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Exhibit E
FINAL COPY
CONTRIBUTION AGREEMENT
BY AND AMONG
FRESENIUS AG,
STERIL PHARMA GMBH
AND
▇. ▇. ▇▇▇▇▇ & CO.-▇▇▇▇.
DATED FEBRUARY 4, 1996
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TABLE OF CONTENTS
PAGE
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I. Definitions......................................................................... 2
1.01 General............................................................. 2
II. Certain Transactions Prior to the
Contribution Date................................................................. 6
2.01 Certain Transfers................................................... 6
2.02 Termination of Agreements........................................... 7
2.03 Other Agreements.................................................... 7
III. [Intentionally Omitted]............................................................. 7
IV. Survival and Indemnification........................................................ 8
4.01 Survival of Agreements.............................................. 8
4.02 Indemnification..................................................... 8
4.03 Procedures for Indemnification for
Third-Party Claims................................................ 8
4.04 Remedies Cumulative................................................. 10
V. Certain Additional Covenants........................................................ 10
5.01 Notices to Third Parties............................................ 10
5.02 Licenses and Permits................................................ 10
5.03 Intercompany Agreements............................................. 10
5.04 Guarantee Obligations............................................... 11
5.05 Further Assurances.................................................. 11
VI. Access to Information............................................................... 12
6.01 Provision of Corporate Records...................................... 12
6.02 Access to Information............................................... 12
6.03 Production of Witnesses............................................. 14
6.04 Retention of Records................................................ 14
6.05 Confidentiality..................................................... 14
6.06 Cooperation with Respect to
Government Reports and Filings.................................... 15
VII. No Representations or Warranties.................................................... 15
7.01 No Representations or Warranties.................................... 15
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TABLE OF CONTENTS (CONTINUED)
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VIII. Miscellaneous....................................................................... 16
8.01 Use of Fresenius AG Name and ▇▇▇▇................................... 16
8.02 Complete Agreement.................................................. 16
8.03 Expenses............................................................ 16
8.04 Jurisdiction and Forum.............................................. 16
8.05 Notices............................................................. 17
8.06 Amendment and Modification.......................................... 18
8.07 Successors and Assigns; No Third-Party
Beneficiaries..................................................... 18
8.08 Counterparts........................................................ 18
8.09 Interpretation...................................................... 18
8.10 Severability........................................................ 18
8.11 References; Construction............................................ 18
SIGNATURES ...................................................................................... 19
EXHIBIT A Tax Indemnification Agreement
EXHIBIT B Terms of Lease
EXHIBIT C Terms of License
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CONTRIBUTION AGREEMENT
This CONTRIBUTION AGREEMENT (this "Agreement"), dated February
4, 1996, by and between Fresenius AG, an Aktiengesellschaft organized under the
laws of the Federal Republic of Germany ("Fresenius AG"), Steril Pharma GmbH, a
wholly owned Gesellschaft mit beschrankter Haftung of Fresenius AG ("GmbH" or
"SP"), and ▇. ▇. ▇▇▇▇▇ & Co.-▇▇▇▇., a Connecticut corporation ("Grace-Conn.").
W I T N E S S E T H:
A. The Reorganization Agreement. Simultaneously herewith,
Grace and Fresenius AG are entering into an Agreement and Plan of Reorganization
(the "Reorganization Agreement") and, prior to the Effective Time, intend to
consummate the transactions contemplated hereby.
B. The Contribution. Prior to the Effective Time, Fresenius
AG intends to contribute its worldwide dialysis business to SP, as provided
herein, and to retain and lease to Newco certain real property and buildings in
the Federal Republic of Germany pursuant to a lease consistent with the terms
set forth in Exhibit B hereto and to retain and license to Newco its name and
certain derived marks pursuant to a license consistent with the terms set forth
in Exhibit C hereto.
C. Newco. In connection with the Contribution, Fresenius AG
intends that SP shall convert to an Aktiengesellschaft, pursuant to German law,
and to become "Newco," consistent with the terms of the Reorganization
Agreement.
D. The Distribution. Immediately prior to the Effective
Time, Grace intends to transfer to (or retain in) Grace-Conn. all non-healthcare
assets and liabilities, its interests in the Amicon bioseparations business and
GN Holdings, Inc. and certain other assets, as contemplated by this Agreement,
and to effect a distribution to its common shareholders of all of its equity
interest in Grace-Conn.
E. The Recapitalization. Following the Distribution and
immediately prior to the Effective Time, Grace intends to consummate the
Recapitalization in which each holder of a Grace Common Share shall hold,
immediately thereafter, a Grace Common Share and one one-hundredth of a NY
Preferred Share.
F. The Mergers. At the Effective Time, the parties intend to
effect a merger of a wholly owned New York corporate subsidiary of Newco with
and into Grace, with Grace being the surviving corporation. Also at the
Effective Time, the parties intend to effect a merger of a wholly owned
Massachusetts corporate subsidiary of Newco with and into Fresenius USA, with
Fresenius USA being the surviving corporation.
G. Financing. It is the intention of the parties hereto
that, prior to the Distribution: (i) Grace and Grace-Conn. shall use reasonable
efforts to cause NMC to arrange new credit facilities so that the transactions
contemplated by the Transaction Agreements may be consummated; (ii) Fresenius AG
shall use reasonable efforts to
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arrange new credit facilities for the FWD Business so that the transactions
contemplated by the Transaction Agreements may be consummated; and (iii) the
parties shall cooperate with one another with respect to the foregoing.
H. Intention of the Parties. It is the intention of the
parties to the Reorganization Agreement that for United States federal income
tax purposes (a) the Distribution shall qualify as a tax-free distribution under
the Code, (b) each of the Mergers shall qualify as a "reorganization" under the
Code, (c) the Contribution shall qualify as a tax-free exchange under the Code
and (d) the Recapitalization shall be tax-free to Grace under the Code.
NOW, THEREFORE, in consideration of the premises, and of the
representations, warranties, covenants and agreements set forth herein, the
parties hereto hereby agree as follows:
ARTICLE I
DEFINITIONS
SECTION 1.01 GENERAL. As used in this Agreement, the following
terms shall have the following meanings (such meanings to be equally applicable
to both the singular and plural forms of the terms defined):
Affiliate: with respect to any specified Person, a Person
that directly, or indirectly through one or more intermediaries, controls, is
controlled by, or is under common control with, such specified Person; provided,
however, that for purposes of this Agreement, no member of either Group shall be
deemed to be an Affiliate of any member of the other Group.
Agreement: as defined in the preamble to this Agreement.
