Attached files
| file | filename |
|---|---|
| EX-4.1 - FORM OF WARRANT - SCIENTIFIC INDUSTRIES INC | finalwarrantform.htm |
| EX-4.2 - REGISTRATION RIGHTS AGREEMENT BY AND AMONG THE COMPANY AND THE INVESTORS - SCIENTIFIC INDUSTRIES INC | finalregrightsform.htm |
| EX-10.3 - PURCHASE AGREEMENT BY AND AMONG THE COMPANY AND THE INVESTORS - SCIENTIFIC INDUSTRIES INC | finalspaform.htm |
| EX-99 - ADDITIONAL EXHIBITS - SCIENTIFIC INDUSTRIES INC | scnd_newboardmemberpressr.htm |
| EX-10.2 - FORM OF SERVICE AGREEMENT - SCIENTIFIC INDUSTRIES INC | directorserviceagreement.htm |
| EX-99 - ADDITIONAL EXHIBITS - SCIENTIFIC INDUSTRIES INC | scndaquiresaquilabiolabsp.htm |
| 8-K - 8-K - SCIENTIFIC INDUSTRIES INC | a8kaquila-1.htm |
28 APRIL 2021
AGREEMENT ON THE SALE AND TRANSFER OF ALL SHARES IN
AQUILA BIOLABS GMBH
(Vertrag über den Kauf und die Abtretung aller
Geschäftsanteile an der
aquila biolabs GmbH)
between
JENS BAYER
KONRAD HERZOG
DAVID FRANK
DANIEL GRÜNES
SEED FONDS II FÜR DIE REGION AACHEN GMBH & CO.
KG
KFW ANSTALT DES ÖFFENTLICHEN RECHTS
SCIENCE HOLDING GMBH
PROF. DR. ROBERT HUBER
as
Sellers
and
SCIENTIFIC BIOPROCESSING HOLDINGS, INC.
as
Buyer
STRICTLY PRIVATE AND CONFIDENTIAL
CONTENTS
CLAUSE PAGE
1.
Defined Terms and
Interpretation 7
2.
Sale and Transfer of
Shares 12
3.
Sale and Transfer of Convertible Loan
Receivables 14
4.
Purchase Price 16
5.
No Leakage 16
6.
Payment of Purchase Price;
Escrow 19
7.
Closing 20
8.
Right to Rescind 21
9.
Sellers' Warranties 21
10.
Breach of Sellers'
Warranties 35
11.
Limitation of Sellers'
Liability 36
12.
Taxes 40
13.
Buyer's Warranties 40
14.
Buyer's Covenants 42
15.
Non-Compete,
Non-Solicitation 42
16.
Cooperation 43
17.
Payments; No Set-off or Retention; Default
Interest 43
18.
Costs and Expenses 44
19.
Confidentiality,
Announcements 45
20.
Notices and
Communications 47
21.
Language 48
22.
Amendment or Variation 49
23.
Sellers' Declaration of
Approval 49
24.
Power of Attorney in Favour of Buyer and
Sellers 49
25.
Severance 50
26.
Entire Agreement 50
27.
Miscellaneous 51
28.
Governing Law and
Jurisdiction 51
THIS AGREEMENT ("Agreement") is dated 26 April 2021
("Signing Date") and
made
BETWEEN:
–
referred to as "Seller 1" –
(2)
Mr Konrad Herzog, born 26 March 1988,
resident at An Gut
Forensberg 2A, 52134 Herzogenrath, Germany
–
referred to as "Seller 2" –
(3)
Mr David Frank, born 28 October 1987,
resident at Martin-Niemöller-Straße 6, 52134
Herzogenrath, Germany
–
referred to as "Seller 3"
–
(4)
Mr Daniel Grünes, born 17 December
1987, resident at Scheffelstraße 13, 50935
Cologne, Germany
–
referred to as "Seller 4"
–
(1)
Seed Fonds II für die Region Aachen GmbH
& Co. KG, a limited partnership registered with the
Local Court (Amtsgericht)
of Aachen under registration number HRA 8071, with its registered
office address at Markt 45-47, 52062 Aachen, Germany
–
referred to as "Seller 5"
–
(2)
KfW Anstalt des öffentlichen
Rechts, a public institution with its registered office
address at Ludwig-Erhard-Platz 1, 53179 Bonn, Germany
–
referred to as "Seller 6"
–
(3)
Science Holding GmbH, a limited
liability company registered with the Local Court (Amtsgericht) of Munich under
registration number HRB 226852, with its registered office address
at Wartaweil 14, 82211 Herrsching am Ammersee, Landkreis Starnberg,
Germany
–
referred to as "Seller 7"
–
–
referred to as "Seller 8"
–
and
–
referred to as "Buyer"
–
Seller 1 to
Seller 8 are also referred to collectively as the
"Sellers" and each as a
"Seller", the Sellers and
the Buyer are also referred to collectively as the "Parties" and individually as a
"Party".
BACKGROUND
(A)
The Sellers are
the sole shareholders of aquila biolabs GmbH, a German limited
liability company registered with the Local Court (Amtsgericht) of Aachen under
registration number HRB 19240, with its registered office
address at Arnold-Sommerfeld-Ring 2, 52499 Baesweiler, Germany
("Company"), further details
of which are set out in Exhibit (A).
The registered share capital of the Company amounts to
EUR 58,480.00 (in words: fifty-eight thousand four hundred and
eighty Euro) and is divided into 58,480 shares with a nominal
amount of EUR 1.00 (in words: one Euro) each.
a)
Seller 1 holds
6,250 (in words: six thousand two hundred and fifty) shares
(consecutive numbers No. 1 to 6,250) with a nominal value of EUR
1.00 (in words: one Euro) each, amounting to a share capital in the
total nominal amount of EUR 6,250.00 (in words: six thousand
two hundred and fifty Euro) (together: "Seller 1 Shares"). Accordingly, Seller
1's participation quota in the Company's entire share capital
amounts to 10.6875%;
b)
Seller 2 holds
6,250 (in words: six thousand two hundred and fifty) shares
(consecutive numbers No. 6,251 to 12,500) with a nominal value of
EUR 1.00 (in words: one Euro) each, amounting to a share
capital in the total nominal amount of EUR 6,250.00 (in words:
six thousand two hundred and fifty Euro) (together: "Seller 2 Shares"). Accordingly, Seller
2's participation quota in the Company's entire share capital
amounts to 10.6875%;
c)
Seller 3 holds
6,250 (in words: six thousand two hundred and fifty) shares
(consecutive numbers No. 12,501 to 18,750) with a nominal value of
EUR 1.00 (in words: one Euro) each, amounting to a share
capital in the total nominal amount of EUR 6,250.00 (in words:
six thousand two hundred and fifty Euro) (together: "Seller 3 Shares"). Accordingly, Seller
3's participation quota in the Company's entire share capital
amounts to 10.6875%;
d)
Seller 4 holds
6,250 (in words: six thousand two hundred and fifty) shares
(consecutive numbers No. 18,751 to 25,000) with a nominal value of
EUR 1.00 (in words: one Euro) each, amounting to a share
capital in the total nominal amount of EUR 6,250.00 (in words: six
thousand two hundred and fifty Euro) (together: "Seller 4 Shares"). Accordingly, Seller
4's participation quota in the Company's entire share capital
amounts to 10.6875%;
e)
Seller 5 holds
7,000 (in words: seven thousand) shares (consecutive numbers No.
25,001 to 32,000) with a nominal value of EUR 1.00 each, amounting
to a share capital in the total nominal amount of EUR 7,000.00 (in
words: seven thousand Euro) and 3,944 (in words three thousand nine
hundred forty-four) shares (consecutive numbers No. 47,601 to
51,544) with a nominal value of EUR 1.00 (in words: one Euro) each,
amounting to a share capital in the total nominal amount of EUR
3,944.00 (in words: three thousand nine hundred forty-four
Euro) (together: "Seller 5
Shares"). Accordingly, Seller 5's participation quota in the
Company's entire share capital amounts to a total of
18.71424%;
f)
Seller 6 holds
7,000 (in words: seven thousand) shares (consecutive numbers No.
32,001 to 39,000) with a nominal value of EUR 1.00 each, amounting
to a share capital in the total nominal amount of EUR 7,000.00 (in
words: seven thousand Euro) and 3,944 (in words three thousand nine
hundred forty-four) shares (consecutive numbers No. 51,545 to
55,488) with a nominal value of EUR 1.00 (in words: one Euro) each,
amounting to a share capital in the total nominal amount of EUR
3,944.00 (in words: three thousand nine hundred forty-four
Euro) (together: "Seller 6
Shares"). Accordingly, Seller 6's participation quota in the
Company's entire share capital amounts to a total of
18.71424%;
g)
Seller 7 holds
8,000 (in words: eight thousand) shares (consecutive numbers No.
39,001 to 47,000) with a nominal value of EUR 1.00 (in words: one
Euro) each, amounting to a share capital in the total nominal
amount of EUR 8,000.00 (in words: eight thousand Euro) and 2,992
(in words two thousand nine hundred ninety-two) shares (consecutive
numbers No. 55,489 to 58,480) with a nominal value of EUR 1.00
each, amounting to a share capital in the total nominal amount of
EUR 2,992.00 (in words: two thousand nine hundred
ninety-two Euro) (together: "Seller
7 Shares"). Accordingly, Seller 7's participation quota in
the Company's entire share capital amounts to a total of 18.79632%;
and
h)
Seller 8 holds 600
(in words: six hundred) shares (No. 47,001 to 47,600) with a
nominal value of EUR 1.00 (in words: one Euro) each, amounting to a
share capital in the total nominal amount of EUR 600.00 (in words:
six hundred Euro) (together: "Seller 8 Shares"). Accordingly, Seller
8's participation quota in the Company's entire share capital
amounts to 1.026%.
(C)
On 23/25 April
2020, the Company and the Sellers entered into a convertible loan
agreement and subsequently into a prolongation agreement relevant
thereto ("Convertible Loan
Agreement") as set out in Exhibit (C),
based on which Seller 5, Seller 6 and Seller 7 each
granted convertible loans to the Company.
a)
Seller 5 has
outstanding receivables (including any accrued interest) against
the Company under the Convertible Loan Agreement in the amount of
EUR 364,661.64 (in words: threehundred sixty-four thousand
sixhundred sixty-one Euro and sixty-four Eurocent);
b)
Seller 6 has
outstanding receivables (including any accrued interest) against
the Company under the Convertible Loan Agreement in the amount of
EUR 364,437.50 (in words: threehundred sixty-four thousand
fourhundred thirty-seven Euro and fifty Eurocent);
c)
Seller 7 has
outstanding receivables (including any accrued interest) against
the Company under the Convertible Loan Agreement in the amount of
EUR 105,017.81 (in words: onehundred five thousand seventeen
Euro and eighty-one Eurocent).
(E)
The Companies are
active in the business of development, production, marketing and
sale of devices, equipment and software for the analysis,
evaluation and control of fermentation and cell culture processes,
as well as advising companies on the development and optimisation
of such processes ("Business").
(G)
None of the
Companies own any real property.
