AGREEMENT AND THIRD AMENDMENT TO
PURCHASE AGREEMENT
This Agreement and Third Amendment to Purchase Agreement, dated July 23,
2001 (this "AGREEMENT") is by and between BASF Aktiengesellschaft ("SELLER")
and Abbott Laboratories ("PURCHASER").
W I T N E S S E T H:
WHEREAS, Purchaser and Seller are parties to that certain Purchase
Agreement dated as of December 14, 2000 (Number 194 of the Roll of Deeds for
2000 of Dr. Norbert Meister, notar, at Frankfurt am Main), as amended by the
Amendment dated as of March 2, 2001 (Number 226 of the Roll of Deeds for 2001
of Dr. Gerhard Pilger, notar, at Frankfurt am Main) and the Second Amendment
dated as of May 18, 2001 (Number 56 of the Roll of Deeds for 2001 of Dr.
Norbert Meister, notar, at Frankfurt am Main), pursuant to which Purchaser
acquired the Shares and Transferred Patents (collectively, the "PURCHASE
AGREEMENT").
WHEREAS, Sections 9 and 10 of the Purchase Agreement provide for an
adjustment of the Non-Indian Purchase Price according to the procedures
described therein (the "ADJUSTMENT PROCEDURES");
WHEREAS, Exhibit 7.4 of the Purchase Agreement provides for the
determination of the Knoll India Net Asset Value;
WHEREAS, in furtherance of the Adjustment Procedures, Deloitte & Touche
GmbH ("D&T") issued an Auditor's Report, together with an opinion thereon,
dated April 20, 2001 (collectively, the "D&T REPORT");
WHEREAS, Seller and Purchaser (the "PARTIES") have agreed to certain
adjustments, described more particularly in EXHIBIT A-1 hereto, to the
Closing Net Asset Value reflected in the D&T Report, and that such Closing
Net Asset Value as so adjusted, as described more particularly in EXHIBIT A-2
hereto, shall be the "CLOSING NET ASSET VALUE" for purposes of this Agreement
and Sections 9.1(b) and 9.1(c) of the Purchase Agreement;
WHEREAS, the Parties have agreed to defer their mutual obligation under
Section 10.2 of the Purchase Agreement to allocate the amount by which the
Closing Net Asset Value exceeds the Reference Net Asset Value (the
"ADDITIONAL PURCHASE PRICE") until completion of the procedures described in
Section 21.4 of the Purchase Agreement and as more particularly described
herein;
WHEREAS, in connection with the Adjustment Procedures, Seller has agreed
to reimburse Purchaser, and indemnify Purchaser against, certain matters and
Damages, as described more particularly herein; and
WHEREAS, the Parties desire to amend (a) Section 18 of the Purchase
Agreement to clarify its application to Closing Tax Assets (as defined in
Section 4 of this Agreement), and (b)
Section 27.3 of the Purchase Agreement with respect to the application of
such Section to Mexico.
NOW, THEREFORE, in consideration of the premises and the mutual
agreements, covenants and representations below, the Parties agree as follows:
1. CERTAIN DEFINITIONS.
Terms used in this Agreement with initial capital letters that are
not otherwise defined in this Agreement will have the meanings given to them
in the Purchase Agreement.
2. ADJUSTMENTS, PAYMENT AND ALLOCATION.
(a) The Closing Net Asset Value contained in the D&T Report set
forth as Item A to Exhibit A-2 shall be adjusted in accordance with Exhibit A-1
hereto, and such Closing Net Asset Value as so adjusted, shall be
EUR 2,082,600,000 and as such the "FINAL CLOSING NET ASSET VALUE."
(b) The Parties hereby acknowledge and agree that the amount of the
Additional Purchase Price shall be EUR 1,332,200,000, of which EUR
1,064,300,000 was paid to Seller on May 23, 2001 leaving EUR 267,900,000
owing by Purchaser to Seller to be satisfied and to be paid as follows:
(i) EUR 87,600,000 of net debt owing by BASF shall be forgiven as described
in Items H and I on Exhibit A-2, and (ii) EUR 180,300,000, together with
interest thereon at the rate of six percent (6%) per annum from March 2, 2001
to the date of payment, will be paid by Purchaser to Seller, within two (2)
business days from the date of this Agreement, by transfer of immediately
available funds to BASF AG, Konto: 0201000700, Commerzbank Ludwigshafen,
BLZ 54540033, SWIFT COBADEFF545.