Asset: any and all assets and properties, tangible or
intangible, including, without limitation, the following: (i) cash, notes and
accounts and notes receivable (whether current or non-current); (ii)
certificates of deposit, banker's acceptances, stock, debentures, evidences of
indebtedness, certificates of interest or participation in profit-sharing
agreements, collateral-trust certificates, preorganization certificates or
subscriptions, transferable shares, investment contracts, voting-trust
certificates, fractional undivided interests in oil, gas or other mineral
rights, puts, calls, straddles, options and other securities of any kind; (iii)
intangible property rights, inventions, discoveries, know-how, patents and
patent applications, trade secrets, confidential information, registered and
unregistered trademarks, service marks, service names, trade styles and trade
names and associated goodwill; statutory, common law and registered copyrights;
applications for any of the foregoing, rights to use the foregoing and other
rights in, to and under the foregoing; (iv) rights under leases, contracts,
licenses, permits, distribution arrangements, sales and purchase agreements,
other agreements and business arrangements; (v) real estate and buildings and
other improvements thereon; (vi) leasehold improvements, fixtures, trade
fixtures, machinery, equipment (including transportation and office equipment),
tools, dies and furniture; (vii) office supplies, production supplies, spare
parts, other miscellaneous supplies and other tangible property of any kind;
(viii) computer
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equipment and software; (ix) raw materials, work-in-process, finished goods,
consigned goods and other inventories; (x) prepayments or prepaid expenses; (xi)
claims, causes of action, choses in action, rights under express or implied
warranties, rights of recovery and rights of set-off of any kind; (xii) the
right to receive mail, payments on accounts receivable and other communications;
(xiii) lists of customers, records pertaining to customers and accounts,
personnel records, lists and records pertaining to customers, suppliers and
agents, and books, ledgers, files and business records of every kind; (xiv)
advertising materials and other printed or written materials; (xv) goodwill as a
going concern and other intangible properties; (xvi) employee contracts,
including any rights thereunder to restrict an employee from competing in
certain respects; and (xvii) licenses and authorizations issued by any
governmental authority.
Business: the Fresenius AG Business or the FWD Business.
Contribution: as defined in the Reorganization Agreement.
Contribution Date: the date on which the Effective Time
occurs.
CTC-DE: as defined in Section 8.04(b) of this Agreement.
CTC-NY: as defined in Section 8.04(b) of this Agreement.
Debt: as defined in the Reorganization Agreement.
Effective Time: as defined in the recitals to this Agreement.
Foreign Exchange Rate: with respect to any currency other
than United States dollars as of any date, the rate on such date at which such
currency may be exchanged for United States dollars as quoted in The Wall Street
Journal.
Fresenius AG: as defined in the preamble to this Agreement.
Fresenius AG Assets: all Assets owned by any member of the
Fresenius AG Group immediately prior to the Contribution Date, other than FWD
Business Assets and other than any stock or assets of Fresenius USA.
Fresenius AG Business: all of the business and operations
conducted at any time, whether prior to, on or after the Contribution Date, by
any member of the Fresenius AG Group, other than the FWD Business.
Fresenius AG Group: Fresenius AG and the Fresenius AG
Subsidiaries, other than any member of the FWD Business Group.
Fresenius AG Indemnitees: Fresenius AG, each Affiliate of
Fresenius AG and each of their respective Representatives and each of the heirs,
executors, successors and assigns of any of the foregoing.
Fresenius AG Subsidiaries: all direct and indirect
Subsidiaries of Fresenius AG, other than FWD Business Subsidiaries and other
than Fresenius USA and its
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Subsidiaries; provided, however, that for purposes of this Agreement, GmbH and
the FWD Business Subsidiaries shall not be deemed to be Subsidiaries of
Fresenius AG.
Fresenius Tax Indemnification Agreement: a tax sharing
agreement between Fresenius AG and GmbH substantially in the form attached
hereto as Exhibit B, with such changes as may be mutually satisfactory to
Fresenius AG, GmbH, and Grace-Conn.
Fresenius USA: Fresenius USA, Inc., a Massachusetts
Corporation.
Fresenius USA Merger: as defined in the Reorganization
Agreement.
FWD Business: as defined in the Reorganization Agreement,
but including all business and operations of Fresenius USA.
FWD Business Assets: as defined in the Reorganization
Agreement, but including all Assets of Fresenius USA.
FWD Business Group: GmbH and each other FWD Business
Subsidiary.
FWD Business Indemnitees: Grace-Conn., Newco, GmbH, each
Affiliate of GmbH and each of their respective Representatives and each of the
heirs, executors, successors and assigns of any of the foregoing.
FWD Business Subsidiary: (i) all FWD Business Subsidiaries
(as defined in the Reorganization Agreement), (ii) Fresenius USA and (iii) all
corporations, partnerships or other business entities in which any member of the
FWD Business Group has owned or will own any equity interest or other investment
and which predominantly relates to the FWD Business.
FWD Indemnitor: as defined in Section 2.01 of this Agreement.
GmbH: as defined in the preamble to this Agreement.
G-GmbH: as defined in Section 2.01 of this Agreement.
Grace: as defined in the Reorganization Agreement.
Grace-Conn.: as defined in the preamble to this Agreement.
Group: the Fresenius AG Group or the FWD Business Group.
Indemnifiable Losses: all losses, Liabilities, damages,
claims, demands, judgments or settlements of any nature or kind, known or
unknown, fixed, accrued, absolute or contingent, liquidated or unliquidated,
including all reasonable costs and expenses (legal, accounting or otherwise as
such costs are incurred) relating thereto, suffered (and not actually reimbursed
by insurance proceeds) by an Indemnitee, including any reasonable costs or
expenses of enforcing any indemnity hereunder.
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Indemnifying Party: a Person who or which is obligated under
this Agreement to provide indemnification.
Indemnitee: a Person who or which may seek indemnification
under this Agreement.
Indemnity Payment: an amount that an Indemnifying Party is
required to pay to or in respect of an Indemnitee pursuant to Article IV.
Information: all records, books, contracts, instruments,
computer data and other data and information.
Liabilities: all debts, liabilities and obligations, whether
absolute or contingent, matured or unmatured, liquidated or unliquidated,
accrued or unaccrued, known or unknown, whenever arising, and whether or not the
same would properly be reflected on a balance sheet.
Litigation Matters: actual, threatened or future litigations,
investigations, claims or other legal matters that have been or may be asserted
against, or otherwise adversely affect, Fresenius AG and/or GmbH (or members of
either Group).
NMC: National Medical Care, Inc., a Delaware corporation and
an indirect wholly owned subsidiary of Grace.
Newco: as defined in the Reorganization Agreement.
NY Preferred Registration Statement: as defined in the
Reorganization Agreement.
Other Agreements: an employee benefits agreement,
restructuring agreements, an insurance procedures agreement, a lease consistent
with the terms set forth in Exhibit B hereto, a license consistent with the
terms set forth in Exhibit C hereto, the Fresenius Tax Indemnification Agreement
and the other agreements entered into or to be entered into in connection with
the Contribution referred to in any of the foregoing as contemplated by Section
2.03.
Person: an individual, a partnership, a joint venture, a
corporation, a limited liability company, a trust, an unincorporated
organization or a government or any department or agency thereof.
Privileged Information: with respect to either Group,
Information regarding a member of such Group, or any of its operations, Assets
or Liabilities (whether in documents or stored in any other form or known to
employees or agents) that is or may be protected from disclosure pursuant to the
attorney-client privilege, the work product doctrine or other applicable
privileges, that a member of the other Group may come into possession of or
obtain access to pursuant to this Agreement or otherwise.
Recapitalization: as defined in the Reorganization Agreement.
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Registration Statement: a registration statement to effect
the registration of the Newco capital stock (or depositary receipts therefor) to
be issued pursuant to the Reorganization Agreement under the Securities Act.
Reorganization Agreement: as defined in the recitals to this
Agreement.
Representative: with respect to any Person, any of such
Person's directors, officers, employees, agents, consultants, advisors,
accountants, attorneys and representatives.
Securities Act: the Securities Act of 1933, as amended,
together with the rules and regulations promulgated thereunder.
SP: as defined in the preamble to this Agreement.
