Share Purchase Agreement between
Exhibit
2.1
between
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1.
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XXXXX
Xxxxxxxx XX,
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Xxxxxxxx.
000, 0000 Xxxxx
Xxxxxxxxxxx
registered
in the commercial register of the canton Bern under
CH-073.3.004.855-3
- the
"Seller" -
and
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2.
|
Domilens
Akquisitions GmbH,
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registered
in the commercial register at the local court Hamburg under HRB
112681, Xxxxxxxxxxxxxxx 0,
00000
Xxxxxxx,
- the
"Purchaser"
-
- the
Seller and the Purchaser together the “Parties” and each individually
also a “Party”-
Page 1 of
35
Table
of Contents [not part of the notarization]
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Table of Contents
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2
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List of Definitions
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3
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List of Annexes
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4
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Preamble
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6
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Section 1 Sale and Transfer
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7
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Section 2 Distributions
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8
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Section 3 Purchase Price; Net Purchase Price; Earn
Out; Escrow
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9
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Section 4 Seller’s Representations &
Warranties
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14
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Section 5 Legal
Consequences
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21
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Section 6 Taxes
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24
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Section 7 Period until the Closing
Date
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28
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Section 8 Representations and Covenants of the
Purchaser
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28
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Section 9 Indemnification
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30
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Section 10 Consents
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31
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Section 11 Confidentiality and Press
Releases
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31
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Section 12 Covenant Not to
Compete
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32
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Section 13 Notifications to the
Parties
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33
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Section 14 Execution of this
Agreement
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34
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Section 15 Miscellaneous
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34
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Page 2 of
35
List
of Definitions [not part of the notarization]
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Actual
EBIT
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as
defined in Section 3 Subsection 5.2
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Agreement
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as
defined in Subsection 3 of the Preamble
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Basket
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as
defined in Section 5 Subsection 5.3
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BGB
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as
defined in Section 3 Subsection 3.3
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Business
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as
defined in Subsection 1 of the Preamble
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Business
Day
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as
defined in Section 15 Subsection 15.8
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Closing
Date
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as
defined in Section 1 Subsection 1.1
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Company
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as
defined in Subsection 1 of the Preamble
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Debt
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as
defined in Section 4 Subsection 4.7 (2)
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De-Minimis-Claim
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as
defined in Section 5 Subsection 5.3
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Disclosed
Documents
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as
defined in Section 5 Subsection 5.6
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Distributions
resolved and/or paid after 3.10.09
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as
defined in Section 2 Subsection 1
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Domilens
Merger
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as
defined in Subsection 3 of the Preamble
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Domilens
Merger Breach
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as
defined in Section 9 Subsection 9.2
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Earn
Out Amount
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as
defined in Section 3 Subsection 5.1
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Earn
Out Calculation
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as
defined in Section 3 Subsection 5.2
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EBIT
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as
defined in Section 3 Subsection 5.2
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Escrow
Agreement
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as
defined in Section 3 Subsection 6
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Escrow
Amount
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as
defined in Section 3 Subsection 1
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Financial
Statements 10/2009
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as
defined in Section 4 Subsection 4.2
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Former
Domilens GmbH
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as
defined in Subsection 3 of the Preamble
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Further
Provisions
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as
defined in Section 4 Subsection 2
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GmbHG
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as
defined in Section 1 Subsection 1.2
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Initial
Amount
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as
defined in Section 3 Subsection 1
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Intellectual
Property Rights
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as
defined in Section 4 Subsection 4.5.1
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Key
Employee/ Key Employees
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as
defined in Section 4 Subsection 4.8.2
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Material
Agreement/ Material Agreements
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as
defined in Section 4 Subsection 4.7
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Net
Purchase Price
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as
defined in Section 3 Subsection 3.1
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Neutral
Auditor
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as
defined in Section 3 Subsection 5.7
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Party/
Parties
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as
defined in the recitals
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Page 3 of
35
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Purchase
Price
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as
defined in Section 3 Subsection 3.1
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Purachaser
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as
defined in the recitals
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Purchaser
Representation
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as
defined in Section 8 Subsection 8.1
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Relevant
Year
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As
defined in Section 3 Subsection 5.1
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Representations
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as
defined in Section 4
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Seller
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as
defined in the recitals
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Seller´s
Bank Account
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as
defined in Section 3 Subsection 3.2
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Sellers´s
Knowledge
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as
defined in Section 4 Subsection 4.13
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Shares
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as
defined in Subsection 2 of the Preamble
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Signing
Date
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as
defined in Section 3 Subsection 3.2
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Stated
Capital
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as
defined in Subsection 2 of the Preamble
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Statement
of Objections
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as
defined in Section 3 Subsection 5.6
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Tax/
Taxes
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As
defined in Section 6 Subsection 6.2
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Tax
Breach
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As
defined in Section 6 Subsection 6.10
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Third
Party Claim
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As
defined in Section 5 Subsection 5.2
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List
of Annexes [not part of the notarization]
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Annex
Preamble 3
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Merger
Agreement with respect to the Domilens Merger
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Annex
2.1
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Distributions
of Former Domilens and / or the Company
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Annex
3.5.2
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Definition
of EBIT
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Annex
3.6
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Escrow
Agreement
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Annex
4.1.1 a)
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Copy
of the articles of association of the Company
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Annex
4.1.1 b)
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Copy
of an excerpt of the commercial register of the Company
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Annex
4.2(a)
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Financial
Statements 10/2009
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Annex
4.2(b)
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List
of Further Provisions
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Annex
4.3.1
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List
of real property leased or rented by the Company
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Annex
4.3.2
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List
of other real property used by the Company
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Annex
4.5.1
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List
of Intellectual Property Rights
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Page 4 of
35
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Annex
4.5.2
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List
of written notices concerning pending proceedings, governmental hints and
declacations of third parties indicating potential threats of Intellectual
Property Rights
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Annex
4.7(a)
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List
of Material Agreements
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Annex
4.7(b)
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Bundling
Agreements
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Annex
4.8.1
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List
of collective bargaining and material agreements with unions,
workers´councils and similar organisations
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Annex
4.8.2 a)
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List
of employees of the Company
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Annex
4.8.2 b)
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List
of contracts, agreements, promises and employee compensation agreements
relating to Key Employees
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Annex
4.8.3
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List
of pension arrangements and similar arrangements with employees
constituting claims against the Company of more than EUR 10,000.00 a
year
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Annex
4.9
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List
of insurance policies
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Annex
4.10
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List
of pending lawsuits, court actions, similar proceedings or written threats
of those actions involving an amount in dispute exceeding EUR
10,000.00
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Annex
4.11
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List
of business transactions not having been conducted in the ordinary course
of business
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Annex
4.11(2)
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Clarifying
list of business transactions having been conducted in the ordinary course
of business
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Annex
4.13
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List
of individuals whose knowledge is imputed to the Seller´s
Knowledge
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Annex
5.5 (a)
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Disclosed
Documents
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Annex
5.5 (b)
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List
of individuals whose knowledge is imputed to the Purchaser´s
knowledge
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Annex
8.5
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Distribution
Agreement
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Annex
10.2
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Declaration
of consent
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Page 5 of
35
Preamble
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1.
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The
Seller, a non-listed Swiss stock corporation with registered office in
Nidau registered in the commercial register of the canton Bern under
registration number CH-073.3.004.855-3 holds all shares (Geschäftsanteile) in
the company Domilens GmbH, formerly filed with the commercial register
under the trade name “Fentus 15. GmbH”, a German limited liability company
(Gesellschaft mit
beschränkter Haftung) with registered office in Hamburg, registered
in the commercial register of the local court of Hamburg under
registration number HRB 109119 (the “Company”). The object of
the Company is the import, export, business and distribution of ophthalmic
medical products in the territories of Germany and Austria (the “Business”). The Company
may carry on any business which seems appropriate to achieve this
object.
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2.
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The
stated capital of the Company amounts to EUR 25,000.00 (the “Stated Capital”). The
Stated Capital is divided into 25,000 shares in the nominal amount of
EUR 1.00 each (the “Shares”), all of which
are held by the Seller.
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3.
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Prior
to the conclusion of this Share Purchase Agreement (the “Agreement”), the
Company - by way of merger under dissolution without liquidation according
to Section 2 para. 1 no. 1, Sections 4 et seq., Sections 46 et seq. German
Transformation Act (Umwandlungsgesetz,
UmwG) (merger
through absorption) - has assumed all obligations and liabilities of the
German limited liability company DOMILENS Vertrieb für medizinische
Produkte GmbH, formerly registered in the commercial register of the local
court of Hamburg under registration number HRB 38182 (“Former Domilens GmbH”).
The merger agreement with respect to aforementioned merger between Former
Domilens GmbH and the Company (“Domilens Merger”),
including the respective application letters to the commercial register
(Handelsregisteranmeldungen)
and the merger registration notice (Eintragungsmitteilung)
are attached to this Agreement as Annex
Preamble 3. Upon registration of the Domilens Merger in the
commercial register Former Domilens GmbH ceased to exist, whereas the
Company assumed all obligations and liabilities of Former Domilens
GmbH.
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4.
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The
Company is not a shareholder in any other entity nor holds ownership
interests, of whatever kind, in any other third
party.
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5.
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The
Purchaser is a limited liability company, which is indirectly held with a
majority of its shares by a private equity fund and plans to carry out the
acquisition of the Company involving a management buy-out. The Seller and
the Purchaser have exchanged information with each other that is true and
correct and that entitles each of the Seller and the Purchaser to
determine that no clearance is required from, and no application needs to
be made to, the German Cartel Office or any competition or anti-trust
authority within the European Union or elsewhere with respect to a
proposed or actual sale of the Shares by the Seller to the
Purchaser.
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Page 6 of
35
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6.
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The
Seller wishes to sell the Shares to the Purchaser, and the Purchaser
wishes to acquire the Shares from the Seller under the terms and
conditions of this Agreement.
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Therefore,
the Parties agree as follows:
Section
1
Sale and Transfer
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1.1
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On
the terms and subject to the conditions of this Agreement the Seller
hereby sells and, subject to the payment of the Initial Amount and the
Escrow Amount pursuant to Sections 3.1, 3.2 and 3.6 to the Seller’s Bank
Account stipulated in Section 3.2 and the escrow account specified in the
Escrow Agreement stipulated in Section 3.6, transfers the Shares
(including any and all rights and obligations pertaining to the Shares) to
the Purchaser. The Purchaser accepts such sale and transfer. The date the
Shares are transferred to the Purchaser is hereinafter referred to as the
“Closing
Date”.
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1.2
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The
Seller and the Purchaser instruct the notary public to notify the
commercial register pursuant to Section 40 (2) of the German Act on
Limited Liability Companies (“GmbHG”) and to submit to
the Company a shareholders’ list in accordance with Section 40 (2) GmbHG
after the notary public has received evidence of the payment of the
Initial Amount and the Escrow
Amount.
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1.3
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The
Seller undertakes not to pass any shareholders’ resolutions of the Company
after the transfer of the Shares to the Purchaser has become effective in
accordance with Section 1.1.
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1.4
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For
the period between the effectiveness of the transfer of the Shares to the
Purchaser in accordance with Section 1.1 and the time at which the
Purchaser is regarded as shareholder vis-à-vis the Company in accordance
with Section 16 para. 1 sentence 1 GmbHG, subject to the payment of the
Initial Amount and the Escrow Amount having been made pursuant to Section
3.2 and 3.6, the Seller herewith grants to the Purchaser an irrevocable
power of attorney to exercise without limitation all shareholder rights,
including to pass shareholders’ resolutions of all kind, but expressly
excluding the right to sign a declaration of subscription (Übernahmeerklärung).
The Purchaser shall indemnify the Seller from any liability arising out of
any action made on behalf of the Seller under the power of attorney
granted in this Section 1.4.
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Page 7 of
35
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1.5
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The
Seller undertakes to forward promptly following the effectiveness of the
transfer of the Shares to the Purchaser in accordance with Section 1.1
anything that the Seller receives following such date in its capacity as
shareholder of the Company (e.g. distributions, subject to Section
2).
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Section
2
Distributions
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2.1
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The
right to receive undistributed distributions and retained profits (Gewinnbezugsrechte)
attributable to the current business year with respect to the Shares as
well as all retained profits of the preceding business years (i.e
undistributed profits carried forward and undistributed profits for which
no resolution on their use has been adopted) of Former Domilens GmbH and
the Company are for the account of the Purchaser. For the sake of
clarification, Annex
2.1 sets out the distributions (Ausschüttungen) of
Former Domilens and/or the Company which have been resolved and/or paid
after 3 October 2009, and there are no unpaid distributions outstanding
against active resolutions.
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2.2
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In
the event that the competent tax authority imposes withholding
tax (Kapitalertragsteuer) on
the Company in connection with distributions made to the Seller by Former
Domilens GmbH within the time period between 3 October 2009 and
22 December 2009, the Seller undertakes to assert claims for
refund of the respective withholding tax vis-à-vis the competent tax
authority and to assign such asserted claims to the Company.
The assignment shall follow the requirements of Section 46 of the
German Tax Code (Abgabenordnung, “AO”).
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2.3
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In
the event that the competent tax authority imposes withholding
tax (Kapitalertragsteuer) on
the Company in connection with distributions made to the Seller within the
time period between 23 December 2009 and the Closing Date, the Seller
undertakes to assert claims for refund of the respective
withholding tax vis-à-vis the competent tax authority and
to assign such asserted claims to the Company. The assignment
shall follow the requirements of Section 46
AO.
