Exhibit 10.1
SHARE PURCHASE AGREEMENT
by and between
MERCK GENERICS HOLDING GMBH
MERCK S.A.
MERCK INTERNATIONALE BETEILIGUNG GMBH
as Sellers
MERCK KGAA
as Sellers’ Guarantor and Sellers’ Representative
and
MYLAN LABORATORIES INC.
as Purchaser
for the acquisition of
all shares in
Merck dura GmbH,
Merck Generics Group B.V.,
EMD, Inc.,
Merck Generics Belgium B.V.B.A., and
Merck Genericos S.L.
12 May 2007

 

--------------------------------------------------------------------------------

 

Table of Contents

         
Table of Contents
    i  
Index of Defined Terms and Abbreviations
    v  
List of Exhibits and Schedules
  ix  

Share Purchase Agreement
    1  
Preamble
    2  
1. Definitions and Rules of Construction
    2  
1.1 Certain Defined Terms
    2  
1.2 Headings
    6  
1.3 German Terms
    7  
1.4 General Rules of Construction
    7  
2. Current Status
    7  
2.1 The Companies
    7  
2.2 The Subsidiaries
    8  
3. Sale and Transfer
    9  
3.1 Sale and Transfer of the Shares
    9  
3.2 Repayment of Shareholder Loans and Shareholder Deposits
    11  
3.3 Termination of Cash Management
    12  
4. Purchase Price and Payments
    13  
4.1 Purchase Price
    13  
4.2 Determination and Payment of Final Purchase Price
    15  
4.3 Adjustment of Final Purchase Price
    16  
4.4 General Rules for Payments
    16  
5. Final Accounts
    17  
5.1 Preparation of Effective Date Financial Statements
    17  
5.2 Resolution of Disputes
    19  
6. Regulatory and Other Authorizations
    20  
6.1 Regulatory Procedures
    20  
6.2 Merger Filings
    21  
6.3 Best Efforts
    21  
6.4 Cooperation
    21  
6.5 Other Transactions
    22  
7. CLOSING CONDITIONS
    22  
7.1 Closing Conditions
    22  
7.2 All Reasonable Efforts to Fulfill Closing Conditions
    24  
7.3 Notification of Satisfaction
    24  
7.4 Termination Rights
    24  
8. Closing
    25  
8.1 Closing and Effective Date
    25  
8.2 Closing Venues
    26  
8.3 Closing Actions
    26  
8.4 Closing Confirmation
    28  
9. Representations and Warranties of Sellers
    28  
9.1 Existence and Capacity of Sellers
    28  
9.2 The Companies and the Shares
    29  

i

--------------------------------------------------------------------------------

 

         
9.3 The Subsidiaries
    30  
9.4 Licenses and Permits
    30  
9.5 Financial Statements
    31  
9.6 Conduct of Business since 31 December 2006
    32  
9.7 Real Property and Other Assets
    33  
9.8 Intellectual Property
    34  
9.9 Material Agreements
    35  
9.10 Insurance
    37  
9.11 Personnel
    37  
9.12 Employee Benefits
    38  
9.13 Litigation and Product Liability
    40  
9.14 Environmental Matters
    40  
9.15 Taxes
    42  
9.16 Finders’ Fees
    43  
9.17 Pre-Sale Reorganization
    43  
9.18 Additional Information
    43  
10. Remedies
    44  
10.1 Breach
    44  
10.2 Knowledge
    45  
10.3 De-Minimis, Threshold and Deductible
    46  
10.4 Maximum Liability
    46  
10.5 Limitation Period
    46  
10.6 Willful Misconduct
    47  
10.7 No “Double Dip”
    47  
10.8 Exclusion of other Remedies
    47  
10.9 No Third Party Rights
    47  
10.10 Mitigation
    48  
10.11 Procedure / Third-Party-Claims
    48  
10.12 Reductions of Purchase Price
    50  
10.13 Claims and Agreements
    50  
10.14 Tax and Litigation Indemnity
    51  
11. Purchaser’s Guarantees, Covenants and other Agreements
    52  
11.1 Purchaser’s Representations
    52  
11.2 Remedies
    53  
11.3 Financing
    53  
11.4 Maximum Liability
    54  
11.5 Limitation Period
    54  
11.6 Exclusion of other Remedies
    55  
11.7 Mitigation
    55  
12. Tax Indemnity
    55  
12.1 Tax Indemnity
    55  
12.2 Cooperation on Tax Matters
    60  
12.3 Filing of Tax Returns
    60  
12.4 Control of Tax Audits
    60  
12.5 Tax Covenants
    61  
12.6 Tax Refunds
    62  
12.7 Tax Sharing Agreements
    62  
12.8 Exclusion and Indemnity by Purchaser
    63  
13. Indemnification for Litigation
    63  
13.1 Sellers Indemnification
    63  

 

--------------------------------------------------------------------------------

 

         
13.2 Seller Controlled Litigation
    63  
13.3 Purchaser Controlled Litigation
    65  
13.4 Cooperation of the Parties
    66  
13.5 Insurance Benefits
    67  
13.6 Tax Benefits
    67  
13.7 Mitigation
    67  
13.8 Payment
    67  
13.9 Characterization of Indemnification Payments
    67  
13.10 Exclusivity of Remedies
    68  
14. Pre-Sale Reorganization
    68  
14.1 Continuance of Pre-Sale Reorganization
    68  
14.2 Completion by Sellers of Actions not Finalized upon Closing
    68  
14.3 Conversion and Transfer of EMD Crop Bioscience Inc.
    69  
15. Conduct of Business after Signing
    69  
15.1 Activities between Signing and Closing
    69  
15.2 Advice of Change
    72  
15.3 Consultation
    72  
15.4 Activities between Effective Date and Closing Date
    73  
15.5 Employee Consultations
    73  
15.6 Financing
    73  
15.7 Excluded Businesses
    75  
15.8 Non-Solicitation and Non-Compete
    76  
15.9 Additional Covenants
    77  
16. Brand License, Intellectual Property, Insurance and Guarantees
    77  
16.1 Brand License Agreement
    77  
16.2 Intellectual Property
    78  
16.3 Transitional Service Agreement
    79  
16.4 Insurance Coverage
    80  
16.5 Merck Guarantees
    80  
16.6 Sellers’ Guarantees
    80  
17. Sellers’ Guarantor and Sellers’ Representative
    81  
17.1 Sellers’ Guarantor
    81  
17.2 Guarantees by Sellers’ Guarantor
    81  
17.3 Remedies
    81  
17.4 Authorization of Sellers’ Representative
    82  
18. Public Announcements and Confidentiality
    82  
18.1 Confidentiality
    82  
18.2 Press Release
    83  
18.3 Return of Documents
    83  
19. Notices
    84  
19.1 Form and Addresses
    84  
19.2 Date of Receipt
    85  
20. Costs
    85  
21. Miscellaneous
    86  
21.1 Severability
    86  
21.2 Exhibits
    86  
21.3 Entire Agreement
    86  
21.4 Amendments
    86  
21.5 Assignment and Designation of Transferors
    86  
21.6 Governing Law
    87  
21.7 Arbitration
    87  

 

--------------------------------------------------------------------------------

 

Index of Defined Terms and Abbreviations

         
2004 and 2005 Financial Statements
    31  
2006 Financial Statements
    2  
2007 Accounting Guidelines
    2  
Accounting Firm
    18  
Accounting Guidelines
    3  
Adjustment Purchase Price
    16  
Affiliate
    3  
Agreed Rate
    3  
Agreement
    1  
AktG
    3  
Ancillary Agreements
    3  
Base Purchase Price
    13  
Belgian Tax Benefit
    58  
BGB
    3  
Brand License Agreement
    77  
Breach of Covenant
    44  
Breach of Representations
    44  
Bridge Financing
    53  
Business
    3  
Business Day
    3  
Cash
    14  
Cash Management
    12  
Claim
    45  
Claim Notice
    48  
Closing
    26  
Closing Actions
    26  
Closing Conditions
    23  
Closing Date
    25  
Closing Venue
    26  
Collective Agreements
    38  
Commitment Letter
    53  
Companies
    2  
Company Claims
    50  
Confidentiality Agreement
    83  
Corporate Names
    3  
Covered Proceeding
    60  
Credit Facilities
    53  
Damages
    63  
Debt Securities
    53  
De-Minimis Amount
    46  
Directors and Officers
    3  
Disclosure Schedules
    28  
Dispute
    87  
Dura
    7  
Dura Share
    7  

iv

--------------------------------------------------------------------------------

 

         
Dura Transfer Deed
    9  
Effective Date
    25  
Effective Date Financial Statements
    17  
EMD
    8  
EMD Shares
    8  
Encumbrance
    3  
Environmental Law
    40  
Environmental Permit
    40  
Environmental Reports
    40  
Exceptions
    18  
Excluded Business
    75  
Excluded Jurisdictions
    68  
Final Purchase Price
    15  
Final Purchase Price Statement
    20  
Financial Debt
    14  
Financing
    53  
Genericos Transfer Deed
    10  
Genius Belgium
    8  
Genius Belgium Shares
    8  
Genius Belgium Transfer Deed
    10  
Genius Genericos
    8  
Genius Genericos Shares
    8  
Governmental Authority
    4  
Group Companies
    9  
Group IP
    34  
Guarantee
    4  
Hazardous Materials
    41  
Hypothetical Tax Benefit
    57  
IFRS
    4  
Indebtedness
    4  
Insurance Policies
    37  
Intellectual Property
    5  
Interests
    5  
Interim Loans
    12  
Joint Closing Condition
    22  
Key Employees
    37  
Leased Real Property
    33  
Legal Entity
    5  
LIBOR
    3  
Loss
    45  
Mastermind
    1  
Material Adverse Effect
    5  
Material Agreements
    35  
Merck Guarantees
    80  
MGG
    7  
MGG Shares
    8  
MGG Transfer Deed
    9  
Note Financing
    53  
Occupational Pension Scheme
    39  
Owned Real Property
    33  

 

--------------------------------------------------------------------------------

 

         
Parties
    1  
Pension Plans
    38  
Permits
    30  
Permitted Encumbrances
    5  
Person
    6  
Plan
    39  
Post-Effective Date Tax Period
    6  
Pre-Effective Date Tax Liability
    6  
Pre-Effective Date Tax Period
    6  
Preliminary Purchase Price
    15  
Pre-Sale Reorganization
    68  
Purchase Price
    13  
Purchase Price Determination Statement
    17  
Purchaser
    1  
Purchaser Claim Counsel
    66  
Purchaser Controlled Litigation
    65  
Purchasers Knowledge
    46  
Real Property
    33  
Release
    41  
Required Financial Information
    74  
Revised Statement
    18  
Scheduled Litigation
    63  
Secure System Separation Activities
    79  
Seller 1
    1  
Seller 2
    1  
Seller 3
    1  
Seller Claim Counsel
    64  
Seller Closing Conditions
    23  
Seller Controlled Litigation
    64  
Sellers
    1  
Sellers’ Affiliate
    6  
Sellers Claims
    51  
Sellers’ Guarantor
    1  
Sellers’ Knowledge
    6  
Sellers’ Representative
    1  
Senior Credit Facilities
    53  
Shareholder Loans
    11  
Shares
    8  
Signing Date
    6  
Straddle Period
    6  
Subsidiaries
    8  
Subsidiary Loans
    13  
Subsidiary Shares
    9  
Target Working Capital
    14  
Tax
    6  
Tax Benefit
    57  
Tax Indemnity De Minimis Amount
    59  
Tax Indemnity Threshold
    59  
Taxing Authority
    6  
Third Party Claim
    48  

 

--------------------------------------------------------------------------------

 

         
Third Party Expert
    19  
Threshold
    46  
Trademark
    6  
Transitional Services Agreement
    27  
U.S. Securities Act
    73  
UK Pension Scheme
    38  
Working Capital
    14  
Working Capital Adjustment
    14  
Working Capital Difference
    14  

 

--------------------------------------------------------------------------------

 

List of Exhibits and Schedules

         
Exhibit 1.1(a)
  2006 Financial Statements
Exhibit 1.1(b)
  2007 Accounting Guidelines
Exhibit 1.1(c)
  Sellers’ Knowledge
Exhibit 2.2
  Subsidiaries
Exhibit 3.1.2(a)
  Dura Transfer Deed
Exhibit 3.1.2(b)
  MGG Transfer Deed
Exhibit 3.1.2(d)
  Merck Belgium Transfer Deed
Exhibit 3.1.2(e)
  Genericos Transfer Deed
Exhibit 3.1.4
  Form of Merck Belgium Shareholder Consent
Exhibit 3.2.1
  Shareholder Loans
Exhibit 3.3.1
  Cash Management
Exhibit 3.4.1
  Subsidiary Loans
Exhibit 4.1.4
  Purchase Price Allocation
Exhibit 7.1
  Competition Law Approvals
Exhibit 8.3.14
  Transitional Services Agreement
Exhibit 8.4
  Form of Closing Confirmation
Disclosure Schedule 9.3.2
  Encumbrances on Subsidiary Shares
Disclosure Schedule 9.4.1
  Permits
Disclosure Schedule 9.4.2
  Compliance with Permits and Laws
Disclosure Schedule 9.5(c)
  Undisclosed Liabilities
Disclosure Schedule 9.6.2
  Ordinary Course
Disclosure Schedule 9.7.1
  Real Property
Disclosure Schedule 9.7.2
  Real Property Encumbrances
Disclosure Schedule 9.8.1
  Intellectual Property
Disclosure Schedule 9.8.2
  IP Encumbrances
Disclosure Schedule 9.8.4
  IP Claims by Third Parties
Disclosure Schedule 9.8.6
  IP Infringements
Disclosure Schedule 9.9
  Material Agreements
Disclosure Schedule 9.9.2
  Terminated Material Agreements
Disclosure Schedule 9.9.4
  Conflicts with Material Agreements
Disclosure Schedule 9.10.1
  Insurance Overview
Disclosure Schedule 9.10.1(a)
  Self-Insurance Overview
Disclosure Schedule 9.11.1
  Key Employees
Disclosure Schedule 9.11.2
  Key Employee Terminations
Disclosure Schedule 9.11.3
  Transaction Bonuses
Disclosure Schedule 9.11.4
  Labor Disputes
Disclosure Schedule 9.11.5
  Collective Agreements
Disclosure Schedule 9.12.2
  Pension Plans
Disclosure Schedule 9.13.1
  Litigation
Disclosure Schedule 9.13.2
  Product Recalls
Disclosure Schedule 9.14.1(c)
  Environmental Reports
Disclosure Schedule 9.14.2(a)
  Environmental Claims
Disclosure Schedule 9.14.5
  Releases of Hazardous Materials
Disclosure Schedule 9.15.5
  Tax Appeals
Exhibit 9.18
  Additional Information
Exhibit 13.1
  Indemnified Litigation

viii

--------------------------------------------------------------------------------

 

         
Exhibit 14.1(a)
  Post-Effective Date Reorganization Actions
Exhibit 14.1(b)
  Excluded Jurisdictions
Exhibit 15.1.1
  Activities between Signing and Closing
Exhibit 15.4
  Activities between Closing and Effective Date
Exhibit 15.5
  Employee Consultations
Exhibit 15.9.2
  Pension Matters
Exhibit 15.9.3
  Form of FIRPTA Certificate
Exhibit 16.1.1
  Form of Brand License Agreement
Exhibit 16.2.3
  Licensed IP
Exhibit 16.3
  Excluded Services
Exhibit 16.4
  Insurance
Exhibit 16.5.1
  Merck Guarantees

ix

--------------------------------------------------------------------------------

 

Share Purchase Agreement
This Share Purchase Agreement (this “Agreement”) is made as of 12 May 2007 by
and between

1.   Merck Generics Holding GmbH, a limited liability company organized under
the laws of Germany and registered with the commercial register
(Handelsregister) of the municipal court (Amtsgericht) of Darmstadt, Germany,
under HRB 7759,

- “Seller 1” -

2.   Merck S.A., a stock corporation organized under the laws of France and
registered with the commercial register (registre de commerce et des sociétés)
of Lyon under no. 777335340 RCS Lyon,

- “Seller 2” -

3.   Merck Internationale Beteiligung GmbH, a limited liability company
organized under the laws of Germany and registered with the commercial register
of the municipal court of Darmstadt, Germany, under HRB 8239,

- “Seller 3” -
- Seller 1, Seller 2 and Seller 3
jointly the “Sellers” –

4.   Merck KGaA, a partnership limited by shares organized under the laws of
Germany and registered with the commercial register of the municipal court of
Darmstadt, Germany, under HRB 6164,

- “Merck”, and also referred to as
“Sellers’ Guarantor” and “Sellers’ Representative” -

5.   Mylan Laboratories Inc., a corporation organized under the laws of the
Commonwealth of Pennsylvania with business address at 1500 Corporate Drive,
Canonsburg, Pennsylvania 15317, U.S.A.;

- “Purchaser ” -
- Sellers, Sellers’ Guarantor and Purchaser
are also referred to as “Parties”

 

--------------------------------------------------------------------------------

 

Preamble
WHEREAS, Purchaser is interested in acquiring the generics business operated by
Merck through various direct and indirect subsidiaries;
WHEREAS, Dura GmbH, Merck Generics Group B.V., EMD, Inc., Merck Generics Belgium
B.V.B.A. and Merck Genericos S.L. (together, the “Companies”) and the Companies’
respective subsidiaries are active in the development, manufacture and
distribution of generic drugs and specialty products;
WHEREAS, simultaneous with the execution of this Agreement, certain members of
management of the Group Companies are entering into employment agreements with
Purchaser or certain of its Affiliates, which employment agreements shall be
conditioned on the Closing and become effective on the Closing Date; and
WHEREAS, Purchaser intends to acquire from Sellers, and Sellers intend to sell
to Purchaser, all of the issued shares in the Companies;
NOW THEREFORE, the Parties agree as follows:
1.
DEFINITIONS AND RULES OF CONSTRUCTION
1.1 Certain Defined Terms
In this Agreement, except where set forth otherwise, the following terms and
abbreviations shall have the following meanings:
“2006 Financial Statements”: The audited consolidated balance sheet, the audited
consolidated profit and loss statement and the audited consolidated statement of
free cash flow of the Companies and the Subsidiaries, as of 31 December 2006 for
the year then ended, as adjusted for the factors stated in the basis for their
preparation and as attached hereto as part of Exhibit 1.1 (a);
“2007 Accounting Guidelines”: Those parts of the Accounting Guidelines
applicable to the fiscal year 2007, that are attached hereto as Exhibit 1.1 (b);

2

--------------------------------------------------------------------------------

 

“Accounting Guidelines”: The accounting principles, methods and policies
specified in the accounting guidelines of the Merck group, which are based on
and consistent with IFRS, for the years ended 31 December 2004, 2005 and 2006,
respectively, that were made available to Purchaser in the Data Room;
“Affiliate”: With respect to any Person, any other Person that directly, or
indirectly through one or more intermediaries, controls, is controlled by or is
under common control with such Person; for purposes of this definition,
“control” when used with respect to any Person, shall mean the possession,
directly or indirectly, of the power to appoint, direct or cause the direction
of the management or to decide or cause the decision upon policies of such
Person, whether through contract or the ownership, directly or indirectly, of
more than 50% of the voting or equity securities or other interests of any such
Person;
“Agreed Rate”: LIBOR plus 1.0%. For this purpose, “LIBOR” means the London
Interbank Borrowing Rate fixing as quoted by the British Bankers Association on
Bloomberg, on the day before the term of the relevant interest period starts,
with a term corresponding to the period for which interest is to be calculated
and, if LIBOR is not available for such period, the next longer period for which
LIBOR is available;
“AktG”: The German Stock Corporation Act (Aktiengesetz);
“Ancillary Agreements”: The Brand License Agreement and the Transitional
Services Agreement;
“BGB”: The German Civil Code (Bürgerliches Gesetzbuch);
“Business”: The development, manufacture and distribution of generic drugs and
specialty products, as conducted by the Group Companies on the Signing Date,
after giving effect to the completion of the Pre-Sale Reorganization;
“Business Day”: Any day that is not a Saturday, Sunday or public holiday in
Frankfurt am Main, Germany;
“Corporate Names ”: Any corporate names and trade names;
“Directors and Officers”: Any director, officer, managing director
(Geschäftsführer) or member of any other statutory board or body of
representation of any Legal Entity;
“Encumbrance”: Any security interest, pledge, hypothecation, mortgage, land
charge or

3

--------------------------------------------------------------------------------

 

lien (or comparable legal rights in any applicable jurisdiction); and any
interest of a vendor or a lessor under any conditional sale agreement, capital
lease or title retention agreement (or any financing lease having substantially
the same economic effect as any of the foregoing);
“Governmental Authority”: Any federal, national, state, local, municipal, or
international government, governmental, regulatory, legislative or
administrative authority, agency or commission, or any court, tribunal, or
judicial or arbitral body of competent jurisdiction;
“Guarantee” of or by any Person (the “guarantor”) means any obligation,
contingent or otherwise, of the guarantor guaranteeing or having the economic
effect of guaranteeing any Indebtedness or other obligation of any other Person
(the “primary obligor”) in any manner, whether directly or indirectly, and
including any obligation of the guarantor, direct or indirect, (a) to purchase
or pay (or advance or supply funds for the purchase or payment of) such
Indebtedness or other obligation or to purchase (or to advance or supply funds
for the purchase of) any security for the payment thereof, (b) to purchase or
lease property, securities or services for the purpose of assuring the owner of
such Indebtedness or other obligation of the payment thereof, (c) to maintain
working capital, equity capital or any other financial statement condition or
liquidity of the primary obligor so as to enable the primary obligor to pay such
Indebtedness or other obligation or (d) as an account party in respect of any
letter of credit or letter of guaranty issued to support such Indebtedness or
obligation; provided, that the term Guarantee shall not include endorsements for
collection or deposit in the ordinary course of business;
“IFRS”: The International Financial Reporting Standards as promulgated by the
International Accounting Standards Board (IASB) and as in effect from time to
time and at the relevant point of time, that may include standards that can be
applied on a voluntary basis, in each case applied consistently throughout the
periods involved;
“Indebtedness” of any Person means, without duplication, (a) all obligations of
such Person for borrowed money, (b) all obligations of such Person evidenced by
bonds, debentures, notes or similar instruments, (c) all obligations of such
Person under conditional sale or other title retention agreements relating to
property acquired by such Person, (d) all obligations of such Person in respect
of the deferred purchase price of property or services (excluding current
accounts payable incurred in the ordinary course of business and milestone
payments incurred in connection with any investment or series of related
investments), (e) all Indebtedness of others secured by (or for which the holder
of such Indebtedness has an existing right, contingent or otherwise, to be
secured by) any Encumbrance on property owned or acquired by such Person,
whether or not the Indebtedness secured thereby has been assumed, (f) all
Guarantees by such Person of Indebtedness of others, (g) all obligations of such
Person to pay rent or other amounts under any lease of (or other arrangement
conveying the right to use) real or personal property, or a combination thereof,
which obligations would be required to be classified and accounted for as
capital leases on a balance sheet of such Person, (h) all obligations,

4

--------------------------------------------------------------------------------

 

contingent or otherwise, of such Person as an account party in respect of
letters of credit and letters of guaranty, (i) all obligations, contingent or
otherwise, of such Person in respect of bankers’ acceptances, (j) all
obligations of such Person under any swap agreement or under any similar type of
agreement, (k) all obligations under any receivables facility, including
obligations that would be Indebtedness outstanding at such time under such
receivables facility if the same were structured as a secured lending agreement
rather than a purchase agreement, (l) in the case of any sale and leaseback
transaction not constituting a capital lease, the present value (discounted at
the interest rate implicit in such transaction) of the total obligations of the
lessee for rental payments during the remaining term of the lease included in
such sale and leaseback transaction (including any period for which such lease
has been extended) and (m) all obligations of such Person under any synthetic
lease transaction. The Indebtedness of any Person shall include the Indebtedness
of any other entity (including any partnership in which such Person is a general
partner) to the extent such Person is expressly liable therefor as a result of
such Person’s ownership interest in or other relationship with such entity and
pursuant to contractual arrangements, except to the extent the terms of such
Indebtedness provide that such Person is not liable therefor;
“Intellectual Property”: Any patent, utility model, copyright, design right,
design right registration, Trademark, trade secret and database right, in each
case whether registered or unregistered, and all rights or forms of intellectual
property protection having equivalent or similar effect anywhere in the world;
for purposes hereof, “registered” shall include registrations and applications
for registrations;
“Interests”: Any shares, partnership interests or other equity interests in any
Legal Entity or rights to acquire any of the foregoing;
“Legal Entity”: Any corporation, company, partnership, association or other
legal entity validly established pursuant to the laws of any jurisdiction;
“Material Adverse Effect”: Any event, circumstance, or change in, or effect on,
the Business that is materially adverse to the business, assets, results of
operation or financial condition of the Group Companies taken as a whole;
“Permitted Encumbrances”: Any (i) retention of title rights, liens, pledges or
similar Encumbrances in favor of suppliers, mechanics, carriers, workmen,
landlords and the like or similar liens arising or incurred in the ordinary
course of business relating to obligations that are not delinquent beyond the
applicable cure periods or that are being contested in good faith; (ii) liens
for Taxes, assessments and charges and similar claims that in all such cases are
either not yet due and payable, or the validity of which is being contested in
good faith; and (iii) easements, covenants, rights of way and similar
restrictions that do not and would not materially impair the use or value of
such property for its current purposes;

5

--------------------------------------------------------------------------------

 

“Person”: Any natural person or any Legal Entity;
“Pre-Effective Date Tax Liability”: Any Tax liability of any Group Company for a
Pre-Effective Date Tax Period, including, for the avoidance of doubt, any Tax
liability attributable to any Pre-Sale Reorganization measure set forth in
Exhibit 14.1 (c);
“Pre-Effective Date Tax Period”: Any taxable period (or portion thereof) ending
on or before the Effective Date;
“Post-Effective Date Tax Period”: Any taxable period (or portion thereof)
beginning after the Effective Date;
“Sellers’ Affiliate”: Any Affiliate of any Seller other than the Group
Companies;
“Sellers’ Knowledge”: Solely the actual knowledge (positive Kenntnis) as of the
Signing Date of the individual persons listed on Exhibit 1.1 (d);
“Signing Date”: The day on which this Agreement is notarized;
“Straddle Period”: Any taxable period that begins before and ends after the
Effective Date;
“Tax”: Any tax, levy or duty within the meaning of Section 3 German Tax Act
(Abgabenordnung) or similar tax, levy or duty under applicable foreign law as
well as social security contributions including any related fine, penalty,
surcharge or interest;
“Taxing Authority”: Any Governmental Authority with the authority to assess a
Tax; and
“Trademark”: Any registered and unregistered trademarks and service marks,
including logos, slogans, Corporate Names, product names, domain names, and
applications to register any of the foregoing, together with the goodwill
symbolized by any of the foregoing.
1.2 Headings
The headings in this Agreement are inserted for convenience only and shall not
affect the interpretation of this Agreement.

