Share Sale and Transfer Agreement regarding all shares in Haleko Hanseatisches Lebensmittelkontor GmbH & Co. OHG, Food-Tech Handelsgesellschaft mbH, Aktivkost Handelsgesellschaft mbH, HPH Hamburger Pharma Handelsgesellschaft mbH of among Weider...
EXHIBIT
10.1
Share
Sale and Transfer Agreement
regarding
all shares in
Haleko
Hanseatisches Lebensmittelkontor GmbH & Co. OHG,
Food-Tech
Handelsgesellschaft mbH,
Aktivkost
Handelsgesellschaft mbH,
HPH
Hamburger Pharma Handelsgesellschaft mbH
of
17
June 2005
among
Weider
Nutrition GmbH,
Haleko
Management GmbH,
and
Atlantic
Grupa d.o.o.
Hopen
Investments B.V.,
Svalbard
Investments GmbH
1
This
share sale and transfer agreement (this "Agreement")
is made on 17 June 2005 by
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1.
|
Weider
Nutrition GmbH, registered in the commercial register at the local
court
in Hamburg under registration number HRB 68089 with business address
as
Xxxxxxxxxxxxxx Xxxx 0, 00000 Xxxxxxx, Xxxxxxx;
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("Seller
1")
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2.
|
Haleko
Management GmbH, registered in the commercial register at the local
court
in Hamburg under registration number HRB 67421 with headquarters
at
Xxxxxxxxxxxxxx Xxxx 0, 00000 Xxxxxxx,
Xxxxxxx;
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(“Seller
2”)
(Seller
1 and
Seller 2 collectively referred to herein as the "Sellers")
and
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3.
|
Atlantic
Grupa d.o.o., Xxxxxxxx 0, 00000 Xxxxxx, Xxxxxxx
|
("Atlantic
Grupa")
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4.
|
Hopen
Investments B.V., registered in the commercial register at the trade
register of the Chamber of Commerce and Industries for Rotterdam
under no.
24378086
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("Purchaser
1")
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5.
|
Svalbard
Investments GmbH, registered in the commercial register at the local
court
in Hamburg under registration number HRB 93737 with headquarters
at
Xxxxxxxxxxxxx 00, 00000 Xxxxxxx, Xxxxxxx (currently named TACITA
Vermögensverwaltungsgesellschaft
mbH).
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("Purchaser
2")
(Purchaser
1 and Purchaser 2 collectively referred to herein as the "Purchasers")
-
the
Sellers and the Purchasers individually also referred to herein as the
“Party”,
and, collectively, as the “Parties”
-
2
PREAMBLE
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A.
|
Seller
1
holds, inter alia, a share in the amount of DM 50,000 (fifty
thousand German Marks) in Seller 2. Seller 2 holds a partnership
interest
in the amount of DM 4,000 (four thousand German Marks)
("Participation 2") in Haleko Hanseatisches
Lebensmittelkontor GmbH & Co. OHG (“Haleko”), a
partnership organised under German law, registered in the commercial
register at the local court of Hamburg under registration no. HRA
92767.
The sole other partner in Haleko is Seller 1 with a partnership interest
of DM 1,496,000 (one million four hundred ninety-six thousand German
Marks) ("Participation 1"). Participation 1 and
Participation 2 are collectively referred to herein as the
"Participation". The business year of Haleko runs from
1 May to 30 April the following year.
Haleko itself
holds all of the shares in Multipower Nutrition S.a.r.l, Haleko Italia
S.r.l. and Power Gym Ltd. Power Gym Ltd. holds 50 % of the shares
in
Sports Direct Ltd..
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|
B.
|
Appendix A
to this Agreement shows the shareholder accounts as of
30 April 2005 which are kept at Haleko for the shareholders
comprising accounts for the fixed capital (Festkapitalkonten),
current accounts resulting from the former transformation of Haleko
GmbH
into Haleko OHG (Gesellschafterverrechnungskonten aus
Umwandlung), retained earnings of the shareholders
(Gewinnguthaben) and current accounts for the shareholders
(Gesellschafterverrechnungskonten) which result from transactions
between Haleko and its shareholders.
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|
C.
|
Seller
1 also holds in each of the following entities the entire stated
capital
with a share in
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|
-
|
Aktivkost
Handelsgesellschaft mbH, a private limited company organised under
the
laws of Germany, registered in the commercial register at the local
court
in Hamburg under registration number HRB 32457, with headquarters
at
Xxxxxxxxxxxxxx Xxxx 0, 00000 Xxxxxxx, Xxxxxxx
("Aktivkost") in the nominal amount of DM 50,000 (fifty
thousand German Marks) ("Share 1"); the
business year of Aktivkost runs from 1 May to 30 April
the following year;
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|
-
|
Food-Tech
Handelsgesellschaft mbH, a private limited company organised under
the
laws of Germany, registered in the commercial register at the local
court
in Hamburg under registration number HRB 37276, with headquarters
at
Xxxxxxxxxxxxxx Xxxx 0, 00000 Xxxxxxx, Xxxxxxx ("Food-Tech")
in the nominal amount of DM 100,000 (hundred thousand German Marks)
("Share
2"); the
business year of Food-Tech runs from 1 May to 30 April
the following year, and
|
|
-
|
HPH
Hamburger Pharma Handelsgesellschaft mbH, a private limited company
organised under the laws of Germany, registered in the commercial
register
at the local court in Hamburg under registration number HRB 49842,
with
headquarters at Xxxxxxxxxxxxxx Xxxx 0, 00000 Xxxxxxx, Xxxxxxx
("HPH")
in the nominal amount of DM 100,000 (hundred thousand German Marks)
("Share
3");
the business year of HPH runs from 1 May to 30 April
the following year.
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Share
1, Share 2 and Share 3 collectively referred to herein as the "Share".
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D.
|
Haleko
owes to Seller 1 an amount of € 831,918.76 due to unpaid interest for a
loan granted from Seller 1 to Haleko in 1999. The principal has been
repaid in full. The still outstanding amount does not bear any interest
("Loan").
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|
E.
|
By
assumption
agreement of 21 December 1998, Weider Nutrition S.L. assumed a guarantee
(Bürgschaft)
furnished
to Haleko in
the amount of DM 550,000 to secure certain claims by Haleko against
Food-Tech (the “Weider
Spain Surety”).
The Weider Spain Surety has not been enforced and is still
existing.