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Page 8 of
35
Section
3
Purchase
Price; Net Purchase Price; Earn Out; Escrow
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3.1
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The
total purchase price to be paid by the Purchaser to the Seller for the
sale and transfer of the Shares (including any and all rights and
obligations pertaining to the Shares) shall be an amount of
EUR 10,512,100.00 (in words: Euro ten million five hundred twelve
thousand one hundred) (the "Purchase Price") which
shall be reduced by adjustments with respect to distributed
dividends and SOX expenses from EUR 10,512,100.00 by EUR 826,400.00 to
EUR 9,685,700.00 (in words: Euro nine million six hundred eighty
five thousand seven hundred) (such amount of EUR 9,685,700.00
hereinafter referred to as the "Net Purchase Price") . The
Net Purchase Price shall be binding and final upon the Parties regardless
of the accuracy of the aforementioned figures and
adjustments.
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3.2
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The
Net Purchase Price of EUR 9,685,700.00, except for a partial amount
of EUR 100,000.00 which shall be paid pursuant to Section 3.6 hereof into
an escrow account (such amount the “Escrow Amount”), i.e. an
amount of EUR 9,585,700.00 (the “Initial Amount”) shall
be due five Business Days after this Agreement is notarized (the day on
which this Agreement is notarized the “Signing Date”) and paid
in Euro by way of wire transfer free of any costs and fees into the
following bank account of the Seller (the “Seller’s Bank
Account”):
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Account
holder:
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STAAR
Surgical AG
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Bank:
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UBS
AG, Bern, Switzerland
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IBAN:
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XX00
0000 0000 0000 0000 X
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Account
number:
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272-351697.62Z
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Reference:
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DOMILENS
GmbH
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3.3
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Should
the Initial Amount and the Escrow Amount not be paid when due and payable
under this Agreement, the transfer of the Shares to the Purchaser shall
not become effective in accordance with Section 1.1 until the Initial
Amount and the Escrow Amount shall have been paid in full and the
Purchaser shall pay to the Seller for any periods of default as default
interest an amount constituting eight (8) per cent per annum above the
then applicable base rate (Basiszinssatz) pursuant
to Section 247 of the German Civil Code (“BGB”) of the sum that is
not paid when due and payable. If the Initial Amount and the Escrow Amount
have not been paid eight Business Days after the Signing Date at the
latest, the Seller may rescind immediately this Agreement (Rücktritt vom Vertrag)
by giving written notice to the
Purchaser.
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Page 9 of
35
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3.4
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Any
right of the Purchaser to set-off and/or to withhold any payments due
under this Agreement is hereby expressly waived and excluded except for
claims which are undisputed or awarded by final and absolute (rechtskräftig) judgment
or settlement.
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3.4a
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The
Parties agree (i) that the Company still owes to the Seller the management
fees for the fourth quarter of 2009 in the amount of EUR 72,300.00 which
shall be paid by the Company no later than 16 March 2010 and (ii) that the
Seller does not have any claims for management fees for the period
starting on 1 January 2010.
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3.5
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Earn
Out
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3.5.1
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Subject
to the terms and conditions set forth in this Section 3.5, the Seller
shall be entitled to receive further payments in addition to the Net
Purchase Price pursuant to Section 3.1 for the Shares sold by the Seller,
depending on the performance of the Company in the financial years 2010,
2011 and 2012 (hereinafter referred to as the “Relevant Years” and each
a “Relevant Year”
and the consideration hereinafter referred to as the “Earn Out Amounts” and
each an “Earn Out
Amount”). The Earn Out Amounts shall be made in three annual
installments independently from another, subject to the achievement of a
certain performance of the Company in each of the Relevant Years as
defined in Section 3.5.3 (1) through
(3).
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3.5.2
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The
Earn Out Amounts shall be calculated on the basis of the actual results of
earnings before interest and taxes (“EBIT”) of the Company
for the Relevant Year pursuant to the definition of EBIT set forth in
Annex
3.5.2 (as adjusted to reflect that extraordinary items and events
as described in more details in Annex 3.5.2 will not be taken into
account) (hereinafter referred to as the “Actual
EBIT”).
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3.5.3
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Based
on the Actual EBIT, the Earn Out Amount for each Relevant Year shall be
calculated as follows:
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(1)
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Relevant
Year 2010
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If the
Company’s Actual EBIT amounts to a minimum of EUR 2,500,000.00 in the
Relevant Year 2010, the Earn Out Amount for the Relevant Year 2010 shall be
EUR 200,000.00. If the Company’s Actual EBIT is less than
EUR 2,500,000.00 in the Relevant Year 2010, the Seller shall not be
entitled to an Earn Out Amount for the Relevant Year 2010.
Page 10 of
35
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(2)
|
Relevant
Year 2011
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If the
Company’s Actual EBIT amounts to a minimum of EUR 2,900,000.00 in the
Relevant Year 2011, the Earn Out Amount for the Relevant Year 2011 shall be
EUR 225,000.00. If the Company’s Actual EBIT in the Relevant Year 2010 was
less than EUR 2,500,000.00 but the aggregate Actual EBIT for the Relevant
Years 2010 and 2011 amounts to at least EUR 5,400,000.00, the Earn Out Amount
for the Relevant Year 2011 shall be increased by EUR 200,000.00 to
EUR 425,000.00.
If the
Company’s Actual EBIT is less than EUR 2,900,000.00 in the Relevant Year
2011, the Seller shall not be entitled to an Earn Out Amount for the Relevant
Year 2011.
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(3)
|
Relevant
Year 2012
|
If the
Company’s Actual EBIT amounts to a minimum of EUR 3,500,000.00 in the
Relevant Year 2012, the Earn Out Amount for the Relevant Year 2012 shall be
EUR 250,000.00. If the Company’s Actual EBIT in the Relevant Year 2011 was
less than EUR 2,900,000.00 but the aggregate Actual EBIT for the Relevant
Years 2011 and 2012 amounts to at least EUR 6,400,000.00, the Earn Out Amount
for the Relevant Year 2012 shall be increased by EUR 225,000.00 to
EUR 475,000.00.
If the
Company’s Actual EBIT is less than EUR 3,500,000.00 in the Relevant Year
2012, the Seller shall not be entitled to an Earn Out Amount for the Relevant
Year 2012.
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3.5.4
|
The
Company’s Actual EBIT for each Relevant Year shall be derived (abgeleitet) from the
audited financial statements of the Company for the financial years 2010,
2011 and 2012, as the case may be. As promptly as possible and in any
event not later than 30 April of the year following the relevant
financial year, the Company shall prepare and have audited, and Purchaser
shall ensure that the Company prepares and has audited, the financial
statements in accordance with the applicable provisions of the German
Commercial Code and the German generally accepted accounting principles as
consistently applied with past practice, maintaining the same accounting
and valuation principles, methods and rules. The auditor certifying the
financial statements shall at the same time calculate the respective Earn
Out Amount for each Relevant Year in accordance with the provisions of
this Section 3.5, applying the principles set forth in
Annex 3.5.2 and Section 3.5.3 (hereinafter referred to as the
“Earn Out
Calculation”). Forthwith (unverzüglich) upon the
audit of the financial statements of the Company for the respective
financial year, the Purchaser shall deliver to the Seller the Earn Out
Calculation for each Relevant Year together with a copy of the audited
financial statements of the Company for its
review.
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Page 11 of
35
|
3.5.5
|
The
Seller and its auditors shall have full access to the management,
employees, books and accounts as well as other financial data of the
Company and to the working papers of the auditor of the Company as is
reasonably necessary for the review of the financial statements and the
Earn Out Calculation. The Purchaser shall procure that upon request of the
Seller the Company grants such access and that the Company’s auditor shall
be released from its professional confidentiality obligation for the
benefit of the Seller and its auditor, and that upon such request the
Company authorizes and instructs its auditor to grant access to its
working papers and any related documentation to the extent it is necessary
to review the Earn Out Calculation.
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3.5.6
|
Within
30 Business Days as of the delivery of the Earn Out Calculation and the
copy of the audited financial statements, the Seller shall submit to the
Purchaser any objections against the Earn Out Calculation, as the case may
be, by providing the Purchaser with a written statement of objections,
specifying in reasonable detail the grounds for the objections
(hereinafter referred to as the “Statement of
Objections”). If and to the extent the Seller does not object
during such period in such manner, the Earn Out Calculation shall become
final and binding upon the Parties.
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3.5.7
|
If
and to the extent the Seller and the Purchaser cannot agree on the
objections of the Seller as set forth in the Statement of Objections
within 30 Business Days after receipt by the Purchaser of the Statement of
Objections as duly submitted pursuant to Section 3.5.6, either the
Seller or the Purchaser may present the not agreed objections to a neutral
auditor from an auditing firm of international or German national
recognition to be jointly designated by the Seller and the Purchaser
within additional 15 Business Days (the “Neutral Auditor”) or,
failing such agreement on the Neutral Auditor, each Party may request for
the Neutral Auditor to be appointed by the Institute of Auditors in
Germany (Institut der Wirtschaftsprüfer in Deutschland e.V.) in
Düsseldorf, to decide upon the issue in dispute by way of an arbitrary
opinion (Schiedsgutachten). The
Neutral Auditor shall only decide on the items in dispute as notified by
the Purchaser in the Statement of Objections and shall give the Seller and
the Purchaser adequate opportunity to present their views in writing and
at a hearing to be held in the presence of the Seller and the Purchaser
and/or their advisors. The Neutral Auditor’s decision shall be final and
binding as among the respective Parties. The costs of the Neutral Auditor
shall be allocated to the respective Parties in accordance with the rules
set forth in Sections 91 et seq. of the German Code on Civil
Procedure (Zivilprozessordnung).
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Page 12 of
35
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3.5.8
|
The
Earn Out Amount for each Relevant Year shall be due within one week after
the Earn Out Calculation has become final and binding pursuant to Section
3.5.6 or Section 3.5.7, as the case may
be.
|
|
3.5.9
|
Should
the Purchaser during the period between Closing Date and the end of the
Relevant Year 2012, i.e. 31 December 2012, (i) liquidate or dissolve the
Company or (ii) sell and/or transfer the shares in the Company or conduct
comparable actions which lead to a change-of-control in the voting rights
in the Company or (iii) sell and/or transfer the material assets of the
Company, the Seller shall be entitled to receive immediately upon such
occurrence the amounts set out in the table below if the minimum
enterprise values achieved in such
event:
|
|
Enterprise
Values
achieved in Relevant Year below
|
at
least EUR 17,251,000.00
|
at
least EUR 20,011,200.00
|
at
least EUR 24,151,400.00
|
|
2010
|
Earn
Out Amount = EUR 600,000.00
|
||
|
2011
|
Earn
Out Amount = EUR 400,000.00
|
||
|
2012
|
Earn
Out Amount = EUR 250,000.00
|
Should
there be any such occurrence, any such payment shall be additional to any
Earn Out Amount that has been earned and shall not affect in any way any Earn
Out Amount that may be due or that may become due with respect to any
completed Relevant Year prior to such occurrence. In this case
the right to any annual Earn Out Amount for the Relevant Year that is still
incomplete and any future Relevant Year terminates.
|
3.5.10
|
In
case that the Company is merged by way of universal succession under the
German Transformation Act into the Purchaser or any other legal entity,
such legal successor of the Company shall be deemed to be the
Company in the sense of this Section 3.5 and the provisions
therein shall apply accordingly.
|
|
3.6
|
The
Escrow Amount shall be due one week after the Signing Date and shall be
transferred with reference "Domilens Escrow Amount" into an interest
bearing bank account (Treuhandkonto) of the
acting notary (the “Escrow Agent”), details
of which are set out in the Escrow Agreement. At Signing of this Agreement
the Seller and the Purchaser shall enter into an escrow account agreement
with the Escrow Agent in the form and substance as attached in Annex
3.6 (“Escrow
Agreement”).
|
Page 13 of
35
The
Escrow Agent is hereby irrevocably instructed to pay the Escrow Amount upon
occurrence of the payment conditions (Auszahlungsbedingungen) as
set out in the Escrow Agreement to the Seller and/or to the Purchaser, as the
case may be.
Section
4
Seller’s
Representations & Warranties
The
Seller hereby guarantees to the Purchaser by means of an independent promise of
guarantee (selbstständiges
Garantieversprechen) within the meaning of Section 311 (1) BGB
(hereinafter referred to as representations and warranties (“Representations”) that –
within the scope and subject to the requirements and limitations provided in
this Agreement, especially in Sections 4 and 5 - the following statements in
this Section 4 are complete and correct as at the Signing Date and, unless
explicitly made hereinafter as of a specific date, also on the Closing Date, and
that the Seller will not take any measures or resolve on any issue which could
make any of the following statements untrue or misleading. The Seller and the
Purchaser agree and explicitly confirm that the Representations in this Section
4 shall not be qualified and construed as, quality guarantees concerning the
object of the purchase (Garantie für die Beschaffenheit der
Sache) within the meaning of Sections 443, 444 BGB, respectively, and
that Section 444 BGB shall not and does not apply to the Representations
contained in this Section 4.
|
4.1
|
Corporate Issues and
Authority of the Seller
|
|
4.1.1
|
The
statements made in the Preamble of this Agreement with respect to the
Company are correct. The Company has been duly incorporated and is validly
existing under German law. Annex
4.1.1 a) contains a correct copy of the articles of association of
the Company, and Annex
4.1.1 b) contains a correct copy of an excerpt of the commercial
register of the Company.
|
|
4.1.2
|
The
Shares are fully paid up and have not been repaid. There are no
obligations to make further contributions (keine
Nachschusspflichten).
|
|
4.1.3
|
The
Seller is the legal and beneficial owner of the Shares and is entitled to
freely dispose of the Shares without the consent of third parties
(including governmental authorities and courts). The disposal of the
Shares does not violate or constitute any rights - of whatever kind - of
third parties.
|
Page 14 of
35
|
4.1.4
|
The
Shares are unencumbered and free of any rights of third parties, and there
are no obligations to grant or transfer to third parties such rights. The
Company is not a shareholder in any other entity nor holds participations,
of whatever kind, in any other third
party.
|
|
4.1.5
|
No
other party than the Seller, neither directly nor indirectly, owns, or has
any rights to become the owner of, shares in the Company, and there exist
no obligations to grant such shares or
rights.
|
|
4.1.6
|
No
application for the commencement of insolvency proceedings over the assets
of the Company has been filed or commenced, and no such proceedings have
been rejected on account of a lack of
assets.
|
|
4.2
|
Financial
Statements
|
|
|
The
financial statements of the Company immediately following the merger with
Former Domilens GmbH (Übernahmebilanz) as of
3 October 2009 (the “Financial Statements
10/2009”) as attached as Annex
4.2(a) have been prepared in accordance with German generally
accepted accounting principles as consistently applied in accordance with
past practice. The Financial Statements 10/2009 present a true and fair
view, within the meaning of Section 264 (2) of the German Commercial Code
(HGB) of the assets and liabilities (Vermögenslage),
financial condition (Finanzlage) and
results of operation (Ertragslage) of the
Company for the period referenced therein. The Purchaser is aware of the
fact that certain provisions (Rückstellungen) as set
forth in Annex
4.2(b) have not been made or have not been made in a sufficient
amount in the Financial Statements 10/2009 (“Further Provisions”).