NOW IT IS AGREED as follows:
1.1
Definitions
In this
Agreement each of the terms listed below has the meaning given to
it directly below or in the part of this Agreement identified
opposite to such term:
|
"Affiliate"
|
Shall
mean affiliated companies in the meaning of §§ 15 et seq.
of the German Stock Corporation Act (AktG) and shall have an equivalent
meaning if the Recipient and/or any of its affiliates are subject
to the laws of a foreign jurisdiction; with respect to
Seller 5 and Seller 6, the term Affiliate shall not
include any portfolio companies.
|
|
"Applicable
Period"
|
Clause
15.1
|
|
"Agreement"
|
Introductory
Section
|
|
"AO"
|
Clause 9.3(c)
|
|
"Authority"
|
Clause 1.2(i)
|
|
"Business"
|
Background
Paragraph (E)
|
|
"Business
Day"
|
Clause 1.2(j)
|
|
"Buyer"
|
Introductory
Section (5)
|
|
"Buyer's
Knowledge"
|
Clause 13.3
|
|
"Buyer's
Warranty/ies"
|
Clause 13.1
|
|
"Civil
Code"
|
Shall
mean Bürgerliches
Gesetzbuch
|
|
"Claim"
|
Clause 1.1.1
|
|
"Closing"
|
Clause 7.1
|
|
"Closing
Actions"
|
Clause 7.2
|
|
"Closing
Date"
|
Clause 7.1
|
|
"Closing
Memorandum"
|
Clause 7.3
|
|
"Company"
|
Background
Paragraph (A)
|
|
"Companies"
|
Background
Paragraph (D)
|
|
"Confidentiality
Agreement"
|
Clause 19.5
|
|
"Convertible
Loan Agreement"
|
Background
Paragraph (C)
|
|
"Data
Room"
|
Clause 11.4(e)(ii)
|
|
"Data
Room Stick"
|
Clause 11.4(e)(ii)
|
|
"Default
Interest"
|
Clause 17.2
|
|
"Effective
Date"
|
Clause 2.1(j)
|
|
"Escrow
Account"
|
Clause 6.3
|
|
"Escrow
Agreement"
|
Clause 6.3
|
|
"Escrow
Amount"
|
Clause 6.2
|
|
"Exclusive
Intellectual Property"
|
Clause 9.3(e)(ii)
|
|
"Fair"
|
Clause 11.4(e)(ii)
|
|
"Financial
Statements 2020"
|
Clause 9.3(a)(i)
|
|
"Fundamental
Warranties"
|
Clause 11.2(a)(i)
|
|
"Information
Technology"
|
Clause 9.3(e)(vi)
|
|
"Insolvency
Code"
|
Shall
mean Insolvenzordnung
|
|
"Intellectual
Property"
|
Clause 9.3(e)(i)
|
|
"Leakage"
|
Clause
5.4
|
|
"Leased
Real Properties"
|
Clause 9.3(d)(ii)
|
|
"Legal
Disputes"
|
Clause 9.3(o)
|
|
"Limitation
Period"
|
Clause (a)
|
|
"Limited
Liability Companies Act"
|
Shall
mean Gesetz betreffend die
Gesellschaften mit beschränkter Haftung
|
|
"Material
Agreements"
|
Clause 9.3(h)(i)
|
|
"Parties"
|
Introductory
Section
|
|
"Party"
|
Introductory
Section
|
|
"Permits"
|
Clause 9.3(k)(i)
|
|
"Permitted
Leakage"
|
Clause 5.5
|
|
"Pre-Effective
Date Tax"
|
Exhibit 12
|
|
"Pre-Effective
Date Tax Period"
|
Exhibit 12
|
|
"Purchase
Price"
|
Clause 4.1
|
|
"Qualified
Claim"
|
Clause 1.1
|
|
"Regulatory
Requirements"
|
Clause 17.1(b)
|
|
"Relevant
Person"
|
Clause 20.3
|
|
"Relevant
Tax Matter"
|
Exhibit 12
|
|
"Relevant
Tax Return"
|
Exhibit 12
|
|
"Representatives"
|
Shall
mean, in relation to any person, its directors, officers,
authorised persons, employees, agents, consultants and professional
advisors.
|
|
"SEC"
|
Shall
mean the United States Securities and Exchange
Commission
|
|
"Seller"
|
Introductory
Section
|
|
"Seller 1",
"Seller 2",
"Seller 3",
"Seller 4",
"Seller 5",
"Seller 6",
"Seller 7",
"Seller 8"
|
|
|
"Seller 1
Shares", "Seller 2
Shares", "Seller 3
Shares", "Seller 4
Shares", "Seller 5
Shares", "Seller 6
Shares", "Seller 7
Shares", "Seller 8
Shares"
|
Background
Paragraph (B)
|
|
"Sellers'
Account"
|
Clause 6.2
|
|
"Sellers'
Knowledge"
|
Clause 1.2(a)
|
|
"Sellers'
Related Party/ies"
|
Clause 5.6
|
|
"Sellers'
Tax Warranty/ies"
|
Exhibit 12
|
|
"Sellers'
Warranty/ies"
|
Clause 9.1
|
|
"Sellers"
|
Introductory
Section
|
|
"Signing
Date"
|
Introductory
Section
|
|
"Sold
CL Receivables"
|
Clause 3.1
|
|
"Sold CL Receivables Seller 5", "Sold CL Receivables Seller 6",
"Sold CL Receivables
Seller 7"
|
|
|
"Sold
Shares"
|
Clause
2.1(h)
|
|
"Sold
Shares Seller 1", "Sold
Shares Seller 2", "Sold
Shares Seller 3", "Sold
Shares Seller 4", "Sold
Shares Seller 5", "Sold
Shares Seller 6", "Sold
Shares Seller 7", "Sold
Shares Seller 8"
|
|
|
"Stock
Corporation Act"
|
Shall
mean Aktiengesetz
|
|
"Subsidiary"
|
Background
Paragraph (D)
|
|
"Tax(es)"
|
Exhibit 12
|
|
"Tax
Authority"
|
Exhibit 12
|
|
"Tax
Benefits"
|
Exhibit 12
|
|
"Tax
Claim Notice"
|
Exhibit 12
|
|
"Tax
Indemnification Claim"
|
Exhibit 12
|
|
"Tax
Returns"
|
Exhibit 12
|
|
"Transaction"
|
Background
Paragraph (F)
|
|
"VAT"
|
Clause 4.3
|
|
"Warranty
Breach"
|
Clause 10.1
|
1.2
Interpretation
(a)
Where any
statement is qualified as being limited by the "Sellers' Knowledge", the statement is
deemed to be given to the actual knowledge (positive Kenntnis) which the persons
identified in Exhibit (a)
had as at the Signing Date or should have had if they were not
acting grossly negligent (grobe
Fahrlässigkeit).
(b)
The table of
contents and headings and sub-headings of this Agreement are for
convenience only and do not affect the construction of this
Agreement.
(c)
Unless the context
requires otherwise, words denoting the singular include the plural
and vice versa and references to any gender include all other
genders. References to any person (which for the purposes of this
Agreement include individuals, bodies corporate, unincorporated
associations, partnerships, governments, governmental agencies and
departments, statutory bodies or other entities, in each case
whether or not having a separate legal personality), include the
person's successors in title and permitted assignees.
(d)
The words "other",
"include", "including" and "in particular" do not connote
limitation in any way.
(e)
References to
recitals, Annexes, Exhibits, clauses and sub-clauses are to
(respectively) recitals to, Annexes to, Exhibits to and clauses and
sub-clauses of this Agreement (unless otherwise specified) and
references within an Annex or Exhibit to paragraphs or annexes
are to paragraphs or annexes of that Annex or Exhibit (unless
otherwise specified).
(f)
Where a German term
has been inserted in italics after an English term, the German term
alone is authoritative for the purpose of interpreting such English
term throughout this Agreement, without regard to any other
interpretation of the English term. If in any jurisdiction other
than the Federal Republic of Germany the meaning and construction
of any English legal term in this Agreement differs from the
meaning and construction of such term under German law, the meaning
and construction under German law prevails, and no reference to any
legal concept under any jurisdiction other than Germany is
construed from the use of any particular English term.
(g)
Unless otherwise
provided for in this Agreement, any reference to "writing" or
"written" includes the text form in accordance with
§ 126b of the Civil Code (Textform).
(h)
References in this
Agreement to dates and times of the day are (unless otherwise
expressly provided) to dates and times in Germany.
(i)
"Authority" means any supranational, EU,
federal, state, municipal, local or other governmental department,
commission, board, bureau, agency or instrumentality, or any
administrative, judicial or arbitration court or panel (for the
avoidance of doubt, including, without limitation, the SEC, the
German Federal Ministry for Economic Affairs and Energy
(Bundeministerium für
Wirtschaft und Energie) and the German Supreme Audit
Institution (Bundesrechnungshof)).
2
SALE
AND TRANSFER OF SHARES
2.1
Sale of all Shares
in the Company
(a)
Seller 1
hereby sells to the Buyer on the terms and subject to the
conditions of this Agreement the Seller 1 Shares and all other
shares it may hold in the Company ("Sold Shares Seller 1") with all
rights and obligations attaching to them as from the current year,
including the rights to any profits or dividends;
(b)
Seller 2
hereby sells to the Buyer on the terms and subject to the
conditions of this Agreement the Seller 2 Shares and all other
shares it may hold in the Company ("Sold Shares Seller 2") with all
rights and obligations attaching to them as from the current year,
including the rights to any profits or dividends;
(c)
Seller 3
hereby sells to the Buyer on the terms and subject to the
conditions of this Agreement the Seller 3 Shares and all other
shares it may hold in the Company ("Sold Shares Seller 3") with all
rights and obligations attaching to them as from the current year,
including the rights to any profits or dividends;
(d)
Seller 4
hereby sells to the Buyer on the terms and subject to the
conditions of this Agreement the Seller 4 Shares and all other
shares it may hold in the Company ("Sold Shares Seller 4") with all
rights and obligations attaching to them as from the current year,
including the rights to any profits or dividends;
(e)
Seller 5
hereby sells to the Buyer on the terms and subject to the
conditions of this Agreement the Seller 5 Shares and all other
shares it may hold in the Company ("Sold Shares Seller 5") with all
rights and obligations attaching to them as from the current year,
including the rights to any profits or dividends;
(f)
Seller 6
hereby sells to the Buyer on the terms and subject to the
conditions of this Agreement the Seller 6 Shares and all other
shares it may hold in the Company ("Sold Shares Seller 6") with all rights
and obligations attaching to them as from the current year,
including the rights to any profits or dividends;
(g)
Seller 7
hereby sells to the Buyer on the terms and subject to the
conditions of this Agreement the Seller 7 Shares and all other
shares it may hold in the Company ("Sold Shares Seller 7") with all
rights and obligations attaching to them as from the current year,
including the rights to any profits or dividends;
(the
Sold Shares Seller 1, the Sold Shares Seller 2, the Sold
Shares Seller 3, the Sold Shares Seller 4, the Sold Shares Seller
5, the Sold Shares Seller 6, the Sold Shares Seller 7 and the Sold
Shares Seller 8 together the "Sold Shares").
(a)
Each of the
Sellers hereby transfers the Sold Shares sold by it to the Buyer
with effect in rem (mit dinglicher
Wirkung) subject to the condition precedent (aufschiebende Bedingung) of the receipt
of the Purchase Price following its payment in accordance with
Clause 6.2.
(c)
The Buyer hereby
accepts all transfers of all shares as set out above.
2.3
Consents
(a)
The respective
spouses of Seller 2, Seller 3, and Seller 8 have
consented (eingewilligt) to
the sale and transfer of the Sold Shares sold by the
respective Seller and all other transactions contemplated under
this Agreement by written declarations, copies of which are
attached hereto as Exhibit (a).
Seller 1 and Seller 4 are not married.
(b)
The shareholders'
meeting of the Company has consented to the sale and transfer of
the Sold Shares to the Buyer and the transactions contemplated by
this Agreement. A copy of the shareholders' resolution is attached
for documentation purposes as Exhibit
(b).