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|
F.
|
The
Sellers wish to sell, and the Purchasers wish to buy, the Participation
and the Share and the Loan subject to the terms and subject to the
conditions set out in this
Agreement.
|
3
THEREFORE,
the Sellers and the Purchasers agree as follows:
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1.
|
SALE
AND PURCHASE
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|
1.1
|
Pursuant
to the terms and conditions set forth in this Agreement, Seller 1
hereby
sells, and Purchaser 1 hereby accepts to buy, Participation 1, Share
1,
Share 2 and Share 3 with commercial effect on 1 May 2005
(hereinafter the "Effective
Date")
free and clear of any encumbrances, together with all ancillary rights,
including - as applicable - the right to receive all undistributed
dividends of previous business years and the current business
year.
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For
the avoidance of doubt, by Purchaser 1 acquiring the Participation 1
with commercial effect as of the Effective Date Purchaser 1 also assumes
the existing shareholder accounts kept at Haleko for Seller 1, i.e.
the
fixed capital, the current account resulting from transformation and the
retained earnings as set forth in Appendix A, provided, however, as
regards
the current account from transactions and the retained earnings account of
Seller 1 those two accounts shall be set-off against each other so that
Purchaser 1 only assumes the balance between those two accounts.
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1.2
|
Pursuant
to the terms and conditions set forth in this Agreement, Seller 2
hereby
sells, and Purchaser 2 hereby accepts to buy, Participation 2 with
commercial effect on 1 May 2005 (hereinafter the "Effective
Date")
each of it and free and clear of any encumbrances, together with
all
ancillary rights, including - as applicable - the right to receive
all
undistributed dividends of previous business years and the current
business year.
|
For
the avoidance of doubt, by Purchaser 2 acquiring the Participation 2
with commercial effect as of the Effective Date Purchaser 1 also assumes
the existing shareholder accounts kept at Haleko for Seller 2, i.e.
the
fixed capital, the current account resulting from transformation and the
retained earnings as set forth in Appendix A, provided, however, as
regards
the current account from transactions and the retained earnings account of
Seller 2 those two accounts shall be set-off against each other so that
Purchaser 2 only assumes the balance between those two accounts.
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1.3
|
Pursuant
to the terms and conditions set forth in this Agreement Seller 1
hereby
sells, and Purchaser 1 hereby accepts to buy, the Loan with commercial
effect as of the Effective Date.
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|
2.
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PURCHASE
PRICE
|
|
2.1
|
The
purchase price for the Share 1 (the "Share
1 Purchase Price")
is
|
€
29,300.
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2.2
|
The
purchase price for the Share 2 (the "Share
2 Purchase Price")
is
|
€
1.
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2.3
|
The
purchase price for the Share 3 (the "Share
3 Purchase Price")
is
|
€
65,914.
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2.4
|
The
purchase price for the Participation 1 (the "Participation 1
Purchase Price")
is
|
€
11,541,620.
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2.5
|
The
purchase price for the Participation 2 (the "Participation 2
Purchase Price")
is
|
€
31,247.
4
|
2.6
|
The
purchase price for the Loan (the "Loan
Purchase Price")
is
|
€
831,918
(the
Share 1, 2 and 3 Purchase Price, the Participation 1 Purchase Price,
the
Participation 2 Purchase Price and the Loan Purchase Price collectively
hereinafter also referred to as the "Total Purchase
Price"
which all together amounts to € 12,500,000 (in words: Euro twelve million
five hundred thousand).
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2.7
|
In
addition,
Purchasers undertake that the receivable by Haleko against Weider
Nutrition Group, Inc. in the amount of € 344,198.52 is reduced by 50 % to
€ 172,099.26. Seller 1 undertakes that the remaining receivable in
the
amount of € 172,099.26 is paid to Haleko within 10 days after the
date
hereof.
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|
3
+ 4.
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[Intentionally
left blank.]
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|
5.
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COMPLETION
|
|
5.1
|
[Intentionally
left blank.]
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|
5.2
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Payment
of the Total Purchase Price
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|
(a)
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The
Total Purchase Price will be paid at notarisation of the agreement
by
SWIFT Transaction to the following account of the Seller 1
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Account
No.: 075355800
Bank
Code: 00000000
Bank: Deutsche
Bank XX
Xxxxx
Code: XXXXXXXX
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(b)
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Seller
1 herewith confirms to Purchaser 1 and Purchaser 2 the receipt of
the
Total Purchase Price.
|
|
For
the avoidance of doubt, Seller 1 and Seller 2 will
internally
decide upon splitting the Total Purchase Price as between themselves.
By
confirming to Purchaser 1 and Purchaser 2 that the
Total
Purchase Price has been received by Seller 1 , the Purchaser 1
and Purchaser 2 shall be discharged from their respective
obligation
to pay the relevant part of the Purchase Price for the acquisition
of the
Shares 1, 2 and 3 and Participation 1
and
Participation 2 as well as the
Loan.
|
|
5.3
|
Shareholder
resolutions
|
|
(a)
|
The
represented notary is instructed to file immediately the shareholder
resolutions attached hereto
as Appendix
5.3 (a),
on the resignation of Xxxxxx Xxxxxx and where applicable, Xxxxxx
X. Xxxx
or any other representative of the Sellers or any of their direct
or
indirect shareholders as a managing director of each of Aktivkost,
Food-Tech, Power Gym Ltd. (UK) and HPH, with the commercial register
(Handelsregister)
at the local court (Amtsgericht)
Hamburg as far as Aktivkost, Food-Tech and HPH are concerned, and
with the
relevant register, if applicable, as far as Power Gym Ltd. (UK) is
concerned.
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|
(b)
|
The
represented notary is instructed to file immediately the shareholder
resolutions attached hereto as Appendix
5.3 (b),
on the termination of the domination and profit and loss transfer
agreement between Seller 1 and Aktivkost.
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5
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(c)
|
The
represented notary is instructed to file immediately the application
of
entry at the Commercial Register at the lower court of Hamburg of
the
change in ownership of the Participation attached hereto as Appendix
5.3 (c).
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6.
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TRANSFER
OF SHARE, LOAN AND
PARTICIPATIONS
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|
6.1
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Seller
1 hereby assigns and transfers Participation 1 and each of Share
1, Share
2, Share 3 to Purchaser 1 who accepts each of such assignments and
transfers.