The Purchaser hereby acknowledges that the Further Provisions have been
taken into account during the negotiation and determination of the Net
Purchase Price, and, thus, the Purchaser shall not be entitled to any
claims under this Section 4.2 with respect to the Further
Provisions.
|
|
4.3
|
Real
Property
|
|
4.3.1
|
Annex
4.3.1. contains a complete and correct list of real property leased
or rented by the Company as of the Signing Date, whether as lessee or
lessor. The Company is not the legal owner of any real
estate.
|
Page 15 of
35
|
4.3.2
|
Any
other real property used by the Company as of the Signing Date but not
listed in Annex 4.3.2
is not material for the operation of the
Business.
|
|
4.4
|
Other
Assets
|
The
assets owned or lawfully used by the Company as of the Signing Date are
sufficient to, and in a reasonably operational and maintenance condition (gebrauchsfähiger Zustand),
fair wear and tear excepted, to continue the Business substantially in the same
manner as conducted at the Signing Date.
|
4.5
|
Intellectual Property
Rights
|
|
4.5.1
|
Annex
4.5.1 contains a complete and correct list of patents, trade marks
and other registered intellectual property rights and internet domain
names owned or used in connection with the operation of the Business by
the Company as of the Signing Date (the “Intellectual Property
Rights”).
|
|
4.5.2
|
Except
as set out in Annex
4.5.2, the Seller has not received written notice from any third
party that the Intellectual Property Rights are, as of the Signing Date,
subject to any pending proceedings for opposition, cancellation,
revocation or rectification which may negatively affect the operation of
the Business nor, to the Seller’s Knowledge, are the Intellectual Property
Rights being materially infringed by third parties. Except as set out in
Annex
4.5.2, the Seller has not received written notice from any
governmental authority that any fees necessary to maintain the
Intellectual Property Rights have not been paid, any necessary renewal
applications have not been filed, or that any other material steps
necessary for the maintenance of the Intellectual Property Rights have not
been taken. To the Seller’s Knowledge and except as set out in Annex
4.5.2, the Business does not materially infringe any intellectual
property rights of third parties. The trademark “Domilens” as used in the
Business is owned by the Company and, to the Seller’s Knowledge, not
subject to any third party rights.
|
|
4.6
|
Compliance with Laws
and Permits
|
|
|
The
Company holds, as of the Signing Date, all permits and licences which are
required, if any, under applicable public laws (Öffentliches Recht) in
order to conduct its Business as presently conducted and which are
material for its Business. To the Seller’s Knowledge there are no threats
of any revocation or restriction or subsequent orders (nachträgliche
Anordnungen) relating to any such permits or licences after the
Closing Date which would negatively affect the Business in any material
respect. The Company conducts its Business in compliance with such permits
and licences and all applicable laws and regulations that are material to
the Business.
|
Page 16 of
35
|
4.7
|
Material
Agreements
|
|
|
Annex
4.7(a) contains a complete and correct list of material agreements
as described below to which the Company, as of the Signing Date, is party
and of which the main obligations have not yet been completely fulfilled
(together the “Material
Agreements” and each a “Material
Agreement”):
|
|
|
(1)
|
rental
and lease agreements relating to real estate which, individually, provide
for annual payments of EUR 32,000.00 or more and which cannot be
terminated by the Company on 6 months or less notice without
penalty;
|
|
|
(2)
|
loan
agreements, bonds, notes or any other instruments of monetary debt (other
than trade payables, customer accounts, credits, allowances, refunds,
rebates, discounts, deferred payments or other liabilities) (“Debt”) involving any
third party outside the Company and, individually, for an amount of
EUR 32,000.00 or more;
|
|
|
(3)
|
guaranties,
indemnities and suretyships issued for any third party other than the
Company, in each case, for an amount of EUR 32,000.00 or
more;
|
|
|
(4)
|
written
and, to the Seller’s Knowledge, oral agreements with suppliers (other than
the Seller or its affiliates) with a duration of more than one year, in
each case, for an amount of EUR 32,000.00 or
more;
|
|
|
(5)
|
movable
property rent or lease agreements, either as lessee or lessor, involving
an annual rent or lease payment of more than EUR 30,000.00 per
asset;
|
|
|
(6)
|
license
agreements, either as licensee or licensor, relating to intellectual
property rights, whether registered or not, involving the payment to or
from the Company of an annual license fee of more than EUR
30,000.00;
|
|
|
(7)
|
advisory
or service agreements (Beratungs- oder
Dienstleistungsverträge),either as service provider or principal,
with an aggregate annual gross compensation of more than
EUR 30,000.00; and
|
|
|
(8)
|
any
continuing obligations (Dauerschuldverhältnisse)
(other than any agreements described in Sections 4.7 (1) through (7) or
described in Sections 4.8 or 4.9, irrespective in each case of any
materiality threshold set forth in such Sections) which (i) cannot be
terminated by the Company on 6 months or less notice without penalty and
which provide for annual obligations of the Company in excess of
EUR 32,000.00 or (ii) upon their termination result in
compensation claims against the Company of more than EUR
32,000.00 per year.
|
Page 17 of
35
|
|
To
the Seller’s Knowledge, all of the Material Agreements are, as of the
Signing Date, in full force and effect. To the Seller’s Knowledge there
has not been any notice of termination of any of the Material Agreements
that has been served on the Company. To the Seller’s Knowledge, the
Company is not in any material breach of any of the Material
Agreements.
|
|
|
Annex 4.7(b) contains a
list of bundling agreements with certain of the Company’s customers to
which the Company is a party as of the Signing Date. The Seller hereby
explicitly excludes any liability with respect to any bundling agreements,
in particular, but not limited to, such bundling agreements as listed in
Annex 4.7(b). The Purchaser hereby agrees to the exclusion of liability.
For the sake of clarification: The Parties acknowledge that none of the
bundling agreements shall be deemed to be a Material
Agreement.
|
|
4.8
|
Employees
|
|
4.8.1
|
Annex
4.8.1 contains, as of the Signing Date, a complete and correct list
of collective bargaining and material agreements with unions, workers’
councils and similar organisations by which the Company, as of the Signing
Date, is bound.
|
|
4.8.2
|
Annex
4.8.2(a) contains, as of the Signing Date, a complete and correct
list of employees of the Company. Annex 4.8.2(b)
contains, as of the Signing Date, a complete and correct list of written
and, to the Seller’s Knowledge, verbal, contracts and agreements and
promises relating to employees who are entitled, as of the Signing Date,
to receive in the calendar year 2009 a gross annual base salary (excluding
fringe benefits, such as incentives, stock options or appreciation rights,
company car and other benefits) in excess of EUR 60,000.00 (such employees
collectively the “Key
Employees” and each of them a “Key Employee”) as well
as all bonus, pension, compensation, profit sharing or other written and,
to the Seller’s Knowledge, verbal, employee compensation arrangements
applicable to any of the Key Employees. Except as set forth in
Annex 4.8.2(b), as of the Signing Date, none of the Key Employees has
given notice of termination of his or her employment. None of the Key
Employees has been awarded or otherwise been promised any payment or any
other monetary benefit in connection with the transactions contemplated by
this Agreement that is payable by the Company, the Seller or the Seller’s
affiliates.
|
Page 18 of
35
|
4.8.3
|
Annex 4.8.3
contains a complete and correct list of any pension arrangements or other
post retirement benefit schemes, participation in profit or sales or other
bonus payments and all similar arrangements in each individual case or the
aggregate of all cases resulting in any payment by the Company to any
employee of more than EUR 10,000.00 per
year.
|
|
4.9
|
Insurance
|
|
|
Annex
4.9 contains a complete and correct list of all insurance policies
of the Company and/or for the benefit of the Company. To the Seller’s
Knowledge, the Company has not received written notice from any third
party that the insurance policies listed in Annex
4.9 are not valid and in full force or that any premiums due under
the above policies have not been duly paid up to the Signing Date. To the
Seller’s Knowledge, there are no circumstances due to which any such
policy may be voidable.
|
|
4.10
|
Litigation
|
|
|
There
are no lawsuits, court actions or similar proceedings before a court of
justice, arbitration panel or an administrative authority involving an
amount in dispute (Streitwert) exceeding
EUR 10,000.00 in each individual case on the Signing Date pending
(rechtshängig)
or, to the Seller’s Knowledge, threatened in writing to be filed against
the Company, except those disclosed in Annex 4.10.
|
|
4.11
|
Ordinary Course of
Business
|
|
|
Except
as set forth in Annex
4.11 and except with respect to the distributions as described in
Section 2.1 hereof, the Domilens Merger, the purchase and/or repayment of
Debt by any affiliate of the Company, and changes in estimates and
projections of the Company disclosed in writing by the Seller to the
Purchaser prior to the Signing Date, (i) from 3 October 2009 until the
Signing Date, the business operation of the Company and (ii) from
1 January 2009 until the Signing Date, the business operation of
Former Domilens GmbH have been conducted in the ordinary course of
business and substantially in the same manner as before, and there has
been no material adverse change with respect to the Business taken as a
whole. In particular, subject to the exceptions set forth in the prior
sentence, the Company from 3 October 2009, and Former Domilens GmbH
from 1 January 2009, until the Signing Date, have
not:
|
|
|
(1)
|
declared
any dividend or made any other distribution except for such distributions
as set forth in Section 2;
|
Page 19 of
35
|
|
(2)
|
undertaken
to make any capital expenditure or entered into any contract or commitment
outside the ordinary course of business; for the avoidance of doubt, the
Purchaser hereby acknowledges that in particular, but not limited to, the
expenses, payments, commitments and provisions made or incurred by the
Company after 3 October 2009 as set out in Annex
4.11(2) have occurred within the ordinary course of
business;
|
|
|
(3)
|
acquired
or disposed of any fixed asset relating to its Business outside the
ordinary course of business and other than at arm’s length
conditions;
|
|
|
(4)
|
as
from 3 October 2009 incurred any Debt or other indebtedness which would
have to be reflected in the annual financial statements of the Company as
of 31 December 2009 vis-à-vis third parties except as in the ordinary
course of business;
|
|
|
(5)
|
made
any advance or extended any Debt to any third party outside the ordinary
course of business;
|
|
|
(6)
|
made
any material change in the terms of employment (including compensation) of
any Key Employees other than in the ordinary course of
business;
|
|
|
(7)
|
undertaken
any structural measures pursuant to the German Transformation Act (Umwandlungsgesetz,
UmwG).
|
|
4.12
|
No other Seller’s
Representations
|
|
4.12.1
|
The
Purchaser explicitly acknowledges that it is purchasing and acquiring the
Shares and the Business in the condition they are in on the Closing Date
based upon its own inspection, examination and determination with respect
thereto, and that it is undertaking the acquisition based upon its own
inspection, examination and determination without reliance upon any
express or implied representations, warranties or guaranties of any nature
made by the Seller except for the guarantees expressly given by the Seller
under this Agreement.
|
|
4.12.2
|
Without
limiting the generality of the foregoing, the Purchaser acknowledges that
the Seller gives no representation, warranty or guarantee with respect
to
|
|
|
(1)
|
any
projections, estimates or budgets delivered or made available to the
Purchaser of future or estimated revenues, future or estimated results of
operations (or any component thereof), future or estimated cash flows or
future or estimated financial condition (or any component thereof) or the
future or estimated business operations of the
Company;
|
Page 20 of
35
|
|
(2)
|
any
other information or documents made available to the Purchaser or its
counsel, accountancy or advisors with respect to the Business or the
Company, including, but not limited to, the Information Memorandum and the
information provided during the management presentation delivered on 8
September 2009, except as expressly set forth in this Agreement;
or
|
|
|
(3)
|
any
tax matter except as provided for in Section
6.
|
|
4.13
|
Seller’s
Knowledge
|
|
|
In
this Agreement, the knowledge of the Seller (the “Seller’s Knowledge”)
shall solely encompass the actual knowledge (positive Kenntnis) and
gross negligent lack of knowledge (xxxx fahrlässige
Unkenntnis) after reasonable inquiry as of the Signing Date of the
individuals listed in Annex 4.13.
