A.Prot. 2002/343
dated August 28, 2002 of the Notary
Xxxxxxx Xxxxx, Basel (Switzerland)
NOTARIAL DEED
Share Purchase and Transfer AGREEMENT
Negotiated at Basel/Switzerland this 28th (twenty-eighth) day of August 2002
(two thousand and two).
Before me, the undersigned Notary Public
Xxxxxxx Xxxxx
at Basel/Switzerland appeared today:
1. Dr. Xxxx Xxxxxx, born October 7, 1970, German citizen, attorney at law,
domiciled at DE-61231 Bad Xxxxxxx, Xxxxxxxxxxx Xxxxxxx 00, identified by
his German Identity Card,
acting not in his own name, but as authorized representative of
a) Xxxxxxx Beteiligungsgesellschaft mbH ("Seller"), a German limited
liability company having its registered seat in DE-65510 Xxxxxxx,
Xxxxxxxxx Xxx. 00-00, registered with the commercial register of the
local court of Idstein under HRB 2050, on the basis of a certified
power of attorney dated August 8, 2002, a hereby certified copy of
which is attached to this Deed;
b) Xxxxxxx Outdoors Inc. ("Xxxxxxx Outdoors"), a company incorporated
under the laws of Wisconsin, USA, having its registered office in 000
Xxxx Xxxxxx, Xxxxx 000, Xxxxxx, Xxxxxxxxx XX 00000, XXX, on the basis
of a certified power of attorney dated August 12, 2002, a hereby
certified copy of which is attached to this Deed.
2. Xx. Xxxxx Xxxxxx, born August 4, 1966, German citizen, attorney at law,
domiciled at XX-00000 Xxxxxxx, Xxxxxxxxxxxxxxxxxx 00, identified by his
German Identity Card,
acting not in his own name, but as authorized representative of
Ganymed Einhundertdreiundsiebzigste Vermogensverwaltungs GmbH
("Purchaser"), a German limited liability company having its registered
office in XX-00000 Xxxxxxxxx am Main, Oberlindau 76-78, registered with the
commercial register of the local court of Frankfurt am Main under HRB
55059, on the basis of a certified power of attorney dated August 26, 2002,
a hereby certified copy of which is attached to this Deed.
(Seller, Purchaser and Xxxxxxx Outdoors collectively the "Parties")
The acting Notary advised the persons appearing that a notary who or whose
partners in the law firm have formerly acted as legal advisors to one of the
parties involved in the matter to be notarized would not be entitled to take
office as a notary in the matter at hand pursuant to ss. 233 Sect. 1(4) of the
Introductory Act of the Canton Basel-City relating to the Swiss Civil Code which
provision corresponds with the so-called "Vorbefassungsverbot" under the German
Act of Notarization (ss. 3 Sect. 1(7)). The acting Notary states that he himself
and his firm have not been involved in the matter at hand in the meaning of said
provisions. The Parties hereby confirm such statement of the acting Notary.
The persons appearing requested this Deed to be recorded in the English
language. The acting Notary Public who is in sufficient command of the English
language ascertained that the persons appearing are also in command of the
English language. After having been instructed by the acting Notary, the persons
appearing waived the right to obtain the assistance of a sworn interpreter and
to obtain a certified translation of this Deed.
First the persons appearing asked for the Notarization of the following:
The parties have full knowledge of the Notarial Deed A.Prot. 2002/336 of the
acting Notary of August 21, 2002 ("Reference Deed"). The parties hereby confirm
the entire wording and content of the Reference Deed and the declarations made
by Xx. Xxxxxx Hugli on their behalf. The persons appearing waived the right to
have the Reference Deed read
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aloud and to have it attached to this present Deed. The original of the
Reference Deed was available for inspection during the present Notarization.
Any reference in the present Deed to an Annex shall be deemed as a reference to
the corresponding Annex in the Reference Deed as far as such Annex is not
replaced, amended or altered in an Annex to the present Deed.
Hereafter is set forth a list of the Annexes and their source reference:
List of Annexes
Reference Present
Description Content Deed Deed
----------- ------- --------- -------
A/1 Business Description X --
3.1 Debt X --
3.4 Status Principles X --
5.1.4 Share Capital X --
5.1.6 Interest in Third Parties X --
5.1.7/1 Financial Statements X --
5.1.7/2 Company Management Members X --
5.1.8/1 Disposed Fixed Assets X --
5.1.8/2 Encumbrances etc. on Fixed X --
Assets
5.1.9 Lease Contracts X --
5.1.10/1 Owned Intellectual X --
Property Rights
5.1.10/2 Encumbrances etc. on IPR X --
5.1.10/3 Infringements on IPR X --
5.1.10/4 Xxxxxxx Group IPR X --
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Reference Present
Description Content Deed Deed
----------- ------- --------- -------
5.1.12 Litigation X --
5.1.13/1 Principal Agreements (1) X replacement
of page "Xxxx
Wolfskin
Accounts
Payable Trade"
5.1.13/2 Principal Agreements (2) X --
5.1.13/2(a)-(i) Principal Agreements (3) X --
5.1.13/3 Defaults X --
5.1.14(a) Employees X --
5.1.14(b) Works Agreements etc. X --
5.1.14(c) Pension Commitments X --
5.1.14(d) Management Service Contracts X --
5.1.15 Insurance Contracts X --
5.1.19/1 Material Adverse Changes X --
5.1.19/2 Management Case X --
5.2 Seller's Knowledge X --
6.5 Data Room Index and X --
Additional Documents
10.1 Regulatory Authorities X --
11.1 Xxxxxxx Guarantees X --
11.2(a)/1 Territory X --
11.2(a)/2 Excluded Activities X --
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Reference Present
Description Content Deed Deed
----------- ------- --------- -------
11.9/1 Store Partners X --
11.9/2 NA JW Business X --
Then the persons appearing, acting as indicated, declared with request for
Notarization the following
Share Purchase and Transfer Agreement
Preamble
A. The Xxxxxxx Outdoors group is an industrial group headquartered in Racine,
Wisconsin, USA, which is engaged in the designing, manufacturing and
marketing of recreational products ("Xxxxxxx Group"). The ultimate parent
company of the Xxxxxxx Group is Xxxxxxx Outdoors, whose shares are listed
at the NASDAQ. One of the Xxxxxxx Group's businesses is the German-based
Xxxx Wolfskin business which is engaged in developing and marketing premium
outdoor apparel, equipment and footwear ("JW Business" or "JW"). The JW
Business, which is described in more detail in Annex A/1, comprises
locations in Germany and Switzerland.
The JW Business is operated by Xxxx Wolfskin Ausrustung fur Draussen GmbH
(the "Company") as parent company and by its subsidiary Xxxx Wolfskin
Schweiz GmbH, Switzerland (the "JW Subsidiary"; the Company and the JW
Subsidiary hereinafter the "JW Entities"). The Company has an aggregate
share capital of (euro) 260,000 (in words: EURO two hundred sixty thousand)
consisting of one share in the nominal amount of (euro) 260,000 (in words:
EURO two hundred sixty thousand) (the "Share").
B. As the result of a review of Xxxxxxx Outdoors' long-term strategic focus,
the JW Business was classified as non-core for the future strategy of the
Xxxxxxx Group. Therefore, Xxxxxxx Outdoors has decided to dispose of its
interest in the Company to allow the JW Business to further strengthen its
strong position in the markets in which it is operating and to expand its
business into new areas under new ownership.
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C. Purchaser is a German limited liability company with its registered offices
in Frankfurt am Main, registered with the commercial register of the local
court of Frankfurt am Main under HRB 55059, and is engaged in the
administration of property. Purchaser's sole shareholder is Ganymed Outdoor
Beteiligungs GmbH & Co. Kommanditgesellschaft, a German limited
partnership, affiliated to Xxxx Capital Fund VII-E (UK), Limited
Partnership, a limited partnership organized under the laws of England and
Wales.
D. The disposal of the JW Business shall be effected by the sale and transfer
of Xxxxxxx Group's interest in the Company.