(c) The Parties further acknowledge and agree that upon the final
determination and payment of the Seller or Purchaser Pension Indemnification
Amount, if any, in accordance with the provisions in Section 21.4 of the
Purchase Agreement (the "PENSION AMOUNT"), such Pension Amount will be netted
against or added to, as the case may be, the Additional Purchase Price (as so
adjusted, the "ADJUSTED ADDITIONAL PURCHASE PRICE"), and the Parties will
agree upon allocations of the Adjusted Additional Purchase Price as provided
in Section 5 of this Agreement.
3. INDEMNIFICATION AND REIMBURSEMENT.
(a) INDEMNIFICATION.
(i) Seller shall indemnify and hold harmless each member of
the Purchaser Group from and against all Damages (including without
limitation, costs and expenses of litigation, amounts paid in settlement and
reasonable attorneys' fees) arising out of or related to any of the items or
matters described on the disclosure letter (the "DISCLOSURE LETTER") to this
Agreement (each, an "INDEMNIFIED ITEM"). With respect to each Indemnified
Item, Purchaser shall have, or retain, as the case may be, full control of
the defense and the proceedings, including the right to settle. If requested
by Purchaser, Seller shall cooperate in good faith with Purchaser in order to
contest effectively such claim.
2
(ii) If and to the extent a specific provision is
set forth in the Disclosure Letter with respect to a Indemnified Item,
Seller's liability for indemnification pursuant to Section 3(a)(i) of this
Agreement shall be reduced by the amount of such provision.
(iii) Seller's liability for indemnification
pursuant to Section 3(a)(i) of this Agreement above shall not exceed, for
each Indemnified Item, the respective amounts set forth in the Disclosure
Letter.
(iv) If the liabilities of the Purchaser Group as
set forth in and established by the final order or judgment (without right of
appeal) of the case described in Item 13 in the Disclosure Letter together
with all Damages incurred by Purchaser Group in connection with such case
(collectively, "ITEM 13 LIABILITIES") are less than 1,534,000 Euro, Purchaser
shall pay to Seller an amount equal to (i) 1,534,000 Euro, minus (ii) the
Item 13 Liabilities. If the Item 13 Liabilities are greater than 1,534,000
Euro, Seller shall pay to Purchaser an amount equal to (i) the Item 13
Liabilities, minus (ii) 1,534,000 Euro, but in no event greater than
1,634,000 Euro.
(b) NO LIMITATIONS. Seller's obligations set forth in this
Section 3 shall be in addition to, independent of, and not be limited by, any
provision included in the Purchase Agreement, including Section 15 thereof.
4. Section 18.1 is amended by deleting the first sentence thereof
and substituting the following:
Seller shall indemnify Purchaser on an After-Tax Basis against (i)
any liability for Taxes relating to the Companies for any taxable
period ending on or before the Closing Date and any Pre-Closing
Straddle Period if and to the extent such liability exceeds the
liabilities or accruals taken into account by the Closing Net Asset
Value Statement for Taxes relating to said periods, PROVIDED,
HOWEVER, that such obligation to indemnify shall be limited to the
percentage of such liability that corresponds to the percentage of
the direct or indirect ownership interest of Seller in the Companies
sold hereunder and (ii) any permanent reduction in the nominal value
(determined as of the Closing Date) of any Tax Asset included on the
Closing Net Asset Value Statement resulting from an adjustment by
any governmental tax authority of any item (including, without
limitation, any loss carryforward, credit carryforward, deduction,
or income inclusion) taken into account in determining such Tax
Asset; PROVIDED that the indemnity under this clause (ii) shall
include any penalty imposed by the relevant governmental tax
authority related to such adjustment. Excluded are reductions to the
extent due to changes in tax law after the Closing Date, expiration
of items due to inability to utilize after the Closing Date,
elections made by Purchaser after the Closing Date and business
restructuring done by Purchaser after the Closing Date.
5. ALLOCATIONS. After the final determination and payment of the
Pension Amount in accordance with Section 2(c) of this Agreement, the Parties
will agree upon allocations of the Adjusted Additional Purchase Price in
accordance with Section 10.2 of the Purchase Agreement.
3
The Parties acknowledge and agree that any payment made by Seller to
Purchaser or any other member or Purchaser Group, or by Purchaser to Seller,
pursuant to Section 3 of this Agreement shall be considered part of the
Additional Purchase Price, and the Parties shall agree upon allocation(s) at
such time(s) as appropriate. The Parties further acknowledge and agree that
there will be no change to the purchase price allocation with respect to
Knoll India, Hokuriku or Knoll Pakistan for any reason.