|
Section
5
Legal
Consequences
|
5.1
|
If
any of the Seller's Representations under Section 4 is wholly or partially
breached, the Purchaser may demand from the Seller that it shall be placed
in the position in which it would have been had the Representation not
been breached (Naturalrestitution). If
the Seller is unable to achieve this position within forty-five (45) days
after having been notified by the Purchaser of the breach in writing, the
Purchaser may only claim for monetary damages (Schadensersatz in
Geld),
including consequential damages (Folgeschäden), indirect
losses (mittelbare Schäden) and loss of
profits (entgangener Gewinn) as far as such
damages and/or losses are reasonably foreseeable (vorhersehbar) at the
Signing Date and covered by the defined scope of coverage of the specific
Representation which has been breached. Damages shall, however, in any
case not cover internal administration or overhead costs and/or frustrated
expenses (vergebliche Aufwendungen). If
the damages of the Purchaser are based on the fact that a third party
asserts claims against the Company that are in breach of this Agreement,
the Seller may fulfil its duty to remedy the breach also by indemnifying
and holding harmless the Company against such third party claims and
reasonable costs and expenses related to the defence of such third party
claims.
|
Page 21 of
35
|
5.2
|
In
the event that in connection with a breach of a Representation any claim
or demand of a third party is asserted against the Purchaser or the
Company (“Third Party Claim”),
the following shall apply:
|
|
|
(1)
|
Claims
against the Seller in connection with such a breach may only be asserted
if the Purchaser has made available to the Seller a copy of the Third
Party Claim or demand and of all material (including time-sensitive)
documents, including all court correspondence and all correspondence
between the Purchaser and/or the Company and the third party related to
the Third Party Claim.
|
|
|
(2)
|
In
no event shall the Purchaser or the Company be entitled to acknowledge or
settle a Third Party Claim or permit any such acknowledgment or settlement
without the Seller’s prior written consent to the extent that such Third
Party Claims may result in a liability of the Seller under this
Agreement.
|
|
|
(3)
|
The
failure of the Purchaser to fully comply with its obligations under this
Section 5.2 shall release the Seller from its respective obligations under
Sections 4 and 5 unless and to the extent the Purchaser can prove that
such failure did not have a negative impact on the Seller’s liability
under this Agreement.
|
|
5.3
|
The
Purchaser may claim damages against the Seller in connection with a breach
of a Representation pursuant to Section 4 only if such individual claim or
a series of claims exceeds the amount of EUR 10,000.00 (in words: Euro ten
thousand) (hereinafter the “De-Minimis-Claim”) and
the amount of all claims for damages to be taken into account exceeds the
amount of EUR 75,000.00 (in words: Euro seventy five thousand) in the
aggregate (hereinafter the “Basket”). If the claims
for damages to be taken into account exceed the Basket, the Purchaser may
claim the full amount of the
claims.
|
|
5.4
|
The
Seller shall not be liable for, and the Purchaser shall not be entitled to
claim for, any damages of the Purchaser under or in connection with a
Representation pursuant to Section 4 if and to the extent
that
|
|
|
(1)
|
the
matter to which the claim relates is specifically provided for or noted in
the Financial Statements 10/2009, or reserves (Rückstellungen)
contained in the Financial Statements 10/2009 may be reversed, or the
value of assets which had been depreciated has been reinstated in prior
accounts (Wertaufholung), or
accounts receivable which had already been written off, in whole or in
part, are fulfilled by the respective debtors after the Closing Date;
or
|
Page 22 of
35
|
|
(2)
|
any
damages of the Purchaser are covered by existing insurance policies;
or
|
|
|
(3)
|
any
damages of the Purchaser are covered by enforceable claims against other
third parties.
|
|
5.5
|
With
the exception of claims based on a breach of Section 4.1, the Seller shall
not be liable if and to the extent that the Purchaser raises any claim
under Sections 4 through 5 if the underlying facts or circumstances to
which the claim relates were known by the Purchaser. For the purpose of
this Section 5.5, the Purchaser’s knowledge shall be limited to those
underlying facts or circumstances reasonably apparent from the information
provided to the Purchaser prior to entering into this Agreement on the
basis of a thorough review of the status of the Company and the Business
from a commercial, financial and legal perspective, including, but not
limited to, a review of the documents identified in Annex
5.5(a) and disclosed in the data room (hereinafter referred to as
the “Disclosed
Documents”). For the purposes of this Section 5.5 the facts and
circumstances that were explicitly disclosed in the Disclosed Documents,
the information memorandum sent to the Purchaser’s advisors on 23 July
2009, the management presentation presented by the Company’s management on
8 September 2009, and during subsequent meetings or in this Agreement or
its Annexes are deemed to be known by the Purchaser. The knowledge of the
persons listed in Annex
5.5(b) shall be imputed to the
Purchaser.
|
|
5.6
|
The
Seller's aggregate liability for any claims under this Agreement
(including, for the avoidance of doubt, claims for restitution in kind but
except for any claims for performance (Erfüllungsansprüche))
is limited to 75% of the Net Purchase Price pursuant to Section 3.1, other
than in the case of claims for breach of Section 4.1 and/or Section 6
and/or indemnity claims pursuant to Section 9 and/or claims for breach of
Section 12, for which the Seller’s aggregate liability shall be limited to
100% of the Net Purchase Price pursuant to Section
3.1.
|
|
5.7
|
Any
further claims on the part of the Purchaser against the Seller under this
Agreement going beyond the Seller's obligations and Representations
contained herein are - whatever the legal reason - expressly excluded,
unless mandatory liability law applies for intent (Vorsatz) or fraud
(Arglist). Claims
on the part of the Purchaser for rescission following avoidance on the
grounds of error (Anfechtung wegen
Irrtums) from this Agreement are, notwithstanding anything herein
to the contrary, expressly excluded. Except for the rescission right
provided for in Section 3.3, otherwise notwithstanding anything herein to
the contrary, any claims for withdrawal (Rücktritt) are
expressly excluded. Claims for reduction of the Net Purchase Price (Minderung) due to
statutory warranty claims (gesetzliche
Gewährleistungsrechte) shall also be
excluded.
|
Page 23 of
35
|
5.8
|
The
limitation periods (Verjährungsfristen)
shall be as follows:
|
|
|
(1)
|
All
claims of the Purchaser based on a breach of a Representation contained in
Section 4.1 shall become time-barred (verjähren) upon the
expiration of a period of seven (7) years after the Closing
Date.
|
|
|
(2)
|
All
remaining claims of the Purchaser based on the breach of a Representation
against the Seller in connection with this Agreement shall become
time-barred upon the expiration of a period of eighteen (18) months after
the Closing Date.
|
|
5.9
|
The
limitation periods set forth in Section 5.8 shall be suspended (gehemmt) as soon as
the Purchaser has notified the Seller in writing and with a short
description of the reasons underlying the claim within the limitation
period that it intends to bring a claim against the Seller. Such
suspension shall expire six months from receipt of such notification by
the Seller unless the Purchaser commences legal proceedings against the
Seller within such period or takes any other actions in accordance with
Sections 203, 204 BGB within such
period.
|
|
5.10
|
Section
254 of the German Civil Code shall remain unaffected, i. e. the Purchaser
is in particular obliged to prevent the occurrence of any damages and to
limit the scope of any damages
incurred.
|
|
5.11
|
Payments
of the Seller to the Purchaser pursuant to this Agreement shall be
considered to be a reduction of the Net Purchase Price. To the extent the
Seller makes any payment directly to the Company, in the relationship
between the Purchaser and the Company, this shall be considered to be a
capital contribution on behalf of the
Purchaser.
|
Section
6
Taxes
|
6.1
|
In
addition to the Representations made under Section 4, the Seller hereby
guarantees to the Purchaser by means of an independent promise of
guarantee (selbstständiges
Garantieversprechen) within the meaning of Section 311 (1) BGB, for
which the restrictions set forth in Section 5 shall apply accordingly
unless explicitly provided for in this Section 6, that the following
is correct as at the Closing Date:
|
Page 24 of
35
|
|
All
taxes within the meaning of Section 3 of the German Tax Code (Abgabenordnung), all
public social security payments (Sozialversicherungsbeiträge)
and any other tax imposed by any governmental authority responsible for
the imposition of such tax (each a “Tax” and together the
“Taxes”) imposed
on the Company which relate to completed assessment periods (steuerliche
Veranlagungszeiträume) ending on or before the Closing Date have
been duly filed by the due date for such assessment period, paid on time
or – in case such Taxes have not been due on or before the Closing Date –
are reflected in the Financial Statements 10/2009 as a liability or a Tax
accrual. Hidden profit distributions (verdeckte
Gewinnausschüttungen) have not been
made.
|
|
6.2
|
Subject
to, and limited by, the provisions set forth in this Section 6, the Seller
hereby undertakes to indemnify the Purchaser from all Tax liabilities
relating to the Company and to the period
prior to the Closing Date, except to the extent such Tax
liabilities
|
|
(a)
|
are
provided for in the Financial Statements either as a liability (Verbindlichkeit) or as
a pro-vision or reserve (Rückstellung);
|
|
(b)
|
are
the result of any transaction or act directly or indirectly initiated by
the Purchaser or the Company following the Closing
Date;
|
|
(c)
|
can
be offset against Tax loss carry-backs or Tax loss carry-forwards,
provided, however, that any use or reduction caused directly or indirectly
by the Purchaser other than as a result of purchasing the Company of such
Tax loss carry-backs or Tax loss carry-forwards shall be disregarded;
or
|
|
(d)
|
are
the result of any change in the accounting or taxation policies introduced
following the Signing Date, unless such change is required in order to
comply with laws or administrative
guidelines.
|
|
6.3
|
Payments
to be made by the Seller as a result of any claim by the Purchaser under
this Agreement shall be reduced by any Tax benefits incurring to the
Company and relating to assessment periods ending after the Closing Date
which are attributable to the event or claim giving rise to such payment,
e.g. Tax deductions resulting from higher depreciation (Phasenverschiebungen).
Such reduction amount shall be calculated as the net present value of the
future benefits as of the day of the Seller’s compensation payment with an
interest rate of 6 % p.a.
|
|
6.4
|
The
Purchaser shall pay to the Seller any Tax refund (Steuererstattung)
(including any claim for repayment of any Tax) or Tax credit (Steuerguthaben)
received by the Company after the Closing Date which is attributable to an
assessment period ending on or before the Closing Date, if and to the
extent such refund or credit is not reflected as an asset in the Financial
Statements 10/2009 unless such refund or credit in one assessment period
is compensated by corresponding higher Taxes in other assessment periods.
The same shall apply in the event that accruals/reserves and liabilities
relating to Taxes to be imposed for assessment periods ending on or before
the Closing Date prove to exceed the actual Tax burden as determined by
the competent Tax authorities by a final and binding assessment. The
Purchaser shall inform the Seller without undue delay (unverzüglich) of any
such Tax refunds or credits.
|
Page 25 of
35
|
6.5
|
Claims
against the Seller resulting from a breach of a guarantee pursuant to
Section 6.1 or for indemnification pursuant to Section 6.2 shall be
handled as follows:
|
|
|
(1)
|
The
Seller shall be given the opportunity to take part in any Tax
inspection or other audit carried out by a competent authority relating to
assessment periods ending on or before the Closing Date and relating to
issues resulting in an asserted breach of a guarantee set forth in Section
6.1 or the indemnification set forth in
Section 6.2;
|
|
|
(2)
|
the
Purchaser or the Company shall inform the Seller without undue delay (unverzüglich) of the
announcement and/or the commencement of such Tax inspections or other
audit;
|
|
|
(3)
|
after
the Seller has been informed pursuant to sub-paragraph (2) above and the
Seller has requested the Purchaser to procure that the Company objects or
appeals, the Purchaser shall procure without undue delay that the Company
objects to or appeals against any Tax assessment (Xxxxxx- xxxx
Abgabenbescheid) detrimental to the Seller and – if requested by
the Seller – litigates any dispute on Taxes with the authority, in each
case in accordance with the specific instructions of the Seller which
shall include drafts of any written correspondence required with the tax
authorities and submissions required for legal proceedings unless (i) an
agreement can be reached with regard to the result of an investigation or
audit with the express consent of the Seller or (ii) the instructions of
the Seller lead to direct disadvantages for the Company for the period
following the Closing that outweigh the potential claim against the
Seller. Any costs and expenses incurred by an objection or appeal made at
the request of the Seller other than the Company’s own (internal) costs
shall be borne by the Seller;
|
|
|
(4)
|
the
Purchaser shall procure that after the Closing Date the Seller and its
advisors and other representatives of the Seller shall have access to
accounting, financial, Tax and other records, including internal and
external correspondence (and shall allow them to make copies thereof), as
well as to other information, management, employees and auditors of the
Company, in each case for the period until the Closing Date, as long as
and to the extent necessary or useful to the Seller in connection with any
claims under this Section 6. The Purchaser shall keep, and procure that
the Company keeps, all books and records relating to any period prior to
the Closing Date in accordance with and during the periods required under
applicable law. The Purchaser agrees to cause the Company to give the
Seller reasonable notice prior to transferring or destroying any books or
records of the Company relating to any matters which may be relevant with
respect to any obligation or claim of the Seller under or in connection
with this Section 6 and, if the Seller so requests, to deliver such books
or records to the Seller. To the extent that the Seller requires original
documents, the Purchaser shall forward such books and records to the
Seller, and the Seller shall return them immediately after the Seller no
longer requires these documents.
|
Page 26 of
35
|
6.6
|
If
the Purchaser fails to comply with any of its obligations provided for in
Section 6.5 in any material respect, it shall not be entitled to any
claims under this Section 6 against the Seller if the failure to
do so has negatively affected the ability of the Seller to appeal a Tax
assessment. If the Parties are in dispute regarding the question whether
or not the respective failure of the Purchaser to materially comply
with its obligations provided for in Section 6.5, has
negatively affected the ability of the Seller to appeal a Tax assessment,
the Purchaser shall be under the burden of proof in this
respect.
