losses (including in this case
consequential damages, indirect damages and lost profits) in case
the Seller has not complied with its obligation (i) to transfer the
Shares and hereby breached its obligations in Sections 7.1.1(x)
through 7.1.1(xv), 7.1.3, 7.2.1 second last sentence, 7.2.3 or
7.2.4, (ii) to comply with the covenants set forth in Section 15.1,
15.4, 16, 17 or 18.1. The right to withdraw (zurucktreten) from, or
otherwise terminate, this Agreement or to require the winding up of
the transactions contemplated by this Agreement, any claims for
breach of pre-contractual obligations (culpa in contrahendo)
including claims under Sections 241 para. (2), 311 para. (2) and
para (3) BGB, any claims for breach of contract (Schadensersatz
wegen Pflichtverletzung) including claims under Sections 280, 282
BGB, any claims based on frustration of contract (Storung der
Geschaftsgrundlage) including claims under Section 313 BGB, any
claims of the Purchaser for defects of the Shares or the business of
the Company under Sections 437 to 441 BGB, and any claims under tort
including claims under Sections 823 et seq. BGB, except for claims
for wilful deceit (arglistige Tauschung) or other intentional
breaches of contract (vorsatzliche Vertragsverletzungen), shall be
excluded. Subject to the provisions of Section 8 the Purchaser
agrees to acquire the Company, the Subsidiaries and their business
in the condition they are on the Signing Date and on the Closing
Date, respectively, without reliance upon any expressed or implied
representations, warranties or guarantees of any nature made by or
on behalf of or imputed to the Seller except for the independent
guarantees set out in Section 8.
Without limiting the generality of the foregoing, the Purchaser
acknowledges that the Seller gives no guarantee, representation or
warranty with respect to (i) any projections, estimates or budgets
delivered or made available to the Purchaser of future revenues,
future results of operations (or any component thereof) or the
future business and operations of the Group Companies, (ii) any
other information or documents made available to the Purchaser or
its counsel, accountants or advisors with respect to the Group
Companies, except as expressly set forth in this Agreement.
9.10 No third party Rights. No provision of this Agreement constitutes a
contract for the benefit of a third party within the meaning of
Section 328 BGB or otherwise (kein Vertrag zugunsten Dritter oder
mit Schutzwirkung zugunsten Dritter), irrespective of
51
whether any payment under this Agreement is made to the Purchaser,
the Company or a Subsidiary.
9.11 Threshold Test; Payments. In case the Purchaser asserts a Claim in a
currency other than Euros, the procedures set forth in Section 4.1.3
shall be applied (including, without limitation, with respect to the
calculation of their amounts in relation to the De Minimis Amount,
the Threshold or the maximum liability under Section 9.6) as per the
date the Purchaser submits the Claim Notice or, as the case may be,
the notification of a Third Party Claim. Any payments by the Seller
under this Agreement shall be made in Euros unless the Loss has
occurred in another currency in which case the payment shall be made
in this currency. Any payments made by the Seller to Purchaser
hereunder including pursuant to Sections 7.1.8 and 10.2 shall
constitute a reduction of the Purchase Price. Any payments received
by the Seller according to Section 11 or 13 (e.g. Tax Refunds) shall
constitute an increase of the Purchase Price paid to the Seller.
10. Indemnities
10.1 Indemnities for Legal Proceedings. The Seller shall indemnify and
hold harmless the Purchaser or, at the Purchaser's own and free
discretion, any Group Company from and against all Losses (as
defined in Section 10.5 below) incurred in connection with any
claim, action, suit, litigation, arbitration, inquiry, proceeding or
investigation existing on or arising prior to the Closing Date, set
out in Disclosure Schedule 8.15.
10.2 Agency Agreements Indemnity. The Seller shall indemnify and hold
harmless the Purchaser, Purchaser's Guarantor or, at the Purchaser's
own and free discretion, any of the Group Companies from and against
all Losses (as defined below in Section 10.5) incurred in connection
with unlawful payments made (or offers, promises, authorizations or
agreements to make), directly or indirectly, prior to the Closing
Date to or by (i) persons engaged in the marketing, distribution or
sale of products of the Group Companies (by way of "special
commission" or otherwise) or (ii) any official or employee of a
government (including officials and employees of any department,
agency or instrumentality thereof, and officials and employees of
companies that are government owned or controlled), political party,
or international organization, or any candidate for political
office, or similar person. Such Losses shall include those relating
to matters disclosed in the Deloitte Report subject to Section 10.6.
For the avoidance of doubt, such Losses shall (i) include, without
limitation, (a) payments, fines and charges to be paid to
governmental bodies or courts or losses suffered as a consequence of
any order or decision in connection with such unlawful payments, (b)
losses in connection with remedies of customers or third parties,
(c) damage claims asserted in relation to such unlawful payments in
connection with a breach of guarantee or other provisions of
agreements by which Interests in former Affiliates were sold (in
particular with respect to the disposal of Interests in DBT
Maschinenfabrik Xxxxxx GmbH and DBT Mineral Processing GmbH), (d)
consequential damages, indirect damages and lost profits (with the
exception of (ii) of this sentence), (e) payments required to be
made in connection with the termination of any employee or agent of
any Group Company, (f) fines, fees, costs and expenses
52
resulting from or related to the restatement of any financial
statements of any Group Company arising from the actions referred to
above, (g) any costs, fines, fees or expenses (including without
limitation legal and indemnification fees and expenses), whether
criminal or civil, by any authorities arising from or related to
such unlawful payments and (h) any and all attorneys fees related to
the foregoing, (ii) exclude any damages suffered from the negative
impact of such payments referred to in sentence 1 of this Section
10.2 on reputation or the development of the share price of the
Purchaser, Purchaser's Guarantor or any of their Affiliates.
10.3 Indemnity for Product Liability Claims. The Seller shall indemnify
and hold harmless the Purchaser or, at the Purchaser's own and free
discretion, any Group Company from and against all Losses (as
defined in Section 10.5 below) incurred in connection with warranty
claims, product liability claims, claims for late delivery or other
liabilities arising under contracts by which products of the Group
Companies were distributed, delivered or sold prior to the Closing
Date or with respect to products sold which were assembled and ready
for shipment prior to the Closing Date.
10.4 Indemnity for disposed-of Interest. The Seller shall indemnify and
hold harmless the Purchaser or, at the Purchaser's own and free
discretion, any Group Company from and against all Losses (as
defined in Section 10.5 below) incurred in connection with any
claims or other liabilities (including, without limitation, claims
due to breach of guarantees and indemnification claims) arising out
of or in connection with agreements on the sale or other disposal of
Interests listed in Exhibit 10.4.
10.5 Limitations. Claims under this Section 10 shall be time-barred 7
years after the Closing Date except for Claims under Section 10.6
which shall be time-barred on June 30, 2011, and under Section 10.7
which shall be time-barred 24 months after the Closing Date. Section
9 shall apply with the exception of Sections 9.4.1, 9.4.2 second
sentence, 9.5 and 9.7, provided that notification pursuant to
Section 9.2 or 9.3 shall not be required with respect to
circumstances disclosed in the Disclosure Schedules (which
disclosures do not limit the Purchaser's rights under this Section
10). For the purposes of this Section 10, "Loss" or "Losses" shall
include consequential or indirect damages (Folgeschaden, mittelbare
Schaden) and loss of profits (entgangener Gewinn). The limitations
pursuant to Section 9.1, second last and last sentence, shall apply
except for Losses to be indemnified under Section 10.2.
10.6 Site Indemnity; CBA Indemnity. The Seller shall indemnify and hold
harmless the Purchaser or, at the Purchaser's own and free
discretion, the Company or Deutsche Bergbau Service GmbH ("DBS")
from and against all Losses (as defined in Section 10.5 above) up to
a maximum amount of EUR 10 million
(i) incurred due to compliance with the obligation to operate the
sites in Lunen, Xxxx and Wuppertal in accordance with Art. 4
first sentence of the Collective Bargaining Agreement (as
defined and referred to in Section 15.2 hereof) to the extent
such Losses had not been incurred absent such compliance, or
(ii) in connection with an integration of the Xxxx operation
into the Lunen site, provided that the determination whether
and to what
53
extent such Losses have been incurred shall be made by the
Supervisory Board of the Company with binding effect for the
Parties hereto, or
(ii) resulting from a CBA Conflict. A "CBA Conflict" shall exist if
and to the extent the Purchaser, the Company or DBS is
prohibited, in whole or in part, from utilizing or receiving
the full benefit of the rules set out in, and using the
flexibility allowed for under, the Collective Bargaining
Agreement referred to in Section 15.2 because of the
applicability or application of any other collective
bargaining agreement, works agreement or similar agreement
which is applicable individually to the Company or DBS (i.e.,
with the exception of Flachen- oder Manteltarifvertrage or
similar agreements) (e.g., if upon exercise of the special
termination right under the Collective Bargaining Agreement
referred to in Section 15.2 workforce reductions or site
closures in the Company or DBS were restricted because of the
application of the existing "Zukunftsvereinbarung" for the
Company dated April 20, 2005 entered into between the same
parties that have concluded the Collective Bargaining
Agreement).
10.7 Non Disclosure/Access to Information. Other than as required by
applicable Regulation (including court order), between the Signing
Date and the Closing Date, the Purchaser and Purchaser's Guarantor
agree that they will not disclose any information contained in the
Deloitte Report to any third party (other than any officer,
director, manager or employee thereof or any agent thereof subject
to duties of confidentiality), including government authorities and
regulatory bodies, without the Seller's prior written consent which
shall not unreasonably be withheld; provided Purchaser shall notify
Seller of any such Regulation or court order with sufficient time to
allow Seller to object to the production of the information. The
Purchaser and the Seller agree that the Purchaser's failure to
comply with this provision shall release Seller from any obligation
to indemnify Purchaser for any Third Party Claim arising from the
disclosed information, regardless whether such obligation arises
from Section 10 of this Agreement or any other provision of this
Agreement. Following the Closing Date, the Purchaser shall consult
with and provide summaries to the Seller of communications,
correspondence and meetings, including all oral communications,
teleconferences or video-conferences and in-person meetings, with
any federal, state or local criminal, civil or regulatory agency
that relate to any inquiry, investigation, claim, or proceeding
regarding the matters of the Deloitte Report, and Purchaser shall
consult with Seller as to the advisability of allowing one (1)
representative of the Seller to participate in (but not control)
such communications and/or meetings. Purchaser and Seller agree to
cooperate in good faith regarding any monetary settlement of a Third
Party Claim hereunder, provided any such failure to agree on any
such settlement shall not limit or mitigate Purchaser's rights under
this Agreement (including Section 10.2). With respect to the
preceding two sentences such obligations shall apply mutatis
mutandis for the time period between the Signing Date and the
Closing Date to the Seller.