3
SALE
AND TRANSFER OF CONVERTIBLE LOAN RECEIVABLES
(b)
Seller 6
hereby sells to the Buyer on the terms and subject to the
conditions of this Agreement with economic effect (mit wirtschaftlicher Wirkung) as of the
Closing Date any receivables and rights Seller 6 may have
under the Convertible Loan Agreement ("Sold CL Receivables
Seller 6");
(the
receivables and rights sold pursuant to this Clause 3.1 the "Sold
CL Receivables"). The parties confirm that the convertible
loan agreements do not contain a prohibition on the assignment of
the lenders' claims within the meaning of Section 399,
2nd
alternative of the German Civil Code (BGB).
(a)
Each of
Seller 5, Seller 6 and Seller 7 hereby transfers the
Sold CL Receivables sold by it to the Buyer with effect
in rem (mit dinglicher Wirkung) subject to the
condition precedent (aufschiebende
Bedingung) of the receipt of the Purchase Price following
its payment in accordance with Clause 6.2.
(c)
The Buyer hereby
accepts all transfers of all receivables and rights as set out in
this Clause 3.2.
3.3
Termination of the
Convertible Loan Agreement
Prior
to the Closing Date, the parties to the Convertible Loan Agreement
have entered into a termination agreement by which the Convertible
Loan Agreement, except for the claims underlying the Sold CL
Receivables to be sold and transferred under this Agreement, has
been terminated subject to the condition precedent of the
occurrence of Closing.
3.4
Buyer's
Undertakings and Indemnity
(a)
Buyer undertakes
to procure (dafür
einstehen) that, for at least one (1) full year after the
Closing Date, the CL Receivables shall not be repaid by the
Company, in part or in total, to Buyer or to any other person or
entity that acquired (whether by contractual transfer or otherwise)
the CL Receivables. Buyer shall pass on such non-repayment
obligation to any onward (direct or indirect) owner of a
participation in the Companies.
(b)
Buyer shall
indemnify and hold harmless Sellers from and against any and all
losses, liabilities (whether present or future, actual or
contingent), damages and reasonable costs and expenses (including
Taxes, reasonable legal and advisory fees, expenses and
disbursements) arising out of or in connection with any
non-compliance with Clause (a).
4
PURCHASE
PRICE
The
aggregate total purchase price payable by the Buyer to the Sellers
for all Sold Shares and all Sold CL Receivables ("Purchase Price") is:
EUR 6,499,063.34
(in
words: six million four hundred ninety-nine thousand sixty three
Euro and thirty-four Eurocent).
4.2
Payments made by
the Sellers
Any
payment made by any of the Sellers to the Buyer after Closing
pursuant to this Agreement will be considered an agreed reduction
of the Purchase Price.
The
Parties are of the opinion that the transactions contemplated under
this Agreement do not trigger any German value added tax or any
other taxes of similar nature ("VAT" (Umsatzsteuer)) and that the Purchase
Price is a price net of any VAT. The Sellers undertake not to waive
any applicable VAT exemptions. Notwithstanding the foregoing, the
Parties further agree that, if and to the extent the transactions
contemplated in this Agreement are subject to VAT, such VAT shall
be paid by Buyer in addition to the Purchase Price or other payment
under this Agreement (as applicable) within ten (10) Business Days
after Buyer has received from the Sellers an invoice which complies
with the provisions of Sections 14, 14a German VAT Code
(Umsatzsteuergesetz) (or
applicable provisions in other jurisdictions). Any interest,
penalties or similar charges levied on, or in connection with, VAT,
if any, shall be borne by Buyer.
5.1
Each Seller
hereby warrants as an individual debtor (als Einzelschuldner) (in the form of
independent warranties (selbständige Garantieversprechen)
pursuant to § 311 (1) of the Civil Code) that in the period
from (and including) the Effective Date and up to (and including)
the Signing Date, no Leakage, other than Permitted Leakage, has
occurred with respect to such Seller which has not been remedied at
the costs of the Sellers prior to or on the Signing Date, or will
not have been remedied at the costs of the Sellers prior to the
Closing Date.
5.2
Each Seller
hereby undertakes as an individual debtor (als Einzelschuldner) to procure
(dafür einstehen) that
in the period after (and excluding) the Signing Date and up to (and
including) the Closing Date, no Leakage, other than Permitted
Leakage, will occur with respect to such Seller without the
Buyer’s prior written consent.
5.3
Remedies
(a)
Subject to the
occurrence of Closing, in case of any breach or incorrectness of
the warranties or undertakings given in Clauses 5.1 and 5.2 by a
Seller, such Seller as an individual debtor (als Einzelschuldner) and under
exclusion of any joint and several as well as partial liability
(unter Ausschluss der Gesamt- und
Teilschuld), will compensate the Buyer for any Leakage
(other than Permitted Leakage) directly resulting from such breach
or incorrectness and any Tax resulting from such Leakage, if and to
the extent levied upon the Companies, however net of any actual
monetary gain or other benefit which accrues to Buyer or the
Companies from such Leakage, on a EUR for EUR basis within thirty
(30) Business Days after the Buyer has notified the Sellers that a
Leakage has occurred, specifying in reasonable detail the amount
and the facts and circumstances underlying the Leakage (unless, for
the avoidance of doubt, such Leakage has already been repaid or
reimbursed to the Buyer or the Company prior to such notification
of the Sellers by the Buyer and/or has been reflected in the
Purchase Price calculation). Any compensation claims of the Buyer
under this Clause (a) shall become
time-barred within 12 (twelve) months after the Closing
Date.
(b)
Any amount payable
pursuant to Clause 5.3(a) shall bear
interest at the rate of 5% per
annum for the period from but not including the Closing Date
up to but not including the date payment is received by the Buyer,
calculated on the basis of the actual/actual method, taking into
account the actual number of days lapsed and the actual number of
days of the relevant calendar year.
(b)
the grant of any
loan by any of the Companies to any Seller;
(c)
any repayment of
any shareholder loan or the payment of any interest by any of the
Companies on any shareholder loan granted by any Seller to any of
the Companies;
(d)
any waiver or
release, or commitment to waive or release, by any of the Companies
of any amount or obligation owed or due to it, towards or to the
benefit of any Seller without adequate consideration (ohne angemessene
Gegenleistung);
(e)
any assumption or
grant of any guarantee or security by any of the Companies for any
financial debt owed by a Seller;
(f)
any assumption or
discharge of, or indemnity from, in each case granted by any of the
Companies, any liability (including any recharge of costs of any
kind) owed by a Seller, or a third party for the benefit of any
Seller;
(g)
any payment by any
of the Companies of any advisory, management, transaction or other
fees or expenses, service charges, license or royalty fees to a
Seller;
(h)
any return of
capital (whether by way of a reduction of capital or redemption or
purchase of its own shares or otherwise) to any Seller by any of
the Companies;
(i)
any payment by,
or on the account of, any of the Companies, of any brokerage,
finder's fee, commission, advisory fees or expenses, bonus, extra
compensation, severance payment or other incentive to any third
party (including any Seller) (i) in connection with or in respect
of (a) the preparation, negotiation or execution of this Agreement,
or (b) the preparation and consummation of the Transaction, and
(ii) not addressed in the cost allocation agreement a copy of which
is attached as Exhibit 5.4(i);
(j)
any payment of
bonuses or provision of other benefits by any of the Companies to
any Seller or any officer, director, employee or advisor of any
Seller as well as the payment of any taxes, including wage tax and
social security contributions, in each case to the extent triggered
through (i) the execution of this Agreement, or (ii) the
preparation and consummation of the transaction contemplated by the
Transaction;
(a)
contemplated or
disclosed in, or otherwise in connection with the transactions
under, this Agreement (including its Exhibits and
Annexes);
(b)
made at the request
or with the consent of Buyer;
(c)
required under
existing management service or employment agreements (other than
payments within the meaning of Clause 5.4(j)) or other agreements with the
Sellers;
(d)
required by law,
regulation or order of a competent court or similar
body;
(e)
reflected in the
calculation of the Purchase Price;
(f)
which is performed
in the ordinary course of business of the Company;
(g)
which gives rise to
a monetary gain, avoided loss, savings or other benefit (including
an effectively reduced Tax payment obligation) for or by Buyer or
any of the Companies (Vorteilsausgleich); or
(h)
explicitly set out
in Exhibit
5.5.
5.6
Any Affiliates of
a Seller, or any person related to a Seller or to any Affiliates of
a Seller (nahestehende
Personen) within the meaning of § 138 of the
Insolvency Code (such persons each a "Sellers' Related Party" and collectively "Sellers' Related Parties"), is
considered to be included in the term "Seller" for the purposes of
Clauses 5.4 and 5.5.
6
PAYMENT
OF PURCHASE PRICE; ESCROW
Account
Holder:
xxxxxxxxxxxx
IBAN:
xxxx xxxx xxxx xxxx xxxx xx
BIC:
xxxxxxx
Credit
Institution:
Sparkasse
Aachen
or any
other bank account notified by the Sellers to the Buyer no less
than five (5) Business Days prior to the respective payment date or
otherwise agreed by the Parties in writing ("Sellers' Account"). Such payment shall
have debt discharging effect (schuldbefreiende Wirkung) once it has
been irrevocably credited (unwiderruflich gutgeschrieben) to
Seller's Account.
Account
Holder:
xxxxxxxxxxx
IBAN:
xxxx xxxx xxxx xxxx xxxx xx
BIC:
xxxxxxx
Credit
Institution:
Sparkasse
Aachen
(the
"Escrow Account"). Such
payment shall have debt discharging effect (schuldbefreiende Wirkung) once it has
been irrevocably credited (unwiderruflich gutgeschrieben) to the
Escrow Account.
Prior
to the Signing Date, the Sellers and the Buyer have entered into an
escrow agreement. A signed copy of the executed escrow agreement is
attached as Exhibit 6.3
for evidence purposes ("Escrow
Agreement").
6.4
The funds held in
the Escrow Account shall serve as security for any claim of the
Buyer against any of the Sellers under or in connection with this
Agreement. The Parties undertake to undertake all steps and give
such instructions as may be necessary to give effect to the
provisions of the Escrow Agreement without undue
delay.
7
CLOSING
The
performance of the Closing Actions ("Closing") will take place on the venue
where the notarization takes place on 28 April 2021, unless the
Parties agree on a different time and venue to perform the Closing
Actions. The day on which the Closing Actions are actually
performed and executed is referred to as the "Closing Date".
On the
Closing Date, the Parties will perform the following actions
("Closing Actions") in the following
order:
(a)
The Sellers shall
deliver to the Buyer duly executed managing director employment
agreements between the Company and each of Seller 1, Seller 2,
Seller 3 and Seller 4, substantially in the form and substance as
attached hereto as Exhibit
(a);
(b)
The Sellers shall
deliver to the Buyer a copy of the unilateral declaration by the
Company to Infors AG according to which the Company has declared a
modification of the contractual territory under the existing
distribution agreement between the Company and Infors AG dated
1 February 2016 (including amendments thereto), substantially
in the form and substance as attached hereto as Exhibit
(b);
(c)
Immediately
following Closing, the Parties will execute a closing memorandum
substantially in the form and substance set out in Exhibit 7.3
("Closing Memorandum"). The Closing Memorandum
serves solely as evidence that Closing has occurred and that the
transfers of the Sold Shares set out in Clause 2.2 were completed. The execution of the
Closing Memorandum will not limit or prejudice the rights of the
Parties arising under or in connection with this Agreement or under
applicable law.