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|
6.2
|
Seller
2 hereby assigns and transfers Participation 2 to Purchaser 2 who
accepts
such assignment and transfer.
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6.3
|
Seller
1 hereby assigns and transfers the Loan to Purchaser 1 who
accepts
such assignment and transfer.
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7.
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REPRESENTATIONS
AND WARRANTIES OF THE
SELLERS
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The
Sellers and Purchasers hereby agree pursuant to section 311, subsection 1,
of
the German Civil Code (“BGB”)
(selbständiges
Garantieversprechen)
that the following is true as of the date hereof (unless otherwise indicated)
(the “Representations
and Warranties”).
The Parties agree that all Representations and Warranties, unless stated
otherwise below, apply to Haleko, Aktivkost, Food-Tech, HPH and the Subsidiaries
(as listed in Schedule 7.1 (b)). As far as Sports Direct Ltd., Power Gym Ltd.
and Multipower Nutrition S.a.r.l. are concerned, the Representation and
Warranties (except for section 7.1 of this Agreement) are only given to the
Seller’s Knowledge.
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7.1
|
Organisation
|
| (a) |
Haleko,
Aktivkost, Food-Tech and HPH (the "Companies")
and the Subsidiaries are duly organised and validly existing under
the
laws of Germany or any other laws of the country of incorporation.
The
statements contained in paragraph A and C and D of the Preamble to
this
Agreement are correct and complete. The statements contained in paragraph
B of the Preamble to this Agreement are, to Sellers’ knowledge, correct
and complete in all material
respects.
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| (b) |
The
Companies have no direct or indirect subsidiaries or affiliates and
own no
security or similar interest in any company or entity except for
as
disclosed in Schedule
7.1 (b)
(the entities disclosed in Schedule 7.1 (b) are referred to herein
as the
“Subsidiaries”).
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| (c) |
The
Sellers have delivered to the Purchasers a complete and correct copy
of
the current version of the valid articles of association of the Companies.
Except for the shareholder resolution described
in section 5.3 of this Agreement and except for as disclosed in
Schedule
7.1 (c),
there are no applications to the commercial register regarding changes
of
the articles of association which have not been registered and no
shareholder resolutions which must be registered and have not yet
been
filed with a commercial register.
|
| (d) |
The
Companies and the Subsidiaries have all material governmental and
other
authorisations, licenses or permits necessary to carry on their respective
business as now conducted, except where the failure to have such
authorization, license, or permit would not have a Material Adverse
Effect
on the Companies or the
Subsidiaries
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7.2
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Capitalisation
and Dividends
|
| (a) |
[Intentionally
left blank]
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6
| (b) |
Seller
1 owns the Share and Participation 2, and
Seller 2 owns Participation 1. Seller 1 has the unrestricted power
and
authority to dispose of the Share and Participation 2, and Seller
2 has
the unrestricted power and authority to dispose of
Participation 1.
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| (c) |
The
Share and the Participation as well as all shares in the Subsidiaries
have
been validly issued, are free of any encumbrances and are fully paid
in,
and no event has occurred which could be regarded as a repayment
of share
capital. Neither the Share, the Participation nor the shares in any
of the
Subsidiaries are subject to or have been issued in violation of
pre-emptive or similar rights. No options or other rights to acquire
shares in the Companies or any of the Subsidiaries have been granted.
Neither the Share, the Participation nor any of the shares in any
of the
Subsidiaries are subject to any voting or trust agreements or arrangements
or shareholders' agreement and sub-participation or similar
rights.
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| (d) |
Since
1 January 2005 neither the Sellers nor any of the affiliated companies
of
the Sellers has directly or indirectly withdrawn any amount of cash
from
the Companies or any of the Subsidiaries and no direct or indirect
payments have been made by the Companies or any of the Subsidiaries
to any
of the Sellers or any of Sellers' affiliated companies other than
in the
ordinary course of business and on arms’ length terms and the measures
which led to the receivable mentioned in section 2.7 of this
Agreement.
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|
7.3
|
No
insolvency proceedings
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Neither
the Companies nor any of the Subsidiaries have incurred the obligation to
initiate bankruptcy, insolvency or judicial composition proceedings. To the
Seller’s Knowledge, no bankruptcy, insolvency or judicial composition
proceedings have been initiated or applied for under the laws under which the
Companies or any of the Subsidiaries, as applicable, are registered and, to
the
Seller’s Knowledge, there exist no circumstances which would justify the opening
of such proceedings or the avoidance, challenge or rescission of this Agreement
under the German Insolvency Code.
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7.4
|
Financial
statements
|
To
the Seller’s Knowledge, the audited financial statements of Haleko and the
financial statements of the other Companies, each for the period ended 30 April
2005, as attached as copies in Schedule
7.4 (a)
(the “Financial
Statements”)
are true and accurate in all material respects, have been prepared in accordance
with the rules of the German Commercial Code and with generally accepted German
(or other locally applicable) accounting standards and present, in all material
respects, a true and fair view of the assets and liabilities (Vermögenslage),
financial condition (Finanzlage)
and results of operation (Ertragslage)
of the Companies.
To the Seller’s knowledge, the Companies, on a consolidated basis do not have
any material contingent liabilities other than those shown in the Financial
Statements or incurred in the ordinary course of business or except such
liabilities which would not have a Material Adverse Effect on the
Companies.
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7.5
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Records
|
To
the Seller’s Knowledge, all material accounts, books, financial and other
records (the “Records”)
of the Companies and each of the Subsidiaries have been fully, properly and
accurately maintained, in all material respects, to a standard appropriate
for
the Records, are in the possession or under the control of the Companies or
the
Subsidiaries, as applicable, and provide a fair and accurate representation
of
the Companies' and each of the Subsidiaries’ business in all material respects.
|
7.6
|
Absence
of certain changes
|
Since
April 30, 2005:
| (a) |
the
Sellers have not resolved to distribute any dividends and no such
distribution has taken place nor have the Companies or any of the
Subsidiaries made other payments to the Sellers or any affiliate
thereof
other than in an arm's length transaction in the ordinary course
of
business; and
|
| (b) |
no
transaction has taken place or has been initiated relating to the
Companies, any of the Subsidiaries or any of their respective assets
other
than in the ordinary course of business or other than stated in this
Agreement, the schedules and exhibits thereto or disclosed to the
Purchasers or Atlantic Grupa or their advisors in the Data Room (as
defined below), except as such transaction that would not have a
Material
Adverse Effect on the Companies or any of the Subsidiaries, as
applicable.