Subsidiary: with respect to any specified Person, (i) any
corporation or other legal entity of which such Person or any of its
subsidiaries controls or owns, directly or indirectly, more than 50% of the
stock or other equity interest entitled to vote on the election of members to
the board of directors or similar governing body, and (ii) any corporation,
partnership or other business entity, in which such person has owned or shall
own any equity interest or other investment and which predominantly relates to
the business and operations conducted by such person's Group.
Tax: as defined in the Fresenius Tax Indemnification
Agreement.
Third-Party Claim: any claim, suit, derivative suit,
arbitration, inquiry, proceeding or investigation by or before any court, any
governmental or other regulatory or administrative agency or commission or any
arbitration tribunal asserted by a Person who or which is neither a party hereto
nor an Affiliate of a party hereto.
ARTICLE II
CERTAIN TRANSACTIONS PRIOR TO THE CONTRIBUTION DATE
SECTION 2.01 CERTAIN TRANSFERS. As promptly as practicable
following the date hereof (and in any event prior to the Contribution Date),
Fresenius AG shall contribute the FWD Business and all FWD Business Assets to
Newco. In furtherance of the foregoing:
(a) Fresenius AG shall identify all existing Subsidiaries
engaged solely in the FWD Business and contribute the capital stock of
such Subsidiaries to SP.
(b) Fresenius AG shall identify all German FWD Business Assets
(other than any capital stock, which is to be contributed pursuant to
(a) above) and shall contribute such assets to a newly formed GmbH
("G-GmbH").
(c) Fresenius AG shall contribute all capital stock of G-GmbH
to SP.
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(d) Fresenius AG shall use reasonable best efforts to cause
each remaining Subsidiary which conducts part of the FWD Business to
divest itself of all Assets which are not FWD Business Assets; and,
immediately thereafter, Fresenius AG shall contribute the capital stock
of each such Subsidiary to SP; provided, however, that in no event
shall Fresenius AG take any action which causes any representation set
forth in the Fresenius AG Tax Matters Certificate to be untrue.
(e) To the extent that any FWD Business Assets remain in
Fresenius AG Subsidiaries other than SP (or its direct Subsidiaries)
and G-GmbH, Fresenius AG shall cause each such Subsidiary to divest
itself of such FWD Business Assets and then shall cause such FWD
Business Assets to be contributed to other Subsidiaries, which may be
newly formed, and shall then contribute all of the capital stock of
such Subsidiaries to SP.
(f) Fresenius AG shall contribute all capital stock of
Fresenius USA held by it to SP.
(g) The Subsidiaries contributed to SP shall collectively be
"FWD Indemnitor," on a joint and several basis, and none of such
Subsidiaries shall be a direct or indirect parent of Grace.
(h) Fresenius AG shall undertake such transactions as may be
necessary for SP to become Newco, consistent with the terms of the
Reorganization Agreement.
(i) The foregoing shall be effectuated pursuant to transfer
documents and agreements acceptable to Grace-Conn.
SECTION 2.02 TERMINATION OF AGREEMENTS. Except as agreed by
Grace in writing prior to the Contribution Date, Fresenius AG shall terminate
all agreements between any member of the Fresenius AG Group and any member of
the FWD Business Group except as specifically provided herein or in the Other
Agreements.
SECTION 2.03 OTHER AGREEMENTS. Each of Fresenius AG and GmbH
shall enter into, or cause the appropriate members of the Group of which it is a
member, to enter into, the Tax Indemnification Agreement and Other Agreements as
may be advisable in connection with the Distribution including, without
limitation, agreements with respect to employee benefits, restructuring,
insurance procedures and other matters, all such other agreements to be on terms
acceptable to Grace-Conn. prior to the Distribution Date.
ARTICLE III
[Intentionally Omitted.]
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ARTICLE IV
SURVIVAL AND INDEMNIFICATION
SECTION 4.01 SURVIVAL OF AGREEMENTS. All covenants and
agreements of the parties hereto contained in this Agreement shall survive the
Contribution Date.
SECTION 4.02 INDEMNIFICATION. (a) Except as specifically
otherwise provided in the Other Agreements, FWD Indemnitor shall indemnify,
defend and hold harmless the Fresenius AG Indemnitees from and against (1) all
Indemnifiable Losses arising from or relating to the FWD Business or the FWD
Business Assets, whether such Indemnifiable Losses relate to events, occurrences
or circumstances occurring or existing, or whether such Indemnifiable Losses are
asserted, before or after the Contribution Date; and (2) all Indemnifiable
Losses arising out of or based upon any untrue statement or alleged untrue
statement of a material fact, or omission or alleged omission to state a
material fact required to be stated, in the Registration Statement, NY Preferred
Registration Statement or the Proxy Statement supplied by Grace or its
subsidiaries or any preliminary or final form thereof or any amendment thereto,
or necessary to make the statements therein not misleading.
(b) Except as specifically otherwise provided in the Other
Agreements, Fresenius AG shall indemnify, defend and hold harmless the FWD
Business Indemnitees from and against (1) all Indemnifiable Losses of or
relating to the Fresenius AG Group (including, without limitation, relating to
Fresenius USA or its shareholders or the Fresenius AG Business), whether such
Indemnifiable Losses relate to events, occurrences or circumstances occurring or
existing, or whether such Indemnifiable Losses are asserted, before or after the
Contribution Date, other than those Indemnifiable Losses arising from the FWD
Business; (2) all Indemnifiable Losses arising from or relating to all
litigation brought by Fresenius USA shareholders acting in such capacity
relating to the Reorganization; and (3) all Indemnifiable Losses arising out of
or based upon any untrue statement or alleged untrue statement of a material
fact, or omission or alleged omission to state a material fact required to be
stated, in the Registration Statement, NY Preferred Registration Statement or
the Proxy Statement or any preliminary or final form thereof or any amendment
thereto, or necessary to make the statements therein not misleading, except that
such indemnifications shall not apply to any Indemnifiable Losses that arise out
of or are based upon any statement or omission, or alleged statement or
omission, in any portion of the Registration Statement, NY Preferred
Registration Statement or the Proxy Statement, or any preliminary or final form
thereof or any amendment thereto, supplied by Grace or its Subsidiaries.
(c) Notwithstanding anything to the contrary set forth herein,
indemnification relating to any arrangements between any member of the Fresenius
AG Group and any member of the FWD Business Group for the provision after the
Contribution of goods and services in the ordinary course shall be governed by
the terms of such arrangements and not by this Section 4.02.
SECTION 4.03 PROCEDURES FOR INDEMNIFICATION FOR THIRD-PARTY
CLAIMS. (a) GmbH shall, and shall cause the other FWD Business Indemnitees to,
notify Fresenius AG in writing promptly after learning of any Third-Party Claim
for which any FWD Business Indemnitee intends to seek indemnification from
Fresenius AG
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under this Agreement. Fresenius AG shall, and shall cause the other Fresenius AG
Indemnitees to, notify GmbH in writing promptly after learning of any
Third-Party Claim for which any Fresenius AG Indemnitee intends to seek
indemnification from FWD Indemnitor under this Agreement. The failure of any
Indemnitee to give such notice shall not relieve any Indemnifying Party of its
obligations under this Article except to the extent that such Indemnifying Party
or its Affiliate is actually prejudiced by such failure to give notice. Such
notice shall describe such Third-Party Claim in reasonable detail considering
the information provided to the Indemnitee.