10.8 Indemnity Unsecured Payment of Lunen Purchase Price. The Seller
shall indemnify and hold harmless the Purchaser or, at the
Purchaser's own and free discretion, the Company, from and against
all Losses (as defined in Section 10.5 above) arising out
54
of the Company paying the purchase price under the real estate
purchase agreement pursuant to Section 7.1.1(xv) without the
conditions set out in Part C, section II.2. lit. a) - c) of Exhibit
7.1.1(xv)(a) being fulfilled and the Company neither receiving title
to the Lunen property in accordance with the terms of the real
estate purchase agreement nor being refunded the purchase price paid
under the real estate purchase agreement pursuant to Section
7.1.1(xv).
11. Purchaser's Guarantees; Purchaser's Guarantor
11.1 Purchasers' Representations. Purchaser and Purchaser's Guarantor
hereby guarantee (garantiert) by way of an independent guarantee
(verschuldensunabhangiges Garantieversprechen) pursuant to Section
311 para. (1) BGB that the following statements are true and correct
on the Signing Date and the Closing Date.
11.1.1 Status of Purchaser. Purchaser and Purchaser's Guarantor are duly
incorporated and validly existing under the laws of their
incorporation. The statements made in the Purchaser's Confirmation
are true and correct. No insolvency or similar proceedings have
been, or to the Purchaser's best knowledge been threatened to be,
opened over the assets of the Purchaser or the Purchaser's
Guarantor. Neither the Purchaser nor the Purchaser's Guarantor are
either illiquid (zahlungsunfahig) or over-indebted (uberschuldet).
This Agreement constitutes legal, valid and binding obligations of
the Purchaser and the Purchaser's Guarantor enforceable in
accordance with its terms.
11.1.2 Absence of Violations. Except for the merger control clearances
pursuant to Sections 7.1.1(i) and 7.1.1(ii), the execution and
delivery of and the performance by the Purchaser and the Purchaser's
Guarantor of its respective obligations under this Agreement (i) is
within the Purchaser's and the Purchaser's Guarantors, respectively,
corporate powers, (ii) will not result in a breach of any provision
of its respective articles of association or equivalent
constitutional document, (iii) will not result in a breach of, or
constitute a default under, any instrument to which the Purchaser or
the Purchaser's Guarantor, respectively, is a party or by which the
Purchaser or the Purchaser's Guarantor, respectively, is bound and
which is material in the context of the transactions contemplated by
this Agreement, (iv) does not require any approval by any
governmental authority or any corporate or shareholder actions and
(v) does not result in a breach of any Regulation by which the
Purchaser or the Purchaser's Guarantor, respectively, is bound and
which is material in the context of the transactions contemplated by
this Agreement. Purchaser's Guarantor is not in violation of any of
the provisions of such certificate of its incorporation or by-laws.
11.1.3 Execution and Delivery; Enforceability. Each of Purchaser and
Purchaser's Guarantor has duly executed and delivered this Agreement
and, assuming due authorization, execution and delivery of this
Agreement by the Company, this Agreement constitutes its legal,
valid and binding obligation, enforceable against it in accordance
with its terms, except that enforcement hereof may be subject to or
limited by (i) bankruptcy, insolvency or other similar laws, now or
hereafter in effect, affecting its creditors' rights generally and
(ii) the effect of general principles of equity (regardless of
whether enforceability is considered in a proceeding at law or in
equity).
55
11.1.4 SEC Documents; Undisclosed Liabilities.
Purchaser's Guarantor has filed all reports, schedules, forms,
statements and other documents required to be filed by Purchaser's
Guarantor with the United States Securities and Exchange Commission
(the "SEC") since January 1, 2004 pursuant to Sections 13(a) and
15(d) of the Securities Exchange Act of 1934, as amended (the
"Exchange Act") (such documents and any other documents filed by
Purchaser's Guarantor with the SEC, as have been amended since the
time of their filing, the "SEC Documents"). As of its respective
date, or if amended, as of the date of the last such amendment, each
SEC Document, including the consolidated financial statements of the
Purchaser's Guarantor and its consolidated subsidiaries (including,
in each case, any related notes thereto) set forth therein (i)
complied in all material respects with the requirements of the
Exchange Act or the Securities Act as the case may be, and the rules
and regulations of the SEC promulgated thereunder applicable to such
SEC Document, and (ii) did not contain any untrue statement of a
material fact or omit to state a material fact required to be stated
therein or necessary in order to make the statements therein, in
light of the circumstances under which they were made, not
misleading.
11.1.5 Financing Commitments. The Purchaser has sufficient immediately
available funds or binding (equity and/or debt) financing
commitments, subject to customary conditions in such commitments, to
enable it to pay the Purchase Price. True and complete copies of all
such financing commitments have been delivered to the Seller on the
Signing Date.
11.1.6 Purchase for Investment and Continuation of Business. Purchaser is
purchasing the sold Shares in its own name and for investment for
its own account, as per the Signing Date until the Forward Purchase
Closing Date, and not with a view to any sale or distribution
thereof or any portion thereof, and Purchaser currently intends to
continue the operation of the business of the Group Companies in the
future, to the extent commercially practicable and reasonable.
11.1.7 Private Placement. The Purchaser (a) is able to bear the economic
risk of losing its entire investment in the Shares, and (b) has
knowledge and experience in financial and business matters such that
it is capable of evaluating the risks and merits of this investment.
The Purchaser acknowledges that it is acquiring the Shares for its
own account, and not with a view to any distribution, resale,
subdivision, or fractionalization thereof in violation of the
Securities Act or any other applicable securities law, and the
Purchaser has no present plans to enter into any contract,
undertaking, agreement or arrangement for any such distribution,
resale, subdivision, or fractionalization of the Shares. The
Purchaser acknowledges and agrees that, based in part upon its
guarantees contained herein and in reliance upon applicable
exemptions, the sale of the Shares will not as of the Closing Date
be registered under the Securities Act or the securities laws of any
jurisdiction and that accordingly, the Shares may not be offered for
sale, sold, or otherwise transferred in whole or in part, except in
compliance with all applicable laws, including securities laws.
56
11.2 Remedies. In the event of any breach or non-fulfillment of any
guarantee set forth in Sections 11.1.1 through Section 11.1.7,
Purchaser shall put the Seller into the position that the Seller
would have been in if the breach had not occurred or the guarantee
had been fulfilled (Naturalrestitution). If and to the extent the
Purchaser has not cured the breach or has not fulfilled the
guarantee within a period of two months after receipt of a request
from the Seller to do so, the Purchaser shall pay to the Seller the
amount of all Losses which the Seller have incurred or suffered as a
result of the breach or non-fulfillment of the guarantee by the
Purchaser. Claims shall be time barred after the fifth anniversary
of the Closing Date.
11.3 Purchaser's Guarantor. Purchaser's Guarantor herewith irrevocably
and unconditionally guarantees within the meaning of a guarantee
pursuant to Section 311 para. (1) BGB that Purchaser will fulfill
its obligations under this Agreement and under the articles of
association of the Purchaser (the "Purchaser's Obligations") and
that Bucyrus Holdings GmbH will fulfill its obligations under the
Forward Purchase Agreement and the Shareholders' Agreement. The
guarantee set forth in this Section 11.3 is a continuing guarantee
and shall remain in force and effect until the Purchaser has
performed and discharged all of the Purchaser's Obligations and
Bucyrus Holdings GmbH has performed and discharged all of its
obligations under the Forward Purchase Agreement and the
Shareholders' Agreement. Such guarantee shall be for the benefit of
HT within the meaning of Section 328 BGB (echter Vertrag zugunsten
Dritter) to the extent it relates to the obligations of Bucyrus
Holdings GmbH under the Forward Purchase Agreement and the
Shareholders' Agreement and to the obligations of the Purchaser
under the articles of association of the Purchaser.
12. Environmental Indemnifications
12.1 Definitions. The following terms as used in this Section 12 have the
following meaning:
"Enforceable Administrative Notice": An administrative notice is
considered to be enforceable in the event that (i) no objection
against it has been filed, or (ii) any objection which has been
filed against it will be without a suspensive effect. The Purchaser
may decide not to file an objection after it has obtained the prior
written consent by the Seller which may not be unreasonably
withheld.
"Environmental Contamination" means any pollutants, contaminants or
other Hazardous Materials (as defined below) that are existing in
the soil air, on or in the soil, sediments, groundwater, surface
water or structures, provided that the hazardous substances
contained in structures are respirable and may be harmful to human
health, on the Closing Date and which are regulated by, or may
result in liability under, any Environmental Law (as defined below)
applicable at the location of the relevant property.
"Environmental Law(s)" means - irrespective of any transitional
period - any laws, ordinances, regulations, European directives,
common laws where applicable, orders, administrative notices,
decisions, judgments, binding administrative provisions, agreements,
binding land-use planning or zoning regulations or other binding
57
governmental regulations relating to or imposing liability or duties
for the protection of the environment, including, but not limited
to, human beings and the human health and safety, the occupational
health and safety, the preservation or reclamation of natural
resources, of natural resources damages, the management (including,
but not limited to, handling, generation, manufacturing,
distribution, collection, transportation, storage, disposal,
arrangement of disposal, cleanup, treatment or release) of Hazardous
Materials and waste, in each case to the extent applicable to the
Group Companies as in effect in the relevant jurisdiction on the
Closing Date, or - though promulgated after the Closing Date - to
the extent not imposing new or more onerous obligations.
"Environmental Loss" means in the case of a claim pursuant to
Section 12.2 any Loss as defined in Section 9.1, and in the case of
a claim pursuant to Section 12.3 any Loss as defined in Section
10.5, in each case arising from any Environmental Matter (as defined
below).
