EXHIBIT 2.2
[FRESHFIELDS BRUCKHAUS ▇▇▇▇▇▇▇▇ LOGO]
--------------------------------------------
SALE AND PURCHASE AGREEMENT
--------------------------------------------
regarding the
sale and purchase of the
EDH Dental Business
Execution Version EDH SPA - 23 December 2003
2
by and between
1. all shareholders of Euro Dental Holding GmbH:
1.1 Permira Europe I LP1, with business address at ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇
- "EDH SELLER 1" -
1.2 Permira Europe I LP1B, with business address at ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇
- "EDH SELLER 2" -
1.3 Permira Europe I LP2, with business address at ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇
- "EDH SELLER 3" -
1.4 Permira Europe I LP3, with business address at ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇
- "EDH SELLER 4" -
1.5 Permira Europe I LP3B, with business address at ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇
- "EDH SELLER 5" -
1.6 Permira Europe I LP4, with business address at ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇; Company No.: 13799
- "EDH SELLER 6" -
1.7 Permira Europe I LP4B, with business address at ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇
- "EDH SELLER 7" -
3
1.8 Permira Europe I LP5, with business address at ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇
- "EDH SELLER 8" -
1.9 Permira Europe I LP5B, with business address at ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇
- "EDH SELLER 9" -
1.10 Permira Europe I LP6, with business address at ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇
- "EDH SELLER 10" -
1.11 Permira Europe I PGGMLP, with business address at ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇
- "EDH SELLER 11" -
1.12 Permira Europe I Co Invest Scheme, with business address at ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇
- "EDH SELLER 12" -
1.13 Range Park - Servicos de Consultoria Commercial Sociedade Unipessoal,
S.A., with business address at ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
▇▇▇▇, ▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇
- "EDH SELLER 13" -
1.14 ▇▇▇▇▇▇▇▇ UK Venture Fund IV Trust, with business address at ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇
- "EDH SELLER 14" -
1.15 ▇▇▇▇▇▇▇▇ UK Venture Fund IV LP1, with business address at ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇,
▇▇▇ ▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇
- "EDH SELLER 15" -
1.16 ▇▇▇▇▇▇▇▇ UK Venture Fund IV LP2, with business address at ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇,
▇▇▇ ▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇
- "EDH SELLER 16" -
1.17 ▇▇▇▇▇▇▇▇ UK Venture Fund IV Co Investment Scheme, with business address at
▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇
- "EDH SELLER 17" -
4
1.18 ▇▇▇▇▇▇▇▇ Ventures International Life Sciences Fund LP1, with business
address at ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇-▇▇▇▇,
▇▇▇
- "EDH SELLER 18" -
1.19 ▇▇▇▇▇▇▇▇ Ventures International Life Sciences Fund LP2, with business
address at ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇-▇▇▇▇,
▇▇▇
- "EDH SELLER 19"
1.20 ▇▇▇▇▇▇▇▇ Ventures International Life Sciences Fund Trust, with business
address at ▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇ 11, Bermuda
- "EDH SELLER 20" -
1.21 ▇▇▇▇▇▇▇▇ Ventures International Life Sciences Fund Co Invest Scheme, with
business address at ▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇ 11, Bermuda
- "EDH SELLER 21" -
1.22 Metropolitan Life Insurance Company, with business address at ▇▇ ▇▇▇▇
▇▇▇▇▇▇, ▇.▇. ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇ ▇▇▇▇▇-▇▇▇▇, ▇▇▇
- "EDH SELLER 22" -
1.23 ▇▇▇▇▇ ▇▇▇▇▇▇▇, with address at ▇▇▇▇▇▇▇▇▇▇▇ ▇, ▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇
- "EDH SELLER 23" -
1.24 ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ as joint heirs of
▇▇▇▇▇▇ ▇▇▇▇▇▇, each, with address at ▇▇▇▇▇▇▇▇▇▇(▇▇▇▇)▇ ▇, ▇▇▇▇▇ ▇▇▇▇▇▇▇▇,
▇▇▇▇▇▇▇
- "EDH SELLERS 24" -
1.25 ▇▇▇▇ ▇▇▇▇▇▇▇▇▇, with address at ▇▇▇▇▇▇-▇▇▇▇▇▇▇-▇▇▇▇(▇▇▇▇)▇ ▇, ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇
- "EDH SELLER 25" -
1.26 ▇▇▇▇ ▇▇▇▇, with address at ▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇ ▇, ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇,
▇▇▇▇▇▇▇
- "EDH SELLER 26" -
1.27 ▇▇▇▇▇▇▇ ▇▇▇▇, with address at ▇▇(▇▇▇▇)▇▇▇▇▇ ▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇
- "EDH SELLER 27" -
5
1.28 ▇▇▇ ▇▇▇▇▇, with address at Darmstadter ▇▇▇▇(▇▇▇▇)▇ ▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇▇▇,
▇▇▇▇▇▇▇
- "EDH SELLER 28" -
1.29 ▇▇▇▇▇ ▇▇▇▇▇▇, with address at ▇▇▇▇▇▇▇▇▇(▇▇▇▇)▇ ▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇
- "EDH SELLER 29" -
1.30 ▇▇▇ ▇▇▇▇▇▇▇, with address at ▇▇▇▇▇▇▇▇▇▇▇▇(▇▇▇▇)▇ ▇, ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇,
▇▇▇▇▇▇▇
- "EDH SELLER 30" -
1.31 ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, with address at ▇▇ ▇▇▇▇▇▇▇▇ ▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇
- "EDH SELLER 31" -
1.32 Christoph Gusenleitner, with address at ▇▇▇▇▇-▇▇▇▇▇▇▇▇▇-▇▇▇▇(▇▇▇▇)▇ ▇,
▇▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇
- "EDH SELLER 32" -
1.33 ▇▇▇▇▇▇ ▇▇▇▇▇▇▇, with address at ▇▇▇▇▇▇▇▇▇▇(▇▇▇▇)▇ ▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇▇▇,
▇▇▇▇▇▇▇
- "EDH SELLER 33" -
1.34 ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, with address at ▇▇▇▇▇▇▇▇▇▇▇(▇▇▇▇)▇ ▇, ▇▇▇▇▇ ▇▇▇▇▇▇▇▇,
▇▇▇▇▇▇▇
- "EDH SELLER 34" -
1.35 ▇▇. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇, with address at ▇▇▇▇▇▇▇▇▇ ▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇▇▇,
▇▇▇▇▇▇▇
- "EDH SELLER 35" -
1.36 ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, with address at Auf der ▇▇ ▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇
- "EDH SELLER 36" -
1.37 ▇▇▇▇▇ ▇▇▇▇, with address at ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇
- "EDH SELLER 37" -
6
1.38 ▇▇▇▇▇▇ ▇▇▇▇▇, with address at ▇▇▇▇▇-▇▇▇▇▇▇-▇▇▇▇▇▇▇▇▇ ▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇▇▇,
▇▇▇▇▇▇▇
- "EDH SELLER 38" -
1.39 ▇▇▇▇ ▇▇▇▇▇▇, with address at ▇▇▇▇▇▇-▇▇▇▇▇▇▇▇▇-▇▇▇▇ ▇, ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇
- "EDH SELLER 39" -
1.40 ▇▇▇▇▇▇▇ ▇▇▇▇, with address at An den ▇▇▇▇▇▇ ▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇-▇▇▇▇▇▇▇▇,
▇▇▇▇▇▇▇
- "EDH SELLER 40" -
1.41 Wolfgang Ni(beta)ing, with address at ▇▇▇▇▇▇▇▇▇▇ ▇▇, ▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇
- "EDH SELLER 41" -
1.42 ▇▇▇▇▇▇ ▇▇▇▇▇▇, with address at ▇▇▇▇▇▇▇▇▇▇▇▇▇▇(▇▇▇▇)▇ ▇, ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇,
▇▇▇▇▇▇▇
- "EDH SELLER 42" -
1.43 ▇▇▇▇▇▇▇▇ ▇▇▇▇, with address at ▇▇ ▇▇▇▇▇▇▇ ▇, ▇▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇
- "EDH SELLER 43" -
1.44 VILAO - Trading E Marketing LDA, with business address at ▇▇▇ ▇▇▇ ▇▇▇▇▇▇
▇▇, ▇▇▇▇-▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇
- "EDH SELLER 44" -
- EDH Seller in items 1.1 through 1.44 are collectively referred to as
"EDH SELLERS" -
2. ▇▇▇▇▇▇▇▇ Associati s.r.l., with business address at ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇,
▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇
- "KRUGG SELLER" -
- on the one side -
7
3. Blitz HH 02-650 GmbH, with business address at Am ▇▇▇▇▇▇▇▇ ▇▇, ▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇
- "EDH PURCHASER" -
4. ▇▇▇▇▇ ▇▇▇▇▇▇ (▇▇▇▇▇) GmbH, with business address at Am ▇▇▇▇▇▇▇▇ ▇▇, ▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇,
- "KRUGG PURCHASER" -
5. ▇▇▇▇▇ ▇▇▇▇▇▇ Europe Inc., with business address at ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇,
▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, ▇▇▇,
- "LOAN PURCHASER" -
6. ▇▇▇▇▇ ▇▇▇▇▇▇, Inc., with business address at ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇,
▇▇▇ ▇▇▇▇ ▇▇▇▇▇, ▇▇▇
- "▇▇▇▇▇ ▇▇▇▇▇▇" -
- on the other side -
- EDH Sellers and Krugg Seller are collectively referred to as "SELLERS"
and individually as "SELLER", ; EDH Purchaser and Krugg Purchaser are
collectively referred to as "SHARE PURCHASERS" and individually as "SHARE
PURCHASER", Share Purchasers and Loan Purchaser are collectively referred
to as "PURCHASERS" and individually as "PURCHASER"; EDH Purchaser, Krugg
Purchaser, Loan Purchaser, ▇▇▇▇▇ ▇▇▇▇▇▇ and Sellers are individually
referred to as a "PARTY" and collectively as "PARTIES" -
8
TABLE OF CONTENTS
CLAUSE PAGE
PREAMBLE.............................................................................................. 9
Section 1 Corporate Structure.................................................................... 10
Section 2 Financial Debt......................................................................... 13
Section 3 Sale and Purchase of Shares and Shareholder Loans...................................... 18
Section 4 Purchase Price......................................................................... 18
Section 5 Economic Transfer Date / Signing Date / Closing Date / Closing......................... 21
Section 6 Sellers' Guarantees.................................................................... 30
Section 7 Purchaser's Guarantees................................................................. 42
Section 8 Remedies............................................................................... 43
Section 9 Expiration of Claims / Limitation of Claims............................................ 50
Section 10 Sellers' Covenant..................................................................... 51
Section 11 Indemnity............................................................................. 52
Section 12 Restriction of Announcement / Cooperation / Confidentiality / Non-competition
and Non-solicitation............................................................................. 52
Section 13 Notices / Exercise of Rights.......................................................... 54
Section 14 Miscellaneous......................................................................... 55
Section 15 Exhibits / Disclosure Schedules / Definitions......................................... 60
9
PREAMBLE
(A) EDH Sellers are the sole shareholders of Euro Dental Holding GmbH, a
limited liability company organised under German law, registered in the
Commercial Register maintained at the Lower Court of Offenbach am Main
under registration number HRB 34839 and having its legal domicile in
Langen/Hessen, Germany ("EDH"), which through its direct and indirect
subsidiaries ("EDH GROUP"), is engaged in the trading and distribution of
dental products in Germany and Italy ("EDH DENTAL BUSINESS").
EDH and the Krugg Seller are the sole shareholders of Krugg S.p.A., a
company of the EDH Group, holding 99 % and 1 % of the stated capital,
respectively.
A corporate chart of the EDH Group is attached as Exhibit A.
(B) Sellers are interested to sell and transfer all of their shares in EDH
and, in case of the Krugg Sellers, in Krugg S.p.A. as well as all
shareholder loans granted to EDH to Purchasers and Purchasers are
interested to acquire such shares and shareholder loans from Sellers upon
the terms and conditions of this sale and purchase agreement including its
exhibits and schedules ("AGREEMENT").
(C) In addition to acquiring the shares in EDH and in Krugg S.p.A., EDH
Purchaser, Loan Purchaser and ▇▇▇▇▇ ▇▇▇▇▇▇ will enter into a sale and
purchase agreement ("DEMEDIS AGREEMENT") to acquire all shares in demedis
GmbH a limited liability company organised under German law, registered in
the Commercial Register maintained at the Lower Court of Offenbach am Main
under registration number HRB 34827 and having its legal domicile in
Langen/Hessen, Germany ("DEMEDIS"), which through its direct and indirect
subsidiaries is engaged in the trading and distribution of dental products
in Germany, The Netherlands, Belgium, Luxembourg and Austria ("DEMEDIS
GROUP").
10
NOW, THEREFORE, THE PARTIES AGREE AS FOLLOWS:
SECTION 1
CORPORATE STRUCTURE
1.1 EDH SHARES. EDH Sellers hold the following shares in the following nominal
amounts in EDH ("EDH SHARES"):
NOMINAL AMOUNT OF SHARE IN EURO (EACH
SHAREHOLDER SHAREHOLDER ONLY HOLDS ONE SHARE)
--------------------------------------------------------------------------------------------------------
Permira Europe I LP1 85,050
Permira Europe I LP1B 51,150
Permira Europe I LP2 57,550
Permira Europe I LP3 55,100
Permira Europe I LP3B 55,100
Permira Europe I LP4 40,800
Permira Europe I LP4B 82,600
Permira Europe I LP5 64,850
Permira Europe I LP5B 78,850
Permira Europe I LP6 50,050
Permira Europe I PGGMLP 78,850
Permira Europe I Co Invest Scheme 2,850
Range Park - Servicos de Consultoria Commercial
Sociedade Unipessoal, S.A 42,000
▇▇▇▇▇▇▇▇ UK Venture Fund IV Trust 17,850
▇▇▇▇▇▇▇▇ UK Venture Fund IV LP1 18,800
▇▇▇▇▇▇▇▇ UK Venture Fund IV LP2 8,100
▇▇▇▇▇▇▇▇ UK Venture Fund IV Co Invest Scheme 400
▇▇▇▇▇▇▇▇ Ventures International Life Sciences Fund LP1 22,250
▇▇▇▇▇▇▇▇ Ventures International Life Sciences Fund LP2 4,900
▇▇▇▇▇▇▇▇ Ventures International Life Sciences Fund Trust 7,900
▇▇▇▇▇▇▇▇ Ventures International Life Science Co Invest Scheme 200
11
Metropolitan Life Insurance Company 56,150
▇▇▇▇▇ ▇▇▇▇▇▇▇ 5,000
▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
as joint heirs of ▇▇▇▇▇▇ ▇▇▇▇▇▇ who deceased in
September 2003 5,000
▇▇▇▇ ▇▇▇▇▇▇▇▇▇ 10,000
▇▇▇▇ ▇▇▇▇ 500
▇▇▇▇▇▇▇ ▇▇▇▇ 600
▇▇▇ ▇▇▇▇▇ 300
▇▇▇▇▇ ▇▇▇▇▇▇ 500
▇▇▇ ▇▇▇▇▇▇▇ 500
▇▇▇▇▇▇▇ ▇▇▇▇▇▇ 500
Christoph Gusenleitner 300
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇
▇▇. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ 200
▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ 100
▇▇▇▇▇ ▇▇▇▇ 9,950
▇▇▇▇▇▇ ▇▇▇▇▇ 1,100
▇▇▇▇ ▇▇▇▇▇▇ 2,000
▇▇▇▇▇▇▇ ▇▇▇▇ 3,000
Wolfgang Ni(beta)ing 1,000
▇▇▇▇▇▇ ▇▇▇▇▇▇ 5,000
▇▇▇▇▇▇▇▇ ▇▇▇▇ 5,000
VILAO - Trading E Marketing LDA 67,700
1.2 KRUGG SELLER SHARES. Krugg Seller holds 300,000 shares in the nominal
amounts of EUR 0.52 each (which together represent 1 % of the total
registered share capital in the nominal amount of EUR 15,600,000) in Krugg
S.p.A. ("KRUGG SELLER SHARES"), a limited liability company organised
under Italian law, registered in the Commercial Register maintained in
Milan under registration number 13088630150 and having its legal domicile
in Milan, Italy ("KRUGG").