NOW, THEREFORE, the Parties agree as follows:
Article 1
Sale and Assignment of the Share
1.1 Subject to the conditions precedent set forth in Sec. 10.1, Seller hereby
sells the Share including all rights attached thereto to Purchaser, who
hereby accepts such sale, with effect as of the Closing Date as defined
hereinafter.
1.2 Subject to the conditions precedent set forth in Sec. 10.1 and to the
further condition that the Initial Purchase Price as set forth in Sec. 2.1
is paid pursuant to Sec. 2.2, Seller hereby assigns the Share to
Purchaser, who hereby accepts such assignment, as of the Closing Date
(such assignment hereinafter the "Closing").
Purchaser shall have the right to receive dividends for the entire fiscal
year beginning June 30, 2002, provided that the adjustment procedure in
Sec. 3 remains unaffected thereof.
1.3 The "Closing Date" as referred to herein shall be the third banking day in
Frankfurt am Main (each such banking day a "Business Day") following the
day on which the last of the conditions precedent pursuant to Sec. 10.1
will be satisfied or waived pursuant to Sec. 10.2, however not before
August 29, 2002, or any other day as agreed between the Parties.
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Article 2
Initial Purchase Price
2.1 Subject to the adjustment pursuant to Article 3, the purchase price owed
by Purchaser for the Share shall be(euro) 64,000,000 (in words: EURO
sixty-four million) ("Initial Purchase Price").
2.2 The Initial Purchase Price shall be paid by Purchaser by 5:00 p.m. German
time on the Closing Date by wire transfer of immediately available funds
at Purchaser's expense to such account of Seller as Seller may specify in
writing to Purchaser at least three Business Days prior to the Closing
Date.
2.3 The Initial Purchase Price shall bear interest at a rate of 4 % p.a. as
from the Economic Transfer Date as defined hereinafter until the payment
of the Initial Purchase Price. The interest payment shall be due at the
time of the purchase price adjustment pursuant to Sec. 3.3 by wire
transfer of immediately available funds at Purchaser's expense to such
account of Seller as Seller may specify to Purchaser at least three (3)
Business Days prior to the due date. Notwithstanding Sec. 12.4, Seller
shall be entitled to set off its claim for payment of interest on the
Initial Purchase Price against any claims of Purchaser, if any, arising
from the purchase price adjustment set forth in Article 3 hereof.
Article 3
Adjustment of Initial Purchase Price
3.1 For the purposes of this Agreement, the following definitions shall apply:
"Cash" means the aggregate of the following amounts as set out in the cash
ledgers of any of the JW entities:
cash at bank of any of the JW Entities;
+ cash of any of the JW Entities which has not been banked;
+ the amount payable under cheques made out to any of the JW
Entities which has not been paid into the bank account of any
of the JW Entities;
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+ amounts payable under any credit card receipts in favor of any
of the JW Entities;
+ short term investments, e.g. money market funds.
"Debt" shall have the meaning as set forth in Annex 3.1.
For the avoidance of doubt, Debt does not include (i) guarantees, (ii)
letters of credit issued or given by the Company to cover or guarantee
future obligations, (iii) losses from hedging contracts which were
disclosed subsequent to Seller's due diligence report and the final bid
letter and (iv) any intercompany debt whether interest bearing or not,
including, but not limited to, any intercompany trade payables and trade
receivables.
"Net Inventory" means
gross inventory comprising the following items:
inventory at hand (raw materials and finished goods) of
any of the JW Entities;
work in progress of any of the JW Entities (raw material
in production);
goods in transfer of any of the JW Entities (finished
goods shipped by suppliers not yet received);
- inventory reserves set aside by any of the JW Entities.
"Trade Working Capital" means
Net Inventory;
+ gross trade receivables less allowance for doubtful accounts;
- trade payables.
3.2 The Initial Purchase Price owed by Purchaser pursuant to Article 2 shall
be subject to the following adjustments (the Initial Purchase Price as
adjusted pursuant to the following provisions hereinafter the "Adjusted
Purchase Price"):
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3.2.1 If Cash (as set out in the Status) minus Debt (as set out in the
Status) as per August 2, 2002, 24.00 hours ("Economic Transfer
Date") exceeds or is less than (euro) 0 (in words: EURO zero), then,
within five (5) Business Days of either the Adjustment Report
becoming final under Sec. 3.4(e) or the decision of the Expert
Arbitrator being made available for collection by the Parties
pursuant to Sec. 3.4(f), either: if the balance is greater than
(euro) 0 (in words: EURO zero) Purchaser shall pay the balance to
Seller or, as the case may be, if the balance is less than (euro) 0
(in words: EURO zero), Seller shall pay the balance (expressed
positively) to Purchaser.
3.2.2 If Trade Working Capital as per the Economic Transfer Date (as set
out in the Status) exceeds or is less than (euro) 24,500,000 (in
words: EURO twenty-four million five hundred thousand) by more than
1 % (the "Adjustment Amount"), then, within five (5) Business Days
of either the Adjustment Report becoming final under Sec. 3.4(e) or
the decision of the Expert Arbitrator being made available for
collection by the Parties pursuant to Sec. 3.4(f), either: if the
Adjustment Amount is a positive amount Purchaser shall pay to Seller
an amount equal to the Adjustment Amount or, as the case may be, if
the Adjustment Amount is a negative amount then Seller shall pay to
Purchaser an amount equal to the Adjustment Amount (expressed
positively), provided that the amount which equals 1 % shall not be
deducted from the Adjustment Amount and the Adjustment Amount
therefore shall include the 1 %.
3.3 The amount by which the Adjusted Purchase Price is higher or lower than
the Initial Purchase Price, as the case may be, plus interest on such
excess or shortfall amount at a rate of 4 % p.a. as from the Economic
Transfer Date shall be paid by Purchaser or Seller, respectively, within
five (5) Business Days after the Status and Adjustment Report as defined
hereinafter has become final and binding for the Parties pursuant to Sec.
3.4 by wire transfer of immediately available funds at the respective
payer's expense to such account which the respective payee may specify in
writing to the payer at least three (3) Business Days prior to the due
date set forth above.
3.4 The Cash, Debt and Trade Working Capital of the JW Entities as per the
Economic Transfer Date will be determined as follows:
(a) Seller shall ensure that the management of the JW Entities shall (i)
prepare within ten (10) Business Days after the Economic Transfer
Date (a) a status
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showing all items included in Cash, Debt and Trade Working Capital
of the JW Entities as per the Economic Transfer Date ("Status")
prepared in accordance with the principles set forth in Annex 3.4,
and (b) a report ("Adjustment Report") calculating on the basis of
the Status the amount of Cash, Debt and Trade Working Capital of the
JW Entities as per the Economic Transfer Date and (ii) provide a
copy of the Status and the Adjustment Report to Seller. Seller will
provide a copy of the Status to Purchaser immediately upon Closing.
(b) Seller shall submit the Status and the Adjustment Report to Xxxxxx
Xxxxxxxx Wirtschaftsprufungs-, Steuerberatungsgesellschaft mbH, a
member of Ernst & Young International ("Seller's Auditor") for
review. Seller's Auditor shall complete such review within twenty
(20) Business Days and submit the Status and Adjustment Report to
Purchaser.
(c) Purchaser shall ensure that at all times after the Closing Date
Seller and Seller's Auditor and their respective personnel, agents,
accountants or other professional advisors shall have access to the
respective business sites as well as to any facilities of the JW
Entities and be allowed to participate in any physical inventories
and to inspect any relevant books, records, documents or other
materials and data for the purpose of a proper conduct of the
procedures set forth in this Sec. 3.4. Purchaser shall, and shall
cause the JW Entities as well as Purchaser's and the JW Entities'
personnel, agents, accountants and other professional advisors
involved in the preparation of the Status, to fully co-operate with
Seller and Seller's Auditor and their respective personnel, agents,
accountants and other professional advisors in all matters relating
to the conduct of the procedures set forth in this Sec. 3.4 and
provide all relevant information relating to all items included in
the Status as requested from time to time for the purpose of a
proper conduct of the procedures set forth in this Sec. 3.4.