"Environmental Matter(s)" means any matter relating to Environmental
Contamination caused by any of the Group Companies before or on the
Closing Date, or to an Environmental Contamination which is, on the
Closing Date, existing on or emanating from or to any property
owned, leased or operated by the Group Companies on the Closing Date
or having been owned, leased, possessed or operated before the
Closing Date, or any non-compliance arising under applicable
Environmental Laws existing on the Closing Date.
"Environmental Permit" means any governmental permit, authorization
or license which is required by the Group Companies for their
operations as currently conducted under any applicable Environmental
Law.
"Hazardous Materials" means dangerous substances as defined in
Article 2 paragraph (1) and (2) of the European Community Council
Directive 67 / 548 EEC, as amended until the Closing Date or any
substance which is (i) defined as a hazardous substance, hazardous
material, hazardous waste, pollutant or contaminant under any
applicable Environmental Laws, (ii) a petroleum hydrocarbon,
including crude oil or any fraction thereof, (iii) hazardous, toxic,
corrosive, flammable, explosive, infectious, radioactive or
carcinogenic, or (iv) regulated pursuant to any Environmental Laws.
"Release" means any spilling, leaking, pumping, pouring, emitting,
emptying, discharging, injection, escaping, leaching, dumping, or
disposing into the environment of any Hazardous Materials.
"Specific Environmental Matter" means any identified Environmental
Matter for which reasonable indications exist that legal
requirements under Environmental Laws could occur, such as, but not
limited to the exceedance of relevant legal limit values.
12.2 Environmental Guarantees. Except as disclosed in Disclosure Schedule
12.2 the Seller guarantees in the form of an independent guarantee
(as further set forth in the introduction to Section 8) that,
58
12.2.1 The Businesses of the Group Companies on the sites owned, leased,
possessed or operated by the Group Companies on the Closing Date are
and have been conducted in compliance with material Environmental
Law.
12.2.2 The Group Companies have no material liability related to or arising
from any employees or any other person's exposure to Hazardous
Materials, including, without limitation, asbestos and manganese or
claims related to silicosis, and the Group Companies are not aware
of any threatened claims related to such exposure or claims.
12.2.3 To the Seller's Knowledge there has not been and is no Release of
any Hazardous Materials existing on, beneath or from the surface,
subsurface or groundwater associated with any real property
currently or formerly owned, leased or operated by any Group Company
whereby any Group Company has or could have liability arising under
Environmental Laws;
12.2.4 No Group Company has received any written notice or order from any
governmental authority, and no administrative or governmental
action, suit, investigation or proceeding is pending or has been
asserted in writing against any Group Company which alleges a
material violation of any Environmental Law; and
12.2.5 Except as disclosed in Disclosure Schedule 12.2.5 each Group Company
has obtained all Environmental Permits required for its operations
as presently conducted and, to the extent that on or after the
Closing Date a Third Party could raise a claim, is and has been in
all material respects in compliance with the terms of such permits
and all administrative contracts entered into with governmental
authorities as of the Closing Date, and none of the Group Companies
has received any written notice from any competent governmental
authority that such authority intends to cancel or revoke or alter
any Environmental Permit.
12.2.6 Section 8.19 and 8.21 shall apply to Environmental Matters,
Environmental Law and Environmental Permits and the guarantees
contained in this Section 12.2 mutatis mutandis.
12.2.7 In the event that any of the statements made in Section 12.2 is
incorrect, Section 9.1 shall apply mutatis mutandis.
12.3 Environmental Indemnity. Subject to the provisions contained in this
Section 12, the Seller shall indemnify and hold harmless the
Purchaser, or at the Purchaser's free and own discretion, any of the
Group Companies from any Environmental Losses of the Purchaser or
the Group Companies which result from (i) an Enforceable
Administrative Notice issued due to an Environmental Matter, (ii) a
public law agreement entered into, with consent of the Seller, due
to an Environmental Matter, (iii) a third party claim arising under
an Environmental Law related to any Environmental Matter and (iv)
remediation or investigation activities carried out due to the
suspicion of a potential imminent danger to public health or safety,
(v) remediation or investigation which has been agreed to by the
Seller or (vi) activities
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related to an Environmental Matter legally required to comply with
and to avoid liability under Environmental Laws (collectively the
"Environmental Claims").
12.4 Exclusion of Seller's Liability. The Seller shall not be liable for
any Environmental Loss pursuant to Sections 12.2 or 12.3 to the
extent that:
12.4.1 In case of Section 12.2: Section 9.4 applies mutatis mutandis; and
in case of Section 12.3 Sections 9.4.2, 9.4.3 and 9.4.4 apply
mutatis mutandis; or
12.4.2 (i) the use of or the operations conducted at a property are
materially changed so that an industrial use or activities
reasonably related thereto is no longer pursued, or (ii) the
Purchaser or any of the Group Companies solicit, trigger or
otherwise actively cause, directly or indirectly any environmental
examination by any governmental authorities, unless these activities
are required under Environmental Law or by an Enforceable
Administrative Notice, or there is a valid business reason other
than merely or predominantly to trigger a liability of Seller or the
Group Companies under Section 12.2 or 12.3, or (iii) the Purchaser
or any of the Group Companies conduct any kind of investigation,
audit, survey or similar examination of the soil, ground water or
other environmental conditions of the premises of any Group Company,
apart from the review of pertinent documentation and the conduct of
interviews and the mere visual inspection of the surface of the soil
without any kind of drilling or opening of the soil, unless being
required to do so under Environmental Law or by an Enforceable
Administrative Notice, or there is a valid business reason other
than merely or predominantly to trigger a liability of the Seller or
any of the Group Companies under Section 12.2 or 12.3, and in each
case mentioned under (i) to (iii) this has resulted after the
Closing Date in, or increased, the Environmental Loss that Seller is
obligated to pay anyhow; always and in each case mentioned under (i)
to (iii) provided that the Seller's liability shall not so be
limited, if Environmental Matters occur or are identified in
connection with expansion, construction, repair, maintenance or
replacement activities undertaken by the Purchaser or by the
relevant Group Company after the Closing Date which do not fall
within the scope of (i) and the Environmental Loss claimed by the
Purchaser results from obligations of the Purchaser or the Group
Companies under Environmental Laws or an Enforceable Administrative
Notice; further provided that if an intended expansion or
construction activity can reasonably be expected to lead to a
liability of the Seller under Section 12.2 or 12.3, the Purchaser
will, and will use reasonable efforts to cause the relevant Group
Company to, consider, after good faith discussions with Seller,
available alternative options being less burdensome for the Seller,
to the extent the same are feasible and commercially reasonable.
12.5 Limitations.
12.5.1 De Minimis and Threshold. Section 9.5 shall also apply to
Environmental Losses, and the same shall be applied against the
Threshold pursuant to Section 9.5, provided, however, that the
Seller shall only be liable for claims pursuant to Section 12.2 and
12.3 if the actual individual Claim exceeds EUR 50,000 (in words:
Euro fifty thousand) (the "Environmental De Minimis").
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12.5.2 Section 12.5.1 does not apply to claims pursuant to Section 12.2 and
12.3 to the extent the Environmental Loss incurred and suffered by
the Purchaser or the Group Companies relates to the sites Germiston,
South Africa, Wuppertal, Xxxxxxxx 00, Xxxxxxx and Argenton,
Australia.
12.5.3 Maximum Liability. Section 9.6 shall apply to claims under Section
12.2 and Section 12.3.
12.5.4 Sliding Scale and Pro rata Principle. Seller's obligations pursuant
to Section 12.3 shall, depending on the year after the Closing Date
in which any facts relating to a Specific Environmental Matter are
notified by the Purchaser or any of the Group Companies pursuant to
Section 12.6, be limited to the following percentages of such
Environmental Loss :
Year after Closing Date Percentage
1st 95%
2nd 95%
3rd 90%
4th 80%
5th 70%
6th 60%
7th 50%
8th 40%
9th 30%
10th 20%
11th 10%
12th 5%
Provided, however, that in respect of any Environmental Loss
notified the Environmental Losses against which indemnification is
sought must actually have been suffered or incurred by the Purchaser
or the Group Companies, it being understood that the Seller shall
not be obliged to indemnify and hold harmless the Purchaser or the
Group Companies from and against any Environmental Loss suffered
after the 12th anniversary of the Closing Date. The percentage
applicable to an Environmental Loss shall be determined on the basis
of the year in which a notification of such a Specific Environmental
Matter has been made pursuant to Section 12.6. In addition, with
respect to any Environmental Loss of Group Companies which are not
directly or indirectly wholly owned by the Seller, any claim of
Purchaser under Section 12.2 and 12.3 shall be pro-rated according
to the direct or indirect Interest of the Seller in such Group
Company.
12.5.5 Limitation Period Any claims of the Purchaser under Section 12.2
shall be time-barred 30 (thirty) months after the Closing Date. Any
claims of the Purchaser under Section 12.3 shall be time-barred 12
(twelve) years after the Closing Date. Section 9.8 shall apply
mutatis mutandis.
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12.6 Indemnification Procedures. If the Purchaser or any of the Group
Companies becomes aware of any facts which may give rise to an
indemnification claim with respect to any Environmental Matter, the
Purchaser shall promptly, but in no event later than within 20
Business Days, inform the Seller thereof in accordance with Section
9.2 and Section 9.3, provided, however, that the failure or delay of
the Purchaser to provide any such written notice shall not limit the
Purchaser's right to recover Losses except to the extent such
failure or delay is prejudicial to the defense of such Third Party
Claim. Section 9.2 shall apply mutatis mutandis. Section 9.3 shall
apply to the defense against any actions, claims, demands or
proceedings asserted or announced by any Third Party (including any
governmental authority). In addition, (i) the Seller shall on its
own costs be entitled to retain any environmental experts and
consultants other than those retained by the Group Companies in
connection with any such Environmental Matter and (ii) the Purchaser
shall give the Seller and any environmental expert retained by the
Seller the opportunity to investigate any property owned or occupied
by the Purchaser or any Group Company (including the taking of soil
samples) during ordinary business hours after reasonable
notification. Provided, however, such investigation does not
unreasonably interfere with the operation of any property and Seller
indemnifies Purchaser for any damage or injury by Seller's
investigation, and, Purchaser has the legal authority to allow such
investigation on Property it does not own, and provided further,
that any remedial action shall be controlled by the Purchaser or the
relevant Group Company. The Purchaser shall assure that the relevant
Group Company will comply with the terms and conditions of any
existing agreements as set forth in Disclosure Schedule 12.6 between
any entities of the Seller's Group and the Group Companies relating
to the clean-up, indemnification procedures or cooperation in
connection with any Environmental Matter.