(a)
If the Buyer fails
to fulfil its obligation pursuant to Clause 7.2(c), i.e. to pay the Purchase Price in
accordance with Clause 6.2 to the
Sellers' Account, within five (5) Business Days after the scheduled
Closing Date, the Sellers shall first set a deadline of five (5)
Business Days for the Buyer by written statement (written statement
of one Seller being sufficient) specifying the breach of
obligation; after the fruitless expiration of the five (5) Business
Day deadline, the Sellers may rescind (zurücktreten) this Agreement by
joint written statement (within the meaning of § 126 of
the Civil Code (Schriftform)) to the Notary who shall
then inform the Buyer.
(b)
If the Sellers fail
to fulfil any of the Closing Actions pursuant to Clauses 7.2(a) and 7.2(b)
(unless to the extent such failures to fulfil the Closing Actions
are the result of a lack of required actions or cooperation of a
third party (except for the Company)) within five (5) Business Days
after the Closing Date, the Buyer may rescind (zurücktreten) this Agreement by
written notice within the meaning of § 126 of the Civil
Code (Schriftform) to the
Notary who shall then inform the Sellers.
8.2
There shall be no
right of rescission if the rescinding party itself has caused such
reason for rescission by culpable action or omission contrary to
good faith.
8.3
Legal Consequences
of Rescission
In the
event of a rescission (Rücktritt) of this Agreement under
Clause 8.1, this Agreement shall
lose its effectiveness retroactively (ex tunc) and the Parties shall no
longer have any claims and obligations under this Agreement.
Clause 1, this
Clause 8 and Clauses 17 to 22 and
25 to 28
shall however survive any rescission, without limit in time. A
rescission of this Agreement in accordance with
Clause 8.1 is without prejudice
to any claim a Party has resulting from a breach of this Agreement
by any other Party prior to the date of rescission.
9.1
As further
specified in Clauses 9.2 and
9.3 and 9.4, the Sellers hereby warrant to the Buyer
(in the form of independent warranties (selbständige Garantieversprechen)
pursuant to § 311 (1) of the Civil Code) subject to
any limitations contained in this Agreement that each of the
statements set out below in Clauses 9.2, 9.3 and
9.4 is true and accurate as at the
Signing Date and as at the Closing Date or at any such other date
specifically mentioned in such statement (such statements each a
"Sellers' Warranty" and
collectively the "Sellers'
Warranties").
Sellers
make the relevant Sellers' Warranties under exclusion of any joint
and several liability (unter
Ausschluss jeglicher gesamtschuldnerischer Haftung) as
partial debtors (als
Teilschuldner), unless where it is expressly specified that
a Seller makes a relevant Sellers' Warranty individually on its own
account and relating to its own circumstances as an individual
debtor (als
Einzelschuldner).
9.2
The following
statements in this Clause 9.2 are
made by all Sellers except for Seller 6
(cf. Clause 9.4) and unless
to the extent otherwise specified, in case of Clauses (a)(ii), (a)(iii),
(a)(iv), (a)(v), 9.2(a)(ix)
9.2(a)(xi), 9.2(b)(i), 9.2(b)(iv), 9.2(b)(v) and 9.2(b)(vii), however, only by the relevant
Seller individually on its own account and relating to its own
circumstances as an individual debtor (als Einzelschuldner):
(i)
The Companies
have been duly incorporated and are validly existing under the laws
of Germany. All matters which are required to be registered in the
commercial register by the Company have been duly registered
therein, all matters which are required to be reported to such
commercial register have been duly reported and all documents to be
submitted to such commercial register have been duly submitted
thereto.
(ii)
Clause 9.2(a)(i)
applies to Seller 5, Seller 6 and Seller 7 mutatis mutandis.
(v)
Where applicable,
the execution and consummation of this Agreement and of the
transactions contemplated therein does not violate articles of
association, partnership agreement or other corporate documents, as
the case may be, or any other legal obligations of a Seller and is
not subject to challenge (Anfechtung) by any third party on any
legal basis, including any creditor protection laws.
(vi)
The complete and
accurate versions of the articles of association currently in force
for the Companies have been made available to the Buyer. These
articles of association are fully effective and enforceable. With
the exception of the agreements set out in Annex 9.2(a)(vi), there are no agreements
which oblige any of the Companies to subject itself to the
management of, or transfer their profit to, a third
party.
(vii)
Unless registered
in the commercial register of the Company there are no directors,
general attorneys-in-fact (Generalbevollmächtigte) and/or
authorised signatories (Prokuristen) of the Company, and there
are no persons holding a commercial power of attorney (Handlungsbevollmächtigte) or any
other similar power of attorney granted by the
Company.
(viii)
None of the
Companies is (i) over-indebted (überschuldet), (ii) unable to pay
its debts when they become due (zahlungsunfähig), (iii) insolvent
or (iv) subject to any insolvency proceedings or comparable
proceedings which has been announced in writing within the meaning
of § 126 of the Civil Code (Schriftform) to the respective
Company.
(ix)
Clause 9.2(a)(viii) applies to each Seller
mutatis
mutandis.
(x)
There is no
action, suit, investigation or other proceeding pending or
threatened against or affecting any of the Companies before any
court, arbitrator, governmental body, agency or official that in
any manner challenges or seeks to prevent, enjoin, alter or
materially delay the execution or consummation of this Agreement or
the transactions contemplated therein.
(xi)
Clause 9.2(a)(x)
applies to each Seller mutatis
mutandis.
(i)
The Sold Shares
are all shares in the Company. The Sold Shares are freely
transferable, free and clear of any liens and encumbrances of third
parties and are not subject to any (a) trust arrangement
(Treuhandverhältnis)
except for the Sold Shares Seller 7, silent partnership
(stille Beteiligung) or
subparticipation (Unterbeteiligung); (b) pending transfer
or other disposition (Verfügung); (c) sale,
contribution, option or other contractual arrangement creating an
obligation to transfer or encumber; or (d) shareholders' resolution
providing for their redemption (Einziehung) or exclusion (Ausschluss), except for those rights
and agreements disclosed in Annex 9.2(b)(i).
(ii)
Clause 9.2(b)(i)
applies to the shares in the Subsidiary mutatis mutandis.
(iii)
None of the
Companies has any other participatory interests or branches or is
party to a joint venture, consortium or other internal company
(Innengesellschaft).
(iv)
The information
in relation to the Companies in Background Paragraph (A), (B) and
(D) of this Agreement is accurate. Unless set out otherwise in Annex
9.2(b)(i), the Sellers are the sole
owners of their respective Sold Shares and the Sellers are not
subject to any restrictions on transfer.
(v)
The shares in the
Company have been validly issued in compliance with applicable law.
The shares in the Company have been fully paid up, have not been
repaid in whole or in part, and are free from subsequent payment
obligations (Nachzahlungsverpflichtungen),
additional payment obligations (Nebenverpflichtungen) and other payment
obligations and restrictions. The Company has not resolved or made
any distribution since the Effective Date. All increases of the
share capital of the Company have been carried out in accordance
with all applicable legal and statutory provisions.
(vi)
Clause 9.2(b)(v)
applies to the shares in the Subsidiary mutatis mutandis.
(a)
Annual financial
statements and equity
(i)
The audited
consolidated financial statements of the Company together with an
unqualified auditor's certificate for the financial year ending on
31 December 2020 ("Financial
Statements 2020") have been prepared in accordance with the
accounting standards, principles and practices generally accepted
in the jurisdiction of incorporation of the Company. They present,
as of the date of their preparation and based on the view of the
Company's management as of such date, in all material respects a
true and fair view of the state of affairs of the Company as
regards the level of the Company's assets and liabilities, profits
(or losses) and financial position (Vermögens-, Finanz- und
Ertragslage) as at the respective reference date. To
Sellers' Knowledge, there are no liabilities that should have been
taken into account when the respective annual financial statements
were prepared and which are not reflected as a liability or a
provision. For the avoidance of doubt, nothing in this
Clause 9.3(a)(i) shall be
construed as an objective accounts guarantee (harte bzw. objektive Bilanzgarantie)
within the meaning of the decision by the Higher Regional Court
(Oberlandesgericht)
Frankfurt am Main dated 7 May 2015 (26 U 35/12).
(ii)
Unless set forth
in Annex 9.3(a)(ii), there are no material
circumstances affecting asset values and liabilities as at 31
December 2020 which have become known after finalisation of the
annual financial statements but before (or on) the present
date.
(iii)
To Sellers'
Knowledge, as at 31 December 2020, with the exception of
liabilities which are not required to be reflected in the financial
statements of the relevant company (nicht bilanzierungspflichtige
Sachverhalte), the Companies have no liabilities other than
those which are expressly identified in the annual financial
statements and, insofar as they are not required to be expressly
reflected as a liability or a provision on the balance sheet, all
contingent liabilities (Haftungsverhältnisse) are recorded
as below-the-line items on the balance sheet or in the notes to the
financial statements (Anhang).
(iv)
To Sellers'
Knowledge, the books, accounting records and other records of the
Companies have been maintained in all material respects in
accordance with all applicable laws on a proper and consistent
basis. All
books, accounting records and other records belonging to the
Companies are in the possession of and subject to unrestricted
access by the respective company.
(b)
Assets
The
Companies have full, unrestricted and unencumbered ownership and
possession of all tangible and intangible assets used or intended
for use in their business or which are necessary to conduct their
respective businesses in the manner currently conducted,
except:
(i)
for those assets
which they have rented (gemietet), leased for use (gepachtet) or leased (geleast), in the usual course of
business,
(ii)
to the extent that
any such assets are subject to usual retention of title provisions
in favour of suppliers pending payment, or
(iii)
to the extent that
any such assets are subject to security rights created in the usual
course of business.
Other
than the agreements listed in Annex 9.3(c),
none of the Companies have entered into any agreement (the main
obligations of which have not been completely fulfilled) with any
Seller or any direct or indirect shareholders, relatives
(Angehörige) within
the meaning of Section 15 (1) of the German Tax Code (Abgabenordnung – "AO") of any Seller or such shareholders,
or with business entities (other than the respective other company)
in which any Seller or any of such shareholders has a direct or
indirect participation.
(d)
Real
property
(i)
None of the
Companies (i) is the owner or co-owner of any real estate or (ii)
holds any rights equivalent to real property (grundstücksgleiche Rechte).
Annex 9.3(d)(ii) contains an accurate and
complete list of all real properties which are subject to a lease
or sub-lease agreement entered into by any of the Companies as
lessee or lessor, irrespective of whether concluded in writing
(within the meaning of § 126 of the Civil Code
(Schriftform)) or not,
(together the "Leased Real
Properties") setting out for each Leased Real Property the
location, size, use, and, in relation to the lease or sub-lease
agreements, the parties (name and address), date of agreement,
monthly rent, ancillary payments and any side agreements with
respect to the Leased Real Properties.
(iii)
In relation to the
Leased Real Properties:
(aa)
no lease agreement
contains restrictions which prevent the Leased Real Properties from
being used for their current use;
(bb)
except as set forth
in Annex 9.3(d)(ii) (i) there are no
current rent and ancillary payments payable under the relevant
lease agreements and (ii) no side agreements exist and no rent
reviews are pending or currently under negotiation;
(cc)
the Companies have
paid the rent, the ancillary payments and all other amounts payable
under or in connection with the lease agreements when
due;
(dd)
the Companies have
not violated any of their obligations under the relevant lease
agreements.
(i)
The Companies are
the owner or licensee of all, in each of the following cases
material, patents, patent applications, utility models, other
rights in and resulting from inventions, know-how, trade secrets,
trademarks, business names, Internet domains, IT-systems (including
hardware, communication systems, network systems), design rights,
software, databases and other copyright works/neighboring rights
(including sui generis
database rights) (the "Intellectual
Property") required to conduct the Business substantially as
carried out up to the Signing Date. As regards their trade secrets,
the Companies have taken reasonable measures to protect them in
order to avoid any infringement and to ensure the Companies'
protected ownership of such trade secrets. None of the Companies is
limited in the use of its Intellectual Property by any contractual
obligations or restrictions (such as exclusive license agreements),
unless explicitly disclosed in the applicable disclosure
Annexes.