(d) Within twenty (20) Business Days after the receipt of the Status and
the Adjustment Report pursuant to para. (b), however not earlier
than twenty (20) Business Days after the Closing Date, Purchaser
shall notify Seller of any objections against the contents of the
Status specifying the items to which such objections relate and the
reason for such objections or against the calculations in the
Adjustment Report by delivering to Seller a written notice
("Disagreement Notice").
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(e) To the extent Purchaser does not raise objections by delivery of a
Disagreement Notice to Seller pursuant to para. (d) within the
period referred to in para. (d), the Status and the Adjustment
Report as submitted by Seller's Auditor shall become final and
binding for the Parties.
If a Disagreement Notice is delivered pursuant to para. (d) within
the period referred to in para. (d), Seller and Purchaser shall
attempt to resolve the disputed issues by meeting and conferring in
good faith during the 15-day period following the receipt of the
Disagreement Notice by Seller.
(f) If Seller and Purchaser are unable to resolve their disagreement
within such 15-day period, then each of Purchaser or Seller shall be
entitled to submit the disputed issues to the Frankfurt office of
KPMG Deutsche Treuhand-Gesellschaft Aktiengesellschaft
Wirtschaftsprufungsgesellschaft which shall decide the dispute
acting as expert arbitrator (Schiedsgutachter,ss. 317 German Civil
Code (Burgerliches Gesetzbuch)) ("Expert Arbitrator"). The Expert
Arbitrator shall be instructed by the Party or Parties submitting
the dispute to it to render a decision regarding the disputed items
within a one-month period, if possible, which decision shall be
final and binding for the Parties. The Expert Arbitrator shall
furthermore be instructed by the Party or Parties submitting the
dispute to it (i) to make its decision having regard to the
provisions of the Agreement, in particular, but not limited to, the
accounting and valuation standards and principles referred to in
para. (a) above, (ii) not to decide on legal issues and not to
deviate from, or replace, the JW Entities' or Seller's Auditor's
discretion exercised within the accounting and valuation standards
and principles referred to in para. (a) above in preparing and
reviewing the Status and the Adjustment Report except to the extent
such discretion was improperly exercised (Ermessensuberschreitung),
(iii) to give each of the Parties the opportunity to present their
views in writing and in an oral hearing prior to rendering its
decision, and (iv) to render its decision in writing with reasons.
The Expert Arbitrator shall furthermore be instructed by the Party
or Parties submitting the dispute to it to retain experts at its own
discretion to obtain any expert opinions required to render its
decision on a reasonably informed basis. The Expert Arbitrator's
decision shall not go beyond the disputed issues and specific value
determined by either Party.
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The Expert Arbitrator shall also decide on the allocation of the
costs of the mediation procedure in accordance with xx.xx. 91 et
seq. of the German Civil Procedure Rules (Zivilprozessordnung).
Article 4
Exclusion of Statutory Claims
Seller and Purchaser agree that the applicability of the provisions of xx.xx.
434 et seq. of the German Civil Code including any and all warranty claims and
other remedies provided for therein shall be excluded. In entering into this
Agreement, the Parties assume that the statements set forth in Article 5 shall
be true and correct as of the date hereof or such other date as expressly
provided for in Article 5. For the avoidance of doubt, the Parties agree that
the statements made in Article 5 do not constitute Beschaffenheitsgarantien
within the meaning of xx.xx. 443, 444 of the German Civil Code (BGB). As a
precaution, Purchaser herewith expressly waives (i) the assertion of any
statutory claims against Seller pursuant to xx.xx. 434 et seq. of the German
Civil Code and (ii) any recourse to ss. 444 of the German Civil Code.
In case of the incorrectness of any of the statements set forth in Article 5,
Seller shall be liable to Purchaser in accordance with Article 6 and Purchaser
shall only have the remedies set forth in Article 6 which shall be the exclusive
remedies available to Purchaser.
Article 5
Agreements regarding the Share and other matters
5.1 Seller and Purchaser hereby agree that the following statements with
regard to the Share, the Company and the JW Business shall be true and
correct as of the date hereof or such other date as expressly provided
hereinafter:
5.1.1 As of the Closing Date, the Company is duly incorporated and
validly existing under the laws of Germany and has the power to
own its assets and to carry on the JW Business.
5.1.2 As of the Closing Date, Seller is the sole owner of the Share and
the Share is validly issued, fully paid, not repaid and
non-assessable and free and clear of any security interests,
liens, pledges, or other encumbrances or third party rights and
not subject to any transfer restrictions or pre-emption or similar
acquisition rights, except as provided in its articles of
association.
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5.1.3 As of the Closing Date, there are no outstanding subscriptions,
options, warrants or rights to acquire any newly issued share of
the Company or any agreements to which the Company is a party by
which it is bound to issue any new shares.
5.1.4 As of the Closing Date, the JW Subsidiary is duly incorporated and
validly existing under the laws of Switzerland and has the power
to own its assets and to carry on the JW Business and has the
share capital as shown in Annex 5.1.4 hereto, the Company holds
all shares in the JW Subsidiary and such shares are validly
issued, fully paid, not repaid and non-assessable and free and
clear of any security interests, liens, pledges, or other
encumbrances or third party rights and not subject to any transfer
restrictions or pre-emption or similar acquisition rights, except
as provided in its articles of association.
5.1.5 As of the Closing Date, there are no outstanding subscriptions,
options, warrants or rights to acquire any newly issued shares of
the JW Subsidiary or any agreements to which the JW Subsidiary is
a party by which it is bound to issue any new shares.
5.1.6 Except as disclosed in Annex 5.1.6, neither of the JW Entities
owns any interest in any corporation, partnership, joint venture
or other business entity as of the Closing Date.
5.1.7 The consolidated financial statement of the JW Entities as per
June 30, 2002 ("Financial Statement") attached as Annex 5.1.7/1
has been prepared in accordance with US GAAP as consistently
applied with past practice ("US Accounting Principles") and the
Financial Statement presents fairly the consolidated earnings,
assets and liabilities and the financial condition of the JW
Entities.
The members of the Company's management listed in Annex 5.1.7/2
have confirmed to the Seller in writing that, to their best
knowledge as of the date hereof, no JW Entity had, as of June 30,
2002, any liabilities or obligations, whether accrued, contingent
or otherwise (except as reflected or provided for in the Financial
Statement or the notes under the financial statements as of June
30, 2002 prepared in accordance with German GAAP as consistently
applied with past practice, hereinafter the "Notes"), that,
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pursuant to the US Accounting Principles, would have had to be
reflected or provided for in the Financial Statement or stated in
the Notes if they had been known to those members of the Company's
management listed in Annex 5.1.7/2 as of June 30, 2002.
5.1.8 The Company is the owner of the fixed assets (Sachanlagevermogen)
reflected in the Financial Statement or acquired by it after June
30, 2002 except for fixed assets (i) which have been disposed of
in the ordinary course of business or (ii) as set out in Annex
5.1.8/1 hereto ("JW Fixed Assets"). The JW Fixed Assets are free
of any liens, pledges or other encumbrances or any other third
party rights except (a) granted with respect to liabilities or
reserves which are reflected in the Financial Statement or (b) as
set forth in Annex 5.1.8/2 or (c) granted in the ordinary course
of business.
5.1.9 Annex 5.1.9 hereto contains a list of all leases for real property
leased by any of the JW Entities as of the Closing Date. None of
the JW Entities owns any real property.
5.1.10 As of the Closing Date, the JW Entities are the owners of all
patents, utility models, registered designs, copyrights and trade
and service marks and all applications for any of the foregoing
identified in Annex 5.1.10/1 hereto ("Owned Intellectual Property
Rights") and all registrations, other filings or fees payable for
such Owned Intellectual Property Rights have been made, filed or
paid when due; except as set out in Annex 5.1.10/2 hereto, the
Owned Intellectual Property Rights are valid and free of security
rights, pledges, beneficial interests or other encumbrances or
licenses, rights to use or option rights of third parties and, to
Seller's Knowledge, not contested.