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|
7.7
|
Title
to and condition of the
assets
|
The
Companies
and any of the Subsidiaries:
| (a) |
except
as stated in Schedule
7.7(a),
hold unrestricted title to, or are authorized to use, all material
assets
necessary for their business operation. No assets are encumbered
by third
party rights with the exception of statutory pledges, reservations
of
title and security transfers of title as well as other encumbrances
entered into in the normal course of business (e.g. bank loan agreements);
and
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| (b) |
their
material machinery and equipment currently used is in proper working
conditions in all material respects except for normal wear and tear
and
except as listed in Schedule
7.7.(b),
|
except
for the inaccuracy of the foregoing representations (a) and (b) that would
not
have a Material Adverse Effect on the Companies and any of the
Subsidiaries.
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7.8
|
Loan
|
Seller
1 has legal and beneficial title to the Loan of which as of the date of this
Agreement are outstanding no more than € 831,918.76. The Loan is free of
any encumbrances or other third party rights. No payments on the Loan have
been
made since 30 April 2005.
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7.9
|
Material
information
|
Information
has been made available to the Purchasers and Atlantic Grupa and their advisors
in a data room (the “Data
Room”),
the index for which (the “Index”)
is attached hereto as Exhibit
7.9.
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7.10
|
Taxes
|
To
the Sellers’ Knowledge, the Companies and the Subsidiaries have submitted all
material tax returns, relating to any domestic and foreign taxes required to
be
filed in the 3 (three) years prior hereto, and all material Taxes imposed on
the
Companies and/or the Subsidiaries and due in the relevant period have been
paid
or have been provided for in the relevant balance sheet of the Companies or
the
Subsidiaries, as applicable. "Tax" or "Taxes" shall mean
any taxes, charges, duties, and levies of any kind imposed by any federal,
state, local or foreign governmental authority competent for the imposition
of
such tax.
To
the Sellers' Knowledge, the consummation of the sale and transfer of the
Participation 1 and Participation 2 to Purchaser 1 and
Purchaser 2 respectively should in view of the supplemental tax balance
sheets kept for Seller 1 and Seller 2 in relation to the
Participation 1 and Participation 2 and loss carried forward
not cause
additional trade tax burdens for Haleko and/or Purchaser 1 and
Purchaser 2.
7
|
7.11
|
Employees
|
| (a) |
Schedule
7.11 (a)
to this Agreement is a complete and correct list of all employees
and
apprentices as well as free-lancers (freie
Mitarbeiter)
rendering services for the Companies and the Subsidiaries. Copies
of the
standard employment agreements currently used for newly hired employees
of
Haleko are included in Schedule
7.11 (a).
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| (b) |
No
pension or retirement schemes or any other similar commitments or
arrangements with any managing director or employees have been made
or
promised by the Companies or any of the
Subsidiaries.
|
| (c) |
Schedule
7.11 (c) contains
a complete and correct list of all collective bargaining agreements
(including
firm-wide) and works agreements, in house labour practices (betriebliche
Übungen)
and general promises made to all employees (Gesamtzusagen).
|
| (d) |
Schedule
7.11 (d) contains
a complete and correct list of all present implementation agreements
(Interessenausgleiche)
and social plans (Sozialpläne)
of the Companies or the
Subsidiaries.
|
| (e) |
Complete
and correct copies of all individual employment agreements, each
in their
current version, including all supplemental agreements, amendments
and
side letters, (i) between Haleko and Xxxxxxx Xxxxxx and (ii) for any
employee of the Companies or the Subsidiaries whose annual compensation
exceeds € 60,000 (sixty thousand Euros) and/or have a notice period for
termination of the employment agreement longer than pursuant to statutory
law have been provided to the Purchasers, and such agreements are
listed
in Schedule
7.11 (e).
In particular, there is no service agreement between Xxxxxx Xxxxxx
and the
Companies or any of the Subsidiaries.
|
| (f) |
No
managing director (Geschäftsführer)
or member of the senior management (leitender
Angestellter)
of the Companies and the Subsidiaries has terminated or, to the Seller’s
Knowledge, declared an intention to terminate the employment
relationship.
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|
7.12
|
Intellectual
property
|
| (a) |
The
Companies or any of the Subsidiaries, as applicable, own, are authorized
to use without any material restriction or have acquired valid licences
to
all industrial and intellectual property rights, including, without
limitation, patents, design patents, utility models, trademarks,
names,
designations, know-how and recipes listed in Schedule 7.12(a)
(the "Intellectual Property Rights"). Other than
the Intellectual Property Rights, no industrial and intellectual
property
rights are required to carry on the business of the Companies or
any of
the Subsidiaries as presently conducted except for the incorrectness
of
such representation that would not have a Material Adverse Effect
on the
Companies and the Subsidiaries.
|
| (b) |
To
the
Seller’s Knowledge,
|
|
(1)
|
none
of the Intellectual Property Rights owned by the Companies or the
Subsidiaries are encumbered and all Intellectual Property Rights
have been
duly maintained, except for the incorrectness of such representation
that
would not have a Material Adverse Effect on the Companies and the
Subsidiaries;
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|
(2)
|
except
as listed in Schedule
7.12(b) Part 1,
no such Intellectual Property Right is challenged by any third party
(including, without limitation, registration authorities); and
|
8
|
(3)
|
except
as listed in Schedule
7.12(b) Part 2,
no exclusive licenses to third parties in respect of any Intellectual
Property Rights owned by the Companies or any of the Subsidiaries
have
been granted to any third party, except that the incorrectness of
such
representation would not have a Material Adverse Effect on the Companies
and the Subsidiaries.
|
| (c) |
To
the Seller’s Knowledge, the consummation of the transactions contemplated
under this Agreement will not result in a loss or impairment of the
right
to own or use any of the Intellectual Property Rights nor will such
performance require the consent of any third
party.
|
| (d) |
The
Companies or any of the Subsidiaries, as applicable, own, are authorized
to use without any material restrictions or have acquired valid licences
to all hardware, software and other information technology systems
(the
"IT-Rights") which are currently used in the business of
the Companies or any of the Subsidiaries as presently conducted,
except
for the incorrectness of such representation that would not have
a
Material Adverse Effect on the Companies and the Subsidiaries.
|
| (e) |
To
the Seller’s Knowledge, the consummation of the transactions contemplated
under this Agreement will not result in a loss or impairment of the
right
to own or use any of the IT-Rights nor will such performance require
the
consent of any third party.
|
|
7.13
|
Real
property
|
| (a) |
Haleko
is the sole and unrestricted owner of the real property used by the
Companies or any of the Subsidiaries in Bleckede in particular the
real
property registered in the land register of Bleckede kept at the
local
court of Lüneburg, volume 51, page 1289 (the “Property”).