|
|
6.7
|
Payments
by the Seller to the Purchaser pursuant to this Section 6 shall be made
within ten Business Days following a written notice by the Purchaser,
provided that the Seller shall not be required to make any payment earlier
than five Business Days before such Taxes are due for payment to the tax
authority. In case of any Tax being contested in accordance with Section
6.5 (3), a payment of such Tax to the tax authority will be considered due
on the date on which the Seller has to make a payment. Payments by the
Purchaser pursuant to Section 6.4 shall be made within ten Business days
after the relevant decision of the tax authority resulting in a Tax
refund.
|
|
6.8
|
If
and to the extent the Purchaser receives amounts of the Escrow Amount from
the Escrow Account pursuant to Section 3.6 hereof, such payment shall
accordingly reduce any liability under this
Agreement.
|
|
6.9
|
All
claims of the Purchaser based on a breach of a guarantee contained in
Section 6.1 and for indemnification pursuant to Section 6.2 and
claims of the Seller pursuant to Section 6.4 shall become time-barred six
(6) months after the final and binding assessment (formell bestandskräftige
Festsetzung) of the relevant
Taxes.
|
Page 27 of
35
|
6.10
|
All
claims of the Purchaser based on a breach of a guarantee contained in
Section 6.1 and for indemnification pursuant to Section 6.2 (“Tax Breach”) shall be
subject to the limitations of Section
5.6.
|
Section
7
Period
until the Closing Date
|
7.1
|
The
Seller undertakes and procures, unless otherwise provided in this
Agreement, that the Business of the Company during the period between
Signing Date and Closing Date will be conducted in the ordinary course of
business and that the Company will neither take extraordinary measures nor
omit to take material measures with the consequence that the
Representations of the Seller in this Agreement become
incorrect.
|
|
7.2
|
During
the period between Signing Date and Closing Date the Seller will not take,
cause or perform any extraordinary management measures without the prior
written consent of the Purchaser, in particular it shall not increase the
salaries of employees. During the period between Signing Date and Closing
Date the Seller will neither resolve on any amendments of the articles of
association of the Company nor resolve on any profit
distributions.
|
Section
8
Representations
and Covenants of the Purchaser
|
8.1
|
The
Purchaser hereby guarantees by way of an independent promise of guarantee
pursuant to Section 311 (1) BGB (“Purchaser
Representation”) the
following:
|
|
|
(1)
|
The
statements made by the Purchaser in the Preamble of this Agreement are
correct.
|
|
|
(2)
|
The
execution and performance by the Purchaser of this Agreement and the
consummation of the transaction contemplated herein do not (i) violate the
articles of association or by–laws of the Purchaser nor (ii) violate any
applicable law, regulation, judgement, injunction or order binding on the
Purchaser, and (iii) there is no action, law suit, investigation or
proceeding pending against, or to the knowledge of the Purchaser
threatened against, the Purchaser before any court, arbitration panel or
governmental authority which in any manner challenges or seeks to prevent,
alter or delay the transaction contemplated
herein.
|
Page 28 of
35
|
|
(3)
|
The
Purchaser has sufficient immediately available funds or binding financing
commitments to pay the Net Purchase Price and to make all other payments
required to be made under or in connection with this
Agreement.
|
|
8.2
|
In
the event that the Purchaser is in breach of any Purchaser Representation
pursuant to Section 8.1, the Purchaser shall indemnify and hold harmless
the Seller from any damages incurred by the Seller. All claims of the
Seller arising under this Section 8.1 and 8.2 shall become time–barred
five years after the Closing.
|
|
8.3
|
The
Purchaser shall procure that after the Closing Date the Seller and its
representatives are given reasonable access to, and are allowed to make
copies of, (i) the annual books of accounts for the fiscal year 2009
ending on 1 January 2010 and (ii) the books of account for the first and
second quarter of the fiscal year 2010 as well as any other financial
information required to achieve the deconsolidation on the Closing Date
or, if the Closing Date is not the last day of a month, on the end of the
month following the Closing Date. The Purchaser shall procure that after
the Closing Date the Seller and the Seller’s ultimate shareholder, STAAR
Surgical Company, and their advisors shall have access to accounting,
financial, Tax and other records, including internal and external
correspondence (and shall allow them to make copies thereof), as well as
to other information, management, employees and auditors of the Company to
the extent required by the Seller and/or the Seller’s ultimate
shareholder, STAAR Surgical Company, for the preparation, investigation
and audit of their financial
statements.
|
|
8.4
|
To
the extent that after the Closing Date a third party raises a claim
against the Seller which is due to a legal relationship between such third
party and the Company, the Purchaser shall hold harmless and indemnify the
Seller from any such claim as well as any costs and expenses incurred in
connection therewith in the event that the claim is based on actions taken
by the Company after the Closing Date. The Parties agree by way of an
agreement in favour of third parties in the sense of Section 328 BGB that
sentence 1 of this Section 8.4 shall apply accordingly in the event
that the third party raises a claim against a company which is affiliated
to the Seller within the meaning of Section 15 of the German Stock
Corporation Act or any of its members of the management board, supervisory
board or similar board, or employees or
shareholders.
|
|
8.5
|
Prior
to the date hereof, the Company on the one side and STAAR SURGICAL AG,
STAAR Surgical Company, and STAAR Japan Inc. on the other side have
concluded the Distribution Agreement attached as Annex
8.5. For the sake of clarification the Parties hereby acknowledge
that any previously accepted orders placed by the Company at STAAR
Surgical Company and/or STAAR Surgical Company’s affiliates which have not
been delivered and/or paid at the Signing Date as well as all intercompany
trade payables and intercompany trade receivables under these orders shall
remain unaffected by the conclusion of this Agreement and the Distribution
Agreement.
|
Page 29 of
35
|
8.6
|
The
Purchaser hereby undertakes to the Seller that the Purchaser shall (i)
procure that the Company is able at all times to fulfil its financial
obligations and further does not encounter a financially distressed
situation or the threat of an insolvency or similar procedure and (ii)
refrain from liquidation or winding up of the Company and/or its
operations for a period of 12 months after the Closing
Date.
|
|
8.7
|
The
Purchaser hereby undertakes to the Seller that the Purchaser shall procure
that the Company transfers within 15 Business Days after the Signing Date
and free of any charge to the Seller or a company nominated by the Seller
all rights in the German trademark “STAAR Gel”, registered under the
registration number 300698860. The Purchaser shall procure that the
Company provides any declaration and carries out any act which may be or
become necessary for the Seller or the nominated company to receive
ownership of the trademark “STAAR Gel” and to have the transfer of rights
registered in the respective trademark
register.
|
Section
9
Indemnification
|
9.1
|
The
Seller hereby undertakes to indemnify the Purchaser for any loss suffered
by the Purchaser arising from any claims against the Company raised by
persons other than the Seller who were or claim to be or to have been
former shareholders of Former Domilens GmbH arguing, inter alia, that they
lost their shares or rights to their shares in Former Domilens GmbH as a
result of the Domilens Merger.
|
|
9.2
|
All
claims of the Purchaser for indemnification pursuant to Section 9.1 shall
be limited in the aggregate to 100% of the Net Purchase Price pursuant to
Section 3.1.
|
|
9.3
|
The
period of limitation for all claims of the Purchaser under this Section 9
shall become time-barred (verjähren) upon the
expiration of a period of seven (7) years after the Closing
Date.
|
Page 30 of
35
Section
10
Consents
|
10.1
|
Waiving
all time limits and formal requirements prescribed by law or by the
articles of association with regard to the convening and holding of
shareholder’s meetings the Seller as the sole shareholder of the Company
hereby holds an extraordinary shareholder’s meeting and resolves as
follows:
|
The
shareholder’s meeting hereby consents to the transfer of the Shares pursuant to
this Agreement. There being no further resolutions, the meeting is
closed.
|
10.2
|
The
Company declared its consent to the sale and transfer of the Shares from
the Seller to the Purchaser. The original of the declaration of consent is
attached as Annex
10.2.
|
Section
11
Confidentiality and
Press Releases
|
11.1
|
The
Parties undertake that any matter in connection with this Agreement, the
conclusion and execution of this Agreement and its content, shall be
maintained in confidence, provided the disclosure is not mandatory under
applicable disclosure law. The Purchaser agrees that the Seller and its
ultimate shareholder may disclose the existence and content of this
Agreement pursuant to applicable securities laws if the Seller and its
ultimate shareholder reasonably determine that such disclosure is
required. The Seller agrees that the Purchaser discloses the existence and
content of this Agreement to such financial institutions which finance the
transaction contemplated under this
Agreement.
|
|
11.2
|
Subject
to Section 11.1 the Parties shall cooperate in issuing a press release or
similar statements regarding this
Agreement.
|
|
11.3
|
In
the unlikely event that this Agreement is terminated without the Closing
having been consummated, the Purchaser undertakes to keep confidential all
information received from the Seller in connection with the transactions
contemplated by this Agreement and to return all documents and information
embodied otherwise which it received from the Seller, together with any
copies thereof, and to destroy all documents and information embodied
otherwise it produced based on information received from the Seller,
unless such information is in the public domain without breach of a
confidentiality obligation towards the Seller. The Purchaser shall not be
entitled to any retention right with respect to such documents or
information.
|
Page 31 of
35
Section
12
Covenant
Not to Compete
|
12.1
|
The
Seller undertakes for a period of two (2) years from the Closing Date,
however in any case only for a period legally permissible, not to engage
in any activity which would, directly or indirectly, compete in Germany
and/or Austria with or result in competition with the Business of the
Company. In particular, the Seller shall not during such period establish
or acquire, or acquire shares in, any business or business entity in
Germany and/or Austria which would, directly or indirectly, compete in
Germany and/or Austria with the Business of the Company. However, the
Seller shall be entitled (i) to acquire any company or business that at
the time of such acquisition sells products such company or business
itself manufactures (not third party products) into Germany and/or Austria
which are in competition with the products sold or distributed by the
Company and (ii) to acquire shares in any company listed on a stock
exchange. It is further understood that the Seller and/or the Seller’s
affiliates shall in no way be limited from selling or distributing to the
Company, or any affiliates that may be formed
hereafter.
|
|
|
The
Seller and/or the Seller’s affiliates (verbundene
Unternehmen), including without limitation STAAR Surgical Company
and STAAR Japan Inc., shall also be entitled to directly or indirectly
sell or distribute any of their products in Germany and/or Austria to the
extent permitted by the Distribution Agreement as attached as Annex 8.5.
For the sake of clarification: To the extent that the Distribution
Agreement as attached as Annex 8.5 permits the Seller and/or the Seller’s
affiliates to directly or indirectly sell or distribute any of their
products in Germany and/or Austria, e.g. (i) with respect to such products
which the Company chooses not to distribute under the Distribution
Agreement or (ii) if the exclusivity granted in the Distribution Agreement
has terminated, the covenant not to compete pursuant to this Section 12.1
shall not be applicable.
|
|
12.2
|
If
the Seller does not comply with the non-compete covenant and such
infringement shall continue despite a warning notice from the Purchaser,
then the Seller shall pay to the Purchaser a penalty of EUR 27,500.00. In
the event of a permanent violation, the Seller shall pay for each month of
the remaining term of the non-compete covenant during which such violation
is existent a monthly amount of EUR 27,500.00. This shall be without
prejudice to the right of the Purchaser to seek further damages to the
extent suffered by the Purchaser or require cease and desist of the
damaging conduct, provided, however, that any payment under the penalty
shall be credited to damages to which the Purchaser is entitled and that
all claims of the Purchaser pursuant to Section 12 shall be limited in the
aggregate to 75% of the Net Purchase Price pursuant to Section
3.1.
|
Page 32 of
35
Section
13
Notifications
to the Parties
|
13.1
|
All
declarations, notifications or other communications under this Agreement
and its Annexes shall be made and be submitted in writing (§ 126 BGB) to
the addresses specified below.
|
|
13.2
|
Notices
to the Seller:
|
STAAR
Surgical AG,
Attn.:
Xxxxx Xxxxxx and Xxxx Xxxxx
Xxxxxxxxxxx
000,
0000
Xxxxx
Xxxxxxxxxxx
and
with a
copy to:
Xxxxxx
Xxxxxxx
Rechtsanwalt
Xxxxxx X. Xxxxxxx
Xx
Xxxxxxxxxx 00
00000
Xxxxxxx
Xxxxxxx
|
13.3
|
Notices
to the Purchaser:
|
Domilens
Akquisitions GmbH,
Attn: Xx.
Xxxxxxxx Xxxxx
Xxxxxxxxxx
Xxxxxxxx 000 x,
00000
Xxxxxxx,
Xxxxxxx
with a
copy to:
Rittstieg
Rechtsanwälte
Rechtsanwalt Xx.