1.3 DIRECT SUBSIDIARIES. EDH holds shares in the following companies:
1.3.1 one share in the nominal amount of EUR 1,000,000 (which represents
100 % of the total registered share capital) in DentalMV GmbH
(formerly M + W Dental Beteiligungsgesellschaft mbH) ("DENTALMV
SHARE"), a limited liability company organised under German law,
registered in the Commercial Register maintained at the Lower Court
of Friedberg/Hessen under registration number HRB 3753 and having
its legal domicile in
12
Budingen, Germany ("DENTALMV");
1.3.2 29,700,000 shares in the nominal amount of EUR 0.52 each (which
together represent 99 % of the total registered share capital in the
amount of EUR 15,600,000) in Krugg; and
1.3.3 one share in the nominal amount of EUR 25,000 (which represents 100
% of the total registered share capital) in DentraNet GmbH
("DENTRANET SHARE"), a limited liability company organised under
German law, registered in the Commercial Register maintained at the
Lower Court of Munich under registration number HRB 138230 and
having its legal domicile in Munich, Germany ("DENTRANET").
(DentalMV, Krugg and DentraNet are hereinafter collectively referred
to as the "DIRECT SUBSIDIARIES".)
1.4 INDIRECT SUBSIDIARIES. The Direct Subsidiaries and their respective direct
or indirect subsidiaries hold shares and partnership interests in the
following companies and partnerships:
1.4.1 DentalMV holds shares and partnership interests in the following
com-panies and partnerships:
(i) one share in the nominal amount of EUR 25,000 (which
represents 100 % of the total registered share capital) in M +
W Dental Verwaltungsgesellschaft mbH, a limited liability
company organised under German law, registered in the
Commercial Register maintained at the Lower Court of
Friedberg/Hessen under registration number HRB 3756 and having
its legal domicile in Budingen, Germany ("M + W VERWALTUNG");
(ii) one limited partnership interest (Kommanditanteil) in the
amount of DM 299,500 (which represents 99,833 % of the total
registered liability capital (eingetragenes Haftkapital) in M
+ W Dental ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇ GmbH & Co. KG, a limited
partnership organised under German law, registered in the
Commercial Register maintained at the Lower Court of
Friedberg/Hessen under registration number HRA 2186 and having
its legal domicile in Budingen, Germany ("M + W KG");
13
1.4.2 M + W Verwaltung holds one capital interest (Kapitalanteil) as
general partner (Komplementar) in the nominal amount of DM 500
(which represents 0,167 % of the total registered liability
capital (eingetragenes Haftkapital)) in M + W KG.
(M + W Verwaltung and M + W KG are hereinafter collectively referred to as
the "INDIRECT SUBSIDIARIES"; EDH, the Direct Subsidiaries and the Indirect
Subsidiaries are collectively referred to as the "COMPANIES" and,
individually, as "COMPANY"; the shares and partnership interests directly
or indirectly held by the Direct Subsidiaries and the Indirect
Subsidiaries in the Direct and Indirect Subsidiaries are hereinafter
collectively referred to as the "INDIRECT SHARES"; the EDH Shares, the
Krugg Seller Shares and Indirect Shares are collectively referred to as
the "SHARES".)
SECTION 2
FINANCIAL DEBT
2.1 SHAREHOLDER LOANS. The following EDH Sellers have granted to EDH the
following shareholder loans with the outstanding principal amounts stated
below and accruing interest at a variable interest rate of EURIBOR plus 2
%:
PRINCIPAL AMOUNT outstanding
in Euro (including accrued
PRINCIPAL AMOUNT outstanding in and unpaid interest as of the
LENDER Euro (without accrued interest) Economic Transfer Date)
----------------------------------------------------------------------------------------------------------------
Permira Europe I LP1 2,424,586.08 2,885,028.06
Permira Europe I LP1B 1,458,123.03 1,735,028.46
Permira Europe I LP2 1,640,739.60 1,952,324.90
Permira Europe I LP3 1,570,502.46 1,868,749.35
Permira Europe I LP3B 1,570,502.46 1,868,749.35
Permira Europe I LP4 1,163,127.04 1,384,011.14
Permira Europe I LP4B 2,354,348.94 2,801,452.51
Permira Europe I LP5 1,848,641.53 2,199,708.53
Permira Europe I LP5B 2,247,588.49 2,674,417.67
Permira Europe I LP6 1,427,218.69 1,698,255.22
Permira Europe I PGGMLP 2,247,588.49 2,674,417,67
Permira Europe Co Invest Scheme 81,475.08 96,947.64
14
Range Park - Servicos de 1,196,840.87 1,424,127.41
Consultoria Commercial Sociedade
Unipessoal, ▇.▇
▇▇▇▇▇▇▇▇ UK Venture Fund IV Trust 508,516.90 605,087.00
▇▇▇▇▇▇▇▇ UK Venture Fund IV LP1 536,611.75 638,517.22
▇▇▇▇▇▇▇▇ UK Venture Fund IV LP2 230,377.81 274,127,80
▇▇▇▇▇▇▇▇ UK Venture Fund IV Co 11,237.94 13,372.09
Invest Scheme
▇▇▇▇▇▇▇▇ Ventures International 634,943.75 755,522.99
Life Sciences Fund LP1
▇▇▇▇▇▇▇▇ Ventures International 140,474.27 167,151.09
Life Sciences Fund LP2
▇▇▇▇▇▇▇▇ Ventures International 224,758.85 267,441.77
Life Sciences Fund Trust
▇▇▇▇▇▇▇▇ Ventures International 5,618.97 6,686.04
Life Sc. Co Invest Scheme
Metropolitan Life Insurance Company 1,601,406.80 1,905,522.59
VILAO 1,930,116.58 2,296,656.13
-Trading E Marketing LDA
Aggregate amounts 27,055,346.39 32,193,302.63
(The above shareholder loans are hereinafter collectively referred to as
"SHAREHOLDER LOANS"; the shareholders who have granted the Shareholder
Loans are hereinafter collectively referred to as "SHAREHOLDER LENDERS";
the loan agreements on the basis of which the Shareholder Loans have been
granted (as amended) are hereinafter collectively referred to as
"SHAREHOLDER LOAN AGREEMENTS".) The Shareholder Loans have been fully paid
out.
2.2 BANK DEBT
15
2.2.1 EDH SENIOR FACILITY. Under a certain senior facility and working
capital facility agreement dated 20 December 1999 (as amended) ("EDH
SENIOR FACILITY AGREEMENT") EDH and DentalMV have been granted a
senior loan facility at varying interest rates ("EDH SENIOR
FACILITY") by Bayerische Hypo- und Vereinsbank AG and The Royal Bank
of Scotland ("EDH SENIOR LENDERS"). In order to secure the claims of
the EDH Senior Lenders under the EDH Senior Facility Agreement,
certain security has been granted to the EDH Senior Lenders. As of
the Economic Transfer Date (as defined in Section 5.1.3) the
principal plus accrued and unpaid interest outstanding under the EDH
Senior Facility amounted to EUR 17,383,923.96 (in words: Euro
seventeen million three hundred eighty three thousand nine hundred
twenty three and ninety six cents) ("EDH SENIOR FACILITY AMOUNT").
2.2.2 MEZZANINE FACILITY I. Under a certain mezzanine loan agreement dated
20 December 1999 (as amended) ("MEZZANINE LOAN AGREEMENT I")
DentalMV has been granted a mezzanine loan facility at varying
interest rates ("MEZZANINE FACILITY I") by Pricoa Private Capital
Partners, C., L.P., which has subsequently been taken over by The
Royal Bank of Scotland as lender ("MEZZANINE LENDER I"). In order to
secure the claims of the Mezzanine Lender I under the Mezzanine Loan
Agreement I, certain security has been granted to the Mezzanine
Lender I. As of the Economic Transfer Date the principal plus
accrued and unpaid interest outstanding under the Mezzanine Facility
I amounted to EUR 21,075,491.14 (in words: twenty one million
seventy five thousand four hundred ninety one and fourteen cents)
("MEZZANINE FACILITY AMOUNT I").
2.2.3 MEZZANINE FACILITY II. Under a certain mezzanine loan agreement
dated 17 May 2000 (as amended) ("MEZZANINE LOAN AGREEMENT II")
DentalMV has been granted a mezzanine loan facility at varying
interest rates ("MEZZANINE FACILITY II") by Pricoa Private Capital
Partners, C., L.P. ("MEZZANINE LENDER II") which has been assumed by
EDH as new borrower under an amendment agreement dated 14 November
2000. In order to secure the claims of the Mezzanine Lender II under
the Mezzanine Loan Agreement II, certain security has been granted
to the Mezzanine Lender II. As of the Economic Transfer Date the
principal plus accrued and unpaid interest outstanding under the
Mezzanine Facility II amounted to EUR 4,691,838.97 (in words: four
million six hundred thousand ninety one eight hundred thirty eight
and ninety seven cents) ("MEZZANINE FACILITY AMOUNT II").
2.2.4 MEZZANINE FACILITY III. Under a certain mezzanine loan agreement
dated 9 October 2000 ("MEZZANINE LOAN AGREEMENT III") EDH has been
granted mezzanine loan facility at varying interest rates
("MEZZANINE FACILITY III") by
16
Mezzanine Lender II. As of the Economic Transfer Date the principal
plus accrued and unpaid interest outstanding under the Mezzanine
Facility III amounted to EUR 286,346.23 (in words: two hundred
eighty six thousand three hundred forty six and twenty three cents)
("MEZZANINE FACILITY AMOUNT III").
2.2.5 KRUGG FACILITIES. Under a certain senior facility agreement dated 20
December 2001 (as amended), a certain working capital facility
agreement dated 24 May 2001 (as amended) and certain other working
capital facilities ("KRUGG FACILITY AGREEMENTS") Krugg has been
granted a senior loan facility and certain working capital
facilities at varying interest rates ("KRUGG FACILITIES") by Banca
IntesaBci MedioCredito S.p.A. and other banks ("KRUGG Lenders"). In
order to secure the claims of the Krugg Lenders under the Krugg
Facility Agreements, certain security has been granted to the Krugg
Lenders. As of the Economic Transfer Date the principal plus accrued
and unpaid interest outstanding under the Krugg Facilities amounted
to EUR 22,934,707.45 (in words: Euro twenty two million nine hundred
thirty four thousand seven hundred seven and forty five cents)
("KRUGG FACILITY AMOUNT").
(The EDH Senior Facility, the Mezzanine Facility I, the Mezzanine Facility
II, the Mezzanine Facility III and the Krugg Facilities are hereinafter
collectively referred to as "BANK DEBT".)
2.3 REPAYMENT OF BANK DEBT. The Parties agree that the Bank Debt shall be
repaid by EDH Purchaser as set out below.
Except as modified by Section 2.4, on the Closing Date (as defined in
Section 5.1.3) EDH Purchaser shall:
2.3.1 pay the outstanding principal plus accrued and unpaid interest as
well as any prepayment and all other charges in respect of the EDH
Senior Facility as of the Closing Date ("EDH SENIOR FACILITY
REPAYMENT AMOUNT") in discharge of all payment obligations under the
EDH Senior Facility as set forth in Section 5.4.3;
2.3.2 pay the outstanding principal plus accrued and unpaid interest as
well as any prepayment and all other charges in respect of the
Mezzanine Facility I as of the Closing Date ("MEZZANINE FACILITY I
REPAYMENT AMOUNT") in discharge of all payment obligations under the
Mezzanine Facility I as set forth in Section 5.4.4;
17
2.3.3 pay the outstanding principal plus accrued and unpaid interest as
well as any prepayment and all other charges in respect of the
Mezzanine Facility II as of the Closing Date ("MEZZANINE FACILITY II
REPAYMENT AMOUNT") in discharge of all payment obligations under the
Mezzanine Facility II as set forth in Section 5.4.5;
2.3.4 pay the outstanding principal plus accrued and unpaid interest as
well as prepayment and all other charges in respect of the Mezzanine
Facility III as of the Closing Date ("MEZZANINE FACILITY III
REPAYMENT AMOUNT") in discharge of all payment obligations under the
Mezzanine Facility III as set forth in Section 5.4.6;
2.3.5 pay the outstanding principal plus accrued and unpaid interest as
well as prepayment and all other charges in respect of the Krugg
Facilities as of the Closing Date ("KRUGG FACILITIES REPAYMENT
AMOUNT") in discharge of all payment obligations under the Krugg
Facilities as set forth in Section 5.4.7.
Without undue delay following the satisfaction of the Closing Condition
(as defined in Section 5.2), but in any event not later than three (3)
Business Days thereafter, Sellers shall notify EDH Purchaser in writing of
the EDH Senior Facility Repayment Amount, the Mezzanine Facility I
Repayment Amount, the Mezzanine Facility II Repayment Amount, the
Mezzanine Facility III Repayment Amount and the Krugg Facility Repayment
Amount.
2.4 ASSUMPTION OF BANK DEBT. Instead of repaying the entire Bank Debt on the
Closing Date, EDH Purchaser or Sellers in respect of the Krugg Facilities
may also request from the respective other Party in writing that the
relevant Bank Debt which does not need to be repaid on the Closing Date
due to the exercise of a change-of-control right or other agreement
between the relevant lenders and borrowers stays within the EDH Group
("DEBT ASSUMPTION REQUEST", such part of the Bank Debt that will not be
repaid "ASSUMED BANK DEBT"). The Debt Assumption Request can only be
issued before the relevant Companies have agreed with the relevant lenders
to repay the relevant Bank Debt on the Closing Date or are required to
repay the relevant Bank Debt on the Closing Date for any other reason and
in no event later than five (5) Business Days (as defined in Section 14.6)
prior to the Closing Date. A Debt Assumption Request issued by EDH
Purchaser shall include a confirmation by the relevant lender(s) of the
Assumed Bank Debt that it/they agree that the Assumed Bank Debt stays
within the relevant Company. In case a valid Debt Assumption Request has
been issued, EDH Purchaser will not be required to repay the Assumed Bank
Debt as set forth in the relevant Sections 5.4.3 to 5.4.7 on the Closing
Date and Sellers will not need to deliver the relevant release and
discharge of debt or other confirmations in relation to the Assumed Bank
Debt as set forth in the relevant Sections 5.4.12 to 5.4.16.
18
SECTION 3
SALE AND PURCHASE OF SHARES AND SHAREHOLDER LOANS
3.1 OBJECT OF SALE AND PURCHASE. Subject to the terms and conditions of this
Agreement,
3.1.1 Krugg Seller hereby sells to Krugg Purchaser the Krugg Seller Shares
and Krugg Purchaser hereby purchases from Krugg Seller the Krugg
Seller Shares, provided however, that the Parties agree that the
signing of this Agreement shall in no event be treated as a transfer
of title of the Krugg Seller Shares under Italian law;
3.1.2 EDH Sellers hereby sell the EDH Shares to EDH Purchaser and EDH
Purchaser hereby purchases from EDH Sellers the EDH Shares; and
3.1.3 Shareholder Lenders hereby sell the Shareholder Loans to Loan
Purchaser and Loan Purchaser hereby purchases from Shareholder
Lenders the Shareholder Loans. (The EDH Shares, the Krugg Seller
Share and the Shareholder Loans are hereinafter collectively
referred to as the "SOLD ASSETS")
3.2 RIGHTS AND OBLIGATIONS ATTACHED TO THE SOLD ASSETS. The Sold Assets are
sold to Purchasers with all rights and obligations attached thereto as
from the Economic Transfer Date including the right to receive the
interest accrued on the Shareholder Loans and the right to receive all
dividends in respect of the EDH Shares and the Krugg Seller Shares
relating to periods as from the Economic Transfer Date.
3.3 CONSENT REQUIREMENTS. All consents required under the articles of
association of EDH and Krugg to effect the sale and transfer of the EDH
Shares and the Krugg Seller Shares have been, or shall have been duly
obtained prior to, or on the Closing Date. The consent of EDH for the
transfer of the Shareholder Loans is attached hereto as Exhibit 3.3.
SECTION 4
PURCHASE PRICE
4.1 PURCHASE PRICE. The aggregate purchase price for the Sold Assets (the
"PURCHASE PRICE") is EUR 139,606,434.44 (in words: Euro one hundred thirty
nine million six hundred six thousand four hundred thirty four and forty
four cents. The Purchase Price shall be fixed and not be subject to any
adjustments unless otherwise set forth in this Agreement.