The Property is free and clear of any material liens, encumbrances
and
rights of third parties other than those reflected in the excerpt
from the
land register attached hereto as Exhibit
7.13.
|
| (b) |
Other
than the Property, neither the Companies nor any of the Subsidiaries
own
any other real property or rights similar to real property (grundstücksgleiche
Rechte)
including, without limitation, hereditary building rights (Erbbaurechte).
|
| (c) |
To
the Seller’s Knowledge, no material agreements or other legal transactions
have been entered into which would constitute any obligation for
the
Companies or any of the Subsidiaries to effect any conveyance, agreement
"in
rem", consent or other act leading to any material encumbrance
of the Property.
|
| (d) |
To
the extent any land or building used by the Companies or any of the
Subsidiaries is not part of the Property, the Companies and/or any
of the
Subsidiaries are authorized to use such land and/or buildings under
legally valid lease agreements or similar legal instruments (the
"Leases"),
and, to the Seller’s Knowledge, such Leases have not been terminated
(whether unilaterally by either party thereto or by mutual agreement)
or
materially amended. To the Seller’s Knowledge, the consummation of the
transactions contemplated herein will not give the other party to
the
Leases any right to terminate the
Leases.
|
|
7.14
|
Litigation
|
No
material legal disputes and regulatory proceedings (including, without
limitation, criminal and administrative investigations) to which the Companies
or the Subsidiaries are a party or
subject to are pending except as stated in Schedule
7.14.
|
7.15
|
Violation
of agreements and law, change of
control
|
To
the Seller’s
Knowledge and except as set forth in Schedule
7.15
9
| (a) |
the
conclusion, execution or completion of this Agreement does not infringe
the articles of association, partnership agreements or by-laws of
the
Companies or the Subsidiaries nor any material agreements, restrictions
or
any other regulations to which the Sellers or the Companies or any
of the
Subsidiaries are subject;
|
| (b) |
the
conclusion, execution or completion of this Agreement will not result
in,
or give rise to,
a termination of,
or changes to,
any written agreements and arrangements or governmental or other
authorisations, licenses or permits which are material for the businesses
of the Companies and the
Subsidiaries;
|
| (c) |
the
Companies are in compliance with all applicable statutes, regulations
and
other provisions as well as all judgments, decrees, permits or other
rulings or decisions by any court, arbitration tribunal or other
authority
with respect to the conduct and continuation of its present or previous
business operations,
|
except
as the inaccuracy of the foregoing representations would not have a Material
Adverse Effect on the Companies and any of the Subsidiaries.
|
7.16
|
Material
Agreements
|
| (a) |
Except
for the Loan, Schedule
7.16 (a)
completely and correctly lists all agreements of the Companies and/or
any
of the Subsidiaries which require annual or lump-sum payments in
excess of
€ 150,000 (one hundred fifty thousand Euros) and which have not yet
been
completely fulfilled as of the date hereof (nicht
vollständig erfüllte Verträge)
(the "Material
Agreements"),
including without limitation, the
following:
|
| (1) |
Agreements
relating to the acquisition, sale or encumbrance of real property
or
rights similar to real property;
|
| (2) |
agreements
relating to the acquisition or sale of other fixed assets (Gegenstände
des Anlagevermögens);
|
| (3) |
rental
or leasing agreements;
|
| (4) |
license
agreements entered into as licensor or licensee;
|
| (5) |
loan
or other credit agreements entered into as lender or borrower (except
customary extensions of payment dates for receivables or payables
granted
or received in the ordinary course of business) as well as factoring
agreements;
|
| (6) |
guaranties,
suretyships (Bürgschaften),
assumption of debts (Schuldübernahme,
Schuldbeitritt),
comfort letters or similar legal instruments of any kind issued by
the
Companies and the Subsidiaries;
|
| (7) |
agreements
with authorized dealers (Vertragshändler)
or commercial agents (Handelsvertreter) or other distribution
agreements;
|
| (8) |
the
agreements in place with the ten largest customers and suppliers
of the
Companies and the Subsidiaries,
|
| (9) |
joint
venture, cooperation or similar agreements with third parties as
well as
any agreements which may have a restrictive impact on
competition.
|
| (b) |
Except
as listed in Schedule 7.16 (b) Part 1 and to the Seller's
Knowledge, all of the Material Agreements that are subject to German
law
are legally binding and none of the Material Agreements have been
terminated, and to the Seller’s Knowledge, no party to a Material
Agreement has stated its intention to terminate such agreement.
Except
as listed in Schedule 7.16 (b) Part 2 and to the Seller's
Knowledge, no counterparty to any Material Agreement will have any
consent
right, right to terminate, amend or otherwise modify any Material
Agreement for any reason in connection with provisions of this Agreement
and its consummation.
|
10
|
7.17
|
[Intentionally
left blank.]
|
|
7.18
|
Insurances
|
Schedule
7.18
contains a complete and correct list of all insurance policies taken out by,
or
for the benefit of, the Companies or any of its Subsidiaries or its assets
or
business operations. All such insurance contracts are valid, and no material
claims are outstanding. To the Sellers’ Knowledge, the respective policy holder
has fulfilled all its obligations (including premium payments) under the
respective insurance policies. None of the insurance policies listed in
Schedule
7.18
will terminate upon the execution or consummation of this
Agreement.
|
7.19
|
Environmental
matters
|
To
the Sellers’ Knowledge,
| (a) |
the
real property owned and/or used by the Companies or any of its
Subsidiaries is free from any environmental contamination of soil,
soil
air, water or groundwater (in particular pollutants, contaminants,
harmful
soil changes, suspect areas, residual contamination or suspect residual
contamination pursuant to § 2 para. 3-6 of the Federal Soil Protection Act
[BBodSchG])
and there are no asbestos or other harmful, in particular health
endangering or other substances used in the built-on buildings which
would
entitle the competent authorities to order an investigation, monitoring,
clean-up, securing measure, containment or other measure under
Environmental Law or which would lead to a liability to third parties.