Xxxx Xxxxx
Xxxx
Xxxxxxxx 00,
00000
Xxxxxxx
Xxxxxxx
Page 33 of
35
|
13.4
|
The
aforementioned addresses shall remain in effect unless and until a Party
has notified the other Party in writing of the alteration of its
address.
|
Section
14
Execution
of this Agreement
|
14.1
|
The
Parties shall participate and support each other in order to execute this
Agreement without delay, in particular they shall take all measures and
make all declarations necessary for the execution of this
Agreement.
|
|
14.2
|
If
execution measures performed with due care and in accordance with common
behaviour patterns of the relevant branch may be expected to result in
material adverse effects, each Party shall prior to the performance of
such measure inform the other Party in writing and shall only perform such
measure with the prior written consent of the other
Party.
|
Section
15
Miscellaneous
|
15.1
|
The
costs for the notarization of this Agreement and its execution shall be
borne by the Purchaser. All transfer taxes resulting from or in connection
with this Agreement and its execution, in particular real estate transfer
taxes, shall be borne by the Purchaser. In other respects, the Parties
shall each bear their own costs, in particular the costs for their
respective tax, legal and financial
advisors.
|
|
15.2
|
This
Agreement, including its Annexes, shall be governed and construed in
accordance with German law, excluding the United Nations Convention on
Contracts for the International Sale of Goods
(CISG).
|
|
15.3
|
In
the event of any dispute between the Parties arising out of or in
connection with this Agreement, exclusive jurisdiction shall be with the
competent courts in Hamburg,
Germany.
|
Page 34 of
35
|
15.4
|
This
Agreement constitutes the full understanding of the Parties and the
complete and exclusive statements of the terms and conditions of the
Parties’ agreements relating to the subject matter hereof and supersedes
any and all prior agreements and understandings, whether written or oral,
that may exist between the Parties with respect to the subject matter of
this Agreement or parts thereof. Side agreements to this Agreement do not
exist.
|
|
15.5
|
Amendments
and supplements to this Agreement shall be valid only if signed by the
Seller and the Buyer and made in writing (Section 126 BGB), except where a
stricter form (e.g. notarization) is required under applicable law. The
same applies for any amendment or supplement to this
provision.
|
|
15.6
|
All
Annexes are an integral part of this Agreement. Other ancillary agreements
have not been made. Headings in this Agreement are inserted for
convenience only and shall not affect the interpretation of this
Agreement. Where a German term has been inserted, either directly or in
brackets after the English term (or such English term is repeated
elsewhere in this Agreement), the German term alone and not the English
term to which it relates shall be decisive for purposes of interpretation
of the relevant English term in this
Agreement.
|
|
15.7
|
The
Purchaser may not assign this Agreement and any claims or rights under
this Agreement without the prior written consent of the Seller, except for
assignments to the Purchaser’s banks financing the transaction governed by
this Agreement.
|
|
15.8
|
The
term “Business
Day” shall mean all working days except for Saturdays and Sundays
and the statutory holidays (gesetzliche Feiertage)
of Hamburg/Germany. As far as interest (interest for delay or other
interest) is payable pursuant to this Agreement, such interest shall be
calculated on the actual days elapsed and on a 360 day/year-basis
(360/360).
|
|
15.9
|
If
a provision of this Agreement is or becomes wholly or partially
ineffective or unenforceable, the effectiveness and enforceability of all
other provisions in this Agreement shall remain
unaffected.
|
Page 35 of
35
Annex
3.5.2
Staar
EBIT calculation based on German GAAP (HGB)
|
Item
/ Account
|
Commentary
|
Exemplary
calculation
for
the year 2009
(EUR)
|
|||||||||||||
|
Jahresüberschuss
|
Net
income
|
as
defined by HGB (Section 275 (2) 20.)
|
446,890.00
|
||||||||||||
|
plus/minus
Sonstige Steuern
|
plus/less
Other taxes
|
as
defined by HGB (Section 275 (2) 19.)
|
5,654.17
|
||||||||||||
|
5,654.17
|
|||||||||||||||
|
plus/minus
Steuern vom Einkommen und vom Ertrag
|
plus/less
Income taxes
|
as
defined by HGB (Section 275 (2) 18.)
|
267,059.42
|
||||||||||||
|
S22830
|
Körperschaft-Steuererstattung
|
-1,859.40
|
|||||||||||||
|
[Ledger
Acc.]
|
[to
come]
|
268,918.82
|
|||||||||||||
|
plus
Außerordentliche Aufwendungen
|
plus
Exceptional expenses
|
as
defined by HGB (Section 275 (2) 16.)
|
45,499.19
|
||||||||||||
|
S20000
|
Außerordentliche
Aufwendungen
|
45,499.19
|
|||||||||||||
|
minus
Außerordentliche Erträge
|
less
Exceptional income
|
as
defined by HGB (Section 275 (2) 15.)
|
116,001.00
|
||||||||||||
|
S27150
|
Erträge
aus Zuschreibungen des Umlaufvermögens
|
116,001.00
|
|||||||||||||
|
Ergebnis
der gewöhnlichen Geschäftstätigkeit
|
Result
from ordinary operations
|
as
defined by HGB (Section 275 (2) 14.)
|
649,101.78
|
||||||||||||
|
plus
Zinsen und ähnliche Aufwendungen
|
plus
Interest and similar expenses
|
as
defined by HGB (Section 275 (2) 13.)
|
7.01
|
||||||||||||
|
S21100
|
Zinsaufwendungen
für kurzfristige Verbindlichkeitn
|
7.01
|
|||||||||||||
|
S21200
|
Zinsaufwendungen
für langfristige Verbindlichkeiten
|
0.00
|
|||||||||||||
|
plus
Abschreibungen auf Finanzanlagen und
|
plus
Write-offs on financial assets and
|
as
defined by HGB (Section 275 (2) 12.)
|
0.00
|
||||||||||||
|
Wertpapiere
des Umlaufvermögens
|
securities
held under current assets
|
||||||||||||||
|
minus
Zinsen und ähnliche Erträge
|
less
Interest and similar income
|
as
defined by HGB (Section 275 (2) 11.)
|
109,709.15
|
||||||||||||
|
S26500
|
Sonstige
Zinsen und ähnliche Erträge
|
108,551.15
|
|||||||||||||
|
S26570
|
Xxxxxxxxxxx
§000x AO betriebliche Steuern
|
556.00
|
|||||||||||||
|
S26580
|
Zinserträge
§233a AO Körperschaftsteuer / Vermögensteuer
|
602.00
|
|||||||||||||
|
minus
Erträge aus anderen Wertpapieren und Ausleihungen
|
minus
Income from other securities
|
as
defined by HGB (Section 275 (2) 10.)
|
0.00
|
||||||||||||
|
des
Finanzanlagevermögens
|
and
financial assets
|
||||||||||||||
|
minus
Erträge aus Beteiligungen
|
minus
Income from participations
|
as
defined by HGB (Section 275 (2) 9.)
|
0.00
|
||||||||||||
|
plus
Aufwendungen aus Wechselkursdifferenzen
|
plus
Expenses f. exchange rate losses
|
included
in position "Sonstige betriebliche Aufwendungen"
|
357,121.97
|
||||||||||||
|
S21500
|
Aufwendungen
aus Kursdifferenzen
|
84,192.43
|
|||||||||||||
|
S48700
|
Abschreibungen
auf Finanzanlagen
|
272,929.54
|
|||||||||||||
|
minus
Erträge aus Wechselkursdifferenzen
|
less
Income from exchange rate gains
|
included
in position "Sonstige betriebliche Erträge"
|
160,648.35
|
||||||||||||
|
S26600
|
Erträge
aus Kursdifferenzen
|
160,648.35
|
|||||||||||||
|
EBIT
(vor Bereinigungen)
|
EBIT
(pre adjustments)
|
735,873.26
|
|||||||||||||
|
plus/minus
Aufwendungen/Erträge für Management Gebühren
|
plus/less
Expenses/income from
|
included
in position "Sonstige betriebliche Aufwendungen"
|
320,368.56
|
||||||||||||
|
von/an
Eigentümern
|
management
service charges
|
of
HGB Section 275 (2) 8.
|
|||||||||||||
|
to/from
shareholders
|
|||||||||||||||
|
S47801
|
Fremdarbeiten
USA/Schweiz (Management Service Fees)
|
322,614.02
|
|||||||||||||
|
S47802
|
Management
Service Fees (Domilens) 19% MWSt
|
-2,245.46
|
|||||||||||||
|
plus/minus
Andere nicht operative, außerordentliche oder
|
plus/less
Other non-operating or
|
list
of such potential items to be provided by the Company
|
431,359.75
|
||||||||||||
|
periodenfremde
Sachverhalte, die im EBIT
|
extraordinary
items or items
|
||||||||||||||
|
vor
Bereinigungen enthalten sind
|
items
belonging to other
|
||||||||||||||
|
accounting
periods
|
|||||||||||||||
|
(included
in EBIT pre adjustments)
|
|||||||||||||||
|
Excluding
Stock Provision belonging to prior years
|
95,000.00
|
Not
relevant in future
|
E
X
A
M
P
L
E
S
|
||||||||||||
|
Excluding
Staar Related SOX and Audit Cost
|
85,000.00
|
||||||||||||||
|
Excluding
Bonus Expenses due to new Bonus Plan
|
119,000.00
|
||||||||||||||
|
Excluding
Special Merger Cost
|
21,000.00
|
||||||||||||||
|
Excluding
Differences US-German GAAP due to Bundling Provisions
|
102,026.83
|
From
2010 no difference between US GAAP and German GAAP, as deprciation
according to contract term in both cases (as discussed with
Xxxx).
|
|||||||||||||
|
Excluding
Differences US-German GAAP due to Capital Lease
|
9,332.92
|
According to German GAAP leasing fees higher then
depreciation and interest. But will be less each year. Proposal: use
only leasing fees, no adjustments.
|
|||||||||||||
|
plus/minus
Operative oder betriebliche Sachverhalte, die NICHT
|
plus/less
Operating items NOT
|
0.00
|
|||||||||||||
|
im
EBIT vor Bereinigungen enthalten sind
|
(included
in EBIT pre adjustments); e.g.
|
||||||||||||||
|
•
acquisition expenses, i.e. legal, tax and financial advisor fees from the
acquisition should not be borne by the Company (neither directly nor
indirectly)
|
|||||||||||||||
|
•
acquisition indebtedness charges, i.e. interest, fees and any other
charges related to indebtedness incurred for the Purchaser’s acquisition
of the Company or any refinancing or assignment of such
indebtedness
|
|||||||||||||||
|
•
any earn out payments pursuant to Section 3.5 of the
SPA
|
|||||||||||||||
|
•
any additional revenue or expenses from companies that are acquired by the
Company
|
|||||||||||||||
|
Final
EBIT for Staar
|
1,487,601.57
|
||||||||||||||
1/1
Annex 8.5
FORM OF DISTRIBUTION
AGREEMENT
THIS AGREEMENT is entered into and made
effective this 24th day of February, 2010, by and between
|
1.
|
STAAR
SURGICAL AG,
|
a Swiss
corporation with a principal place of business at Xxxxxxxxxxxx 000, XX – 2560
Nidau, Switzerland
|
2.
|
STAAR
Surgical Company,
|
a Delaware corporation with a principal
place of business at 0000 Xxxxxx Xxx., Xxxxxxxx, XX 00000,
XXX
|
3.
|
STAAR
Japan Inc.,
|
|
|
a
Japanese corporation, with its principal place of business at 0-00-00,
Xxxxx, Xxxxxx-Xx, Xxxxx 000-0000,
Xxxxx
|
(hereinafter
together referred to as "Companies" or individually as “Company”)
And
|
4.
|
Domilens
GmbH,
|
|
|
a
German limited liability company organized and existing under the laws of
Germany, with its principal place of business at Holsteiner Xxxxxxxx 000x
00000 Xxxxxxx, Xxxxxxx
|
(hereinafter
referred to as "Distributor").
1. Appointment and
Acceptance
1.1 Companies
hereby appoint Distributor to purchase and resell the Products in the Territory
during the term of this Agreement. Companies shall be separately
liable for any obligations of any of the Companies under this Agreement and
shall therefore not be jointly and severally liable. Distributor accepts this
appointment on the terms and conditions set forth herein. During the first part
of the term of this Agreement until February 23, 2013 Distributor shall be
appointed on an exclusive basis. If the exclusivity is not mutually renewed in
writing after February 23, 2013, Distributor shall act on a non-exclusive basis
during the second part of the term of this Agreement from February 24, 2013
until February 23, 2015. Distributor shall not represent, manufacture, market or
sell in the Territory any products, which are in competition with the
implantable xxxxxxxx lenses (ICL) or the preloaded silicone KS-3AI intraocular
lenses manufactured by the Companies until February 23, 2013 or during any
period thereafter for which the exclusivity is mutually renewed in
writing.
1.2 The
term "Products" shall mean the products, specified by brand name, manufactured
and/or sold by Companies listed on Exhibit A
hereto. Any of the Companies may from time to time modify or change
the design or specification of any of the Products. The relevant Company will
notify Distributor promptly of any significant modification or change in the
design or specifications of any Product. Companies reserve the right to delete
discontinued Products upon ninety (90) days prior written notice to Distributor.
The Companies and the Distributor agree that Distributor’s rights pursuant to
article 1.1 shall also automatically comprise any modifications, revisions or
extensions of existing Products manufactured by the Companies. The Companies
shall inform the Distributor in due time of the modification, revision or
extension of any such existing Product. The Parties shall then mutually agree on
reasonable terms on prices and supply quantities. For any new
products, which are not modifications, revisions or extensions of existing
Products, the Parties shall negotiate in good faith, whether these new products
shall be distributed by the Distributor and the prices and supply quantities of
such new products. In particular a Product shall be regarded as a new product
when it is substantially different to an existing Product. A Product shall be
regarded as a modification, revision or extension if it substitutes for an
existing Product. The Companies shall have no obligation to propose to the
Distributor the distribution in the Territory of third party products already
distributed by any affiliate of the Companies. New products to be distributed by
the Distributor upon mutual agreement shall be included within the term
"Products" hereunder by way of an amendment to Exhibit
A.
1.3 The
term "Territory" shall mean the geographic area defined on Exhibit B
hereto. Distributor agrees not to actively distribute the Products,
neither to advertise the Products nor to establish any branch nor to maintain
any distribution depots for distribution of the Products, outside the Territory
in a territory which is exclusively granted to another distribution partner of
Companies or which Companies have reserved for itself. This restriction shall
not prevent Distributor from processing any unsolicited requests from customers
outside the Territory. Companies are entitled to name these territories in due
time to Distributor. The territories which are actually granted to another
distribution partner or which Companies have reserved for themselves are listed
in Exhibit
C.
1.4 Distributor
shall take over from Companies the customers currently existing in the
Territory. These customers and the annual turnover realised with these customers
during the last five calendar years are listed in Exhibit
D.