19
4.2 PAYMENT AMOUNT / HOLDBACK ESCROW AMOUNT. The Purchase Price shall consist
of a portion of EUR 129,606,434.44 (in words: Euro one hundred twenty nine
million six hundred six thousand four hundred thirty four and forty four
cents) ("PAYMENT AMOUNT") and EUR 10,000,000 (in words: Euro ten million),
subject to Section 5.4.2 in connection with Section 5.9, ("HOLDBACK ESCROW
AMOUNT").
4.3 PURCHASE PRICE INTEREST. The Purchase Price shall bear interest at a rate
of six per cent (6%) p.a. as from and including the Economic Transfer Date
until and including the Closing Date ("PURCHASE PRICE INTEREST"),
provided, however, that in case of a Down Payment in accordance with
Section 4.3a, the amount subject to interest pursuant to this Section
shall be, as from the Down Payment Date, reduced to the Purchase Price
minus the Down Payment.
4.3a DOWN PAYMENT. Purchasers shall make a down payment in the amount of EUR
10,000,000 (in words: Euro ten million) to the Escrow Account (as defined
in the Escrow Agreement) on January 20, 2004 ("DOWN PAYMENT") if the
Closing has not yet occurred by this date ("DOWN PAYMENT DATE").
4.4 PURCHASE PRICE AND PURCHASE PRICE INTEREST ALLOCATION. The Parties agree
that the Purchase Price and the Purchase Price Interest shall be allocated
to the EDH Shares, the Krugg Seller Shares and the Shareholder Loans as
set out in Exhibit 4.4.
4.5 PAYMENT OF PAYMENT AMOUNT / PURCHASE PRICE INTEREST. On the Closing Date,
Purchasers shall pay the Payment Amount (minus the Down Payment if already
paid in accordance with Section 4.3a) and the Purchase Price Interest into
the Sellers' Account (as defined in Section 4.7) pursuant to Section
5.4.1.
4.6 PAYMENT OF HOLDBACK ESCROW AMOUNT. On the Closing Date, Purchasers shall
pay the Holdback Escrow Amount to the escrow agent under the Escrow
Agreement (as defined in Section 4.10) ("ESCROW AGENT") in accordance with
Section 5.4.2.
4.7 SELLERS' ACCOUNT. Except for the Holdback Escrow Amount and the Down
Payment, all payments owed by Purchasers to Sellers under this Agreement,
including the Purchase Price and the Purchase Price Interest, shall be
paid by Purchasers in immediately available funds free of any charges,
taxes or other deductions by wire transfer to Sellers' bank account, the
details of which will be notified in writing by Sellers to Purchasers at
the latest five (5) Business Days prior to the Closing Date ("SELLERS'
ACCOUNT").
4.8 DEFAULT INTEREST. If Purchasers fail to pay the Purchase Price or the
Purchase Price Interest on the Closing Date (in accordance with Section
5.4.1), with value (Wertstellung) prior to 5:00 p.m. Central European Time
or to make any other payment when
20
due under this Agreement, interest at the rate of 600 basis points above
EURIBOR as from and including the relevant due date until, and including,
the date of payment shall become due and payable on the relevant due date,
without prejudice to any other rights and remedies of Sellers arising from
such failure.
4.9 NO RETENTION OR SET-OFF. Purchasers shall not be entitled to exercise a
right of set-off (Aufrechnung) or retention (Zuruckbehaltungsrecht) with
respect to its obligations to pay the Purchase Price and Purchase Price
Interest or to make any other payments under this Agreement, unless
Purchasers' claim on which Purchasers have based their right of set-off or
retention has been acknowledged by Sellers in writing or has been
determined by a final and non-appealable court judgement or arbitral
award, as the case may be.
4.10 RELEASE OF HOLDBACK ESCROW AMOUNT. The Holdback Escrow Amount shall be
released to Sellers and/or Purchasers, as the case may be, in accordance
with the escrow agreement to be entered into prior to 20 January 2003 or
the Closing (whichever occurs earlier) and substantially in the form as
set forth in Exhibit 4.10 ("ESCROW AGREEMENT").
4.11 FUTURE CAPITAL SUPPLY AND FINANCING. Purchasers are aware that the EDH
Group, besides its bank credit lines, depends on capital supply and
financing by its shareholders which is presently provided by the
Shareholder Loans. With effect as of the Closing Date, Sellers have no
continuing responsibility to provide capital or financing to the EDH
Group; rather, the capital supply and financing of the EDH Group will be
assumed, as of the Closing Date, by Purchasers.
4.12 PAYMENT GUARANTEE. At any time prior to the Closing Date, Purchasers will,
upon written request of Sellers, deliver an unconditional and irrevocable
guarantee payable on first written demand for the obligations of
Purchasers to pay the Purchase Price and the Purchase Price Interest (less
the Down Payment if already paid in accordance with Section 4.3a) under,
or in connection with, this Agreement issued by a German saving
institution (Sparkasse) or a Standard & Poor's AA or better rated German
or US bank of international standing ("PAYMENT GUARANTEE"). Sellers' will
bear the costs of the guarantee fee (Avalprovision) for the Payment
Guarantee, provided, however, that the costs need to be agreed by Sellers
before delivery of the Payment Guarantee and provided further that
Purchasers will have no obligation to deliver the Payment Guarantee if
Sellers cannot agree on the relevant costs.
21
SECTION 5
ECONOMIC TRANSFER DATE / SIGNING DATE / CLOSING DATE / REFERENCE DATE / CLOSING
5.1 DEFINITIONS. Economic Transfer Date, Signing Date, Closing Date and
Reference Date shall have the following meanings in this Agreement:
5.1.1 "ECONOMIC TRANSFER DATE" shall be 30 September 2003, 24:00 o'clock;
5.1.2 "SIGNING DATE" shall be the day on which this Agreement has been
duly executed before a notary public;
5.1.3 "CLOSING DATE" shall be the day defined in Section 5.4;
5.1.4 "REFERENCE DATE " shall be 23 December 2003.
5.2 CLOSING CONDITION. The transactions contemplated under this Agreement (the
"TRANSACTION") shall be completed (erfullt) pursuant to Section 5.4 below
only if (a) the Federal Cartel Office (Bundeskartellamt) has notified
Sellers or Purchasers that the Transaction does not fulfil the prohibition
prerequisites of Sec. 36 (1) of the Act Against Restraints of Competition
(Gesetz gegen Wettbewerbsbeschrankungen, GWB) or (b) the one month period
pursuant to Sec. 40 (1) sentence 1 GWB has expired, unless the Federal
Cartel Office has stated to enter into an examination of the Transaction
in accordance with Sec. 40 (1) sentence 1 GWB or (c) the Federal Cartel
Office has cleared the Transaction pursuant to Sec. 40 (2) sentence 1 GWB
or (d) the examination period set forth in Sec. 40 (2) sentences 2 and 3
GWB has expired, unless the Federal Cartel Office has issued a decision to
prohibit the Transaction.
(The condition precedent listed in Section 5.2 is hereinafter referred to
as "CLOSING CONDITION".)
The Parties shall inform each other in writing without undue delay as soon
as the Closing Condition has been fulfilled.
5.3 MERGER CONTROL AND OTHER GOVERNMENTAL FILINGS.
5.3.1 The Parties shall make all reasonable endeavours and render to each
other all reasonably necessary support and cooperation to ensure
that the Closing Condition is fulfilled as soon as possible after
the Signing Date. In particular, Purchasers shall ensure that any
filings to be made pursuant to Section 5.2 with the German Federal
Cartel Office and the relevant filing with the Italian
22
merger control authorities will be made within five (5) Business
Days after the Signing Date unless the applicable laws and
regulations require an earlier filing, and in such case the filing
shall be made at the earlier date. Although each Party remains
responsible for preparing and making its own required filings,
Sellers and Purchasers shall fully cooperate with one another in
preparing and making the relevant filings and in furnishing all
information required in connection therewith. Purchasers shall fully
involve Sellers in any proceedings with the relevant merger control
authorities, in particular Purchasers shall (i) not take any actions
in respect of the relevant merger control filings or contact the
merger control authorities without Sellers' prior consultation, (ii)
provide Sellers with all reasonable information on the filing(s),
allow Sellers, at their request, to attend all meetings or other
contacts with the merger control authorities without getting
actively involved in such contacts and meetings, (iii) promptly
notify Sellers about any contacts planned or made, actions planned
or taken or information received in respect of any relevant merger
control filings or contacts with any merger control authorities and
(iv) provide Sellers with all relevant documents related thereto.
5.3.2 Purchasers shall undertake or cause to be undertaken all reasonable
steps necessary to remove any impediments, restrictions, or
conditions that may affect the timely satisfaction of the Closing
Conditions set forth in Section 5.2.1, however, Purchasers shall not
be obliged to dispose of any of their assets or any assets of their
Affiliates.
5.4 CLOSING ACTIONS. The consummation of the Transaction ("CLOSING") shall
take place six (6) Business Days after the Closing Condition has been
fulfilled at the offices of Freshfields Bruckhaus ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇
▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇, starting at 9.00 a.m., or at such
place, day and time as agreed between the Parties ("CLOSING DATE"). On the
Closing Date and subject to Sections 2.4 and 5.9, the Parties shall take,
or cause to be taken, the following actions ("CLOSING ACTIONS") which
shall be taken in the order set forth below and which shall be deemed to
have been taken simultaneously (Zug um Zug):
5.4.1 Purchasers shall pay the Payment Amount and the Purchase Price
Interest (minus the Down Payment, if already paid in accordance with
Section 4.3a, and minus the portion of the Purchase Price attributed
to the Krugg Seller Shares in accordance with Exhibit 4.4 ("RETAINED
KRUGG PURCHASE PRICE") if the provisions of Section 5.9 apply in
respect of the Krugg Seller Shares) in immediately
23
available funds free of any charges, taxes or other deductions by
wire transfer to Sellers' Account;
5.4.2 Purchasers shall pay the Holdback Escrow Amount (minus the amount
allocated to the Krugg Seller liability set forth in Exhibit 8.5
("RETAINED KRUGG ESCROW AMOUNT") if the provisions of Section 5.9
apply in respect of the Krugg Seller Shares) in immediately
available funds free of any charges, taxes or other deductions by
wire transfer to the Escrow Agent's account as set forth in the
Escrow Agreement ("ESCROW ACCOUNT");
5.4.2a Sellers and Purchasers shall instruct in writing the Escrow Agent
to (i) release the Down Payment and (ii) pay the amount of the Down
Payment in immediately available funds free of any charges, taxes or
other deductions by wire transfer to Sellers' Account;
5.4.3 EDH Purchaser shall pay the EDH Senior Facility Repayment Amount in
immediately available funds free of any charges, taxes or other
deductions by wire transfer to the EDH Senior Lenders. The payment
shall be made to a bank account to be notified in writing by the
Sellers to EDH Purchaser at the latest 5 (five) Business Days prior
to the Closing Date ("EDH SENIOR LENDERS' ACCOUNT");
5.4.4 EDH Purchaser shall pay the Mezzanine Facility I Repayment Amount in
immediately available funds free of any charges, taxes or other
deductions by wire transfer to the Mezzanine I Lender. The payment
shall be made to a bank account to be notified in writing by the
Sellers to EDH Purchaser at the latest 5 (five) Business Days prior
to the Closing Date ("MEZZANINE I LENDER'S ACCOUNT");
5.4.5 EDH Purchaser shall pay the Mezzanine Facility II Repayment Amount
in immediately available funds free of any charges, taxes or other
deductions by wire transfer to the Mezzanine II Lender. The payment
shall be made to a bank account to be notified in writing by the
Sellers to EDH Purchaser at the latest 5 (five) Business Days prior
to the Closing Date ("MEZZANINE II LENDER'S ACCOUNT");
5.4.6 EDH Purchaser shall pay the Mezzanine Facility III Repayment Amount
in immediately available funds free of any charges, taxes or other
deductions by wire transfer to the Mezzanine II Lender's Account;
5.4.7 EDH Purchaser shall pay the Krugg Facilities Repayment Amount in
immediately available funds free of any charges, taxes or other
deductions by wire
24
transfer to the Krugg Lenders'. The payment shall be made to a bank
account to be notified in writing by the Sellers to EDH Purchaser
at the latest 5 (five) Business Days prior to the Closing Date
("KRUGG LENDERS' ACCOUNT");
5.4.8 Sellers shall revoke ▇▇▇▇▇▇▇ ▇▇▇▇'▇ position as managing director
of EDH and grant discharge of his duties (Entlastung erteilen) for
the time of his service as managing director of EDH up to and
including the Closing Date (unless the Demedis Agreement will be
consummated at the same time as or earlier than this Agreement) and
shall procure that ▇▇▇▇▇▇▇ ▇▇▇▇'▇ (unless the Demedis Agreement
will be consummated at the same time as or earlier than this
Agreement) and ▇▇▇▇▇▇ Abbondati's positions as members of the board
of Krugg are revoked and that discharge of their duties (Entlastung
erteilen) for the time of their service as members of the board of
Krugg up to and including the Closing Date is granted.
5.4.9 EDH Purchaser and EDH Sellers shall execute a notarial deed in
respect of the assignment of the EDH Shares before a German notary
in the form attached hereto as Exhibit 5.4.9;
5.4.10 [Intentionally left blank];
5.4.11 Loan Purchaser and Shareholder Lenders shall execute an agreement
providing for the transfer of the Shareholder Loans by way of the
assumption of all rights and obligations arising under and in
connection with the Shareholder Loan Agreements by Purchaser with
full discharging effect for the Shareholder Lenders
(Vertragsubernahme mit schuldbefreiender Wirkung) in the form
attached hereto as Exhibit 5.4.11;
5.4.12 Sellers shall deliver to EDH Purchaser a letter of the EDH Senior
Lenders (i) confirming that all payment obligations under the EDH
Senior Facility Agreement have been fully discharged and (ii)
releasing all security rights granted to the Lenders in connection
with the EDH Senior Facility;
5.4.13 Sellers shall deliver to EDH Purchaser a letter of the Mezzanine I
Lender (i) confirming that all payment obligations under the
Mezzanine Loan Agreement I have been fully discharged and (ii)
releasing all security rights granted to the Mezzanine I Lender in
connection with the Mezzanine I Facility;
5.4.14 Sellers shall deliver to EDH Purchaser a letter of the Mezzanine II
Lender (i) confirming that all payment obligations under the
Mezzanine Loan Agreement II and the Mezzanine Loan Agreement III
have been fully discharged and
25
(ii) releasing all security rights granted to the Mezzanine II
Lender in connection with the Mezzanine II Facility;
5.4.15 Sellers shall deliver to EDH Purchaser a letter of the Krugg
Lenders releasing security rights granted to the Krugg Lenders in
connection with the Krugg Facilities;
5.4.15a Krugg Purchaser and Krugg Seller shall assign the Krugg Seller
Shares before an Italian notary and prepare all further actions
which can be taken on the same day without any delay in order to
implement the assignment, even if this only happens subsequent to
the Closing;
5.4.16 EDH Purchaser and EDH Seller shall execute all agreements necessary
to implement the release of all security rights granted to the
Krugg Lenders as set forth in Section 5.4.15 before an Italian
notary;
5.4.17 Sellers shall deliver to Purchasers a certificate confirming that,
to Sellers' Knowledge, (i) the guarantees given in Section 6 were
and/or are true and correct in all "material" respects as of the
date applicable to such guarantees (ignoring, however, for the
purpose of confirming that these guarantees were and are true in
all "material" respects that certain guarantees are already
qualified by materiality, Material Adverse Effect or similar words,
i.e., the materiality standard shall not be taken into account
twice in respect of one and the same guarantee) or, (ii), list in
the form of subject headings (schlagwortartig) whether and to which
extent these guarantees were not or are not true and correct as of
the relevant date ("GUARANTEE CONFIRMATION"). For the avoidance of
doubt, the Guarantee Confirmation shall not create or increase any
liability of Sellers or confer any withdrawal right to the Parties
not otherwise existing under this Agreement;
5.4.18 Sellers shall deliver a letter substantially in the form attached
hereto as Exhibit 5.4.18 confirming that following the completion
of Closing Actions in Sections 5.4.1 to 5.4.17 they have no more
claims in connection with this Transaction against any of the
Companies other than those (i) expressly set forth in this
Agreement or (ii) related to any employment matters;
5.5 WITHDRAWAL RIGHTS. The Parties may withdraw from this Agreement as
follows:
5.5.1 the Sellers may withdraw from this Agreement if
(i) the Closing Condition has not been satisfied at the latest 10
(ten) months after the Reference Date;
26
(ii) if any of the Purchasers has not fully performed its
obligations under Section 5.4 at the latest within 10 (ten)
Business Days following the Closing Date.