12.7 Additional Rights and Remedies.
12.7.1 The Parties agree that the responsibility of the Seller, the
Purchaser and the Group Companies with respect to Environmental
Matters shall be exclusively governed by this Agreement and that,
except for the Purchaser's or any of the Group Company's claims
expressly set forth in this Section 12, no Environmental Matters
shall give rise to any claims by the Purchaser or any Group Company
against any member of the Seller's Group based on whatever legal
reason. Any claims pursuant to Xxxxxxx 00 xxxx. (0) XXxxXxxX
(Xxxxxx-Xxxxxxxxxxxxxxxxx) and any similar statutory claims under
the laws of any other jurisdiction relating to any Environmental
Matter shall be excluded
12.7.2 The Purchaser shall indemnify and hold harmless the Seller and its
legal successors subject to a maximum limitation period of 12 years
from the Closing Date, from any liability, all costs and expenses
and all other damages and losses related to any Environmental Matter
with respect to the Group Companies, their business and the
properties and assets owned or used by it at any time, except and to
the extent that the Seller is required to indemnify the Purchaser
with respect to the relevant Environmental Matter pursuant to this
Section 12. Sections 12.1, 12.3 and 12.6 shall apply mutatis
mutandis.
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12.7.3 The Purchaser or the Group Companies shall rebate any amount paid by
the Seller pursuant to Section 12.3 (i) in the event the
administrative notice is revoked by the authorities or overruled by
a court decision after the Seller has indemnified or held harmless
the Purchaser or the relevant Group Company, in each case to the
extent the Seller is not otherwise obligated to pay the
Environmental Loss suffered by the Purchaser or the Group Companies
and to the extent the Environmental Loss is recovered by the
Purchaser or the Group Companies. Seller's claim to rebate shall be
time-barred 1 (one) year after the administrative notice has become
legally binding, been revoked by the authorities or has been
overruled by a legally binding court decision.
12.7.4 Section 9.8 shall apply mutatis mutandis.
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13. Taxes
13.1 General Provisions.
13.1.1 Definitions. The following terms, as used in this Section 13, have
the following meanings:
"Indemnifiable Tax" means any Tax validly imposed on any of the
Group Companies by any Tax Authority;
"Straddle Tax Period" means, with respect to any Group Company, any
period with respect to which Taxes are or may be assessed that
begins on or before the Closing Date and ends after the Closing
Date;
"Post-Closing Date Tax Period" means, with respect to any Group
Company, any period with respect to which Taxes are or may be
assessed that begins after the Closing Date;
"Pre-Closing Date Tax Period" means, with respect to any Group
Company, any period with respect to which Taxes are or may be
assessed that ends on or before the Closing Date;
"Tax Refund" means any repayment of any Tax received by any Group
Company and any claim for repayment of any Tax assessed in favor of
any Group Company by a Tax Authority;
"Tax Return" means any return, declaration, report, claim for
refund, notice, form or information relating to any Tax, including
any schedule or attachment thereto;
"Tax Saving" means the net present value (calculated on a basis of a
discount rate of 5 %) of any decrease of any assessed Tax, including
any increase of loss carry forwards, any depreciable, amortizable or
accruable item or amount relevant for the assessment of any present
or future Tax, or any corporation tax credit
(Korperschaftsteuerguthaben within the meaning of Section 37 KStG or
similar tax credits under the tax laws of any other jurisdiction),
in each case regardless of whether any such decrease, credit or
other item or amount is attributable to the Purchaser, or the
relevant Group Company or any of the Affiliates of the Purchaser
other than the Group Companies;
"Tax Authority" means any competent governmental authority in charge
of imposing any Tax.
For the avoidance of doubt, any loss carry forwards for corporate
income tax or trade tax purposes and their validity and usability
shall not be part of, and shall be exempt from this Section 13.
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13.1.2 Allocations in Respect of Straddle Tax Periods. For purposes of this
Section 13:
Any reference to an amount of income or loss attributable to the
pre-Closing portion of a Straddle Tax Period means the amount of
income or loss actually earned or incurred during the portion of
such Straddle Tax Period ending on the Closing Date, determined on
the basis of a closing of the books of the affected Group Company as
of the close of business on the Closing Date;
Any reference to an amount of income or loss attributable to the
post-Closing portion of a Straddle Tax Period means the total amount
of income or loss earned or incurred during that Straddle Tax
Period, minus the amount of income or loss attributable to the
pre-Closing portion of that Straddle Tax Period under the rules of
this Section 13.1.2;
Any reference to an amount of Indemnifiable Tax attributable to the
pre-Closing or post-Closing portion of a Straddle Tax Period means
the Indemnifiable Tax that would have been payable with respect to
the income attributable to that portion of the Straddle Tax Period,
determined as if such portion were a separate period for the
assessment of such Indemnifiable Tax; and
Any reference to an amount of credit attributable to the pre-Closing
or post-Closing portion of a Straddle Tax Period means the amount of
credit that would have been allowable with respect to that portion
of the Straddle Tax Period, determined as if such portion were a
separate period for the assessment of any relevant Tax and the
income or loss for such period, and the Indemnifiable Tax payable
with respect to such period, were the income or loss and
Indemnifiable Tax attributable to that portion of the Straddle Tax
Period under the rules of this Section 13.1.2.
For the avoidance of doubt, the amount of income or loss
attributable to a pre-Closing or post-Closing portion of a Straddle
Tax Period is determined strictly on a closing-of-the-books basis,
and is not limited by the existence or amount of overall income or
loss earned or incurred by the relevant Group Company for the entire
Straddle Tax Period.
13.2 Tax Guarantee. The Seller guarantees to the Purchaser in the form of
independent guarantees (as further set forth in the introduction to
Section 8) that, as of the date hereof, except as otherwise
disclosed in accordance with Section 9.4.1,
13.2.1 all Tax Returns required to be filed with any Tax Authority on or
prior to the date hereof with respect to any Pre-Closing Date Tax
Period by or on behalf of the Seller or the Group Companies have
been filed on a timely basis taking into account any permitted
extension;
13.2.2 the Seller and the Companies have timely paid (if required by
applicable law) all Taxes shown as payable by them (i) on any valid
and enforceable Tax assessment notice issued by any Tax Authority
other than Taxes contested in good faith that are listed and
described in Disclosure Schedule 13.2.2 or (ii) on any Tax Return
filed by them with any Tax Authority; and
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13.2.3 neither the Seller nor any Company is involved in any Tax audit or
investigation (other than regular Tax audits in the Ordinary Course
of business, such as the routine Betriebsprufungen in Germany) as of
the Signing Date. Between the Signing Date and the Closing Date the
Seller will notify without undue delay the Purchaser of any audit
with respect to a Group Company taking place or being announced
after the Signing Date.
13.3 Preparation of Tax Returns and Payment of Tax.
13.3.1 In the period between the date hereof and the Closing Date, the
Seller shall prepare and file, and cause the Group Companies to
prepare and file, all Tax Returns required to be filed on an
individual or consolidated basis by or on behalf of any of them on
or before the Closing Date and shall timely pay, or cause to be
timely paid, all Taxes payable under such Tax Returns.
13.3.2 After the Closing Date, the Purchaser shall prepare and file, or
cause to be prepared and filed, when due all Tax Returns required to
be filed on an individual or consolidated basis by or on behalf of
the Purchaser or the Group Companies that need not be prepared or
filed by the Seller, provided, however, that any Tax Returns
relating in whole or in part to any Pre-Closing Date Tax Period or
Straddle Tax Period shall be subject to the review and prior written
consent of the Seller. The Purchaser shall ensure that any Tax
Returns to be reviewed and approved by the Seller will be furnished
to the Seller not later than 30 days prior to the due date of the
relevant Tax Return and that all Taxes payable under such Tax
Returns shall be timely paid. The Seller shall be deemed to have
given its consent to any Tax Return timely furnished to it for its
review if it had failed to review such Tax Return and to provide its
comments to the Purchaser or the relevant Group Company within two
weeks following the receipt (Zugang) thereof.
13.3.3 With respect to the VAT tax integration (umsatzsteuerliche
Organschaft) between the Company and the Seller, the Purchaser shall
procure that the Seller will promptly receive invoices (in
accordance with Section 14 UStG for any deliveries and services
provided, but not yet invoiced, to the Company prior to the Closing
Date. Any VAT reimbursement claims (Vorsteuererstattungsanspruche)
in connection with such deliveries and services, including any
subsequent corrections thereof, shall be for the account of the
Seller or the respective shareholder of the Seller (in accordance
with applicable law). Any VAT (Umsatzsteuerzahllast - equal to the
balance between VAT owed to the tax authorities and deductible VAT)
payable by the Seller (or by the relevant shareholder of the Seller
as a result of the VAT tax integration) with respect to the relevant
calendar months preceding the Closing Date shall be borne by the
Seller. The Purchaser shall promptly notify the Seller of any matter
relevant in connection with this Section 13.3.3.
13.4 Tax Covenants of Purchaser. The Purchaser shall indemnify and hold
harmless the Seller with respect to any Taxes imposed on the Seller,
and shall forego any indemnification under Section 13.6 with respect
to Taxes imposed on the Group Companies, to the extent such Taxes
would not have been imposed but for any action
66
taken by the Purchaser or any of the Group Companies after the
Closing Date (including any change in the exercise of any Tax
election right, the amendment of any Tax Return other than as a
result (Folgewirkung) of a tax audit, the termination of any control
or profit transfer agreement or tax consolidation scheme, the
implementation of any acquisition structure in connection with this
Agreement or the approval or implementation of any restructuring).
13.5 Tax Refunds. In the event that the Purchaser or any Group Company
receives a Tax Refund after the Closing Date, the Purchaser shall
pay to the Seller as an additional portion of the Purchase Price the
aggregate portions of such Tax Refund that are (i) received in
respect of Taxes paid for any Pre-Closing Date Tax Period or (ii)
received in respect of Taxes paid for any Straddle Tax Period and
attributable to the pre-Closing portion of that Straddle Tax Period.