(ii)
The Company is
the owner of the Intellectual Property set forth in Annex 9.3(e)(ii)/1 and has an exclusive license for the
Intellectual Property set forth in Annex 9.3(e)(ii)/2 (commonly, the "Exclusive Intellectual Property"). All
fees as may be due for application, registration and maintenance of
any Exclusive Intellectual Property have been paid in full. Except
as set forth in Annex
9.3(e)(ii)/3, none of the Companies has granted
licenses to any third party or even waived their rights in respect
of the Exclusive Intellectual Property rights.
(iii)
The Companies
have all exploitation rights in respect of copyright works of their
employees as attributed to the Companies by the respective
applicable statutory law, i.e. have not deviated in favor of any
employees from the law. No current or former employees, owners,
directors, officers or consultants of the Companies have any
exploitation rights in any Intellectual Property, unless explicitly
disclosed in the disclosure Annexes to this Agreement. Any
exceptions from the statements in this Clause 9.3(e)(iii) are set out in Annex 9.3(e)(iii).
(iv)
There are no
unsatisfied claims, other than potential future regular
remuneration claims, of employee inventors to remuneration for
employee inventions (Arbeitnehmererfindungsvergütung)
which have their legal origins in circumstances arising before the
Closing Date and the Companies have fulfilled their statutory
duties that the Companies may have in respect of any employee
inventions, except as set out in Annex 9.3(e)(iv).
(v)
To Sellers'
Knowledge, neither the Intellectual Property nor the products,
services and business operations of the Companies are infringing
any property rights of third parties, except as set out in
Annex 9.3(e)(v). No written claims for
infringement of any property rights of third parties have been made
in the last twelve (12) months prior to the Signing Date and there
is no threat of such claims being made, except as set out in
Annex 9.3(e)(v).
(vi)
To Sellers'
Knowledge, in the last twelve (12) months prior to the Signing
Date, none of the Companies has suffered any material operational
and/or functional disruptions, i.e. disruptions of one or more
IT-systems of a consecutive duration of five (5) hours or more, or
loss of data which can be attributed to a functional disruption in
the IT hardware or software, i.e. in particular in the networks,
computer and communication systems, hardware, software, interfaces
and other technical systems for storing, processing or transmitting
data which are necessary and used in the operations of the
Companies (the "Information
Technology").
(vii)
The Companies have
implemented and use IT security systems with a security-level to be
reasonably expected for a company active in the
Business.
(viii)
The Information
Technology is in a proper, fully functional condition (subject to
normal wear and tear) to be reasonably expected for a company
active in the Business. To Sellers' Knowledge, no material service
or maintenance work is required and all material updates, patches
and service packs have been implemented and are generally
functionable.
(ix)
Selectrion GmbH
neither owns nor uses any Intellectual Property rights of any of
the Companies.
(f)
Data
Protection
(i)
In the period of
three (3) years prior to the Signing Date, there have been no
investigations, proceedings, inquiries, orders or other measures by
the data protection Authorities at (or, to Sellers' Knowledge,
against) any of the Companies.
(ii)
There is no threat
in writing within the meaning of § 126 of the Civil Code
(Schriftform) of any fines
in respect of any past or current violations of data protection
law.
(g)
Know-how-protection
(i)
All items of the
Companies which contain secret or confidential know-how of the
Companies (documents, databases, etc.) are adequately protected
against unauthorized access by third parties and the employees of
the Companies are instructed to treat the relevant information
confidentially and just share such information on a need-to-know
basis.
(ii)
To Sellers'
Knowledge, there have been no cases since the formation of the
Company in which know-how of the Company was acquired, used, passed
on or disclosed by employees, customers, contractual partners or
(other) third parties without or against the will of the
Companies.
(iii)
Since the formation
of the Company, no written claims (within the meaning of
§ 126 of the Civil Code (Schriftform)) have been made against
any of the Companies for (i) the unauthorized acquisition, use,
transfer or disclosure of the know-how of employees, customers,
contractual partners or (other) third parties and/or (ii) a
violation of agreed confidentiality and protective measures. To the
Sellers' Knowledge, there are no facts on which claims within the
meaning of the preceding sentence could be based.
(h)
Material agreements
and obligations
(i)
Annex 9.3(h)(i) contains for the Company a
correct and complete list of all of the following agreements the
main obligations of which have not been completely fulfilled
(together the "Material
Agreements") setting out for each Material Agreement the
type of agreement, the parties (name), date, term and any ancillary
agreements, amendments, side letters and waivers (if
any):
(aa)
loan agreements
with, security granted in favour of, or obligations to,
banks;
(bb)
agreements
connected with the acquisition or sale of equity interests in legal
entities;
(cc)
agreements on
corporate joint ventures or joint development of
products;
(dd)
guarantees
(Garantien), bonds
(Bürgschaften),
comfort letters (Patronatserklärungen), indemnity
obligations (Freistellungsverpflichtungen) and
similar securities;
(ee)
research and
development agreements;
(ff)
agreements
regarding swaps, options, forward sales or purchases, futures and
other financial derivatives;
(gg)
agreements which
contain restrictions on competition or which otherwise restrict the
freedom of the Companies to conduct and expand their Business in a
material way;
(hh)
agreements
providing for usage rights and/or on maintenance and service
provision agreements relating to the Information Technology of the
Companies, other than off-the-shelf software licenses;
(ii)
agreements listed
in Annex (c);
(jj)
agreements to sell,
transfer, lease or dispose over any assets (other than the sale of
inventories) owned by the Companies outside their ordinary course
of business and with a market value exceeding, in each case,
EUR 5,000 (in words: five thousand Euro);
(kk)
all agreements and
obligations with a term of more than one (1) year or that cannot be
terminated within a period of twelve (12) months and which (in each
individual case) result in annual obligations of more than
EUR 5,000 (in words: five thousand Euro) (net) for any of the
Companies;
(ll)
all agreements with
customers and suppliers of the Company which (in each individual
case) have annual obligations of more than EUR 10,000 (in
words: ten thousand Euro);
(mm)
all agreements with
distribution, commercial agency or other agreements relating to
distribution which (in each individual case) have annual
obligations of more than EUR 5,000 (in words: five thousand
Euro);
(nn)
any commitment to
enter into any of the agreements referred to in this clause
9.3(h)(i).
(ii)
To Sellers'
Knowledge, each of the Material Agreements is valid and enforceable
against the relevant contractual partner(s), and all Material
Agreements have been duly performed, all due obligations contained
therein have been fulfilled and none of them has been terminated
nor has any such termination been declared or threatened within the
last twelve (12) month.
(iii)
No notice of
termination has been received or given by any of the Companies in
writing within the meaning of § 126 of the Civil Code
with respect to any Material Agreement. None
of the Companies has received formal written notice within the
meaning of § 126 of the Civil Code from any counterparty
to a Material Agreement that it intends to terminate
it.
(i)
Warranty claims
against the Companies
There
are no warranty claims (kaufrechtliche
Gewährleistungsansprüche) which have been brought
forward (in writing within the meaning of § 126 of the
Civil Code (Schriftform)) against the Companies within the
last 12 months and have not yet been settled, exceeding an
aggregate amount of EUR 5,000 (in words: five thousand
Euro).
(j)
Commercial agency
agreements
No
claims arising from the suspension or termination of distribution
(Vertragshändler),
commercial agency (Handelsvertreter) or other agreements
relating to distribution (irrespective of whether such have been
already terminated or not) have been brought forward against the
Companies in writing within the meaning of § 126 of the
Civil Code (Schriftform).
(k)
Licences and legal
provisions
(i)
Each of the
Companies is entitled to conduct its Business in the manner it is
currently conducted and has all material official permits, licences
and concessions issued by an Authority and required to conduct its
current Business as currently conducted (the "Permits"). To Sellers' Knowledge, the
Permits are in full force and effect (bestandskräftig) and have not been
challenged (angefochten) by
any third party. None of the Permits has been withdrawn, amended or
revoked in whole or in part in writing within the meaning of
§ 126 of the Civil Code (Schriftform) and, to Sellers'
Knowledge, there is no threat of any such withdrawal, amendment or
revocation. None of the Sellers is aware of any circumstances which
could lead to the restriction or revocation of any of the
Permits.
(ii)
The Companies are
and have been in full compliance with the Permits, including any
ancillary provisions (Nebenbestimmungen)
thereto.
(iii)
The Companies are
not a party to any public law agreements (öffentlich-rechtliche
Verträge).
(iv)
No violation by any
of the Companies is being or prior to the Signing Date has been
alleged in writing (within the meaning of § 126 of the
Civil Code (Schriftform))
by any Authority or any other third party with respect to any
environmental or other public law requirements.
(v)
Neither any Seller,
any Affiliate of a Seller, the Companies nor their directors and
employees have, directly or indirectly, in connection with the
Business
(aa)
used any funds of
the Companies for bribes, other unlawful purposes or political
contributions in violation of applicable laws;
(bb)
requested or
accepted any bribes or other unlawful benefits; or
(cc)
maintained any
funds or assets that have not been properly recorded in the books
and records of the Companies.
Except
as set out in Annex (l),
none of the Companies has been granted any public grants
(Zuschüsse), aids
(Beihilfen) or subsidies
(Subventionen).
(i)
Annex (m)(a) contains a correct and complete
anonymized list of the employees (including directors) of the
Companies as at 31 March 2021. Such list correctly states for
each employee the function/position and fixed monthly gross salary
and other remuneration entitlements (including any variable
remuneration entitlements and all additional benefits of monetary
value (such as company cars, insurance, etc.)) and the notice
period for a termination of the employment.
(ii)
Salaries and wages,
taxes and social security contributions are properly paid or shown
as liabilities in the financial statements of the
Companies.
(iii)
Annex 9.3(m)(iii) contains a list of all
material collective bargaining agreements, company-related
bargaining agreements and works agreements applicable to the
Companies which are more than a mere repetition of statutory
law.
(iv)
No freelancer,
consultant or other contracting party treated as self-employed
whose services any of the Companies uses or has used can
legitimately or rightfully claim the existence of an employment
relationship with one of the Companies (de facto employee). No
temporary employees (Leiharbeitnehmer) have worked or are
working for any of the Companies.
(v)
There is no social
compensation plan (Sozialplan) that has not yet been fully
implemented and no reconciliation of interests has been carried out
at any of the Companies.
(vi)
There are no
obligations or commitments on the part of the Company to continue
its business operations at the existing locations (location
guarantees), to maintain a certain number of employees (employment
guarantees) or to refrain from operational changes.
(vii)
None of the
Companies has made any direct or indirect commitment to pay a
retirement pension, disablement pension, pension for surviving
dependants or similar pension to present or former employees.
Proper accruals have been made for the liabilities of the Companies
arising from such pension obligations to the extent permitted by
tax law.
(viii)
Up to the date of
this Agreement, no employee of the Company has informed a Seller in
writing (within the meaning of § 126 of the Civil Code
(Schriftform)) or the
respective company that he or she intends to terminate his or her
employment.
(ii)
To the Sellers'
Knowledge, the Companies were in the past, and still are,
adequately insured against all risks which a prudent businessman
usually insures himself against and the insurance policies are in
force and have not been terminated.
Except
as disclosed in Annex
(o), none of the Companies is
involved in any pending or threatened (in writing within the
meaning of § 126 of the Civil Code (Schriftform)) disputes, court
proceedings, administrative proceedings or investigations,
including proceedings before an arbitration tribunal ("Legal Disputes").