5.5.2 prior to the Closing Date, Purchasers may withdraw from this
Agreement
(i) if a MAC (as defined in Section 5.5.3) has occurred and the
withdrawal is expressly based on the MAC ("MAC WITHDRAWAL")
(ii) for any other reason ("NON MAC WITHDRAWAL").
5.5.3 "MAC" shall mean if between the Reference Date and the beginning of
the Closing set forth in Section 5.4 or the end of the 90th day
following the Reference Date (whichever occurs earlier) an act,
event or occurrence or a series of acts, events or occurrences has
occurred that has a material adverse effect on the business,
operations, assets, liabilities or financial condition of the EDH
Group, taken as a whole, that either result or are reasonably likely
to result in a reduction of the (a) Net Equity (as defined below) of
more than EUR 20,000,000 (in words: Euro twenty million), or, (b)
Sustainable Annual Operating Profit (as defined below) of more than
EUR 6,000,000 (in words: Euro six million), in each case of the EDH
Group on a consolidated basis, and in case of the Sustainable Annual
Operating Profit in comparison to the fiscal year of the EDH Group
ending on 30 September 2003 (i.e., EUR 21,970,636.50 (in words: Euro
twenty-one million nine hundred seventy thousand six hundred thirty
six and fifty cents)), provided that;
(i) adverse effects from the development or changes of the general
economic, financial, regulatory, legal or political conditions
(including the relevant market in which the EDH Group is
active and the financing market);
(ii) adverse effects to the extent related to, or caused by, the
acquisition of the EDH Group by Purchasers, including the
identity of Purchasers and its shareholders;
(iii) adverse effects to the extent they are covered by insurance or
valid claims against third parties to the extent such claims
would be recorded as a receivable on the asset side of a
balance sheet in accordance with German generally accepted
accounting principles on a balance sheet end date
(Bilanzstichtag) and
27
(iv) effects resulting from changes in (i) accounting principles or
standards, or (ii) good will,
shall be disregarded (if and to the extent applicable) for purposes
of determining whether or not a material adverse effect within the
meaning of this clause has occurred.
("NET EQUITY" shall be determined in accordance with German general
accepted accounting principles (German Commercial Code - HGB)
applied on a basis consistent with the audited Financial Statements
2003 and is defined as the equity position of the Demedis Group as
set out in the audited Financial Statements 2003. According to this
definition, Net Equity shall consist of the following items: equity
(Eigenkapital) as per Section 266 subsec. 3, no. A I, A II, A III, A
IV and A V HGB; badwill as per Section 301 subsec. 3 HGB; minority
interests as per Section 307 subsec. 1 HGB, foreign exchange
differences as per Section 244 and Section 298 subsec. 1 HGB. To the
extent that Net Equity as defined above is negative, Section 268
subsec. 3 HGB applies.)
("SUSTAINABLE ANNUAL OPERATING PROFIT" shall mean earnings before
interest, taxes and good will effects as prepared by the management
of the EDH Group and reflected in the Financial Statements 2003 and
adjusted for the following items in order to arrive at "sustainable"
earnings:
(a) effects from changes in accounting principles, policies
and procedures since the Economic Transfer Date;
(b) effects from changes in the principles applied in
establishing accounting estimates since the Economic
Transfer Date;
(c) effects from changes in the group of consolidated
companies or other non-organic growth (acquisitions /
disposals) since the Economic Transfer Date;
(d) effects on the EDH Group to the extent related to, or
caused by, the acquisition of the EDH Group by
Purchasers, including the identity of Purchasers and its
shareholders;
(e) extraordinary income / expenses as defined by the German
Commercial Code;
(f) other one-off, non-recurring income / expense items;
(g) restructuring and restructuring related expenses;
28
(h) non-periodic income / expense items unless of a
recurring nature.)
5.6 NOTICE OF WITHDRAWAL. A withdrawal (Rucktritt) pursuant to Section 5.5 is
only valid if the other party and the Escrow Agent have received a notice
of withdrawal (Rucktrittserklarung) in writing ("WITHDRAWAL NOTICE"). In
the event that the Closing Condition has not been satisfied within twelve
(12) months after the Signing Date and neither Party has withdrawn from
this Agreement, this Agreement shall be deemed void.
5.7 CONSEQUENCES OF WITHDRAWAL. In case of a withdrawal under Section 5.5 the
following rules shall apply:
5.7.1 In case of a:
(i) MAC Withdrawal by Purchasers, the Parties shall instruct the
Escrow Agent to (a) release the Down Payment and (b) pay the
Down Payment to Purchasers within 5 (five) Business Days
following the Withdrawal Notice to an account to be notified
by Purchasers to Sellers in writing together with the
Withdrawal Notice. The provisions of Sections 5.5 to 5.7 and
Sections 12.4, 12.5, 13, 14.1, 14.2, 14.3, 14.7 and 14.10
shall survive a withdrawal pursuant to Section 5.5 to 5.7.
(ii) Non MAC Withdrawal by Purchasers or a withdrawal by Sellers
based on Section 5.5.1 or an automatic termination of this
Agreement pursuant to Section 5.5.6 2nd sentence the Parties
shall instruct the Escrow Agent to (a) release the Down
Payment and (b) pay the Down Payment to Sellers by wire
transfer to an account to be notified by Sellers and Sellers
shall be irrevocably entitled to retain the Down Payment as a
compensation for the significant efforts, costs and expenses
incurred in connection with the sales process, the significant
risk of the EDH Dental Business being seriously adversely
affected in case a closing has not occurred by this date as
well as the additional efforts, costs and expenses to be
incurred in connection with a new sales process to be
initiated with a view to disposing of the EDH Dental Business.
Purchasers are fully aware that in case of a Non MAC
Withdrawal Sellers will retain the Down Payment, have received
legal advise in this respect and acknowledge that the Down
Payment will be an amount for an adequate compensation for all
such efforts, risks, costs and expenses involved in case of
such withdrawal. The provisions of Sections 5.5 to 5.7 and
Sections 12.4, 12.5, 13, 14.1, 14.2, 14.3, 14.7 and 14.10
shall survive a withdrawal pursuant to Section 5.5 to 5.7.
29
5.7.2 Save as provided for in Section 5.7.1, if a Party withdraws from
this Agreement in accordance with Section 5.5, such withdrawal shall
be without any liability of either Party (or any shareholder,
director, officer, employee, agent, consultant, adviser or
representative of such Party) to the other Party.
5.8 NO FURTHER CONDITIONS / WITHDRAWAL RIGHTS. The Parties agree that except
for the Closing Condition (as defined in Section 5.2) and the withdrawal
rights set forth in Section 5.5 the obligations of the Parties to
consummate the Transaction shall not be subject to any other conditions,
requirements or withdrawal rights and none of the Parties may withdraw
from, rescind or terminate this Agreement or refuse to fulfil any of its
obligations thereunder, except as expressly provided for in this
Agreement.
5.9 NON-TRANSFER OF KRUGG SELLER SHARES. If on the Closing Date the Krugg
Lenders have neither released the pledge over the Krugg Shares ("KRUGG
SHARE PLEDGE") or the further security granted to the Krugg Lenders nor
approved the sale and transfer of the Krugg Seller Shares, the Parties
agree that the Closing shall be consummated nonetheless, provided, however
that the following rules will apply:
5.9.1 Krugg Seller shall not be obliged to (i) transfer the Krugg Seller
Shares as set forth in Section 5.4.15a. (ii) deliver a release
letter regarding the security granted in respect of the Krugg
Facilities as set forth in Section 5.4.15, and (iii) execute all
agreements necessary to implement the release of all security rights
granted to the Krugg Lenders as set forth in as set forth in Section
5.4.16.
5.9.2 Purchasers shall pay only the reduced Purchase Price and the reduced
Holdback Escrow Amount as set forth in Sections 5.4.1 and 5.4.2,
respectively.
5.9.3 Krugg Purchaser shall repay or cause Krugg to repay the Krugg
Facilities as soon as possible following the Closing Date, if not
already repaid as part of the Closing.
5.9.4 Krugg Seller shall transfer the Krugg Seller Shares as soon as (i)
the Krugg Share Pledge has been released or (ii) the Krugg Lenders
have approved such transfer, whatever occurs earlier ("KRUGG SHARE
TRANSFER").
5.9.5 Upon the Krugg Share Transfer Krugg Purchaser shall pay:
(i) the Retained Krugg Purchase Price to Sellers' Account;
(ii) the Retained Krugg Escrow Amount to the Escrow Account.
30
5.9.6 Between the Closing Date and the date on which the Krugg Share
Transfer occurs ("KRUGG SHARE TRANSFER DATE"), Krugg Seller shall,
to the extent legally permissible and permissible under the relevant
Krugg share pledge agreement ("KRUGG SHARE PLEDGE AGREEMENT") only
exercise its rights in respect of the Krugg Seller Shares with the
prior written consent of Krugg Purchaser.
5.9.7 Between the Closing Date and the Krugg Share Transfer Date, Krugg
Seller shall, to the extent legally permissible and permissible
under the Krugg Share Pledge Agreement, not be entitled to any
rights of dividends or liquidation proceeds.
5.9.8 The Time Limitations of any Purchaser Claims against Krugg Sellers
based on a breach of Sections 6.1.2 (i) and (ii) with respect to the
Krugg Seller Shares shall, in deviation from Section 8.8.3, start to
run as from the Krugg Share Transfer Date.
SECTION 6
SELLERS' GUARANTEES
6.1 SELLERS' GUARANTEES. Sellers hereby guarantee, except as set forth in the
disclosure letter attached hereto as Exhibit 6.1 and subject to any
limitations contained in this Agreement, including the remedies set out in
Section 8 and the limitations set out in Section 9, in particular the Time
Limitations, the De Minimis Amount, the Basket and the Liability Cap (each
as defined in Section 9) by way of an independent guarantee
(selbststandige Garantie) pursuant to Section 311 (1) German Civil Code
(Burgerliches Gesetzbuch) that the statements set forth hereinafter are
correct as of the Signing Date and will be correct at the Closing Date,
unless expressly specified otherwise herein; provided, however, that
(i) in respect of Section 6.1.1 the guarantee shall be given by
each Seller only with respect to itself;
(ii) in respect of Section 6.1.2, 2nd sentence the guarantee shall
be given by each Seller only with respect to the share sold by
such Seller;
(iii) in respect of Section 6.1.7 the guarantee shall be given by
each Seller only with respect to the portion of the
Shareholder Loan sold by such Seller;
31
(iv) guarantees made as of a specific date shall be correct only as
of such date;
(v) guarantees which are subject to Sellers' Knowledge (as defined
below) shall only be correct as of the Signing Date;
(vi) the term "SELLERS' KNOWLEDGE" shall mean the actual knowledge
(positive Kenntnis) as of the Signing Date of ▇▇▇▇▇▇▇ ▇▇▇▇,
▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇, Giorgio Beretta,
▇▇▇▇▇ ▇▇▇▇ and ▇▇▇▇▇▇ ▇▇▇▇ ("SELLERS' KNOWLEDGE INDIVIDUALS")
and in respect of the guarantees in Sections 6.1.8, 6.1.11,
6.1.13, 6.1.21 and 6.1.22 the term Sellers' Knowledge shall
mean the actual knowledge as of the Signing Date of the
Sellers' Knowledge Individuals and the knowledge they could
have obtained after due inquiry with the relevant key
employees of the Companies responsible for the relevant
aspects covered by the guarantees in Sections 6.1.8, 6.1.11,
6.1.13, 6.1.21 and 6.1.22;
(vii) the term "MATERIAL ADVERSE EFFECT" shall mean any state of
facts, events, changes or effects having a material adverse
effect on the assets, liabilities, financial condition or
business operations of the EDH Group as a whole.
6.1.1 ENFORCEABILITY / CORPORATE IDENTITY. This Agreement constitutes a
valid and binding obligation of Sellers, enforceable under German
law against each of the Sellers in accordance with its terms, except
as the enforceability thereof may be limited by bankruptcy,
insolvency, reorganisation, moratorium, or other similar laws
relating to or affecting the rights of creditors generally and
except that the remedy of specific performance and injunctive relief
and other forms of equitable relief may be subject to equitable
defences and to the discretion of the court before which any
proceeding may be brought. Each of the Sellers have the corporate
authority to execute this Agreement and to perform its obligations
under this Agreement.
6.1.2 EXISTENCE OF COMPANIES / OWNERSHIP OF SHARES. Each of the Companies
is duly incorporated and validly existing under the laws of its
jurisdiction. Except as listed in Schedule 6.1.2,
(i) the Shares are held by Sellers and the Companies as set out in
Section 1;
32
(ii) the Shares are free and clear of any liens, encumbrances or
other third party rights, except for the pledges granted to
the lenders under the Bank Debt;
(iii) there are no pre-emptive rights, rights of first refusal,
options, voting agreements or other rights of third parties
(granted in favour of or agreed between any of the Companies)
to acquire any of the Shares;
(iv) the Shares are fully paid up, have not been repaid and are
non-assessable (nicht nachschusspflichtig);
(v) there are no silent partnerships or other rights to
participate in any of the Companies' revenues or profits; and
in each case except for rights given under statutory law, or the
articles of association or by-laws.
6.1.3 COMPANY INFORMATION. Schedule 6.1.3 contains a complete list of the
articles of association and by-laws (or their equivalent formation
documents in the relevant jurisdiction) of the Companies valid as of
the Signing Date. Copies of such documents have been made available
to Purchasers prior to the execution of this Agreement. The
description of the group structure set forth in Section 1 of this
Agreement hereof is correct, and the Companies do not hold any legal
or beneficial interest in any other businesses.
6.1.4 SUPERVISORY AND ADVISORY BOARDS. Schedule 6.1.4 contains a complete
list of all supervisory and advisory boards of all Companies
including the names of the relevant members.
6.1.5 INSOLVENCY PROCEEDINGS. No insolvency proceedings against the
Companies are pending (i.e., a court has formally commenced
insolvency proceedings (Insolvenzverfahren eroffnet) in accordance
with the German Insolvency Code (Insolvenzordung) or the
corresponding procedure under Italian law in respect of Krugg) or
have been applied for by the Companies, or, to Sellers' Knowledge,
have been applied for by any third party. Purchasers are aware of
the present net equity position of the Companies and in particular
of EDH and the existing subordination agreements signed by the
relevant EDH Sellers in respect of the Shareholder Loans in order to
avoid insolvency risks (for the absence of which Sellers do,
however, not assume any responsibility).
6.1.6 AFFILIATES / ENTERPRISE AGREEMENTS. Except as disclosed in Schedule
6.1.6 and Section 1, the Companies have no affiliated companies
within the meaning
33
of Section 15 German Stock Corporation Act ("AFFILIATES") nor do
they hold any participation or sub-participation in any other
company and there exist no enterprise agreements within the meaning
of Sections 291 and 292 German Stock Corporation Act (Aktiengesetz).
6.1.7 SHAREHOLDER LOANS. The Shareholder Loan Agreements have been validly
entered into and can be freely sold and transferred by the
Shareholder Lenders without the consent of any third party being
required, except only for the consent of EDH as borrower which has
already been granted pursuant to the consent declaration attached
hereto as Exhibit 3.3. Shareholder Lenders and Sellers do not assume
any guarantee that the Shareholder Loans are enforceable or
collectable and Purchasers are in particular aware of the
subordination agreements signed by Seller in respect of the
Shareholder Loan and of the fact that they might legally be treated
as deemed equity irrespective of such subordination
(eigenkapitalersetzende Gesellschafterdarlehen).
6.1.8 MATERIAL INTELLECTUAL PROPERTY RIGHTS. The Companies own, or
lawfully use, all such patents, trade marks, copyrights, software,
domain names, which are material to carrying on the EDH Dental
Business taken as a whole (herein after collectively referred to as
"INTELLECTUAL PROPERTY RIGHTS"). Schedule 6.1.8 (a) contains a true
and complete list of the Intellectual Property Rights (except for
off the shelf standard software) of which the Companies are the
legal owners indicating (i) the nature and the registered owner of
the Intellectual Property Rights and (ii) if applicable, the
jurisdiction in which such Intellectual Property Rights have been
registered. Except as disclosed in Schedule 6.1.8 (a), the Companies
are entitled to dispose freely of the Intellectual Property Rights,
which are owned by the Companies. No other than the Intellectual
Property Rights are necessary for the EDH Dental Business to conduct
its business as currently conducted. Except as listed in Schedule
6.1.8 (b), the Intellectual Property Rights are not subject to any
pending or threatened proceedings for opposition or cancellation
which may adversely affect the operation of the EDH Dental Business
taken as a whole nor, to Seller's Knowledge, being infringed by any
third party. All fees necessary to maintain the Intellectual
Property Rights have been paid, except for non-payments which will
not have and can not reasonably be expected to have a Material
Adverse Effect. To Sellers' Knowledge, the Companies do not infringe
any material intellectual property rights owned by a third party.