(b) Except as otherwise provided in subsection (c) of this
Section 4.03, an Indemnifying Party may, by notice to the Indemnitee and to FWD
Indemnitor, if Fresenius AG is the Indemnifying Party, or to the indemnitees and
Fresenius AG, if FWD Indemnitor is the Indemnifying Party, at any time after
receipt by such Indemnifying Party of such Indemnitee's notice of a Third-Party
Claim, undertake (itself or through another member of the Group of which the
Indemnifying Party is a member) the defense or settlement of such Third-Party
Claim. If an Indemnifying Party undertakes the defense of any Third-Party Claim,
such Indemnifying Party shall thereby admit its obligation to indemnify the
Indemnitee against such Third-Party Claim, and such Indemnifying Party shall
control the investigation and defense or settlement thereof, and the Indemnitee
may not settle or compromise such Third-Party Claim, except that such
Indemnifying Party shall not require any Indemnitee, without its prior written
consent, to take or refrain from taking any action in connection with such
Third-Party Claim, or make any public statement, which such Indemnitee
reasonably considers to be against its interests, nor shall the Indemnifying
Party, without the prior written consent of the Indemnitee and of FWD
Indemnitor, if the Indemnitee is a FWD Business Indemnitee, or of the Indemnitee
and of Fresenius AG, if the Indemnitee is a Fresenius AG Indemnitee, consent to
any settlement that does not include as a part thereof an unconditional release
of the Indemnitees from liability with respect to such Third-Party Claim or that
requires the Indemnitee or any of its Representatives or Affiliates to make any
payment that is not fully indemnified under this Agreement or to submit to any
non-monetary remedy; and subject to the Indemnifying Party's control rights, as
specified herein, the Indemnitees may participate in such investigation and
defense, at their own expense. Following the provision of notice to the
Indemnifying Party, until such time as an Indemnifying Party has undertaken the
defense of any Third-Party Claim, as provided herein, such Indemnified Party
shall control the investigation and defense or settlement thereof, without
prejudice to its right to seek indemnification hereunder.
(c) If an Indemnitee reasonably determines that there may be
legal defenses available to it that are different from or in addition to those
available to its Indemnifying Party which make it inappropriate for the
Indemnifying Party to undertake the defense or settlement thereof, then such
Indemnifying Party shall not be entitled to assume undertake the defense or
settlement of such Third-Party Claim; and counsel for the Indemnifying Party
shall be entitled to conduct the defense of such Indemnifying Party and counsel
for the Indemnitee shall be entitled to conduct the defense of such Indemnitee,
it being understood that both such counsel shall cooperate with each other to
conduct the defense or settlement of such action as efficiently as possible.
(d) In no event shall an Indemnifying Party be liable for the
fees and expenses of more than one counsel for all Indemnitees in connection
with any one action,
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or separate but similar or related actions, in the same jurisdiction arising out
of the same general allegations or circumstances.
(e) FWD Indemnitor shall, and shall cause the other FWD
Business Indemnitees to, and Fresenius AG shall, and shall cause the other
Fresenius AG Indemnitees to, make available to each other, their counsel and
other Representatives, all information and documents reasonably available to
them which relate to any Third-Party Claim, and otherwise cooperate as may
reasonably be required in connection with the investigation, defense and
settlement thereof. Any joint defense agreement entered into by Fresenius AG or
FWD Indemnitor with any third party relating to any Third-Party Claim shall
provide that Fresenius AG or FWD Indemnitor may, if requested, provide
information obtained through any such agreement to the Fresenius AG Indemnitees
or the FWD Business Indemnitees.
SECTION 4.04 REMEDIES CUMULATIVE. The remedies provided in
this Article IV shall be cumulative and shall not preclude assertion by any
Indemnitee of any other rights or the seeking of any other remedies against any
Indemnifying Party. However, the procedures set forth in Section 4.03 shall be
the exclusive procedures governing any indemnity action brought under this
Agreement or otherwise and relating to a Third-Party Claim, except as otherwise
specifically provided in any of the Other Agreements.
ARTICLE V
CERTAIN ADDITIONAL COVENANTS
SECTION 5.01 NOTICES TO THIRD PARTIES. In addition to the
actions described in Section 5.02, the members of the Fresenius AG Group and the
members of the FWD Business Group shall cooperate to make all other filings and
give notice to and obtain consents from all third parties that may reasonably be
required to consummate the transactions contemplated by this Agreement and the
Other Agreements.
SECTION 5.02 LICENSES AND PERMITS. Each party hereto shall
cause the appropriate members of its Group to prepare and file with the
appropriate licensing and permitting authorities applications for the transfer
or issuance as may be necessary or advisable in connection with the Contribution
to its Group of all material governmental licenses and permits required for the
members of its Group to operate its Business after the Contribution. The members
of the Fresenius AG Group and the members of the FWD Business Group shall
cooperate and use all reasonable efforts to secure the transfer or issuance of
the licenses and permits.
SECTION 5.03 INTERCOMPANY AGREEMENTS. All contracts, licenses,
agreements, commitments or other arrangements, formal or informal, between any
member of the Fresenius AG Group, on the one hand, and any member of the FWD
Business Group (or any unit of the FWD Business), on the other hand, in
existence as of the Contribution Date, pursuant to which any member of either
Group provides to any member of the other Group services (including, without
limitation, management, administrative, legal, financial, accounting, data
processing, insurance, or technical support), or the use of any Assets of any
member of the other Group, or the secondment of any employee, or
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pursuant to which rights, privileges or benefits are afforded to members of
either Group as Affiliates of the other Group, shall terminate as of the close
of business on the day prior to the Contribution Date, except as specifically
provided herein or in the Other Agreements. From and after the Contribution
Date, no member of either Group shall have any rights under any such contract,
license, agreement, commitment or arrangement with any member of the other
Group, except as specifically provided herein or in the Other Agreements.
SECTION 5.04 GUARANTEE OBLIGATIONS. (a) Fresenius AG and FWD
Indemnitor shall cooperate, and shall cause their respective Groups to
cooperate, to terminate, or to cause a member of the FWD Business Group to be
substituted in all respects for any member of the Fresenius AG Group in respect
of, all obligations of any member of the Fresenius AG Group under any loan,
financing, lease, contract, or other obligation in existence as of the
Contribution Date pertaining to the FWD Business for which such member of the
Fresenius AG Group may be liable, as guarantor, original tenant, primary obligor
or otherwise. If such a termination or substitution is not effected by the
Contribution Date, (1) FWD Indemnitor shall indemnify and hold harmless the
Fresenius AG Indemnitees for any Indemnifiable Loss arising from or relating
thereto, and (2) without the prior written consent of the Chief Financial
Officer, Treasurer or any Assistant Treasurer of Fresenius AG, from and after
the Contribution Date, FWD Indemnitor shall not, and shall not permit any member
of the FWD Business Group or any of its Affiliates to, renew or extend the term
of, increase its obligations under, or transfer to a third party, any loan,
lease, contract or other obligation for which any member of the Fresenius AG
Group is or may be liable unless all obligations of the Fresenius AG Group with
respect thereto are thereupon terminated by documentation reasonably
satisfactory in form and substance to the Chief Financial Officer, Treasurer or
any Assistant Treasurer of Fresenius AG.