Environmental
Law
means any (binding) law (including, without limitation, statutory
and
common law), regulation or permit (including any technical standards
or
standards of conduct applicable thereunder) relating or imposing
liability
for the protection of the environment or of safety and
health;
|
| (b) |
neither
the Companies nor any of its Subsidiaries have received any unresolved
written or other notice or order from any governmental authority
or third
party, and no administrative or governmental or private action, suit,
investigation or proceeding is pending and has been asserted or threatened
in writing or otherwise against the Companies or any of its Subsidiaries
which alleges a violation of any Environmental Law or requires any
investigation, monitoring, clean-up, securing measure or other remedial
action with respect to any environmental contamination or the use
of
harmful substances;
|
| (c) |
the
Companies and its Subsidiaries have obtained all material environmental
permits required for its operations (as presently conducted) in accordance
with all applicable Environmental Law and are, in all material respects,
in compliance with the terms of such permits and Environmental Law,
and
none of the Companies or any of its Subsidiaries has received any
written
or other notice from any competent authority that such authority
intends
to cancel or revoke or vary or modify (to their detriment) any
environmental permit.
|
except
as the inaccuracy of the foregoing representations would not have a Material
Adverse Effect on the Companies and any of the Subsidiaries.
|
7.20
|
Knowledge
|
“Sellers’
Knowledge”
in the meaning of this section 7 is actual
knowledge (positive
Kenntnis)
of the current legal representatives of the Sellers (i.e. Xxxxx Xxxx, Xxxxxx
Xxxx, Xxxxxx Xxxxxx,
Xxxxx Xxxxxxx, Xxxxxxx Xxxxxx) as well as Xxx Xxxxxx (the
"Representatives") or exists if any of the Representatives
should have been aware (grobfahrlässige Unkenntnis) of the fact or
circumstance covered by the relevant Representations and
Warranties.
11
|
7.21
|
Exclusion
of warranty
|
Except
for wilful misrepresentation (Arglist)
by the Sellers, any warranty claim according to this section 7 is excluded
as
far as the underlying facts are known to the Purchasers, Atlantic Grupa and
their advisors. Such knowledge shall be deemed to exist if the relevant
information giving rise to such claim was contained in the
Data Room, the content of which is summarised in the Index or if the information
was given in writing to the Purchasers, Atlantic Grupa or their representatives
or their advisors and is listed in Schedule
7.21.
|
7.22
|
Material
Adverse Effect
|
“Material
Adverse Effect”
means any change or effect that is materially adverse to the financial
condition, the business operations or the results of business operations of
the
Companies or the Subsidiaries, as applicable, and which affects the profit
and
loss account (Gewinn-
und Verlustrechnung)
of such entity adversely by an amount of more than € 200,000. The following
circumstances shall
in
no event constitute a Material Adverse Effect regardless of their financial
impact: Any change or effect arising out of (i) changes of general economic
conditions (including, but not limited to, general operations of the capital
markets) or of conditions generally affecting companies in the industries in
which the Companies and/or any of the Subsidiaries operate, (ii) disruptions
to
any business of the Companies and/or any of the Subsidiaries attributable to
the
transactions contemplated by this Agreement or its announcement and (iii)
changes in laws or the interpretation thereof.
|
7.23
|
Multiple
violations
|
If
the same or a related set of facts violates more than one of the Representations
or Warranties, the Purchasers shall be entitled to claim damages as per section
8.2 below only once.
|
8.
|
CONSEQUENCES
OF INCORRECT REPRESENTATIONS AND
WARRANTIES
|
|
8.1
|
Notification
and repair period
|
Should
any of the Representations and Warranties be entirely or partially incorrect,
incomplete or not accurate, the Purchasers shall inform the respective Seller(s)
that has or that have breached the respective Representations and Warranties
as
soon as reasonably practical to set a time limit to the respective Seller or
the
respective Sellers of at least 4 (four) weeks to bring about a situation which
is in accordance with this Agreement (the “Repair
Period”).
|
8.2
|
The
Sellers’ obligation
|
Subject
to sections 8.5 and 8.6 hereof, by the end of the Repair Period the respective
Seller or the respective Sellers are obliged to effect the situation which
would
have existed if the Representations and Warranties had been correct, complete
or
accurate (Naturalrestitution). Should this not happen in time or should
such repair be impossible, Sellers shall compensate the Purchasers for any
loss
or damage, suffered by the Companies, the Subsidiaries and/or the Purchasers
by
reason of such breach subject to sections 8.5 and 8.6 hereof by payment of
monetary damages only.
|
8.3
|
Other
remedies
|
Any
and all further rights, in particular any and all rights to withdraw from or
rescind this Agreement and any and all further rights regarding warranties,
out
of pre-contractual obligations,
breach of contract etc. are excluded unless the respective Seller or the
respective Sellers has or have acted with intent.
12
|
8.4
|
Periods
for asserting remedies
|
Any
rights or claims of the Purchasers for violation of Representations and
Warranties shall become time-barred (verjähren)
after a period of 12 (twelve) months from the date hereof. The aforesaid
limitation period shall be extended (gehemmt)
in the event of the initiation of civil proceedings as defined in section 204
(1) no. 11 BGB and in case of negotiations according to section 203 BGB. In
case
of a re-initiation (Neubeginn)
of the period of limitation as defined in section 212 of the BGB, the new period
of limitation shall be the longer of six months or the remainder of the initial
period of limitation.
|
8.5
|
De
minimis provision
|
Any
warranty rights pursuant to this Agreement (including any and all rights under
this section 8 but excluding any claims for indemnification pursuant to sections
9.1 and 9.2 of this Agreement) exist only if they exceed € 150,000 (one hundred
fifty thousand Euros) in each individual case, and then only to the extent
that
they exceed in the aggregate € 400,000 (four hundred thousand Euros)
(Freigrenze).
|
8.6
|
Limitation
of liability
|
The
aggregate liability of the Sellers for all rights out of Representations and
Warranties, excluding the claims for indemnifications
pursuant to sections
9.1
and 9.2
of
this Agreement, is limited to a total amount equal to 20% of the Total Purchase
Price. For the calculation of the aforesaid limitation of liability, any
reasonable costs and expenses incurred by the Sellers for a restitution in
kind
in accordance with section 8.2 shall be taken into account, always provided,
however, that such restitution in kind has been successful.