The Companies either own and hold valid leases and/or licenses to
all material computer hardware, software and other information
technology ("IT"), which is currently used by the Companies to
conduct their business as currently conducted. All material leases
or licenses in respect of such IT are effective.
34
Except as disclosed in Schedule 6.1.8 (c), since the Economic
Transfer Date, there were no material interruptions, material data
losses or material similar incidents attributable to the IT owned
or used by the Companies, and which, in addition, had or are likely
to have a Material Adverse Effect on the EDH Dental Business. To
Sellers' Knowledge, the IT has the capacity and performance
necessary to conduct the business operations of the Companies as
conducted on the Signing Date.
6.1.9 INSURANCE. As of the Signing Date, the Companies, maintain for
their own benefit the insurance policies which are listed in
Schedule 6.1.9 (i), and except as set forth in Schedule 6.1.9 (ii),
all due premiums under such insurance policies have been paid.
Except as disclosed in Schedule 6.1.9 (ii), there are no material
claims pending under any of the insurance policies and, to Seller's
Knowledge, no facts exist which could give rise to any such claims.
6.1.10 MATERIAL ASSETS. Except as disclosed in Schedule 6.1.10, the
Companies own, or hold lawful possession of, all fixed assets
(Anlagevermogen) material to the EDH Dental Business and
capitalized in the Financial Statements 2003, except for such
assets which were sold, abandoned or otherwise disposed of since
the Economic Transfer Date in the ordinary course of business
("MATERIAL ASSETS"). Except as disclosed in Schedule 6.1.10, the
Material Assets are not encumbered with any liens, pledges or other
encumbrances in favour of third parties, except for:
(i) rights of retention of title (Eigentumsvorbehalte), liens or
pledges in favour of suppliers, mechanics, landlords and
carriers granted in the ordinary course of business; and
(ii) security rights granted to banks and other lenders in respect
of the Bank Debt which will be released on the Closing Date;
(iii) encumbrances (Belastungen) other than rights under (i) and
(ii) above which individually or in the aggregate do not
exceed EUR 150,000 (in words: Euro one hundred fifty
thousand).
6.1.11 MATERIAL AGREEMENTS. Schedule 6.1.11 contains a correct list, as of
the Signing Date, of all of the following written agreements to
which any of the Companies is a party and which have not yet been
completely fulfilled (hereinafter collectively referred to as the
"MATERIAL AGREEMENTS"):
35
(i) agreements providing for a consideration in excess of EUR
250,000 (in words: Euro two hundred fifty thousand) and
relating to the acquisition or sale of (a) interests in other
companies or (b) real estate;
(ii) rental and lease agreements relating to real estate which,
individually, provide for annual net payments of EUR 65,000
(in words: Euro sixty five thousand) or more;
(iii) loan agreements (other than between the Companies), bonds,
notes or any other instruments of debt made or issued, as the
case may be, by any of the Companies (other than made or
issued for the benefit of another Company and other than the
Bank Debt);
(iv) guarantees, suretyships, comfort letters
(Patronatserklarungen) and similar instruments issued by any
of the Companies for any debt of any third party, i.e., other
than for any of the Companies for an amount of EUR 100,000
(in words: Euro one hundred thousand) or more in each
individual case;
(v) employment agreements providing for a fixed annual salary of
EUR 75,000 (in words: Euro seventy five thousand) or more;
(vi) any hedging agreements or derivatives contracts made by any
of the Companies;
(vii) distribution or agency agreements (other than between the
Companies or with any company of the Demedis Group) with an
annual net sales volume (as per the last completed financial
year ending on 30 September 2003) of EUR 1,000,000 (in words:
Euro one million) or more;
(viii) agreements for joint-ventures, strategic alliances, joint
development of products or other forms of co-operations;
(ix) agreements to sell, or otherwise dispose of any fixed assets
owned by a Company with a fair market or replacement value in
excess of EUR 200,000 (in words: Euro two hundred thousand);
(x) license agreements with any Company as licensee or licensor,
which resulted during the last fiscal year, or are likely to
result during the current fiscal year in annual royalties in
excess of EUR 100,000 (in words: Euro one hundred thousand);
36
(xi) agreements with the top 10 suppliers of M+W KG and Krugg
based on the volume of purchase orders in the last fiscal
year ending on 30 September 2003;
(xii) except as disclosed in any other Schedule to this Section 6
material agreements outside the ordinary course of business;
(xiii) agreements expressly imposing restrictions on a Company to
compete with any third party, to acquire any products or
services from a third party, to sell any products or to
perform any services for any third party or to develop any
technology, if and to the extent that such restrictions will
prevent the Company from conducting its business operations
or pursuing its business development activities; it being
understood that all distribution, agency or similar
agreements containing restrictions on territories shall be
disregarded provided that such restrictions are in line with
the ordinary standards for distribution, agency or similar
agreements in the dental distribution business in general.
To Sellers' Knowledge and except as disclosed in Schedule 6.1.11,
each of the Material Agreements is in effect. To Sellers' Knowledge
and except as disclosed in Schedule 6.1.11, no party to any of the
Material Agreements has indicated in writing that it will terminate
the agreement as a result of the Transaction and none of the
Material Agreements contains a change-of-control clause entitling
the contracting party to terminate the agreement as a result of the
Transaction.
6.1.12 PERMITS. Except as disclosed in Schedule 6.1.12, the Companies are
in possession of all governmental approvals, licenses and permits
necessary to operate the EDH Dental Business and which are material
to the EDH Dental Business taken as a whole. The Permits are in
full force and effect. Except as disclosed in Schedule 6.1.12, none
of the Permits has been challenged by any third party and, to
Seller's Knowledge, there are no circumstances, which would justify
such challenge, and no proceedings regarding a revocation or
withdrawal of any Permit has been initiated or threatened, and, to
Seller's Knowledge, there are no circumstances, which would justify
such revocation or withdrawal.
6.1.13 LITIGATION. Except as disclosed in Schedule 6.1.13, the Companies
are not party to any court or administrative proceedings, including
arbitration proceedings, either as plaintiff or defendant, having a
litigation value (Streitwert) exceeding EUR 50,000 (in words: Euro
fifty thousand) in the individual case.
37
6.1.14 SHOP AGREEMENTS. Schedule 6.1.14 contains a list of all material
shop agreements (i.e. agreements which are entered into between a
Company and a representative body of employees of a Company, unless
such agreements repeat mandatory statutory law only) existing as of
the Signing Date and providing for any of the following:
(i) benefit or incentive plans relating to a change of control in
a Company;
(ii) limitations to terminate employment agreements, including
agreements providing for severance payments; or
(iii) obligations of a Company to make specific investments or to
guarantee the employment of a certain number of employees.
6.1.15. LABOR STRIKES AND VIOLATION OF LAWS. Except as disclosed in
Schedule 6.1.15, none of the Companies is experiencing:
(i) any strike, slowdown, or work stoppage by or lockout of its
employees; or
(ii) any lawsuit relating to the alleged violation of any law or
order applicable in Germany and Italy and relating to
discrimination, civil rights, workers' safety or working
conditions,
which would have a Material Adverse Effect.
6.1.16 TAX MATTERS. Except as disclosed in Schedule 6.1.16
(i) all taxes owed or to be payable by any Company under
applicable laws and relating to periods ending on or before
the Economic Transfer Date have been paid or have been
accrued for in the year-end accounts of the relevant Company
(Einzelabschluss) as at the Economic Transfer Date. For
purposes of this Agreement "TAXES" means any taxes and public
dues, including but not limited to income tax, value-added
tax, trade tax, wage tax, withholding tax, sales tax,
property or transfer tax under mandatory law, or customs
duties (Zolle) or social security contributions, together
with any interest, penalty or addition to taxes (Steuerliche
Nebenleistungen) imposed by any governmental authority
responsible for the imposition of such taxes;
(ii) as of the Signing Date, the Companies are subject only to
general tax audits (Allgemeine Betriebsprufungen) and to
special tax audits as far
38
as the type of tax requires them (Besondere Betriebsprufungen
- especially VAT and wage taxes but not subject to any
disputes regarding Taxes);
(iii) all tax returns required to be filed by the Companies on or
before the Signing Date have been filed and are true and
correct in all material respects;
(iv) there has been no notice or any written claim, action, suit,
proceeding or investigation now pending against or with
respect to any Company in respect of any Taxes;
(v) no tax authority in a jurisdiction where a Company is not
paying Taxes has made a claim or written assertion that a
Company is or may be subject to Taxes by such jurisdiction,
otherwise than by deduction of Taxes at source.
Purchasers, to the degree legally permissible, further agree
that they shall not (and Purchasers shall ensure that none of
the Companies shall) make, change, modify or withdraw any tax
filings for the tax periods until and including 30 September
2003 (or agree to any of the foregoing) without the prior
written consent of Sellers which shall not unreasonably be
withheld, unless required by law or to make a factually
correct filing.
6.1.17 FINANCIAL STATEMENTS 2002 AND 2003. Except as disclosed in Schedule
6.1.17, the audited consolidated year end accounts
(Konzernabschluss) of EDH as at 30 September 2002 and the audited
consolidated year end accounts of EDH as at 30 September 2003, in
each case consisting of the balance sheet, the profit and loss
statement and the notes (Anhang) thereto ("FINANCIAL STATEMENTS
2002 and FINANCIAL STATEMENTS 2003", respectively) have in all
material respects been prepared in accordance with German generally
accepted accounting principles applying to EDH consistent with past
practice and present a true and fair view of the assets and
liabilities (Vermogenslage), financial position (Finanzlage) and
earning positions (Ertragslage) in accordance with Section 297 (2)
of the German Commercial Code (HGB) of the EDH Group taken as a
whole, as of the relevant balance sheet date or the relevant
period, as the case may be.
6.1.18 NO MATERIAL ADVERSE CHANGES / CONDUCT OF BUSINESS. Except as
disclosed in Schedule 6.1.18, and apart from changes resulting
from, or relating to, general political developments or
developments of the economy in general or in the
39
relevant marketplace, to Sellers' Knowledge during the period from
Economic Transfer Date until the Signing Date no event has occurred
or action been taken which would qualify as a breach of the
covenants set forth in Section 10 had such covenants already been
in place for the period of time between the Economic Transfer Date
and the Signing Date.
6.1.19 DEALINGS WITH SIRONA GROUP. Except as disclosed in Schedule 6.1.19
the supply relationships between Sirona Beteiligungs- und
Verwaltungsgesellschaft mbH or any of its affiliates as supplier
and any of the Companies as distributor are at arm's length terms.
6.1.20 PRODUCT LIABILITY. Except as disclosed in Schedule 6.1.20, no
product liability claims (Produkthaftungsanspruche) in connection
with any products sold by the Companies prior to the Economic
Transfer Date are pending (anhangig) against any of the Companies.
The products of the Companies sold prior to the Economic Transfer
Date do not have any defects, which could give rise to any such
product liability claims.
6.1.21 ENVIRONMENTAL LIABILITIES. To Sellers' Knowledge, except as
disclosed in Schedule 6.1.21 and further except where the
inaccuracy of the statement would not have a Material Adverse
Effect
(i) the Companies are in compliance with all laws relating to
pollution and the protection of the environment and material
for the operations of the EDH Group, taken as a whole
(collectively "ENVIRONMENTAL LAWS");
(ii) as of the Signing Date, no Company has received in writing
any notice or communication stating or alleging that it is in
violation of any Environmental Laws;
(iii) between January 2000 and the Signing Date, no Company has
received by the competent environmental authorities a written
notice or communication to conduct any kind of investigation
audit, survey or similar examination of environmental
conditions;
provided, however, that Purchasers shall not have any claims under
this Section 6.1.21 if after the Signing Date Purchasers, or after
the Closing Date Purchasers or any of the Companies,
(a) conduct any kind of investigation, audit, survey or
similar examination of the soil, ground water or other
environmental conditions of the premises of any Company,
apart from the
40
review of pertinent documentation and the conduct of
interviews and the mere visual inspection of the surface
of the soil without any kind of drilling or opening of
the soil ("ENVIRONMENTAL EXAMINATION"), without being
required to do so under a court judgement or
administrative order unless there is a valid business
reason other than merely or predominantly to trigger a
liability of Sellers under this Section 6.1.21,
(b) solicit, trigger or otherwise actively cause, directly
or indirectly, any Environmental Examination by any
governmental authorities or any other party unless there
is a valid business reason other than merely or
predominantly to trigger a liability of Sellers under
this Section 6.1.21.
For the avoidance of doubt, Sellers shall not be liable for any
contamination if and to the extent it did not exist as of the
Closing Date, in particular if and to the extent a contamination
requiring clean-up results from
(v) any non-compliance of Purchasers or the Companies with
Environmental Laws after the Closing Date;
(w) negligent omissions to take actions required to be taken
by the Purchasers or the Companies under applicable laws
and relating to environmental matters after the Closing
Date;
(x) any negligent act or omission of any employee or any
other representative of, or service provider to, the
Companies after the Closing Date.
The other general limitations to Sellers' liability under or
in connection with this Agreement shall remain unaffected.
6.1.22 COMPLIANCE WITH LAWS. To Sellers' Knowledge, except as disclosed in
Schedule 6.1.22, each Company is in all material respects in
compliance with the laws and regulations of any jurisdiction
applicable to the Companies' and all orders, decrees or rulings of,
or restrictions imposed by, any judicial, governmental or
regulatory body (collectively "LAWS AND ORDERS") in all relevant
jurisdictions. To Sellers' Knowledge, no material non-compliance
with the Laws and Orders has been alleged in writing to the
Companies and, to Sellers' Knowledge, there are no circumstances,
which would justify such allegations. To Sellers' Knowledge, none
of the Companies is subject to any material administrative or
material criminal investigations and no such material
investigations
41
have been threatened in writing to the Companies, and to Seller's
Knowledge, no circumstances exist, which would justify the
initiation of such a material investigation.
6.1.23 EMPLOYEES. Schedule 6.1.23 (i) includes for each Company a correct
and complete list of its employees (Arbeitnehmer) on an anonymous
basis with various information related to such employees. Except as
disclosed in Schedule 6.1.23 (ii), none of the Companies have
increased any of their directors' or employees' remuneration or
benefit entitlements after the Economic Transfer Date other than in
accordance with (i) the terms of the relevant employment and
service agreements in force as of the Economic Transfer Date, (ii)
applicable shop or collective bargaining agreements, (iii) past
practise or (iv) as part of the Stay Bonus Arrangements. None of
the Sellers' Knowledge Individuals has given written notice of
termination and, to Seller's Knowledge, no circumstances exist that
any of these employees is giving notice of termination (provided
that for the purpose of defining Sellers' Knowledge in this
particular case, the knowledge of the Sellers' Knowledge
Individuals shall be disregarded in respect of themselves).
Schedule 6.1.23 (iii) includes for each Company a correct and
complete list of certain pension obligations.
6.1.24 REAL ESTATE. Except for the real estate listed in Schedule 6.1.24
(i) the Companies do not own any real estate. The real estate used
by the Companies is listed in Schedule 6.1.24 (ii).
6.2 CONSENTS. Purchasers acknowledge that certain consents may be required in
connection with contracts of the Group Companies containing
change-of-control provisions and that such consents have not been
obtained. While Sellers shall take reasonable efforts to assist Purchasers
in obtaining such consents, Purchasers agree that Sellers shall not have
any liability arising from the failure to obtain such consents and that no
guarantee, covenant or other obligation of Sellers shall be breached and
no condition shall be deemed not to have been satisfied as a result (i) of
the failure to obtain such consent, (ii) the termination of any such
contract or (iii) any lawsuit commenced or threatened arising from the
failure to obtain such consent or the termination of such contract.