(p)
Compliance
(i)
In conducting
their business, the Companies do not infringe applicable material
laws such as, in particular, anti-money-laundering laws,
anti-corruption laws, competition or export control laws; provided,
however, that the Sellers' Warranty under this Clause 9.3(p)(i) shall not apply to any data
protection laws.
(ii)
Prior to the
Signing Date, none of the Companies has received a notification
(Bescheid) by any
governmental body (other than related to tax audits) alleging a
violation of applicable laws by the Companies.
(iii)
Neither the
Companies nor any of the Sellers nor any employees of the Companies
have granted, promised or raised the prospect of an unlawful
advantage or benefit in connection with business operations of the
Companies, or have been granted, promised, or given the prospect of
such an advantage or benefit.
(q)
Conduct of
Business
Since
31 December 2020, the Business of the Companies has been carried on
in normal and ordinary course consistent with past practice of the
respective company. Since such date no event has occurred which
individually or jointly with other events has, to a material
extent, adversely affected the asset or profit situation of any of
the Companies on the basis of the Financial Statements
2020.
9.4
Only the
statements in Clauses 9.2(a)(ii),
9.2(a)(iii), 9.2(a)(iv), 9.2(a)(v), 9.2(a)(ix), 9.2(a)(xi), 9.2(b)(i), 9.2(b)(v) and 9.2(b)(vii) are also made by Seller 6, in
each case individually on its own account and relating to its own
circumstances as an individual debtor (als Einzelschuldner).
9.5
The scope and
limits of the warranties given in this Clause 9 are determined by Clauses 10 and 11 which
form an integral part of those warranties (Bestandteil der
Garantieerklärung). The Sellers do not give or assume
any warranties other than those set forth in this
Clause 9. The Parties agree that
none of the warranties or statements of the Sellers contained in
this Agreement constitutes a warranty or representation with
respect to the quality of the purchase object (Kaufgegenstand) within the meaning of
§§ 276 (1), 443 of the Civil Code (Garantie für die Beschaffenheit der
Sache) nor an agreement as to the condition of the goods
sold (Beschaffenheitsvereinbarung) within the
meaning of § 434 (1) of the Civil Code and none of
such warranties or statements is to be interpreted as such. The
Seller's Warranties shall exclusively be made for purposes of risk
allocation among the Parties. To the extent permitted by law, any
concept of imputed or attributed knowledge or intent (Wissens- oder Willenszurechnung) from
any individual to Sellers other than the persons listed in
Exhibit 1.2(a) shall be expressly
and comprehensively excluded for any claims, whether contractual,
statutory or otherwise. The Parties agree that if any disclosure of
events or documents made in the disclosure Annexes is below any
materiality threshold provided for such disclosure requirement, or
contains additional information, such disclosure shall not be used
to construe the extent of the required disclosure (including any
standard of materiality) pursuant to the relevant Sellers'
Warranty.
Subject
to the provisions of this Clause 10, in the event that any of the statements
made by a respective Seller under the Sellers' Warranties is
incorrect (in each case a "Warranty
Breach"), the breaching Sellers are obligated - as partial
debtors (als
Teilschuldner), or where expressly provided, as individual
debtors, in each case under exclusion of any joint and several
liability (unter Ausschluss
jeglicher gesamtschuldnerischer Haftung) - as follows: they
have to put the Buyer, or at the election of the Buyer, the
Companies, into the same position that it/they would have been in
if the relevant Sellers' Warranty had been correct (Naturalrestitution) or, to the extent
such natural restitution (Naturalrestitution) is not possible or
not implemented within six (6) weeks following the notice under
Clause 10.2, Buyer may elect to
claim from the breaching Sellers to pay damages for non-performance
to the Buyer or the Companies in cash (Schadensersatz in Geld).
The
breaching Sellers are liable only for actual losses (direkte Schäden) incurred by the Buyer or the
respective Company as a result of the relevant Warranty Breach,
excluding any direct or indirect not reasonably foreseeable loss of
profits, special punitive or exemplary damages and any not
reasonably foreseeable consequential damages (Folgeschäden) and any potential or
actual reduction in value (Minderung) of the Companies or the
Buyer beyond the actual loss incurred; it being understood that any
losses shall be calculated on a Euro-for-Euro basis. The Sellers
shall not be liable for any loss of business opportunity, any
miscalculation of the Purchase Price by the Buyer, any wasted
expenditure (vergebliche
Aufwendungen) and/or for any incidental or internal
administrative and overhead costs of the Companies.
If,
after Closing, the Buyer becomes aware of a Warranty Breach or any
circumstances which are reasonably likely to result in a Warranty
Breach, the Buyer will notify the Sellers within twenty
(20) Business Days of becoming aware of such Warranty Breach
or such circumstances. Such notification must state the nature of
the Warranty Breach and, to the extent reasonably possible at that
point in time, a good faith estimate of the amount of the losses
which are likely to be suffered by the Buyer or the Companies as a
result of such Warranty Breach.
10.3
No other
Remedies
Unless
otherwise agreed in this Agreement all legal remedies of Buyer for
a Warranty Breach or any other breach of a Seller's obligations
under this Agreement other than those specified in
Clause 10.1 are hereby excluded.
In particular, claims for or based on the right to reverse the
transactions contemplated under this Agreement (großer Schadensersatz), a
reduction of the purchase price (Minderung), rescission (Rücktritt) or other claims for
defects pursuant to § 437 of the Civil Code, culpa in
contrahendo (§ 311 of the Civil Code), positive breach of
contract (§ 280 of the Civil Code) (Schadensersatz wegen
Pflichtverletzung), frustration of contract (§ 313
of the Civil Code) (Störung
der Geschäftsgrundlage) or contest (Anfechtung) are excluded except in the
case of wilful misconduct or fraudulent misrepresentation. Any
claim of the Buyer for the transfer of the Shares (Erfüllungsanspruch) as provided in
Clause 2.2 is not intended to be
limited or excluded by the terms of Clauses 10 and 11.
1.1.1
With respect to
any claim in connection with a Warranty Breach ("Claim"), the Sellers are only liable, if
the amount of such Claim or the aggregate amount of Claims
resulting from the same or several related circumstances exceeds
EUR 7,500 (in words: seven thousand five hundred Euro)
("Qualified Claim");
and
1.1.2
the aggregate
amount of all Qualified Claims exceeds EUR 75,000 (in words:
seventy five thousand Euro), in which case the Sellers shall be
liable only for such amount of the Qualified Claims exceeding
EUR 75,000 (in words: seventy five thousand
Euro).
11.1
Separate
Liability
1.1.3
The liability of
the Sellers under this Agreement shall not be joint and several
(keine gesamtschuldnerische
Haftung). Any liability of a Seller shall be separate
(teilschuldnerische
Haftung), unless where it is expressly specified that a
Seller shall be individually liable (einzelschuldnerische Haftung). In case
several Sellers are partially liable (haften teilschuldnerisch) towards Buyer
under or in connection with this Agreement, each Seller shall only
be liable pro rata to the
portion of the Purchase Price received by it, subject to the
limitations set out in this Clause 11. Any liability cap (Clause 11.2) shall apply to each Seller pro rata to the portion of the Purchase
Price received by it.
(a)
Specific Liability
Cap
The
total liability of a Seller under or in connection with this
Agreement shall be capped as follows:
(i)
liability in
relation to Sellers' Warranties under Clauses 9.2(a)(i) to 9.2(a)(vi), 9.2(a)(viii), 9.2(a)(ix), 9.2(a)(x), 9.2(a)(xi) and 9.2(b) ("Fundamental Warranties"): 100% of the
portion of the Purchase Price received by the relevant
Seller;
(ii)
liability in
relation to Sellers' Warranties which are not Fundamental
Warranties:
(aa)
in the case of
Seller 1, Seller 2, Seller 3 and Seller 4: 15%
of the portion of the Purchase Price received by the relevant
Seller; provided, however, that with regard to a breach of the
Sellers' Warranties set out in Clause 9.3(e), the liability cap shall be increased by
an additional 10% of the portion of the Purchase Price received by
the relevant Seller; and
(bb)
in the case of
Seller 5, Seller 6, Seller 7 and Seller 8: the
portion of the Escrow Amount allocated to the relevant
Seller;
(iii)
liability with
respect to Taxes (Clause 12): 25%
of the portion of the Purchase Price received by the relevant
Seller.
(b)
Overall
Cap
The
overall liability of each respective Seller towards the Buyer under
or in connection with this Agreement shall in any case be limited
to the Purchase Price amount actually received by such
Seller.
11.3
Limitation
Period
(i)
36 (thirty-six)
months after the Closing Date in respect of Claims under or in
connection with the Fundamental Warranties;
(ii)
all claims of Buyer
arising as a result of wilful or intentional breaches of Sellers'
obligations under this Agreement shall become time-barred in
accordance with the statutory rules in §§ 195, 199
of the Civil Code;
(v)
12 (twelve) months
after the Closing Date in respect of all other claims.
(b)
The principle of
suspension of the statute of limitations (Hemmung der Verjährung) in
accordance with § 203 of the Civil Code
in the event negotiations take place shall apply to all Claims, if
the relevant Parties agree in writing that the Limitation Period
shall be tolled (gehemmt).
11.4
Limitations on
Sellers' Liability
Any
liability of the Sellers in respect of any claim against the
Sellers under or in connection with this Agreement is excluded to
the extent that:
(a)
the corresponding
claim is based on a change in the legal situation (including, for
the avoidance of doubt, any change of law, statute, ordinance,
rule, regulation, common law rule, case law or administrative
practice of any government, governmental department, agency or
regulatory body) after the Signing Date;
(b)
any measure or
action has been taken or omitted to be taken with respect to the
subject matter of the claim prior to the Closing Date at the
express written request, or with the express unqualified
(vorbehaltlos) written
approval or acquiescence, of the Buyer;
(c)
the Buyer or any of
its Affiliates (after the Closing Date, also including the Company)
has caused or contributed to (verursacht oder mitverursacht) such
claim and/or has failed to comply with its duty to mitigate damages
pursuant to § 254 (2) of the Civil
Code;
(d)
any amounts are
recoverable or could have been recoverable from any third party
(including any insurance company);
(e)
the facts forming
the basis of the Claim:
(i)
were known or could
have been known to the Buyer or any of its Affiliates or
Representatives on the Signing Date taking into account that Buyer,
prior to entering into this Agreement, has conducted a detailed and
in-depth due diligence including a comprehensive Q&A process by
which the Buyer had the opportunity to thoroughly review the
condition of the Companies and the Business including the
commercial, technical, organizational, financial, tax,
environmental and legal aspects of the Companies and to discuss the
same with the Companies' management;
(ii)
have been
disclosed to the Buyer or its Representatives in a Fair Manner.