1.5 Companies
and Distributor agree that all purchase orders shall (in accordance with past
practice) be directed to either STAAR SURGICAL AG or STAAR Japan Inc. and STAAR
Surgical Company shall be under no obligation to provide Distributor with the
Products as long as Distributor can order them from either STAAR SURGICAL AG or
STAAR Japan Inc..
2. Direct Sales; Other Brand
Names
2.1 Companies’
policy is to sell the Products through their distributor organization,
wherever possible. As long as the Companies supply the Distributor on
an exclusive basis the Companies will thus not make any direct sales of the
Products to customers in the Territory and will refer such customers to the
Distributor. After the exclusivity period has ended, Companies shall be free to
make sales of the Products directly or through third parties, without Companies
being obligated to compensate Distributor.
2
2.2
Companies acknowledge that during the exclusivity period their supply
obligations pursuant to this Agreement in the Territory extend to any Products
under a brand name different from a Product brand name as long as such Products
are manufactured by the Companies and are in all material respects of the same
type, size and capability of the Products.
3. Business of
Distributor
3.1 Distributor
is and shall remain an independent contractor and the relationship between
Companies and Distributor shall not be construed as a principle-agent
relationship or partnership unless Distributor agrees to that relationship in
writing. Distributor agrees that the Companies have granted it no
authority to act or make any representations or warranties on behalf of
Companies. Distributor is at all times acting for its own
account, and at its own expense. Distributor represents to Companies
that Distributor has adequate personnel, facilities and other resources in the
Territory from which to sell and distribute the Products. Distributor
shall comply with all applicable laws, statutes, regulations and treaties
relating to the sale and distribution of the Products and the performance of its
duties and obligations hereunder.
4. Term
4.1 This
Agreement becomes effective upon signing. The term of this Agreement shall
terminate subject to the terms and conditions of this Agreement on February 23,
2015. If Companies and Distributor expressly agree in writing to
renew this Agreement prior to the foregoing expiration date, this
Agreement shall continue in full force and effect until February 23 of the
calendar year following the expiration date.
5. Prices and
Terms
5.1 The
prices which Distributor shall pay to Companies for the Products shall be fixed
for 2010 as specified on the Price List included within Exhibit
A. The prices quoted are exclusive of any national, state or
local sales, use, value-added or other taxes, customs duties, or similar
tariffs and fees which shall be the responsibility of
Distributor. In the event that Companies are required to
pay any such taxes, duties or fees, such items will be added to the invoice to
be paid by Distributor. Prices are subject to an annual review by the Parties.
If the Parties cannot agree on an adjustment of prices, the Companies are
entitled to increase the prices invoiced to the Distributor for ICL lenses in
line with inflationary increases of prices in Germany. Subject to mutual
agreement between the Parties the prices for KSX and KS3-AI (“Cataract
Products”) would then stay the same unless Companies can demonstrate that its
costs have risen more than 20 % as compared to Companies’ costs at the time
Companies and the Distributor have last agreed on prices in which case Companies
can pass on such increased costs to Distributor as price increases.
5.2 Payment
for the products will be in EUR (Euro) into such bank account as designated by
the relevant Company to Distributor. Terms of payment shall be by irrevocable
letter of credit acceptable to the relevant Company. Distributor will effect
payment at 60 (sixty) days after the invoice. As from day 61 (sixty one) all
accounts will be subject to an interest charge of 1% per month.
3
5.3 In
the event Companies establish a line of credit for Distributor or permit
Distributor to purchase Products on open account, Companies retain title to
said Products and reserve all rights with respect to such delivered Products
permitted by law including, without limitation, the rights of recession,
repossession, resale, and stoppage in transit until the full amount due from
Distributor in respect of such Products has been paid.
6. Companies
Obligations
Companies shall, during the term of
this Agreement:
6.1 Provide
Product training, at mutually acceptable times and places, for a reasonable
number of Distributor's personnel, provided that Distributor shall pay all
expenses of its personnel attending such training sessions (including without
limitation salaries and transportation), while Companies will pay for their own
expenses related to such training sessions;
6.2 Furnish
Distributor, without charge, reasonable quantities of Product literature, in the
English language, which Companies may publish or prepare from time to
time;
6.3 Render
reasonable periodic assistance to Distributor on Product technical and sales
issues; and
6.4 Invoice
Distributor for each Product sold on the day it is shipped or in accordance with
the terms of the accepted order.
6.5 In
2010 the Companies will pay to the Distributor a marketing allowance amount of
EUR 47,220.00 (gross). The amount is payable in four equal installments which
are payable at the end of each quarter in 2010 respectively. The Companies shall
be entitled to recommend the marketing activities which are financed by such
marketing allowance. Provided that Distributor uses the marketing allowance to
finance marketing activities for ICLs (which do not have to occur in the quarter
in which an installment is received but all usage of ICL marketing allowances
shall have occurred not later than 30 June 2011) it shall have the final right
to decide which activities are to be financed through the marketing
allowance.
7. Distributor
Obligations
Distributor shall, during term of this
Agreement:
7.1 Actively
use its best efforts to promote and penetrate the market for the Products in the
Territory. After the end of the exclusivity period Distributor shall only be
under an obligation to use reasonable efforts to promote and penetrate the
market for the Products in the Territory;
4
7.2 Employ
adequate staff having specialized technical training, maintain adequate stocks
of Products, and maintain facilities and other resources within the Territory,
at its own expense, from which to sell and distribute the Products;
7.3 Submit
to Companies regular quarterly status reports reflecting sales activities
and anticipated requirements of customers in the Territory; notwithstanding this
obligation to keep Companies informed Distributor shall not be obliged or
entitled to disclose the identity of its customers to Companies, neither during
the term of this Agreement, nor upon or by reason of its termination, unless
Companies expressly request such disclosure in order to conduct a Recall
pursuant to Section 11 of this Agreement. After the end of the exclusivity
period, Distributor shall not be under an obligation to provide reports
reflecting anticipated requirements of customers in the Territory;
7.4 Maintain
adequate insurance against all types of public liability, in such amounts and
with such insurers as is customary in accordance with sound business
practices. At either Companies' request, furnish to Companies a
certificate of insurance or other evidence satisfactory to Companies with
respect to the above; and
7.5 Provide
customer and guarantee services as required herein.
8. Forecasts/Purchase
Orders/Minimum Product Quantities
8.1 Distributor,
on a quarterly basis, shall forward to Companies forecasts of Product
requirements designating the quantities of each model of the Products which
Distributor intends to sell.
8.2 Any
purchase orders issued by Distributor are subject to acceptance by Companies and
will not be deemed accepted until a written confirmation has been dispatched by
Companies.
8.3 During
the exclusivity period of this Agreement, Distributor shall purchase from the
Companies the minimum quantity of each Product ("Minimum Product Quantities")
that Companies and Distributor shall agree upon in advance. The
Minimum Product Quantities for each line of Products (ICLs and Cataract
Products) for the years 2010, 2011 and 2012 of this Agreement are shown on Exhibit E hereto. The
Minimum Product Quantities for subsequent twelve month periods for which the
exclusivity period is extended shall be submitted by Companies to Distributor,
after consultation with Distributor at least ninety (90) days prior to each such
twelve month period. If Companies and Distributor fail to agree upon
the Minimum Product Quantities for any such twelve month period, then the
Minimum Product Quantities for such twelve month period shall be deemed to be
ten percent (10%) greater than the Minimum Product Quantities for the preceding
twelve month period. Failure of Distributor to purchase the Minimum
Product Quantities during 2010, 2011 or 2012 and for any subsequent twelve month
period in which the exclusivity is mutually renewed shall entitle the Companies
to terminate the exclusivity effective January 1, of the calendar year following
the calendar year in which Distributor failed to purchase the Minimum Products
Quantities for that line of Products for which the Distributor has failed to
purchase the Minimum Purchase Quantities (but treating for this purpose KS-3AI
and KSX as one product category).
5
8.4 The
Distributor places a binding purchase order with the Companies as detailed in
Exhibit F for delivery before December
31, 2010 which
amounts to the Minimum Purchase Quantity for 2010.
9. Delivery
9.1 Delivery
of all Products ordered by Distributor shall be made Ex Works at Companies’
facility or the named point of shipment. ICC INCOTERMS (2000 edition)
shall apply, except insofar as these INCOTERMS may be inconsistent
with the terms of this Agreement.
9.2 In
the event Distributor fails to take delivery and/or shipment of Products
pursuant to the terms of this Agreement: (i) Companies
shall be entitled to store the Products in a warehouse at the expense and risk
of Distributor; (ii) the price of the Products shall become
immediately due and payable by Distributor; (iii) if payment is
secured by a letter of credit, Companies may receive payment upon
presentation of its sales invoice and warehouse receipt; and
(iv) after sixty (60) days from the date upon which the price becomes
payable, Companies may dispose of the Products in a commercially reasonable
manner without notice to Distributor and recover any shortfall and related
expenses from Distributor.
9.3 All
Products ordered pursuant to accepted purchase orders shall be scheduled for
delivery in accordance with Companies’ then current and normal delivery
times. Should the Companies fail to deliver accepted purchase orders in
accordance with such delivery times they shall be liable for damages. Any such
damage claim shall be limited to the purchase price invoiced by the relevant
Company to Distributor of the delayed Product.
10. Warranty and Limitation of
Liability
10.1 Companies
warrant that the Products, when delivered to Distributor pursuant to this
Agreement, will meet the written Companies specifications for such Products in
effect as of the time of such delivery. The foregoing warranty is in lieu of and
excludes all other warranties, express or implied (including but not limited to
any warranties of merchantability or fitness for a particular
purpose). Companies may twice attempt to replace any Product which is
returned to and found to be defective . If a replacement is not provided within
30 days after Companies have been notified about a defective Product, Companies
are liable for damages. Companies shall, however, not be responsible
for any incidental or consequential loss, damage, or expense which arises
directly or indirectly from the use of the Products. The remedy for breach of
warranty shall initially be, at option of the relevant Company which delivered
the non-conforming Product, the repair or replacement, at the relevant Company’s
expense, of the non-conforming Product; provided that, such Product is returned
to the relevant Company within one (1) year after delivery (the "warranty
period"). Distributor shall notify the relevant Company of the
non-conforming Product within the warranty period. In any event, the
relevant Company shall only be liable for damages in an amount up to the
purchase price invoiced by the relevant Company to Distributor of the returned
product.. Products may only be returned by Distributor when accompanied by a
return material authorization number issued by the relevant Company which
delivered the non-conforming Product. Shipping expenses for Products
returned by Distributor will be prepaid by Distributor. Companies
shall pay for shipment back to Distributor for Products repaired under
warranty. For Products returned for repair that are not covered under
warranty, Companies’ standard repair charges shall be applicable in addition to
all shipping expenses. Distributor is to observe transport and
storage conditions of all products as indicated in the directions for use and
packaging. The above warranty is contingent upon proper installation,
use and maintenance of the Products and does not apply to Products which have
been repaired or modified without Companies’ written approval.
6
10.2 Distributor
shall not make any representation or warranty as to the Products except for the
warranty stated in Section 10.1 above. Distributor shall not alter
the Products and shall not recommend or knowingly sell the Products for any uses
except as described in Companies’ Product label and labelling and in accordance
with the written instructions and warnings furnished by
Companies. Distributor agrees to deliver to its customers at or
before sale all specifications, inserts, instructions, and warnings furnished by
Companies and to retain records evidencing such delivery.
10.3 Distributor
agrees to indemnify Companies against any liability, demand, cost or expense
(including reasonable attorney's fees) caused by any claim that is attributable
to the failure by Distributor to perform its obligations hereunder or to
Distributor's misconduct or negligence in the shipment, storage, handling,
distribution, promotion or sale of the Products.
10.4 Companies
agree to indemnify Distributor against any liability, demand, cost or expense
(including reasonable attorney’s fees) caused by third parties who make any
claims (including with respect to intellectual property rights) with respect to
the manufacturing or design of the Products.
11. Regulatory & Post-Market Surveillance
Requirements
11.1 Traceability: Distributor
shall maintain records to allow for traceability of individual serial/lot
numbers to customers for all sales of the Products. The obligation to keep said
traceability records shall survive termination of this Agreement.
11.2 Recall: In the event that
Companies deem it necessary to recall any Product, or any governmental authority
requests recall of any Product distributed or sold by Distributor or any other
party which bought the Product from the Distributor for resale (“Third Party
Reseller”) in the Territory, Distributor and Companies shall cooperate fully
with each other in effecting such recall. Distributor shall
notify all customers who received the recalled product and shall record all
receipts of product returned under the Recall. Companies inform the Distributor
that he is expected to maintain copies of recall notification letters and to
maintain a distribution log that can show where product was
shipped.
11.3 Customer Complaints: For the
purpose of this point, “Complaints” are defined as reports received by end users
of Products or their healthcare providers related to the safety or efficacy of
the Products. Complaints will be received and documented by
Distributor. Documentation will include Product model and serial or
lot number, customer contact information, and as much detail as possible
regarding the nature of the complaint. Distributor will forward any
report of significant bodily injury or death resulting from use of Products to
Companies immediately, but not later than within two (2) working days of
receipt. Distributor Reseller will forward all other complaints to
Companies immediately, but not later than within four (4) working days of
receipt without disclosing the identity of the customer. If
evaluation of Product involved in a complaint by Companies is required,
Distributor will use best efforts to retrieve Product, if available, and return
to Companies. Companies will pay for shipment of such Product back to
Companies. Companies take responsibility to investigate all
Complaints, and to determine if reporting to regulatory authorities in various
markets is required, and to submit such reports when required.