6

--------------------------------------------------------------------------------

 

1.3 German Terms
If any provision in this Agreement contains an English term after which either
in the same provision or elsewhere in this Agreement a term or terms in German
have been added in parentheses and/or italics, then it shall be solely such
German term and not the English term that is decisive for the interpretation of
the respective provision.
1.4 General Rules of Construction
The definitions of terms herein shall apply equally to the singular and plural
forms of the terms defined. Whenever the context may require, any pronoun shall
include the corresponding masculine, feminine and neuter forms. The words
“include”, “includes” and “including” shall be deemed to be followed by the
phrase “without limitation” and shall not be construed to express limitation in
any way. The word “will” shall be construed to have the same meaning and effect
as the word “shall”. Unless the context requires otherwise (i) any definition
of, or reference to, any agreement, instrument or other document herein shall be
construed as referring to such agreement, instrument or other document as from
time to time amended, supplemented or otherwise modified (subject to any
restrictions on such amendments, supplements or modifications set forth herein),
(ii) any reference herein to any Person shall be construed to include such
Person’s successors and assigns, (iii) the words “herein”, “hereof”, “hereby”
and “hereunder”, and words of similar import, shall be construed to refer to
this Agreement in its entirety and not to any particular provision hereof,
(v) the words “immediately” and “promptly” shall mean without undue delay (ohne
schuldhaftes Zögern), and (vi) all references herein to Sections, Exhibits and
Disclosure Schedules shall be construed to refer to Sections of, and Exhibits
and Disclosure Schedules to, this Agreement unless indicated otherwise in this
Agreement.
2.
CURRENT STATUS
2.1 The Companies

  2.1.1   Dura. Merck dura GmbH (“Dura”) is a limited liability company (GmbH)
organized under the laws of Germany and registered with the commercial register
of the municipal court (Amtsgericht) of Darmstadt, Germany, under HRB 6211. The
stated capital (Stammkapital) of Dura is EUR 25,850 represented by one share in
the nominal amount of EUR 25,850 (the “Dura Share”). Seller 1 holds the Dura
Share.     2.1.2   MGG. Merck Generics Group B.V. (“MGG”) is a private company
with limited liability (besloten vennootschap met beperkte aansprakeljkheid)
organized under

7

--------------------------------------------------------------------------------

 

      the laws of the Netherlands with its statutory seat in Rotterdam, having
its place of business at Prins Bernardplain 200, 1097 JB Amsterdam, and
registered with the commercial register (Kammer van Koophandel) of Amsterdam
under 24171754. The stated issued capital of MGG is EUR 190,501 represented by
381,002 shares (the “MGG Shares”). Seller 1 holds all MGG Shares.     2.1.3  
EMD. EMD, Inc. (“EMD”) is a corporation organized under the laws of Delaware,
U.S.A. The authorized share capital of EMD consists of 100 shares of common
stock, par value USD 0.01 per share, 100 shares of which are issued and
outstanding (such issued and outstanding shares, the “EMD Shares”). Seller 2
holds all EMD Shares.     2.1.4   Merck Belgium. Merck Generics Belgium B.V.B.A.
(“Merck Belgium”) is a limited liability company (Besloten Vennootschap met
Beperkte Aansprakelijkheid) organized under the laws of Belgium, having its
registered office at 3090 Overijse, Brusselsesteenweg 288. The stated capital
(maatschappelijk kapitaal) of Merck Belgium amounts to EUR 18,550 represented by
18,550 nominative shares (aandelen opnaam). Seller 3 holds 18,549 Merck Belgium
shares (the “Merck Belgium Shares”) and MGG holds one share in Merck Belgium.  
  2.1.5   Merck Genericos. Merck Genericos S.L. (“Merck Genericos”) is a limited
liability company (Sociedad de Responsabilidad Limitada) validly existing and
incorporated under the laws of Spain and registered with the commercial registry
of Barcelona, at page 75, sheet B-240,742, volume 34,115. The stock capital of
Merck Genericos amounts to EUR 2,560,000 represented by 2,560 stock quotas
(Participaciones Socialesi) (the “Merck Genericos Shares”). Seller 3 holds all
Merck Genericos Shares.     2.1.6   Definitions. The Dura Share, the MGG Shares,
the EMD Shares, the Merck Belgium Shares and the Merck Genericos Shares are
hereinafter also referred to as the “Shares”.

2.2 The Subsidiaries

  2.2.1   Subsidiaries. The Companies directly and indirectly hold the Interests
in the Legal Entities as set forth in Exhibit 2.2 (and except as set forth
therein, hold no other Interests in Legal Entities).     2.2.2   Definitions.
The Legal Entities listed on Exhibit 2.2 shall be referred to as the
“Subsidiaries”. The Companies and the Subsidiaries shall be jointly referred to
as

8

--------------------------------------------------------------------------------

 

      the “Group Companies”. The Interests in the Subsidiaries as set forth in
Exhibit 2.2 shall be referred to as the “Subsidiary Shares”.

3.
SALE AND TRANSFER
3.1 Sale and Transfer of the Shares

  3.1.1   Sale and Purchases. Each Seller hereby sells to Purchaser, in each
case with economic effect as of the Effective Date, the Shares as follows:

  (a)   Seller 1 hereby sells (verkauft) the Dura Share and the MGG Shares to
Purchaser, and Purchaser hereby accepts such sale;     (b)   Seller 2 hereby
sells (verkauft) the EMD Shares to Purchaser, and Purchaser hereby accepts such
sale; and     (c)   Seller 3 hereby sells (verkauft) the Merck Belgium Shares
and the Merck Genericos Shares to Purchaser, and Purchaser hereby accepts such
sale.

  3.1.2   Transfer. Subject to the satisfaction or waiver of the Closing
Conditions and the terms and conditions of this Agreement, at the Closing Date,
each Seller shall transfer to Purchaser the Shares sold pursuant to
Section 3.1.1 above, and Purchaser shall accept such transfer, by way of
separate transfer deeds as follows:

  (a)   Seller 1 shall transfer its Dura Share to Purchaser (or its designee in
accordance with Section 21.5) by way of a notarial transfer deed in
substantially the form set forth in Exhibit 3.1.2(a) (the “Dura Transfer Deed”);
    (b)   Seller 1 shall transfer the MGG Shares to Purchaser (or its designee
in accordance with Section 21.5) by way of a notarial transfer deed in
substantially the form set forth in Exhibit 3.1.2(b) (the “MGG Transfer Deed”);
    (c)   Seller 2 shall transfer the EMD Shares to Purchaser (or its designee
in accordance with Section 21.5) by way of due endorsement and delivery of the
certificate(s) representing the EMD Shares;

9

--------------------------------------------------------------------------------

 

  (d)   Seller 3 shall transfer the Merck Belgium Shares to Purchaser (or its
designee in accordance with Section 21.5) by way of a written transfer deed (the
“Merck Belgium Transfer Deed”) in substantially the form set out in
Exhibit 3.1.2(d); and     (e)   Seller 3 shall transfer the Merck Genericos
Shares to Purchaser (or its designee in accordance to Section 21.5) by way of a
notarial transfer deed (the “Genericos Transfer Deed”) in substantially the form
set out in Exhibit 3.1.2(e).

  3.1.3   Ancillary Rights. The Shares are sold and transferred with all
ancillary rights appertaining thereto (Nebenrechte), including all dividend
rights (Gewinnbezugsrecht) to profits pertaining to previous business years and
the current business year that have not been distributed before the Effective
Date.     3.1.4   Corporate Consent. Seller 3 shall consent, and Seller 1 shall
cause MGG to consent, as shareholders of Merck Belgium to the sale and transfer
of the Merck Belgium Shares pursuant to this Agreement, such consent being in
substantially the form set out in Exhibit 3.1.4.     3.1.5   Structure of
Transaction. At the election of Purchaser, (i) any one or more Affiliates of
Purchaser may be substituted for Purchaser in the transaction and (ii) Purchaser
or any such substituted purchaser or purchasers may directly acquire Interests
in any Subsidiary, either in lieu of or in addition to acquisitions of the
Shares in the Companies set forth in this Section 3.1, provided that Purchaser
shall not take any such actions that can reasonably be expected to prevent or
materially hinder or delay the consummation of the transactions contemplated by
this Agreement and provided further that this Section 3.1.5 does not permit the
direct acquisition of Interests in Dey Inc. The parties will cooperate in good
faith to effectuate any such substitution and/or change in the acquisition
structure, including executing any necessary or advisable amendments to this
Agreement in order to reflect the foregoing. Purchaser will agree to an
appropriate full indemnification arrangement with Sellers and Sellers’
Affiliates to the extent such change in acquisition structure increases the tax
costs to Sellers and Sellers’ Affiliates above the amount of costs that would
have been incurred in connection with the sales and transfers set forth in this
Section 3.1. as of the Signing Date. All incremental costs and expenses
(including reasonable out of pocket expenses for counsel) incurred by Sellers or
Sellers’ Affiliates in connection with the implementation of any substitution or
change in the acquisition structure contemplated by this Section 3.1.5 shall be
reimbursed, and all risks related to such acquisition structure shall be
assumed, by Purchaser. Any changes to the structure pursuant to this
Section 3.1.5 shall be disregarded for purposes of Section 9 of this Agreement.

10

--------------------------------------------------------------------------------

 

  3.1.6   EMD Crop Bioscience. Purchaser shall use its best efforts after the
Signing Date to optimize the tax position of Sellers and Sellers’ Affiliates
with respect to EMD Crop Bioscience Inc. (which may involve the transfer of such
entity after the Closing), provided that separate outside tax counsel to each of
the financing sources under the Commitment Letter, Sellers and Purchaser have
provided an opinion reasonably acceptable to such financing sources and
Purchaser with respect to the transactions contemplated with respect to EMD Crop
Bioscience Inc. All incremental costs and expenses (including reasonable out of
pocket expenses for counsel) incurred by Purchaser in connection with the
implementation of the actions contemplated by this Section 3.1.6 shall be
reimbursed, and all risks related to such actions shall be assumed, by Sellers
and Sellers’ Affiliates.

3.2 Repayment of Shareholder Loans and Shareholder Deposits

  3.2.1   Details of Shareholder Loans and Shareholder Deposits. Sellers’
Guarantor, Sellers and certain of Sellers’ Affiliates have granted to certain of
the Group Companies loans or have deposited with certain of the Group Companies
funds (together the “Shareholder Loans”), which Shareholder Loans as of the
Signing Date are set forth in Exhibit 3.2.1. Additional Shareholder Loans may be
granted after the Signing Date on arm’s length terms by Sellers and Sellers’
Affiliates (in accordance with the terms of this Agreement).     3.2.2  
Repayment. Purchaser agrees that the Shareholder Loans together with interest
accrued thereon up to the repayment date will be repaid by the respective
borrower to the respective lender. At the option of Sellers’ Representative,
repayment will be made either on or prior to Closing. For the avoidance of
doubt, any amounts (including accrued interest) not repaid on or prior to the
Effective Date shall be deemed to constitute Financial Debt.     3.2.3   Direct
Payment. If the repayment of the Shareholder Loans takes place at Closing, the
funds for the satisfaction of all obligations of the respective borrowers under
the Shareholder Loans will be made available by Purchaser to the borrowers on
the basis of new shareholder loans or, in case Shareholder Loans may not be
repaid at such time for legal reasons, by contribution of equity. Purchaser
shall, subject to the satisfaction or the waiver of the Closing Conditions and
the terms and conditions of this Agreement, at Closing, pay the amounts owed
under the Shareholder Loans on such date on behalf of the borrowers directly to
the lenders, and such payments are made in performance (Erfüllung) of (i) the
borrowers’ obligations to repay the Shareholder Loans, and (ii) Purchaser’s
obligation to lend, and make available, to the borrowers the respective funds
under the new shareholder loans or as equity, as the case may be.

11

--------------------------------------------------------------------------------

 

3.3 Termination of Cash Management

  3.3.1   Cash Management. Certain of the Group Companies as well as various
Sellers’ Affiliates are presently participating in cash pooling arrangements
involving external banks or in an inhouse bank concept (“finavigate”) under
which intercompany clearing takes place; further, intercompany transactions of
Group Companies are settled on intercompany accounts that Group Companies hold
with an inhouse bank of Sellers’ Affiliates (such arrangements, concept and
accounts together, the “Cash Management”). The aggregate balances of credits and
debits under the Cash Management as of 31 March 2007 are set forth in
Exhibit 3.3.1.     3.3.2   Termination of Existing Cash Management. On or before
Closing, the Cash Management between the Group Companies and Sellers’ Affiliates
will be terminated and all payment claims and obligations of the Group Companies
and Sellers’ Affiliates will be settled so that all claims and liabilities
resulting from Cash Management will be zero as of Closing. The effective date of
the termination will be determined by Sellers’ Representative in its discretion.
    3.3.3   Payment of Obligations under the Cash Management. If individual Cash
Management liabilities of Group Companies cannot be paid by Group Companies for
legal reasons, Sellers will procure that interim loans are granted to such
entities at arm’s length terms by other Group Companies, or by third parties or
Sellers’ Affiliates (in each case, in accordance with the terms of this
Agreement), in order to enable the Group Companies to satisfy their Cash
Management liabilities or transform such Cash Management liabilities into
interim loans or interim deposits.     3.3.4   Interim Loans. To the extent that
any of the Group Companies is in need of liquidity as a result of the
termination of the Cash Management prior to Closing, Sellers shall ensure that
interim loans or interim deposits at arm’s length terms are provided to such
Group Companies by other Group Companies, or third parties or Sellers’
Affiliates (in each case, in accordance with the terms of this Agreement).    
3.3.5   Repayment of Loans. To the extent that interim loans or interim deposits
are granted or made by Sellers’ Affiliates to Group Companies, or interim loans
or interim deposits by Sellers’ Affiliates result from a transformation of Cash
Management liabilities, in accordance with Section 3.3.3 or Section 3.3.4 above
(together, the “Interim Loans”), Purchaser shall repay the principal of such
loans outstanding at Closing and any accrued interest in respect thereof to the
respective lenders at Closing. For the avoidance of doubt, any such amounts
(including accrued interest) not repaid on or prior to the Effective Date shall
be deemed to constitute Financial Debt. Section 3.2.3 applies, mutatis mutandis.

12

--------------------------------------------------------------------------------

 

3.4 Repayment of Subsidiary Loans

  3.4.1   Details of Subsidiary. The Group Companies have granted to Sellers and
Sellers’ Affiliates loans (the “Subsidiary Loans”) as set forth in
Exhibit 3.4.1.     3.4.2   Repayment. Sellers’ Representative agrees to ensure
that the Subsidiary Loans will be repaid together with interest accrued thereon
up to the repayment date. At the option of Sellers’ Representative, repayment
will be made either prior to or at Closing.

4.
PURCHASE PRICE AND PAYMENTS
4.1 Purchase Price

  4.1.1   Purchase Price. The aggregate purchase price for the Shares sold under
Section 3 (the “Purchase Price”) shall amount to

EUR 4,900,000,000
(in words: Euro four billion nine hundred million)
(the “Base Purchase Price”)
plus
(a) the Cash of the Group Companies on a consolidated basis;
minus
(b) the Financial Debt of the Group Companies on a consolidated basis;
plus (minus)
(c) the Working Capital Adjustment.
Each of the components of the Purchase Price set out in clauses (a), (b) and (c)
will be calculated as of the Effective Date.

13

--------------------------------------------------------------------------------

 

  4.1.2   Definitions. The following terms shall have the following meanings:

  (a)   “Cash” means the sum of (i) cash and cash-equivalents and
(ii) securities and other financial investments, both as defined in greater
detail in paragraphs 2.1 and 2.2 of the 2007 Accounting Guidelines, and (iii) to
the extent not covered by (i) or (ii), all receivables held by Genpharm Inc.
under loans granted to Gennium Pharma Inc.     (b)   “Financial Debt” means the
sum of (i) current financial liabilities, (ii) non-current financial
liabilities, and (iii) pensions and other post-employment benefits netted with
(iv) deferred pension expenses, (i) through (iv) as defined in greater detail in
paragraphs 4.1, 5.1, 5.4, 2.5.13291 and 2.5.132911 of the 2007 Accounting
Guidelines, and (v) Tax liabilities, provisions and reserves recognized for
Pre-Sale Reorganization measures set forth in Part 8 (U.S.) of Exhibit 14.1.    
(c)   “Target Working Capital” shall mean Euro 382,000,000.     (d)   “Working
Capital” means the difference between (i) the sum of (A) trade receivables and
(B) inventories, and (ii) trade payables, all as defined in greater detail in
paragraphs 2.3, 2.4 and 4.2 of the 2007 Accounting Guidelines.     (e)  
“Working Capital Difference” shall mean the difference between the Working
Capital and the Target Working Capital.     (f)   “Working Capital Adjustment”
shall

  (i)   mean, if the Working Capital exceeds the Target Working Capital, the
addition of the entire Working Capital Difference to the Base Purchase Price
when calculating the Purchase Price pursuant to Section 4.1.1;     (ii)   mean,
if the Working Capital is less than the Target Working Capital, subtraction of
the entire Working Capital Difference from the Base Purchase Price when
calculating the Purchase Price pursuant to Section 4.1.1; and     (iii)  
otherwise be zero.

14

--------------------------------------------------------------------------------

 

  4.1.3   Preliminary Payment. The “Preliminary Purchase Price” shall be the
amount notified by Sellers to Purchaser not later than three Business Days after
the Closing Conditions have been satisfied or waived, such amount to be equal to
Sellers’ Representative’s reasonable estimate of the Purchase Price as of the
Closing Date. The notification will include estimates of each of the components
of the Purchase Price set out in Sections 4.1.1(a), (b) and (c) and will also
include a schedule of any amounts that will be payable at Closing pursuant to
Sections 3.2.3, 3.3.5 and 3.4.2.     4.1.4   Allocation. The Purchase Price
shall be allocated in accordance with Exhibit 4.1.4.

4.2 Determination and Payment of Final Purchase Price

  4.2.1   Final Purchase Price. The Purchase Price shall be considered finally
determined once the Effective Date Financial Statements and the Purchase Price
Determination Statement become final and binding in accordance with Section 5.
The “Final Purchase Price” shall be the Purchase Price as set forth in the Final
Purchase Price Statement.     4.2.2   Adjustment. Any difference between the
Final Purchase Price and the Preliminary Purchase Price shall be paid as
follows:

  (a)   If the Final Purchase Price exceeds the Preliminary Purchase Price,
Purchaser shall pay to Sellers an amount equal to the excess plus interest on
such excess from and including the Effective Date to, but excluding, the date of
actual payment; and     (b)   If the Final Purchase Price is less than the
Preliminary Purchase Price, Sellers shall pay to Purchaser an amount equal to
the sum of (i) the shortfall, (ii) the interest paid at Closing on the
Preliminary Purchase Price to the extent attributable to such shortfall, and
(iii) interest on the sum of (i) and (ii) from and including the Closing Date
to, but excluding, the date of actual payment,

any such amount to be paid by Purchaser or Sellers, as the case may be, shall be
paid within ten Business Days after the Effective Date Financial Statements have
become final and binding upon the Parties in accordance with Section 5. The
interest rate shall be the Agreed Rate, provided, however, that if the payment
is not made within these ten Business Days, Section 4.4.4 shall apply with
respect to the subsequent time-period until such payment is actually made.

15

--------------------------------------------------------------------------------

 

4.3 Adjustment of Final Purchase Price

  4.3.1   Adjustment for Pre-Sale Reorganization. The Final Purchase Price shall
be adjusted as of the date that is 15 Business Days after the completion of all
the Pre-Sale Reorganization matters set forth on Exhibit 14.1(a) for direct
effects of the Pre-Sale Reorganization on Cash, Financial Debt and Working
Capital of the Group Companies that arise after the Effective Date (the
“Adjustment Purchase Price”). The effects of Taxes attributable to the Pre-Sale
Reorganization which have not been taken into account as Financial Debt shall be
disregarded and such Taxes shall solely be covered by Section 12.     4.3.2  
Payments. Sellers shall pay to Purchaser and Purchaser shall pay to Sellers the
amount by which the Adjustment Purchase Price falls short of, or exceeds, the
Final Purchase Price, as the case may be, plus interest on such difference from
and including the date on which the respective Pre-Sale Reorganization measure
is completed. The payment shall be made within ten (10) Business Days of the
date on which the Adjustment Purchase Price has become final and binding upon
the Parties. The interest rate shall be the Agreed Rate, provided, however, that
if the payment is not made within these ten (10) Business Days, Section 4.4.4
shall apply with respect to the subsequent time-period until payment is actually
made.     4.3.3   Determination of Adjustment Purchase Price. The Adjustment
Purchase Price shall be determined in accordance with Section 5, which shall
apply, mutatis mutandis.     4.3.4   Allocation of Adjustment Purchase Price.
The Adjustment Purchase Price shall be allocated to the Companies by the
respective direct effects on Cash, Financial Debt and Working Capital pursuant
to Section 4.3.1 for each respective Company (including its respective
Subsidiaries). The amount of the Final Purchase Price allocated to the
respective Companies pursuant to Section 4.1.4 shall increase or decrease
accordingly.

4.4 General Rules for Payments

  4.4.1   Modes of Payment. Any payments under this Agreement shall be made by
wire transfer in immediately available funds, with value as of the relevant due
date set out in this Agreement or otherwise provided by law, free of bank fees
and any other charges.     4.4.2   Payments to Sellers. All payments by
Purchaser to Sellers, or any of them, under or in connection with this Agreement
shall be made to the bank accounts that have

16

--------------------------------------------------------------------------------

 

     been notified by Sellers’ Representative to Purchaser at least five
Business Days prior to the due date for the respective payment.

  4.4.3   Payments to Purchaser. All payments by Sellers, or any of them, to
Purchaser under or in connection with this Agreement shall be made to the bank
account as notified by Purchaser to Sellers at least five Business Days prior to
the due date for the respective payment.     4.4.4   Default Interest. Any
payments not made when due under this Agreement shall bear interest from and
including the respective due date to, but excluding, the date of actual payment
at the Agreed Rate plus 3% per annum.     4.4.5   Interest Method. Any interest
under this Agreement shall accrue from day to day and shall be calculated in
accordance with the method 30/360, i.e., on the basis of a month of 30 days and
a year of 360 days.     4.4.6   No Right to Set-Off. Any right of Purchaser to
set-off and/or to withhold any payments due under this Agreement shall be
excluded unless Purchaser’s respective counter claim is undisputed or has been
confirmed by final decision of a court or arbitration tribunal.

5.
FINAL ACCOUNTS
5.1 Preparation of Effective Date Financial Statements.

  5.1.1   Preparation. Within 45 days after the Closing Date, Sellers’
Representative shall prepare and deliver to Purchaser consolidated financial
statements of the Companies and the Subsidiaries as of the Effective Date (the
“Effective Date Financial Statements”) consisting of

  (a)   a balance sheet (Bilanz); and     (b)   a statement (the “Purchase Price
Determination Statement”) setting forth, in each case as of the Effective Date,
and as determined in accordance with the Effective Date Financial Statements and
the definitions for these items in this Agreement:

  (i)   the Cash;

17

--------------------------------------------------------------------------------

 

  (ii)   the Financial Debt;     (iii)   the Working Capital Adjustment; and    
(iv)   the Purchase Price;

together with an audit certificate by KPMG Deutsche Treuhand-Gesellschaft
Aktiengesellschaft Wirtschaftsprüfungsgesellschaft (the “Accounting Firm”).

  5.1.2   Method. The Effective Date Financial Statements shall be prepared in
accordance with the 2007 Accounting Guidelines, applied on a consistent basis
with the 2006 Financial Statements and the 2005 and 2004 Financial Statements
except such changes indicated in the accounting guidelines and circulars of the
Merck Group for the years 2004 through 2007 (the “Exceptions”). A copy of such
accounting guidelines and circulars has been provided to Purchaser for its
review prior to the Signing Date and has been deposited with the acting notary
for information purposes only.     5.1.3   Cooperation. Purchaser shall, and
shall cause the Group Companies to, fully cooperate with Sellers’ Representative
and the Accounting Firm in the preparation or review, as the case may be, of the
Effective Date Financial Statements, including granting Sellers’ Representative
and its employees and advisors and the Accounting Firm reasonable access to all
relevant business records and documents during normal business hours, and
permitting Sellers’ Representative and its employees and advisors and the
Accounting Firm to consult at reasonable times with the Directors and Officers,
employees and representatives of Purchaser or the relevant Group Company.    
5.1.4   Objections of Purchaser. Any objections of Purchaser with respect to the
Effective Date Financial Statements must be stated within 45 days after receipt
by Purchaser of the Effective Date Financial Statements and the Purchase Price
Determination Statement by providing Sellers with (i) a written statement of
objections, specifying in reasonable detail the grounds for the objections, and
(ii) a revised version of the Purchase Price Determination Statement (the
“Revised Statement”) that reflects such objections and are accompanied by an
audit certificate of an accounting firm of international standing, confirming
the correctness of the objections. Purchaser shall be permitted to review the
working papers of Sellers’ and Sellers’ Affiliates and Sellers will request from
the Accounting Firm the grant of its permission for Purchaser to review the
working papers of the Accounting Firm relating to the Effective Date Financial
Statements and the Purchase Price Determination Statement in the 45-day period
following their receipt. If Purchaser does not object during such period in such
manner, the Effective Date Financial Statements and the Purchase Price
Determination

18

--------------------------------------------------------------------------------

 

Statement shall become final and binding upon the Parties upon the expiration of
such period.

  5.1.5   Costs. The Group Companies shall bear the costs for the preparation of
the Effective Date Financial Statements to the extent such costs are incurred by
them in connection with assembling financial information and providing such
information to Sellers. Sellers shall bear the remaining costs for the
establishment of the Effective Date Financial Statements, including the costs
for the Accounting Firm. Purchaser shall bear the costs for the review by itself
and its accountants of the Effective Date Financial Statements.

5.2 Resolution of Disputes

  5.2.1   Good Faith Attempt to Settle. If Purchaser has objected to the
Purchase Price Determination Statement within the required time and in the
required manner, Sellers and Purchaser shall attempt in good faith to settle the
disagreement. If Sellers and Purchaser reach an Agreement on all or certain of
the disputed items, such agreed items shall become final and binding upon the
Parties.     5.2.2   Appointment of Third Party Expert. If Sellers and Purchaser
cannot settle the disagreement on any disputed items of the Purchase Price
Determination Statement within 30 days after receipt by Sellers of the Revised
Statement, Sellers or Purchaser may request that the matter be presented to a
neutral auditor from an auditing firm of international standing to be jointly
designated by Sellers and Purchaser (the “Third Party Expert”). If Sellers and
Purchaser cannot agree on the Third Party Expert within 10 days after such a
request is made to present the matter to a neutral auditor, the Third Party
Expert shall be appointed by the Institute of Chartered Accountants in England
and Wales at the request of either Sellers or Purchaser after consideration of
the proposals and comments by Sellers and Purchaser. Sellers and Purchaser shall
jointly instruct the Third Party Expert to decide the issues in dispute in
accordance with the provisions of this Section 5.     5.2.3   Scope of Decisions
of Third Party Expert. Unless instructed otherwise jointly by Sellers and
Purchaser, the Third Party Expert shall limit its decisions to the items in
dispute, but shall determine the Purchase Price Determination Statement in its
entirety on the basis of its decisions and the undisputed items of the Purchase
Price Determination Statement. The Third Party Expert shall not take any
decisions that would be outside the scope of the positions taken by Sellers and
Purchaser. The Third Party Expert shall also be entitled to decide on the
construction of this Agreement to the extent necessary for its decisions. The
Third Party Expert shall act as an expert (Schiedsgutachter) and not as an
arbitrator.

19

--------------------------------------------------------------------------------

 

  5.2.4   Procedure. Sellers and Purchaser shall immediately furnish to the
Third Party Expert the Effective Date Financial Statements, the Purchase Price
Determination Statement and the Revised Statement and shall furnish as soon as
possible all other documents and information reasonably requested by the Third
Party Expert to render his decision. The Third Party Expert shall promptly
provide copies of all documents and other information made available by Sellers
or Purchaser to the respective other Party; Sections 427 and 444 of the German
Civil Procedure Act (Zivilprozessordnung) shall apply accordingly. Before
rendering its decision, the Third Party Expert shall give Sellers and Purchaser
the opportunity to present their positions, which shall include at least one
oral joint hearing of Sellers and Purchaser; the professional advisors of
Sellers and Purchaser may participate in such meeting. The Third Party Expert
shall use best efforts to deliver its written opinion, which shall include the
reasons for its decision, as soon as reasonably practical, but in any event not
later than 60 days after the Third Party Expert has accepted its appointment.
The Third Party Expert’s decisions and the Effective Date Financial Statements
and the Purchase Price Determination Statement as determined by the Third Party
Expert shall be final and binding upon the Parties.     5.2.5   Costs. The costs
and expenses of the Third Party Expert shall be borne by Sellers – on the one
side – and Purchaser – on the other side – in accordance with Sections 91 to 93
of the German Civil Procedure Act.     5.2.6   Final Accounts. The Purchase
Price Determination Statement as finally agreed by Purchaser and Sellers in
accordance with Section 5.2.1, or decided by the Third Party Expert in
accordance with Section 5.2.4, shall be the “Final Purchase Price Statement”.

6.
REGULATORY AND OTHER AUTHORIZATIONS
6.1 Regulatory Procedures.
Sellers and Purchaser will each (i) use its best efforts to obtain (or cause the
Companies to obtain) as promptly as practicable all authorizations, consents,
orders and approvals, and to make all filings with all Governmental Authorities
required or expedient to consummate the transactions contemplated by this
Agreement, (ii) cooperate fully with the other Parties in promptly seeking to
obtain all such authorizations, consents, orders or approvals and to make all
such filings and (iii) provide such further information as promptly as
practicable to any Governmental Authority as such Governmental Authority may
reasonably request in connection therewith.

20

--------------------------------------------------------------------------------

 

6.2 Merger Filings
Sellers and Purchaser agree that they will make any pre-closing filings
necessary and expedient in connection with any merger control clearance referred
to in Section 7.1 below promptly (but in no event later than fifteen Business
Days after the Signing Date) and any post-closing filings promptly after the
Closing Date. To the extent permitted under applicable law, any such filings
shall be made jointly by Purchaser and Sellers. Purchaser will pay all costs
(including fees and other payments to obtain any authorizations, consents,
orders or approvals) of any proceeding at any Governmental Authority, except for
the fees of Sellers’ and Sellers’ Representative’s counsel and other advisers.
6.3 Best Efforts

  6.3.1   All Actions. Purchaser shall offer and take all steps and/or measures
and do all and any acts that are necessary to obtain clearance by any competent
Governmental Authority, including the restructuring or sale of Purchaser and/or
its Affiliates or businesses or any other assets (e.g., product licenses), which
shall also include the closing down of businesses or parts thereof, if
necessary. Purchaser may not request any adjustment of the Purchase Price or
other amendment to this Agreement, or withhold any amount payable by it
hereunder as a result of any step, measure and/or act as described above, and
any such step, measure and/or act shall be solely for the account of Purchaser.
    6.3.2   Contest. With respect to the Closing Conditions, if the consummation
of the Closing is prohibited by any Governmental Authority or if any
administrative or judicial action or proceeding is instituted challenging any
transaction contemplated by this Agreement as violating any applicable merger
control law, Purchaser and Sellers, as applicable, shall contest such decision,
action or proceeding (including by way of litigation) and use all other
reasonable efforts to ensure that the Closing may be consummated as contemplated
by this Agreement and as timely as reasonably practicable.

6.4 Cooperation
Sellers and Purchaser each undertakes to use its best efforts to meet all
deadlines given by any competent Governmental Authority and to immediately do
all acts, measures and other action necessary or expedient in the course of any
proceeding with any Governmental Authority in connection with this Agreement or
the transactions contemplated hereby, including the following (in each case to
the extent relating to this Agreement or the transactions contemplated hereby):
(i) Sellers and Purchaser will promptly notify each other of any communication
that it or any of its Affiliates receives from any Governmental Authority and
permit the other Party to review in advance any proposed communication by

21

--------------------------------------------------------------------------------

 

such Party to any Governmental Authority; (ii) Sellers and Purchaser will each
use its best efforts to consult with the other Party in advance of any meeting
with any Governmental Authority and, to the extent permitted by such
Governmental Authority, give the other Party the opportunity to attend such
meeting; (iii) Sellers and Purchaser will coordinate and cooperate fully with
each other in exchanging such information and providing such assistance as the
other Party may reasonably request in connection with the foregoing and in
seeking early termination of any applicable waiting period; and (iv) Sellers and
Purchaser will provide each other with copies of all correspondence, filings or
communications; provided, however, that materials may be redacted as necessary
(x) to comply with contractual arrangements, and (y) to address reasonable
privilege or confidentiality concerns, provided, however, that any such redacted
materials will be exchanged, in unredacted form, between Sellers’ counsel and
Purchaser’s counsel on an outside-counsel-basis.
6.5 Other Transactions
Purchaser shall not enter into any other agreement to effect any acquisition of
any business or products that can reasonably be expected to prevent or
materially delay the consummation of the transactions contemplated by this
Agreement or to materially increase the time required, to: (i) obtain the
expiration or termination of the waiting period under any merger control law or
regulation applicable to the transactions contemplated by this Agreement; or
(ii) obtain all authorizations, consents, orders and approvals of Governmental
Authorities necessary for the consummation of the transactions contemplated by
this Agreement.
7.
CLOSING CONDITIONS
7.1 Closing Conditions

  7.1.1   The obligations of the Parties to perform the Closing Actions pursuant
to Section 8.3 shall be subject to satisfaction or waiver in writing by Sellers
and Purchaser of the condition (the “Joint Closing Condition”) that Closing
shall be permissible pursuant to the competition laws of the jurisdictions set
forth in Exhibit 7.1 (as a result of, e.g., the approval granted by the
competent merger control authority or the expiration of any applicable waiting
period and the absence of an order by any Governmental Authority prohibiting the
transaction contemplated by this Agreement) and that no applicable law or
judicial order preventing the consummation of the Closing Actions shall be in
effect.     7.1.2   The obligations of Sellers to perform the Closing Actions
pursuant to Section 8.3 shall be further subject to satisfaction of the
conditions (or waiver in writing by

22

--------------------------------------------------------------------------------

 

      Sellers) (the “Seller Closing Conditions”) that:

  (a)   The representations and warranties of Purchaser contained in this
Agreement shall be accurate as of the Signing Date, and, to the extent made as
of the Closing Date, as of the Closing Date, unless a different date is
indicated in the respective representation or warranty, in which case as of such
different date, in each case other than for such failures to be accurate
(without giving effect to any limitation as to “materiality” or “Material
Adverse Effect” or to any similar limitation set forth therein) that,
individually and in the aggregate, have not had and could not reasonably be
expected to have a material adverse effect on the ability of Purchaser to
perform its obligations under this Agreement. Sellers’ Representative shall have
received certificates signed on behalf of Purchaser by its chief executive
officer and chief financial officer to such effect.     (b)   Purchaser shall
have performed in all material respects all material obligations required to be
performed by it under this Agreement at or prior to the Effective Date or
Closing Date, as applicable. Sellers’ Representative shall have received
certificates signed on behalf of Purchaser by its chief executive officer and
chief financial officer to such effect.

  7.1.3   The obligations of Purchaser to perform the Closing Actions pursuant
to Section 8.3 shall be further subject to satisfaction of the conditions (or
waiver in writing by Purchaser) (together with the Seller Closing Conditions and
the Joint Closing Condition, the “Closing Conditions”) that:

  (a)   The representations and warranties of Sellers contained in this
Agreement shall be accurate as of the Signing Date, and, to the extent made as
of the Closing Date, as of the Closing Date, unless a different date is
indicated in the respective representation or warranty, in which case as of such
different date, in each case other than for such failures to be accurate
(without giving effect to any limitation as to “materiality” or “material
adverse effect” or to any similar limitation set forth therein) that,
individually and in the aggregate, have not had and could not reasonably be
expected to have a Material Adverse Effect. Purchaser shall have received
certificates signed on behalf of Sellers by a member of the management board of
Sellers’ Representative to such effect.     (b)   Since the Signing Date, there
shall not have occurred a Material Adverse Effect, provided that for purposes
only of this Section 7.1.3 (b) the following events, circumstances, changes or
effects shall not be taken into

23

--------------------------------------------------------------------------------

 

account in determining whether a Material Adverse Effect has occurred: (i) those
that affect the economy, the industries in which the Group Companies operate, or
the securities and financial markets in general (including legal and regulatory
changes as well as changes in the general political or economic environment), so
long as the event, circumstance, change or effect does not disproportionately
affect the Group Companies; (ii) those caused by, arising out of, or
attributable to, the announcement of the intention to sell the Business and/or
the Companies, or the execution of this Agreement or the performance of the
transactions contemplated hereby; or (iii) those caused by any action or
inaction (x) of Sellers’ Representative, any Seller or Sellers’ Affiliate, or
any Group Company in accordance with this Agreement, any Ancillary Agreement or
the written request of Purchaser or (y) of Purchaser or any Person that was an
Affiliate of Purchaser at the time of such action or inaction. Purchaser shall
have received certificates signed on behalf of Sellers by a member of the
management board of Sellers’ Representative to such effect.

  (c)   Sellers and Sellers’ Affiliates shall have performed in all material
respects all material obligations required to be performed by each of them under
this Agreement at or prior to the Effective Date or Closing Date, as applicable,
and Purchaser shall have received certificates signed on behalf of each Seller
by a member of the management board of Sellers’ Representative to such effect.

7.2 All Reasonable Efforts to Fulfill Closing Conditions
Each Party shall use all reasonable efforts to ensure that the Closing
Conditions will be satisfied as soon as possible; Section 6 above remains
unaffected.
7.3 Notification of Satisfaction
Each Party shall notify the other Parties promptly after they become aware that
the Closing Conditions have been satisfied. Purchaser will give prompt notice to
Sellers, and Sellers will give prompt notice to Purchaser, in each case if the
respective Party becomes aware of representations and warranties made by it
contained in this Agreement becoming untrue or inaccurate or the failure by it
to comply with any covenant contained in this Agreement, in each case to an
extent that would result in a failure of the applicable Closing Condition.
7.4 Termination Rights
If the Closing Conditions have not been satisfied prior to the expiry of
270 days after the

24

--------------------------------------------------------------------------------

 

Signing Date, any Party that is not then in material breach of its obligations
in respect to the Joint Closing Condition hereunder may withdraw from this
Agreement with immediate effect. Upon the exercise of any withdrawal right, this
Agreement in its entirety, including the sale of the Shares, shall become null
and void upon notification of such withdrawal, provided, however, that Sections
17, 18, 19, 20, 21.1, 21.6 and 21.7 shall generally survive termination of this
Agreement. Subject to the terms and conditions of the Agreement, any rights to
claim damages in connection with violations of obligations under or in
connection with this Agreement shall remain unaffected.
8.
CLOSING
8.1 Closing and Effective Date

  8.1.1   Closing Date. The transaction contemplated by this Agreement shall be
consummated

  (a)   if the day that falls five Business Days after the Closing Conditions
have been satisfied falls between the eighth and the last calendar day of a
month (in each case, including such day), on the last calendar day of such
month, provided, however, that if this is not a Business Day, the next Business
Day; and     (b)   if the day that falls five Business Days after the Closing
Conditions have been satisfied falls between the first and the seventh calendar
day of a month (in each case, including such day), on such calendar day falling
five Business Days after the last Closing Conditions have been satisfied

(the applicable day, the “Closing Date”).

  8.1.2   Effective Date. The “Effective Date” shall be, in case
Section 8.1.1(a) is applicable, the Closing Date as specified therein and, in
case Section 8.1.1(b) is applicable, the last calendar day of the last month
ending prior to the Closing Date as specified therein.     8.1.3   Other Closing
Date. The parties may mutually agree upon any other Closing Date than the date
determined by application of Section 8.1.1, provided, however, that this shall
not affect the determination of the Effective Date.

25

--------------------------------------------------------------------------------

 

8.2 Closing Venues

  8.2.1   General Closing. The Closing shall take place at the offices of
Skadden, Arps, Slate, Meagher & Flom LLP, An der Welle 5, 60322 Frankfurt am
Main, Germany, or at such other location as mutually agreed upon by the Parties
(the “Closing Venue”).     8.2.2   Local Closings. The MGG Transfer Deed and the
Genericos Transfer Deed shall be notarized in Spain and the Netherlands,
respectively, and copies of the transfer deeds notarized in these countries
shall be faxed or emailed in PDF form to the Closing Venue on the Closing Date
immediately after their execution.

8.3 Closing Actions
On the Closing Date, the Parties shall meet at the Closing Venue at 10:00 AM CET
(or such other time as mutually agreed between the Parties), and take, or cause
to be taken, the following actions (the “Closing Actions”), which in their
entirety shall constitute the “Closing”:

  8.3.1   Payments. Payment by Purchaser to Sellers of the Preliminary Purchase
Price plus interest thereon, if any, at the Agreed Rate from and including the
Effective Date to, but excluding the Closing Date;     8.3.2   Dura Transfer
Deed. Execution of the Dura Transfer Deed by Purchaser and Seller 1;     8.3.3  
MGG Transfer Deed. Execution of the MGG Transfer Deed in The Netherlands by
representatives of Purchaser and Seller 1;     8.3.4   EMD Transfer Deed.
Endorsement of a stock transfer certificate to Purchaser by Seller 2;     8.3.5
  EMD Shares. Endorsement and delivery of the certificate(s) representing the
EMD Shares by Seller 2 to Purchaser;     8.3.6   Merck Belgium Transfer Deed.
Execution of the Merck Belgium Transfer Deed by Purchaser and Seller 3;

26

--------------------------------------------------------------------------------

 

  8.3.7   Genericos Transfer Deed. Execution of the Genericos Transfer Deed in
Spain by representatives of Purchaser and Seller 3;     8.3.8   Termination of
Shareholder Loans. To the extent not terminated and repaid prior to the Closing,
execution by the lenders under Shareholder Loans and the respective debtors of
an agreement on the termination of the Shareholder Loans and repayment by
Purchaser of the outstanding principal and accrued interest;     8.3.9  
Repayment of Interim Loans. To the extent not terminated prior to Closing,
execution of an agreement by the relevant persons on the termination of the
Interim Loans and payment by Purchaser of any principal outstanding and interest
accrued under the Interim Loans to Sellers for the account of the respective
borrowers;     8.3.10   Termination of Cash Management. To the extent not
terminated prior to Closing, execution of an agreement by the respective
Sellers’ Affiliates and the Group Companies that participate in the Cash
Management on the termination of the participation of such Group Companies in
the Cash Management and payment of any amounts owed thereunder by the respective
debtors;     8.3.11   Repayment of Subsidiary Loan. To the extent not terminated
prior to Closing, execution of an agreement by the relevant persons on the
termination of the Subsidiary Loans and, to the extent not repaid prior to
Closing, repayment of the Subsidiary Loans with interest accrued thereon;    
8.3.12   Resignation Letters. Delivery by Sellers of resignation letters of the
Directors and Officers of the Group Companies who are remaining Directors and
Officers or Employees of Sellers or Sellers’ Affiliates;     8.3.13   Brand
License Agreement. Sellers’ Representative and Purchaser shall enter into the
Brand License Agreement substantially in the form as attached as Exhibit 16.1.1;
    8.3.14   Transitional Services Agreement. Sellers’ Representative and
Purchaser shall enter into the Transitional Services Agreement (the
“Transitional Services Agreement”) which, subject to Section 16.3, will be
substantially in the form attached as Exhibit 8.3.14; and     8.3.15  
Certificates. Sellers shall deliver to Purchaser executed certificates pursuant
to Section 7.1.3 (a) and (b). Purchaser shall deliver to Sellers’ Representative
executed certificates pursuant to Section 7.1.2(a) and (b).

27

--------------------------------------------------------------------------------

 

8.4 Closing Confirmation
After all Closing Actions have been taken, Sellers and Purchaser shall confirm
in writing that all Closing Actions have been taken and that the Closing has
occurred. This confirmation shall be substantially in the form attached as
Exhibit 8.4.
9.
REPRESENTATIONS AND WARRANTIES OF SELLERS
Assuming (where relevant) for the purposes of this Section 9 that the Pre-Sale
Reorganization has been completed in accordance with Section 14 as of the
Signing Date, each Seller represents and warrants in the form of an independent
guarantee (selbständiges Garantieversprechen - Section 311 BGB) to Purchaser
that, except as set forth in the Disclosure Schedules attached hereto (the
"Disclosure Schedules”), the statements set forth in this Section 9 are accurate
as of the Signing Date and, solely with respect to Sections 9.1 through 9.3 and
9.17, as of the Closing Date, unless a different date is indicated in the
respective representation and warranty, provided, however, that any provisions
of this Agreement relating to the consequences of a breach of any of the
representations and warranties, including the provisions and limitations set
forth in Sections 9 and 10 form an integral part of this guarantee (Inhalt des
Schuldverhältnisses / Bestandteil der Garantieerklärung), and this guarantee is
only given subject to such provisions and limitations.
9.1 Existence and Capacity of Sellers

  9.1.1   Existence. Sellers are duly established and validly existing under the
laws of their respective jurisdiction as stated in Section 2.1.     9.1.2  
Capacity. The execution of this Agreement by Sellers and the performance of
their respective obligations hereunder are within their respective corporate
powers, do not violate their constitutional documents and have been authorized
by all necessary corporate action on behalf of Sellers, as applicable. No
consent, approval, authorization or order of any Governmental Authority is
required by law for any of Sellers to enter into and perform this Agreement,
except (i) as provided by any applicable merger control law, (ii) as may be
necessary as a result of any facts or circumstances relating solely to Purchaser
or any of its Affiliates, and (iii) such consents, approvals, authorizations or
actions the absence of which (x) would not prevent or materially delay the
consummation by Sellers of the transactions contemplated by this Agreement or
(y) would not have a Material Adverse Effect.     9.1.3   No Insolvency. No
bankruptcy proceedings or other proceedings under

28

--------------------------------------------------------------------------------

 

      applicable law providing protection against enforcement by creditors have
been opened over the assets of any Seller and no circumstances exist that would
require a Seller or its Directors and Officers or shareholders to apply for the
opening of such proceedings.     9.1.4   Enforceability. Assuming due
authorization, execution and delivery by Purchaser, this Agreement constitutes
legal, valid and binding obligations of Sellers enforceable in accordance with
its terms.

9.2 The Companies and the Shares

  9.2.1   Corporate Status. The information given in Section 2.1 with respect to
the Companies is accurate. Each Company (i) has been duly established, (ii) is
validly existing under the laws of the jurisdiction under which it is organized,
and (iii) has the necessary corporate power and authority to own its assets and
properties and carry on its business as currently conducted, except where in
each case of (i) to (iii) the failure to be so organized or existing or to have
the necessary corporate power would not have a Material Adverse Effect. The
acquisition by Purchaser of the Companies will convey to Purchaser all the Legal
Entities that comprise the Business.     9.2.2   The Shares. Each Seller holds
unrestricted legal and beneficial title (uneingeschränkte rechtliche und
wirtschaftliche Inhaberschaft) to the Shares sold by it and each Seller is free
to sell and transfer such Shares to Purchaser. The Shares are not subject to any
Encumbrances. The Shares are validly issued, and fully paid-in and there are no
obligations to make further contributions with respect to the Shares. The Shares
represent all the outstanding Interests in the Companies.     9.2.3   No
Options. There are no outstanding securities convertible or exchangeable into an
Interest in any of the Companies or any options, warrants, calls, subscriptions
or other rights, agreements or commitments obligating any of the Companies to
issue, transfer or sell any Interests in such Company.     9.2.4   No Third
Party Rights. Other than pursuant to this Agreement, no Person has any
pre-emptive rights, rights of first refusal, options, or other rights, whether
enforceable as of the Signing Date, conditioned or otherwise restricted in its
exercisability, with respect to the Shares.

29

--------------------------------------------------------------------------------

 

9.3 The Subsidiaries

  9.3.1   Corporate Status. The information given in Section 2.2 with respect to
Interests in Legal Entities is accurate. Each Subsidiary has been duly
established and is validly existing under the laws of jurisdiction under which
it is organized. Except as disclosed in Exhibit 2.2, the Companies directly or
indirectly own all Subsidiary Shares.     9.3.2   The Subsidiary Shares. Except
as set forth in Disclosure Schedule 9.3.2, the Subsidiary Shares are not subject
to any Encumbrances. The Subsidiary Shares are validly issued and fully paid-in
and there are no obligations to make further contributions with respect to the
Subsidiary Shares. Except as set forth on Disclosure Schedule 9.3.2, the
Subsidiary Shares represent all the outstanding Interests in the Subsidiaries.  
  9.3.3   No Options. There are no outstanding securities convertible or
exchangeable into Interests in any of the Subsidiaries or any options, warrants,
calls, subscriptions or other rights, agreements or commitments obligating any
of the Subsidiaries to issue, transfer or sell any Interests in such Subsidiary
to any Person other than a Group Company.     9.3.4   No Third Party Rights. No
Person has any pre-emptive rights, rights of first refusal, options, or other
rights, whether enforceable as of the Signing Date, conditioned or otherwise
restricted in its exercisability, in respect to the Subsidiary Shares and no
Subsidiary is party to an agreement with a Person other than a Group Company
which would permit such Person to control such Subsidiary or to obligate it to
transfer all or parts of its profits to any such person or entity.     9.3.5  
No Further Equity Participation. Other than the Subsidiary Shares, none of the
Group Companies holds any further Interests in any Legal Entity.

9.4 Licenses and Permits

  9.4.1   Status. Except as disclosed in Disclosure Schedule 9.4.1, the Group
Companies hold all governmental permits, licenses and other public law approvals
that are required by law to conduct the business of the Group Companies as
currently conducted, other than (i) Environmental Permits, which are exclusively
covered by Section 9.14 and (ii) such permits, licenses and approvals, the
absence of which would not result in a Material Adverse Effect (the “Permits”).
To Sellers’ Knowledge, no such Permit has been cancelled, withdrawn or revoked
by a

30

--------------------------------------------------------------------------------

 

      competent Governmental Authority and no Group Company has received any
notice by any such Governmental Authority that it has canceled, withdrawn or
revoked, or that it intends to cancel, withdraw or revoke any such Permit.    
9.4.2   Compliance with Permits and Laws. Except as disclosed in Disclosure
Schedule 9.4.2 or where the failure to comply would not have a Material Adverse
Effect, each Group Company is in compliance with applicable laws and the Permits
(as in effect, enforced and interpreted on the Signing Date) in the
jurisdictions under which such Group Company is organized or conducts business.
No Group Company has received any written notice from a Governmental Authority
of any material failure to comply with any applicable law or the terms of any
Permit except as disclosed in Disclosure Schedule 9.4.2. No Permits will be
subject to suspension, material modification, revocation or non-renewal as a
result of the execution and delivery of this Agreement by Sellers, or the
performance by Sellers of the transactions contemplated hereby. No material
consent of, or registration, declaration or filing with, any Governmental
Authority is required to be obtained or made by or with respect to the Group
Companies in connection with (A) the execution of this Agreement by Sellers and
the performance by Sellers of the transactions contemplated hereby or (B) the
ownership by Purchaser and its Affiliates of the Group Companies following the
Closing, other than those specifically enumerated herein. The representations
contained in this Section 9.4.2 shall not apply to any laws or Permits relating
to Real Property, Intellectual Property, rights, Litigation and Products
Liability issues, Environmental Matters or Tax matters, which shall be
exclusively governed by Sections 9.7, 9.8, 9.13, 9.14, 9.15 and 12.

9.5 Financial Statements

  (a)   The 2006 Financial Statements as well as the audited consolidated
balance sheets, profit and loss statements and statements of free cash flow of
the Companies and their subsidiaries as of 31 December 2005 and 31 December 2004
and the years then ended, as adjusted for the factors stated in the basis for
their preparation and as attached hereto as part of Exhibit 1.1(a) (the “2005
and 2004 Financial Statements”), have been prepared in accordance with IFRS and
in compliance with the applicable Accounting Guidelines, which are based on and
consistent with IFRS, and, except as set forth in the Exceptions consistently
applied throughout all periods represented in the 2006 Financial Statements and
the 2005 and 2004 Financial Statements. The 2006 Financial Statements and the
2005 and 2004 Financial Statements fairly present, in all material respects, the
consolidated financial condition, results of operation and cash-flows of the
Group Companies as of the respective dates thereof and the respective years then
ended, except that such financial statements do not include (i) segment
reporting, (ii) notes, (iii) a full statement of cash flows, and (iv) a

31

--------------------------------------------------------------------------------

 

      presentation of comprehensive income.     (b)   The interim unaudited
financial statements as of 31 March 2007 have been prepared in accordance with
IFRS and in compliance with the 2007 Accounting Guidelines, which are based on
and consistent with IFRS, and, except as set forth in the Exceptions, have been
consistently applied throughout all periods represented in such unaudited
interim financial statements, the 2006 Financial Statements and the 2005 and
2004 Financial Statements.     (c)   The Companies and the Subsidiaries do not
have any liabilities or obligations of any nature (whether accrued, absolute,
contingent, unasserted or otherwise) of the type required to be disclosed in
financial statements prepared in accordance with IFRS, except (i) as disclosed,
reflected or reserved on the face of the 2006 Financial Statements or the
interim unaudited financial statements as of 31 March 2007, (ii) for items set
forth in Disclosure Schedule 9.5(c) and (iii) for liabilities and obligations
incurred in the ordinary course of business consistent with past practice since
the date of the 2006 Financial Statements and not in violation of this
Agreement.     (d)   The Group Companies, taken as a whole, are able to pay
their debts as they become absolute and mature, the present fair salable value
of the assets of the Group Companies, taken as a whole, exceeds the amount that
is required to pay the probable liability of their debts and other liabilities
(including contingent liabilities) as they become absolute and mature, the
assets of the Group Companies, taken as a whole, in each case at a fair
valuation, exceed their debts (including contingent liabilities) and the Group
Companies, taken as a whole, do not have unreasonably small capital to carry on
their businesses, as currently conducted.

9.6 Conduct of Business since 31 December 2006

  9.6.1   No Material Adverse Effect. There has been no Material Adverse Effect
since 31 December 2006.     9.6.2   Ordinary Course. Except for the Pre-Sale
Reorganization or as otherwise disclosed in Disclosure Schedule 9.6.2, since 31
December 2006 the Group Companies have conducted their business in the ordinary
course consistent with past practice except for such conduct that would not have
a Material Adverse Effect.

32

--------------------------------------------------------------------------------

 

9.7 Real Property and Other Assets

  9.7.1   Summary. Disclosure Schedule 9.7.1 contains a list of the material
real property owned (the “Owned Real Property”) (“owning” of “real property”
shall include any kind of legal or commercial ownership, such as co-ownership,
condominium ownership, and property-like rights (grundstücksgleiche Rechte)) or
other rights legally or commercially comparable therewith in any applicable
jurisdiction or leased for an annual lease payment in excess of EUR 500,000 (the
“Leased Real Property” and, together with the Owned Real Property, the “Real
Property”) by the Group Companies.     9.7.2   Owned Real Property. The Group
Companies have good (and, where applicable, marketable) title to the Owned Real
Property, free and clear of all Encumbrances, other than Permitted Encumbrances
and any Encumbrances listed in Disclosure Schedule 9.7.2.     9.7.3   Leased
Real Property. Each lease agreement for any Leased Real Property is a valid
agreement enforceable in accordance with its terms against the relevant Group
Company and, to Sellers’ Knowledge, against the other parties thereto. None of
the relevant Group Companies is in material default or breach, or has received a
written notice alleging that it is in material default or breach, of any lease
agreement for the Leased Real Property and, to Sellers’ Knowledge, none of the
other parties to such lease agreements is in material default or breach of any
such agreement.     9.7.4   Compliance with Laws. None of the Group Companies
has received a written notice from any Governmental Authority that any Real
Property is not in compliance with all applicable legal requirements, except for
such noncompliance that would not result in a Material Adverse Effect.     9.7.5
  Granted Rights. None of the Group Companies has leased or otherwise granted to
anyone the right to use or occupy any Real Property or any portion thereof,
where such lease or grant interferes in any material way with the respective
Group Company’s business.     9.7.6   No Condemnation. None of the Group
Companies has received a written threat of condemnation or similar proceeding
relating to the Real Property.     9.7.7   Assets. The assets of the Group
Companies are free and clear of all Encumbrances, other than (i) Permitted
Encumbrances and (ii) any Encumbrances that, in the aggregate, would not have a
material adverse effect on any Group Company.

33

--------------------------------------------------------------------------------

 

9.8 Intellectual Property

  9.8.1   Summary. Disclosure Schedule 9.8.1 contains a list of all patents,
trademarks, service marks, design rights and copyrights owned by the Group
Companies that is (a) used exclusively in the Business, (b) material for the
Business as currently conducted by the Group Companies, and (c) registered or
are the subject of a pending application for registration (the “Group IP”).    
9.8.2   Title. Except as disclosed in Disclosure Schedule 9.8.2, the relevant
Group Company owns all rights, title and interest in and to its Group IP as
listed in Disclosure Schedule 9.8.1, free and clear of all Encumbrances other
than Permitted Encumbrances.     9.8.3   Rights. Each Group Company owns or has
a right to use all Intellectual Property used in the Business as currently
conducted by the Group Companies, except where the failure to so own or have
such right would not result in a Material Adverse Effect.     9.8.4   Claims by
Third Parties. Except as disclosed in Disclosure Schedule 9.8.4, or as would
not, if adversely decided, result in a Material Adverse Effect, unless resolved,
(i) no Group IP is subject to any pending or, to Sellers’ Knowledge, threatened
litigation or other proceeding for infringement, opposition, cancellation or
revocation, and (ii) none of the Group Companies has received a written claim
since January 1, 2004 that any Group IP is invalid or unenforceable.     9.8.5  
Maintenance. All registration and application fees necessary to maintain
registrations and applications for the Group IP have been paid and all necessary
renewal filings have been made, except for (i) such fees and filings the failure
of which to pay or make would not result in a Material Adverse Effect, and (ii)
fees and filings in relation to Group IP that the Group Companies have decided
to abandon, cancel or allow to lapse.     9.8.6   Infringement of Third Party
IP. Except as disclosed in Disclosure Schedule 9.8.6 or as permitted by
applicable law, to Sellers’ Knowledge, the conduct of the Business as currently
conducted does not infringe any Intellectual Property owned by a third party.  
  9.8.7   IP used Primarily by Group Companies. To Sellers’ Knowledge, as of the
Signing Date, there is no Intellectual Property owned by Sellers or any Sellers’
Affiliate that is used primarily by the Group Companies, except Intellectual
Property (i) that is provided to the Group Companies pursuant to any supply or
distribution

34

--------------------------------------------------------------------------------

 

      agreement, (ii) that will be provided to the Group Companies pursuant to
the Brand License Agreement or the Transitional Services Agreement or (iii) that
is used by Sellers or Sellers’ Affiliates to provide any excluded service set
forth in Exhibit 16.3.

9.9 Material Agreements

  9.9.1   Summary Schedule. Disclosure Schedule 9.9 contains a list of the
following agreements of the Group Companies under which, as of the Signing Date,
any primary contractual obligation (primäre Hauptleistungspflicht) or any
contingent or other obligation (including indemnity obligations) has not yet
been fulfilled (the “Material Agreements”):

  (a)   Credit Agreements of any Group Company, as obligor, with any Person
other than relating to any intercompany loan agreements with any Group Company,
Seller or Sellers’ Affiliate, including any bonds, notes or other instruments
evidencing financial indebtedness of any Group Company, in each case with an
outstanding amount (including interest) on the Signing Date in excess of EUR
5,000,000;     (b)   Guarantees, suretyships, letters of comfort, performance or
warranty bonds and similar instruments issued by any Group Company for any debt
of any Person other than a Group Company in an amount of EUR 5,000,000 or more
per instrument;     (c)   Agreements regarding swaps, options, forward sales or
purchases, futures and other financial derivatives and combinations thereof
involving a potential obligation of a Group Company or notional amount at the
Signing Date in excess of EUR 3,000,000 per agreement;     (d)   Agreements
relating to capital expenditures entered into since 31 December, 2005, involving
an amount in excess of EUR 5,000,000 per agreement;     (e)   Agreements for the
acquisition or sale of (i) assets, other than inventory or in the ordinary
course of business, and (ii) any Interests in Legal Entities or any business
enterprises (Betrieb) or parts thereof (Betriebsteil), providing in either case
for a consideration of more than EUR 5,000,000 per agreement and entered into
since 1 January 2001;     (f)   Agreements for joint ventures, partnerships,
strategic alliances, joint

35

--------------------------------------------------------------------------------

 

      development of products and other forms of cooperation that involved a
sharing of profits or losses per agreement during the year 2006 in payments per
agreement in excess of EUR 2,500,000, or that involved a sharing of revenues (or
profits or losses) per agreement during the year 2006 in excess of EUR
10,000,000, as well as any enterprise agreements within the scope of
Sections 291 and 292 AktG in relation to one or more Group Companies;     (g)  
Supply and third-party manufacturing agreements and binding purchase commitments
with suppliers of any goods or services, including API supply agreements, but
excluding individual purchase orders, that resulted during the year 2006 in a
consideration to be paid by a Group Company of more than EUR 10,000,000 per
agreement;     (h)   Distribution, agency, customer (including sales) and
franchise contracts, other than single purchase orders or intergroup contracts,
that resulted during the year 2006 in annual revenues of more than EUR
10,000,000 per agreement;     (i)   Agreements, excluding customary restrictions
in cooperation, supplier or resale agreements entered into in the ordinary
course of business, imposing any material restriction on the Group Companies
taken as a whole to compete with any Person other than a Group Company; and    
(j)   Any other agreement that resulted during 2006 in an aggregate payment or
payment obligation by a Group Company of more than EUR 10,000,000.

  9.9.2   Status. Except as disclosed in Disclosure Schedule 9.9.2, to Sellers’
Knowledge, (i) the Material Agreements are in full force and effect, and (ii) no
party to a Material Agreement has given a written notice of termination.    
9.9.3   No Breach. None of the Group Companies is in breach or default of any
Material Agreement to which it is a party and, to Sellers’ Knowledge, no other
party to any Material Agreement is in breach thereof, in each case other than
breaches that would not have a Material Adverse Effect.     9.9.4   No Conflict;
Consents. Except as disclosed in Disclosure Schedule 9.9.4, the execution of
this Agreement by Sellers does not, and the performance by Sellers of the
transactions contemplated hereby will not, require any consent under, or give
another party any right of termination of, any Material Agreement, except for
those breaches, unobtained consents and terminations that would be immaterial.

36

--------------------------------------------------------------------------------

 

9.10 Insurance

  9.10.1   Summary. Except for self-insurance maintained with Affiliates,
Disclosure Schedule 9.10.1 contains a list of all material insurance policies of
the Group Companies relating to the assets, businesses or operations of the
Group Companies (the “Insurance Policies”). Disclosure Schedule 9.10.1(A)
contains a detailed description of the self-insurance maintained with
Affiliates. After the Closing Date the Group Companies will not own any
interests in or have any liabilities under such self-insurance.     9.10.2  
Status. To Sellers’ Knowledge, the Insurance Policies are in full force and
effect and no material claims by any Group Company are pending under any of such
policies as to which coverage has been questioned, denied or disputed by the
insurer.

9.11 Personnel

  9.11.1   Key Employees. Disclosure Schedule 9.11.1 contains a list of the
Group Companies’ (i) Executive Management Committee Members, (ii) Directors and
Officers and (iii) employees, in both cases of (ii) and (iii), with a fixed
annual gross base salary in 2006 (excluding, for the avoidance of doubt,
performance-related payments, bonuses and any benefits) in excess of EUR 200,000
(collectively the “Key Employees”).     9.11.2   Termination. Except as set
forth in Disclosure Schedule 9.11.2, none of the Key Employees has given or been
given written notice of termination of his employment.     9.11.3   Transaction
Bonuses. Except as set forth in Disclosure Schedule 9.11.3, no employee of a
Group Company has a contractual right to any (i) extra income or bonus payment
from any Group Company as a result of the execution of, or consummation of the
transactions contemplated by, this Agreement or (ii) enhanced redundancy or
severance payment from any Group Company arising solely from the execution of,
or consummation of the transactions contemplated by, this Agreement.     9.11.4
  Labor Disputes. Except as disclosed in Disclosure Schedule 9.11.4 and except
for any matter that would not reasonably be expected to have a Material Adverse
Effect, the Group Companies are not and have not been during the last three
years, subject to any strike or lockout of their employees. Each Group Company
has, in relation to each of its current and former employees, complied in all
material

37

--------------------------------------------------------------------------------

 

      respects with all material obligations owed to and in respect of those
employees under all applicable laws, regulations, Collective Agreements (as
defined below), terms and conditions of employment, and other agreements
relevant to the conditions of service of its employees.     9.11.5   Collective
Agreements. Disclosure Schedule 9.11.5 contains a list of all material written
collective bargaining agreements with trade unions by which a Group Company is
bound (the “Collective Agreements”).

9.12 Employee Benefits

  9.12.1   Summary. Each Plan has been maintained, operated and administered in
compliance in all respects with its terms, all other applicable laws (including,
for U.S. Plans, the applicable provisions of the Employee Retirement Income
Security Act of 1974, as amended (“ERISA”), and the United States Internal
Revenue Code of 1986, as amended (the “U.S. Tax Code”)), and all applicable
Collective Agreements, and has been maintained, where required, in good standing
with applicable regulatory authorities, in each case except where the failure to
be so maintained, operated or administered would not reasonably be expected,
individually or in the aggregate, to result in a material liability to Purchaser
or its Affiliates.     9.12.2   Disclosure Schedule 9.12.2 contains a list of
all written collective plans to which a Group Company is bound with respect to
pensions or any other retirement, death or disability benefits in respect of any
of their employees or former employees (or any dependant thereof), other than
(i) statutory pension schemes, health and unemployment insurance and other
statutory employee benefit schemes, (ii) vacation or sick pay, (iii) any
insurance policies for the benefit of employees (including workers’ compensation
or accident insurance), (iv) any funded benefit schemes (including defined
contribution schemes and payments to life insurance companies) financed by way
of salary deductions, or (v) collective plans currently involving annual costs
to the employer of not more than EUR 1,000,000 per benefit scheme (the “Pension
Plans”).     9.12.3   No employees of the Group Companies participate in or
otherwise receive benefits from any plan, program, policy or arrangement,
whether formal or informal, oral or written, that is sponsored or maintained by
any group or entity other than one or more of the Group Companies.     9.12.4  
Other than the Merck Pension Scheme established by a trust deed (the “UK Pension
Scheme”), none of the Group Companies is or has been at any time on or after
April 27, 2004 but before Closing, associated or connected (as defined in

38

--------------------------------------------------------------------------------

 

      section 38(10) of the UK Pensions Act 2004) with any person who is or was
the employer in relation to an occupational pension scheme as defined in the UK
Finance Act 2004, whether or not registered (an “Occupational Pension Scheme”)
(which is not a money purchase scheme or a prescribed scheme under section 38(1)
and section 43(1) of the UK Pensions Act 2004 and no Group Company has any
liability (actual, contingent, present or future) under or in connection with an
Occupational Pension Scheme.     9.12.5   None of the current or former
employees of any Group Company since 30 August 1993 transferred to Sellers or a
Sellers’ Affiliate or any Group Company as a result of a “relevant transfer” (as
defined in the UK Transfer of Undertakings (Protection of Employment)
Regulations 1981 or 2006) with a right to benefits under or in relation to an
occupational pension scheme outside regulation 7(2) of the UK Transfer of
Undertakings (Protection of Employment) Regulations 1981 or regulation 10(2) of
the UK Transfer of Undertakings (Protection of Employment) Regulations 2006.    
9.12.6   There do not exist, nor do any circumstances exist that would
reasonably be expected to result in, any liabilities under Title IV of ERISA or
similar provision of other U.S. or non-U.S. law for, or with respect to, any
Pension Plan, benefit plan, agreement or benefit arrangement that is sponsored,
maintained or contributed to, or required to be sponsored, maintained or
contributed to, by any of the Sellers or Sellers’ Affiliates, for the benefit of
its employees, other than a Plan, that is or would reasonably be expected,
individually or in the aggregate, to result in any material liability, at or
after the Closing, to Purchaser or its Affiliates, including any Group Company.
    9.12.7   Contributions. All contributions and other payments due and payable
from the participating employers required under the terms of the Pension Plans
have been paid, accrued or otherwise reserved in accordance with past practice
and the requirements of applicable law.     9.12.8   Definitions. “Plan” means
any compensatory, retirement, pension, health, disability, welfare, incentive
bonus, share incentive, share option, profit sharing, perquisite or fringe
benefit plan, program, policy or arrangement, whether formal or informal, oral
or written, that is sponsored, maintained or contributed to, or required to be
sponsored, maintained or contributed to, by any of the Group Companies or with
respect to which any Group Company has any actual or contingent liability.

39

--------------------------------------------------------------------------------

 

9.13 Litigation and Product Liability

  9.13.1   Litigation. Except as listed in Disclosure Schedule 9.13.1, there is
no pending litigation either before a court or an arbitration tribunal
(gerichtliche Rechtsstreitigkeiten und Schiedsverfahren), involving a claim of
more than EUR 1,000,000 or, to Sellers’ Knowledge, potentially involving
non-monetary relief or penalties that would have a material negative impact on a
Group Company, against any Group Company and no such litigation has been
threatened in writing.     9.13.2   Product Recalls. Except as listed in
Disclosure Schedule 9.13.2 since 31 December 2006 none of the Group Companies
has or initiated a product recall for reasons of a lack of quality or fitness
for use or for any other reason of any products manufactured by such Group
Company that reflected annual sales in 2006 in excess of EUR 1,000,000 whereby a
return of products in the ordinary course of business does not constitute a
product recall for that purpose.     9.13.3   Limited Applicability. The
representations contained in this Section 9.13 shall not apply to any litigation
or product liability claims relating to Intellectual Property, Environmental
Matters or Tax matters, which shall be exclusively governed by Sections 9.8,
9.14, 9.15 and 12.

9.14 Environmental Matters

  9.14.1   Definitions. For purposes of this Section 9.14,

  (a)   “Environmental Law” shall mean any law, regulation, rule, order, decree,
judgment, legally binding agreement or Permit relating to or imposing liability,
for pollution, the protection of the environment, natural resources, or the use,
handling, generation, manufacturing, distribution, collection, transportation,
storage, disposal, investigation, cleanup or Release of, or exposure to,
Hazardous Materials, in each case as in effect in the relevant jurisdiction on
the Signing Date and as enforced and interpreted by the competent Governmental
Authorities on such date;     (b)   “Environmental Permit” means any
governmental permit, license, or other public law approvals that is required by
the Group Companies for their operations under any applicable Environmental Law;
    (c)   “Environmental Reports” shall mean the specific items identified as
“key findings” in the executive summaries of the Phase I reports listed on

40

--------------------------------------------------------------------------------

 

      Disclosure Schedule 9.14.1(c) and disclosed to Purchaser prior to the
Signing Date;     (d)   “Hazardous Materials” means any chemicals, materials or
substances defined as or included in the definition of “hazardous substances”,
“hazardous wastes”, “hazardous materials”, “hazardous constituents”, “restricted
hazardous materials”, “extremely hazardous substances”, “toxic substances”,
“dangerous substances”, “contaminants”, “pollutants”, “toxic pollutants”, or
words of similar meaning and regulatory effect under any applicable
Environmental Law; and     (e)   “Release” shall mean any release, spill,
emission, discharge, leaking, pumping, injection, deposit, disposal, dispersal,
leaching or migration into or through the indoor or outdoor environment
(including, without limitation, ambient air, surface water, groundwater and
surface or subsurface strata) or at, into, onto, through or out of any property.

  9.14.2   Environmental Claims. Except (i) to the extent set forth in the
Environmental Reports, or (ii) as listed in Disclosure Schedule 9.14.2(a), or
(iii) any non-compliance that would not have a Material Adverse Effect, no Group
Company has received any written notice or order from any Governmental
Authority, and no administrative or judicial action, suit, investigation demand,
directive, claim, lien, judgment or proceeding has been asserted in writing or,
to Sellers’ Knowledge is threatened, against any Group Company that alleges a
violation of, or liability under, any Environmental Law.     9.14.3  
Environmental Permits. Except to the extent set forth in the Environmental
Reports, each Group Company has obtained and maintained all material
Environmental Permits required for its Business as presently conducted in
accordance with all applicable Environmental Laws and is, in all material
respects, in compliance with the terms of such permits, and none of the Group
Companies has received any written notice from any competent Governmental
Authority that such authority has canceled, revoked or modified in any material
respect or intends to cancel or revoke, or modify in any material respect any
term or condition of, any Environmental Permit.     9.14.4   Compliance. Except
to the extent set forth in the Environmental Reports, each Group Company and the
Business is and has been in compliance with all applicable Environmental Laws,
except any non-compliance that would not have a Material Adverse Effect.    
9.14.5   Releases; Contamination. Except (i) to the extent set forth in the
Environmental

41

--------------------------------------------------------------------------------

 

      Reports or (ii) as listed in Disclosure Schedule 9.14.5, there are and
have been no Releases, spills or discharges of Hazardous Materials or any
pollution, contamination, or presence of Hazardous Materials, at, on, above,
underneath or through any of the Real Properties or any other location,
including third party waste disposal sites, in each case which Release,
pollution, contamination or presence is reasonably likely to result in material
costs to or obligations of any Group Company for the investigation, monitoring,
remediation or other response action relating to such event or condition.    
9.14.6   Exclusive Representations. The representations and warranties contained
in this Section 9.14 are the only representations and warranties being made with
respect to (i) compliance with, or liability under, any Environmental Law or
(ii) any environmental, health or safety matter, including natural resources,
related in any way to the Business, this Agreement or its subject matter. No
other representation contained in this Agreement will apply to any such matter
and no other representation and warranty, express or implied, is made with
respect thereto.

9.15 Taxes

  9.15.1   Filing of Tax Returns. All material Tax returns required to be filed
with any Taxing Authority relating to a Tax assessment period ending on or
before the Signing Date by or on behalf of a Group Company, have been filed when
due.     9.15.2   Tax Payments. All Taxes assessed and payable by a Group
Company, which have become due for payment up to and including the Signing Date
have been paid or will be paid by the Closing Date unless contested in good
faith.     9.15.3   Tax Records. To Sellers’ Knowledge, with respect to a Tax
assessment period ending on or before the Signing Date, all Group Companies have
maintained sufficient and accurate records, especially information required to
support Tax returns, information that has been or may be filed, lodged or
submitted to any Taxing Authority or is required to be kept under any applicable
Tax law, including documentation legally required for transfer pricing purposes
as of the Signing Date.     9.15.4   Tax Audits. To Sellers’ Knowledge, no Group
Company is involved in any Tax audit or investigation (other than regular Tax
audits in the normal course of business) relating to any Tax period ending on or
before the Signing Date.     9.15.5   Tax Appeals. Except as listed in
Disclosure Schedule 9.15.5, to Sellers’ Knowledge, no Group Company is involved
in any appeal in regard to Tax

42

--------------------------------------------------------------------------------

 

      matters currently pending, including proceedings in Tax courts to which a
Group Company is a party and that involve an amount in dispute in excess of EUR
100,000.     9.15.6   Tax Losses. No warranty is given or implied in regard of
the existence, validity or usability of any Tax losses and Tax loss
carryforwards of any Group Company.

9.16 Finders’ Fees
As of the Signing and the Closing Date, no Group Company has any obligation or
liability to pay any fees or commissions to any broker, finder or agent or other
third party advisor with respect to this Agreement and the consummation of the
transactions contemplated hereby.
9.17 Pre-Sale Reorganization
After giving effect to the Pre-Sale Reorganization to the extent completed prior
to Closing, the assets and rights of the Group Companies will be sufficient for
the conduct of the Business immediately following the Closing Date in
substantially the same manner as conducted by Sellers, Sellers’ Affiliates and
the Group Companies immediately prior to the Closing Date, assuming for purposes
hereof the continued provision by Sellers and Sellers’ Affiliates of the
services to be provided in the Transitional Services Agreement and the “excluded
services” set forth in Exhibit 16.3 as well as the provision of rights to the
Group Companies pursuant to the Brand License Agreement and except for any
agreements that are the subject of Section 10.13.3.
9.18 Additional Information
As promptly as practicable after the Signing Date (but in no event more than 20
Business Days after the Signing Date), Sellers and Sellers’ Affiliates shall
provide to Purchaser the information described on Exhibit 9.18, which
information shall be complete and accurate as of the respective date such
information shall have been provided.
Subject to the terms and conditions of this Agreement, Purchaser agrees to
purchase and acquire the Shares (including each Company’s business, the
Subsidiaries and their respective businesses) in the condition they are in on
the Closing Date, and to perform the transactions contemplated by this Agreement
based upon its own inspection, examination and determination with respect
thereto without reliance upon any express or implied representations, warranties
or guarantees of any nature made by, or on behalf of or imputed to, Sellers
except for the representations explicitly given by Sellers in this Agreement.
Without limiting the generality of the foregoing, Purchaser acknowledges that,
except as expressly set forth in this Agreement,

43

--------------------------------------------------------------------------------

 

Sellers give no representation, warranty or guarantee with respect to any
projections, estimates or budgets delivered or made available to Purchaser of
future results, cash flows, operations or the conditions of the Business or any
other information or documents made available to Purchaser or its accountants or
other advisors with respect to the Business or the Group Companies.
To the extent that the representations under this Section 9 relate to the
condition (Beschaffenheit, within the meaning of Section 444 BGB) of any Group
Company, they shall not be construed as a warranty of the condition
(Beschaffenheitsgarantie) within the meaning of Section 444 BGB. These
representations are made in view of the agreement of the Parties as to the
allocation of actual or potential risks of the Group Companies, and shall be
subject to the modalities and limitations, including the limitations on
liability, including of the amount, set forth in Section 10 (such modalities and
limitations forming an integral part of the representations themselves and the
allocation of risks agreed between the Parties). Furthermore, Purchaser
acknowledges that these representations are given by Sellers based upon the
Parties’ joint understanding of the non-applicability of Section 444 BGB, and
Purchaser agrees not to invoke any rights thereunder should Section 444 BGB turn
out to be applicable nonetheless. To the extent any amounts are awarded to
Purchaser due to the applicability of Section 444 BGB, they shall be treated as
an increase of the Purchase Price, unconditionally payable by Purchaser to
Sellers in cash.
10.
REMEDIES
10.1 Breach

  10.1.1   Damages. Subject to the terms, conditions, exclusions and limitations
provided in this Section 10, in the event that any of the representations made
by a Seller in this Agreement is incorrect (a “Breach of Representations”) or
Sellers’ breach any covenant or agreement contained in this Agreement (“Breach
of Covenant”), Sellers and Sellers’ Guarantor shall put Purchaser or, at the
option of Purchaser, any of the Group Companies into the position that Purchaser
or the Group Company, as applicable, would have been had the Breach of
Representations or Breach of Covenant not occurred (Naturalrestitution). If and
to the extent Sellers (or any other person on behalf of Sellers) have not cured
the Breach of Representations or Breach of Covenant within a reasonable time
period, but no later than seven days after receipt of a Claim Notice from
Purchaser, or such restitution is impossible or Sellers finally refuse
(verweigert ernsthaft und endgültig) to make restitution in kind, Purchaser may
claim solely for: monetary damages (Schadenersatz in Geld), provided, however,
that in the case of a Breach of Representations the damages to be compensated
shall only be actual damages according to Section 249 BGB, excluding, however,
(i) consequential or indirect damages (Folgeschäden, mittelbare Schäden),
(ii) lost opportunities (entgangene

44

--------------------------------------------------------------------------------

 

      Geschäftschancen), (iii) internal administration and overhead costs and
(iv) any losses based solely on the argument that the purchase price for the
Shares was calculated on the basis of incorrect assumptions or information
(collectively, “Loss”). The principle of compensation and accounting for
benefits and advantages according to Sections 249 et seq. German Civil Code
(Vorteilsausgleichung) shall apply.     10.1.2   General Exclusions. Sellers and
Sellers’ Guarantor shall not be liable for Losses or any claim under this
Section 10, or any other claim under or in connection with this Agreement
against any Seller or Sellers’ Guarantor (a “Claim”) for any Breach of
Representations if and to the extent:

  (a)   such Losses have reduced the Final Total Purchase Price by reducing the
amount of Cash or Working Capital or increasing the amount of Financial Debt;  
  (b)   the amount of the Claim has been covered by actual recoveries in
directly related claims against third parties (other than a Group Company) or by
actual recoveries from existing insurance coverage; it being understood and
agreed that Purchaser will use its best efforts to pursue any available
recoveries in any such claims against third parties and from existing insurance
coverage;     (c)   there exist any Tax Benefit; or     (d)   the event giving
rise to the Claim has resulted from any action taken by a Seller, any Sellers’
Affiliate or a Group Company after the Signing Date at the written request or
direction of, or with written consent of, Purchaser.

10.2 Knowledge

  10.2.1   Sellers and Sellers’ Guarantor shall not be liable for any Breach of
Representations, and Purchaser shall not be entitled to bring any claim under
this Section 10, or any other claim under or in connection with this Agreement
against any Seller or Sellers’ Guarantor, (i) if and to the extent Purchaser, or
any of their respective Directors and Officers or, if acting for Purchaser in
connection with this Agreement or the transactions contemplated hereby, any of
Purchaser’s employees, had actual knowledge on the Signing Date of facts,
circumstances or events which a reasonable third party knowing this Agreement
would conclude as of the Signing Date formed the basis of a Claim
(anspruchsbegründende Umstände gemäß § 199 Abs. 1 Nr. 2 BGB) on the Signing Date
(“Purchasers

45

--------------------------------------------------------------------------------

 

      Knowledge”), or (ii) if and to the extent the matter resulting in the
claim was disclosed expressly on the relevant Section or subsection of the
Disclosure Schedule or Exhibits to which the claim relates; provided, however,
that any matter set forth in one Section or subsection of the Disclosure
Schedule or Exhibits will be deemed to apply to each other Section or subsection
of the Disclosure Schedule or Exhibits to which its relevance to such other
Section or subsections of the Disclosure Schedule or Exhibits is readily
apparent on its face.     10.2.2   Deemed Knowledge. Without limiting the
generality of Section 10.2.1, Purchaser shall be deemed to have knowledge of all
facts that are expressly included in the Financial Vendor Due Diligence Report
prepared by KPMG Deutsche Treuhandgesellschaft Aktiengesellschaft
Wirtschaftsprüfungsgesellschaft, Marie-Curie-Str. 30, 60439 Frankfurt, dated 3
April 2007 and made available to the Purchaser on 7 May, 2007 and all such facts
shall also constitute Purchasers Knowledge.

10.3 De-Minimis, Threshold and Deductible
Except for Claims resulting from a Breach of Representations by Sellers under
Sections 9.1, 9.2, 9.3, 9.16 and 9.17, and Claims for failure to comply with
Section 12, 13, 14 or 15.1 Sellers shall only be liable for Claims if and to the
extent (i) the actual individual Claim exceeds EUR 500,000 (the “De-Minimis
Amount”), and (ii) the aggregate amount with respect to all Claims (including
Claims that do not exceed the De-Minimis Amount in the individual case) exceeds
EUR 50,000,000 (the “Threshold”), in which case Sellers shall only be liable for
the amount exceeding the Threshold.
10.4 Maximum Liability
The maximum aggregate liability of Sellers for all claims under or in connection
with this Agreement, including all Claims for Breaches of Representations, shall
be limited to 15 per cent. of the Final Purchase Price to the extent it has been
received by Sellers, except for Claims resulting from a Breach of
Representations by Sellers pursuant to Sections 9.1, 9.2, 9.3 and 9.17 and for
Claims under Section 12, 13, 14 and 15.1 for which the maximum aggregate
liability of Sellers (including all other claims under or in connection with
this Agreement) shall be limited to the Final Purchase Price to the extent it
has been received by Sellers.
10.5 Limitation Period

  10.5.1   Limitation. All Claims for Breaches of Representations shall be
time-barred (verjähren) after the lapse of 18 months from the Closing Date
except for Claims

46

--------------------------------------------------------------------------------

 

      resulting from Breaches of Representations under Sections 9.1, 9.2, 9.3,
9.14 and 9.17 that shall be time-barred after the later of 5 years after the
Closing Date.     10.5.2   Suspension of Limitation. Section 203 BGB shall not
apply.

10.6 Willful Misconduct
None of the limitations contained in this Section 10 shall apply to the extent a
Breach of Representations is caused by willful misconduct (vorsätzlich
rechtswidriges Handeln) of a Seller.
10.7 No “Double Dip”
If one and the same set of facts (Sachverhalt) qualifies under more than one
provision as a Breach of Representations or entitles Purchaser to a claim or
remedy under more than one provision of, or in connection with, this Agreement,
even if the Purchaser makes multiple Claims arising from such facts, the
Purchaser shall not be entitled to aggregate recoveries from such Claims in
excess of its aggregate Losses arising from such facts.
10.8 Exclusion of other Remedies
The Parties agree that the rights and remedies that Purchaser may have against
Sellers for a Breach of Representations or any other breach of any obligation
under this Agreement shall be exclusively governed by this Agreement. To the
extent permitted by law, any further claims and remedies (other than claims for
specific performance (primäre Erfüllungspflichten), fraud and those other claims
explicitly provided for in this Agreement), irrespective of which nature, amount
or legal basis, are hereby expressly waived and excluded, including claims under
pre-contractual fault (Section 311 para. 2 and 3 BGB), breach of contract
(Pflichtverletzung aus dem Schuldverhältnis) or liability in tort (Delikt), any
right to reduce the Purchase Price (Minderung) and any right to rescind or
otherwise wind-up this Agreement (Rücktritt oder sonstige Rückabwicklung) or
based on frustration of contract (Störung der Geschäftsgrundlage).
10.9 No Third Party Rights
Unless explicitly stated in this Agreement, no provision of this Agreement
constitutes a contract for the benefit of a Third Party within the meaning of
Section 328 BGB or otherwise (kein Vertrag zugunsten Dritter oder mit
Schutzwirkung zugunsten Dritter), irrespective of whether any payment under this
Agreement is made to Purchaser or any Group Company.

47

--------------------------------------------------------------------------------

 

10.10 Mitigation
Purchaser shall be under a general obligation in accordance with Section 254 BGB
and shall use its best efforts to mitigate the amount of any Loss of Purchaser
or a Group Company, or indemnity amount under this Agreement.
10.11 Procedure / Third-Party-Claims

  10.11.1   Claim Notice. Purchaser shall notify Sellers promptly of any Breach
of Representations if Purchaser discovers such Breach of Representations after
the Closing Date, describing the potential claim in reasonable detail and, to
the extent practical, stating the estimated amount of such claim and giving
Sellers the opportunity to remedy the Breach of Representations within the
time-period set forth in Section 10.1.1 (such notice, the “Claim Notice”);
provided, however, that failure to give such notice shall reduce the rights of
Purchaser to seek indemnity or claim damages to the extent such right for
indemnity or damage was caused or materially increased by such failure.    
10.11.2   Purchaser’s Cooperation. Purchaser shall give Sellers such information
and assistance, as they, Sellers’ Representative or any of their advisors
reasonably request for the purposes of investigating the matter or circumstance
giving rise to such Breach of Representations. If and to the extent a valid
claim under Section 10.1 exists with respect to a Claim Notice, all reasonable
costs and expenses so incurred by Purchaser shall be borne by Sellers; if and to
the extent a valid claim under Section 10.1 does not exist with respect to a
Claim Notice, Purchaser shall bear all costs and expenses, including all costs
and expenses reasonably incurred by Sellers or Sellers’ Representative.    
10.11.3   Third Party Claims. Purchaser shall promptly notify any Sellers’
Representative in writing of any claim, suit, action or proceeding (including,
for the avoidance of doubt, any audits or examinations by tax, environmental or
other Governmental Authorities) brought or threatened in writing by a third
party in respect of which Purchaser reasonably expects to seek indemnity or
claim damages under this Agreement (a “Third Party Claim”); provided, however,
that failure to give such notice shall not affect the right to seek indemnity or
claim damages except to the extent the Third Party Claim or other Loss was
caused or materially increased by such failure. So long as Sellers have given a
binding acknowledgement of their obligations to indemnity Purchaser with respect
to the applicable claim, suit, action or proceeding, the following provisions of
this Section 10.11.3 shall apply:

  (a)   Sellers’ Rights. At the request of any Seller or Sellers’
Representative,

48

--------------------------------------------------------------------------------

 

      Purchaser shall (i) make available to Sellers and Sellers’ Representative
a copy of the documents substantiating the Third Party Claim and of all
time-sensitive documents relating to the Third Party Claim, and (ii) give
Sellers (through Sellers’ Representative), at their own costs, the opportunity
to defend Purchaser or the relevant Group Company against such claim. Sellers
shall notify Purchaser of their decision to defend the Third Party Claim in
writing. Sellers (also through Sellers’ Representative) shall have the right to
defend the claim by all appropriate proceedings and shall have the sole power to
direct and control such defense, subject to the provisions of Section 10.11. In
particular, Sellers (through Sellers’ Representative) may (i) participate in and
direct all negotiations and correspondence with the third party, (ii) appoint
and instruct counsel, reasonably acceptable to Purchaser, acting in the name of
Purchaser or the relevant Group Company and (iii) require that the Third Party
Claim be litigated or settled in accordance with Sellers’ Representative’s
instructions. Notwithstanding the foregoing, Sellers’ counsel shall have no
conflict of interest relative to Purchaser or Purchaser’s Affiliates with regard
to the assignment and shall not assume any representation of Seller in a
judicial dispute between the Parties during the time of its retention as
Sellers’ counsel; in any of those cases, unless otherwise agreed by Purchaser,
Seller shall promptly select new counsel and shall notify Purchaser of the
identity of the new counsel upon its appointment. Sellers (through Sellers’
Representative) (A) shall conduct such proceedings in good faith taking the
interests of Purchaser or the relevant Group Company into account, (B) discuss
the defense and the proceeding in good faith with Purchaser or the Group
Company, (C) promptly inform Purchaser of any material communication with third
parties relating to the Third Party Claim not otherwise known to Purchaser or
the Group Company, (D) furnish to Purchaser drafts of pleadings, briefs or other
documents, sufficiently in advance of their submission to allow Purchaser time
for review and comment; (E) notify Purchaser sufficiently in advance of
substantive meetings on the litigation to enable Purchaser to attend such
meetings; and (F) inform Purchaser of all terms of any proposed settlement of
the litigation. In no event shall Purchaser or the relevant Group Company be
entitled to acknowledge or settle a claim or permit any such acknowledgement or
settlement without Sellers’ Representative’s prior written consent.
Notwithstanding the foregoing, Sellers shall not, and shall ensure that none of
their Affiliates nor counsel will, settle or otherwise compromise any Third
Party Claim, or portion thereof, without the prior written consent of Purchaser,
which consent shall not be unreasonably withheld or delayed; provided, however,
that Purchaser shall not be required to agree to the entry into any settlement
that (i) requires an admission of wrongdoing by Purchaser or Purchaser’s
Affiliates (including the Group Companies) or (ii) provides for injunctive or
other non-monetary relief affecting Purchaser or Purchaser’s Affiliates
(including the Group Companies) in any way (it being understood and agreed that

49

--------------------------------------------------------------------------------

 

      Purchaser shall act in good faith when deciding whether to grant its
consent to non-monetary relief).     (b)   Cooperation. After Sellers have
notified Purchaser of their decision to defend the Third Party Claim, Purchaser
shall, and shall cause the relevant Group Company to, (i) reasonably cooperate
with Sellers and Sellers Representative in the defense of any Third Party Claim,
(ii) grant Sellers (through Sellers’ Representative) and their advisors
reasonable access to all relevant business records and documents (during normal
business hours) and, upon their request, provide them with copies thereof, and
(iii) permit Sellers and their representatives to consult with the Directors and
Officers, employees and representatives of Purchaser or the relevant Group
Company in a reasonable fashion and to a reasonable extent. If and to the extent
a valid claim under Section 10.1 exists with respect to the Claim Notice for the
Third Party Claim, all reasonable costs and expenses so incurred by Purchaser in
defending a Third Party Claim shall be borne by Sellers; if and to the extent a
valid claim under Section 10.1 does not exist with respect to a Claim Notice for
the Third Party Claim, Purchaser and the relevant Group Company shall bear all
their own costs and expenses, it being understood that Sellers shall bear all
costs and expenses in connection with the defense (including advisor’s fees)
during any time in which they assumed the defense. In any event, each Party
shall bear its own internal administrative costs, expenses and overhead.

10.12 Reductions of Purchase Price
Any payment by Sellers under this Section 10 shall be treated as a reduction of
the Purchase Price allocated to the relevant Company (including its
Subsidiaries) pursuant to Section 4.1.4.
10.13 Claims and Agreements

  10.13.1   Claims by Group Companies. The Parties are in agreement that upon
the Closing, each Group Company shall not have any claims that derive from or
would not have arisen in the absence of the capacity of Sellers or Sellers’
Affiliates as direct or indirect shareholders of the Group Companies or that
constitute claims for damages or other compensation, whether known or unknown,
against any Seller or Sellers’ Affiliates, including any claims for damages,
losses and expenses, except (i) any claims for outstanding primary performance
obligation under any agreement with such person and (ii) any claims that have
arisen (Entstehung) after the Signing Date (together, the “Company Claims”), and
Purchaser shall cause the Group Companies to act accordingly and, if necessary,
waive any claims that they may still have other than the Company

50

--------------------------------------------------------------------------------

 

      Claims. In addition, Purchaser shall hold harmless and indemnify Sellers
and Sellers’ Affiliates, as the case may be, from and against any and all
damages, costs and expenses arising out of any claims that a Group Company might
raise against any Sellers or Sellers’ Affiliates other than Company Claims.
Sellers and Sellers’ Affiliates are not aware of any such claims other than the
Company Claims.     10.13.2   Claims by Sellers. The Parties are in agreement
that upon the Closing, any of the Sellers or Sellers’ Affiliates shall not have
any claims that derive from or would not have arisen in the absence of the
capacity of Sellers or Sellers’ Affiliates as direct or indirect shareholders of
the Group Companies or that constitute claims for damages or other compensation,
whether known or unknown, against any Group Company, including any claims for
damages, losses and expenses, except (i) any claims for outstanding primary
performance obligation under any agreement with such person and (ii) any claims
that have arisen (Entstehung) after the Signing Date (together, the “Sellers
Claims”), and Sellers shall cause Sellers’ Affiliates to act accordingly and, if
necessary, waive any claims that they may still have other than the Sellers
Claims. In addition, Sellers shall hold harmless and indemnify any Group
Company, as the case may be, from and against any and all damages, costs and
expenses arising out of any claims that a Seller or Sellers’ Affiliates might
raise against any Group Company other than Sellers Claims.     10.13.3  
Existing Agreements. The Parties agree and will procure that, except for the
Ancillary Agreements, all service, lease and sub-lease agreements, and all
license agreements, and all other agreements of any kind, between any of the
Group Companies and any of Sellers or Sellers’ Affiliates shall be terminated
except if the Seller and the Purchaser agree otherwise between the Signing Date
and the Closing Date. Sellers, Sellers’ Affiliates and Purchaser shall cooperate
to, as soon as reasonably practicable after the Signing Date, agree on the terms
of any such agreements that shall remain in effect after the Closing Date (and
Sellers, Sellers’ Affiliates and Purchaser shall not unreasonably withhold their
consent to any such agreement).

10.14 Tax and Litigation Indemnity
Sections 10.7, 10.8, 10.9 and 10.10 shall apply, mutatis mutandis, to any
indemnity claims under Sections 12 and 13. The remaining provisions of this
Section 10 shall not apply to any indemnity claims under Sections 12 and 13,
unless explicitly so provided therein.
10.15 Resulting Taxes
For the avoidance of doubt, income taxes payable as a result of any Claim under
Section

51

--------------------------------------------------------------------------------

 

10, 12, and 13, shall not increase Sellers’ liability.
11.
PURCHASER’S GUARANTEES, COVENANTS AND OTHER AGREEMENTS
11.1 Purchaser’s Representations
Purchaser hereby represents and warrants by way of an independent guarantee
(selbstständiges Garantieversprechen) pursuant to Section 311 para. 1 BGB to
Sellers that the statements set forth in this Section 11 are accurate on the
Signing Date and will be accurate as of the Closing Date, unless a different
date is indicated in the respective representation and warranty, provided,
however, that any provisions of this Agreement relating to the consequences of a
breach of this Section 11.1 form an integral part of this guarantee (Inhalt des
Schuldverhältnisses / Bestandteil der Garantieerklärung), and this guarantee is
only given subject to such provisions and limitations:

  11.1.1   Existence. Purchaser is duly incorporated and validly existing under
the laws of the Commonwealth of Pennsylvania.     11.1.2   Capacity. The
execution of this Agreement by Purchaser and the performance of its obligations
hereunder are within its corporate powers, do not violate its constitutional
documents and have been authorized by all necessary corporate action on behalf
of Purchaser. No consent, approval, authorization or order of any Governmental
Authority is required by law for Purchaser to enter into and perform this
Agreement, except (i) as provided by any applicable merger control law, (ii) as
may be necessary as a result of any facts or circumstances relating solely to
Sellers or any Sellers’ Affiliate, and (iii) such consents, approvals,
authorizations or actions the absence of which would not prevent or materially
delay the consummation by Purchaser of the transactions contemplated by this
Agreement.     11.1.3   No Insolvency. No bankruptcy proceedings or other
proceedings under applicable law providing protection against enforcement by
creditors have been opened over the assets of Purchaser and no circumstances
exist that would require Purchaser or its Directors and Officers or shareholders
to apply for the opening of such proceedings.     11.1.4   Enforceability. This
Agreement constitutes (assuming due authorization,

52

--------------------------------------------------------------------------------

 

      execution and delivery by Sellers) legal, valid and binding obligations of
Purchaser enforceable in accordance with its terms.     11.1.5   Financing of
the Transactions. Purchaser has delivered to Sellers complete and accurate
copies of an executed commitment letter (the “Commitment Letter”) addressed to
Purchaser to provide Purchaser with (i) senior secured first lien credit
facilities (the “Senior Credit Facilities” and, together with the Bridge
Financing (defined below), the “Credit Facilities”), (ii) an unsecured senior
interim loan (the “Bridge Financing”, and together with debt securities (the
“Debt Securities”) issued in lieu of or to refinance such Bridge Financing or
any portion thereof, the “Note Financing”). The Note Financing, the Senior
Credit Facilities and any alternative financing is collectively referred to as
the “Financing”. As of the Signing Date, Purchaser has no reason to believe that
it will be unable to satisfy on a timely basis any term or condition of closing
to be satisfied by it contained in the Commitment Letter assuming accuracy of
the representations and warranties by Sellers and compliance by Sellers with
their covenants herein. Purchaser has fully paid any and all commitment fees or
other fees required by the Commitment Letter to be paid on or before the Signing
Date. Subject to its terms and conditions, the Financing, when funded in
accordance with the Commitment Letter, and taken together with cash on hand of
Purchaser will provide Purchaser with acquisition financing at the Closing
sufficient to perform the Closing Action under Section 8.3.1.

11.2 Remedies
Subject to the terms, conditions, exclusions and limitations provided in this
Agreement, in the event of any breach or non-fulfillment of any guarantee set
forth in Section 11.1 or Purchaser’s breach any other covenant or agreement
contained in this Agreement Purchaser shall put Sellers and Sellers’
Representative into the position that Sellers and Sellers’ Representative would
have been in had the breach not occurred or the guarantee had been fulfilled
(Naturalrestitution). If and to the extent Purchaser has not cured the breach or
has not fulfilled the guarantee within a period of seven days after receipt of a
request from Sellers’ Representative to do so, Purchaser shall pay to Sellers
the amount of all losses that Sellers have incurred or suffered as a result of
the breach or non-fulfillment of the guarantee by Purchaser.
11.3 Financing
Purchaser shall use its reasonable best efforts to arrange the Financing on the
terms and conditions described in the Commitment Letter, including using
reasonable best efforts to (i) negotiate definitive agreements with respect
thereto on the terms and conditions contained therein or on other terms no more
adverse to Sellers and (ii) satisfy on a timely basis all conditions applicable
to Purchaser in such definitive agreements that are within its

53

--------------------------------------------------------------------------------

 

control. In the event any portion of the Financing becomes unavailable on the
terms and conditions contemplated in the Commitment Letter, Purchaser shall
(A) with respect to the Credit Facilities, use its reasonable best efforts to
arrange to obtain alternative financing from alternative sources on comparable
or more favorable terms to Purchaser (as determined in the reasonable judgment
of Purchaser) as promptly as practicable following the occurrence of such event,
and (B) with respect to the Note Financing, use its reasonable best efforts to
arrange to obtain alternative financing from alternative sources on comparable
or more favorable terms to Purchaser (as determined in the reasonable judgment
of Purchaser) no later than the Closing Date. In the event that (x) all or any
portion of the Financing structured as Debt Securities has not been consummated,
(y) all Closing Conditions shall have been satisfied or waived and Sellers have
delivered the Required Financial Information and (z) the Bridge Financing (or
alternative bridge financing obtained in accordance with Section 11.3) is
available on the terms and conditions described in the Commitment Letter (or any
replacement commitment letter), Purchaser shall use the proceeds of the Bridge
Financing (or such alternative bridge financing) to replace the proceeds from
such Debt Securities no later than the Closing Date. Purchaser shall give
Sellers prompt notice of any termination of the Commitment Letter. Purchaser
shall keep Sellers informed on a reasonably current basis in reasonable detail
of the status of its efforts to arrange the Financing. For the avoidance of
doubt, Purchaser’s receipt of the proceeds of the Financing shall not be deemed
to constitute a Closing Condition.
11.4 Maximum Liability
The maximum aggregate liability of Purchaser for all claims of Sellers pursuant
to Section 11.2 shall be limited to 15 per cent. of the Purchase Price, except
for claims for the failure to perform required Closing Actions and for failure
to comply with Section 6.3, for which the maximum aggregate liability of
Purchaser (including all other claims under or in connection with this
Agreement) shall be limited to the Purchase Price (provided, that if the Closing
shall occur and the Purchase Price has been paid, the maximum liability of
Purchaser shall thereafter be limited to an amount equal to 15 per cent. of the
Final Purchase Price).
11.5 Limitation Period

  11.5.1   Limitation. All claims of Sellers pursuant to Section 11.2 shall be
time-barred (verjähren) after the lapse of 18 months from the Closing Date (or,
if there has not been a Closing Date, from the Signing Date).     11.5.2  
Suspension of Limitation. Section 203 BGB shall not apply.

54

--------------------------------------------------------------------------------

 

11.6 Exclusion of other Remedies
The Parties agree that the rights and remedies that Sellers may have against
Purchaser for a Purchaser’s Breach or any other breach of any obligation under
this Agreement shall be exclusively governed by this Agreement. To the extent
permitted by law, any further claims and remedies (other than claims for
specific performance (primäre Erfüllungspflichten), fraud and those other claims
explicitly provided for in this Agreement), irrespective of which nature, amount
or legal basis, are hereby expressly waived and excluded, including claims under
pre-contractual fault (Section 311 para. 2 and 3 BGB), breach of contract
(Pflichtverletzung aus dem Schuldverhältnis) or liability in tort (Delikt), any
right to reduce the Purchase Price (Minderung) and any right to rescind or
otherwise wind-up this Agreement (Rücktritt oder sonstige Rückabwicklung) or
based on frustration of contract (Störung der Geschäftsgrundlage).
11.7 Mitigation
Sellers and Sellers’ Guarantor shall be under a general obligation in accordance
with Section 254 BGB and Sellers and Seller’s Guarantor shall use their best
efforts to mitigate the amount of any Loss of Sellers and Sellers’ Guarantor or
indemnity amount under this Agreement.
12.
TAX INDEMNITY
12.1 Tax Indemnity

  12.1.1   Notwithstanding any other provision to the contrary in this
Agreement, after the Closing Date, Sellers shall indemnify and hold harmless
(freistellen) Purchaser, or at Purchaser’s option, the respective Group Company
(which shall in no event be directly entitled to claim payment under this
Section 12.1 from any Sellers) for:

  (i)   any Pre-Effective Date Tax Liability not reflected in the determination
of Financial Debt;     (ii)   any liability under United States Treasury
Regulation Section 1.1502-6 or any comparable provision under any applicable Tax
laws of any other jurisdiction; and     (iii)   any liability imposed on any
Group Company as a result of any

55

--------------------------------------------------------------------------------

 

contractual arrangement existing on the Effective Date under which such Group
Company is required to indemnify any Person (other than another Group Company)
for any Tax, but only if and to the extent the amount of any such contractually
indemnified Tax exceeds a threshold of EUR 500,000,

      in each case for any Pre-Effective Date Tax Period. For the avoidance of
doubt, Income Taxes payable as a result of any indemnity claim shall not be the
liability of Seller.     12.1.2   Straddle Period. For purposes of the
indemnities under Section 12.1.1, any Tax liability for a Straddle Period shall
be apportioned between the Pre-Effective Date Tax Period and the Post-Effective
Date Tax Period. Such apportionments shall be made on a per diem basis for
(i) real and personal property Taxes and (ii) exemptions, allowances or
deductions that are calculated on an annual basis (such as the deduction for
depreciation). Such apportionment shall be made for all other Taxes on the basis
of a “closing of the books” as of the end of the Effective Date.     12.1.3  
Time for Payment. Any indemnity claim under Section 12.1.1 shall become due and
payable at the same time the respective Tax becomes due and payable for the
relevant Group Company irrespective of whether an underlying assessment has been
appealed, but in no event earlier than ten (10) Business Days after Sellers
received notice of such claim from Purchaser together with reasonable evidence
thereof. If the relevant Group Company has applied for a suspension of
enforcement (Aussetzung der Vollziehung), such claim shall not be due if and to
the extent such suspension of enforcement has been granted or until such
suspension of enforcement has finally been rejected by the competent Taxing
Authority. Upon request by Sellers, Purchaser shall procure that a reasonable
application for suspension of enforcement is made. It is understood and agreed
that, if Purchaser is required to grant any security interest
(Sicherheitsleistung) for the benefit of the relevant Taxing Authority in
connection with an application for a suspension of enforcement, then Sellers
shall bear the economic burden of such a grant of a security interest.    
12.1.4   Tax Benefits.

  (a)   If the event that gives rise to an indemnity claim under Section 10.1.1,
12.1.1, or 13.1, as the case may be, results in an actual Tax Benefit (as
defined below) to Purchaser (or the relevant Group Company) at the time such
indemnity claim is paid, Sellers’ indemnity payment shall be reduced by the
amount of such Tax Benefit. If, however, the event with respect to which such
indemnity claim is made gives rise to a Tax Benefit that Purchaser (or the
relevant Group Company) will realize (in whole or in

56

--------------------------------------------------------------------------------

 

      part) after such indemnity payment by Sellers (a “Subsequently Realized
Tax Benefit”), then such indemnity payment shall be reduced as determined in
Section 12.1.4(b). For purposes of this Agreement, a “Tax Benefit” means an
amount by which the tax liability of Purchaser (or any Group Company) is reduced
(including by deduction, reduction of income by virtue of increased tax basis or
otherwise, entitlement to refund, credit or otherwise) plus any related interest
received from the relevant Taxing Authority, using a “with and without”
methodology. Therefore, if Purchaser (or the relevant Group Company) has other
losses, deductions, credits or similar tax items available to it, with respect
to any taxable period, the amount of the Tax Benefit shall be equal to the
excess, if any, of (i) the hypothetical tax liability of Purchaser (or the
relevant Group Company) for such taxable period, computed without regard to any
losses, deductions, credits or similar tax items relating to the event giving
rise to an indemnity claim under Section 10.1.1, 12.1.1, or 13.1, as the case
may be, over (ii) the actual tax liability of Purchaser (or the relevant Group
Company) of such taxable period, computed after taking into account any losses,
deductions, credits or similar tax items relating to the event giving rise to an
indemnity claim under Section 10.1.1, 12.1.1, or 13.1. The principles of the
“with and without” methodology shall be applied for each Tax separately.     (b)
  The reduction of any indemnity payment under Section 10.1.1, 12.1.1, or 13.1,
as the case may be, in order to reflect a Subsequently Realized Tax Benefit
shall be equal to the amount of the net present value of Purchaser’s
Hypothetical Tax Benefit (as defined below). The term “Hypothetical Tax Benefit”
shall mean the product of (i) the aggregate amount of the Tax benefit resulting
from the event that gives rise to the indemnity claim and (ii) 50% of the
applicable Tax rate at the time of the indemnity payment. For purposes of
calculating the net present value of the Hypothetical Tax Benefit, (i) the
discount rate shall be 5 per cent., (ii) the relevant discount periods shall be
the taxable years (using a 365-day convention) over which Purchaser will realize
the Hypothetical Tax Benefit (assuming both sufficient taxable income in each
year to fully absorb the relevant portion of the Hypothetical Tax Benefit and no
change of law), (iii) the compounding convention shall be daily compounding and
(iv), with respect to each discount period, the relevant portion of the
Hypothetical Tax Benefit shall be treated as being realized on the last day of
such discount period. In the event that there is a disagreement between Sellers’
Guarantor and Purchaser as to whether the Purchaser or the relevant Group
Company will be entitled to a Subsequently Realized Tax Benefit, then such
disagreement shall be resolved by an opinion rendered by an internationally
recognized Tax expert mutually agreed upon by Sellers’ Guarantor and Purchaser.
The cost of such an opinion shall be borne equally by Sellers’ Guarantor and
Purchaser.

57

--------------------------------------------------------------------------------

 

  (c)   Notwithstanding any provision to the contrary in this Agreement, in the
case of the Pre-Sale Reorganization in Belgium, upon written demand by Sellers’
Guarantor (it being understood that this demand shall include sufficient
documentation proving both the existence and the size of the Belgian Tax Benefit
(as defined below)) , the Purchaser shall make within ten (10) Business Days a
payment to the Sellers in an amount equal to the net present value of the
hypothetical Belgian Tax Benefit (as defined below), if any. The term “Belgian
Tax Benefit” shall mean the product of (i) Purchaser’s aggregate amount of the
Tax basis step up caused by the taxable Pre-Sale Reorganization in Belgium and
(ii) 50% of the applicable Tax rate at the time of the taxable Pre-Sale
Reorganization in Belgium. For purposes of calculating the net present value of
the Belgian Tax Benefit, (i) the discount rate shall be 5 per cent., (ii) the
relevant discount periods shall be the taxable years (using a 365-day
convention) over which Purchaser will realize the Belgian Tax Benefit (assuming
both sufficient taxable income in each year to fully absorb the relevant portion
of the Belgian Tax Benefit and no change of law), (iii) the compounding
convention shall be daily compounding and (iv), with respect to each discount
period, the relevant portion of the Belgian Tax Benefit shall be treated as
being realized on the last day of such discount period. The Sellers and Sellers’
Guarantor on the one hand and Purchaser on the other hand shall cooperate in
good faith to implement the agreement reflected in this Section 12.1.4(c). In
the event that there is a disagreement between Sellers’ Guarantor and Purchaser
in respect of the Belgian Tax Benefit, then such disagreement shall be resolved
by an opinion rendered by an internationally recognized Tax expert mutually
agreed upon by Sellers’ Guarantor and Purchaser. The cost of such an opinion
shall be borne equally by Sellers’ Guarantor and Purchaser.     (d)  
Notwithstanding any provision to the contrary in this Agreement, in the case of
the Pre-Sale Reorganization in the United States, if, at any time after the
Closing, any Group Company or Purchaser obtains any Tax refund attributable to
the Pre-Sale Reorganization in the United States, then Purchaser shall promptly
pay over the amount of any such Tax refund to the Sellers’ Guarantor. The
Purchaser shall provide Seller’s Guarantor with a written statement that sets
forth in reasonable detail the calculation of such Tax refund.     (e)  
Notwithstanding any provision to the contrary in this Agreement, in respect of
all Pre-Sale Reorganizations (other than those mentioned in Section 12.1.4(c) or
(d)), the Parties agree that all Tax Benefits attributable to such Pre-Sale
Reorganizations are de minimis and, as a result, the Parties further agree that
such Tax Benefits shall be disregarded for purposes of this Agreement.

58

--------------------------------------------------------------------------------

 

  12.1.5   Adjustment to the Purchase Price. Any item being part of the
calculation of payment obligations under this Section 12.1 shall be treated as
an adjustment to the Purchase Price allocated to the relevant Company (including
its Subsidiaries) pursuant to Section 4.1.4.     12.1.6   Statute of
Limitations. Any indemnity claim of Purchaser or any relevant Group Company
against Sellers under this Section 12.1 shall be time-barred (verjähren) five
(5) years from the Closing Date, except that any such indemnity claim concerning
Taxes related to the United States shall be time-barred six (6) years from the
Closing Date.     12.1.7   Others. Section 442 of the BGB and Section 377 of the
German Commercial Code (Handelsgesetzbuch) shall not apply to any indemnity
under this Section 12.1.     12.1.8   Maximum Liability. The maximum aggregate
liability of Sellers for all claims under this Section 12.1 shall be limited to
15 per cent. of the Final Purchase Price to the extent it has been received by
Sellers. It is understood that any payment of Sellers pursuant to Section 10
shall also count towards the limitation of this Section 12.1.8.     12.1.9  
De-Minimis and Threshold.

  (a)   Subject to Section 12.1.9(c), Sellers shall only be liable under
Section 12.1.1. if and to the extent (i) the actual individual claim under
Section 12.1.1 exceeds EUR 250,000 (the “Tax Indemnity De Minimis Amount”) and
(ii) the aggregate amount with respect to all claims under Section 12.1.1
(including any individual claim under Section 12.1.1 the amount of which does
not exceed the Tax Indemnity De Minimis Amount) exceeds EUR 2,500,000 (the “Tax
Indemnity Threshold”), in which case Sellers shall only be liable for the amount
exceeding the Tax Indemnity Threshold.     (b)   For purposes of
Section 12.1.9(a), it is understood that the term “individual claim” shall mean
an indemnity claim brought forward with respect to a Group Company under
Section 12.1.1 relating to a Tax item in a particular Tax year. Therefore, for
example, indemnity claims under Section 12.1.1 relating to the same type of Tax
item but to different Tax years shall not be aggregated for purposes of the Tax
Indemnity De Minimis Amount calculation.     (c)   Any indemnity claim under
Section 12.1.1 relating to the Pre-Sale

59

--------------------------------------------------------------------------------

 

      Reorganization shall not count for and be subject to the limitations of
Section 12.1.9(a).

12.2 Cooperation on Tax Matters
Purchaser shall, and shall cause the Group Companies to, reasonably cooperate
with Sellers and their advisers in connection with any Tax matter that could
give rise to any liability of Sellers or Purchaser under this Agreement
including, without limitation, the conduct of any inquiry, examination, audit,
investigation, correspondence, negotiation, dispute, appeal or litigation with
respect to any Tax matter. Such cooperation shall include providing or making
available all relevant books, records and documentation and the reasonable
assistance of its Directors and Officers and employees during usual business
hours.
12.3 Filing of Tax Returns
After the Closing Date, Purchaser shall procure that the Group Companies prepare
and file all Tax returns, including any amendments thereto, relating to a
Pre-Effective Date Period or a Straddle Period, required to be filed by or on
behalf of the Group Companies after the Closing Date (other than for the
avoidance of doubt, consolidated tax returns, if any, (i) that include a Group
Company and (ii) that, after the Closing Date, are to be filed by Sellers or
Sellers’ Affiliates), provided, however, that (i) Sellers shall be given the
opportunity to participate in the preparation of, and to review, any such Tax
return and (ii) no such Tax return shall be filed without prior written approval
of Sellers which approval shall not be unreasonably withheld or delayed. To the
extent Sellers review such a Tax return, as a result of which there is any
disagreement or dispute between Sellers and Purchaser in relation to such Tax
return, Purchaser shall consult with Sellers, and Sellers and Purchaser shall
use reasonable efforts to resolve the disagreement or dispute in good faith.
Purchaser shall ensure that any such Tax return to be reviewed and approved by
Sellers under this Section 12.3 will be furnished to Sellers not later than
thirty (30) Business Days prior to the due date (including any extensions) of
such Tax return.
12.4 Control of Tax Audits

  12.4.1   Within ten (10) Business Days after the receipt from a Taxing
Authority of any notice of the commencement of any Tax audit, examination or
judicial or administrative proceeding or receipt from a Taxing Authority of any
proposed adjustment, demand or notice of deficiency with respect to Taxes or tax
returns of, or in respect of, any Group Company for any taxable period (or
portion thereof) that could give rise to a claim for indemnification under
Section 12.1.1 (each, a “Covered Proceeding”) Purchaser shall notify the
Sellers’ Representative in reasonable detail and in writing of such receipt.

60

--------------------------------------------------------------------------------

 

  12.4.2   The Sellers’ Representative (on behalf of Sellers) shall have
exclusive control over such Covered Proceeding through representatives of its
own choosing and at its expense, except that Sellers’ Representative (on behalf
of Sellers) shall

  (a)   notify Purchaser of significant developments with respect to such
proceeding and keep Purchaser reasonably informed and consult with Purchaser
with respect to any issue that reasonably could be expected to have an adverse
effect on Purchaser (or any of its Affiliates),     (b)   give to Purchaser a
copy of any Tax adjustment proposed in writing with respect to such Covered
Proceeding and copies of any other correspondence with the relevant Taxing
Authority relating to such Covered Proceeding, and     (c)   otherwise permit
Purchaser to participate in such proceedings at Purchaser’s own expense.

  12.4.3   If, and to the extent required, Purchaser shall promptly execute (or
cause to be executed by the relevant taxpayer) reasonable powers of attorney or
other documents authorizing the Sellers’ Representative to act in connection
with such Covered Proceeding.     12.4.4   The Sellers’ Representative shall not
pay or compromise any Tax liability asserted in such Covered Proceeding that

  (a)   purports to bind Purchaser or any of its Affiliates for any
Post-Effective Date Tax Period or     (b)   reasonably could be expected to have
a material adverse effect on Purchaser (or the relevant Group Company),

in each case without Purchaser’s prior written consent, which consent shall not
be unreasonably withheld or delayed.
12.5 Tax Covenants
Furthermore, Purchaser covenants to Sellers that, after the Closing Date,
Purchaser will

  (a)   not cause or permit a Group Company to make or change, with retroactive

61

--------------------------------------------------------------------------------

 

      effect, any Tax election, amend any Tax return or take any Tax position on
any Tax return that may result in a liability of Sellers under this Agreement
without the prior written consent of Sellers’ Representative, which consent
shall not be unreasonably withheld or delayed;     (b)   upon request of
Sellers, procure as soon as possible from the United States Internal Revenue
Service a “Pre-Filing Agreement,” pursuant to Revenue Procedure 2007-17, with
respect to the amount of United States Federal income tax directly resulting
from the Pre-Sale Reorganization; Section 12.4 shall apply mutatis mutandis to
this proceeding; and     (c)   not cause or permit a Group Company, during the
time period between Closing and (including) 30 June 2012, to engage in any
transaction in respect of the shares of Merck Genericos - Productos
Farmaceuticos Lda. Portugal that could cause a taxable event to Seller and
Sellers’ Guarantor and its general partners under Section 26(2) UmwStG a. F. (it
being understood that, upon written request by Purchaser, Sellers’ Guarantor
will cooperate in good faith with Purchaser in order to determine whether a
proposed transaction involving the shares of Merck Genericos - Productos
Farmaceuticos Lda. will result in a taxable event to Sellers’ Guarantor and its
general partners (Section 328 BGB)).

12.6 Tax Refunds
At any time after the Closing but no later than five (5) years after the
Closing, Seller shall be entitled to receive immediate payment from Purchaser of
any Tax refund with respect to any Pre-Effective Date Tax Period, provided with
the exception of 12.1.4(c) and (d) that (i) the individual Tax refund exceeds
EUR 250,000 and (ii) the Tax refund has not been taken into account in the
determination of the Final Purchase Price. Purchaser shall be entitled to retain
(i) any individual Tax refund that does not exceed EUR 250,000 or (ii) any Tax
refund that has been taken into account in the determination of the Final
Purchase Price. For the avoidance of doubt, claims not exceeding EUR 250,000
shall, however, reduce claims for indemnity in accordance with Section 12.1.4.
12.7 Tax Sharing Agreements
On the Closing Date, any Tax sharing agreement between any Group Company, on the
one hand, and any Person that is not a Group Company, on the other hand, shall
be terminated effective as of the end of the Effective Date, and any such
terminated Tax sharing agreement shall have no further effect for any future
taxable period.

62

--------------------------------------------------------------------------------

 

12.8 Exclusion and Indemnity by Purchaser

  (a)   If, with respect to any indemnity claim under Section 12.1.1, Purchaser
(i) fails to comply with its obligations under Sections 12.2, 12.3, 12.4 or
12.5(a) and (b) and (ii) fails to cure such non-compliance within thirty
(30) Business Days after the occurrence of such non-compliance, then Sellers
shall be released from such indemnity claim, but only if and to the extent that
Purchaser’s non-compliance has resulted in a liability for Sellers under
Section 12.1.1 in excess of the liability that would have been imposed on
Sellers had Purchaser complied with its obligations under Sections 12.2, 12.3,
12.4 or 12.5(a) and (b).     (b)   If Purchaser does not comply with its
obligations under Section 12.5(c), then Purchaser shall indemnify and hold
harmless Sellers’ Guarantor and its general partners (Section 328 BGB) from all
German income Taxes actually paid as a result of such noncompliance, if any. It
is understood that the transactions contemplated by this Agreement will not
result in any Tax indemnity obligation for Purchaser under this Section 12.8(b).

13.
INDEMNIFICATION FOR LITIGATION
13.1 Sellers Indemnification
Subject to and limited by the terms and conditions of this Section, from and
after the Closing Date, Sellers shall indemnify Purchaser against any and all
judgments, criminal fines, settlements, costs of complying with non-monetary
judgements and settlements (for five years from the applicable effective date
thereof and to the extent reasonably necessary to bring the Group Companies into
compliance therewith) and out-of-pocket costs and expenses (“Damages”), imposed
upon or agreed to or incurred by the Group Companies, that are paid after the
Effective Date, by reason of or resulting from the litigation, or any claims
made thereunder, described on Exhibit 13.1 hereto and any similar or other
follow-on civil or criminal or other claims arising out of or relating to the
same or similar or related pre-Closing facts as those alleged in or underlying
the litigation described in Exhibit 13.1 (or related litigation that has been
settled) (collectively, the “Scheduled Litigation”).
13.2 Seller Controlled Litigation

  13.2.1   Subject to compliance with the provisions of Section 13.2, and
provided that Sellers have given Purchaser a binding acknowledgement that the
applicable

63

--------------------------------------------------------------------------------

 

      matter constitutes Scheduled Litigation, Sellers shall have the right to
assume the defense of the Scheduled Litigation. To the extent Sellers assume the
defense of a Scheduled Litigation (the “Seller Controlled Litigation”):

  (a)   Sellers shall be authorized to engage and instruct counsel (“Seller
Claim Counsel”) on behalf of the defendant Group Company and to take all
decisions and actions in regard to the Scheduled Litigation, including the
waiver of rights and the entry into settlement agreements, subject to the
limitations set forth in this Section 13.2.1.     (b)   Purchaser shall not
make, and shall cause the Group Companies not to make, any admission of
liability, agreement or compromise in respect of any Seller Controlled
Litigation without prior consultation with and the prior written consent of
Sellers.     (c)   Purchaser shall take and cause its Affiliates, including the
Group Companies and all employees, advisers and agents of Purchaser, its
Affiliates and the Group Companies, to take all such steps or actions as are
reasonably necessary to avoid, resist, defend, appeal or compromise any Seller
Controlled Litigation to the extent such steps or actions do not unreasonably
interfere with the operation of the Group Companies, provided that Sellers bear
all fees, out-of-pocket costs and expenses in connection with taking such steps
or actions.     (d)   Sellers shall notify Purchaser of the identity of Seller
Claim Counsel promptly after the appointment of Seller Claim Counsel. Counsel
currently appointed by Sellers or Group Companies for existing Scheduled
Litigation shall be acceptable to continue the existing representations and to
assume the representation of Scheduled Litigation that is similar to the
existing litigation. Other Seller Claim Counsel shall have no conflict of
interest relative to Purchaser or Purchaser’s Affiliates with respect to the
assignment, and shall not assume any representation of Sellers in a judicial
dispute between the Parties during the time of its retention as Seller Claim
Counsel; in any of those cases, unless otherwise agreed by Purchaser, Sellers
shall promptly select new Seller Claim Counsel and shall notify Purchaser of the
identity of the new Seller Claim Counsel upon its appointment.     (e)  
Purchaser shall have the right to participate fully in the defense of Seller
Controlled Litigation and to employ separate counsel at its own expense, it
being understood that Seller shall control the defense. Seller Claim Counsel
shall communicate regularly with Purchaser, including, without limitation:
(i) informing Purchaser of material developments related to Seller Controlled
Litigation; (ii) promptly furnishing to Purchaser copies of all substantive
correspondence, pleadings, briefs or other documents related to

64

--------------------------------------------------------------------------------

 

      Seller Controlled Litigation; (iii) reasonably coordinating with Purchaser
to enable Purchaser to join in any material conference call on Seller Controlled
Litigation; (iv) coordinating with Purchaser to enable Purchaser to attend any
meeting that involves Seller Controlled Litigation; and (v) promptly informing
Purchaser of all non-monetary terms of any proposed settlement of Seller
Controlled Litigation.     (f)   Sellers, its Affiliates and Seller Claim
Counsel may settle or otherwise compromise any Seller Controlled Litigation, or
portion thereof, on behalf of the respective defendant, without the prior
written consent of Purchaser, to the extent the settlement or compromise is
monetary. Any non-monetary elements of a settlement or compromise require the
consent of Purchaser which shall act in good faith when deciding whether to
grant its consent.

  13.2.2   With respect to claims arising out of or relating to the same or
similar pre-Closing facts as those alleged in or underlying the Scheduled
Litigation, Purchaser will give Sellers prompt written notice of any claim,
whether threatened or pending, which Purchaser reasonably believes may give rise
to Damages. The written notice to Sellers shall include (i) any written notice
of the claim that Purchaser received; (ii) an estimated amount of the Damages
that have been or may be sustained by the Group Companies; (iii) a description
of the claim in reasonable detail; and (iv) copies of any written evidence or
documents relating to the claim.     13.2.3   If Sellers do not assume the
defense of a Scheduled Litigation within a period of ten Business Days after
receipt by Sellers of written notification by Purchaser of a claim under
Section 13.2.2 (or as of the Closing Date in the case of Scheduled Litigation
listed on Exhibit 13.1), Purchaser or any of its Affiliates shall (upon further
written notice to Sellers) have the right to undertake the defense, compromise
or settlement of the respective claims on behalf of and for the account and risk
of Sellers.

13.3 Purchaser Controlled Litigation

  13.3.1   With respect to any litigation covered under Section 13.2 in which
Sellers elect not to control the litigation (or fail to assume the defense of
the litigation under Section 13.2.3) (the “Purchaser Controlled Litigation”),
the following terms, limitations and conditions apply to the indemnification
rights of Purchaser, in addition to those prescribed in Section 13.2:

65

--------------------------------------------------------------------------------

 

  13.3.2   Purchaser shall assume the defense of any Purchaser Controlled
Litigation, provided that Sellers shall bear all fees, out-of-pocket costs and
expenses in connection with such defense.

  (a)   Such defense shall be conducted through counsel selected by Purchaser
(“Purchaser Claim Counsel”). Purchaser shall notify Sellers of the identity of
Purchaser Claim Counsel promptly after the appointment of Purchaser Claim
Counsel. Notwithstanding the foregoing, Purchaser Claim Counsel shall have no
conflict of interest relative to Sellers or Sellers’ Affiliates with respect to
the representation, and shall not assume any representation of Purchaser in a
dispute between the Parties during the time of its retention as Purchaser Claim
Counsel; in any of those cases, unless otherwise agreed by Sellers, Purchaser
shall promptly select new Purchaser Claim Counsel and shall notify Sellers of
the identity of the new Purchaser Claim Counsel upon its appointment.     (b)  
Sellers shall have the right to participate fully in the defense of Purchaser
Controlled Litigation and to employ separate counsel at its own expense, it
being understood that Purchaser shall control the defense. Purchaser Claim
Counsel shall communicate regularly with Sellers, including, without limitation:
(i) informing Sellers of material developments related to Purchaser Controlled
Litigation; (ii) promptly furnishing to Sellers copies of all substantive
correspondence, pleadings, briefs or other documents related to Purchaser
Controlled Litigation; (iii) reasonably coordinating with Seller to enable
Seller to join in any material conference call on Purchaser Controlled
Litigation; (iv) coordinating with Sellers to enable Sellers to attend any
substantive meeting that involves Purchaser Controlled Litigation; and (v)
promptly informing Sellers of all non-monetary terms of any proposed settlement
of Purchaser Controlled Litigation.     (c)   Purchaser, its Affiliates and
Claim Counsel, may not settle or otherwise compromise any Purchaser Controlled
Litigation, or portion thereof, on behalf of the respective defendant, without
the prior written consent of Sellers (not to be unreasonably withheld or
delayed).

13.4 Cooperation of the Parties
Each Party shall use best efforts to give the other Parties its full cooperation
in defending all claims subject to indemnification hereunder and shall enter
into a joint defense agreement for that purpose. Such cooperation shall include
but not be limited to (i) furnishing and, upon request, procuring the attendance
of potential witnesses for interview, preparation, submission of witness
statements and the giving of evidence at any related

66

--------------------------------------------------------------------------------

 

hearing; (ii) promptly furnishing documentary evidence to the extent available
to it or its Affiliates (including the Group Companies); (iii) providing access
to any other relevant party, including but not limited to any agents of or
advisers to the parties as reasonably needed; and (iv) sharing of legal advice
subject to common interest privilege.
13.5 Insurance Benefits
All payment obligations of Sellers for any indemnifiable Damages under this
Section 13 shall be net of any insurance or other prior or subsequent recoveries
actually received by Purchaser or its Affiliates (including the Group Companies
after Closing) arising out of or relating to the facts that gave rise to the
right of indemnification, it being understood and agreed that Purchaser or its
Affiliates (including the Group Companies after Closing) will use best efforts
to pursue such insurance and other recoveries.
13.6 Tax Benefits
All payment obligations of Sellers for any indemnifiable Damages under this
Section 13 shall be net of Tax Benefits, if any.
13.7 Mitigation
Purchaser shall be under a general obligation in accordance with Section 254 BGB
and Purchaser shall use its commercially reasonable efforts to mitigate the
amount of any Damages under this Section 13.
13.8 Payment
Sellers shall pay to Purchaser within ten Business Days after the provision by
Purchaser of evidence that the Damage has been incurred or suffered, the amount
of any claim for indemnification hereunder, but in any event not before the
respective indemnifiable Damage is due for payment by Purchaser. Upon request of
Purchaser, Sellers shall pay such amounts directly to any third party to which
such amounts are due.
13.9 Characterization of Indemnification Payments
Payments by Sellers under this Section 13 shall be treated as an adjustment to
the Purchase Price allocated to the relevant Company (including its
Subsidiaries) pursuant to Section 4.1.4.

67

--------------------------------------------------------------------------------

 

13.10 Exclusivity of Remedies
The remedies provided in this Section 13 comprise the exclusive remedies of
Purchaser with respect to the Scheduled Litigation. Purchaser shall have no
recourse to other remedies, except to enforce payment or performance under this
Section 13.
14.
PRE-SALE REORGANIZATION
14.1 Continuance of Pre-Sale Reorganization.
Exhibit 14.1(a) sets forth certain reorganization measures that Sellers have
taken or are in the process of taking or will take, as the case may be, and the
status of the Pre-Sale Reorganization as of the Signing Date. Sellers shall
continue and complete, and take all actions necessary or expedient in connection
with, the Pre-Sale Reorganization prior to the Effective Date, except for the
actions contemplated to occur after the Effective Date as set forth in
Exhibit 14.1(a). To the extent, after giving effect to the Pre-Sale
Reorganization, Sellers and Sellers’ Affiliates own any assets of whatever kind
and nature, real or personal, tangible or intangible, intended to be used
exclusively in the operation or conduct of the Business, Sellers and Sellers’
Affiliates will transfer such assets to the Group Companies without charge. Any
such material assets that are used (but not used exclusively) by the Group
Companies shall be made available to the Group Companies by Sellers and Sellers’
Affiliates on the same basis as they are currently made available. The foregoing
provisions shall apply mutatis mutandis to assets or rights held by the Group
Companies that are used by Seller or Sellers’ Affiliates. The foregoing
provisions do not apply to assets or rights (i) covered by Section 16 hereof,
(ii) used, held for use or intended to be used solely in the Excluded
Jurisdictions set forth in Exhibit 14.1(b) (“Excluded Jurisdictions”) until the
time of and subject to the acquisition of applicable Excluded Business,
(iii) used, held for use or intended to be used in providing the services to be
provided in the Transitional Services Agreement and the “excluded services” set
forth in Exhibit 16.3, (iv) provided pursuant to the Brand License Agreement or
(v) provided under supply or distribution agreements that are the subject of
Section 10.13.3. Except as set forth in Exhibit 14.1(a) as of and following the
Effective Date the Group Companies shall have no liabilities or obligations of
any nature (whether accrued, absolute, contingent, unasserted or otherwise)
arising out of the operation or conduct of any business of Sellers or Sellers’
Affiliates other than the Business. The activities described in this
Section 14.1, together with the actions set forth in Section 16.2, are referred
to as the “Pre-Sale Reorganization”.
14.2 Completion by Sellers of Actions not Finalized upon Closing
To the extent any aspect of the Pre-Sale Reorganization is not fully completed
by the Closing Date, Sellers shall promptly complete, and shall have the right
to reasonably direct

68

--------------------------------------------------------------------------------

 

and control the completion of, any such outstanding measure, and Purchaser shall
cause the Group Companies to reasonably comply with any corresponding requests
by Sellers. All costs and liabilities resulting from the Pre-Sale Reorganization
shall be borne by Sellers, except Purchaser’s and the Group Companies’ own
internal costs and overhead. Sellers shall, from time to time after Closing,
inform Purchaser of the then current status of the Pre-Sale Reorganization
measures outstanding at Closing.
14.3 Conversion and Transfer of EMD Crop Bioscience Inc.
Sellers shall procure that EMD Crop Bioscience Inc. shall be transferred to
Sellers or Sellers’ Affiliates prior to the Effective Date. Sellers will fully
indemnify (without caps, baskets or thresholds or other limitations) Purchaser
and its Affiliates from any costs, expenses and liabilities in connection with
EMD Crop Bioscience Inc.
15.
CONDUCT OF BUSINESS AFTER SIGNING
15.1 Activities between Signing and Closing

  15.1.1   Ordinary Course. Prior to the Closing Date, Sellers shall cause the
Group Companies to operate their business in the ordinary course of business
consistent with past practice and shall use their reasonable best efforts to
comply with all applicable material laws and to preserve intact their respective
current business organizations, keep available the services of their current
officers and employees, keep their relationships with customers, suppliers,
licensors, licensees, consultants, distributors and others having business
dealings with them, keep their research and development relationships and
arrangements with collaborators, contract research organizations, clinical
research sites and others, and maintain their franchises, rights and permits,
except (i) as set forth on Exhibit 15.1.1, (ii) in accordance with the Pre-Sale
Reorganization or (iii) otherwise expressly in accordance with this Agreement.  
  15.1.2   Material Actions. Prior to the Closing Date, except (i) as set forth
on Exhibit 15.1.1, (ii) in accordance with the Pre-Sale Reorganization or
(iii) otherwise expressly in accordance with this Agreement, no Seller shall,
and Sellers shall procure that the Group Companies will not, without the prior
written consent of Purchaser, which shall not be unreasonably withheld,

  (a)   issue, deliver, sell or grant (i) any shares of its capital stock,
(ii) any bonds, debentures, notes or other indebtedness of any kind having the
right to vote (or convertible into, or exchangeable for, securities having the
right

69

--------------------------------------------------------------------------------

 

      to vote) on any matters on which holders of Shares may vote or other
voting securities, (iii) any securities convertible into or exchangeable for, or
any options, warrants or rights to acquire, any such shares, voting securities
or convertible or exchangeable securities, (iv) any “phantom” stock, “phantom”
stock rights, stock appreciation rights or stock-based performance units or
(v) any options, warrants, rights, securities, units, commitments, contracts,
arrangements or undertakings of any kind that give any Person the right to
receive any economic benefits and rights accruing to holders of capital stock of
any Group Company, other than the issuance of shares of its capital stock by a
wholly owned Group Company to another wholly owned Group Company,     (b)  
purchase, redeem or otherwise acquire any shares of capital stock of any of the
Group Companies or any other securities thereof or any rights, warrants or
options to acquire any such shares or other securities,     (c)   sell,
transfer, create any Encumbrances on or otherwise dispose of any of the Shares,
or grant any options, warrants, pre-emptive rights, rights of first refusal or
other rights to purchase or obtain the Shares,     (d)   make any change in
accounting methods, principles or practices materially affecting the reported
consolidated assets, liabilities or results of operations of the Group
Companies, except insofar as may have been required by a change in IFRS or
applicable statute, law (including common law), ordinance, rule or regulation,  
  (e)   incur any Indebtedness (other than Financial Debt that may be prepaid
without premium or penalty or other Indebtedness incurred in the ordinary course
of business and consistent with past practice) or make any loans, advances or
capital contributions to, or investments in, any other Person, other than to or
in the Group Companies or pursuant to the Cash Management arrangements,     (f)
  make or incur any capital expenditure that is not budgeted in the 2007 annual
budget and that, individually, is in excess of EUR 2,500,000,     (g)   make or
change any Tax election or method of accounting for Tax purposes or settle or
compromise any Tax liability or refund, other than in the ordinary course of
business consistent with past practice or as required by applicable statute, law
(including common law), ordinance, rule or regulation or that is not material to
the Group Companies, taken as a whole,

70

--------------------------------------------------------------------------------

 

  (h)   (i) pay, discharge or satisfy any material claims, liabilities or
obligations (absolute, accrued, asserted or unasserted, contingent or
otherwise), other than the payment, discharge or satisfaction, (a) of
Indebtedness (including Financial Debt) or (b) in the ordinary course of
business or as required in accordance with their terms, of liabilities to the
extent reflected or reserved against in, or contemplated by, the 2006 Financial
Statements or incurred in the ordinary course of business consistent with past
practice, (ii) waive any material claims or rights of substantial value or
(iii) waive the benefits of, or agree to modify in any material way, any
material confidentiality or similar agreement to which any Group Company is a
party other than in the ordinary course of business, or     (i)   effect any
measure or act with respect to the Companies for

  (i)   the liquidation of a Group Company, any transformation or merger of a
Group Company, the conclusion of any enterprise agreement within the scope of
Sections 291, 292 AktG, or any change of the articles of association or other
comparable charter or organizational documents of a Group Company;     (ii)  
the acquisition or disposal of Legal Entities or businesses (through the
acquisition or disposition of shares or assets) or the conclusion of any
partnership, joint venture or consortium agreement, in each case outside the
ordinary course of business, if it leads to payments by the Group Companies in
excess of EUR 5,000,000 per annum;     (iii)   the acquisition, disposal or
encumbrance of any fixed assets, including real property, other than in the
ordinary course of business, with an individual or aggregate value of or
exceeding EUR 2,500,000;     (iv)   the acquisition or disposal, whether
outright, by way of license or otherwise, of Intellectual Property other than in
the ordinary course of business, unless such transaction provides for a total
consideration of less than EUR 2,500,000 per annum or EUR 5,000,000 over its
term;     (v)   other than in the ordinary course of business consistent with
past practice, any material change in the terms of employment (including
material changes to compensation, retirement benefits, severance or termination
benefits, change in control payments and benefit plans or arrangements),
including the termination without

71

--------------------------------------------------------------------------------

 

      cause, of any Director, Officer or Key Employee of any Group Company;    
(vi)   in the case of any Officer or employee of the Group Companies who, as of
the Signing Date, primarily performs services in a position with the Group
Companies, the transfer of any such Officer or employee to a position with any
of Sellers or Sellers’ Affiliates in which such employee will not be considered
an employee of the Group Companies as of the Closing;     (vii)   the grant or
creation of any Encumbrance over the Shares or any Encumbrances other than
Permitted Encumbrances on any assets or Owned Real Property of the Group Company
other than Encumbrances on any assets or Owned Real Property that in the
aggregate, together with Encumbrances existing on the Signing Date, are
immaterial to any Group Company; or     (viii)   the material modification,
amendment or termination of any Material Agreement or any agreement provided
pursuant to in Section B of Exhibit 9.18, or the entry into any agreement that,
if it were in effect on the Signing Date, would have constituted a Material
Agreement or would have been required to be provided pursuant to Section B of
the Exhibit 9.18 other than in each case, in the ordinary course of business.

15.2 Advice of Change
Sellers will promptly advise Purchaser orally and in writing of any state of
facts, event, change, effect, development, condition or occurrence that,
individually or in the aggregate, could reasonably be expected to have a
Material Adverse Effect.
15.3 Consultation
In connection with the continuing operation of the Business between the Signing
Date and the Closing Date, Sellers and Sellers’ Affiliates will use reasonable
best efforts to consult in good faith on a regular basis with the
representatives of Purchaser to report all material operational developments and
the status of ongoing operations; provided that the consultation required by
this Section 15.3 will be subject to compliance with applicable law and
conducted in a manner so as not to disrupt in any material respect the business
of the Group Companies. Sellers acknowledge that such consultation will not
constitute a waiver by Purchaser of any rights it may have under this Agreement
and that Purchaser

72

--------------------------------------------------------------------------------

 

will not have any liability or responsibility for any actions of the Group
Companies or any of their respective directors or officers with respect to
matters that are the subject of such consultations.
15.4 Activities between Effective Date and Closing Date
If the Effective Date is prior to the Closing Date, then, except as set forth in
Exhibit 15.1.1, no Seller shall, and Sellers shall procure that the Group
Companies will not, without the prior written consent of Purchaser (a) declare,
make, pay or otherwise effect any dividends, return of capital, or other
distributions by the Companies to Sellers or Sellers’ Affiliates or (b) waive
any material claims of the Group Companies. All further obligations under
Section 15.1 remain unaffected.
15.5 Employee Consultations
Purchaser and Sellers shall, and shall cause their respective Affiliates, to the
extent required under applicable law or by agreement, to (i) notify their
employees of the transactions contemplated by this Agreement and (ii) inform or
consult with the works councils, unions or equivalent employee representation
bodies as listed in Exhibit 15.5 with respect to the transactions contemplated
by this Agreement. Each Party shall provide the other Party with such
information as they may reasonably request in connection with such notifications
and consultations.
15.6 Financing
Sellers and Sellers’ Affiliates shall provide, and shall cause their respective
Representatives to provide, and during the period prior to Closing shall cause
the Group Companies and their Representatives to provide, all reasonable
cooperation in connection with the arrangement of the Financing (including Debt
Securities in lieu of or to refinance any Bridge Financing and any registered
offering or exchange offer with respect to any Debt Securities) as may be
reasonably requested by Purchaser including (i) participation in meetings,
drafting sessions and due diligence sessions, (ii) furnishing Purchaser and its
financing sources as soon as reasonably practicable after the Signing Date and
prior to the Closing Date with the following information regarding the Group
Companies required by Regulation S-X and Regulation S-K and the other rules and
regulations under the United States Securities Act of 1933, as amended (the
“U.S. Securities Act”): (A) audited financial statements (including balance
sheets, statements of income and cash flows, a statement of shareholders equity
and related notes) audited for the most recently completed three fiscal years
and reviewed (as per “SAS 100” (or equivalent)) for the most recently completed
interim periods required to be included as of the Closing Date and the
corresponding interim periods in the prior year, each of them prepared in
accordance with IFRS and stated in Euros, and reconciled to United States
generally accepted accounting

73

--------------------------------------------------------------------------------

 

principles in accordance with applicable requirements of the United States
Securities and Exchange Commission, together with the report (unqualified, if
obtainable) of an independent registered public accounting firm and certificate
that such accounting firm was independent under, and has audited such financial
statements in accordance with, applicable requirements of the United States
Securities and Exchange Commission (the “Required Financial Information”) and
(B) such other information as Purchaser may reasonably request, (iii) assisting,
and using reasonable best efforts to cause its accountants to assist, Purchaser
and its financing sources in the preparation of (A) pro forma financial
statements of Purchaser for the most recently completed full fiscal year of
Purchaser and the most recently completed interim periods required to be
included as of the Closing Date, prepared in accordance with United States
generally accepted accounting principles and Regulation S-X under the U.S.
Securities Act, (B) offering documents for the Financing, (C) materials for
rating agency presentations and (D) Financing agreements and related schedules
and exhibits, including schedules of existing Indebtedness and Encumbrances of
Group Companies, (iv) cooperating with the marketing efforts of Purchaser and
its financing sources for the Financing, (v) using reasonable best efforts to
cause the provision of consents of accountants for use of their reports in any
materials relating to the Financing and any required filings with the Securities
and Exchange Commission, (vi) facilitating the pledging of collateral and the
provision of guarantees by the Group Companies, (vii) using reasonable best
efforts to obtain accountants’ comfort letters, and (viii) obtaining legal
opinions, officer’s certificates, surveys and title insurance; provided that
none of the Sellers, Sellers’ Affiliates or Group Companies shall be required to
pay any commitment or other similar fee or incur any other expense, except for
non-reimbursable out-of-pocket expenses and, in the case of internal overhead
costs, reasonably allocated internal overhead costs in excess of Euro 250,000,
in connection with the Financing (in the case of Group Companies prior to
Closing). Sellers and Sellers’ Affiliates shall discuss with Purchaser and
Purchaser’s representatives the preparation of the requested financials
hereunder and the scope and conduct of the audit and shall consult with them and
keep them informed during the audit process. Sellers and Sellers’ Affiliates
shall also permit Purchaser and Purchaser’s representatives to discuss and
review the conduct of the audit with the accounting firm conducting the audit.
Purchaser shall, promptly upon request by the Sellers, reimburse Sellers,
Sellers’ Affiliates and the Group Companies for all reasonable out-of-pocket
costs and reasonably allocated internal overhead costs (not to exceed, in the
case of such overhead costs, Euro 250,000 in the aggregate) incurred by Sellers,
Sellers’ Affiliates and the Group Companies in connection with such cooperation,
and, without prejudice to Section 9.5, Purchaser shall fully indemnify Sellers’
Representative, Sellers, Sellers’ Affiliates and their respective officers,
directors, employees and controlling persons against any costs, expenses or
other liability that may arise from the use of the reconciliation to United
States generally accepted accounting principles included in the Required
Financial Information. The cooperation by Sellers and Sellers’ Affiliates in
connection with Purchaser’s use of such reconciliation shall not constitute
their adoption, support of or representation concerning such reconciliation and
they shall have no responsibility for their use (it being understood and agreed,
however, that a customary representation letter to the independent registered
public accounting firm shall be provided in connection with such
reconciliation). No Seller or Sellers’ Affiliate shall have any responsibility
for, and any such Seller or Seller’s Affiliate shall be indemnified against all

74

--------------------------------------------------------------------------------

 

losses, liabilities, costs and expense arising out of information included in
any Purchaser offering document or public filing other than information provided
by such Seller or Seller’s Affiliate expressly for inclusion therein (including
the Required Financial Information), it being understood that any information so
provided that is used in a manner or form other than the use in the manner or
form reasonably provided by any Seller or Sellers’ Affiliate shall be deemed not
provided by such Seller or Sellers’ Affiliate. Notwithstanding anything to the
contrary in this Section 15.6, the obligations set forth in this Section shall
be subject to the advice of counsel for Sellers and Sellers’ Affiliates that the
performance requested is in accordance with applicable legal requirements.
It is understood and agreed that for so long as Sellers and Sellers’ Affiliates
use their best efforts to perform all obligations and requirements provided in
this Section 15.6, the sole remedies for failure to perform in all material
respects such obligations and requirements shall be (x) Purchaser’s right not to
Close or (y) the right to specifically enforce the obligations of Sellers and
Sellers’ Affiliates to use their best efforts to perform such obligations and
requirements.
15.7 Excluded Businesses
After the Closing Date, Purchaser shall have the option to, or to cause any of
its Affiliates to, require Sellers and Sellers’ Affiliates to transfer to
Purchaser or one of its Affiliates any of the generic development, manufacture
and distribution businesses of Sellers and Sellers’ Affiliates for generic drugs
and specialty products in the Excluded Jurisdictions (the “Excluded
Businesses”). Purchaser may notify Seller of the exercise of such option with
respect to any Excluded Businesses only within the first two years after the
Closing Date. In consideration for the transfer of any Excluded Business,
Purchaser’s only payment obligation in connection with such transfers shall be
to pay to Sellers and Sellers’ Affiliates the actual costs incurred by Sellers
and Sellers’ Affiliates in separating the Excluded Businesses of Sellers and
Sellers’ Affiliates from any other businesses of Sellers and Sellers’ Affiliates
(including transfer taxes and value added taxes and restructuring costs,
including any required severence costs), provided that (i) such transfers shall
be on a “debt free” and “cash free” basis and (ii) Purchaser or its Affiliates
may only acquire Excluded Businesses if it also acquires all Excluded Businesses
in the same region (which shall be categorized as Latin America, Eastern Europe
and Asia). Sellers and Sellers’ Affiliates, on the one hand, and Purchaser, on
the other hand, shall negotiate all applicable definitive documentation in good
faith and in an orderly fashion after the Closing Date. Sellers and Sellers’
Affiliates shall use their reasonable best efforts to separate as soon as
practicable but in an orderly fashion after the Closing Date the respective
Excluded Businesses from any other businesses of Sellers and Sellers’
Affiliates. Sellers and Sellers’ Affiliates shall after the Closing Date
undertake the actions under this Section 15.7 in a commercially reasonable
manner that preserves the economic value of the transactions contemplated by
Section 15.7. Sellers and Sellers’ Affiliates shall consult with Purchaser after
the Closing Date regarding such actions and shall reasonably accommodate
Purchaser’s requests with respect thereto. It is understood and agreed that none
of the

75

--------------------------------------------------------------------------------

 

provisions in this Section 15.7 shall be required to be complied with to the
extent they would reasonably be expected to prevent or materially delay the
consummation of the transactions contemplated by this Agreement.
15.8 Non-Solicitation and Non-Compete

  15.8.1   Sellers and Sellers’ Affiliates understand that Purchaser shall be
entitled to protect and preserve the going concern value of the business of the
Group Companies (including their know-how) to the extent permitted by law and
that Purchaser would not have entered into this Agreement absent the provisions
of this Section 15.8 and, therefore, subject to Section 15.8, for a period of
two (2) years from the Closing Date, (i) Sellers and Sellers’ Affiliates shall
not directly or indirectly solicit, recruit or hire any current or former
director, officer or other employee of the Group Companies or solicit or
encourage any employee of the Group Companies to leave the employment of the
Group Companies; provided, however, that the foregoing will not operate to
prohibit Sellers and Sellers’ Affiliates from conducting general, non-targeted
solicitations for employment or hiring persons who respond to such general,
non-targeted solicitations for employment or hiring any person that left the
employ of the Group Companies more than six months previously or (ii) acquire
any Interests in any Legal Entity engaged in the same line of business as the
Business if the activities associated with such same line of business as the
Business represent 20% or more of such Legal Entity’s consolidated annual
revenues or assets, it being understood that this clause (ii) does not apply in
the case of the acquisition of an Interest in a Legal Entity engaged in the same
line of business as the retained business of the Sellers’ Representative group.
    15.8.2   It is the intention of Parties that if any of the restrictions or
covenants contained in Section 15.8.1 is held to cover a geographic area or to
be for a length of time which is not permitted by applicable law, or in any way
construed to be too broad or to any extent invalid, such provision shall not be
construed to be null, void and of no effect, but to the extent such provision
would be valid or enforceable under applicable law, such provision shall be
construed and interpreted or reformed so as to provide for a restriction or
covenant having the maximum enforceable geographic area, time period and other
provisions (not greater than those contained herein) as shall be valid and
enforceable under applicable law. Each of the parties acknowledges, however,
that Section 15.8.1 has been negotiated by the Parties and that the geographical
and time limitations on activities are reasonable in light of the circumstances
pertaining to the Parties.     15.8.3   The Parties agree that the provisions of
this Section 15.8 may be specifically enforced by any court of competent
jurisdiction. The provisions on arbitration as contained in Section 21.7 shall
not apply to any disputes arising out of or in connection with this
Section 15.8.

76

--------------------------------------------------------------------------------

 

15.9 Additional Covenants

  15.9.1   Sellers and Sellers’ Affiliates will take all steps necessary to
ensure that, from and after the Closing Date, current and former employees of
Sellers and Sellers’ Affiliates cease to participate in any benefit plan or
benefit agreement of any of the Group Companies.     15.9.2   Sellers and
Sellers’ Guarantor shall take the actions set forth on Exhibit 15.9.2 with
respect to certain pension or similar post-retirement matters.     15.9.3   On
or prior to Closing, Sellers’ Representative shall deliver to Purchaser a
“FIRPTA” certificate substantially in the form attached hereto as
Exhibit 15.9.3, duly executed and acknowledged.

16.
BRAND LICENSE, INTELLECTUAL PROPERTY,
INSURANCE AND GUARANTEES
16.1 Brand License Agreement

  16.1.1   License. Subject to the satisfaction or waiver of the Closing
Conditions and the terms of this Agreement, Merck and Purchaser shall enter into
a trademark license agreement regarding the use of certain Licensed Marks (as
defined therein), including the “Merck” Trademark, substantially in the form set
forth in Exhibit 16.1.1 (the “Brand License Agreement”).     16.1.2   Use by
Group Companies. Purchaser shall cause the Group Companies not to continue the
use after the Closing Date, and Purchaser shall be responsible and liable
towards Merck for any use after the Closing Date by any Group Company, of
(i) the “Merck” name or logo or any variation thereof (including any Trademark
that comprises or consists of the term “Merck” or any variation thereof), or
(ii) any Trademark listed on Exhibit A to the Brand License Agreement, other
than as permitted in the Brand License Agreement.     16.1.3   Corporate Names
of Group Companies. Purchaser shall, and shall cause the Group Companies to,
take all necessary and appropriate actions, to change each of the names of the
Group Companies that use the name “Merck” or any variation thereof as part of
their corporate name, by deleting such term from their corporate name in
accordance with the Brand License Agreement.

77

--------------------------------------------------------------------------------

 

16.2 Intellectual Property

  16.2.1   “Merck” Trademark. Purchaser acknowledges that Sellers’
Representative retains and owns all right, title and interest in the Trademark
“Merck” and any Trademarks that include, comprise or consist of the term
“Merck”, any variation thereof that is or was used in connection with the
Business and the goodwill symbolized by and connected with the use thereof,
including the Trademarks set forth on Exhibit B of the Brand License Agreement.
Should any such Trademarks be registered in the name of a Group Company, Sellers
shall have the right to amend or transfer the applicable Trademark registration
to reflect that such Trademark is owned by Sellers’ Representative. Any such
Trademark shall be subject to the provisions governing Licensed Marks under the
Brand License Agreement to the extent it is used by a Group Company on the
Signing Date.     16.2.2   Intellectual Property Used by Seller Group. All
Intellectual Property (other than as set forth in Section 16.2.1 above) that is
owned by a Group Company, but used by any of Sellers or Sellers’ Affiliates
outside of the Business shall be transferred, at the election of Sellers, to
Sellers or one of Sellers’ Affiliates. Any such Intellectual Property other than
Trademarks shall be subject to the license granted under Section 16.2.3 below.
Any Trademarks included in, or including, such Intellectual Property, shall be
subject to the provisions governing Licensed Marks under the Brand License
Agreement to the extent they are used by a Group Company on the Signing Date.
All Intellectual Property that is owned by Sellers or Sellers’ Affiliates, but
used exclusively by the Group Companies shall be transferred, at the election of
Purchaser, to Purchaser or any of its Affiliates.     16.2.3   Additional
Intellectual Property. In the event that, following the Closing Date, either
party identifies any Intellectual Property (other than Trademarks) that (i) is
owned by Sellers or any Sellers’ Affiliate, (ii) is used by the Business (or, at
the time of and subject to their acquisition, any Excluded Businesses), other
than solely in connection with excluded services set forth in Exhibit 16.3,
(iii) is not provided to the Group Companies pursuant to the Brand License
Agreement or the Transitional Services Agreement, (iv) is or was not provided to
the Group Companies pursuant to any supply or distribution agreement that is the
subject of Section 10.13.3 (“Additional Intellectual Property”), effective as of
such identification, the Sellers or such Sellers’ Affiliate, as applicable,
hereby grant to the Group Companies the non-exclusive, royalty free, fully paid,
perpetual, freely sublicensable right and license to use such Additional
Intellectual Property (a) in the conduct of the Business and (b) subject to and
from and after the acquisition by Purchaser of any Excluded Business, in the
conduct of such Excluded Business.     16.2.4   Transfer of Certain Trademarks.
Sellers will ensure that EMD Chemicals Inc. transfers the Trademark EpiPen prior
to the Effective Date to an entity to be designated by Purchaser. Seller 1 will
transfer the Trademarks Duranifin and

78

--------------------------------------------------------------------------------

 

      Enadura prior to the Effective Date to an entity to be designated by
Purchaser. The consideration payable for the transfer of the aforementioned
Trademarks will be part of the Purchase Price as indicated in Exhibit 4.1.4. The
Parties will ensure that the out-of-pocket costs incurred in connection with
such transfers will be borne by Sellers and Sellers’ Affiliates.     16.2.5  
Written Materials. In the event that, following the Closing Date, Purchaser or
one of the Group Companies identifies written materials evidencing Intellectual
Property owned by Sellers or any Sellers’ Affiliate that are in the possession
of Purchaser or one of the Group Companies, Purchaser or such Group Company, as
applicable, agrees (i) to return to Sellers or destroy such written materials,
(ii) not to use such written materials for any purpose and (iii) not to disclose
such written materials to any third party. In the event that, following the
Closing Date, a Seller or any Sellers’ Affiliate identifies written materials
evidencing the Intellectual Property used exclusively in connection with the
Business (or after and subject to its acquisition by Purchaser, any Excluded
Business), Seller or such Sellers’ Affiliate, as applicable, agrees (i) to
return to Purchaser or destroy such written materials, (ii) not to use such
written materials for any purpose and (iii) not to disclose such written
materials to any third party.

16.3 Transitional Service Agreement
Purchaser will cooperate with Sellers and Sellers’ Affiliates, and Sellers and
Sellers’ Affiliates will cooperate with Purchaser, in connection with (i) the
establishment of secure system connectivity, and (ii) the establishment of
controlled access to data (collectively, “Secure System Separation Activities”).
Purchaser shall bear all costs and expenses incurred by it in connection with
such cooperation, and shall reimburse Sellers and Sellers’ Affiliates for all
costs and expenses incurred by them in connection with Separation Activities.
Prior to Closing, Sellers and Sellers’ Affiliates shall cooperate with Purchaser
in order to discuss in further detail the services set forth on the schedules to
the Transitional Services Agreement. In the event that, between the Signing Date
and Closing, the parties identify any service that (i) is not set forth on the
schedules to the Transitional Services Agreement, (ii) was provided by Sellers
or Sellers’ Affiliates to the Group Companies prior to the Closing Date,
(iii) cannot be obtained from a third party using commercially reasonable
efforts, and (iv) is not listed as an excluded service on Exhibit 16.3, the
parties will work together in good faith to determine the scope, any appropriate
cost, term and timeline for providing such services, including the cost of any
Secure System Separation Activities associated therewith, and the Sellers or
Sellers’ Affiliates will provide any such services pursuant to the Transitional
Services Agreement.

79

--------------------------------------------------------------------------------

 

16.4 Insurance Coverage
Purchaser agrees that the existing insurance coverage for the Group Companies as
listed on Exhibit 16.4 will terminate as of Closing as a result of (i) automatic
termination provisions, (ii) notices by Sellers’ Affiliates or the insurers or
(iii) by agreement with the respective insurers. Purchaser acknowledges and
agrees that Sellers will not reimburse Purchaser or any Group Company for any
premiums or allocations on account of premiums paid or payable by the Group
Companies for any period not fully covered by insurance due to the termination
of the insurance as of or in connection with the Closing provided that Sellers
will grant such reimbursement if and when and to the extent Sellers or Sellers’
Affiliates are reimbursed by the respective insurer for partial periods not
covered because policies are terminated as a result of the transactions
contemplated hereby.
16.5 Merck Guarantees

  16.5.1   Merck Guarantees. Purchaser shall use its best efforts to assist
Sellers and Sellers’ Affiliates in obtaining the release from the obligations
under the guarantees, letters of comfort or similar instruments with respect to
the Group Companies set forth in Exhibit 16.5.1 (the “Merck Guarantees”).    
16.5.2   Indemnification by Purchaser. Subject to Sellers’ obligations to
Purchaser hereunder, Purchaser shall indemnify Sellers and Sellers’ Affiliates
against, and hold them harmless from, any claims made by the beneficiaries of
the Merck Guarantees to the extent the obligated party under the Merck
Guarantees has not been indemnified, or received reimbursement of payments made
on account of such claims, by or from the Group Companies prior to the Closing
Date.

16.6 Sellers’ Guarantees
Sellers guarantee to Purchaser, as from the Closing Date, the payment by Gennium
Pharma Inc. of loan receivables owed by it to Genpharm Inc. to the extent such
receivables are accounted for as Cash in the Effective Date Financial
Statements. In the event Gennium Pharma Inc. does not pay all such amounts when
due, Sellers shall pay such amounts to Purchaser within 30 days after the due
date without demand.

80

--------------------------------------------------------------------------------

 

17.
SELLERS’ GUARANTOR AND SELLERS’ REPRESENTATIVE
17.1 Sellers’ Guarantor
Sellers’ Guarantor hereby unconditionally and irrevocably guarantees the full
and punctual performance of all obligations of Sellers under this Agreement.
Sections 768 and 770 BGB shall apply.
17.2 Guarantees by Sellers’ Guarantor
Sellers’ Guarantor hereby guarantees (garantiert) by way of an independent
guarantee (verschuldensunabhängiges Garantieversprechen) pursuant to Section 311
para. 1 BGB that the following statements are complete and accurate on the
Signing Date and the Closing Date:

  17.2.1   Existence. Sellers’ Guarantor is duly established and validly
existing under the laws of the Federal Republic of Germany.     17.2.2  
Capacity. The execution of this Agreement by Sellers’ Guarantor and the
performance of its obligations hereunder are within its corporate powers, do not
violate its constitutional documents and have been authorized by all necessary
corporate action on behalf of Sellers’ Guarantor. Sellers’ Guarantor is not
bound by any judicial or governmental order (gerichtliche oder behördliche
Verfügung) that would prohibit the performance of its obligations contemplated
hereunder.     17.2.3   No Insolvency. No insolvency proceedings have been
opened over the assets of Sellers’ Guarantor and no circumstances exist that
would require Sellers’ Guarantor or its Directors and Officers or shareholders
to apply for the opening of such proceedings.     17.2.4   Enforceability.
Assuming due authorization, execution and delivery by Purchaser, this Agreement
constitutes legal, valid and binding obligations of Sellers’ Guarantor
enforceable in accordance with its terms.

17.3 Remedies
In the event of any breach or non-fulfillment of any guarantee set forth in
Section 17.2, Sellers Guarantor shall put Purchaser into the position that
Purchaser would have been in

81

--------------------------------------------------------------------------------

 

had the breach not occurred or the guarantee had been fulfilled
(Naturalrestitution). Section 10 applies, mutatis mutandis.
17.4 Authorization of Sellers’ Representative
Each Seller has irrevocably authorized and appointed, and for the avoidance of
doubt hereby irrevocably repeats such authorization and appointment, Sellers’
Representative as its true and lawful representative to exercise in such
Seller’s name and on its account all rights of such Seller and to take all
actions and to make and receive all information, notices and declarations on
behalf of such Seller in connection with this Agreement or exercise all other
rights as otherwise provided for in this Agreement. Sellers hereby appoint
Sellers’ Representative as their agent for service of process in the Federal
Republic of Germany for any legal proceedings involving Sellers that arise out
of or in connection with this Agreement. Purchaser shall direct, send and
deliver all information, notices and declarations for any Seller only to, and
conduct any communication with Sellers only through, Sellers’ Representative.
18.
PUBLIC ANNOUNCEMENTS AND CONFIDENTIALITY
18.1 Confidentiality

  18.1.1   Each of Sellers and Sellers’ Affiliates will keep the Confidential
Information strictly confidential and will not (except as required by applicable
law, regulation or legal process, and only after compliance with Section 18.1.3
below), without Purchaser’s prior written consent, disclose any information in
the Confidential Information, except that the Confidential Information (or
portions thereof) may be disclosed to affiliates, directors, officers,
employees, advisors, agents, and representatives (such persons collectively,
“Representatives”) of Sellers or Sellers’ Affiliates who need to know such
information (it being understood that prior to such disclosure such
Representatives will be informed of the confidential nature of the Confidential
Information and the Sellers’ obligations hereunder). Sellers and Sellers’
Affiliates agree to be responsible for any action by their Representatives that
if taken by them would constitute a breach of this Section 18.1.     18.1.2  
The term “Confidential Information” includes all information with respect to the
Group Companies and the Business, including all copies, reproductions,
summaries, analyses or extracts thereof or based thereon, but does not include
any information that at the time of disclosure or thereafter is generally known
by the public (other than as a result of its disclosure by Sellers or Sellers’
Affiliates after the Signing Date in violation of this Agreement).

82

--------------------------------------------------------------------------------

 

  18.1.3   In the event that Sellers or Sellers’ Affiliates receive a request or
are required to disclose all or any part of the information contained in the
Confidential Information pursuant to the terms of a valid and effective subpoena
or order issued by a court of competent jurisdiction or a federal, state or
local governmental or regulatory body or pursuant to a civil investigative
demand or similar judicial process or otherwise pursuant to applicable law,
Sellers agree to (i) promptly notify Purchaser in writing of the existence,
terms and circumstances surrounding such a request or requirement, (ii) consult
with Purchaser on the advisability of taking legally available steps to resist
or narrow such request or requirement, and (iii) if disclosure of such
information is required, disclose only any such information that Sellers are
advised by legal counsel is legally required to be disclosed and will exercise
reasonable best efforts to obtain an order or other reliable assurance that
confidential treatment will be accorded to such information. Any disclosure of
information shall be limited to the extent Sellers or Sellers’ Affiliates are
advised by legal counsel that they are obliged to disclose.     18.1.4   The
existing confidentiality agreement between Purchaser and Sellers’ Representative
dated 6 March 2007 (the “Confidentiality Agreement ”) shall remain unaffected.

18.2 Press Release
Purchaser and Sellers shall consult with each other before issuing any press
release or otherwise making any public statements with respect to this Agreement
or the transactions contemplated hereby, and neither any Seller nor Purchaser
shall issue any such press release or make any such public statement prior to
such consultation, except that if the relevant Party is required by law or by
applicable stock exchange regulations to make an announcement it may do so, but
only after first consulting with the other Parties. The foregoing provisions
shall apply equally to Sellers’ Guarantor, who shall be required to consult with
Purchaser who shall be required to consult with Sellers’ Guarantor.
18.3 Return of Documents
In the event of the termination of this Agreement, Purchaser shall, and shall
cause each of its Affiliates and representatives to, return promptly or destroy
every document furnished to them in connection with the transactions
contemplated hereby and any copies thereof, which may have been made, other than
documents (i) filed with any government agencies, (ii) that are publicly
available or otherwise known to the public, or (iii) that are required to be
retained by Purchaser’s representatives under applicable laws and regulations of
their practice. Further obligations of the Parties under the Confidentiality
Agreement remain unaffected.

83

--------------------------------------------------------------------------------

 

19.
NOTICES
19.1 Form and Addresses
All notices, consents, and other communications hereunder shall be made in
writing and shall be hand-delivered or sent by facsimile or courier to the
following addresses, or to such other recipients or addresses as notified by the
respective Party to the other Parties in writing no later than five Business
Days before any subsequent notices or communications have been sent to such
person.
19.1.1 Notices to Sellers
Merck KGaA
as Sellers’ Representative
Attn.: Dr. Tilman Schmidt-Lorenz
Frankfurter Straße 250
D-64293 Darmstadt
Fax: + 49-6151-72-7773
with a copy to:
Skadden, Arps, Slate, Meagher & Flom LLP
Attn.: Hilary S. Foulkes
An der Welle 5
D-60322 Frankfurt am Main
Fax: + 49-69-74220-300
     19.1.2 Notices to Sellers’ Guarantor
Merck KGaA
Attn.: Dr. Tilman Schmidt-Lorenz
Frankfurter Straße 250
D-64293 Darmstadt
Fax: + 49-6151-72-7773
with a copy to:
Skadden, Arps, Slate, Meagher & Flom LLP
Attn.: Hilary S. Foulkes
An der Welle 5
D-60322 Frankfurt am Main
Fax: + 49-69-74220-300

84

--------------------------------------------------------------------------------

 

     19.1.3 Notices to Purchaser
Mylan Laboratories Inc.
1500 Corporate Drive,
Canonsburg, Pennsylvania 15317, U.S.A.
Fax: 724 514 1870
with a copy to:
Mark I. Greene, Esq. and Thomas E. Dunn, Esq.
Cravath, Swaine & Moore LLP
Worldwide Plaza
825 Eighth Avenue
New York, New York 10019
Fax: +1 212 474 3700
19.2 Date of Receipt
Notices and communications shall be deemed to have been received (i) on the date
delivered if delivered in person; (ii) on the date of transmission if sent by
facsimile to the addresses set forth above; and (iii) on the day of delivery if
sent by overnight courier; provided in each case that if receipt (a) occurs
after 17:00 hours local time at the place of receipt or (b) on a day that is not
a Business Day, receipt shall be deemed to have occurred on the next succeeding
Business Day. The receiving party has the right to prove that actual receipt
occurred at a later date.
20.
COSTS
The notarial fees for the notarization of this Agreement and all transfer deeds
and other deeds hereunder as well as any costs, fees and expenses relating to
any merger control filings shall be borne by Purchaser. Purchaser shall also be
responsible for the payment of any sales or transfer taxes (including any real
estate transfer taxes, but excluding any value added taxes), court fees or
similar charges, payable by reason of the transactions contemplated by this
Agreement. All other costs, including fees, expenses and charges, in connection
with the preparation, negotiation, execution and consummation of this Agreement
or the transactions contemplated hereby (including the Pre-Sale Reorganization),
including the fees and expenses of professional advisors and costs of
representation shall be borne by the Party commissioning such costs. Sellers
shall ensure that all such out-of-pocket costs of the Group Companies are paid
directly by Sellers prior to Closing (except to the extent any such costs are
included in Financial Debt as of the Effective Date).

85

--------------------------------------------------------------------------------

 

21.
MISCELLANEOUS
21.1 Severability
The invalidity of any provision (or parts thereof) of this Agreement shall not
affect the validity of any other provision hereof, and the invalid provision
shall be deemed to be replaced by a valid provision coming closest in its
commercial effect to the invalid provision. The foregoing shall also apply to
unenforceable provisions and to matters as to which this Agreement is silent. If
a provision of this Agreement should be held invalid by a competent court or an
arbitration tribunal because of the scope of its coverage (such as territory,
subject matter, time, period or amount), such provision shall not be deemed to
be completely invalid but shall be deemed to be valid with the permissible scope
that is nearest to the originally agreed-upon scope.
21.2 Exhibits
All Exhibits and Disclosure Schedules to this Agreement constitute a part of
this Agreement. In the event of a conflict between any Exhibit and the
provisions of this Agreement, the provisions of this Agreement shall prevail.
21.3 Entire Agreement
This Agreement, including the Exhibits and Schedules hereto, shall comprise the
entire agreement between the Parties concerning the subject matter hereof and
shall supersede and replace all prior oral or written agreements or
understanding between the Parties in respect thereof.
21.4 Amendments
Any amendments to this Agreement (including amendments to this clause) shall be
valid only if made in writing, unless another form is required by mandatory law.
21.5 Assignment and Designation of Transferors
Subject to Section 3.1.5, Purchaser shall not be entitled to assign any rights
or claims it may have against any Seller (including Sellers’ Representative)
under this Agreement without the prior written consent of Sellers’
Representative; provided, however, that Purchaser may designate any of its
direct or indirect, wholly owned subsidiaries as

86

--------------------------------------------------------------------------------

 

transferee of the Shares and Purchaser may assign its rights under this
Agreement by way of security in connection with the Financing. Each Seller and
Sellers Representative may assign its rights under this Agreement to any
Sellers’ Affiliate.
21.6 Governing Law
This Agreement shall be governed by, and be construed in accordance with, the
laws of the Federal Republic of Germany, without regard to principles of
conflicts of laws.
21.7 Arbitration

  21.7.1   Except as set forth in Section 15.8 and 5.2, any dispute, controversy
or claim arising out of or in connection with this Agreement, including any
question regarding its existence, validity, or termination (a “Dispute”), shall
be referred to and finally resolved by binding arbitration under the Rules of
Arbitration of the International Chamber of Commerce, which Rules are deemed to
be incorporated by reference into this clause.     21.7.2   There shall be three
arbitrators and the parties agree that, where there are only two parties to the
Dispute, one arbitrator shall be nominated by each of those parties for
confirmation by the ICC Court in accordance with the ICC Rules. Where there are
more than two parties to the Dispute, whether as claimant or as respondent, the
multiple claimants, jointly, and the multiple respondents, jointly, shall
nominate an arbitrator for confirmation by the ICC Court in accordance with the
ICC Rules. In the absence of such a joint nomination and where all parties are
unable to agree to a method for the constitution of the arbitral tribunal, the
ICC Court may appoint each member of the arbitral tribunal pursuant to
Article 10(2) of the ICC Rules. The two arbitrators nominated by the parties
shall jointly nominate the third arbitrator. The third arbitrator shall be
neither a United States citizen nor a German citizen. In the event they cannot
agree on the third arbitrator within ten days of the confirmation by the ICC
Court of the arbitrators nominated by the parties, the third arbitrator shall be
appointed by the ICC Court. The third arbitrator shall act as the chairman of
the tribunal.     21.7.3   The seat or place of arbitration shall be London,
United Kingdom. The language to be used in the arbitral proceedings shall be
English. The award shall be final and binding on the parties and may be entered
and enforced in any court having jurisdiction.     21.7.4   In accordance with
Article 23 of the ICC Rules, the jurisdiction of courts to issue an interim or
preliminary injunction, or any other interim relief, shall remain

87

--------------------------------------------------------------------------------

 

      unaffected by the Parties’ agreement to arbitrate pursuant to this clause.
Without prejudice to such injunctions that may be granted by a court, the
arbitral tribunal shall also have full jurisdiction to grant interim or
provisional remedies, to order a party to seek modification or vacation of an
injunction issued by a court, and to award damages for the failure of a party to
respect the arbitral tribunal’s orders to that effect.     21.7.5   Upon request
by any Party to an arbitration pursuant to this Section 21.7, the arbitral
tribunal may, within 90 days of its appointment, consolidate the arbitration
with any other arbitration or proposed arbitration involving the Parties and
relating to this Agreement or any related agreement between the Parties. The
arbitral tribunal shall not consolidate such arbitrations unless it determines
that (a) there are issues of fact or law common to the arbitrations in question
so that a consolidated proceeding would be more efficient than separate
proceedings, and (b) no Party would be prejudiced as a result of such
consolidation. In the event of different rulings on the consolidation by the
arbitration tribunals constituted hereunder, or such arbitration tribunals and
other tribunals, whether constituted under this Agreement or a related
agreement, the ruling of the first tribunal to be fully appointed shall control.
Following a ruling approving the consolidation of two or more arbitration
proceedings, the Parties to the consolidated arbitration shall use all
reasonable endeavors to agree upon the identity of the arbitration tribunal to
determine such consolidated arbitration. Failing such agreement within 28 days
of the consolidation ruling, the ICC Court shall decide upon the identity of the
arbitration tribunal to determine such consolidated arbitration from the
tribunals already established, reflecting the nominations of arbitrators by the
Parties, and shall appoint the tribunal accordingly.

88