6. NON-COMPETE AMENDMENT. The section in the Purchase Agreement
entitled "Section 27, Non-Compete Covenant" is hereby amended by adding the
following to Section 27.3 after the word "Turkey" and before the word
"shall": "and Mexico".
7. RESERVATION OF RIGHTS. Nothing in this Agreement shall be deemed
to be a waiver by either Party of any right that such Party may have under
and in accordance with the terms of the Purchase Agreement, as amended by
Sections 4 and 6 hereof, or an agreement to forbear from exercising any right
or remedy with respect to any provision in the Purchase Agreement including
Sections 15 and 18 (as so amended). Purchaser specifically reserves its
rights and remedies under the Purchase Agreement, the documents delivered in
connection therewith and applicable law.
8. NOTICES. All notices, statements and other communications to be
given with respect to this Agreement shall be in the English language and
sent by registered mail, by facsimile transmission or by messenger to the
parties at the following addresses or at such other addresses as shall be
specified by the parties:
If to Seller: BASF Atiengeselleschaft
Central Legal Department
67056 Ludwigshafen, Germany
Telefax: 49.621.60.20410
If to Purchaser: Abbott Laboratories
One Abbott Park Road
Abbott Park, Illinois 60053-3500
Telefax: 847-938-6277
Attn: General Counsel
9. ENTIRE AGREEMENT; WRITTEN FORM.
(a) The Purchase Agreement shall remain in full force and
effect and, together with this Agreement and the Disclosure Letter, shall
constitute the entire agreement of the parties with respect to the subject
thereof and hereof and supercede all other prior agreements and undertakings
both written and oral among the Parties with respect to the subject matter
thereof and hereof. In the event of any translation of this Agreement, the
English version shall govern.
(b) Any changes in this Agreement, including, but not
limited to, this clause shall only be valid if made in writing and executed
by both Seller and Purchaser or, if necessary, in a stricter form.
10. ASSIGNMENT. Neither Seller nor Purchaser may assign any rights
or obligations under this Agreement to any third party without the consent of
the respective other Party.
4
11. GOVERNING LAW; JURISDICTION.
(a) This Agreement shall be governed by and construed in
accordance with the laws of the Federal Republic of Germany, without regard
to its choice of law rules.
(b) Except as otherwise expressly stated elsewhere in this
Agreement, all disputes arising out of or in connection with this Agreement,
including any question regarding its existence, validity or termination,
shall be referred to and finally resolved by arbitration in accordance with
the Rules of the German Institute of Arbitration e.V. (DIS) without recourse
to the ordinary courts of law, provided that the Chairman of the Arbitral
Tribunal shall not be of the same nationality as that of any of the parties
to a given dispute. The place of arbitration shall be Frankfurt, Germany; the
language of the arbitration shall be English.
12. EXPENSES.
(a) Except as specifically provided otherwise in this Agreement,
each party shall bear its own expenses and fees (including attorneys',
accountants', consultants' and advisors' fees) in connection with this
Agreement or any of the actions contemplated herein.
(b) Fees and costs triggered by the implementation of this
Agreement, including but not limited to any notarial fees, any transfer or
sales Tax (including any value added Tax and stamp duties and property
transfer Tax according to section 5 paragraph 3 Grunderwerbssteuergesetz, any
registration or publication fees shall be borne by Purchaser.
13. SEVERABILITY. Should any of the provisions of this Agreement be or
become fully or partly invalid or unenforceable, the remainder of the Agreement
shall be valid or enforceable. The invalid or unenforceable provision shall
be replaced by a provision which shall come as close as possible to the
economic purpose of the invalid provision. Any gaps in this Agreement shall
be filled by a provision which the parties as prudent businessmen would be in
good faith have agreed to, had they considered the matter not covered by this
Agreement.
5
EXHIBIT A-1
Adjustments to Closing Net asset Value
Knoll Pharmaceutical
Disputed Items Listing
EXHIBIT A-2
NON-INDIAN PURCHASE PRICE ADJUSTMENT FOR THE BASF PHARMA BUSINESS(1)
------------------------
(1) Does not reflect the Pension Amount that Seller may owe to Purchaser in
accordance with the Section 21.4 of the Purchase Agreement.
Die wortliche Ubereinstimmung vorstehender Ablichtung mit der mir
vorliegenden Urschrift beglaubige ich hiermit.