Except as shown in Annex 5.1.10/3 and to Seller's Knowledge (i)
the use of the Owned Intellectual Property Rights in the JW
Business does not infringe, nor is claimed to infringe, to a
material extent, upon the rights of any third party, and (ii) no
party infringes to a material extent upon any of the Owned
Intellectual Property Rights.
Except as listed in Annex 5.1.10/4 the JW Entities do not use any
intellectual property rights owned by or licensed from any
entities of the Xxxxxxx Group.
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5.1.11 As of the Closing Date, the JW Entities own or hold valid leases,
licenses or other necessary rights (including expectant rights
(Anwartschaften)) with respect to all fixed and current assets
currently used in the operation of the JW Business.
5.1.12 Except as shown in Annex 5.1.12, there are no proceedings pending
before any courts, authorities or arbitration bodies to which any
of the JW Entities is a party with a value in dispute in excess of
(euro) 100,000 (in words: EURO one hundred thousand) and, to
Seller's Knowledge, no such proceedings have been threatened in
writing.
5.1.13 Except for the contracts and agreements listed in Annex 5.1.13/1
or in any other Annex to this Agreement and except for employment
agreements and outstanding purchase and sale orders, none of the
JW Entities is a party to any contracts or agreements which (i)
involve an aggregate outstanding commitment of the respective JW
Entity of more than (euro) 250,000 (in words: EURO two hundred
fifty thousand) or (ii) involve an aggregate outstanding annual
commitment of the respective JW Entity of more than (euro) 125,000
(in words: EURO one hundred twenty-five thousand) and have an
outstanding fixed term of more than two (2) years.
Except for the contracts and agreements listed in Annex 5.1.13/2,
none of the JW Entities is a party to any of the following
agreements:
(a) agreements with suppliers whose business with a JW Entity in
the period between August 1, 2001 to July 31, 2002 exceeded
a value of 5 % of the total purchase volume of the
respective JW Entity in the financial years running from
August 1, 2000 through July 31, 2001, and from August 1,
2001 through July 31, 2002;
(b) franchise agreements with Xxxx Wolfskin Store Partners;
(c) shop-in-shop agreements;
(d) distributorship or agency agreements with third parties;
(e) other customer contracts containing provisions related to
discounting or rebates, including the volume discounts
granted to the 10 customers who generated the highest
turnover in the past
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financial year running from October 1, 2001 through June
30, 2002 (such volume discounts to be disclosed in Annex
5.1.13/2), but excluding early order and all other volume
discounts; margin guarantees, consignment sales,
(non-defective) inventory returns;
(f) loans (Darlehen) extended by any JW Entity or guarantees
(Garantien), suretyships (Burgschaften) or any other
securities granted by any JW Entity for any indebtedness for
any entity other than any other JW Entity;
(g) agreements with Xxxxxxx Group, other than any other JW
Entities including agreements with respect to deliveries of
goods, services or leases provided by or to such entity;
(h) joint venture, consortium or cooperation agreements or other
agreements with third parties involving a sharing of profits
or expenses by the respective JW Entity;
(i) any contracts or agreements other than those listed in
Annexes 5.1.13/1, 5.1.13/2 (a) to (h) and 5.1.9 which are
material for the JW Business as conducted in the past
containing a change of control provision entitling either
party to terminate the contract or agreement as a result of
the consummation of this Agreement.
Furthermore, Annex 5.1.13/2 lists the 15 largest purchase and the
20 largest sale orders, outstanding as of June 30, 2002.
Except as disclosed in Annex 5.1.13/3 hereto, the agreements and
contracts listed in Annexes 5.1.9, 5.1.13/1 or 5.1.13/2
("Principal Agreements") are in full force and effect and the
respective JW Entities are not in breach or default with respect
to any material obligations arising under the Principal
Agreements.
5.1.14 Employment Matters
(a) Annex 5.1.14 (a) contains a true and complete list of all
employees in the JW Business - other than employees who are
temporarily employed or are reimbursed on an hourly basis
("Temporary Staff") - and, as of the Closing Date, the JW
Entities will not
16
employ a number of employees - other than Temporary Staff -
exceeding the current number (Annex 5.1.14 (a)) by more
than 5 %, provided that employees recruited after the date
hereof with the prior written consent of Purchaser shall
not be taken into account;
(b) Annex 5.1.14 (b) hereto contains a true and complete list of
all works agreements (Betriebsvereinbarungen) (including
social plans), benefit, bonus, retention bonus, pension,
compensation, profit sharing or other employee benefit plans
and collective labour agreements (Tarifvertrage) that are
applicable to or relevant for the JW Entities as of the
Closing Date;
(c) Annex 5.1.14 (c) hereto contains a true and complete list of
all individual pension commitments and pension schemes
(betriebliche Altersversorgung) with officers and employees
of any of the JW Entities as of the Closing Date;
(d) Annex 5.1.14(d) hereto contains a true and complete list of
(i) all manag ement service contracts
(Geschaftsfuhrer-Dienstvertrage) and (ii) of all employment
contracts which provide for an annual gross compensation,
including special payments such as bonuses or other
incentives of more than (euro) 100,000 (in words: EURO one
hundred thousand) in each individual case.
5.1.15 Annex 5.1.15 contains a true and complete list of the material
insurance contracts of the JW Entities which are in full force and
effect up to Closing Date and, all premiums due up to the Closing
Date have been paid.
5.1.16 As of the Closing Date, the JW Entities have all material public
approvals, permits and licenses required for the operation of the
JW Business as carried on as of the Closing Date, and, to Seller's
Knowledge, there are no indications for a withdrawal, revocation,
restriction or amendment of any of these permits and licenses.
5.1.17 As of the Closing Date, the JW Business is conducted in material
compliance with all applicable law in any relevant jurisdiction.
No insolvency proceedings have been commenced regarding a JW
Entity or
17
have been threatened in writing and there are no circumstances
which would require the commencement of such proceedings.
5.1.18 In the period between June 30, 2002 and the Closing Date, the JW
Business will have been operated in the ordinary course and
consistent with past practice, except as otherwise expressly
provided in this Agreement as a going concern, in particular with
regard to investment policies, order-intake policies, and payment
and claims procedures. Other than in the ordinary course of
business, the JW Entities will not have changed any customer
contracts or policies containing provisions related to discounting
or rebates (including early order or volume discounts), margin
guarantees, consignment sales or (non-defective) inventory
returns.
5.1.19 In the period between June 30, 2002 and the Closing Date, no
events will have occurred which would be a Material Adverse Change
as defined hereinafter in the business, operations and assets or
financial condition or prospects of the JW Business taken as a
whole except as disclosed in Annex 5.1.19/1 hereto or as
contemplated in this Agreement.
A Material Adverse Change for purposes of this Sec. 5.1.19 shall
be defined as an event which reduces the forecasted EBIT LTM
September 30, 2002 (EUR 8.1 million) or the budgeted EBIT for the
period ending September 30, 2003 (EUR 9.8 million) according to
the management case reviewed by Xxxxxx Xxxxxxxx and which is
attached hereto as Annex 5.1.19/2 (including extraordinary items
and provisions). For purposes of assessing EBIT, timing delays of
one week or less of inventory shipments shall not be considered a
permanent impact to EBIT.
5.2 For the purpose of this Agreement, Seller's Knowledge shall only include
the actual knowledge of the persons listed in Annex 5.2 and the knowledge
of these persons could have obtained acting with the care of a prudent
business man. No knowledge of any other persons shall be considered as, or
be attributed to Seller as, Seller's Knowledge.
18
Article 6
Liability of Seller
6.1 In case of the incorrectness of any of the statements set forth in Article
5 which has not been cured on or prior to the Closing Date, Seller may
attempt to remedy the incorrectness. If Seller fails to remedy the
incorrectness within a reasonable period, such period not to exceed two
(2) months after Seller has received a written notice by Purchaser
regarding the incorrectness of a statement, the following provisions shall
apply:
6.2 Any liability of Seller for the incorrectness of any statements made in
Article 5 pursuant to the following provisions shall be irrespective of
fault (verschuldensunabhangig).