"Fair" means a disclosure,
in particular through documents and information contained in the
virtual data room (the "Data
Room") that is objectively suitable in form, scope and
manner of disclosure to provide the Buyer with a sufficiently clear
and complete picture of the relevant facts of life in a reasonable
manner so that, based on customary market due diligence standards,
a buyer is objectively able to recognize or suspect the inaccuracy
of the corresponding Sellers' Warranty. For evidentiary purposes,
the contents of the Data Room as well as the minutes of the
Management Interview were stored by the Sellers on a USB stick (the
"Data Room Stick") and
copies of the Data Room Stick were exchanged between the Sellers
and the Buyer on the Closing Date. The Parties have furthermore
handed over a copy of the Data Room Stick to the Notary for
evidence purposes on the Closing Date with the instruction to keep
it for a period of five (5) years, unless the Parties jointly issue
a deviating instruction at least in text form (§ 126b of
the Civil Code). After expiry of the period, the notary may destroy
the data room stick;
(iv)
have been taken
into account for the purposes of calculation of the Purchase Price
or the relevant circumstances or facts have already resulted in a
compensation under another claim of Buyer (no
double-counting/double-compensation);
This
limitation does not apply to Claims in respect of the Fundamental
Warranties;
(f)
The Financial
Statements 2020 provide for an accrual (Rückstellung), a liability
(Verbindlichkeit), an
exceptional depreciation (außerplanmäßige
Abschreibung) or a depreciation to reflect lower market
values (Abschreibung auf den
niedrigeren beizulegenden Wert);
(g)
The matter giving
rise to a Warranty Breach or Buyer claim leads to any benefits by
refund, credit, set-off, reduction of Taxes or any other kind of
Tax savings for the Companies, Buyer and/or any Affiliate of Buyer;
it being understood that in the event that any of the Companies,
Buyer and/or any Affiliate of Buyer is entitled to any such Tax
benefit with respect to any amounts for which Buyer makes a claim,
such party shall use reasonable best efforts to obtain any such Tax
benefit;
(h)
The procedures set
forth in Clause 10.2 were not observed
by the Buyer or the Company and the damage has been caused or
increased by this non-observance.
Unless
expressly set out otherwise in this Agreement, any matters relating
to Taxes, any liability, warranty, indemnification or other claim
in connection with or arising from Taxes are covered exclusively by
the provisions set out in Exhibit 12.
13
BUYER'S
WARRANTIES
13.1
The Buyer hereby
warrants to the Sellers (in the form of independent warranties
(selbständige
Garantieversprechen) pursuant to § 311 (1) of
the Civil Code) that each of the statements set out below in
Clause 13.2 are true and accurate
as at the Signing Date and at the Closing Date, or at any other
date specifically mentioned in such statement (such statements each
a "Buyer's Warranty" and
collectively the "Buyers'
Warranties").
(a)
Buyer is a company
duly incorporated and validly existing under the laws of the State
of Delaware, under registration number 5847011. This Agreement
constitutes and all other documents executed by Buyer under or in
connection with this Agreement will, when executed, constitute,
legal, valid and binding obligations of Buyer enforceable in
accordance with their terms.
(b)
Buyer has the
unrestricted right, power, authority and capacity to execute and
consummate this Agreement and the transactions contemplated herein
and that, where applicable, all required approvals of any corporate
body of Buyer have been given and no further approval. With regard
to the execution and performance of this Agreement, Buyer does not
(i) require any approval or consent by any governmental authority,
public agency or other third party, (ii) violate any applicable
law, rule, regulation or decision by any court or governmental
authority or public agency binding on Buyer or (iii) violate the
articles of association or by-laws of Buyer.
(c)
There is no action,
suit, investigation or other proceeding pending or threatened
against or affecting Buyer or its sole shareholder before any
court, arbitrator, governmental body, agency or official that in
any manner challenges or seeks to prevent, enjoin, alter or
materially delay the execution or consummation of this Agreement or
the transactions contemplated therein, and, to Buyer's Knowledge,
there are no circumstances that give rise to any of the
foregoing.
(d)
Neither Buyer nor
any of its shareholders is (i) over-indebted (überschuldet), (ii) unable to pay
its debts when they become due (zahlungsunfähig), (iii) insolvent
or (iv) subject to any insolvency proceedings or comparable
proceedings. To Buyer's Knowledge, there are no circumstances which
could lead to the insolvency of Buyer or any of its
shareholders.
(e)
Buyer has had
access to detailed information about the Companies and the
Business, completed an in-depth due diligence review prior to the
Signing Date including a comprehensive Q&A process and made its
own evaluation of the adequacy and accuracy of such projections,
forecasts, estimates, statements of intents and statements of
opinion (including the reasonableness of the assumptions underlying
the same) of the Business operations of the Companies.
(f)
Buyer explicitly
acknowledges that Sellers – neither directly nor through any
person acting on its behalf – have made no and make no
representations, warranties or guarantees and have assumed no and
assume no disclosure, information or similar obligations in
connection with this Agreement and the transactions contemplated
hereby, except as expressly set forth in this
Agreement.
(g)
Buyer's analysis of
the requirements to file for antitrust or other clearance by
governmental institutions or authorities is true and correct. There
is no requirement to file for any approval or clearance by a
governmental institution or authority.
(h)
Buyer has
sufficient unconditional and immediately available funds to meet
its payment obligations pursuant to this Agreement when due and to
consummate the transactions contemplated under this
Agreement.
13.3
Where any
statement is qualified as being limited by the "Buyer's Knowledge", the statement is
deemed to be given to the actual knowledge (positive Kenntnis) which the persons
identified in Exhibit 13.3
had as at the Signing Date or should have had if they were not
acting grossly negligent (grobe
Fahrlässigkeit).
13.4
If and to the
extent any of the Buyer's Guarantees, covenants or other agreements
pursuant to this Agreement is breached or if Buyer is otherwise
liable to Sellers pursuant to or in connection with this Agreement,
Sellers' respective claims and remedies, and Buyer's liability
vis-à-vis Sellers,
shall, unless otherwise agreed in this Agreement, be determined in
accordance with statutory law.
14
BUYER'S
COVENANTS
14.1
Buyer undertakes to
maintain the current facilities of the Company located in
Baesweiler, Germany for a minimum period of five (5) years
following Closing, provided however, that a reasonable relocation
within the Aachen/Cologne/Düsseldorf region shall be permitted
during this period.
14.2
Buyer shall procure
that, on the second anniversary of the Closing Date, each current
employee of the Company who has continuously remained employed by
the Company or an Affiliate of Buyer and/or the Company throughout
such two-year-period will receive a bonus payment in the amount of
10% of their current annual salary.
14.3
Buyer shall procure
that the shareholder of Seller 7, Dr. Jürgen Schumacher,
will be nominated to the board of directors of Buyer's parent
company Scientific Industries, Inc. upon request.
15
NON-COMPETE,
NON-SOLICITATION
15.1
Each of Seller 1,
Seller 2, Seller 3 and Seller 4 undertakes for a period of two
(2) years from the Closing Date ("Applicable Period") not to carry on any
business anywhere where the Companies operate which competes with
the Business. This undertaking does not apply to any shareholdings
or participations which are for investment purposes only and in
which the respective Seller or the Sellers do not have a material
influence on the conduct of business.
15.2
Each of
Seller 1, Seller 2, Seller 3 and Seller 4 agrees that for
the Applicable Period it shall not, and shall cause any Affiliate
or its respective Seller's Related Parties not to:
(a)
solicit or induce,
directly or indirectly, any current employee of the
Companies:
(i)
to interfere with
the Business, or
(ii)
to discontinue his
or her employment with the Companies;
or
(b)
hire, retain or
attempt to hire or retain any person currently employed or employed
by the Companies within the twelve (12) months period prior to the
Closing Date.
15.3
General
solicitations
For the
avoidance of doubt, no Seller nor any of their Affiliates nor any
Seller's Related Party shall be prohibited from
employing any person who (i) contacted them on his or her own
initiative (without any direct or indirect initiative by a Seller,
its Affiliates or its Seller's Related Parties) or (ii) approaches
the Sellers, their Affiliates or any Seller's Related Parties on an
unsolicited basis in response to a bona fide general public job
advertisement or (iii) has been subject to a non-targeted search
placed by or on behalf of the Sellers, any of their Affiliates or
Seller's Related Parties (iv) is no longer an employee of any
Company at the time of such contact.
15.4
For the avoidance
of doubt, the above restrictions on non-competition and on
non-solicitation have been taken into account in the calculation of
the Purchase Price and are therefore included in the Purchase
Price.
16
COOPERATION
16.1
After the Closing
Date, the Parties shall cooperate in good faith to fully integrate
the Companies' Business into the Buyer's own business.
16.2
Each Party will
cooperate, at its own cost and expense, with the other on the
reasonable request of the other to give full effect to this
Agreement, in particular to execute such documents and take such
further actions as may be reasonably requested by the other Party
to carry out the provisions of this Agreement and the transactions
contemplated in this Agreement, and unless expressly provided
otherwise in this Agreement to obtain in a timely manner all
necessary waivers, consents and approvals to effect all necessary
registrations and filings.
16.3
For a period of ten
(10) years following the Closing but at least until the final
and binding decision of the next Tax Authorities' audit of the
Sellers and the Affiliates of the Sellers, the Buyer will, on
reasonable notice, afford that the Sellers and the Sellers' agents
and advisors are given access during normal business hours to the
books and records of the Company insofar as such books and records
relate to the period ending at Closing, and are permitted to take
(physical and/or electronic) copies of them, for the purpose of the
Sellers' compliance with the requirements of any
Authority.
17.1
All payments under
this Agreement are to be made in EUR and in full when due
(fällig) without any
set-off (Aufrechnung) in
immediately available funds and free from any deduction , and all
obligations under this Agreement shall be made under exclusion of
the right to retain (Zurückbehaltungsrecht), except:
(a)
as explicitly
permitted otherwise under this Agreement (including its Exhibits
and Annexes);
(b)
as may be
required by any applicable requirement of law or of any person who
has regulatory authority which has the force of law ("Regulatory Requirements") (in which event such
deduction or withholding must not exceed the minimum amount
required by such Regulatory Requirements and the payer will
simultaneously pay to the payee whatever additional amount is
required so that the net amount received is equal to what would
have been received if no such deduction or withholding had been
required); or
(c)
to the extent any
such right to set-off, counterclaim, deduction or retention has
been acknowledged in writing within the meaning of § 126
of the Civil Code (Schriftform) by the other Party or has
been finally determined by a competent court as due and
payable.
If a
Party fails to pay any sum payable under this Agreement on the due
date for payment, it is in default (Verzug) of such payment obligation from
the due date, without any further notice of the other Party being
required. Unless otherwise agreed, interest accrues on the unpaid
amount at the rate calculated in accordance with
§ 288 (2) of the Civil Code for the period from and
including the due date up to, but not including, the date payment
is received by the other Party (after as well as before a court
decision) (the "Default
Interest") and default Interest will accrue from day to day
on the basis of the actual number of days elapsed and a 360-day
(three hundred and sixty day) year, and is payable on the final day
of each calendar month in arrears, but in any event on the date of
payment of the sum which the respective Party is in default
with.
18
COSTS
AND EXPENSES
18.1
Unless expressly
provided otherwise in this Agreement each Party pays its own costs
and expenses in relation to the negotiation, preparation, execution
and performance of this Agreement.
18.2
Buyer shall bear
all fees, duties and levies resulting from the notarization of this
Agreement (including any reference deeds or amendment agreements)
and the application to or filing with any Authority.
18.3
Buyer shall bear
any and all direct, indirect, sales, transfer, ad valorem and
ancillary taxes, duties, withholdings, imposts, levies and charges
(including real estate transfer taxes, VAT, stamp duties and other
public levies or other similar charges), in each case payable by
reason of the transactions contemplated under this Agreement
(except for German income Taxes on Sellers' capital gain), and file
all returns and notifications required under statutory law with
respect to the public levies or similar charges as set forth under
this Clause 18.3, in each case
with a copy to Seller.