|
8.7
|
Non-applicability
of section 444 BGB and section 377 of the German Commercial
Code
|
| (a) |
The
Parties agree that section 444, second alternative BGB concerning
the
invalidity of clauses limiting a Sellers’ liability in cases of such
Sellers’guarantees
of certain characteristics (Beschaffenheitsgarantien)
of an object of sale is not applicable to the Sellers' Representations
and
Warranties. In the event that section 444,
second alternative BGB should be
applicable irrespectively hereof, Purchasers
hereby irrevocably
waive its rights to claim any damages under this Agreement to the
extent
such damage claims would not exist without application of section
444,
second alternative BGB.
|
| (b) |
The
Parties agree that section 377 of the German Commercial Code shall
not be
applicable.
|
|
9.
|
UNDERTAKINGS
OF SELLERS AND PURCHASERS
|
|
9.1
|
1998 Agreement
|
The
Sellers are of the opinion that no obligations of the Companies or the
Subsidiaries exist vis-à-vis Xxxxxxxx Xxxxxx and Xxxxxxxxx Xxxxxxxx regarding
the deferred cash payments according to section 2.3(c) and (d) of the Stock
Purchase Agreement between Weider Nutrition Group Inc., Xxxxxxxx Xxxxxx and
Xxxxxxxxx Xxxxxxxx of 9 July 1998. However, the Sellers shall hold the
Purchasers free and harmless from any claims by Xxxxxxxx Xxxxxx and Xxxxxxxxx
Xxxxxxxx existing against Haleko pursuant to section 2.3 (c) and (d) of the
aforesaid agreement if and to the extent to which the Sellers or any of its
direct or indirect shareholders are authorized to assume the defence against
such claims and are in charge of any litigation in connection therewith. Any
settlement entered into by Haleko with regard to the aforesaid subject
matter shall require the prior written consent of Sellers, such consent not
to
be unreasonably withheld.
13
|
9.2
|
Tax
indemnification of
Purchasers
|
| (a) |
The Purchasers
are aware of the fact that the Companies are currently subject to
a tax
field audit for assessment periods 1.1.1998 - 30.4. 2003. For Haleko
the
competent tax office intends to recognize additional taxable
profit,
inter
alia,
in the
amount of DEM 5.26 million. The Sellers furnished the Purchasers
with
a memorandum prepared by the law firm Xxxxxx & Xxxxxxx LLP dated June
9, 2005 dealing with the merits of the arguments raised by the tax
office
with regard to such additional income recognition. The Parties assume
that
the on-going tax field audit at the level of the Companies will not
have
been finalized prior to signing of this Agreement. Therefore, the
Parties
agree as follows:
|
| (1) |
The
Sellers
shall indemnify the Companies for 80% of any negative impact arising
from
the field audit conducted by the tax authorities in spring 2005,
provided
such tax audit has a direct negative cash-effect of taxes payable
in
excess of an exemption threshold (Freibetrag) of € 100,000, which has
to be borne by the Purchasers anyway, and cannot be compensated by
existing loss carry-forwards, any other positive future tax effects
(such
as depreciation allowances, write-downs or other allowances for income
tax
purposes; input tax deductions for VAT purposes etc., excluding future
loss carry forwards), or any other compensatory effect for the benefit
of
any of the
Companies or
the Purchasers. The total exposure of the Purchasers and the Companies
in
excess of the aforesaid exemption threshold shall be limited to
€ 100,000; the Purchasers and the Companies shall, however,
pick up
the tax xxxx for those taxes which will result in compensatory tax
effects
in subsequent years. Example:
The tax
field audit will result in additional cash tax payments of the Companies
in the amount of € 500,000. Compensatory tax effects are
€ 100,000 which are economically borne by the Companies; an
additional € 160,000 will be paid by the Companies and € 240,000
by the Sellers. If the additional tax payments amount to € 1 million,
and no compensatory effects will occur, the Companies will bear
€ 200,000 whereas the Sellers will bear
€ 800,000.
|
| (2) |
The
aforesaid
tax indemnity shall be contingent upon the Sellers’ remaining in joint
control with the Purchasers - each at his own costs of any negotiations
with, and proceedings or litigation against, the tax authorities
as far as
the afore-mentioned tax audit is concerned. The Purchasers are aware
of
the fact that Seller 1 is also subject to the afore-mentioned
tax
field audit and that the recognition of additional taxable profit
in the
amount of DEM 5.26 million may have an impact on Seller 1
as
well. As a consequence, the Companies and the Purchasers agree, to
handle
the afore-mentioned tax field audit in good faith together with the
Sellers. This shall include to negotiate with this tax authorities,
reach
agreements and settlements, instigate legal proceedings and represent
the
Companies and the Purchasers, as the case may be, in such proceedings.
The
Companies and the Purchasers undertake to (i) cooperate with Seller 1
to the extent legally possible, (ii) to provide Seller 1 with
any
information required and (iii) subject to mutual agreement, to make
any
statement, election or other declaration which for statutory purposes
or
for any other reason the Companies or the Purchasers, respectively
have to
make in person.
|
14
| (b) |
Section
9.2(a) shall apply accordingly to any tax field audits at the Companies
covering any periods prior to or including the date hereof, provided
that
such field audit is completed before the fourth anniversary of the
date of
this Agreement.
|
| (c) |
This
section 9.2 shall take priority and deal exclusively with
any taxes
payable by any of the Companies or the Purchasers, as the case may
be, due
to any tax field audits referred to in subsections (a) and
(b)
above.
|
|
9.3
|
Tax
indemnification of Sellers
|
To
the extent the
Sellers incur any Taxes in their capacity as former partners of Haleko, which
(i) are attributable to the period between the Effective Date and the date
of
this Agreement and (ii) are not related to transactions of Haleko outside of
the
ordinary course of business, the Purchasers will indemnify and hold harmless
Sellers from any such Taxes.
|
9.4
|
Use
of the
name “Weider”
|
The
Purchasers undertake not to use the name “Weider”, or any other marks, trade
names or similar right currently
used by the Sellers, in its future business, and to use its best endeavours
to
cause the Companies and the Subsidiaries to purge such name from all materials,
letterheads, signs, and any other media in which the Companies or the
Subsidiaries display such name, unless otherwise expressly provided by agreement
between the Sellers and/or their respective subsidiaries and the Companies
and/or the Subsidiaries.