(b) Fresenius AG and FWD Indemnitor shall cooperate, and shall
cause their respective Groups to cooperate, to terminate, or to cause a member
of the Fresenius AG Group to be substituted in all respects for any member of
the FWD Business Group in respect of, all obligations of any member of the FWD
Business Group under any loan, financing, lease, contract or other obligation in
existence as of the Contribution Date pertaining to the Fresenius AG Business
for which such member of the FWD Business Group may be liable, as guarantor,
original tenant, primary obligor or otherwise. If such a termination or
substitution is not effected by the Contribution Date, (1) Fresenius AG shall
indemnify and hold harmless the FWD Business Indemnitees for any Indemnifiable
Loss arising from or relating thereto, and (2) without the prior written consent
of the Chief Financial Officer, Treasurer or any Assistant Treasurer of FWD
Indemnitor, from and after the Contribution Date, Fresenius AG shall not, and
shall not permit any member of the Fresenius AG Group to, renew or extend the
term of, increase its obligations under, or transfer to a third party, any loan,
lease, contract or other obligation for which any member of the FWD Business
Group is or may be liable unless all obligations of the FWD Business Group with
respect thereto are thereupon terminated by documentation reasonably
satisfactory in form and substance to the Chief Financial Officer, Treasurer or
any Assistant Treasurer of FWD Indemnitor.
SECTION 5.05 FURTHER ASSURANCES. In addition to the actions
specifically provided for elsewhere in this Agreement, each of the parties
hereto shall use reasonable efforts to take, or cause to be taken, all actions,
and to do, or cause to be
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15
done, all things reasonably necessary, proper or advisable under applicable
laws, regulations and agreements to consummate and make effective the
transactions contemplated by this Agreement including, without limitation, the
Asset transfers and debt and cash balances of the other party contemplated
thereby following the Contribution. Without limiting the foregoing, each party
hereto shall cooperate with the other party, and execute and deliver, or use
reasonable efforts to cause to be executed and delivered, all instruments, and
to make all filings with, and to obtain all consents, approvals or
authorizations of, any governmental or regulatory authority or any other Person
under any permit, license, agreement, indenture or other instrument, and take
all such other actions as such party may reasonably be requested to take by any
other party hereto from time to time, consistent with the terms of this
Agreement and the Other Agreements, in order to effectuate the provisions and
purposes of this Agreement. Without limiting the foregoing the parties will as
promptly as practicable (and in the case of this Agreement and the
Reorganization Agreement within one week after the signing hereof in Germany or
Switzerland) apply for any notarial or similar registrations with respect to the
transactions contemplated hereby in foreign jurisdictions.
ARTICLE VI
ACCESS TO INFORMATION
SECTION 6.01 PROVISION OF CORPORATE RECORDS. Prior to or as
promptly as practicable after the Contribution Date, Fresenius AG shall deliver
to GmbH all corporate books and records of the FWD Business Group in its
possession and copies of the relevant portions of all corporate books and
records of the Fresenius AG Group relating directly and primarily to the FWD
Business Assets, the FWD Business, or the Liabilities of the FWD Business Group,
including, in each case, all active agreements, active litigation files and
government filings. From and after the Contribution Date, all such books,
records and copies shall be the property of GmbH. Prior to or as promptly as
practicable after the Contribution Date, GmbH shall deliver to Fresenius AG all
corporate books and records of the Fresenius AG Group in its possession and
copies of the relevant portions of all corporate books and records of the
Fresenius AG Group relating directly and primarily to the Fresenius AG Assets,
the Fresenius AG Business, or the Liabilities of the Fresenius AG Group,
including, in each case, all active agreements, active litigation files and
government filings. From and after the Contribution Date, all such books,
records and copies shall be the property of Fresenius AG.
SECTION 6.02 ACCESS TO INFORMATION. From and after the
Contribution Date, each of Fresenius AG and GmbH shall afford to the other and
to the other's Representatives reasonable access and duplicating rights during
normal business hours to all Information within the possession or control of
such party's Group relating to the other party's Group's pre-Contribution
business, Assets or Liabilities or relating to or arising in connection with the
relationship between the Groups on or prior to the Contribution Date, insofar as
such access is reasonably required for a reasonable purpose, subject to the
provisions below regarding Privileged Information. Without limiting the
foregoing, Information may be requested under this Section 6.02 for audit,
accounting, claims, litigation and Tax purposes, as well as for purposes of
fulfilling disclosure and reporting obligations.
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16
In furtherance of the foregoing:
(a) Each party hereto acknowledges that: (1) Each of Fresenius
AG and GmbH (and the members of the Fresenius AG Group and the FWD
Business Group, respectively) has or may obtain Privileged Information;
(2) there are a number of Litigation Matters affecting each or both of
Fresenius AG and GmbH; (3) both Fresenius AG and GmbH have a common
legal interest in Litigation Matters, in the Privileged Information,
and in the preservation of the confidential status of the Privileged
Information, in each case relating to pre-Contribution business of the
Fresenius AG Group or the FWD Business Group or relating to or arising
in connection with the relationship between the Groups on or prior to
the Contribution Date; and (4) both Fresenius AG and GmbH intend that
the transactions contemplated hereby and by the Reorganization
Agreement and the Other Agreements and any transfer of Privileged
Information in connection therewith shall not operate as a waiver of
any potentially applicable privilege.
(b) Each of Fresenius AG and GmbH agrees, on behalf of itself
and each member of the Group of which it is a member, not to disclose
or otherwise waive any privilege attaching to any Privileged
Information relating to pre-Contribution business of the FWD Business
Group or the Fresenius AG Group, respectively, or relating to or
arising in connection with the relationship between the Groups on or
prior to the Contribution Date, without providing prompt written notice
to and obtaining the prior written consent of the other, which consent
shall not be unreasonably withheld and shall not be withheld if the
other party certifies that such disclosure is to be made in response to
a likely threat of suspension or debarment or similar action; provided,
however, that Fresenius AG and GmbH may make such disclosure or waiver
with respect to Privileged Information if such Privileged Information
relates solely to the pre-Contribution business of the Fresenius AG
Group in the case of Fresenius AG or the FWD Business Group in the case
of GmbH. In the event of a disagreement between any member of the
Fresenius AG Group and any member of the FWD Business Group concerning
the reasonableness of withholding such consent, no disclosure shall be
made prior to a resolution of such disagreement by a court of competent
jurisdiction.
(c) Upon any member of the Fresenius AG Group or any member of
the FWD Business Group receiving any subpoena or other compulsory
disclosure notice from a court, other governmental agency or otherwise
which requests disclosure of Privileged Information, in each case
relating to pre-Contribution business of the FWD Business Group or the
Fresenius AG Group, respectively, or relating to or arising in
connection with the relationship between the Groups on or prior to the
Contribution Date, the recipient of the notice shall promptly provide
to the other Group (following the notice provisions set forth herein) a
copy of such notice, the intended response, and all materials or
information relating to the other Group that might be disclosed. In the
event of a disagreement as to the intended response or disclosure,
unless and until the disagreement is resolved as provided in subsection
(b), the parties shall cooperate to assert all defenses to disclosure
claimed by either party's Group, and shall not disclose any disputed
documents or information until all legal defenses and claims of
privilege have been finally determined.
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SECTION 6.03 PRODUCTION OF WITNESSES. Subject to Section 6.02,
after the Contribution Date, each of Fresenius AG and GmbH shall, and shall
cause each member of the Fresenius AG Group and the FWD Business Group,
respectively, to, make available to Fresenius AG or GmbH or any member of the
Fresenius AG Group or of the FWD Business Group, as the case may be, upon
written request, such Group's directors, officers, employees and agents as
witnesses to the extent that any such Person may reasonably be required in
connection with any Litigation Matters, administrative or other proceedings in
which the requesting party may from time to time be involved and relating to
pre-Contribution business of the Fresenius AG Group or the FWD Business Group or
relating to or in connection with the relationship between the Groups on or
prior to the Contribution Date.
SECTION 6.04 RETENTION OF RECORDS. Except as otherwise agreed
in writing, or as otherwise provided in the Other Agreements, each of Fresenius
AG and GmbH shall, and shall cause the members of the Group of which it is a
member to, retain all Information in such party's Group's possession or under
its control relating directly and primarily to the pre-Contribution business,
Assets or Liabilities of the other party's Group that is less than ten years old
until such Information is at least ten years old except that if, prior to the
expiration of such period, any member of either party's Group wishes to destroy
or dispose of any such Information that is at least three years old, prior to
destroying or disposing of any of such Information, (1) the party whose Group is
proposing to dispose of or destroy any such Information shall provide no less
than 30-days' prior written notice to the other party, specifying the
Information proposed to be destroyed or disposed of, and (2) if, prior to the
scheduled date for such destruction or disposal, the other party requests in
writing that any of the Information proposed to be destroyed or disposed of be
delivered to such other party, the party whose Group is proposing to dispose of
or destroy such Information promptly shall arrange for the delivery of the
requested Information to a location specified by, and at the expense of, the
requesting party.
SECTION 6.05 CONFIDENTIALITY. Subject to Section 6.02, which
shall govern Privileged Information, from and after the Contribution Date, each
of Fresenius AG and GmbH shall hold, and shall use its reasonable efforts to
cause its Affiliates and Representatives to hold, in strict confidence all
Information concerning the other party's Group obtained by it prior to the
Contribution Date or furnished to it by such other party's Group pursuant to
this Agreement or the Other Agreements and shall not release or disclose such
Information to any other Person, except its Affiliates and Representatives, who
shall be bound by the provisions of this Section 6.05, and each party shall be
responsible for a breach by any of its Affiliates or Representatives; provided,
however, that any member of the Fresenius AG Group or the FWD Business Group
may disclose such Information to the extent that (a) disclosure is compelled by
judicial or administrative process or, in the opinion of such Person's counsel,
by other requirements of law, or (b) such party can show that such Information
was (1) available to such Person on a nonconfidential basis (other than from a
member of the other party's Group) prior to its disclosure by the other party's
Group, (2) in the public domain through no fault of such Person or (3) lawfully
acquired by such Person from another source after the time that it was
furnished to such Person by the other party's Group, and not acquired from such
source subject to any confidentiality obligation on the part of such source, or
on the part of the acquiror, known to the acquiror. Notwithstanding the
foregoing, each of Fresenius AG and GmbH shall be deemed to have satisfied its
obligations under this
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Section 6.05 with respect to any Information (other than Privileged Information)
if it exercises the same care with regard to such Information as it takes to
preserve confidentiality for its own similar Information.
SECTION 6.06 COOPERATION WITH RESPECT TO GOVERNMENT REPORTS
AND FILINGS. Fresenius AG, on behalf of itself and each member of the Fresenius
AG Group, agrees to provide any member of the FWD Business Group, and GmbH, on
behalf of itself and each member of the FWD Business Group, agrees to provide
any member of the Fresenius AG Group, with such cooperation and Information as
may be reasonably requested by the other in connection with the preparation or
filing of any government report or other government filing contemplated by this
Agreement or in conducting any other government proceeding relating to
pre-Contribution business of the Fresenius AG Group or the FWD Business Group,
Assets or Liabilities of either Group or relating to or in connection with the
relationship between the Groups on or prior to the Contribution Date. Such
cooperation and Information shall include, without limitation, promptly
forwarding copies of appropriate notices and forms or other communications
received from or sent to any government authority which relate to the Fresenius
AG Group, in the case of the FWD Business Group, or the FWD Business Group, in
the case of the Fresenius AG Group. Each party shall make its employees and
facilities available during normal business hours and on reasonable prior notice
to provide explanation of any documents or Information provided hereunder.
ARTICLE VII
NO REPRESENTATIONS OR WARRANTIES
SECTION 7.01 NO REPRESENTATIONS OR WARRANTIES. Fresenius AG
acknowledges that, prior to the date of this Agreement, it has had primary
responsibility for the operation and management of the FWD Business Assets. GmbH
understands and agrees that no member of the Fresenius AG Group is, in this
Agreement or in any other agreement or document, representing or warranting to
GmbH or any member of the FWD Business Group in any way as to the FWD Business
Assets, the FWD Business or the Liabilities of the FWD Business Group or as to
any consents or approvals required in connection with the consummation of the
transactions contemplated by this Agreement, it being agreed and understood that
GmbH and each member of the FWD Business Group shall take all of the FWD
Business Assets "as is, where is". GmbH and each member of the FWD Business
Group shall bear the economic and legal risk that conveyances of the FWD
Business Assets shall prove to be insufficient, that the title of any member of
the FWD Business Group to any FWD Business Assets, shall be other than good and
marketable and free from encumbrances or that results from the failure of GmbH
or any member of the FWD Business Group to obtain any consents or approvals
relating to the FWD Business required in connection with the consummation of the
transactions contemplated by this Agreement. The foregoing shall be without
prejudice to any rights under Section 4.02 or Section 5.05 of this Agreement.
- 15 -
19
ARTICLE VIII
MISCELLANEOUS
SECTION 8.01 USE OF FRESENIUS AG NAME AND ▇▇▇▇. Prior to
the Contribution Date, Fresenius AG shall enter into a license agreement
consistent with the terms set forth in Exhibit C hereto, providing for the use
of certain of Fresenius AG's names and marks.
SECTION 8.02 COMPLETE AGREEMENT. This Agreement, the exhibits
and schedules hereto and the agreements and other documents referred to herein
shall constitute the entire agreement between the parties hereto with respect to
the subject matter hereof (other than the Reorganization Agreement and the
schedules and exhibits thereto) and shall supersede all previous negotiations,
commitments and writings with respect to such subject matter.
SECTION 8.03 EXPENSES. Fresenius AG shall bear all costs with
respect to the transactions contemplated hereby and by the Other Agreements,
except as otherwise specifically provided in the Reorganization Agreement and
the Other Agreements.
SECTION 8.04 JURISDICTION AND FORUM. (a) The parties hereto
agree that the appropriate forum for any disputes between any of the parties
hereto arising out of this Agreement or the transactions contemplated hereby
shall be any state or federal court in the State of New York or the State of
Delaware provided that the foregoing shall not limit the rights of any person to
obtain execution of judgment in any other jurisdiction. The parties hereto
further agree, to the extent permitted by law, that final and unappealable
judgment against any of them in any action or proceeding contemplated above
shall be conclusive and may be enforced in any other jurisdiction within or
outside the United States by suit on the judgment, a certified or exemplified
copy of which shall be conclusive evidence of the fact and amount of such
judgment.
(b) By the execution and delivery of this Agreement, each of
the parties hereto (i) irrevocably designates and appoints The Corporation Trust
Company ("CTC-NY") care of CT Corporation System, at ▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇,
▇▇ ▇▇▇ ▇▇▇▇ ▇▇ ▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇ of ▇▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇▇ ▇▇▇ ▇▇▇▇, ▇▇▇▇▇, or The
Corporation Trust Company ("CTC-DE") care of Corporation Trust Company, ▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇, ▇▇▇▇▇, as its authorized agent upon which
process may be served in any action or proceeding arising out of or relating to
this Agreement, (ii) submits to the personal jurisdiction of any state or
federal court in the State of New York or the State of Delaware in any such
action or proceeding, and (iii) agrees that service of process upon CTC-NY or
upon CTC-DE shall be deemed in every respect effective service of process upon
such person in any such action or proceeding. Each of the parties hereto further
agrees to take any and all action, including the execution and filing of any and
all such documents and instruments, as may be necessary to continue such
designation and appointment of CTC-NY or CTC-DE in full force and effect so long
as this Agreement shall be in effect. The foregoing shall not limit the rights
of any party to serve process in any other manner permitted by law.
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20
(c) To the extent that either of the parties hereto has or
hereafter may acquire any immunity from jurisdiction of any court or from any
legal process (whether through service or notice, attachment prior to judgment,
attachment in aid of execution, execution or otherwise) with respect to itself
or its property, such person hereby irrevocably waives such immunity in respect
of its obligations with respect to this Agreement.
SECTION 8.05 NOTICES. All notices, requests, claims, demands
and other communications hereunder shall be in writing and shall be given (and
shall be deemed to have been duly given upon receipt) by delivery in person, by
cable, telegram, telex or other standard form of telecommunications, or by
registered or certified mail, postage prepaid, return receipt requested,
addressed as follows:
If to Fresenius AG or any member of the Fresenius AG Group:
Fresenius AG
Borkenberg 14
61440 ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇▇▇
Attention: ▇▇. ▇▇▇ ▇▇▇▇▇
Fax: ▇▇▇-▇▇-▇▇▇▇-▇▇-▇▇▇▇
with a copy to:
O'Melveny & ▇▇▇▇▇
Citicorp Center
▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: ▇▇. ▇▇▇▇▇▇ ▇▇▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
If to GmbH or any member of the FWD Business Group
GmbH
▇/▇ ▇▇▇▇▇▇▇▇▇ ▇▇
▇▇▇▇▇▇▇▇▇▇ ▇▇
▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇▇▇
Attention: ▇▇. ▇▇▇ ▇▇▇▇▇
Fax: ▇▇▇-▇▇-▇▇▇▇-▇▇-▇▇▇▇
with a copy to:
▇. ▇. ▇▇▇▇▇ & Co.-Conn.
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: Secretary
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
- 17 -
21
with a copy to:
Wachtell, Lipton, ▇▇▇▇▇ & ▇▇▇▇
▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇, Esq.
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
or to such other address as any party hereto may have furnished to the other
parties by a notice in writing in accordance with this Section 8.05.
SECTION 8.06 AMENDMENT AND MODIFICATION. This Agreement may be
amended, modified or supplemented only by a written agreement signed by all of
the parties hereto.
SECTION 8.07 SUCCESSORS AND ASSIGNS; NO THIRD-PARTY
BENEFICIARIES. This Agreement and all of the provisions hereof shall be binding
upon and inure to the benefit of the parties hereto and their successors and
permitted assigns, but neither this Agreement nor any of the rights, interests
and obligations hereunder shall be assigned by any party hereto without the
prior written consent of the other party. Except for the provisions of Sections
4.02 and 4.03 relating to indemnities, which are also for the benefit of the
Indemnitees, this Agreement is solely for the benefit of the parties hereto and
their Subsidiaries and Affiliates and is not intended to confer upon any other
Persons any rights or remedies hereunder.
SECTION 8.08 COUNTERPARTS. This Agreement may be executed in
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
SECTION 8.09 INTERPRETATION. The Article and Section headings
contained in this Agreement are solely for the purpose of reference, are not
part of the agreement of the parties hereto and shall not in any way affect the
meaning or interpretation of this Agreement.
SECTION 8.10 SEVERABILITY. If any provision of this Agreement
or the application thereof to any person or circumstance is determined by a
court of competent jurisdiction to be invalid, void or unenforceable, the
remaining provisions hereof, or the application of such provision to persons or
circumstances other than those as to which it has been held invalid or
unenforceable, shall remain in full force and effect and shall in no way be
affected, impaired or invalidated thereby, so long as the economic or legal
substance of the transactions contemplated hereby is not affected in any manner
adverse to any party.
SECTION 8.11 REFERENCES; CONSTRUCTION. References to any
"Article," "Exhibit," "Schedule" or "Section," without more, are to Articles,
Exhibits, Schedules and Sections to or of this Agreement. Unless otherwise
expressly stated, clauses beginning with the term "including" set forth examples
only and in no way limit the generality of the matters thus exemplified.
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IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be duly executed as of the date first above written.
FRESENIUS AG
By: /s/ ▇▇▇▇ ▇▇▇▇▇
-------------------------------
Name:
Title:
STERIL PHARMA GMBH
By: /s/ ▇▇▇▇ ▇▇▇▇▇
-------------------------------
Name:
Title:
▇. ▇. ▇▇▇▇▇ & CO.-CONN.
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
-------------------------------
Name:
Title:
23
EXHIBIT A
TAX INDEMNIFICATION AGREEMENT
TAX INDEMNIFICATION AGREEMENT (the "Agreement"), dated
February , 1996, among FRESENIUS AG, an Aktiengesellschaft organized under the
laws of the Federal Republic of Germany ("Fresenius AG"), Newco and ▇.▇. ▇▇▇▇▇
& Co.-Conn., a Connecticut corporation ("Grace-Conn.").
RECITALS
A. WHEREAS Fresenius AG has organized Newco for the purposes
of effecting the transactions described herein and in the Agreement and Plan of
Reorganization dated February 4, 1996 (the "Reorganization Agreement");
B. WHEREAS, as part of those transactions, Fresenius AG will
have made the Contribution, as such term is defined in the Reorganization
Agreement;
C. WHEREAS, as part of such transactions, ▇.▇. ▇▇▇▇▇ & Co., a
New York corporation ("Grace") will have effected the Recapitalization and the
Distribution, as such terms are defined in the Reorganization Agreement;
D. WHEREAS, as part of such transactions, the Fresenius USA
Merger and the Grace Merger, as such terms are defined in the Reorganization
Agreement, will have occurred; and
E. WHEREAS the parties hereto have determined that it is
necessary and desirable to set forth their agreement with regard to the
liability for Taxes (as such term is defined in that certain Tax Sharing and
Indemnification Agreement dated as of the Closing Date, between Grace and
Grace-Conn. (the "Tax Sharing Agreement")) relating to the Contribution and the
Fresenius USA Merger;
NOW THEREFORE, in consideration of the premises, and of the
covenants and agreements set forth herein and other good and valuable
consideration, the parties agree as follows:
Section 1. Definitions. Capitalized terms not otherwise
defined herein or by reference to a particular document referred to herein
shall have the meaning ascribed to such terms in the Tax Sharing Agreement.
Section 2. Indemnification. Subject to the other provisions
of this Agreement, Fresenius AG agrees to indemnify, defend and to hold
harmless Grace, Grace-Conn., the Grace-Conn. Indemnities, Newco and Newco's
subsidiaries from and against any Taxes, liability and Indemnifiable Losses,
(1) resulting from the Contribution or the Fresenius USA Merger or (2) arising
out of, relating to or associated with any business or assets of Fresenius AG
or its subsidiaries other than the FWD Business Assets or FWD Business ("Other
Business"). Without limiting the foregoing, in the event that a Fresenius AG
subsidiary operates both an FWD Business and an Other Business ("Dual
Subsidiary"), Fresenius AG will indemnify and hold harmless Newco and its
subsidiaries from and against any Tax liability and Indemnifiable Losses
arising from or relating to any Other Business Tax Items. "Other Business Tax
Items" shall mean a Tax Item attributable to
24
Fresenius AG and its subsidiaries other than a Tax Item solely attributable to
the FWD Business. "Tax Item" means any item of income, gain, loss, deduction,
credit, provisions for reserves, recapture of credit or any other item which
increases or decreases taxes paid or payable. Fresenius AG will advance to
Newco and/or any Dual Subsidiary any Taxes attributable to Other Business Tax
Items in advance of the due date for the payment of such Taxes in respect of
any Dual Subsidiary and pay the Tax due with respect to such Tax Return. Newco
will cause to be filed any Tax Returns in respect of any Dual Subsidiary due
after the Closing Date. Fresenius AG shall not be responsible for, and shall
not indemnify, defend or hold harmless Newco or its subsidiaries from, any
Taxes for which any of the corporations that are the subject of the
Contribution or the Fresenius USA Merger are liable in connection with any of
the operations of the FWD Business (and not Other Business Tax Items), whether
occurring before or after the date of the Contribution or the Fresenius US
Merger. Disputes with respect to the calculation of Other Business Tax Items
shall be resolved in the manner set forth in Section 5.04 of the Tax Sharing
Agreement.
Section 3. Notice of Indemnity. Whenever Newco or
Grace-Conn., or any of their respective subsidiaries (hereinafter an
"Indemnitee"), becomes aware of the existence of an issue which could cause
Fresenius AG (hereinafter the "Indemnitor") to have any liability for
indemnification hereunder ("Indemnity Issue"), the Indemnitee shall promptly
give notice to the Indemnitor of such Indemnity Issue. The failure of any
Indemnity to give such notice shall not relieve the Indemnitor of its
obligations under this Agreement except to the extent the Indemnitor or any of
its affiliates is actually materially prejudiced by such failure to give
notice. The Indemnitor and its representatives, at the Indemnitor's expense,
shall be entitled to participate (i) in all conferences, meetings or
proceedings with any taxing authority, the subject matter of which is or
includes an Indemnity Issue and (ii) in all appearances before any court, the
subject matter of which is or includes an Indemnity Issue. The party who has
the responsibility for filing the Tax Return with respect to which there in an
increased Tax liability as a result of an Indemnity Issue (the "Responsible
Party") shall have the right to decide as between the parties how such matter
is to be dealt with and finally resolved with the appropriate taxing authority
and shall control all audits and similar proceedings. The Responsible Party
agrees to cooperate in the settlement of any Indemnity Issue with the other
party and to take such other party's interests into account. If the Indemnitor
is not the Responsible Party, (A) such cooperation may include permitting the
Indemnitor, at the Indemni-tor's sole expense, to litigate or otherwise resolve
any Indemnity Issue, and (B) whenever more than one action is reasonably
available in connection with any Indemnity Issue, the Responsible Party agrees
to take whatever action would mitigate the Indemnitor's liability hereunder,
after consultation with the Indemnitor. Notwithstanding the foregoing, nothing
herein shall require or obligate the Indemnitor to contest any Indemnity Issue.
Section 4. Expenses. Unless otherwise expressly provided in
this Agreement, each party shall bear any and all expenses that arise from
their respective obligations under this Agreement.
Section 5. Entire Agreement. This Agreement, together with
the Tax Sharing Agreement, constitutes the entire agreement of the parties
concerning the subject matter hereof and supersedes all other agreements,
whether or not written, in respect of any indemnification obligation of
Fresenius AG to Newco or Grace-Conn. or any of their respective subsidiaries.
This Agreement may not be amended except in writing, signed by
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the parties hereto. Anything in this Agreement or the Distribution Agreement
to the contrary notwithstanding, in the event and to the extent that there
shall be a conflict between the provisions of this Agreement and the
Distribution Agreement, the provisions of this Agreement shall control.
Section 6. Notices.
To Grace-Conn. or any member of the Grace-Conn. Group:
Grace-Conn.
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: Secretary
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
With a copy to:
Wachtell, Lipton, ▇▇▇▇▇ & ▇▇▇▇
▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇, Esq.
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
To Grace or any member of the NMC Group:
National Medical Care, Inc.
▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: General Counsel
Section 7. Term. This Agreement shall commence on the date
of execution indicated below and shall continue in effect until otherwise
agreed to in writing by Grace-Conn. and Fresenius AG, or their successors.
Section 8. Legal Enforceability. Any provision of this
Agreement which is prohibited or unenforceable in any jurisdiction shall, as to
such jurisdiction, be ineffective to the extent of such prohibition or
unenforceability without in-
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26
validating the remaining provisions hereof. Any such prohibition or
unenforceability in any jurisdiction shall not invalidate or render
unenforceable such provision in any other jurisdiction. Without prejudice to
any rights or remedies otherwise available to any party hereto, each party
hereto acknowledges that damages would be an inadequate remedy for any breach
of the provisions of this Agreement and agrees that the obligations of the
parties hereunder shall be specifically enforceable.
Section 9. Governing Law. This Agreement shall be governed
by the laws of New York.
Section 10. Titles and Headings. Titles and headings to
sections herein are inserted for the convenience of reference only and are not
intended to be a part or to affect the meaning or interpretation of this
Agreement.
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In WITNESS WHEREOF, the parties have executed this Agreement
as of the day of , 1996.
FRESENIUS AG
By:
-----------------------
Name:
Title:
NEWCO
By:
-----------------------
Name:
Title:
▇.▇. ▇▇▇▇▇ & CO.-▇▇▇▇.
By:
-----------------------
Name:
Title:
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EXHIBIT B
PROPOSED TERMS OF LEASE
Property Land and buildings located in Germany to the
extent used in FWD's operations.
Term 30 years.
Rental The equivalent of $12 million per year,
exclusive of maintenance and other costs,
providing for adjustment in accordance with
German commercial practices for similar real
estate.
29
EXHIBIT C
TERMS OF LICENSE FOR NAME AND ▇▇▇▇
Worldwide exclusive use of Fresenius name and trademarks in the Newco corporate
name and in connection with all aspects of the business of supplying renal
care-related goods or services (the "Renal Business"), including laboratories.
The license will be royalty-free and perpetual, subject to minimal trademark
limitations.
North American exclusive use of Fresenius name and trademarks in connection with
all aspects of other businesses of Newco in health care goods or services,
provided that such license shall apply to a particular product or service only
if, at the time of the first proposed commercial use by Newco in connection with
a product or service, such product or service does not compete with a North
American business of Fresenius AG then using the Fresenius name (i.e., first
commercial use, existing Fresenius businesses to be grandfathered). Outside
North America, Newco may obtain a license to use the Fresenius name and
trademarks in connection with health care goods and services with the consent of
Fresenius AG which will not be unreasonably withheld.
Newco to have a right of first negotiation/first refusal from Fresenius AG and
Grace-Conn. on all new technology with respect to application in or in material
special relationship to the Renal Business and the right to use the Fresenius
name and trademark in respect of goods or services manufactured, sold or
provided under such technology.
The parties will negotiate in good faith with respect to commercially reasonable
licenses of the Fresenius name and trademarks beyond the foregoing.
Fresenius AG and Grace-Conn. will each give an appropriate 10-year covenant not
to compete with Newco in the Renal Business.
Outside North America, Newco will do business under the name Fresenius Medical
Care. In North America, Newco will do business initially under the name
Fresenius/NMC.