The Purchaser shall promptly notify the Seller in writing of the
receipt of the Tax Refund or the relevant decision by the Tax
Authority. Any amount payable to the Seller pursuant to this Section
13.5 shall be due and payable within fifteen Business Days after the
Tax Refund has been received by the Purchaser or the relevant Group
Company. Notwithstanding the foregoing, the Purchaser shall not be
required to make any payment to Seller in respect of a Tax Refund to
the extent (i) the Tax Refund was reflected as a receivable or other
asset in the Stand-Alone Financial Statements, (ii) the Tax Refund
is in respect of Taxes paid by the Purchaser or a Group Company
after the Closing Date that have not been reimbursed by Seller
pursuant to Section 13.6, (iii) the Tax Refund is attributable to
the carryback of a loss or credit realized in respect of a
Post-Closing Effective Date Tax Period, or (iv) the Tax Refund is
attributable to the portion of a carryback of a loss or credit
realized in respect of a Straddle Tax Period that is attributable to
the pre-Closing portion of the Straddle Tax Period.
13.6 Tax Indemnification.
13.6.1 Subject to the provisions contained in this Section 13 and in
Section 9.4.4 and 9.10, the Seller shall pay to the Purchaser an
amount equal to (i) any liability for Taxes incurred by any Group
Company arising from a breach of a Tax representation contained in
Section 13.2, (ii) any Indemnifiable Tax payable by any Group
Company with respect to any Pre-Closing Date Tax Period, (iii) an
amount equal to any Indemnifiable Tax attributable to the
pre-Closing portion of any Straddle Tax Period and (iv) any
liability for real estate transfer tax incurred by any Group Company
or the Purchaser and attributable to transactions taking place on or
before the Closing Date (including the execution of this Agreement)
relating to or affecting the Lunen property ((i), (ii),(iii) and
(iv) each referred to herein as a "Tax Loss"). Such indemnification
obligation of Seller shall be reduced by the amount of any Tax
Saving related to the relevant breach or Indemnifiable Tax. However,
such indemnification obligation of Seller shall be determined
without regard to any reduction of Tax resulting from (i) a
carryback of a loss or credit from a Post-Closing Date Tax Period or
(ii) the portion of any carryback or a loss or credit from a
Straddle Tax Period that is attributable to the post-Closing portion
of the Straddle Tax Period, and the amount of any Tax or
Indemnifiable Tax payable or deemed payable by any Group Company
shall be deemed, for purposes of this Section 13.6, to be the amount
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of such Tax or Indemnifiable Tax that would have been payable in the
absence of such carryback of a loss or credit.
13.6.2 The Seller shall not be liable for any Tax Loss that would not have
been incurred but for the Purchaser's breach of any Tax Covenant set
out in Section 13.4 (without prejudice to any other rights of Seller
arising from the breach).
13.7 Limitation Period. Any claims of the Seller and the Purchaser under
this Section 13 shall be time-barred upon expiration of the earlier
of (i) a limitation period of three months after the non-appealable
binding assessment (e.g. bestandskraftige Festsetzung) of the
relevant Tax or (ii) the regular statutory limitation period for the
relevant Tax. Section 9.8 shall apply accordingly. Notwithstanding
the above, the Seller's rights under Section 13.4 and Section 13.5
shall be subject to the applicable statutory limitation period.
13.8 Indemnification Procedures.
13.8.1 If, after the Closing, any Tax Authority informs the Purchaser or
any of the Group Companies of a proposed audit, assessment, dispute
or other circumstance relating to any Tax with respect to which the
Seller may incur any liability under this Agreement, the Purchaser
shall notify the Seller of such matter. The Purchaser's notice shall
be given within ten Business Days after the Purchaser or the
relevant Group Company has received the relevant information from
the Tax Authority, or at any earlier date if required to enable the
Seller to participate in any Tax audit or to review the relevant Tax
assessment within the applicable period available for an appeal or
other legal remedy.
13.8.2 The Purchaser agrees, and shall cause the relevant Group Company,
(i) to give the Seller the opportunity to participate in any audits,
disputes, administrative, judicial or other proceedings related to
any Tax for any Pre-Closing Date Tax Period or Straddle Tax Period
that could give rise to a Seller indemnification obligation under
Section 13.6, (ii) upon the Seller's request, to challenge and
litigate any Tax assessment or other decision of any Tax Authority
related to such Tax, provided that Seller shall bear all internal
and external costs of Purchaser and any Group Company with respect
to such challenge and litigation and (iii) to comply with reasonable
instructions given by the Seller in relation to the conduct of the
proceedings referred in (i) and (ii) above. This shall include,
without limitation, the Seller's right to determine whether or not
any Company will participate in any Tax amnesty with respect to any
Indemnifiable Tax. In all other respects, Sections 9.3 shall apply
to the defense against any assessments or proceedings related to any
Tax for any Pre-Closing Date Tax Period or Straddle Tax Period.
13.9 Cooperation on Tax Matters. Subject to the Parties' obligations
pursuant to the other provisions of this Section 13, the Parties
shall fully cooperate, and shall cause their representatives to
fully cooperate, at their own cost, with each other in connection
with all Tax matters relating to any Pre-Closing Date Tax Period,
including the preparation and filing of any Tax Return or the
conducting of any audit, investigation, dispute or appeal or any
other communication with any Tax Authority. Cooperation
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between the Parties shall include (but shall not be limited to) the
providing and making available by the Purchaser, of all books,
records and information, the assistance of all officers and
employees of the Group Companies and the making available by the
Purchaser or the Group Companies of any premises for the purpose of
any Tax audit of the Seller, to the extent necessary or useful in
connection with such Tax matters. The Parties shall further make
available to any Tax Authority, to the extent required by law or
requested by any Tax Authority, all information, records and
documents relating to Tax liabilities or potential Tax liabilities
for all periods prior to or on the Closing Date, including the Tax
treatment and Tax structure of the transactions contemplated hereby,
and all materials of any kind (including opinions or other Tax
Analysis) that are provided to the Parties relating thereto, and
shall preserve all relevant information, records and documents until
the expiration of any applicable statute of limitations or extension
thereof. The furnishing by the Purchaser or any Group Company to any
Tax Authority of any information related to the Group Companies in
connection with any Tax audit shall require the prior written
consent of the Seller, which shall not be unreasonably withheld.
13.10 With effect of December 31, 2006 all tax allocation agreements shall
be terminated. After December 31, 2006 no tax allocation charges
(Steuerumlagen) will be made between Seller and the Company unless
provided for in the Company 2006 Financial Statements. The Parties
indemnify each other against any such payments.
14. Profit and Loss Transfer Agreement; Guarantees; Derivative Contracts
14.1 Profit and Loss Transfer Agreement. The Parties agree that the
Profit and Loss Transfer Agreement between the Seller and the
Company will be terminated on and with effect as of December 31,
2006, 24.00 hours. The Company shall transfer to the Seller any
profit and the Seller shall compensate the Company for any loss, in
each case generated in the period commenced on January 1, 2006 and
ending on December 31, 2006 as shown in the individual financial
statements of the Company as of December 31, 2006, prepared in
accordance with German GAAP (HGB) (the "Company 2006 Financial
Statements") in accordance with the terms and conditions of such
agreement. The Parties agree that the Seller shall prepare the
Company 2006 Financial Statements. To the extent the Company 2006
Financial Statements show an obligation to transfer profits to the
Seller, such transfer shall be made by the Company prior to the
Closing Date; to the extent the Company 2006 Financial Statements
show an obligation to compensate a loss, such loss shall be
compensated by Seller to the Company prior to the Closing Date.
14.2 Indemnification. The Parties agree and shall procure that upon
payment of the profit transfer or loss compensation in accordance
with Section 14.1, all rights and obligations between the Seller and
the Company related to any profit and loss transfer shall be finally
settled and that the Company's financial statements as of any
previous financial year end shall not be challenged by the Parties
or by or on behalf of the Company after the Closing Date. However,
this shall not prevent management of the Company to claim payments
from the Seller, or the Seller to claim payments from the Company,
in each case if and to the extent this would be required by law.
Subject to the Closing, the Purchaser shall indemnify and hold
harmless the Seller from any
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obligation to compensate the Company for any loss (Sec. 302 AktG) in
excess of the loss shown in the Company's financial statements as of
any previous financial year end, or to return profits distributed in
excess of the amounts which would have been permitted to be
distributed had the underlying financial statements of the Company
been correct. This indemnity shall be in force and effect only as
long as the Purchaser or Purchaser's Guarantor or any of its
Affiliates have control over the Company. Seller shall indemnify and
hold harmless the Purchaser if under the Profit and Loss Transfer
Agreement the Company is obligated to pay to Seller an amount which
is higher than the amount shown in the Company financial statements
as of any previous financial year end.
14.3 Guarantees. With effect as of the Closing Date and subject to
Closing occurring, the Purchaser hereby assumes (i) all the
obligations and liabilities relating to any guarantees, surety for
payment, performance bonds, comfort letters and other security
interests of any kind (including those for old-age partial
retirement (Altersteilzeit) and customs) which the Seller's Group,
or any Third Party on behalf of any member of the Seller's Group,
has provided or will provide prior to the Closing Date, including
those which are listed in Exhibit 14.3 (a), in favor of, or on
behalf of, any Group Company to banks, other financial institutions,
suppliers, customers or other Third Parties (the "Seller's
Guarantees") and (ii) shall indemnify and hold harmless the relevant
members of the Seller's Group from any obligations and liabilities
arising under or in connection with the Seller's Guarantees. The
Purchaser shall further, prior to or on the Closing Date, to the
extent that the relevant members of the Seller's Group are not
released from any Seller's Guarantees other than those from which
the Seller and its Affiliates have been released in accordance with
this Section or such release is not evidenced, prior to or on the
Closing Date, by documents reasonably acceptable to the Seller,
without the Seller having waived the fulfillment of such obligation,
provide an unconditional and irrevocable bank guarantee issued by a
first class (A rated) European or US bank of international standing
and payable upon first demand, in form and substance reasonably
acceptable to the Seller (the "Purchaser's Bank Guarantee"), for
each of the relevant Seller's Guarantees in an amount equal to the
aggregate (actual or contingent) liability of the Seller's Group
under such Seller's Guarantees as notified to the Purchaser by the
Seller no later than five Business Days prior to the Closing Date.
14.4 Derivative Contracts. With effect as of the Closing Date and subject
to Closing occurring the Purchaser hereby assumes, and shall
indemnify and hold harmless the members of the Seller's Group from,
any and all obligations and liabilities that exist or may arise for
the Seller's Group and that relate to the derivative, option,
forward and hedge agreements and similar instruments which have been
entered into in connection with the business operations of the Group
Companies until the Closing Date (including the creation of any
security or fulfillment of any payment obligations) set forth in
Exhibit 14.4. The foreign exchange contracts executed by companies
of RAG Aktiengesellschaft Affiliates on behalf of the Company or
Group Companies, which will become due after Closing, shall not be
transferred to the Company, but will be held by the Seller until
maturity. Seller will reimburse the owed amounts according to such
foreign exchange contracts with value of the due date according to
instructions by the Company, as the case may be. Purchaser will
instruct the Company to pay the
70
owed amounts pursuant to the sentence above with effect as of the
same date according to an avis prepared by Seller.
14.5 Repayment of LoC. The Purchaser shall procure that the Group
Companies shall pay to Seller all amounts received from customers of
Group Companies within 24 months after the Closing Date which are
repayments of amounts paid by the Group Companies on the basis of
letter of credits which have been called by the beneficiaries, but
not paid on the Closing Date and to the extent such amount has been
deducted in the Closing Net Debt Cash calculation in accordance with
the terms in Section 4.
15. Covenants
15.1 Conduct of Business prior to Closing. Except as contemplated by and
in accordance with the terms of this Agreement, Seller shall in the
period between the Signing Date and the Closing Date
15.1.1 not resolve or permit any of the actions referred to in Section
8.16(i) with the exception of (i) payment of the amount due under
the Profit and Loss Transfer Agreement as provided for in Section
14.1 and (ii) any payment of dividends or declaration of dividends
by any Group Company to the Company relating to the period ending
prior to or on December 31, 2006;
15.1.2 instruct the Company (i) to conduct its business, and to cause the
Company's Subsidiaries to conduct their businesses in the Ordinary
Course (including, without limitation, the satisfaction of payables
in accordance with past practice) and in accordance with legal and
regulatory requirements (including regulations) and to maintain
current governmental authorizations and licenses, and (ii) not to,
or not to agree to, terminate, cancel, amend or otherwise adversely
change the Material Agreements or to enter into an agreement that
would qualify as a Material Agreement or to amend the articles of
association of the Group Companies and (iii) not to take or permit
any Group Company to take any of the actions set forth in Sections
8.16(ii) to 8.16(vii), and 8.16(xi) to 8.16(xiii) without the prior
written consent of the Purchaser;
15.1.3 cause the Group Companies to use reasonable efforts to preserve the
current assets and business organization of the Group Companies, to
make the capital expenditures in an amount equal to 15 % to 30 % of
the annual budget for 2007, over the period between the Signing Date
and the Closing Date assuming that such period will not be longer
than 3 months, and to issue performance and related bonds in
accordance with past practice;
15.1.4 procure that the actions listed in Exhibit 15.1.4 hereto relating to
the Group Companies shall not be taken without the Purchaser's prior
written consent which shall not be unreasonably withheld;
15.1.5 consult, and will cause each of the Group Companies to consult, as
far as legally permissible, during normal business hours and on
reasonable notice with such
71
representatives and advisers as the Purchaser may designate with
respect to operational, legal, regulatory or financial matters of a
material nature concerning any of the Group Companies; and
15.1.6 procure that the currency hedging related to the operative business
of the Group Companies is continued in accordance with past practice
at arm's length terms through foreign exchange forward contracts;
and
15.1.7 procure that the Company enters into the real estate purchase
agreement referred to in Section 7.1.1(xv) on terms and conditions
consistent with Exhibit 7.1.1(xv)(a) and Exhibit 7.1.1(xv)(b), or as
approved by the Purchaser.
15.2 Social Charter. Purchaser shall procure that the Company fulfills
the obligations set forth in the collective bargaining agreement
including its amendments (the "Collective Bargaining Agreement") as
attached hereto in Exhibit 15.2 between the Company and Metall NRW,
North Rhine Westfalia Metal and Electrical Industry, represented by
the Federation of Metal Industry Enterprises for Dortmund and the
Dortmund Region (as a representative of the Company) and IG Metall,
NRW District Management, represented by IG Metall, Dortmund Office.
15.3 Use of RAG-Marks, -Domains and -Names.
After the Closing Date, the Purchaser shall not use and ensure that
none of the Group Companies uses (as part of a corporate or trade
name, business identifier, trademark, internet domain or otherwise)
neither of the designations RAG and / or RAG Coal International AG,
RAG- and / or RAG Coal International-Logo ([GRAPHIC
OMITTED],[GRAPHIC OMITTED]), any designation likely to be confused
therewith with regard to the name "RAG" (the "RAG-Marks").
Furthermore, except as provided below, the Purchaser shall not use
and ensure that none of the Group Companies uses or sells any
brochure, sales literature, letterhead, web page, packaging or
promotional or other materials, including online material, company
cars, premises or any other products (the "Labeled Objects") which
contain or carry any of the aforementioned RAG-Marks or any other
xxxx, names or logos which indicate that the Purchaser or any of the
Group Companies is or was part of the RAG Group. The Group Companies
shall, however, be permitted for an interim use-up period of 6
months for online material, including internet domains, in
particular including the content of the internet domain under
xxx.xxx.xx) after the Closing Date, to continue to use Labeled
Objects which have already been labeled as of the Closing Date with
any of the aforementioned RAG-Marks or which bear the corporate
design of the RAG Group, in order to allow an orderly change to new
marketing and branding, provided that any of these Labeled Objects
are labeled with a sticker indicating that the Group Companies have
left the RAG Group. Without undue delay after the Closing Date, the
Purchaser shall take, or cause to be taken, all outstanding actions
and issue, or cause to be issued, all declarations which are
necessary or appropriate to comply with the above obligations. The
Purchaser shall indemnify and hold harmless any member of the RAG
Group companies from all obligations and liabilities arising out of
or in connection with the use of Labeled Objects and / or in
infringement of any of the provisions of this Section 15.3.
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15.4 Lock-up Undertaking. The Seller agrees that it will not, without
prior written consent of the Purchaser or other than in accordance
with the provisions of this Section 15.4 for a period of three years
following the Closing Date (i) directly or indirectly offer, sell
contract to sell, loan, pledge, sell an option to buy, or buy an
option to sell any of the Consideration Shares or otherwise assign
or sell the Consideration Shares or (ii) enter into any transaction
(including swap hedging, short sale or similar transactions) that
transfers to a Third Party, in whole or in part, the economic risk
of holding the Consideration Shares regardless of whether any such
transaction is to be settled by delivery of shares, or in cash, or
by other consideration. The foregoing restrictions will not apply to
(i) a transfer of the Consideration Shares to the Seller's
Affiliates, provided that such Affiliates agree to be bound by
the preceding obligations pursuant to a written agreement
reasonably acceptable to the Purchaser and containing the
guarantees by such Affiliate corresponding to those set forth
in Section 8.18; and
(ii) a sale, transfer or disposal or other transaction of the kind
referred to in sentence 1 of such number of the Consideration
Shares equaling
(a) up to 30 % of the aggregate number of Consideration
Shares on or after the first anniversary of the Closing
Date;
(b) up to 60 % of the aggregate number of Consideration
Shares on or after the second anniversary of the Closing
Date;
(c) up to 100 % of the aggregate number of Consideration
Shares on or after the third anniversary of the Closing
Date; and
(iii) a sale, transfer or disposal or other transaction of the kind
referred to in sentence 1 in connection with (a) a tender
offer by Bucyrus International, Inc., or any of its Affiliates
to re-purchase shares in Bucyrus International, Inc.,
applicable to all shareholders thereof, a capital decrease of
Bucyrus International, Inc., or a redemption of shares in
Bucyrus International, Inc., applicable to all shareholders
thereof, regardless of the class of shares to which such
offer, capital decrease or redemption may relate or (b) a
spin-off, merger or the liquidation of Bucyrus International,
Inc; and
(iv) the acceptance of a public offer for the purchase of shares in
Bucyrus International, Inc., by any Third Party which has been
recommended by the board of directors or the shareholders of
Bucyrus International, Inc., regardless of the class of shares
to which such offer relates.
Until the expiration of 2 years from the Closing Date, Purchaser's
Guarantor shall make available all public information required by,
and in the manner set forth in, paragraph (c) of Rule 144 of the
Securities Act, or any successor thereto.
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15.5 Access to Information. From the date of this Agreement through the
Closing Date, the Seller shall cause each of the officers, managers,
directors, employees, auditors and agents of the Seller and the
Group Companies to afford to the Purchaser and the Purchaser's
officers, directors, employees, auditors, agents and lenders the
right at any time, on reasonable notice during normal business hours
and provided such access does not unreasonably disrupt the
operations of the Business, access to the management employees,
auditors, agents, real and personal property, facilities, inventory
and books and records as Purchaser reasonably shall deem necessary
or desirable and subject to such reasonable restrictions as the
Seller may request to maintain the confidentiality of its
confidential information, this Agreement and the transactions
contemplated hereby, and shall furnish such financial and operating
data and other information with respect to the Group Companies, the
Business and the Shares as the Purchaser may reasonably require. No
such access, examination or review shall in any way affect, diminish
or terminate any of the guarantees or covenants of the Seller set
forth herein.
15.6 Financial Statements. As soon as possible, but not later than March
25, 2007, the Seller shall deliver to the Purchaser the Stand-Alone
Financial Statements (except for the financial statements for the
fiscal year 2006) (i) reconciled to US GAAP compliant with SEC Reg
S-X, such reconciliation to be audited by KPMG, Essen and (ii) and
their audits being brought into accordance with GAAS. Furthermore,
the Seller shall deliver to the Purchaser, as soon as possible, but
no later than the Closing Date, unqualified audited consolidated
financial statements of the Company (consisting of consolidated
balance sheet, consolidated profit and loss account and notes, and a
group report on the situation of the Company) for the fiscal year
2006 prepared in accordance with IFRS and reconciled to US GAAP
compliant with SEC Reg S-X, such reconciliation to be audited by
KPMG in accordance with GAAS. In the event that the Seller is not in
a position to deliver the reconciled Stand-Alone Financial
Statements by April 10, 2007, the Seller shall, as soon as possible,
but no later than on July 10, 2007 deliver the Stand-Alone Financial
Statements and unqualified audited consolidated financial statements
of the Company (consisting of consolidated balance sheet,
consolidated profit and loss account and notes, and a group report
on the situation of the Company) for the period commencing on
January 1, 2007 and ending on March 31, 2007, (i) reconciled to US
GAAP compliant with SEC Reg S-X, such reconciliation to be audited
by KPMG, and (ii) their audits being brought into accordance with
GAAS.
15.7 Supplemental Disclosures. The Seller shall have the obligation to
supplement and amend the Disclosure Schedules to this Agreement as
necessary with respect to any matter hereafter arising or discovered
which, if known at the Signing Date, would have been required to be
set forth or described in the Disclosure Schedules provided,
however, that for the purpose of the rights and obligations of the
parties hereunder, any such supplemental or amended disclosure shall
not, except as Purchaser may otherwise agree in writing, be deemed
to have cured any breach of any guarantee made in Section 8. The
Seller shall promptly notify the Purchaser in writing of any event
following the Signing Date which the Seller becomes aware that will
or may reasonably be expected to be a Material Breach of the
guarantees set forth in Section 8.
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15.8 Survey. Prior to the Closing Date, the Seller shall deliver to the
Purchaser a Survey reasonably acceptable to the Purchaser in form
and substance, certified within sixty (60) days prior to the Closing
Date, prepared by a surveyor licensed in the jurisdiction where such
Owned Real Property is located and certified to the Purchaser and a
title company selected by the Purchaser. The Purchaser shall pay the
costs and expenses of Surveys, whether or not the transactions
contemplated under this Agreement are consummated. Seller shall give
the Purchaser such assistance as the Purchaser may reasonably
request to obtain title insurance on the Owned Real Property in the
United States.
15.9 Payment obligations. The Seller shall procure that the Group
Companies will duly fulfill (i) any and all payment obligations
towards their employees, Key Employees, former employees or former
managing directors relating to the time prior to Closing and (ii)
any and all obligations to pay or to withhold and pay amounts
required by law, statutes, regulations, Collective Agreements or
employment contract, including but not limited to taxes and social
security contributions, relating to the time prior to Closing.
15.10 Performance/Damages. Claims under this Section 15 shall be
time-barred 7 years after the Closing Date. Section 9 shall apply
with the exception of Sections 9.4.1and 9.5. For the purposes of
Sections 15.1 and 15.4, "Loss" or "Losses" shall include
consequential or indirect damages (Folgeschaden, mittelbare Schaden)
and loss of profits (entgangener Gewinn). The limitations pursuant
to Section 9.1, second to last and last sentence, shall apply.
16. Non-Compete
For a period of three years after the Closing Date, the Seller shall
not, and shall cause its Affiliates for so long as they continue to
be an Affiliate of the Seller not to
16.1 engage in the business of the Group Companies as conducted as of the
Closing Date in the current geographical area of activities of the
Group Companies (the "Business"), provided, however, that the
following activities shall be exempt from the covenant not to
compete:
16.1.1 any activities directly or indirectly conducted by the Seller's
Group (as existing on the Signing Date) as of the Closing Date
including such of Deutsche Steinkohle AG and DMT Deutsche Montan
Technologie GmbH for captive use within Seller's Affiliates; or
16.1.2 the manufacture and distribution of products and parts thereof which
are (as of the Signing Date) offered by the Seller's Group as an
integral part of, or in combination with, other products that are
not currently distributed by the Group Companies; or
16.1.3 the acquisition of an interest of 5% of the outstanding capital
and/or voting rights in an entity engaged in business activities
competing with the Business, provided the
75
Seller and its Affiliates are excluded from any control over the
management of such company; or
16.2 solicit for employment of any Key Employee, provided that this
covenant shall not apply with respect to any person who (i) has
given notice of termination of, or agreed with the relevant Group
Company to terminate, his employment without any inducement by
Seller or its respective Affiliate, (ii) has been given notice of
termination of his employment by any of the Group Companies or (iii)
seeks for employment with Seller or any of its affiliates as a
result of general advertising or otherwise upon his own initiative.
17. Transition of Business
17.1 General Cooperation. Notwithstanding the rights of the Parties under
this Agreement, after the Closing the Seller and the Purchaser shall
cooperate and use reasonable efforts to provide for a smooth
transition of the Group Companies to Purchaser as soon as possible.
This shall include (i) the conclusion of transitional service
agreements between the Group Companies and the Seller or Seller's
Affiliates, in each case on terms mutually agreed between the
respective parties and (ii) such assistance the Purchaser may
reasonably request to change the fiscal year of the Company after
the Closing Date.
17.2 IT Licenses. The Purchaser acknowledges that the right to use any
software and to be rendered IT services under the agreements listed
in Exhibit 17.2 that have been entered into by members of the
Seller's Group will terminate upon Closing. The Purchaser will
procure the entry by the Group Companies into IT software and
service agreements to replace such terminating agreements and to
secure a smooth transition.
17.3 Insurances. The Purchaser acknowledges that the insurance cover
provided under the insurance policies taken out by the Seller's
Group (including trade credit insurance) and listed in Exhibit 17.3
will terminate upon Closing. The Purchaser will procure that the
Group Companies take out such insurance coverage as is necessary as
replacement. The Purchaser shall procure that the Group Companies
shall pass on to the Seller all repayments or refunds of insurance
premiums paid by the insurer to the Group Companies in relation to
insurances prepaid and terminated early at the Closing Date less any
termination fees to be borne by the Group Companies. If the Seller
procures at its expense insurance coverage for product liability
claims arising under Section 10.3 the Purchaser shall ensure that
the Group Companies fulfill their obligations under the relevant
insurance, if any, and the Seller and the Purchaser shall procure
that the Group Companies cooperate in good faith to give effect to
such insurance coverage.
17.4 Notification to Business Partners. The Purchaser will procure that
the Group Companies together with the Seller will notify all
business partners in writing promptly after the Closing Date that
any payments, credits and debits may no longer be made on the
accounts belonging to the cash pool referred to in Section 4.2, but
on such newly opened accounts of the Group Companies only which are
specified in the
76
respective notification to business partners. If, after the Closing
Date, the Seller or any of Seller's Affiliates receives any payments
which are made for the benefit of the Company, then the Seller shall
forward (with no right to set off) such amounts to a bank account
held by the Company as listed in Exhibit 17.4. If, after the Closing
Date, the Seller makes payments or incurs liabilities for the
benefit of the Company which have been approved by the Purchaser and
such payments or liabilities are booked on an account to be
established by Seller (the "Current Account"), the Purchaser shall
procure that such amounts are paid by the Company without undue
delay. To the extent any debits are made by the Company and / or the
Subsidiaries on the accounts belonging to the cash pool referred to
in Section 4.2 (including the Current Account) after the Closing
Date or any other accounts maintained by the Seller's Group for the
Company and / or the Subsidiaries the Purchaser shall promptly
balance, or shall procure that the Company will promptly balance,
any such debit by making payment to the respective account. Any
payment to be made in accordance with this Section 17.4 shall be
made in the currency in which the respective account denominates.
17.5 Termination of Intra-group Agreements. The Seller shall procure that
on or before the Closing, the agreements listed in Exhibit 17.5
between the Group Companies on the one side and the Seller and the
Seller's Affiliates on the other side shall be terminated by mutual
agreement with effect as of the Closing Date. The termination shall
be made without any additional costs due to such termination (e.g.,
break-up fees) to the respective party; outstanding obligations
shall be fulfilled when due.
17.6 Consent Declaration Change of Fiscal Year. Upon request of and in
consultation with the Purchaser the Seller shall (i) obtain the
necessary consent declaration of the competent tax authority with
respect to the shortening of the Company's fiscal year so that such
short fiscal year ends on or after the Closing Date and (ii) shall
undertake appropriate steps to give effect to such short fiscal year
under company law. The Parties shall use their best efforts to
timely fix the relevant date for the short fiscal year and to
implement the above steps. For the avoidance of doubts any resulting
cost shall economically be borne by Purchaser.
18. Confidentiality and Public Announcements
18.1 Confidentiality in relation to Group Companies. The Seller and the
Seller's Guarantor shall keep the knowledge about the Group
Companies and their business operation strictly confidential with
the exception that (i) the Seller has and will provide its
professional advisors with information relating the Group Companies,
(ii) Seller may disclose any information if it is required by law,
and (iii) Seller may be entitled to disclose information if
necessary to defend or prosecute lawsuits.
18.2 Confidentiality in relation to this Agreement and the Parties.
Subject to Section 18.4, the Parties, the Purchaser's Guarantor and
the Seller's Guarantor shall keep the knowledge obtained in
connection with the negotiations and execution of this Agreement
with respect to this Agreement, the transactions contemplated herein
and
77
the other Parties and their Affiliates (except for the Group
Companies to which Section 18.1 shall apply exclusively) strictly
confidential.
18.3 Confidentiality Agreement. Subject to Section 18.4 the rights and
obligations under the confidentiality agreement between the Seller
and the Purchaser's Guarantor dated January 13/14, 2005 and as
extended by agreement dated September 12, 2006 shall remain
unaffected.
18.4 Announcements. Each of the Parties, the Seller's Guarantor and the
Purchaser's Guarantor undertakes that prior to the Closing Date it
will not make an announcement in connection with this Agreement
unless (i) such announcement or other disclosure is required by
applicable law, legal process or any applicable stock exchange
(NASDAQ) rule or regulation, or (ii) the timing and content of an
announcement or other disclosure regarding any aspect of the
transactions contemplated herein has been preceded by the written
consent of the Purchaser (which may be granted or withheld in its
reasonable discretion)
19. Notices
All notices and other communications hereunder shall be made in
writing unless notarization or any other specific form is required
by mandatory law, in the English language and shall be hand
delivered or sent by telefax, mail or courier to the following
addresses:
If to Seller, to:
RAG Coal International AG
Rechtsabteilung
Attn. Xx. Xxxxxx Xxxxxxxxx
Xxxxxxxxxxxxx Xxxx(xxxx)x 0 - 00
00000 Xxxxx
Xxxxxxx
Telefax-No. +49 - 201 - 177 4039
with a copy to:
Skadden, Arps, Slate, Xxxxxxx & Xxxx LLP
Attn. Dr. Xxxxx Xxxxx / Xx. Xxxx Xxxxxx
Xxxx-Xxxxxxxxx-Xxxx 0
00000 Xxxxxx
Xxxxxxx
Telefax-No. +49 - 89 - 24 44 95 300
78
If to Purchaser, to:
Bucyrus International, Inc.
Attn. Xxxxx X. Xxxxxx X.X. Xxx 000
0000 Xxxxxxxxx Xxxxxx, XX 00000
XXX
Telefax-No. +1 - 414 - 768 5060
with a copy to:
Winston & Xxxxxx LLP
Attn: Xxxxxxx X. Xxxxx
00 X. Xxxxxx Xxxxx
Xxxxxxx, XX 00000
XXX
Telefax-No. +1 - 312 - 558 5700
and
Freshfields Bruckhaus Xxxxxxxx
Attn: Xx. Xxxxxx Xxxxxxx / Xx. Xxxxxxx Xxxxx
Xxxxxxxxxxxxxx 0
00000 Xxxxxxxxxx
Xxxxxxx
Telefax-No. +49 - 211 - 49 79 103
If to Purchaser's Guarantor, to:
Bucyrus International, Inc.
Attn. Xxxxx X. Xxxxxx
X.X. Xxx 000
0000 Xxxxxxxxx Xxxxxx XX 00000
XXX
Telefax-No. +1 - 414 - 768 5060
with a copy to:
Winston & Xxxxxx LLP
Attn: Xxxxxxx X. Xxxxx
00 X. Xxxxxx Xxxxx
Xxxxxxx, XX 00000
XXX
Telefax-No. +1 - 312 - 558 5700
and
79
Freshfields Bruckhaus Xxxxxxxx
Attn: Xx. Xxxxxx Xxxxxxx / Xx. Xxxxxxx Xxxxx
Xxxxxxxxxxxxxx 0
00000 Xxxxxxxxxx
Xxxxxxx
Telefax-No. +49 - 211 - 49 79 103
or to such other recipients or addresses which may be notified by
any Party to the other Parties in the future in writing.
20. Costs and Taxes
20.1 Costs of Advisors. Each Party shall bear its own costs and expenses
in connection with the preparation, execution and consummation of
this Agreement, including, without limitation, any and all
professional fees and charges of its advisors.
20.2 Other Costs; Fees. The costs of the notarization of this Agreement
shall be borne by the Purchaser. The fees of the competent
governmental antitrust authorities shall be borne by the Seller and
Purchaser in equal amounts. Seller shall pay the fees of the
notarization of the accession of Seller's Guarantor to this
Agreement, and the integration of the financial statements of the
Company as of December 31, 2006 in accordance with Section 8.7.1.
20.3 Taxes. Any transfer taxes, including, without limitation, real
estate transfer tax (Grunderwerbsteuer), and similar domestic or
foreign taxes or charges resulting from the execution and
consummation of this Agreement shall be borne by the Purchaser
subject to Section 13.6.1 (iv). Capital gains taxes shall be borne
by the Seller.
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21. Miscellaneous
21.1 Exhibits. All Exhibits to this Agreement constitute a part of this
Agreement. In the case of a conflict between any Exhibit and the
provisions of this Agreement, the provisions of this Agreement shall
prevail.
21.2 Entire Agreement. This Agreement, the Exhibits and the Disclosure
Schedules and the Confidentiality Agreement between the Seller and
the Purchaser's Guarantor dated January 13/14, 2005 as extended by
agreement dated September 12, 2006 shall comprise the entire
agreement between the Parties concerning the subject matter hereof
and shall supersede and replace all prior oral and written
declarations of intention made by the Parties in respect thereof
(including, but not limited to the notarized Letter of Intent
between the Seller and the Purchaser's Guarantor dated November 10,
2006).
21.3 Amendments. Any amendments to this Agreement (including amendments
to this clause) shall be valid only if made in writing, unless
mandatory law provides for stricter form requirements.
21.4 Interpretation. The headings in this Agreement are inserted for
convenience only and shall not affect the interpretation of this
Agreement. Except as set forth otherwise, all references to
"Section" refer to the corresponding Section of this Agreement. All
words used in this Agreement will be construed to be of such number
as the circumstances require. The word "including" shall not limit
the preceding words or terms. Where this Agreement provides that a
Party shall procure a certain action or situation, such Party shall
be strictly liable, without regard to negligence or other fault, for
any Losses of the other Party resulting from the fact that such
action or situation is not brought about as agreed
(verschuldensunabhangige Erfolgshaftung). Wherever this Agreement
requires the disclosure of or otherwise refers to a contract or
other agreement, such disclosure requirement or other reference
shall apply to and include all ancillary agreements, amendments,
side letters, waivers and similar documents, if any, related
thereto.
21.5 Reference to German Legal Terms. Any reference made in this
Agreement to any types of companies or participations, proceedings,
authorities or other bodies, rights, institutions, Regulations or
legal relationships (herein collectively referred to as the "Legal
Terms") under German law shall extend to any corresponding or
identical Legal Terms under foreign law to the extent that relevant
facts and circumstances must be assessed under such foreign law.
Where no corresponding or identical Legal Terms under foreign law
exist, such Legal Terms shall be introduced as come closest to the
Legal Terms under German law.
21.6 German Terms. If provisions in this Agreement include English terms
with respect to which German terms have been inserted in brackets
and / or italics immediately after the English term, the respective
German terms alone rather than the English terms shall be
authoritative for the interpretation of the respective provisions.
81
21.7 Assignment.
21.7.1 Except as expressly set forth in this Agreement, no Party may
assign, delegate or otherwise transfer any of its rights or
obligations under this Agreement without the consent of each other
Party. Seller hereby consents to the assignment of any claims of
Purchaser under this Agreement to any banks or other lenders as
collateral for any debt incurred by Purchaser or any Affiliate of
Purchaser in connection with the financing of the Purchase Price or
any obligations of Purchaser under this Agreement.
21.7.2 If the Purchaser transfers any controlling shareholding in any Group
Company to any Third Party, Purchaser shall ensure that such Third
Party assumes the obligations set forth or referred to in this
Agreement, to the extent that such obligations relate to the
relevant Company, business or asset. Purchaser shall remain jointly
and severally liable to Seller with respect to the due fulfillment
of any such obligations by the relevant Third Party.
21.7.3 Neither this Agreement nor any provision contained in this Agreement
is intended to confer any rights or remedies upon any person or
entity other than the Parties.
21.8 Set-off and Retention. Except as otherwise agreed between the
Parties, no Party shall be entitled to set off (aufrechnen) or net
(verrechnen) against any claims of any other Party under or in
connection with this Agreement or to exercise any right of retention
(Zuruckbehaltungsrecht).
21.9 Governing Law. This Agreement shall be governed by, and be construed
in accordance with, the laws of the Federal Republic of Germany,
without regard to principles of conflicts of laws and under
exclusion of the United Nations Convention on Contracts for the
International Sale of Goods (CISG).
21.10 Arbitration. Any dispute, controversy or claim arising out of or in
connection with this Agreement including the breach, termination or
invalidity thereof shall be finally settled by binding arbitration
by the Rules of Arbitration of the International Chamber of Commerce
("ICC Rules") in effect at the time of such arbitration (except as
such rules may be modified herein or by mutual agreement of the
parties to such arbitration) by three arbitrators, each of them to
be fluent in German and in English. Each Party shall nominate one
arbitrator in accordance with the ICC Rules. The so nominated
arbitrators shall appoint the third arbitrator who shall act as
chairman. If the two party-appointed arbitrators fail to appoint the
third arbitrator within a period of thirty (30) days as of the
appointment of the second party-appointed arbitrator the third
arbitrator shall be appointed by the International Center of
Arbitration in accordance with the ICC Rules. The seat of the
arbitration shall be London. The language of the arbitration shall
be English, provided that the parties to the arbitration shall be
allowed to submit documents in German or in English. For this
Section 21.10 the Seller and Seller's Guarantor and the Purchaser
and Purchaser's Guarantor respectively shall be deemed to be each
one joint party.
21.11 Partial Invalidity. In the case that one or more provisions of this
Agreement shall be invalid or unenforceable, this shall not affect
the validity and enforceability of the
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other provisions of this Agreement. In such case the Parties agree
to recognize and give effect to such valid and enforceable provision
or provisions which reflect as closely as possible the commercial
intention of such invalid or unenforceable provision as regards
subject matter, amount, time, place and extent. The aforesaid shall
apply mutatis mutandis to any gap in this Agreement. The Seller
hereby waives any argument or claim or defense with respect to the
validity and enforceability of Section 7.1.8 including the amount
payable thereunder.
21.12 Full Liability. For the avoidance of doubt, the Seller shall be 100%
liable (subject to the limitations set forth herein) for the
fulfillment of any of its covenants or other obligations and any of
Purchaser's rights or remedies under this Agreement, without regard
to the fact that the Seller owns, and shall transfer hereunder, less
than 100% of the Shares in the Company.
21.13 Seller's Guarantor. Upon accession of Seller's Guarantor to this
Agreement in accordance with Section 7.2.3(iii) which is hereby
accepted by the Parties, Seller's Guarantor shall be a Party to this
Agreement.
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DBT HOLDINGS GMBH
By: /s/ Xx. Xxxxxxx Xxxxx
--------------------------------
Xx. Xxxxxxx Xxxxx,
Attorney-in-Fact
BUCYRUS INTERNATIONAL, INC.
By: /s/ Xxxxx X. Xxxxxx
--------------------------------------
Xxxxx X. Xxxxxx,
Attorney-in-Fact
RAG COAL INTERNATIONAL AKTIENGESELLSCHAFT
By: /s/ Xx. Xxxxxx Xxxxxxxxx
-------------------------------
Xx. Xxxxxx Xxxxxxxxx,
Attorney-in-Fact