6.3 Subject to the limitations set forth in the following provisions, Seller
shall, in the event that Purchaser or a JW Entity suffers damages as a
result of such incorrectness, pay to Purchaser, or at Purchaser's election
to the respective JW Entity, a compensation for the damages suffered by
Purchaser or the respective JW Entity as a result of such incorrectness,
provided that Seller shall, subject to the following sentence, not be
liable for indirect or consequential damages (Folgeschaden) including, but
not limited to, loss of profit or any value reductions due to lost
earnings or any argument that the purchase price was calculated upon the
basis of incorrect assumptions. In case any of the statements made in
Secs. 5.1.10, 5.1.11, 5.1.12, 5.1.13, 5.1.16 or 5.1.17 are incorrect and
Purchaser elects compensation of the damages suffered by the respective JW
Entity, the Seller shall be liable for the amount of any profits actually
lost by the respective JW Entity as a direct result of such breach, it
being understood that no other indirect or consequential damages may be
claimed or asserted. The legal principles as to the calculation of
damages, mitigation of damages and offsetting of losses by advantages due
to the damaging event (Schadensberechnung, Schadensminderung,
Vorteilsausgleichung) pursuant to xx.xx. 249 et seq. of the German Civil
Code (Burgerliches Gesetzbuch) shall apply.
6.4 Any liability of Seller under this Article 6 shall be excluded to the
extent that the claims of Purchaser or the underlying facts or
circumstances (i) have been collected under insurance policies or claims
against other third parties, or (ii) are covered by any indemnity
provisions under this Agreement (no double counting), or (iii) are
reflected as liabilities or of the type and within the amount of any of
the provisions in the Financial Statement. Any payments actually made by
Seller to Purchaser or any
19
of the JW Entities in order to fulfill a liability which is or becomes
excluded under the foregoing provisions shall be refunded by Purchaser to
Seller immediately upon the occurrence of the event resulting in such an
exclusion of liability.
6.5 Any claims of Purchaser shall be excluded to the extent that such claims
or the underlying circumstances have prior to the signing of this
Agreement been disclosed to Purchaser or any of its officers, directors,
employees, agents, accountants or other professional advisors or
representatives in any of the documents listed in Annex 6.5 hereto.
6.6 Purchaser may assert any claims for an incorrectness of any of the
statements made in Article 5 only if (i) the value of any individual claim
exceeds an amount of (euro) 50,000 (in words: EURO fifty thousand) and
(ii) the value of the aggregate of all claims exceeding the threshold
under (i) above exceeds an amount of (euro) 1,000,000 (in words: EURO one
million) (Freigrenze). Any liability of Seller for the incorrectness of
any of the statements made in Sec. 5.1 other than the statements made in
Sec. 5.1.1, 5.1.2, 5.1.3, 5.1.4 and 5.1.5, is limited to an amount of 20 %
of the Initial Purchase Price. Any liability of the Seller for the
incorrectness of any of the statements made in Sec. 5.1.1, 5.1.2, 5.1.3,
5.1.4 and 5.1.5 is limited to an amount equal to the Initial Purchase
Price.
6.7 Any liability of Seller other than set forth in this Article 6 for the
incorrectness of any of the statements made in Article 5 shall be
excluded. Any rights or claims of Purchaser for rescission (Rucktritt) or
challenge (Anfechtung) of this Agreement or any other release from this
Agreement, be it based on culpa in contrahendo or any other legal grounds,
shall be excluded to the extent legally permitted, except for the
rescission rights provided for under Sec. 10.3. Furthermore, any other
rights or claims of Purchaser in connection with this Agreement and the
transactions contemplated herein based on any legal grounds (whether or
not relating to matters or factual circumstances covered by any of the
statements made in Article 5) including, but not limited to, claims for
damages or reduction of purchase price shall be excluded to the extent
legally permitted except for claims of Purchaser for fulfillment of such
obligations of Seller, which are expressly provided for under this
Agreement, or claims for damages in case of a breach of such obligations.
6.8 A liability of Seller pursuant to this Agreement which relates to court
judgments, public orders or third party claims asserted against Purchaser
or any of the JW Entities requires that Purchaser and/or the respective JW
Entity have, at the choice of
20
Purchaser, either (i) filed all remedies against such court judgments or
public orders or rejected such third party claims and pursued the
respective proceedings or matters with the care of a prudent businessman,
provided that any costs and expenses reasonably incurred by Purchaser or
the respective JW Entity in this context shall be compensated by Seller as
and when incurred and proven by proper evidence or (ii) irrevocably
authorized Seller or any persons designated by Seller to take (at their
own expense) any measures with respect to the respective court judgments,
public orders or third party claims, in particular to reject or accept
such claims, enter into negotiations, file remedies and pursue the
respective proceedings and enter into settlement agreements for and on
behalf of Purchaser and/or the respective JW Entity. Purchaser and/or the
JW Entities shall thereby under no circumstances be entitled to receive
compensation by Seller for any payments made without the prior written
consent of Seller unless on the basis of (i) a provisionally or finally
enforceable court decision or a provisionally or finally enforceable
administrative order (including tax orders) after pursuing the respective
proceedings in accordance with the foregoing provisions or (ii) a
settlement agreement entered into by Purchaser and/or the respective JW
Entity with Seller's prior written consent or for and on behalf of
Purchaser and/or the respective JW Entity by Seller or if the claim has
been conceded in writing by Seller. Purchaser shall, and shall ensure the
respective JW Entity to, inform Seller, and Seller shall inform Purchaser
and/or the respective JW Entity about any events and circumstances that
may have an effect on the obligations of Seller set forth hereunder
without delay. Furthermore, Purchaser shall, and shall ensure the
respective JW Entity to, give to Seller and its personnel, agents,
accountants and other professional advisors and representatives all
necessary support and information in handling such claims including supply
of all relevant information, review of business documents and access to
business sites.
6.9 Any claims of Purchaser under this Article 6 relating to the incorrectness
of any of the statements made in Sec. 5.1.1 - 5.1.3 shall be time-barred
as of December 31, 2008 and any claims under this Article 6 relating to
the incorrectness of any of the other statements made in Sec. 5.1 shall be
time-barred as of December 31, 2003. Any other claims of Purchaser arising
from or in connection with this Agreement or the transactions contemplated
herein based on any legal grounds shall be time-barred as of December 31,
2005, except for claims under Article 7 which shall be time-barred as set
forth therein. Sec. 203 of the German Civil Code shall not apply.
21
6.10 Purchaser shall, and shall ensure the respective JW Entity to, assign to
Seller any claims that Purchaser and/or the respective JW Entity may have
against any party in connection with the matters for which Seller is
liable hereunder, provided that such obligation shall only exist after
Seller has held harmless Purchaser or the respective JW Entity pursuant to
this Article 6 and Seller, in pursuing such claims, shall consult with
Purchaser in order to avoid any unnecessary impairment of the customer or
supplier relationships of the JW Entities.
Article 7
Tax
7.1 Seller shall be liable for, indemnify, and hold harmless, subject to
Purchaser's unfettered discretion, the JW Entities and/or Purchaser from
all taxes and social security payments including ancillary taxes
(steuerliche Nebenleistungen) resulting from tax assessments
(Steuerbescheide) or liability assessments (Haftungsbescheide) in
connection with taxes (jointly referred to as "Taxes" or "Tax")
attributable to a taxable period and/or business year or period ending on
or before the Economic Transfer Date, in particular in connection with a
Tax audit (such assessment or amendment thereof a "Tax Assessment"),
unless such Taxes were calculated as Debt under Annex 3.1.
7.2 Seller shall not be liable under the foregoing paragraph if and to the
extent such tax liabilities are shown or provided for in the Financial
Statement, provided that the adjustment mechanism in Sec. 3 remains
unaffected thereof.
7.3 Purchaser shall be responsible for and shall hold Seller harmless against
any Taxes relating to or attributable to the JW Entities attributable to
all taxable periods and/or business years or period beginning after the
Economic Transfer Date.