6.3 NO OTHER GUARANTEES. Purchasers agree to purchase and accept the Sold
Assets and the EDH Dental Business in their condition they are in on the
Closing Date based upon its own inspection, examination and determination
with respect thereto as to all matters and without reliance upon any
express or implied guarantees, representations or warranties of any nature
made by or on behalf of or imputed to Sellers, except only for the
guarantees expressly set forth in this Agreement. Sellers do therefore not
give or assume any guarantees other than those set forth in this Agreement
and none of the
42
Sellers' Guarantees shall be construed as a guarantee or representation
with respect to the quality of the purchase object within the meaning of
Sections 276 Subsec. 1, 443 German Civil Code (Garantie fur die
Beschaffenheit der Sache). Without limiting the generality of the
foregoing, Purchasers acknowledge that Sellers make no guarantees,
representations or warranties with respect to:
(i) any projections, estimates or budgets delivered or made available to
Purchasers of future revenues, future results of operations (or any
component thereof), future cash flows or future financial conditions
(or any component thereof) or the future business and operations of
the EDH Dental Business or the EDH Group;
(ii) any other information or documents made available to Purchasers or
their counsel, accountants or other advisers with respect to the EDH
Dental Business or the EDH Group, except as expressly set forth in
Section 6 of this Agreement;
(iii) the enforceability and collectibility of the Shareholder Loans
(i.e., the ability and obligation of EDH to repay the relevant
Shareholder Loans)
provided, however, that to Sellers' Knowledge none of the information nor
documents made available to Purchasers or their counsel, accountants or
other advisers with respect to the EDH Dental Business or the EDH Group is
untrue inaccurate in any material respect.
SECTION 7
PURCHASER'S GUARANTEES
Purchasers guarantee to Sellers as of the Signing Date and Closing Date:
7.1 ENFORCEABILITY / NO CONFLICT. This Agreement constitutes the legal, valid
and binding obligation of Purchasers, enforceable against Purchasers in
accordance with its terms, except as the enforceability thereof may be
limited by bankruptcy, insolvency, reorganization, moratorium or other
similar laws relating to or affecting the rights of creditors generally
and except that the remedy of specific performance and injunction relief
and other forms of equitable relief may be subject to equitable defences
and to the discretion of the court before which any proceeding may be
brought. Purchasers have the power and authority to execute this Agreement
and to perform their obligations under this Agreement, and the Transaction
have been duly authorised and approved by all necessary corporate action
of Purchasers.
43
7.2 LITIGATION. There is no action, suit, investigation or proceeding pending
against, or to the knowledge of Purchasers, as of the Signing Date,
threatened against or affecting Purchasers before any court or arbitrator
or governmental body, agency or official body which in any manner
challenges or seeks to prevent, enjoin, alter or materially delay the
Transaction.
7.3 FINANCIAL CAPABILITY. Purchasers have sufficient immediately available
funds or binding and unconditional and irrevocable financing commitments
to make all payments required to be made under or in connection with this
Agreement.
7.4 FINDERS' FEES. Purchasers have no obligation or liability to pay any fees
or commissions to any broker, finder or agent with respect to the
Transaction for which Sellers could become wholly or partly liable.
SECTION 8
REMEDIES
8.1 LIMITATION OF REMEDIES. In the event of a breach or non-fulfilment of any
guarantee, covenant or other obligation of Sellers contained in this
Agreement, Sellers shall put the relevant Purchaser, or at the option of
the relevant Purchaser, the respective Company into the same position it
would have been in if Sellers' Guarantees, covenants or other obligation
contained in this Agreement had been fulfilled or had not been breached
(Naturalrestitution), or, at the option of Sellers, pay damages for
non-performance (▇▇▇▇▇▇▇ Schadenersatz). For purposes of determining the
liability of Sellers, only the actual losses incurred by the respective
Company or Purchasers shall be taken into account and not any potential or
actual reduction (Minderung) in the value of the Companies or the relevant
Purchaser. Sellers shall in no event be liable for any indirect damages
(mittelbare Schaden), consequential damages (Folgeschaden), indirect
losses caused by business interruption (Betriebsunterbrechungschaden) or
lost profits (entgangener Gewinn), damages incidental to any breach or
non-fulfilment of the independent guarantees (Schaden anlasslich einer
Verletzung einer selbstandigen Garantie) or any internal costs (i.e.,
non-out of pocket expenses) incurred by the Companies or the relevant
Purchaser, it being understood that in case of a third party claim
constituting a liability that triggers a Purchaser Claim such liability
will be considered as a direct damage within the meaning of this Agreement
even if it includes consequential damages, losses and lost profits. If and
to the extent damages are paid to any of the Companies, such payments
shall be effected as contributions (Einlagen) made by Purchasers into the
respective Company.
8.2 PURCHASER CLAIM PROCEDURE. In the event of any breach or non-fulfilment of
Sellers' Guarantees, covenants or other obligation contained in this
Agreement or in case of
44
any other claim of a Purchaser against Sellers' under or in connection
with this Agreement ("PURCHASER CLAIM"), Purchaser will give Sellers
written notice of such breach or non-fulfilment, without undue delay (ohne
schuldhaftes Zogern) after its discovery but within twenty five (25)
Business Days thereafter stating in such notice in reasonable detail the
nature thereof and the amount involved, to the extent that such amount has
been determined at the time when such notice is given. Without prejudice
to the validity of the Purchaser Claim or alleged claim in question,
Purchaser shall allow, and cause the Companies to allow, Sellers and their
accountants and professional advisers to investigate the matter or
circumstance alleged to give rise to such Purchaser Claim. Purchaser shall
give and cause the Companies to give such information and assistance,
including, during normal business hours and upon prior written notice,
access to Purchaser's and the Companies' premises and personnel, including
the right to examine and copy or photograph any assets, accounts,
documents and records, as Sellers or their accountants or professional
advisers may request, provided it is done in such a way so as to minimize
business disruption.
8.3 LIMITATION OF SELLERS' LIABILITY. Sellers shall not be liable for, and
Purchasers shall not be entitled to bring any Purchaser Claim, if and to
the extent that:
8.3.1 the matter to which the Purchaser Claim relates has been taken into
account in the Financial Statements 2003 by way of a provision
(Ruckstellung), or depreciation (Abschreibung), or exceptional
depreciation (au(beta)erplanma(beta)ige Abschreibung), or
depreciation to reflect lower market values (Abschreibung auf den
niedrigeren beizulegenden ▇▇▇▇) or otherwise;
8.3.2 the amount of the Purchaser Claim is actually recovered from a third
party (including any agreement by virtue of which any shares in the
Companies have (directly or indirectly) been acquired) or under an
insurance policy in force on the Signing Date, provided, however,
that if the relevant Purchaser could recover the amount of the
Purchaser Claim from a third party or an insurance policy in force
on the Signing Date, the relevant Purchaser shall use all reasonable
efforts to recover the amount of the Purchaser Claim from the
relevant third party or the relevant insurer, as the case may be, as
soon as possible and in case of such recovery reimburse Sellers for
any payments already made in respect of the Purchaser Claim up to
the amount recovered. At the request of Sellers, Purchasers shall
assign the relevant claim to Sellers and deliver to Sellers all
relevant documents related to such Purchaser Claim subject to
applicable law. In the case that Purchasers could not recover such
amount within a period of eighteen (18) months as from the Closing
Date, the relevant Purchaser is entitled to assign the relevant
claim to Sellers who are obliged to accept such assignment, unless
they release the relevant Purchaser from its obligation to further
pursue the possibility of recovery.
45
8.3.3 the payment or settlement of any item giving rise to a Purchaser
Claim results in a tax benefit realized by the Companies or
Purchasers, i.e. when the payment or settlement leads to a tax
deductible expense within the fiscal year of the relevant Company in
which such payment or settlement is made and this tax deductible
expense does not only increase a tax loss carry forward;
8.3.4 the Purchaser Claim results from a failure of Purchasers or the
Companies to mitigate damages pursuant to Section 254 German Civil
Code;
8.3.5 the matter to which the Purchaser Claim relates was actually known
by the persons listed on Exhibit 8.3.5 (i) as of the Closing Date,
taking into account that Purchasers and in particular these persons,
prior to entering into this Agreement, had the opportunity to
thoroughly review the condition of the EDH Group and the EDH Dental
Business under commercial, technical, organisational, financial,
environmental and legal aspects and, in this connection, to hold
discussions with managing directors and other senior employees of
the Companies, and to inspect any relevant real estate; without
limiting the generality of the foregoing. Purchaser shall be deemed
to have knowledge of all matters disclosed in (i) the Information
Memorandum; (ii) the Vendor Due Diligence Report of
PricewaterhouseCoopers, (iii) the PricewaterhouseCoopers Tax Status,
each as disclosed to Purchaser; (iv) any documents listed in the
specific data room index attached hereto as Exhibit 8.3.5 (ii) to
the extent that a reasonable purchaser would have logically
concluded that a Purchaser Claim exists from such disclosure, and
(v) the written answers to any information requests of Purchaser
attached hereto as Exhibit 8.3.5 (iii);
8.3.6 the Purchaser Claim results from or is increased by the passing of,
or any change in any law, statute, ordinance, rule, regulation,
common law rule or administrative practice of any government,
governmental department, agency or regulatory body including
(without prejudice to the generality of the foregoing) any increase
in the rates of any taxes or any imposition of any taxes or any
withdrawal or relief from any taxes, not actually in effect at the
Closing Date;
8.3.7 Sellers were prejudiced by the Purchasers' failure to observe the
procedures set forth in Sections 8.2 and 8.4;
8.3.8 in respect of a Purchaser Claim under Section 6.1.16 (without
prejudice to the generality of Section 8.3.3), if and to the extent
46
(i) the breach of the relevant Sellers' Guarantees results only in
a loss or reduction of tax loss carry-forwards;
(ii) Purchasers impair any obligation of the Companies or Sellers
regarding the preparation of any tax returns of any of the
Companies for assessment periods (Veranlagungszeitraume) up to
and including the Economic Transfer Date ("TAX RETURNS");
(iii) Tax Returns already prepared by Sellers or any of the
Companies prior to the Closing Date should not be filed
accordingly by Purchasers or any of the Companies, provided
that such Tax Returns have been applied in accordance with
applicable laws and accounting practices; or
(iv) any of the Tax Returns which have already been filed should be
changed, modified or withdrawn by Purchasers and/or Companies
without prior written consent of Sellers which may not be
unreasonably withheld;
8.3.9 either Purchasers or the Companies have caused or partially caused
(verursacht oder mitverursacht) such Purchaser Claim after the
Closing Date or by Purchasers after the Signing Date, e.g., by way
of any kind of (corporate) restructurings leading to a retroactive
reclassification of the tax treatment of M+W KG, DentalMV or M+W
Verwaltung, or by the way the repayment of Bank Debt will be booked
on the level of the relevant Companies, provided however that
Purchasers shall be authorized to initiate tax audits with respect
to any of the Companies.
When calculating the amount of the liability of Sellers under this
Agreement all advantages in connection with the relevant matter shall be
taken into account (Vorteilsausgleich) and Sellers shall not be liable
under this Agreement in any respect of any Purchaser Claim for any losses
suffered by Purchasers or the Companies to the extent of any corresponding
savings by or benefit to the Purchasers, any Affiliate of Purchasers or
any Company arising therefrom.
8.4 THIRD PARTY CLAIM PROCEDURE. If the Companies or Purchasers are sued or
threatened to be sued by a third party, including any governmental
agencies, or if the Companies or Purchasers are subjected to any audit or
examination by any tax authority ("THIRD PARTY CLAIM"), which may give
rise to a Purchaser Claim, Purchasers shall give Sellers immediately
(unverzuglich) written notice of such Third Party Claim. Purchasers shall
ensure that Sellers shall be provided with all material, information and
assistance relevant in relation to the Third Party Claim, be given
reasonable opportunity to comment or discuss with Purchasers any measures
which Purchasers
47
proposes to take or to omit in connection with a Third Party Claim. In
particular, Sellers shall be given the opportunity to comment on,
participate in, and review any reports, all relevant tax and social
security audits or other measures and receive without undue delay copies
of all relevant orders e.g. (Bescheide) of any authority, in each case
subject to applicable law. No admission of liability shall be made by or
on behalf of Purchasers or the Companies and the Third Party Claim shall
not be compromised, disposed of or settled without the prior written
consent of Sellers, which shall not be unreasonably withheld. Further,
however, subject to prior consultation with Purchasers and subject to
Purchasers' prior written consent, which shall not be unreasonably
withheld, Sellers shall be entitled at their own discretion to take such
action (or cause Purchasers or the Companies to take such action) as it
deems necessary to avoid, dispute, deny, defend, resist, appeal,
compromise or contest such Third Party Claim (including making counter
claims or other claims against third parties) in the name of and on behalf
of Purchasers or the Companies concerned and Purchasers will give and
cause the Companies to give (subject to them being paid all reasonable
out-of-pocket costs and expenses), all such information and assistance, as
described above, including during normal business hours and upon prior
written notice access to premises and personnel and including the right to
examine and copy or photograph any assets, accounts, documents and records
for the purpose of avoiding, disputing, denying, defending, resisting,
appealing, compromising or contesting any such claim or liability as
Sellers or their professional advisers may reasonably request provided it
is done in such a way so as to minimize business disruption. Sellers agree
to use all such information confidentially only for such purpose and to
treat them confidentially. To the extent that Sellers are in breach of a
Sellers' Guarantee or covenant, all costs and expenses reasonably incurred
by Sellers in defending such Third Party Claim shall be borne by Sellers.
8.5 APPORTIONMENT OF LIABILITY / NO JOINT LIABILITY. Any liability for a
breach of the guarantees given under Section 6.1.1, 6.1.2, 2nd Sentence,
and 6.1.7 shall accrue only to the Seller that has given the respective
guarantee. In case of any other liability under or in connection with this
Agreement the Krugg Seller shall only be liable for the percentage set
forth in Exhibit 8.5 of the total liability and the remaining percentage
of the total liability set forth in Exhibit 8.5 shall accrue to the EDH
Sellers, provided, however that each EDH Seller shall only be liable for
such portion of this remaining liability (after deducting the portion for
which Krugg Seller is liable) pro rata to the amount of the relevant
percentage of its shareholding in EDH. In no case shall any liability of
Sellers under or in connection with this Agreement be a joint liability of
Sellers (Gesamtschuld), i.e., no Seller shall be held liable for a
liability of any other Seller but Sellers shall be liable for any
liabilities of Sellers under or in connection with this Agreement only as
single debtors (Teilschuldner).
48
8.6 NO DOUBLE RECOVERY. For the avoidance of doubt, no Party shall be entitled
to recover one and the same damage or loss more than once under or in
connection with this Agreement.
8.7 SOLE REMEDY. Any claims of Purchasers under or in connection with this
Agreement shall be limited to claims against Sellers that can be satisfied
by the Holdback Escrow Amount. Purchasers shall in no event be entitled to
make any direct claims against any Sellers which will not be covered by
the Holdback Escrow Amount. Any liability of Sellers and recourse by
Purchasers shall at all times be solely limited to the Holdback Escrow
Amount kept by the Escrow Agent in accordance with the Escrow Agreement
and not be directed to any of the Sellers.
8.8 MODIFIED REMEDIES FOR TITLE GUARANTEE. In the case of a breach of Section
6.1.2 (i) or (ii) in respect of the EDH Shares and the Krugg Seller Shares
the following specific amendments to Sellers' liability under this
Agreement will apply:
8.8.1 Share Purchasers shall be entitled to claims for specific
performance (Erfullung) and consequential damages (Folgeschaden);
8.8.2 the Liability Cap will not apply, but the aggregate liability of
each individual Seller will be limited to the pro rata portion of
the Purchase Price attributable to the EDH Shares and the Krugg
Seller Shares of each individual Seller;
8.8.3 the Time Limitation will be extended to a period ending five (5)
years as from the Closing Date;
8.8.4 in the case that the guarantees in Section 6.1.2 (i) or (ii) have
been breached in respect of the EDH Shares and the Krugg Seller
Shares due to a mere technical or formal problem (e.g., if a
notarial deed contains a technical or formal mistake rendering the
transfer of title invalid) all Sellers will use their best efforts
to cooperate with each other and with Share Purchasers in order to
remedy such defect/problem, in particular to ensure that the split
of shares and ownership structure set forth in Section 1.1 will be
put in place. This clause shall, however, not increase the overall
liability of Sellers for a breach of Sections 6.1.2 (i) and (ii) in
respect of the EDH Shares and the Krugg Seller Shares as set forth
in Section 8.8.2;
8.8.5 Share Purchasers shall first raise Purchaser Claims against the
Holdback Escrow Amount before pursuing any Purchaser Claims against
any Sellers directly.