7
11.4 Medical Device Regulation:
Companies informs Distributor that Sections 1, 2, and 3 are requirements of the
Medical Device Directive (93/42/EEC), and that non respect by Distributor of
these sections will oblige Companies to immediately cease supply of Products to
Distributor, and will be regarded as failure to perform a material obligation,
warranty, duty or responsibility.
11.5 Regulatory Requirements: The
Distributor confirms to have full understanding of and will take full
responsibility in order to fulfill the legal Regulatory Requirements that govern
his area of distribution. Companies inform the Distributor that Companies do not
take any legal reliability or responsibility for damages, costs or legal
consequences that may result from the non-observation of the Regulatory
Requirements prescribed by law in the country of distribution. (including
special access, if applicable).
11.6 Training: The Distributor
confirms to have been fully trained by Companies on the products and procedures
of Companies. The Distributor confirms to be familiar with the surgical
procedures for Products. Furthermore, The Distributor confirms to meet
Companies’ requirements and to only resell product to surgeons who have been
duly trained on the surgical procedure. Companies refuse to accept any legal
liability or responsibility for product being subject of complaint and/or
patient injury that may result from a malpractice of the surgical
procedure.
11.7 Third Party Resellers:
Distributor shall have the right to appoint sub-distributors or agents for the
sale of the Products in the Territory. Distributor will inform the Companies
before any future appointment. The Distributor shall ensure that every contract
with a Third party Reseller contains equivalent obligations of the Third Party
Reseller to the obligations of the Distributor pursuant to this Section 11.
Distributor shall further ensure that Companies can independently enforce any
such obligations of a Third Party Reseller
12. Governmental Approvals and
Registrations
12.1 With
the exception of the health registrations for the Products provided for in
Section 12.2 below, Distributor shall secure (and provide copies thereof to
Companies) all necessary governmental permits, licenses and registrations
required in connection with the importation and resale of the Products in the
Territory. Upon expiration or termination of this Agreement, Distributor shall
(if legally possible and at the cost of Companies) transfer to each Company (or
its nominee) all right and title to all import licenses or permits governing the
importation of the Products of that Company into the Territory.
12.2 Copies
of all permits, licenses and registrations referred in section 12.1shall be
promptly forwarded to Companies.
8
13. Companies’ and Distributors’
Proprietary Information and Rights
13.1 Distributor
and Companies recognize and understand that all information not generally known
concerning the other party and the Products, including but not limited to
Companies’ and Distributor’s organization and business affairs, customer lists,
sales information, operating procedures and practices, technical data,
designs, software, know-how, trade secrets, and processes (the "Proprietary
Information"), whether owned by Companies or Distributor or licensed by
Companies or Distributor from third parties, are subject to a valuable
proprietary interest of Companies and Distributor, and that Distributor and
Companies are under an obligation to maintain the confidentiality of
such Proprietary Information. Without limiting the generality of
the foregoing obligations, Distributor and Companies agree that
for the term of this Agreement and thereafter until such time as the Proprietary
Information is in the public domain, Distributor and Companies will
(i) not disclose, publish or disseminate any Proprietary Information, (ii)
not use any Proprietary Information for its own account, (iii) not authorize any
other person to disclose, publish or disseminate the Proprietary
Information, and (iv) treat all Proprietary Information in a
confidential manner, including appropriate marking and secure storage
of written Proprietary Information. The Distributor agrees that the Companies
and their ultimate shareholder may disclose the existence and content of this
Agreement pursuant to applicable securities laws if the Companies and their
ultimate shareholder reasonably determine that such disclosure is
required.
13.2 No
title or ownership of the software bundled or included with any Product
("Software") is transferred to Distributor, and such Software remains the
proprietary property of Companies. The Software is protected by the
U.S. Copyright Act and by international copyright treaties. All
Software, including documentation and any subsequent updates provided by
Companies to Distributor, is licensed only for use on the single Product on
which the Software is first installed. Unauthorized copying of the
Software is expressly forbidden, and Distributor agrees not to distribute copies
of the Software to nonlicensed parties. In no event shall Distributor
reverse engineer, decompile, or disassemble the Software.
13.3 Distributor
acknowledges that the Companies are the owner and/or licensee in the Territory
of the trademark(s) indicated on the Product packaging, advertising or
promotional material or utilized in the sale of the Products (the
"Trademarks"). During the term of this Agreement, Distributor is
authorized to use the Trademarks solely in connection with Distributor's
advertisement, promotion and distribution of the Products in the
Territory. Whenever the Trademark is used, e.g., on any package,
label or advertisement, the right or most prominent use shall always be
accompanied by a legend acceptable to Companies indicating that the Trademark is
licensed to the Distributor by Companies.
13.4 Distributor
shall neither use nor permit others to use the name "STAAR", or any abbreviation
or modification thereof, or the Trademarks or any other trademark or trade name
of Companies as part of the Distributor's firm name or corporate titles, in
signs or in letterheads without the prior written consent of
Companies. Distributor may designate itself as a Distributor of
Products in the Territory in such form and manner as Companies may approve of in
advance in writing. Distributor shall not grant this privilege to any
third party or to any affiliates without Companies’ prior written
consent.
13.5 Distributor
acknowledges that Companies own and retain all patents, trademarks,
copyrights and other proprietary rights in the Products, and agrees that it
will not at any time during or after the termination of this Agreement assert or
claim any interest in or take any action which may adversely affect the validity
or enforceability of any trademark, trade name, trade secret, copyright, or
other proprietary right owned by or licensed to Companies. No
license, either express or implied, is granted to the Distributor by this
Agreement to any patents, trademarks, copyrights, processes, or other
proprietary rights of Companies or its affiliates, except the right to sell the
Products sold to the Distributor hereunder in the Territory, and the license to
use the Software and Trademarks in connection therewith.
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14. Termination
14.1 Companies
or Distributor shall have the right, at its option, to terminate this Agreement,
by giving written notice to the other party, effective immediately upon receipt
of such notice, upon the occurrence of any of the following events:
(A) In
the event that the other party becomes insolvent; proceedings are instituted by
or against it in bankruptcy, insolvency, re-organization or dissolution; or it
makes a general assignment for the benefit of creditors, except (i) to the
extent such unilateral right of termination is limited by national law or public
policy of either party or (ii) Distributor makes such assignment for its banks
or the banks financing its affiliates;
(B) In
the event that the other party fails to perform any material obligation,
warranty, duty or responsibility under this Agreement (including without
limitation Distributor's obligation to pay Companies amounts owing Companies
when due and Distributor's obligations under Section 8.3) and such failure
continues unremedied for a period of thirty (30) days following written notice
thereof; or
14.2 Upon
termination hereby by either party:
14.2.1 All
sums due to either party from the other shall be promptly paid;
14.2.2 Distributor
orders received and accepted by Companies prior to the effective date of the
termination of this Agreement shall be fulfilled in accordance with their
terms;
14.2.3 All
property belonging to one party but in the custody of the other shall be
returned;
14.2.4 Companies
shall have the option to repurchase any or all current and resalable Products in
Distributor's inventory at Distributor's original net purchase
price;
14.2.5 Distributor
shall cease all display, advertising and use of Companies trade names,
trademarks (including the Trademarks), logos and designations, except
uses on the Products which remain in Distributor's possession; and
14.2.6 Except
for Distributor’s failure to purchase the Minimum Products Quantities pursuant
to Section 8.3. of this Agreement, neither party shall be liable to the other
for loss or damage arising from termination of this Agreement and
Distributor hereby waives any compensation that would otherwise be payable to it
by reason of such termination.
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14.2.7 Any
termination of this Agreement shall always have effect towards all Parties of
this Agreement.
15. U.S. Laws and
Regulations
15.1 Distributor
acknowledges that Companies have informed it that United States law and related
regulations may under certain circumstances forbid the re-export of
Products (or associated technical data) sold or transferred to customers in the
Territory or elsewhere. Distributor agrees that it will make every
reasonable effort to comply with such regulations, including providing
customer information required by Companies to comply with United States and
local country laws and regulations.
15.2 Distributor
acknowledges that Companies have informed it that United States law forbids the
making of gifts or payments to government employees or political parties to
induce such employees or parties to misuse positions of influence in order to
obtain or retain business. Distributor agrees that it will not engage
in such conduct, nor permit others under its control to make such gifts or
payments.
16. Limitation of
Liability
16.1 Neither
Companies nor Distributor shall be liable to the other, or to Distributor's
customers, for any special, indirect, or consequential damages, including
but not limited to loss of profits, loss of business opportunities, or loss
of business investment, unless explicitly provided for in this
Agreement.
17 Survival
17.1 In
addition to Distributor's obligation to pay Companies all amounts due hereunder,
the provisions under Sections 10, 11, 12, 13, 15, 16, and 17 shall survive
termination of the Agreement, as well as such other provisions which by their
meaning and intent have applicability beyond the terms of this
Agreement.
18 Assignment
18.1 Neither
party may assign any of the rights or obligations set forth in this Agreement
without the prior written consent of the other; provided that, (i) Companies may
assign any of their rights and delegate any of their obligations hereunder to
each other, their subsidiaries and affiliated companies or in connection with a
sale or transfer of all or substantially all of their business to which this
Agreement relates, whether by merger, sale of assets or otherwise, without
Distributor’s prior written consent and (ii) Distributor may assign any of their
rights hereunder to the its banks or the banks of its
affiliates. This Agreement shall be binding upon and shall inure to
the benefit of the parties hereto and their respective successors and permitted
assigns. Any of the Companies shall be entitled to demand in its own name and
for its own account from Distributor the fulfilment of its obligations toward
the relevant Company or any of the other Companies. Distributor shall be
entitled to demand from Companies that any affiliates of Companies that are not
a party to this Agreement observe the terms of this Agreement as
well.
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19 Integrated
Agreement
19.1 This
Agreement constitutes the entire understanding and agreement between Companies
and Distributor and terminates and supersedes all prior formal or informal
understandings or agreements. Distributor expressly waives any rights it may
have resulting from the termination of any prior formal or informal
understanding or agreement.
20. Force
Majeure
20.1 Performance
of the parties hereto of their respective obligations hereunder shall be subject
to force majeure and acts of God, including but not limited to, insurrections,
riots, wars and war-like operations, explosions, governmental acts, epidemics,
failure of contractors to perform, strikes, fires, accidents, acts of any public
enemy, inability to obtain required materials, supplies, products or qualified
labour, delay in transportation and any applicable law, regulation or
restriction of any foreign, federal, state or local governmental entity or
instrumentality. However, the parties hereto shall use their best
efforts to avoid, remove or cure said circumstances. Any party
temporarily excused for performances hereunder by any such circumstance shall
resume performance with utmost dispatch when such circumstances are removed or
cured. Any party claiming such circumstances as an excuse for delay
in performance shall give prompt notice in writing thereof to the other
party. Nothing herein and no contrary provisions of any law,
regulation, or governmental pronouncement shall, however, relieve the
Distributor of its obligation to make the payments to Companies required
hereunder at the times and in the manner specified.
21. No
Waiver
21.1 No
waiver by either party of any breach or default of any of the covenants or
agreements herein contained shall be deemed a waiver as to any subsequent or
similar breach or default. No right or remedy herein conferred upon
either party is exclusive of any other right or remedy herein or by law or in
equity provided or permitted.
22. Severability
22.1 This
Agreement is divisible, and provisions herein held to be violate of any
applicable treaties, statutes or regulations of any governmental agency having
jurisdiction shall effect only that portion held to be invalid or inoperative,
and the remaining portions of this Agreement shall remain in full force and
effect.
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23. Counterparts
23.1 This
Agreement may be executed in duplicate counterparts, each of which shall be
deemed to be an original; provided however, such counterparts shall together
constitute only one instrument.
24. Notice
24.1 Notices
to be given to any party under this Agreement shall not be effective unless in
writing and hand-delivered or mailed by certified or registered mail to the
party to whom notice is to be given at the address dated on the cover page
hereof or sent by telefax to the party to be notified to such telefax number as
such party hereafter designates by written notice to the other
party. Notices sent by mail shall be deemed to have been given ten
(10) days after the postmark thereof. All other notices shall be
deemed to have been given on the date of receipt thereof. Any party
may change its address by giving written notice of such change in the manner
provided herein.
25. Language
25.1 This
Agreement has been written in the English language. It may be
translated, for convenience, into other languages. However,
in the case of conflict or disagreement, the executed English language
version shall prevail.
26. Orders
preceding this Agreement
26.1 Any
previously accepted orders for Products which have not been delivered or paid at
the date this Agreement is signed remain unaffected.
27. Governing Law and Dispute
Resolution
27.1 This
Agreement is governed by and construed in accordance with the laws of
Switzerland, excluding any applicable provisions of the United Nations
Convention for the International Sales of Goods.
27.2 Any
disputes regarding this Agreement and regarding all sales of the Products to the
Distributor shall be settled exclusively by the courts of Zürich,
Switzerland.
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IN WITNESS WHEREOF, Companies
and Distributor have duly executed this Agreement.
|
STAAR
SURGICAL XX
|
XXXXX
Surgical Company
|
|
a
Swiss corporation
|
a
Californian Company
|
|
By:
___________________________
|
By:
___________________________
|
|
Title:
__________________________
|
Title:
__________________________
|
|
Date:
__________________________
|
Date:
__________________________
|
|
STAAR
Japan Inc.,
|
Domilens
GmbH
|
|
a
Japanese corporation
|
|
|
By:
___________________________
|
By:
___________________________
|
|
Title:
__________________________
|
Title:
__________________________
|
|
Date:
__________________________
|
Date:
__________________________
|
EXHIBIT
A – The Products
EXHIBIT
B – The Territory
EXHIBIT
C – Countries exclusively assigned to the another distributor or reserved to
Companies
EXHIBIT
D – Existing Customers
EXHIBIT
E – Minimum Product Quantities
EXHIBIT
F – Binding Order
14