7.4 Seller shall be entitled to compensation by Purchaser for Tax refunds or
future Tax reductions received by Purchaser or its affiliates (including
after the Economic Transfer Date the JW Entities) if and to the extent
that Tax Assessments regarding the JW Entities for taxable (assessment)
periods or business years or period ending on or before the Economic
Transfer Date are amended or assessed, especially by Tax audit, and such
amendments will cause future Tax reductions (Steuerminderungen) of
Purchaser's or JW Entities' Tax liabilities, e.g. by the increase of
acquisition costs of (depreciable) assets reflected in the respective
balance sheet which Purchaser and/or JW Entities would not have obtained
otherwise. For the avoidance of doubt:
22
Future Tax reductions solely and exclusively based on a future step-up in
the Tax basis of the JW Entities' assets shall be to the sole benefit of
the Purchaser.
7.5 Tax benefits and future Tax reductions which Purchaser or its affiliates
(including after the Economic Transfer Date the JW Entities) received in
accordance with the aforesaid shall reduce the indemnity up to, or
respectively, give Seller a claim against Purchaser of an amount equal to
their net present value, based on (i) the assumption of immediate use of
Tax loss carry backs (Verlustrucktrage) and loss carry forwards
(Verlustvortrage), (ii) the Tax rate for trade tax and corporate income
tax purposes applicable as of the date the respective Tax benefits or Tax
reductions were received for the first time, and (iii) the net present
value being calculated using an interest rate of 6 % p.a.
7.6 Indemnification payments by Seller under this Article 7 shall be made
within ten (10) Business Days following written notice by Purchaser,
provided that the payment of such amounts to the Tax authority is
assessed, and further provided that Seller shall not be required to make
any payment earlier than ten (10) Business Days before such Taxes are due.
For claims under this Article 7, the provisions of Sec. 6.8 shall apply
mutatis mutandis.
7.7 The Purchaser and the Seller agree to furnish or cause to be furnished to
each other, upon request, and each at their own expense, as promptly as
practicable, such information (including access to books and records,
documents or other materials including relevant working papers) and
assistance relating to the JW Entities as is necessary for the filing of
any Tax return, for the preparation for any Tax audit, and for the
prosecution or defense of any claim, suit or proceeding relating to any
adjustment or proposed adjustment with respect to Taxes covering any
taxable assessment period ending on or before the Closing Date, including
making employees available on a mutually convenient basis to provide
additional information and explanations of any material provided
hereunder.
7.8 Subject to the following provisions, Seller agrees to procure the
preparation and filing of all Tax returns of the JW Entities for any
taxable assessment period ending on or before June 30, 2002. Purchaser
shall procure that the JW Entities file Tax returns for the taxable
assessment period including the Economic Transfer Date in accordance with
instructions from, and only with the prior written consent of, Seller to
the extent such instructions comply with applicable laws. Tax returns for
the period including the Economic Transfer Date shall be prepared on a
basis consistent
23
with those prepared for prior taxable assessment periods. Purchaser shall
procure that Seller is provided with a copy of such completed return at
least twenty-five (25) Business Days prior to the due date for the filing
of such return, and Seller shall have the right to review such return and
statement prior to the filing thereof. In case of disputes, Seller and
Purchaser will enter into consultations and will attempt in good faith to
resolve any open issues.
Purchaser shall give to Seller and its personnel, agents, accountants or
other professional advisors full information and full access to the books
and records of the JW Entities for taxable assessment periods ending on or
before or including the Economic Transfer Date, to the extent reasonably
requested.
7.9 Each of the Parties shall be notified by the respective other Party of any
order announcing a Tax audit that may partially or fully extend to taxable
assessment periods ending on or before or including the Economic Transfer
Date and any Tax Assessment resulting therefrom. Such notifications must
be made immediately after the receipt of the respective order or Tax
Assessment.
7.10 The Parties will assist each other in any Tax audit or administrative or
court proceeding of the JW Entities relating to any taxable assessment
period ending on or before or including the Economic Transfer Date. The
Purchaser and the Seller shall keep the respective other party closely
informed as to the progress of such Tax audit, or appeal or action against
any Tax Assessment resulting from such Tax audit.
7.11 For the announced Tax audit for corporate income and trade tax regarding
the taxable periods from 1996 through 2000, Seller may elect to direct
itself or through its authorized representative of its own choice who is
subject to professional secrecy (Berufsverschwiegenheit) such audit and
all administrative or judicial proceedings involving any additional Taxes
asserted in such audit. For all Tax audits relating to periods ending on
or before or including the Economic Transfer Date (including the Tax audit
for the taxable periods from 1996 through 2000 referred to above), Seller,
at its request and at its own costs, through its authorized representative
who is subject to professional secrecy (Berufsverschwiegenheit), shall be
granted the possibility of participating in a Tax audit, inspecting all
relevant documents and making all necessary procedural declarations
relating to periods ending on or before or including the Economic Transfer
Date, provided however, that declarations which could result in a negative
effect on the Tax position of one of the JW Entities shall require the
prior written consent of the Purchaser which shall not be unreasonably
withheld. In
24
case of disputes, Seller and Purchaser will enter into consultations and
will attempt in good faith to resolve any open issues. The Purchaser
shall, at the request of the Seller, cause any of the JW Entities to
appeal (Einlegung eines Einspruchs) and, if necessary, take legal action
(Klageerhebung) against a revised Tax Assessment. The Seller shall bear
the costs of any appeal and/or action it causes to be pursued. The
respective JW Entity shall be represented by a tax counsel appointed by
the Purchaser who shall be instructed to consult with the tax counsel
appointed by the Seller for that purpose.
7.12 Claims arising according to this Article 7 shall be time-barred after the
expiration of a six-month period beginning (i) in case of claims of
Purchaser on the date on which the respective Tax Assessment becomes final
(bestandskraftig) and (ii) in case of claims of Seller on the date on
which a copy of the respective Tax Assessment and of the relevant tax
balance sheets and tax returns have been submitted to Seller. ss. 203 of
the German Civil Code shall not apply.
Article 8
Purchaser's Representations and Warranties
Purchaser hereby warrants and represents as of the date hereof or such other
date as expressly provided hereinafter in form of an independent guarantee:
8.1 As of the date hereof and as of the Closing Date, Purchaser will be duly
incorporated, validly existing and in good standing under the jurisdiction
of its incorporation.
8.2 The execution and performance of this Agreement by Purchaser and the
consummation of the transaction contemplated hereby have been, as of the
date hereof and as of the Closing Date, duly and validly authorized and
approved by all necessary corporate actions and, when executed, this
Agreement shall be legally binding and enforceable against Purchaser in
accordance with its terms.
8.3 As of the date hereof and as of the Closing Date, the execution of this
Agreement and the consummation of the transaction contemplated hereby will
not violate the governing documents of Purchaser and no consent, approval
or authorization of any third party or government authority is required
therefore except as otherwise provided in this Agreement.
25
Article 9
Covenants prior to Closing
In the period between the Economic Transfer Date and the Closing Date, Seller
shall ensure the following:
9.1 No additional debt or other obligation for borrowed money is incurred
except in the ordinary course of business;
9.2 No fixed assets of the JW Business are sold, merged or consolidated to or
with a third party or encumbered with any third party rights outside the
ordinary course of business and no material assets or businesses are
acquired by purchase, merger or otherwise;
9.3 No shareholders' resolutions of any of the JW Entities regarding capital
increases or capital reductions, the creation of authorized capital or any
changes of the articles of associations are adopted except as otherwise
expressly provided in this Agreement in particular with regard to those
resolutions and corporate actions taken for the purpose of effecting the
actions contemplated by Sec. 11.5. Seller will inform Purchaser
immediately after signing about the actions it has taken or intends to
take for such purpose and will provide Purchaser prior to Closing with
written information showing that such steps have been taken;
9.4 No shares or other securities including, but not limited to, convertible
bonds or stock options are issued by any of the JW Entities, and no rights
or claims for the issuance of any such shares or other securities are
created and no shares or other securities of any of the JW Entities are
redeemed or cancelled;
9.5 No increase of the compensation or benefits as currently agreed are
granted and no severance, termination or bonus payments are made by any of
the JW Entities to any of its employees, except in the ordinary course of
business consistent with past practice or as required by law, common
practice (betriebliche Ubung) or contracts or agreements in effect prior
to the date of this Agreement;
9.6 The JW Entities shall not, except in the ordinary course consistent with
past practice or as expressly provided in this Agreement (i) modify, amend
or terminate any Principal Agreements, or (ii) waive, release, compromise
or assign any material rights or claims under the Principal Agreements.