49
it being understood that no further rights, other than those expressly set
forth in this Section 8.8, in particular no further rights of withdrawal,
will be conferred on Share Purchasers.
8.9 TREATMENT OF HOLDBACK ESCROW AMOUNT. In view of Sellers' separate
liability (teilschuldnerische Haftung) as set forth in Section 8.5, the
sole remedy principles set forth in Section 8.7 as well as the modified
remedies for title guarantees set forth in Section 8.8 and for the
avoidance of doubt, the Parties agree that the Holdback Escrow Amount will
not be available to Purchasers as a whole but only in the relevant
liability portions set forth in Section 8.5, i.e., the Holdback Escrow
Amount of EUR 10,000,000 (in words: Euro ten million) will only be paid
into one single account for practicality reasons, but not for reasons of
joint liability, so that for purposes of any Purchaser Claim the Holdback
Escrow Amount will be separated into 45 different and separate portions
reflecting the pro-rata amount of the Purchase Price attributable to
Sellers ("PRO-RATA ESCROW AMOUNT"), so that in no event whatsoever, one
Seller would ever be jointly liable for any liability of another Seller or
for more than the portion of his part of the liability set forth in
Section 8.5. However, if the Pro-rata Escrow Amount is already used up by
Purchaser Claims based on a breach of Section 6.1.2 (i) or (ii) in respect
of the EDH Shares or the Krugg Seller Shares or other Purchaser Claims,
the liability of the relevant Seller will not be limited to the Pro-rata
Escrow Amount, but be increased by the amount of the Pro-rata Escrow
Amount which has already been used to satisfy Purchaser Claims based on a
breach of Section 6.1.2 (i) or (ii) in respect of the EDH Shares or the
Krugg Seller Shares.
Example: If the portion of the Holdback Escrow Amount attributable to
Seller 25 was EUR 200,000 and the relevant share sold by Seller 25 under
this Agreement is affected by a title defect triggering a liability of EUR
300,000, Purchasers can only claim EUR 200,000 against the Holdback Escrow
Amount and the remaining EUR 100,000 from Seller 25 directly but only up
to the portion of the Purchase Price attributable to Seller 25. However,
if thereafter another general guarantee set forth in Section 6 is breached
triggering a liability of EUR 1,000,000, Purchasers will only be able to
claim against the Escrow Account the amount recoverable from all Sellers
other than Seller 25, as the relevant portion of the Holdback Escrow
Amount attributable to Seller 25 has already been used up, so that the
remaining liability for all other shareholders will be limited to the
amount of EUR 1,000,000 less a percentage equal to the percentage of the
Holdback Escrow Amount attributable to Seller 25. The remaining amount up
to EUR 200,000 can, however, be claimed directly from the relevant Seller
25.
50
SECTION 9
EXPIRATION OF CLAIMS / LIMITATION OF CLAIMS
9.1 TIME LIMITATIONS. All claims of Purchasers arising under or in connection
with this Agreement shall be time-barred on 30 April 2005 except for
claims of Purchasers pursuant to Section 8.8 or for claims of Purchasers
arising as a result of wilful, fraudulent or intentional breaches of
Sellers' obligations under this Agreement which shall be time barred in
accordance with the statutory rules in Sections 195, 199 German Civil Code
("TIME LIMITATIONS").
9.2 EXCLUSION OF STATUTORY LIMITATION RULES. To the extent legally permissible
Sections 203 and 209 German Civil Code shall not apply. Any limitation
period pursuant to this Agreement shall be interrupted only in the event
that a statement of claims is filed with the arbitral tribunal or
competent court, as the case may be, within the relevant Time Limitations.
9.3 DE MINIMIS AND BASKET. Sellers shall only be liable under or in connection
with this Agreement if and to the extent that: (i) the amount recoverable
under this Agreement with respect to the individual claim made exceeds EUR
100,000 (in words: Euro one hundred thousand) ("DE MINIMIS AMOUNT")
provided, however, that claims which are based on factually coherent
matters (auf demselben Lebenssachverhalt beruhend) can be aggregated and
(ii) the aggregate amount recoverable under this Agreement with regard to
all claims made (excluding claims which do not exceed the De Minimis
Amount in the individual case) exceeds EUR 1,250,000 (in words: Euro one
million two hundred fifty thousand) ("BASKET") i.e., only if both the De
Minimis Amount and the Basket are exceeded, Sellers shall be liable under
this Agreement in the full amount, subject to the other provisions of this
Section 9. The Parties agree that the terms Material Adverse Effect,
material or any similar materiality qualifier in any of the guarantees in
Section 6 will be disregarded for purposes of determining of whether or
not the De Minimis Amount and the Basket are exceeded or reached, as the
case may be.
9.4 LIABILITY CAP. Subject to Section 8.8.2, the aggregate liability of
Sellers for any possible claims under and in connection with this
Agreement shall not exceed EUR 10,000,000 (in words: Euro ten million)
("LIABILITY CAP"), which will be covered by the Holdback Escrow Amount and
cannot be directly claimed from any of the Sellers.
9.5 EXCLUSION OF STATUTORY RIGHTS. The Parties agree that the remedies which
Purchasers, or any of the Companies, may have against Sellers for breach
of obligations set forth in this Agreement are solely governed by this
Agreement, and the remedies provided for in this Agreement shall be the
exclusive remedies available to Purchasers or the Companies. Apart from
the rights of Purchasers under Section 5 above (i) any right of
51
Purchasers to withdraw (zurucktreten) from this Agreement or to require
the winding up of the Transaction (e.g. by way of gro(beta)er
Schadensersatz or Schadenersatz statt der Leistung), (ii) any claims for
breach of pre-contractual obligations (culpa in contrahendo, including
claims arising under Sections 241 Subsec. 2, 311 Subsec. 2 (3) German
Civil Code) or ancillary obligations (positive Forderungsverletzung,
including to claims arising under Sections 280, 282 German Civil Code),
(iii) frustration of contract pursuant to Section 313 German Civil Code
(Storung der Geschaftsgrundlage), (iv) all remedies of Purchaser for
defects of the Sold Assets under Sections 437 through 441 German Civil
Code and (v) any and all other statutory rights and remedies, if any, are
hereby expressly excluded and waived by Purchasers, except for claims for
wilful deceit (arglistige Tauschung) and other intentional breach of
contract (vorsatzliche Vertragsverletzungen). The Parties agree that
Sellers' Guarantees are only designed for the specific remedies of
Purchasers set forth in Section 6 above and the restrictions contained in
this Section 9 and that Sellers' Guarantees shall not serve to provide
Purchasers with any other claims than those set forth in this Agreement.
The Parties further agree that under no circumstances shall Sellers'
Guarantees be construed as representations of Sellers with respect to the
quality of the purchase object within the meaning of Sections 276 Subsec.
1, 443 German Civil Code (Garantie fur die Beschaffenheit der Sache) and
therefore, Purchaser explicitly waives the application of Section 444
German Civil Code.
SECTION 10
SELLERS' COVENANT
SELLERS' COVENANT. Except as set forth in Exhibit 10, during the period between
the Reference Date and the Closing Date and to the extent legally permissible,
10.1 Sellers shall use all reasonable efforts to ensure that the Companies
shall (i) preserve their material customer relationships, (ii) preserve
the Material Assets in good working condition, reasonable wear and tear
excepted.
10.2 Sellers shall undertake and procure that the Companies shall (i) keep the
existing insurance for the EDH Dental Business in place, (ii) maintain
accounting procedures consistent with past practice and (iii) maintain
inventory holding levels substantially consistent with past practice.
10.3 Sellers shall undertake and procure that the Companies shall conduct the
EDH Dental Business in the ordinary course of business and not, except in
the ordinary course of business and consistent with past practice, (i)
adopt any material change in the articles of association of the Companies,
(ii) make any dividend payments or other distributions of such kind to
Sellers or Affiliates of Sellers, (iii) allot, issue, redeem or
52
repurchase any shares of the Companies, (iv) merge or consolidate with any
other person (other than the Companies), (v) make any material capital
expenditure (i.e. exceeding an amount of EUR 2,000,000) (in words: Euro
two million) (unless reflected in the business plan of the EDH Group which
has been disclosed to Purchaser), (vi) enter into any agreements exceeding
a contract value of EUR 500,000 (in words: Euro five hundred thousand) or
with onerous terms, (vi) cancel or waive any claims or rights of a value
exceeding in the individual case EUR 500,000 (in words: Euro five hundred
thousand), (vii) enter into any agreement or arrangement with Sellers or
an Affiliate with Sellers not at arm's length terms, (viii) commence any
litigation with a dispute value (Streitwert) in excess of EUR 250,000 (in
words: Euro two hundred fifty thousand), (ix) shorten or lengthen the
customary payment cycles for any receivables or payables, (x) acquire or
dispose of any material business or (xi) agree in writing to do any of the
foregoing, provided however, that Sellers and any of the Companies may
enter into bonus agreements with any of the Companies' employees and/or
any of their managing directors in an aggregate maximum amount of EUR
1,077,000 (in words: Euro one million seventy seven thousand), which
amounts shall be borne by the Companies and are already reflected in the
Purchase Price ("STAY BONUS ARRANGEMENTS").
SECTION 11
[INTENTIONALLY LEFT BLANK.]
SECTION 12
RESTRICTION OF ANNOUNCEMENT / STAY BONUS / COOPERATION / CONFIDENTIALITY /
NON-COMPETITION AND NON-SOLICITATION / PARENT LIABILITY / JOINT PURCHASER
LIABILITY
12.1 RESTRICTIONS OF ANNOUNCEMENTS. Each of the Parties undertakes that prior
to the Closing Date it will not make an announcement in connection with
this Agreement unless required by applicable mandatory law or stock
exchange regulations or the other Party hereto has given its consent to
such announcement in writing, including the form of such announcement,
which consents may not be unreasonably withheld and may be subject to
conditions. If and to the extent any announcement or disclosure of
information regarding the subject matter of this Agreement is to be made
under applicable mandatory laws, in particular any applicable stock
exchange regulations, the Party being concerned shall not disclose any
such information without prior consultation with the other Party.
12.2 STAY BONUS. Purchasers acknowledge the Stay Bonus Arrangements (as defined
in Section 10.3) made or to be made to certain of the managing directors
and/or
53
employees of the EDH Group. If and to the extent that the Stay Bonus
Arrangements should not have been validly made by any of the Companies,
Purchasers agrees to provide for such payments to be effected in its own
name as if such promises had been validly made by Purchaser itself under
full discharge of the original debtors.
12.3 COOPERATION. Upon and after the Closing Date, Sellers and Purchasers shall
each use their reasonable best efforts to execute and deliver or procure
to be done, executed and delivered all such further acts, deeds,
documents, instruments of conveyance, assignment and transfer and things
as may be reasonably necessary to implement the terms of this Agreement.
12.4 CONFIDENTIALITY. The Parties agree to keep strictly confidential any
information obtained by them in connection with the negotiation and
conclusion of this Agreement with respect to the respective other party
and its Affiliates unless otherwise agreed in writing between the Parties
or required by applicable law.
12.5 CONFIDENTIALITY WAIVER. Each Party authorises every other Party (and each
employee, representative or other agent of every other Party) to disclose
to any and all persons, without limitation of any kind, the U.S. federal
income tax treatment and tax structure of the Transaction and all
materials of any kind (including opinions or other tax analyses) that are
provided to such party related to such tax treatment and tax structure.
12.6 NON-COMPETITION/ NON-SOLICITATION MAUSER AND FARK. ▇▇. ▇▇▇▇ Mauser and ▇▇.
▇▇▇▇▇▇ Fark of Permira Beteiligungsberatung GmbH have entered into the
non-competition and non-solicitation agreement with Purchaser attached
hereto as Exhibit 12.6 ("NON-COMPETITION / NON-SOLICITATION AGREEMENT").
The Parties expressly agree that none of the Sellers shall be subject to
any kind of non-competition obligation or non-solicitation obligation with
respect to any employees / managing directors of any of the Companies.
Sellers will reimburse all reasonable costs incurred by Gotz Mauser and
▇▇▇▇▇▇ Fark under or in connection with the Non-competition /
Non-solicitation Agreement, including in particular any reasonable
lawyer's fees for defending any claims raised by Purchaser against Gotz
Mauser and ▇▇▇▇▇▇ Fark, to the extent such claims are not validly based on
wilful misconduct on the part of Gotz Mauser and ▇▇▇▇▇▇ Fark. This
obligation shall constitute an agreement for the benefit of third parties
(echte Vereinbarung zugunsten Dritter) within the meaning of Section 328
of the German Civil Code. No obligations shall attach to Purchasers in
respect of Gotz Mauser and ▇▇▇▇▇▇ Fark.
12.7 PARENT LIABILITY. ▇▇▇▇▇ ▇▇▇▇▇▇ will be jointly liable for any and all
obligations of Purchaser under or in connection with this Agreement, even
in case of a transfer of rights and obligations pursuant to Section 14.4.
54
12.8 JOINT PURCHASERS' LIABILITY. All Purchasers will be jointly liable for any
and all obligations of any Purchaser under or in connection with this
Agreement, even in case of a transfer of rights and obligations pursuant
to Section 14.4.
SECTION 13
NOTICES / EXERCISE OF RIGHTS
13.1. NOTICES. All notices and other communications hereunder shall be made in
writing and shall be delivered or sent by registered mail or courier to
the addresses below or to such other addresses which may be specified by
any Party to the other Parties in the future in writing:
If to Sellers:
Freshfields Bruckhaus ▇▇▇▇▇▇▇▇
▇▇. ▇▇▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇
▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇ ▇▇▇▇
▇▇▇▇▇▇▇
with a copy to:
▇▇▇▇▇▇▇▇ Chance
▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇-▇
▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇
If to Purchaser:
▇▇▇▇▇ ▇▇▇▇▇▇, Inc.
Attn.: General Counsel
▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
▇▇▇
55
with a copy to:
▇▇▇▇▇ & ▇▇▇▇▇▇▇▇
Attn.: ▇▇. ▇▇▇▇▇ ▇. ▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇
▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇
13.2 EXERCISE OF RIGHTS. Any statements, declarations and notices of Sellers
under or in connection with this Agreement as well as the Escrow Agreement
may be validly made or given only by ▇▇. ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ (with the address
set forth in Section 13.1) on behalf of all Sellers and Sellers hereby
authorize ▇▇. ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ (with the address set forth in Section 13.1)
to act in their name and on their behalf in making such statements,
declarations and giving such notices. The same shall apply to the exercise
of any rights by Sellers under or in connection with this Agreement.
13.3 SETTLEMENT OF PURCHASER CLAIMS. Sellers hereby appoint ▇▇. ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
(with the address set forth in Section 13.1) ("APPOINTEE") to act in their
name and on their behalf to negotiate, accept, compromise, admit to settle
any Purchaser Claims arising out of or in connection with this Agreement,
provided that this Section shall only apply (a) to Purchaser Claims other
than in respect of a breach of Sections 6.1.2 (i) and (ii), unless the
relevant defect on which the Purchaser Claims is based extends to all
Shareholders, and (b) to Purchaser Claims in respect of which the Time
Limitations have not yet expired, it being understood that in respect of
Purchaser Claims based on a breach of Sections 6.1.2 (i) and (ii) and
extending to all Sellers (as set forth in Section 13.3 (a)), the Time
Limitations of Section 9.1 (and not the extended time limitation set forth
in Section 8.8.3) will apply for purposes of this Section 13.3 (b). Any
termination of such appointment is valid only if (a) made in writing and
(b) if at the same time a new appointee is notified to the Purchaser.
Sellers will pay to the Appointee all reasonable fees for Appointee's
services and expenses incurred by Appointee. This obligation shall
constitute an agreement for the benefit of third parties (echte
Vereinbarung zugunsten Dritter) within the meaning of Section 328 of the
German Civil Code. Any liability of the Appointee shall be limited to
gross negligence (▇▇▇▇▇ Fahrlassigkeit) and wilful misconduct (Vorsatz)
only.