Frankfurt am Main, den 26. Juli 2001
[DR. GERHARD PILGER SEAL] /s/ Dr. Pilger
Dr. Pilger
N o t a r
Beglaubigte Abschrift
POWER OF ATTORNEY
I, the undersigned
Michael G. Strohmeier
with business address at
Jones, Day, Reavis & Pogue
Chicago, Illinois, USA
hereby grant a substitute power of attorney on behalf of
Abbott Laboratories
Abbott Park, Illinois, USA
-hereinafter referred to as the "Company".
Ansgar C. Rempp
Jens U. Boeck
and
Ercan Acikel
each with business address at
Jones, Day, Reavis & Pogue
Frankfurt, Germany
according to the power of attorney dated February 23, 2001 granted to me by
the Company (the "Original Power of Attorney"), a copy of which is attached
hereto, to individually represent the Company within the scope and
limitations provided for by the Original Power of Attorney.
Illinois, July 19, 2001
/s/ Michael G. Strohmeier
-------------------------------------
Michael G. Strohmeier
SUBSCRIBED AND SWORN TO
before me this 19th day of July, 2001
--------------------------------
"OFFICIAL SEAL"
SONIA ARCHER
/s/ Sonia Archer Notary Public, State of Illinois
------------------------------------- My Commission Expires 08/26/03
Notary Public --------------------------------
POWER OF ATTORNEY
We, the undersigned company
Abbott Laboratories
Abbott Park, Illinois, USA
hereinafter referred to as the "Company"
hereby grant powers of attorney to
James L. Tyree
with business address at
Abbott Laboratories
Abbott Park, Illinois, USA
Brian J. Smith
with business address at
Abbott Laboratories
Abbott Park, Illinois, USA
Charles N. Bensinger III
with business address at
Jones, Day, Reavis & Pogue
Chicago, Illinois, USA
and
Michael G. Strohmeier
with business address at
Jones, Day, Reavis & Pogue
Chicago, Illinois, USA
to individually represent the Company in connection with the transactions
contemplated by the purchase agreement dated as of December 14, 2000 (the
"Purchase Agreement") between BASF Aktiengesellschaft, a stock corporation
organized under the laws of the Federal Republic of Germany ("BASF") and the
Company, including, but not limited to, (i) any amendments to the Purchase
Agreement, (ii) the sale of all of the issued and outstanding shares of
capital stock of (a) Knoll AG, a stock corporation organized under the laws
of the Federal Republic of Germany, and (b) BASF Pharmaceutical Corporation,
a Delaware corporation; (iii) the sale to the Company and/or any of its
subsidiaries of all of shares of capital stock or other equity interests
directly or indirectly owned by BASF; (iv) the sale and transfer of certain
patents, trademarks, tradenames and other intellectual property, and to enter
into any kinds of agreements and commitments, including the right to grant
substitute and additional powers of attorney, as any of them deem necessary
and appropriate in connection therewith.
Our representatives shall be authorized to make all statements they deem
necessary or appropriate in this context. Furthermore, our representatives
shall be released from the restrictions set forth in Section 181 of the
German Civil Code.
ABBOTT LABORATORIES
Illinois, 23 day of February, 2001
by:
/s/ Gary P. Coughlan
------------------------------------
Gary P. Coughlan, Senior Vice President,
Finance and Chief Financial Officer
STATE OF ILLINOIS )
) ss.
COUNTY OF LAKE )
The undersigned, a Notary Public in and for the County and State
aforesaid, does hereby certify that Gary P. Coughlan, personally known to me
to be a duly appointed officer of Abbott Laboratories, an Illinois
corporation, appeared before me this day in person and acknowledged under
oath that in such capacity he or she signed and delivered this certificate
pursuant to authority duly given to him by said corporation.
GIVEN under my hand and seal this 23 day of February, 2001.
/s/ Judith Pacheco
-----------------------------------
Notary Public
--------------------------------
OFFICIAL SEAL
JUDITH PACHECO
Notary Public, State of Illinois
My Commission expires 10/4/03
--------------------------------
My Commission expires: 10/4/03
---------
Die wortliche Ubereinstimmung vorstehender Ablichtung mit der mir
vorliegenden Urschrift beglaubige ich hiermit.
Frankfurt am Main, den 26. Juli 2001
[DR. GERHARD PILGER SEAL] /s/ Dr. Pilger
Dr. Pilger
N o t a r
Die wortliche Ubereinstimmung vorstehender Ablichtung mit der mir
vorliegenden Urschrift beglaubige ich hiermit.
Frankfurt am Main, den 26. Juli 2001
/s/ Dr. Pilger
Dr. Pilger
N o t a r