26
Article 10
Conditions Precedent for Consummation
10.1 The consummation (Vollzug) of this Agreement shall be subject to the
satisfaction (or a waiver pursuant to Sec. 10.2) of the conditions
precedent that all consents of, filings and registrations with, and
notifications to, all regulatory authorities as set forth in Annex 10.1
(including, but not limited to, those required by EU Merger Control,
German antitrust law or the Xxxx-Xxxxx-Xxxxxx Antitrust Improvements Act
of 1976, as amended, and the rules and regulations promulgated thereunder)
shall have been obtained or made and shall be in full force and effect and
all waiting periods required by applicable law shall have expired.
In case the clearance of any of the transactions contemplated hereby shall
be granted by any of the merger control authorities only subject to the
fulfillment of certain conditions, obligations or commitments
(collectively the "Commitments"), Purchaser hereby undertakes (i) to
consent to such Commitments and (ii) to enter into all agreements and
carry out all other actions necessary to ensure the fulfillment of such
Commitments including, but not limited to, the divestiture of assets and
interests, the granting of licenses to third parties and the termination
of affiliations with competitors.
The Parties shall cooperate and provide each other with all necessary
assistance to notify the transactions contemplated herein without undue
delay to the merger control authorities in charge. Seller shall be given
the opportunity to be present at meetings, if any, with the merger control
authorities in charge. Each Party must keep the other Party fully informed
at all times on all communications and contacts with the merger
authorities in charge.
10.2 Seller and Purchaser may jointly waive the condition set forth in Sec.
10.1 provided that no such waiver will be effective unless it is set forth
in writing by the respective Party vis-a-vis the other Party.
10.3 This Agreement may be terminated at any time prior to the Closing Date:
10.3.1 by either Purchaser or Seller if the conditions precedent under
Sec. 10.1 unless waived in accordance with Sec. 10.2 have not been
satisfied on or prior to September 5, 2002, provided that neither
Purchaser nor Seller will be entitled to terminate this Agreement
pursuant to this Article 10 if such Party's breach of this
Agreement has prevented satisfaction of the condition
27
or the consummation of the transaction contemplated hereby and
notwithstanding any other claims such Party may have resulting
from such breach.
10.3.2 by Purchaser (i) in case of the incorrectness of any of the
statements set forth in Article 5 other than Sec. 5.1.19, (ii) in
case of a breach on part of the Seller of any obligations or
covenants set forth in this Agreement, if such event pursuant to
(i) or (ii) would otherwise trigger claims of Purchaser or a JW
Entity for damages under this Agreement exceeding an aggregate
amount of(euro)1,500,000 (in words: EURO one million five hundred
thousand) or (iii) in case any circumstance, change in or effect
on the JW Business has occurred after June 30, 2002 which is
materially adverse to the business, operations and assets or
financial condition or prospects of the JW Business taken as a
whole, provided that (i), (ii) and/or (iii) result in a Material
Adverse Change. A Material Adverse Change for purposes of this
Sec. 10.3.2 shall be defined as an event which reduces the
forecasted EBIT LTM September 30, 2002 (EUR 8.1 million) or the
budgeted EBIT for the period ending September 30, 2003 (EUR 9.8
million) according to the management case reviewed by Xxxxxx
Xxxxxxxx and which is attached hereto as Annex 5.1.19/2 by more
than 5 % (including extraordinary items and provisions). For
purposes of assessing EBIT, timing delays of one week or less of
inventory shipments shall not be considered a permanent impact to
EBIT.
For the avoidance of doubt, in case of termination of this
Agreement pursuant to (i) or (iii), Purchaser shall not be
entitled to claim damages.
10.4 The termination rights set forth hereunder must be exercised by the
respective Party by written declaration to the other Party within a period
of fifteen (15) Business Days after the respective Party has obtained
knowledge of its right to terminate this Agreement, however, at the latest
on the day immediately preceeding the Closing Date.
In the event of termination of this Agreement by either Purchaser or
Seller as provided above, this Agreement will forthwith become void and
there will be no liability on the part of any Party to this Agreement to
any other Party, except for the obligation of the Parties in Article 12,
and except that nothing herein will relieve any Party from any breach of
this Agreement prior to such termination.
28
Article 11
Additional Agreements
11.1 Seller and Xxxxxxx Outdoors have granted the guarantees, sureties and
letters of support for the financial indebtedness of the JW Entities as
set forth in Annex 11.1 (the "Xxxxxxx Guarantees"). The Parties agree that
Seller and Xxxxxxx Outdoors shall be released from the Xxxxxxx Guarantees
as of the Closing Date. Seller and Purchaser shall cooperate to obtain the
necessary consents for such release from the respective beneficiaries and
Purchaser shall afford to such beneficiaries such guarantees, securities
and letters of support as may be required to obtain such consent. Until
the respective beneficiaries give their consent to such release from the
Xxxxxxx Guarantees, Purchaser indemnifies Seller and Xxxxxxx Outdoors from
any liabilities, costs and expenses arising from or in connection with any
of the Xxxxxxx Guarantees.
11.2 For a period of three (3) years after the Closing Date, Seller shall not,
and shall cause the other entities of the Xxxxxxx Group not to, directly
or indirectly
(a) compete with any of the JW Entities in the territory listed in Annex
11.2(a)/1 in the area of the JW Business as currently operated,
provided that the activities described in Annex 11.2(a)/2 shall not
be affected by such non-compete obligations;
(b) acquire or hold any interests in, or manage, any entity directly or
indirectly competing with the Entities as prohibited under Sec. 11.2
(a) above; provided, however, that (i) Seller may acquire and hold
directly or indirectly interests or securities of any entity solely
as passive investment so long as such investment does not confer to
Seller directly or indirectly more than 10 % of the voting rights of
such entity or give Seller the right to be represented in the
respective management body or any contractual management or control
rights with respect to such entity and (ii) Seller may acquire and
hold directly or indirectly interests or securities of any entity as
long as less than 10 % of the revenues of such entity or the group
to which such entity belongs are derived from a business that
directly or indirectly competes with the JW Entities as prohibited
under Sec. 11.2 (a) above, provided that in case (ii) Seller will
use its respective best efforts to cause such entity to dispose of
such competing business on commercially reasonable terms.
29
11.3 For a period of two (2) years after the Closing Date, Seller shall not,
and shall cause the other entities of the Xxxxxxx Group not to, actively
solicit for employment any of the current employees of the JW Entities,
provided that general hiring or advertising efforts shall not be affected
by such obligations.
11.4 The joint bank account held by the Company and other affiliates of Xxxxxxx
Outdoors on the basis of a cash pool agreement with Dresdner Bank dated
September 5, 1995 as well as any underlying inter-company agreements has
been terminated prior to the Economic Transfer Date and the Company has
ceased to be a co-owner of the joint account.
11.5 The Parties agree that with effect as of the Closing Date, the Company and
the entities of the Xxxxxxx Group shall have settled all intercompany
accounts, whether they are interest bearing or not, including, but not
limited to, any intercompany trade payables and trade receivables, any
outstanding liabilities under the domination and profit and loss transfer
agreement and the liability to the Seller for the effect of the goodwill
pushed down in the amount of EUR 7,669,378.217
(seven-six-six-nine-three-seven-eight-point-two-one-seven) reflected in
the financial statements of the Company as per June 30, 2002 prepared in
accordance with German HGB and specifically referred in the notes thereto.
For the avoidance of doubt, the Parties agree that the amount of Debt and
Cash existing as of the Economic Transfer Date shall not change between
Economic Transfer Date and Closing Date as a result of the settlement of
intercompany accounts under this Sec. 11.5. Seller shall ensure that any
trade payables or other intercompany obligations owed by the Company to
any entity of Xxxxxxx Group still outstanding on the Closing Date shall be
waived prior to Closing. Seller shall indemnify Purchaser or the JW
Entities from all Taxes resulting from the settlement or waiver of any
intercompany accounts under this Sec. 11.5.
11.6 With a resolution dated April 4, 2002, as amended May 29, 2002, the
shareholders of the Company resolved a short fiscal year running from
October 1, 2001 to June 30, 2002. Such amendment of the articles of
association was entered into the commercial register of the Company on
June 7, 2002. The Company and the Seller entered into an agreement dated
June 18, 2002 to terminate the domination and profit and loss transfer
agreement with effect as of June 30, 2002. The shareholders of the Seller
and the Company have approved such termination at shareholders' meetings
on June 18, 2002 and June 24, 2002, respectively. The termination was
entered into the commercial register of the Company on July 2, 2002. In
case such termination of the domination and profit and loss transfer
agreement was not valid, Seller and Purchaser
30
shall undertake that Seller, Purchaser and Company are put into a position
as if the domination and profit and loss transfer agreement had been
validly terminated as of June 30, 2002.
11.7 In the period between signing of this Agreement and the Closing Date, the
Purchaser and Purchaser's directors, officers, employees, affiliates,
agents, advisors and representatives shall not contact the Company or any
of its officers, directors, employees, affiliates, suppliers or customers
without the prior written consent of Xxxxxxx Outdoors. Such consent can
either be given for each individual contact or in the form of a general
consent with regard to certain issues as stated in the respective written
consent.
11.8 Xxxxxxx Outdoors hereby guarantees the performance of all Seller's
obligations vis-a-vis the Purchaser as agreed herein.
11.9 Purchaser will ensure that the Company will offer support and supply
products, for a period of 24 months after Closing Date, to Xxxxxxx Group
or - with regard to the fulfillment of orders at the discretion of the
Seller - directly to the store partners listed in Annex 11.9/1, with
regard to the current US and Canadian activities related to the JW
Business, in accordance with past practice and as more particularly
described in Annex 11.9/2. Seller shall ensure that the service agreement
between the Company and Xxxxxxx Worldwide Associates Canada n/k/a Xxxxxxx
Outdoors Canada Inc. dated December 31, 1998 will be terminated with
effect as of Closing.
11.10 Seller will execute and deliver all further instruments and documents, and
take all further action, that may be necessary, or that Purchaser may
reasonably request, in order to enable the JW Entities to exercise and
enforce their rights and remedies hereunder with respect to any Owned
Intellectual Property Rights. Seller will in particular execute all
documents, declarations or actions as are necessary to achieve
registration of Purchaser as owner at the national trademark and patent
offices that have issued such Owned Intellectual Property Rights which
registration shall, however, be executed at Purchaser's cost and expense.
Article 12
Miscellaneous
12.1 The terms of this Agreement shall be kept confidential, except as may be
otherwise required pursuant to law, stock exchange rules, judicial or
official compulsion, in
31
which case the disclosing Party shall notify the other Parties in advance
of the impending disclosure, except as otherwise permitted by Sec. 12.2.
12.2 No press releases related to this Agreement and the transaction
contemplated herein, or other announcements to the employees, customers or
suppliers of the JW Business will be issued without the mutual approval of
all Parties hereto, except any public disclosure which any Party in good
faith believes is required by law or regulation or stock exchange rules.
12.3 Each of the Parties shall pay all of its expenses (including fees and
expenses of legal counsel, financial advisors or other representatives or
consultants) incurred by it in connection with the preparation,
negotiation, execution and implementation of this Agreement except as
otherwise provided herein. The costs of the notarization of this Deed
shall be born by the Purchaser.
12.4 The Parties shall not be entitled to set-off (Aufrechnung) of, or
retention (Zuruckbehaltung) with regard to, any rights or claims against
any obligation of the other Parties arising under or in connection with
this Agreement unless as set forth in Sec. 2.3 or as expressly agreed upon
between the Parties or unless such rights or claims of such Party are
finally adjudicated.
12.5 In case any Party does not make any payment on the time and in the amount
owed pursuant to the provisions hereunder, the outstanding amount shall
bear interest as from the due date at a rate of 8 % above base rate
(Basiszinssatz) according to Sec. 247 of the German Civil Code.
12.6 This Agreement shall be binding upon and inure to the benefit of the
Parties hereto and their respective successors and permitted assignees.
This Agreement or any rights or obligations hereunder shall not be
assignable by either Party except with the prior written consent of the
other Party.
12.7 All notices, demands and other communications given or delivered under
this Agreement will be in writing and will be deemed to have been given
when personally delivered or delivered by express courier service or
telecopied. Notices, demands and communications to the Parties will,
unless another address is specified in writing, be sent to the addresses
indicated below:
32
Notices to Seller:
Xxxxx Xxxxx
Vice President, Business Development and Legal Affairs
Xxxxxxx Outdoors Inc.
000 Xxxx Xxxxxx, Xxxxx 000
Xxxxxx, XX 00000
XXX
Telephone Number: x0-000-000-0000
Telecopy Number: x0-000-000-0000
with a copy to:
Xx. Xxxxxx Xxxxx
Shearman & Sterling
Xxxxxxxxxxxx(xxxx)x 00
00000 Xxxxxxxxx xx Xxxx
Xxxxxxx
Telephone Number: x00-00-0000-0000
Telecopy Number: x00-00-0000-0000
Notices to Purchaser:
Xxxxxx Xxxxx
Xxxxxx Xxxxxx
Xxxx Capital Ltd.
0xx Xxxxx, Xxxxxxxxxx Xxxxx
Xxxxxxx Xxxxx
X0X 0XX Xxxxxx
Xxxxxx Xxxxxxx
Telephone Number: x00-00-0000-0000
Telecopy Number: x00-00-0000-0000
33
with a copy to:
Xx. Xxxx Xxxxxxxx
Ashurst Xxxxxx Xxxxx
Xxxxxxxxxxxxxxxxx(xxxx)x 00
00000 Xxxxxx
Xxxxxxx
Telephone Number: x00-00-000000-000
Telecopy Number: x00-00-000000-000
12.8 This Agreement may be amended by the Parties at any time provided that any
such amendments will be binding only if set forth in writing executed by
each of the Parties unless notarization is required by law. The
requirement to amend this Agreement only in writing is also valid for this
Sec. 12.8.
12.9 This Agreement and the documents referred to herein contain the entire
agreement between the Parties and supersede any prior understandings,
agreements or representations by or between the Parties, written or oral,
which may have been related to the subject matter hereof in any way,
except as otherwise expressly provided herein. All annexes referred to
herein are an integral part of this Agreement and any reference to this
Agreement shall include such annexes.
12.10 If any of the provisions of this Agreement is or becomes invalid or
unenforceable, the remaining provisions of this Agreement shall remain
unaffected. The invalid or unenforceable provision shall be replaced by a
valid or enforceable provision which comes as close as possible to the
commercial purpose of the invalid or unenforceable provision.
12.11 The validity, interpretation and fulfillment of this Agreement shall be
governed by the law of the Federal Republic of Germany (excluding the
Vienna Convention on International Sales Contracts).
All disputes arising in connection with this Agreement shall be finally
settled under the Rules of Arbitration of the International Chamber of
Commerce by three arbitrators appointed in accordance with the said Rules.
The seat of arbitration shall be Frankfurt am Main, Germany, and the
language shall be English.
34
IN WITNESS THEREOF this Notarial Deed including the Annex hereto (replacement of
one page of Annex 5.1.13/1) has been read aloud to the persons appearing and was
confirmed and approved by the persons appearing. The persons appearing then
signed this Deed. All this was done at the day herebelow written in the presence
of me, the Notary Public, who also signed this Deed and affixed my official
Seal.
Basel, this 28th (twenty-eighth) day of August 2002 (two thousand and two)
/s/ Xxxx Xxxxxx
--------------------------------
Xxxx Xxxxxx
/s/ Xxxxx Xxxxxx
--------------------------------
Xxxxx Xxxxxx
/s/ Xxxxxxx Xxxxx
--------------------------------
Xxxxxxx Xxxxx, Notary Public
35