SECTION 14
MISCELLANEOUS
14.1 FEES / COSTS / EXPENSES. All expenses, costs, fees and charges in
connection with the Transactions including legal services, shall be borne
by the Party commissioning the respective costs, fees and charges, in
particular, the Companies shall not bear any
56
costs for lawyers, accountants, investment bankers and other advisors
advising Sellers' in relation to the Transaction to the extent not already
paid before the Economic Transfer Date. All notarial fees incurred with
the notarisation of this Agreement and the agreements to be executed to
implement the Transactions as well as all official fees charged by the
cartel authorities in connection with the merger clearances required under
this Agreement shall be borne by Purchasers. Purchasers shall also be
responsible for the payment of any sales, transfer or stamp taxes, or
other similar charges, payable by reason of the Transaction.
14.2 EXHIBITS AND SCHEDULES. All Exhibits and Schedules to this Agreement
constitute an integral part of this Agreement and any reference to this
Agreement includes this Agreement and its Exhibits as a whole. The
disclosure of, or reference to, any matter in this Agreement (including
any Exhibit and Schedule thereto) shall be deemed to be a disclosure.
14.3 ENTIRE AGREEMENT. This Agreement (including all Exhibits and Schedules
hereto) comprises the entire agreement between the Parties concerning the
subject matter hereof and supersedes and replaces all oral and written
declarations of intention made by the Parties in connection with the
contractual negotiations except for the Confidentiality Agreement dated 11
September 2003. Changes or amendments to this Agreement (including this
Section 14.3) must be made in writing by the Parties or in any other
legally required form, if so required.
14.4 NO ASSIGNMENT. No Party shall be entitled to assign any rights,
obligations or claims under this Agreement without the prior written
consent of the other Party provided that the Purchasers may assign all
rights and obligations under this Agreement to an Affiliate of the
Purchasers without the express consent of the Sellers which is hereby
granted, provided however that Purchasers will in any event remain jointly
liable for all obligations of the relevant assignee under and in
connection with this Agreement.
14.5 INTEREST DAYS. Interest payable under any provision of this Agreement
shall be calculated on the basis of actual days elapsed divided by 365.
14.6 BUSINESS DAYS. "BUSINESS DAYS" shall be the days on which banks are open
for business in Frankfurt am Main, Germany.
14.7 NO THIRD PARTY RIGHTS. This Agreement shall not grant any rights to, and
is not intended to operate for, the benefit of third parties unless
otherwise explicitly provided for herein.
14.8 HEADINGS. The headings in this Agreement are inserted for convenience only
and shall not affect the interpretation of this Agreement; where a German
term has been
57
inserted in quotation marks and/or italics it alone (and not the English
term to which it relates) shall be authoritative for the purpose of the
interpretation of the relevant English term in this Agreement.
14.9 SET-OFF / RETENTION. No Party, except as provided otherwise herein, shall
be entitled (i) to set-off (aufrechnen) any rights and claims it may have
against any rights or claims the other Party may have under this Agreement
or (ii) to refuse to perform any obligation it may have under this
Agreement on the grounds that it has a right of retention
(Zuruckbehaltungsrecht) unless the rights or claims of the relevant Party
claiming a right of set-off (Aufrechnung) or retention (Zuruckbehaltung)
have been acknowledged (anerkannt) in writing by the relevant other
Party/Parties or have been confirmed by final decision of a competent
court (Gericht) or arbitration court (Schiedsgericht).
14.10 GOVERNING LAW / ARBITRATION. This Agreement shall be governed by, and be
construed in accordance with, the laws of the Federal Republic of Germany,
excluding the principles of conflicts of laws and the UN Convention on the
Sale of Goods. All disputes arising under or in connection with this
Agreement or its validity shall be finally settled in accordance with the
arbitration rules set forth in Section 15.
14.11 SEVERABILITY. In the event that one or more provisions of this Agreement
shall, or shall be deemed to, be invalid or unenforceable, the validity
and enforceability of the other provisions of this Agreement shall not be
effected thereby. In such case, the Parties hereto agree to recognise and
give effect to such valid and enforceable provision or provisions which
correspond as closely as possible to the commercial intent of the Parties.
The same shall apply in the event that the Agreement contains any
loopholes (Vertragslucken).
14.12 EURO. Any reference to EUR shall mean Euro, the currency of the European
Union. For the purpose of any disclosure thresholds in the representations
and warranties, such reference shall include the equivalent in any foreign
currency at the exchange rate officially determined in Frankfurt am Main,
Germany, on the Signing Date.
14.13 INTERPRETATIONS. Words such as "hereof" or "hereunder" refer (unless
otherwise required by the context) to this Agreement as a whole and not to
a specific provision of this Agreement. The term "including" shall mean
"including, without limitation" and the term "in particular" shall mean
"in particular, without limitation".
SECTION 15
ARBITRATION PROCEEDINGS
58
15.1 COMPETENCE OF THE ARBITRAL TRIBUNAL. All disputes arising out of or in
connection with the Share Purchase Agreement or its validity shall be
finally settled in accordance with the Arbitration Rules of the German
Institution for Arbitration e.V. ("DIS RULES") without recourse to the
ordinary courts of law. Where this Section 15 deviates from the DIS Rules,
this Section 15 shall prevail; where this Section 15 is silent, the DIS
Rules apply.
15.2 PLACE AND LANGUAGE OF THE ARBITRATION. The place of arbitration is
Zurich/Switzerland. The language of the arbitration proceedings is
English. However, no party shall be obliged to submit translations of
documents drafted in the German language.
15.3 APPLICABLE LAW. The arbitral tribunal ("ARBITRAL TRIBUNAL") shall apply
the substantive law as provided in this Agreement.
15.4 COMPOSITION OF THE ARBITRAL TRIBUNAL. The Arbitral Tribunal shall consist
of three arbitrators:
15.4.1 if there are only two parties to the arbitration proceedings, each
party shall nominate one arbitrator. The two arbitrators nominate a
chairman of the Arbitral Tribunal;
15.4.2 several claimants shall nominate one arbitrator jointly; several
respondents shall nominate one arbitrator jointly;
15.4.3 if the arbitration proceedings are not brought by all Sellers or
Purchasers against all Purchasers or Sellers, respectively, the
claimant(s) shall notify all other Parties of the submission of the
statement of claim by registered mail including a copy of such
statement of claim and request that those of them who wish to join
the arbitration proceedings declare such joining and whether they
wish to join on the claimants' or respondents' side, by registered
mail to the parties to the arbitration proceedings (with a copy to
the DIS and with advance fax to all recipients) within two weeks of
receipt. Claimant(s) and respondent(s) will not nominate
arbitrators before the elapse of the above two week period, at the
earliest three weeks from the dispatching of the last of such
notifications by the claimant(s). Parties who declare their joining
to the arbitration proceedings prior to the expiration of this
deadline have to nominate an arbitrator jointly with the party or
parties on whose side they join.
15.5 SUBSEQUENT JOINING. Parties who have not joined the arbitration
proceedings within the deadline provided under Section 15.4.3 do not take
part in the arbitration proceedings. However, they remain entitled to join
the arbitration proceedings on the side of
59
either claimant(s) or respondent(s). In case of a subsequent joining, they
have to accept the composition of the Arbitral Tribunal and the state of
the proceedings at the time of their joining.
15.6 REIMBURSEMENT OF ATTORNEYS' FEES. Several claimants and respondents as
well as Parties joining the arbitration proceedings on either side shall
appoint the same attorney to act for them in the proceedings. If several
claimants or respondents cannot agree on joint representation by the same
attorney, they shall - if they prevail in the arbitration - only be
jointly entitled to reimbursement of attorneys' fees in the amount of fees
they would have incurred in case of joint representation. A joining Party
who appoints a different attorney shall not be entitled to reimbursement
of attorneys' fees. This does not apply in case the attorney acting for
the party on whose side the joining Party intends to join the arbitration
proceedings is prevented from acting for such joining Party due to a
conflict of interest as defined by mandatory German bar rules. In such
case, the joining Contract Party will be entitled to full reimbursement of
its attorneys' fees.
15.7 PROCEDURAL ACTS OF JOINING PARTY. A Party joining the arbitration
proceedings may bring factual submissions in support of or in defence
against a claim and other procedural acts insofar as such declarations or
acts do not contradict declarations or acts of the party or parties on
whose side such Party joined.
15.8 BINDING EFFECT OF AWARD. The Arbitral Tribunal's findings of facts and
law, that do not exclusively concern the relationship between one or
several claimants on the one hand and one or several respondents on the
other hand, but also establish a basis for claims in relation between
other Parties, become binding on all Parties properly notified of the
initiation of the arbitration proceedings regardless of their joining the
arbitration proceedings. In subsequent disputes with other Parties, a
Party who knew of the initiation of the arbitration proceedings is
precluded from relying on the submission that the arbitration proceedings
were decided erroneously or that one of the parties to the arbitration
proceedings misconducted the proceedings. No Party shall be precluded from
relying on grounds to vacate an award in accordance with Sec. 1059 of the
German Code of Civil Procedure (ZPO).
15.9 LIMITATION PERIOD. The Parties agree that the initiation of in arbitration
proceedings expiration of the Limitation Period interrupts the running of
the Limitation Periods in relation to the relevant Purchaser Claim and
also all other Parties regardless of whether such other Parties are
parties to or join the arbitration proceedings. If Parties not
participating in the arbitration proceedings but on whom the award will
have a binding effect pursuant to Section 15.8, the limitation period is
interrupted (gehemmt) from the initiation of the arbitration proceedings
until four (4) months after receipt of the award by registered mail. The
same applies if the arbitration proceedings are
60
terminated by order of the arbitral tribunal or by the DIS Secretariat in
accordance with Sec. 39 of the DIS Rules.
SECTION 16
EXHIBITS / DISCLOSURE SCHEDULES / DEFINITIONS
16.1 EXHIBITS / DISCLOSURE SCHEDULES
Exhibit A Corporate Chart
Exhibit 3.3 Consent for Transfer of Shareholder Loans
Exhibit 4.3 Purchase Price Allocation
Exhibit 5.4.9 Assignment of EDH Shares
Exhibit 5.4.10 Assignment of Krugg Seller Share
Exhibit 5.4.11 Transfer of Shareholder Loans
Exhibit 6.1 Sellers,Guarantees
Exhibit 6.1 (iv) Sellers' Knowledge
Schedule 6.1.2 Ownership of Shares
Schedule 6.1.3 Articles of Association and By-laws
Schedule 6.1.4 Supervisory and Advisory Boards
Schedule 6.1.6 Affiliates/Enterprise Agreements
Schedule 6.1.8 Intellectual Property Rights
Schedule 6.1.9 Insurances
Schedule 6.1.10 Material Assets
Schedule 6.1.11 Material Agreements
Schedule 6.1.12 Governmental Approval, Licences and Permits
Schedule 6.1.13 Litigation
Schedule 6.1.14 Shop Agreements
Schedule 6.1.15 Labor Strikes and Violation of Laws
Schedule 6.1.16 Tax Matters
Schedule 6.1.17 Financial Statements 2002 and 2003
Schedule 6.1.18 Material Adverse Changes
Schedule 6.1.19 Dealings with Sirona Group
Exhibit 8.3.5 Data Room Index
Exhibit 8.3.5 (ii) Written Answers to Information Requests
Exhibit 12.2 Stay Bonus
Exhibit 12.6 Non-competition / Non-solicitation Agreement
Exhibit 14.10 Arbitration Agreement
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16.2 DEFINITIONS
The capitalized terms used in this agreement are defined in the following
Sections and clauses:
Agreement Preamble B
Affiliates Section 6.1.6
Assumed Bank Debt Section 2.4
Bank Debt Section 2.2.4
Basket Section 9.3
Beneficiaries Section 11
Business Days Section 14.6
Closing Section 5.4
Closing Actions Section 5.4
Closing Condition Section 5.2
Closing Date Section 5.1.3
Closing Date Section 5.4
Companies Section 1.4
Company Section 1.4
De Minimis Amount Section 9.3
Debt Assumption Request Section 2.4
Demedis Preamble C
Demedis Group Preamble C
Demedis Call Option Agreement Preamble C
DentraNet Section 1.3.3
DentraNet Share Section 1.3.3
Direct Shares Section 1.3.3
Direct Subsidiary Section 1.3.3
Direct Subsidiaries Section 1.3.3
Down Payment Section 4.3a
Down Payment Date Section 4.3a
Down Payment Escrow Amount Section 4.3.a
Economic Transfer Date Section 5.1.1
EDH Preamble A
EDH Dental Business Preamble A
EDH Group Preamble A
EDH Sellers Preamble 1.
EDH Senior Facility Section 2.2.1
EDH Senior Facility Agreement Section 2.2.1
EDH Senior Facility Amount Section 2.2.1
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EDH Senior Facility Repayment Amount Section 2.3.1
EDH Senior Lenders Section 2.2.1
EDH Senior Lenders' Account Section 5.4.2
EDH Share Section 1.1
Environmental Laws Section 6.1.23
Environmental Investigation Section 6.1.23
Escrow Account Section 5.4.2
Escrow Agent Section 4.6
Escrow Agreement Section 4.10
Financial Statements 2002 and 2003 Section 6.1.17
Guarantee Confirmation Section 5.4.17
GWB-Filing Section 5.2.1
Holdback Escrow Amount Section 4.2
Indirect Shares Section 1.4
Indirect Subsidiaries Section 1.4
Intellectual Property Rights Section 6.1.8
Payment Amount Section 4.2
IT Section 6.1.8
Key Employees Section 6.1.23
Krugg Section 1.2
Krugg Facilities Section 2.2.5
Krugg Facility Agreements Section 2.2.5
Krugg Facility Amount Section 2.2.5
Krugg Facility Repayment Amount Section 2.3.5
Krugg Lenders Section 2.2.5
Krugg Lenders' Account Section 5.4.6
Krugg Seller Preamble 2.
Krugg Seller Shares Section 1.2
Krugg Share Pledge Section 5.9
Krugg Share Pledge Agreement Section 5.9.6
Krugg Share Transfer Section 5.9.4
Krugg Share Transfer Date Section 5.9 6
Liability Cap Section 9.4
M + W Beteiligung Section 1.3.1
M + W Beteiligung Share Section 1.3.1
M + W KG Section 1.4.1 (ii)
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M + W Verwaltung Section 1.4.1 (i)
MAC Section 5.5.3
MAC Withdrawal Section 5.5.2 (i)
Material Adverse Effect Section 6.1 (vii)
Material Agreements Section 6.1.11
Material Assets Section 6.1.10
Material Permits Section 6.1.12
Mezzanine Facility I Section 2.2.2
Mezzanine Facility II Section 2.2.3
Mezzanine Facility III Section 2.2.4
Mezzanine Facility Amount I Section 2.2.2
Mezzanine Facility Amount II Section 2.2.3
Mezzanine Facility Amount III Section 2.2.4
Mezzanine Facility I Repayment Amount Section 2.3.2
Mezzanine Facility II Repayment Amount Section 2.3.3
Mezzanine Facility III Repayment Amount Section 2.3.4
Mezzanine Lender I Section 2.2.2
Mezzanine Lender II Section 2.2.3
Mezzanine I Lender's Account Section 5.4.3
Mezzanine II Lender's Account Section 5.4.4
Mezzanine Loan Agreement I Section 2.2.2
Mezzanine Loan Agreement II Section 2.2.3
Mezzanine Loan Agreement III Section 2.2.4
Net Equity Section 5.5.1 (i) (a)
Non-competition / Non-solicitation Agreement Section 12.6
Non MAC Withdrawal Section 5.5.2 (ii)
Parties Preamble
Party Preamble
Payment Guarantee Section 4.12
Pension Commitments Section 6.1.23
Pro-rata Escrow Amount Section 8.9
Purchase Price Section 4.1
Purchase Price Interest Section 4.3
Purchaser Preamble
Purchaser Claim Section 8.2
Reference Date Section 5.1.4
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Seller Preamble 3.
Sellers Preamble 3.
Sellers' Account Section 4.7
Sellers' Knowledge Section 6.1 (vi)
Sellers' Knowledge Individuals Section 6.1. (vi)
Shareholder Lenders Section 2.2
Shareholder Loan Agreement Section 2.1
Shareholder Loans Section 2.1
Shares Section 1.4
Signing Date Section 5.1.2
Sold Assets Section 3.1
Sustainable Operating Profits Section 5.5.1 (ii)
Taxes Section 6.1.16
Third Party Claim Section 8.4
Tax Returns Section 8.3.8 (iv)
Time Limitations Section 9.1
Transaction Section 5.2