|
9.5
|
Parent
guarantees
|
| (a) |
Pursuant
to a guarantee attached to this Agreement as Appendix
9.5 Weider
Nutrition Group, Inc. guarantees all of the Sellers' obligations
under
this Agreement in an amount equalling 20 % of the Total Purchase
Price.
|
| (b) |
Atlantic
Grupa hereby declares to guarantee (i) all of the Purchasers' obligations
under this Agreement and (ii) up to an amount equalling 20 % of the
Total
Purchase Priceany claims the Sellers have against Haleko due to claims
raised against the Sellers from creditors of Haleko based on the
continuing liability (Nachhaftung) of the Sellers pursuant to section
160
HGB.
|
|
9.6
|
Weider
Spain Surety
|
The
Purchasers
shall procure that Weider Nutrition S.L. is released from the Weider Spain
Surety and shall hold the Sellers and Weider Nutrition S.L. free and harmless
from any claims arising from the surety.
|
10.
|
COSTS
|
Each
Party shall bear the cost of its own legal and other advisers incurred in
connection with the negotiation, execution and completion of this Agreement
and
the transaction contemplated hereby as well as any personal taxes arising
therefrom. All transfer taxes, notaries' and court charges in connection with
the execution and completion of this Agreement shall be borne by the
Purchasers.
|
11.
|
GOVERNING
LAW AND LANGUAGE, DISPUTES
|
|
11.1
|
German
law
|
This
Agreement shall be governed by and construed in accordance with the laws of
the
Federal Republic of Germany excluding the United Nations Convention on the
International Sale of Goods (CISG).
15
| 11.2 |
English
language
|
The
authentic text of this Agreement shall be the English text, except that in
case
of any conflict between any English term herein and the German translation
thereof placed immediately following it in parenthesis, the German translation
shall be binding.
|
11.3
|
Arbitration
|
Any
disputes arising out of or in connection with this Agreement or the breach,
termination or invalidity thereof shall be settled by arbitration in accordance
with the UNCITRAL Arbitration Rules in the version effective on the date hereof.
The appointing authority shall be the President of the Hamburg Court of Appeals
(Präsident
des Hanseatischen Oberlandesgerichts in Hamburg).
The number of arbitrators shall be three. The place of arbitration shall be
Hamburg. The language to be used in the arbitral proceedings shall be
English.
|
12.
|
MISCELLANEOUS
|
|
12.1
|
Assignment
of Rights and Obligations
|
| (a) |
This
Agreement and any rights and obligations hereunder cannot be transferred
or assigned in whole or in part without the prior written consent
of the
other Parties hereto.
|
| (b) |
The
Purchasers may transfer or assign this Agreement or any rights or
obligations hereunder to any of their affiliated entities (within
the
meaning of Section 15 et seq. of the German Stock Corporation Act)
without
prior written consent provided that the respective Purchasers remain
liable for all obligations of such Purchasers under this
Agreement.
|
|
12.2
|
Entire
agreement
|
This
Agreement sets forth the entire agreement and understanding of the Parties
with
respect to the subject matter hereof and supersedes all negotiations and
previous agreements - whether oral or in writing - with respect to such subject
matter.
|
12.3
|
Severability
|
If
any of the provisions of this Agreement shall be or become invalid, this shall
not affect the validity of the remaining provisions. The Parties undertake
to
replace any invalid provisions by such provisions as shall come as close as
possible to their commercial intentions in a legally valid manner. The same
shall apply if this Agreement should contain an unintentional gap.
|
12.4
|
Confidentiality
|
The
Parties shall keep this Agreement confidential and shall only make public
announcements as to its contents upon mutual agreement. This obligation does
not
apply to any disclosure required under the applicable laws, by governmental
regulatory bodies, under banking covenants or stock exchange regulations to
which a Party or its affiliate is subject. The contents of such disclosure
will
be communicated to the other Party promptly after the disclosure.
|
12.5
|
Amendment
|
No
amendment to this Agreement shall be of any effect unless it is in writing
and
signed for or on behalf of the Parties, subject to any requirement for
notarisation. This shall also apply to any amendment of this section
12.5.
16
| 12.6 |
Headings
|
The
headings in this Agreement are inserted for convenience only and shall not
affect the interpretation thereof.
|
12.7
|
Notices
|
Any
notices provided or required under the terms of this Agreement shall be given
in
writing and shall be effective immediately when provided by facsimile
transmission or personal delivery, or 5 (five) days after being sent by
internationally recognised courier, and addressed as follows:
| (a) |
If
to Weider Nutrition GmbH:
|
Weider
Nutrition GmbH
c/o
Latham & Xxxxxxx LLP
Attn.:
Xx. Xxxxxx Xxxxxxx
Xxxxxxxxxxxxx
00, 00000 Xxxxxxx
Xxxxxxx
Fax-No.:
xx00 00 000 00 000
| (b) |
If
to Haleko Management GmbH
|
Haleko
Management GmbH
c/o
Latham & Xxxxxxx LLP
Attn.:
Xx. Xxxxxx Xxxxxxx
Xxxxxxxxxxxxx
00, 00000 Xxxxxxx
Xxxxxxx
Fax-No.:
x00 00 000 00 000
| (c) |
If
to the Purchasers:
|
Atlantic
Grupa d.o.o.
Attn.:
Xx. Xxxxx Xxxxxxxxx
Xxxxxxxx
0, 00000 Xxxxxx
Xxxxxxx
Fax-No.:
+ 000 0 00 00 000
with
a copy to
Freshfields
Bruckhaus Xxxxxxxx
Attn.
Xx. Xxxxxxx Xxxxxx
Xxxxxxxxxxxxx
00, 00000 Xxxxxxx
Xxxxxxx
Fax-No.
+ 00 00 00 00 00 00
IN
WITNESS WHEREOF the Parties have executed this Agreement on the date first
above
written.
17
Weider
Nutrition GmbH
by:
Xxxxx Xxxxxxx
________________________
Haleko
Management GmbH
by:
Xxxxxxx Xxxxxx
________________________
Atlantic
Grupa
by:
Xxxx Xxxxxxxx
____________________
Hopen
Investments BV
by:
Xxxx Xxxxxxxx
____________________
Svalbard
Investments GmbH
by:
Xxxx Xxxxxxxx
____________________
18