19.1
Each Party keeps
confidential and procures that any of its Affiliates keeps
confidential:
(a)
the negotiations
relating to and concerning this Agreement;
(b)
the subject matter
and terms and conditions of this Agreement;
(c)
in the case of
the Sellers, all confidential information of the Buyer and its
Affiliates made available to the Sellers by the Buyer in the course
of the negotiations preceding the Signing Date as well as all
confidential information and business secrets of the Companies,
provided that nothing in this Clause 19.1(c) shall prohibit Seller 1,
Seller 2, Seller 3 and/or Seller 4 from using any
information or secrets within their function as managing director
(or in another capacity) at the Companies and/or in any capacity
within the Buyer group, in each case in accordance with the
respective contractual agreements; and
(d)
in the case of
the Buyer, all confidential information of the Sellers and their
Affiliates and the Companies made available to the Buyer by the
Sellers, their Affiliates or Representatives in the course of the
negotiations preceding the Signing Date, provided that nothing in
this Clause (d) requires the
Buyer to keep any information relating to the Companies
confidential once Closing has occurred.
19.2
Either Party may
disclose any information that it is required to keep confidential
under this Clause 19:
(ii)
to such credit
institutions and financing sources dealing with the financing of
the transaction contemplated under this Agreement or a subsequent
refinancing;
(iii)
in the course of
other M&A transactions of the Parties or their Affiliates
relating to the shares and/or assets of any of the Companies;
or
(b)
with the other
Party's prior written consent; or
(c)
to the extent that
the disclosure is required:
(i)
by Regulatory
Requirements (including, for the avoidance of doubt the SEC, IFRS,
the German Federal Ministry for Economic Affairs and Energy
(Bundeministerium für
Wirtschaft und Energie) and the German Supreme Audit
Institution (Bundesrechnungshof));
(ii)
by an
Authority;
(iii)
to make any filing
with, or obtain any authorisation from, an Authority in connection
with the transactions contemplated by this Agreement;
or
(iv)
to protect the
disclosing Party's interest in any legal proceedings in connection
with this Agreement and the transactions contemplated
therein;
but
will use reasonable endeavours to consult the other Party and to
take into account any reasonable requests it may have received in
relation to the disclosure before making it.
19.3
As far as the
transactions contemplated by this Agreement are concerned, each
Party must supply the other with any information about itself, any
Affiliate of such Party, its business or this Agreement as the
other may reasonably require for the purposes of satisfying any
Regulatory Requirements or requirements of any securities exchange
to which the requiring Party is subject.
19.4
No Party is
entitled to make any press release or other public announcement in
connection with this Agreement except:
(a)
an announcement in
a form agreed by the Buyer and the Sellers; and
(b)
to the extent any
announcement is required by any applicable Regulatory Requirements
(provided that, unless such consultation is prohibited by
Regulatory Requirements, it is made only after consultation with
the Buyer or the Sellers, as the case may be).
19.5
The provisions
of the confidentiality agreement entered into between the Parties
dated 12 May 2019 ("Confidentiality Agreement") are hereby
terminated subject to the occurrence of the Closing, provided that
such termination is without prejudice to any claims of either Party
which have arisen under the Confidentiality Agreement prior to the
date hereof.
19.6
The provisions of
this Clause 19 will continue to
have effect for the period of two (2) years from the Closing
Date.
20.1
Any notice to be
given under this Agreement must be in writing and either be
delivered by hand or by e-mail. Delivery by courier is regarded as
delivery by hand.
20.2
In the context of
this Agreement, Sellers appoint Seller 5 as its representative
to act in relation to the Buyer, any Authority or any other third
party, including the receipt and making of notifications or other
declarations and the execution of Sellers' rights under this
Agreement.
20.3
Notices must be
sent to the address of the relevant Party referred to in this
Agreement or the e-mail address set out below or to such other
address, or e-mail address as may previously have been notified to
the sending Party in accordance with this Clause 20. Each communication must be marked for the
attention of such person as is set out below, or has previously
been notified to the sending Party in accordance with this
Clause 20 (the "Relevant Person").
If to
the Sellers or one of the Sellers, represented by Seller 5,
to:
|
Address:
|
Markt
45-47, 52062 Aachen, Deutschland
|
|
E-mail:
|
schleicher@s-ubg.de
|
|
Attention:
|
Dr.
Ansgar Schleicher
|
|
|
|
|
with a
copy to
|
|
|
Address:
|
Baker
& McKenzie Partnerschaft von Rechtsanwälten und
Steuerberatern mbB, Neuer Zollhof 2, 40221
Düsseldorf
|
|
E-mail:
|
heiko.gotsche@bakermckenzie.com
|
|
Attention:
|
Dr.
Heiko Gotsche
|
|
|
|
If to
the Buyer, to:
|
Address:
|
80
Orville Drive, #102, Bohemia, NY 11716, U.S.A.
|
|
E-mail:
|
hsantos@scientificindustries.com
|
|
Attention:
|
Helena
Santos
|
with a
copy to:
|
Address:
|
CMS
Hasche Sigle Partnerschaft von Rechtsanwälten und
Steuerberatern mbB, Kranhaus 1 / Im Zollhafen 18, 50678 Köln,
Germany
|
|
E-mail:
|
klaus.jaeger@cms-hs.com
|
|
Attention:
|
Klaus
Jäger
|
(a)
if delivered by
hand or courier, at the time of delivery; and
(b)
if delivered by
e-mail, at the time of completion of the transmission to the
Relevant Person of the respective Party by the sender.
If
under this Clause 20 a notice
would be deemed to have been received outside normal business hours
(being 8:00 hours to 20:00 hours on a Business Day) in
the time zone of the territory of the recipient then the notice
will be deemed to have been received at the next opening of
business hours in such place of receipt.
(a)
delivery by courier
was made; or
(b)
the e-mail was
dispatched to the Relevant Person of the respective receiving
Party, unless the receiving party proves that the e-mail has not
been received by such Relevant Person.
20.6
Notwithstanding the
provisions of Clauses 20.4 and
20.5, the Parties may prove receipt of
a notice under this Agreement in any other way admissible.
Irrespective of the foregoing, each Party is obligated to confirm
and to procure that any of its representatives including the
Relevant Person confirm the notifying Party receipt of such notice
promptly.
20.7
A Party may notify
the other Parties of a change to its name, Relevant Person, address
or e-mail address for the purposes of this Clause 20 and notification is effective
on:
(a)
the date specified
in the notification as the date on which the change is to take
place; or
(b)
if no date is
specified or the date specified is less than five (5) Business Days
after the date on which notice is deemed to have been received, the
date falling five (5) Business Days after notice of any such change
is deemed to have been received.
20.8
For the avoidance
of doubt, the Parties agree that the provisions of this
Clause 20 do not apply to the
service of any writ, summons, order, judgment or other document
relating to or in connection with any proceedings.
21
LANGUAGE
This
Agreement and all notices or formal communications under or in
connection with this Agreement must be in English unless otherwise
required by law. Documents attached and referred to in notices or
formal communications under or in connection with this Agreement
may also be in English or German or accompanied by a convenience
translation to English or German.
Any
amendment or variation of this Agreement must be (i) in writing
within the meaning of § 126 of the Civil Code
(Schriftform) or (ii)
notarised if so required under German law. This applies equally to
any amendment or variation of the terms set out in the preceding
sentence. In case of an amendment or variation pursuant to (i) of
the first sentence of this Clause 22,
the Parties are obligated to provide the original signed amendment
or variation to the respective other Party.
23.1
Pursuant to Article
7(3) of the articles of association of the Company, resolutions of
the shareholders' meeting of the Company concerning certain legal
transactions and measures may only be passed with the prior consent
of a simple majority of Seller 5, Seller 6, Seller 7 and Seller
8.
23.2
The Seller 5,
Seller 6, Seller 7 and Seller 8, each individually, hereby grant
their approval to the passing of all shareholders' resolutions of
the Company after Closing by the Buyer as the (future) new
shareholder of the Company. This includes in particular (but not
limited to) shareholder resolutions with regard to the amendment of
the articles of association of the Company as well as the amendment
of the rules of procedure for the management board including the
adjustment of the catalogue of legal transactions requiring prior
approval of the shareholders' meeting or advisory board and the
adoption of new rules of procedure for the advisory board of the
Company. The provisions set out in Clause 24 shall remain unaffected by this
Clause 23.
24.1
The Parties are
aware that the Buyer is not entitled to exercise the shareholder
rights as against the Company until the shareholders' list in which
the Buyer is named as the new shareholder is entered in the
commercial register of the Company. The Sellers undertake not to
act as shareholder of the Company in the period between the Closing
Date and the inclusion of the shareholders' list submitted to the
commercial register by the notary (§ 16 (1) 1
of the Limited Liability Companies Act).
24.2
With effect as
of the Closing Date, the Sellers grant to the Buyer an unrestricted
and irrevocable power of attorney, releasing the latter from the
restrictions set out in § 181 of the Civil Code (except
in the case of Seller 6 which grants such power of attorney,
however only releasing the Buyer from such restrictions set out in
§ 181 Alt. 2 of the Civil Code) and in conjunction
with the right to grant power of attorney to third parties, to
represent each Seller when exercising all and any rights and powers
to which the respective Seller is entitled as shareholder of the
Company, in particular to adopt shareholders' resolutions including
any mutually agreed amendment to the articles of association of the
Company. The power of attorney lapses on entry of the updated
shareholders' list in which the Buyer is named as shareholder of
the Company in the commercial register in accordance with
§ 16 (1) of the Limited Liability Companies
Act.
24.3
The Buyer
undertakes not to pass any shareholders' resolutions based on the
power of attorney given in Clause 24.2 above which may impose any liability on
any of the Sellers, respectively, and will indemnify and keep
indemnified (freistellen)
the Sellers from any third-party claim.
25.1
Nothing in this
Agreement is to be read or construed as excluding any liability or
remedy in respect of fraud.
25.2
Should one or more
provisions of this Agreement be or become invalid or unenforceable
in whole or in parts, or if there is a contractual gap, this does
not affect the validity and enforceability of the remaining
provisions of this Agreement. In place of the invalid or
unenforceable provision, or to fill such contractual gap, such
valid and enforceable provision applies which reflects as closely
as possible the commercial intention of the Parties as regards the
invalid, unenforceable or missing provision. The legal principle
set out in § 139 of the Civil Code, including the
reversal of the burden of proof, does not apply.
26.1
In this
Clause 26, references to this
Agreement include all other written agreements and arrangements
(within the meaning of § 126 of the Civil Code
(Schriftform)) between the
Parties which are expressed to be supplemental to this Agreement or
which this Agreement expressly preserves or requires to be
executed.
26.2
This Agreement
constitutes the entire and only agreement and understanding between
the Parties in relation to its subject matter. All previous drafts,
agreements, understandings, undertakings, representations,
warranties, promises and arrangements of any nature whatsoever
between the Parties with any bearing on the subject matter of this
Agreement are superseded and extinguished to the extent that they
have such a bearing and each of the Parties acknowledges to the
other, after due and careful consideration, that it is not entering
into this Agreement in consequence of or in reliance on anything it
is the purpose of this Clause 26.2 to exclude.
26.3
All Exhibits and
Annexes form an integral part of this Agreement.
27
MISCELLANEOUS
Any
obligation of a Party to indemnify and keep indemnified
(freistellen) another Party
under this Agreement is an obligation to do so on first demand
(auf erstes
Anfordern).
28.1
This Agreement and
its terms are governed by and construed in accordance with German
law, excluding the United Nations Convention for the International
Sale of Goods (CISG) and the conflict of law rules.
28.2
Any and all
disputes or differences arising out of or in connection with this
Agreement, or its breach, termination or invalidity shall be
finally settled by the state courts (staatliche Gerichte) of Germany. The
courts of Düsseldorf, Germany, shall be the competent courts
to the extent legally permitted under applicable law. The Parties
shall bring any proceeding under this Clause 28.2 to the judgement of the
Chamber for Commercial Matters (Kammer für Handelssachen) if
permitted under applicable law.
This
deed was read by the notary to the persons appearing, accepted by
the persons appearing and signed by them and the notary as
follows: