FOIACONFIDENTIAL TREATMENT REQUESTED PORTIONSOF THE EXHIBIT HERETO MARKED BY [**Redacted**] HAVE BEEN OMITTED PURSUANT TO AREQUEST FOR CONFIDENTIAL TREATMENT FILED SEPARATELY WITH THE SECURITIES ANDEXCHANGE COMMISSION

 

 

 

28 October 2010 _ Execution Copy

 

Confidential and privileged   Stock Purchase Agreement   as of 28 October 2010

 

 

1.1	Stocks owned by Sellers	7
1.2	Stocks owned by Minorities	8
1.3	Transfer of Stocks owned by Sellers	9
1.4	Steering Committee; Cash injections	9
1.5	Consequence of violation of the cash injection obligations	13
1.6	Approvals; waiver	14
2.1	First Purchase Price	14
2.2	Second Purchase Price	14
2.3	Third Purchase Price	14
2.4	Additional Purchase Prices	15
2.5	Call Option	15
2.6	Payments	15
3.1	Authorization; Transfer of Title	16
3.2	Financial Statements and Financials	17
3.3	Conduct of Business	18
3.4	Assets	18
3.5	Immoveable Property	18
3.6	Material Contracts	19
3.7	Intellectual Property/Information Technology	19
3.8	Tax Representations	20
3.9	Insurance	21
3.10	Litigation	21
3.11	Permits and Licenses; Compliance	21
3.12	Employees, Consultants, Labor Matters, etc.	21
3.13	Deliberately left free	22
3.14	No Illegal Payments	22
3.15	No Finder’s Fee; No Transaction Costs	22
3.16	Public grants and subsidies; Financing	23
4.1	Self-contained Regime	23
4.2	Administration of Breaches	23
4.3	Exclusion of Liability	24
4.4	Effects of Knowledge	24
4.5	Cooperation	24
4.6	Knowledge	25
4.7	De-minimis / Basket	25
4.8	Maximum Liability in Case of a Breach of Representations	25
4.9	Period of Limitation	25
4.10	Deductions; set-off; bank guarantee	26
4.11	Purchase Price Adjustment	27
6.1	Preservation of Business	28
6.2	IP/IT Consents	29
6.3	Further Actions	29
6.4	Notification	29
9.1	Closing; Completion	30
9.2	Conditions to Closing	30
9.3	Withdrawal Right.	31
9.4	Closing Actions	31
9.5	Second and Third Payment Dates	32
10.1	Definitions	33
10.2	Further Actions	34
10.3	Further measures	34
10.4	Notices	34
10.5	Confidentiality and announcements	35
10.6	Severability	35
10.7	Table of Contents and Headings	35
10.8	Costs and Expenses	36
10.9	Interest	36
10.10	Language	36
10.11	Governing Law	36
10.12	Arbitration	36
10.13	Entire Agreement; Amendments and Waivers	37
10.14	Binding Effect; Assignment; Nominee	37
10.15	Incorporation of Exhibits	37
10.16	Construction	37

 

All exhibits are enclosed

 

 

(the Agreement)

 

dated 28 October, 2010

 

among:

 

Number	Name	Abbreviation
1.	OncoVista Innovative Therapies Inc., 14785 Omicron Drive Suite 104, San Antonio, TX, USA	Seller 1
2.	tbg Technologie Beteiligungs-Gesellschaft mbH (“tbg”), Ludwig-Erhard-Platz 1-3, 53179 Bonn	Seller 2
3.	Rose Nominess Ltd, P.O. BOX 25, Regency Court, Glategny Esplanade, St. Peter Port, Guernsey, GY1 3 AP	Seller 3
4.	Rob Cawthorne, Innisfree, 36 South Road, Warwick, WK02, Bermuda	Seller 4
5.	FELICITAS Beteiligungsgesellschaft Hannover mbH (formerly: Biomed). Aegidientorplatz 1, 30159 Hannover	Seller 5
6.	Axel Deuring, Buchenweg 6a, 30900 Wedemark	Seller 6
7.	Dr. Eckhart Schnakenberg, Kesener Weserstr. 4 B, 28832 Achim	Seller 7
8.	Hans-Peter Winkelmann, Tostedter Weg 11, 21244 Buchholz	Seller 8
9.	Hans Winkelmann, Am Anger 14, 31535 Neustadt	Seller 9
10.	Marion Buchwald, Effertzfeld 8, 41564 Kaarst	Seller 10
11.	Michael Winkelmann, Hagenerstr. 52 e, 31535 Neustadt	Seller 11
12.	Stefan Schröder, Breite Straße 2, 30159 Hannover	Seller 12
13.	Tim Freise, Gartenstr. 107, 60596 Frankfurt	Seller 13
14.	Dr. Silke Lankiewicz, An der Garather Motte 23, 40595 Düsseldorf	Seller 14
15.	Alere Holdings Bermuda Limited Canon's Court, 22 Victoria Street, Hamilton HM12, Bermuda	Purchaser
16.	Alere, Inc., 51 Sawyer Road, Suite 200, Waltham, MA 02453 USA	Alere Guarantor

 

relating to the acquisition of stocks in AdnaGen AG.

 

The Sellers 1 to 14 together the Sellers and each a Seller, and the Sellers and the Purchaser each a Party and together the Parties.

 

The Seller 1 is also referred to as the Sellers Guarantor.

 

The Sellers 5 - 14 are represented by Dr. Siegfried Hauch, Sellers 1, 3 and 4 are represented by Mr. Oliver Keilhack. Seller 2 is represented by Petra Röttcher and Ulrich Wendt. Dr. Siegfried Hauch and Mr. Oliver Keilhack, act as proxies (Bevollmächtigte) for the respective Sellers based on powers of attorney copies of which are attached hereto in Exhibit A. Ms Röttcher and Mr Wendt act as Prokurist and holder of general power of attorney, the relevant documents are attached as copies in Exhibit A. The Purchaser and the Alere Guarantor are represented by attorney Klaus Mohr, Frankfurt am Main, based on powers of attorney copies of which are attached in Exhibit A.

 

 

 

1.

The instruction and authorization letter (the Instruction Letter) a signed copy of which is attached hereto as Exhibit I.1.(1) provides for irrevocable instructions (only to be revoked or amended upon written approval of each of the Sellers and the Purchaser) and the authorization of notary Michael Spring, Taylor Wessing Partnerschaftsgesellschaft, Senckenberganlage 20-22, D-60325 Frankfurt (the Agent) (i) to receive all purchase prices to which the Sellers are entitled under this Agreement, and (ii) to pay upon receipt of the purchase prices the transaction fees as outlined in the Transaction Fee Schedule attached hereto as Exhibit I.1.(2) (the Transaction Fee Schedule).

 

2.

The authorization and instruction of the Agent provided for in the Instruction Letter to pay the transaction fees in accordance with the Transaction Fee Schedule is granted by the Sellers also for the benefit of the Purchaser. According to the Instruction Letter the Agent furthermore waived any rights for set-off (Rechte zur Aufrechnung) or retention (Zurückbehaltungsrechte) relating to the transaction fees set forth in the Transaction Fee Schedule.

 

3.

By accepting and signing the Instruction Letter the Agent acknowledges and agrees to the scope and nature of the instructions as outlined in 1. and 2. above.

 

 

 

1.

WHEREAS this Agreement is entered into at the date hereof (the Signing Date) by and among the Sellers and the Sellers Guarantor on the one hand and the Purchaser on the other hand. The Alere Guarantor shall only be a party to this Agreement insofar as the obligations pursuant to Sections 10.5, 10.8, 10.9, 10.11, 10.12 and its main obligation pursuant to Section 10.14 are concerned.

 

2.

WHEREAS the Company is a stock corporation (Aktiengesellschaft) incorporated in accordance with the laws of the Federal Republic of Germany, registered with the Commercial Register of the Local Court (Amtsgericht) Hannover under HR B 58937. The Company is also referred to in this Agreement as AdnaGen.

 

3.

WHEREAS the entire registered stock capital (Grundkapital) of the Company amounts to EUR 50,000 (Fifty thousand Euros). The registered stock capital has been fully paid in. Direct or indirect repayments of the registered stock capital have not occurred.

 

4.

WHEREAS the registered stock capital of the Company is divided into 50,000 number of stocks (Aktien) (the Stocks) that are owned by the Sellers and the remaining shareholders of the Company as set out in EXHIBIT R 4.

 

5.

WHEREAS the Stocks are name stocks (Namensaktien) without nominal value (Stückaktien) that are endorsed in 14 stock certificates that are held by the Sellers and that are registered in the stocks register (Aktienbuch) of the Company. Copies of the stock certificates as well as the stocks register are contained in EXHIBIT R 5. Seller 6 has lost his share certificate. He hereby agrees to take (together with the Company) any measures necessary or expedient to finalize the forfeiture procedure with respect to these share certificates as soon as possible after the Closing Date. Furthermore, Seller 4 will only be able to hand over his share certificate after October 28, 2010. He has signed the confirmation attached hereto as EXHIBIT 9.4 k).

 

6.

WHEREAS the Company is active in the field of diagnostics detecting circulating tumor cells in tumor patients including (i) manufacturing and distribution of tests and (ii) licensing and R&D activities related to the before activities (together the AdnaGen Business).

 

7.

WHEREAS the Company was founded in 1999 first as a GmbH and financed by (i) venture capital as well as by (ii) funds from Seller 2 and Mittelständische Beteiligungsgesellschaft Niedersachsen (MBG) mbH (MBG or the Silent Partnership Seller) in the form of silent participations. Furthermore, AdnaGen received governmental support in the form of R&D grants for the product area Rare Cell Detection & Analysis (tumor and prenatal diagnostics). EXHIBIT R 7 lists all financing (including all silent participations, R&D grants and loans) received by AdnaGen from venture capital, Seller 2, MBG and EU, State or local government (including governmental agencies, state controlled banks or business development institutions) (each a Financing and together the Financings) and sets out (as of Signing Date) in relation to each Financing in detail (i) the relevant amounts outstanding (including accrued interest), (ii) the term of the Financing, (iii) the maturity dates for repayment, if any (iv) all profit participation or profit depending arrangements, if any, (v) violations, if any, of Financing conditions, (vi) the limitations applying to the utilization (including sale and licensing) of assets and/or the disposition of stocks and/or the move of the business, if any, and (vii) existing rights and entitlements, if any, of parties having provided Financing in relation to Company matters or profits.

 

 

8.

WHEREAS on 22 March 2009 the Sellers 1, 2, 4 and 5, the Partnership Seller and AdnaGen entered into a restructuring agreement as amended from time to time (Restructuring Agreement). A copy of the Restructuring Agreement (and its amendments) is contained in EXHIBIT R 8.

 

9.

WHEREAS the Silent Partnership Seller owns a silent participation (Stille Beteiligung) (Silent Participation) in the Company that it will sell and transfer to the Purchaser at the Closing Date. Copies of the relevant Silent Participation agreement (including amendments) and final drafts of the silent partnership sale and transfer agreement (Silent Partnership Sale and Transfer Agreement) to be executed and delivered at Closing Date are contained in EXHIBIT R 9. The Sellers and the Purchaser acknowledge that the Silent Partnership Seller receives a consideration for the sale and transfer of the silent partnership as provided for in the Silent Partnership Sale and Transfer Agreement.  The Sellers furthermore acknowledge that the payment to the Silent Partnership Seller is in addition subject to the provisions of the Silent Partnership Sale and Transfer Agreement set forth in a separate agreement to be entered into between the Sellers, the Silent Partnership Seller and the Agent.

 

10. WHEREAS the Seller 2 owned a further silent participation in the Company (tbg Silent Participation) that was, according to the terms of the Restructuring Agreement terminated subject to certain conditions. The Restructuring Agreement and the termination pursuant to its terms was approved by the shareholders of the Company in a shareholders meeting dated 23 September 2010. Nevertheless, a partial profit and loss transfer agreement in favor of Seller 2 is still registered with the commercial register of the Company as at the Signing Date. According to the confirmation contained in EXHIBIT R 10 the Seller 2 confirmed the termination of the tbg Silent Participation and transferred (for precautionary reasons) the “legal remainder” of such tbg Silent Participation to the Purchaser. Furthermore, the Company will immediately after the Signing of this Agreement file the application for deletion of the partial profit and loss transfer agreement from the commercial register with effect as at the end of the business year of the Company ending on 31 December 2010.

 

NOW, THEREFORE, THE PARTIES HERETO AGREE AS FOLLOWS:

 

 

1.1	Stocks owned by Sellers

 

Each of the Sellers hereby sells its Stocks in the Company to the accepting Purchaser as outlined in EXHIBIT 1.1.a (including the number of the stocks certificates to be transferred and endorsed to the Purchaser at the Closing as defined in Section 9.1) (the Sold Stocks) with all dividend and dividend drawing rights (Gewinn- und Gewinnbezugsrechte) relating to the period as from 1 January 2010 (the Effective Date) and all subscription and other rights pertaining to each sold Stock (the Sale and Purchase). EXHIBIT 1.1.b lists all owners of Stocks after completion (dingliche Erfüllung) of the Sale and Purchase (the Completion).

 

 

1.2	Stocks owned by Minorities

 

a)

As from Completion, the Purchaser will own 100% of the Stocks. If this was not the case, the following subsections 1.2 b to g would apply:

 

b)

Therefore, as soon as possible, at the latest however within a period of 4 months as from Completion the Sellers shall approach such shareholders who own the remaining outstanding Stocks which have not already been sold and transferred to the Purchaser with effect as at Completion (the Minorities) in order to achieve the acquisition by the Purchaser of 100% of the Stocks.

 

c)

The Parties agree that they shall cooperate in good faith to achieve the Purchaser to acquire 100% of the Stocks. The Sellers Representative shall negotiate the amounts of purchase prices to be paid to the Minorities for their Stocks. The Parties further agree that purchases prices to be agreed with the Minorities in the 4 months period according to Section 1.2 b) shall mirror the purchase price terms and conditions of this Agreement but that the Minorities shall have no information right against either the Purchaser or AdnaGen. The Sellers Representative shall not negotiate purchase prices (pro rated) in excess of the stocks price to be paid to the Sellers under this Agreement unless approved by the Purchaser. The same shall apply mutatis mutandis to any purchase price structure or payment term that differs from the purchase price structure or payment terms agreed in this Agreement: the Sellers Representative shall in particular not negotiate one time payments for the Stocks of the Minorities that are in excess of the (pro rated) First Purchase Price unless approved by the Purchaser.

 

d)

If it turns out that the acquisition of 100% of the Stocks by the Purchaser cannot be accomplished within the time period according to Section 1.2.b), the Parties agree – at the option of the Purchaser, and such option to be exercised within 4 months as from the end of the time period referred to in Section 1.2.b) - to initiate a squeeze out procedure so that the Purchaser can acquire the outstanding Stocks as a result of the squeeze out. To the extent legally permissible the Sellers Representative shall control and all Parties shall actively support the squeeze out, if such procedure is required. The Purchaser shall have the right to object to the advisors and the actions being suggested by the Sellers Representative.

 

e)

All costs and expenses of the Purchaser and/or AdnaGen caused by a squeeze out procedure shall be borne equally by the Sellers (50%) and the Purchaser (50%) up to the Capped Cost Amount, including but not limited to (i) costs caused by or related to corporate law measures (including notary fees and expenses), (ii) costs and expenses of accountants, and (iii) costs and expenses caused by courts fees, accountant and legal fees, in particular all costs and expenses caused in case of a procedure under the Corporate Proceedings Act (Spruchverfahrengesetz) or in case of contest action (Anfechtungs- oder Nichtigkeitsklage).The amount of the Capped Cost Amount shall be EUR 200,000. Any amounts in excess of the Capped Cost Amount shall be borne in total by the Sellers but not by the Purchaser nor by MBG, understood in this context that MBG is not a party to this Agreement and that the before reference to MBG is based on a request of MBG and for clarification purposes only.

 

 

f)

The Sellers shall bear the purchase price agreed between the Sellers and the Minorities or cash compensation resulting from the squeeze-out or any other compensation to be paid to the Minorities and agreed between the Parties as consideration for the Purchaser acquiring all Stocks from the Minorities. For the avoidance of doubt, Section 1.2 c) shall equally apply to any purchase price or voluntary compensation referred to in the preceding clause of this Section 1.2.f).

 

g)

For the avoidance of doubt, the following would only apply if the Purchaser did not acquire 100% of the Stocks: for the purpose of securing the payment of the purchase prices and compensations owing to the Minorities, the Agent shall keep and allocate 2.5% of the First Purchase Price (as defined in Section 2.1) to the acquisition by the Purchaser of the Stocks from the Minorities (the Reserve Amount). The Agent shall pay from the Reserve Amount to the Minorities on behalf of the Purchaser the relevant amounts (as the case may be, either the purchase prices agreed or the cash compensation determined). If and to the extent that the Reserve Amount should not be sufficient to settle all purchase prices or cash compensations payable to Minorities, the Sellers shall be liable for the difference (the Payment Difference), however understood that the Purchaser shall be obliged to pay the Payment Difference to the Minorities to achieve the timely transfer of the Stocks upon complete payment of the purchase price or compensation. The Payment Difference being financed respectively by the Purchaser shall be set off against (or deducted from) any claims of the Sellers for a Second or Third Purchase Price or Milestone Payments.

 

1.3	Transfer of Stocks owned by Sellers

 

The Sellers and the Purchaser are hereby in agreement, that the title to the Sold Stocks shall, subject to the receipt of the First Purchase Price and the approval of the Supervisory Board, pass to the Purchaser (dingliche Übertragung) at the Closing Date, and that the actual transfers shall be effected by endorsement and handing over of the relevant stock certificates. Only for reasons of utmost precaution, each of the Sellers hereby assigns and transfers to the Purchaser, who hereby accepts such assignments and transfers, the Sold Stocks and all its membership rights and other rights pertaining to the Sold Stocks for the period as from the Effective Date whilst such assignment and transfer is conditional upon the receipt of the First Purchase Price and the approval of the Supervisory Board.

 

1.4	Steering Committee; Cash injections

 

a)

A steering committee (Steering Committee) shall be formed immediately after Closing to function as an advisory / oversight committee on all Budget, Milestone and Target related topics. The Steering Committee will be comprised of no less than 4 members and will be equally split between the Purchaser’s and Seller’s representatives. Each of Purchaser and Sellers will appoint its respective two representatives at the Closing Date.

 

 

b)

The Parties agree that the role of the Steering Committee is advisory only unless explicitly otherwise agreed in this Agreement.

 

c)

A business plan of the Company being set up by the Sellers is attached as Exhibit 1.4.c (the Budget). The Budget sets out the expected revenues and costs of the Company for the period ending 31 August 2011.

 

d)

The Purchaser shall be obliged to provide the Company immediately following Completion with a cash injection in an amount of EUR 500,000 (Cash Injection 1).

 

e)

The Cash Injection 1 shall fund the business operations (based on the costs as per Budget) for a period of 6 months as from Completion to the extent that the Company’s actual cash-in revenues are less than budgeted cash-out costs.

 

f)

For the period starting with the seventh month as from Completion and up to and including 31 August 2011, the Purchaser shall provide the Company with a further cash injection in the amount of up to EUR 500,000 (Cash Injection 2) if the Steering Committee determines that the total cash “net income / loss” of the Company as per Budget for the relevant months minus the amount of available cash (or cash equivalents) at the Company is not sufficient to enable the Company to achieve the Budget.

 

g)

For the period as from 1 September 2011 and ending 36 months as from Completion, the Steering Committee shall mutually agree on 6 months budgets (each a New Budget), and the last New Budget covering the remaining term. The Steering Committee shall agree on New Budgets at least six months in advance to the relevant term of a New Budget, i.e. the Steering Committee shall agree on the New Budget for the period starting 1 September 2011 and ending 29 February 2012 on 28 February 2011 at the latest. The Steering Committee shall further determine the amount of the relevant Additional Cash Injection, which will not be higher than EUR 500.000 per any 6 months period. If it turns out during the time period between agreeing on a New Budget and its coming into effect that the projections forming the basis of the New Budget cannot be fulfilled, the management of the Company shall have the right, until 4 weeks before the New Budget enters into effect, to contact the Steering Committee and ask for a revision of the New Budget. If the Steering Committee agrees with the request of the Company’s management the New Budget will enter into effect as amended by the Steering Committee.

 

h)

The Purchaser shall provide the Company for the term of a New Budget with the funding agreed for that term by the Steering Committee (Additional Cash Injections). It is understood that Cash Injections shall not be provided just for the purpose of being in the Company’s bank account but that Cash Injections shall be provided timely in reasonable tranches when required in line with the Budget (or New Budget(s)).

 

 

 

i)

The following applies with respect to the determination of amounts of cash injections and payments:

(1)

The general principle and underlying rational shall be the following: the Company shall have such funds available that are required to cover “Total Costs” (as relevant cash-outs in the period rather than as accounted costs or accruals) as per New Budget, and such funds shall comprise of all actual revenues achieved by the Company, its available cash (or cash equivalents) and, if required, Additional Cash Injections. All Additional Cash Injections (and Conflict Cash Injections) are in any case subject to the Limitations. Ideally, the Company will achieve break even (on a cash basis) as forecasted in the Budget, and in such case there will be no further Additional Cash Injections (or Conflict Cash Injection) as the Company can finance then its operations by using own cash.

 

(2)

The use of the Additional Cash Injections (or Conflict Cash Injection) and the relevant amount of such injection shall be in any case subject to the following regulations and limitations (the Limitations): in no event an installment of a cash injection shall exceed EUR 500,000, the maximum amount of a cash injection within each 6 months interval shall be an amount of EUR 500,000, and all Additional Cash Injections shall be spent only in line with and on the basis of the New Budget. The Steering Committee shall not be entitled to amend or waive the Limitations. For the avoidance of doubt, the management of the Company shall be free to operate the Company’s business within the framework of the New Budget. If necessary, the management of the Company may decide that budgeted amounts shall be allocated to other projects than as anticipated in the New Budget, it being understood if such is the case there is no entitlement for requesting financing for cancelled projects. The management of the Company must however inform the Steering Committee of any such changes.

 

(3)

The Purchaser may elect the form of the Cash Injection 1, Cash Injection 2 or Additional Cash Injection or Conflict Cash Injection, i.e. either in the form of an equity contribution, subordinated loan or a combination thereof.

 

(4)

The Cash Injection 1, the Cash Injection 2 and the Additional Cash Injections (and Conflict Cash Injections) shall enable the Sellers to achieve the Second and Third Purchase Price and Milestone Payments by the Company being able to utilize funds as per the Budget (or New Budgets) with the consequence that cash injections made in form of loans shall be disregarded for purposes of determining the “No Debt” criteria according to Section A.2 of EXHIBIT 2.2 and as further specified in that Exhibit. The Sellers confirm that the maximum amounts of the cash injections are calculated realistically with view to that objective.

 

j)

Purchaser and Sellers agree that the Budget does not provide for the performance of AdnaGen of the following activities:

- [**Redacted**]

- [**Redacted**]

(the Additional Activities).

 

 

The Purchaser shall use commercially reasonable efforts to pursue the Additional Activities. The following process shall apply, either formally or informally: The Company, the Purchaser (or its representative) shall update the Steering Committee either on a regular basis or following a request of the status of the achievements of the Additional Activities and/or allocated efforts/resources therefore.

 

The Purchaser and Sellers Representative shall jointly prepare a detailed plan on activities to be pursued and resources (through funding, allocation of personnel or otherwise) to be used in order to achieve the target of [**Redacted**] (the Plan). Such Plan shall be discussed with the Steering Committee and the Sellers Representative and the Purchaser (or its representative(s) and, if acceptable to the members of the Steering Committee, agreed upon, and, if required, amended from time to time following discussion with the Steering Committee. The Sellers acknowledges that external resources to Alere shall be used carefully and in line with industry practices- it is understood that, in any event, not more than € [**Redacted**] would be allocated to external service fees to pursue the target.

 

The Purchaser acknowledges that reaching the target of [**Redacted**] may involve the employment of external resources to Alere-group, although it is also acknowledged that the Alere-group has a good regulatory group to follow up on these items and provide the necessary input. The implementation of the activities of such Plan may be led by Alere, its representatives or the AdnaGen management as deemed appropriate. For the assessment of the Purchaser's commercially reasonable efforts (as per the above second para. of this section 1.4.j), the implementation of the activities plan is relevant, not the result of each activity, it being understood that, if based on recomme ndations received either from the Alere-group regulatory department and/or external consultants, a certain activity is advised not to be taken then Purchaser or its representative shall be allowed, in its own discretion, after discussion with the Steering Committee, to reject to implement such activity or not to proceed with the execution of certain actions (without any sanction becoming applicable).

 

k)

All injections shall be paid to a bank account of the Company as notified by its management board to the Purchaser.

 

l)

If the Steering Committee cannot mutually agree on a New Budget or thereby on the amount of Additional Cash Injections, the following shall apply:

 

(1)

Either the Purchaser or the Sellers Representative or both shall declare by written notice (no email but by registered letter with a fax in advance) to the respective other Party a status of conflict that starts as from the beginning of the term of a New Budget (or Budget) that cannot be agreed to (the Conflict). If no Conflict is declared, the obligations of the Purchaser to provide Additional Cash Injections cease as from the end of the term of the then prevailing budget.

 

(2)

If no agreement is reached on a New Budget prior to expiration of the term of the then prevailing budget, for the term of a Conflict the last prevailing New Budget (or Budget for the period March to August 2011 in case no New Budget can be agreed for the period starting 1 September 2011) shall continue, i.e. the amount of Additional Cash Injections shall be the amount of the Additional Cash Injection as per the last budgeted period, and shall be due and payable in the same manner as the prevailing Additional Cash Injection (the Conflict Cash Injection). The Conflict Cash Injection shall be subject to the Limitations and the following reductions and adjustments (the Adjustments):

 

 

i.

If the actual cash-in revenues achieved by the Company in the relevant 6 months period (Actual Revenues) are higher than or equal to its actual cash-out costs of the relevant 6 months period (Actual Costs), no Conflict Cash Injection shall fall due. The underlying rational is that, unless budgeted or mutually agreed by the Steering Committee, the Purchaser shall not finance the Company if the Company can cover its cash-out costs by cash-in revenues.

 

ii.

On the costs side the underlying rational is that the Purchaser shall not be obliged to finance the Company’s development based on a cost increase unless budgeted or mutually agreed by the Steering Committee.

 

iii.

The Adjustments shall be calculated for each relevant 6 months period by taking into account cash-in revenues to be achieved and cash-out costs to be caused in the relevant period.

 

iv.

The Adjustment shall be calculated by the Sellers with the support of the Company’s management and notified to the Purchaser 30 Business Days prior to a relevant payment date (Payment Notice) by providing all supporting information and calculation materials and the relevant amount of the requested Conflict Cash Injection. If the Sellers miss that deadline for providing the Payment Notice, the obligation of the Purchaser to provide a Conflict Cash Injection for the relevant 6 months period ceases.

 

m)

The obligations of the Purchaser to provide cash injections shall only create a right of the Sellers under this Agreement but no right or entitlement of the Company nor shall the Company be provided with any protection: the principles of a contract that protects third parties (Vertrag mit Schutzwirkung zugunsten Dritter) or that is for the benefit of a third party (Vertrag zu Gunsten Dritter) shall not apply to this Agreement including the relevant cash injection obligations.

 

1.5	Consequence of violation of the cash injection obligations

 

a)

If the Cash Injection 1 or 2 or any of the Additional Cash Injections or Conflict Cash Injections is not provided timely (and timely by calculating a grace period for payment delays of 5 Business Days as from the due date) and despite a reminder of the Sellers Representative following the payment default not paid within 5 business days as from receipt of the reminder to the Company (Delay 1) in the period between Completion and expiration of the Milestone Period (as defined for the Second Purchase Price), the claim for the Second Purchase Price in an amount of USD 10 (ten) million and in addition the claim for the Third Purchase Price in an amount of USD 5 (five) million shall become existent (entstehen), and relevant payments shall become due (fällig) at the time of the Delay 1 and shall be then subject to the payment terms and conditions agreed to in this Agreement regarding the Second and Third Purchase Price.

 

 

b)

If any of the Additional Cash Injections or Conflict Cash Injections is not provided timely (and timely by calculating a grace period for payment delays of 5 Business Days as from the due date) and despite a reminder of the Sellers Representative following the payment default not paid within 5 business days as from receipt of the reminder to the Company (Delay 2) in the period (x) as from the expiration of the Milestone Period as defined for the Second Purchase Price and (y) the expiration of the Milestone Period (as defined for the Third Purchase Price), the claim for the Third Purchase Price in an amount of USD 5 (five) million (unless already paid due to a failure pursuant to Section 1.5.a) shall become existent (entstehen), and the relevant payment shall become due (fällig) at the time of the Delay 2 and shall then be subject to the payment terms and conditions agreed to in this Agreement regarding the Third Purchase Price.

 

c)

If the Sellers can prove that the failure of the Purchaser to comply with its obligations for providing a relevant Additional Cash Injection or Conflict Cash Contribution materially affected the Company and jeopardized therefore materially the possibility of the Sellers to achieve individual Targets agreed in relation to an individual Milestone Payment, the relevant Milestone Payment shall fall due and the relevant payment shall be subject to the payment terms and conditions agreed to in this Agreement regarding a Milestone Payment unless the Purchaser can prove that the achievement of a relevant Target and therefore the achievement of a relevant Milestone Payment was at the time of the payment default improbable assuming the Company acting in the course of normal business and in line with Budget or New Budgets (or based on the amounts of Conflict Cash Contributions in case of a Conflict).

 

d)

If the Purchaser instructs a bank to transfer the Cash Injection or any Additional Cash Injection to a Company account and the Company receives timely the instructed amount less banking fees or costs being charged by banks involved in the money transfer or less exchange differences, the relevant payment shall be deemed complete and timely and the Purchaser shall make up the difference in due course by transferring the difference to the Company.

 

e)

During a Conflict, the Purchaser shall provide Conflict Cash Injections as notified to him in the Payment Notice by the Sellers’ Representative, however in no event amounts that do not comply with the Limitations or Adjustments. The Purchaser shall be entitled to review the Payment Notice and the relevant calculation and, if an amount notified to the Purchaser in a Payment Notice is according to its calculation in excess of the Conflict Cash Injection that became due in accordance with his Agreement, the Purchaser shall be entitled to deduct the excess amount from the amount notified to it without triggering a penalty or other consequences, and the Parties shall thereafter in good faith discuss and solve that topic.

 

1.6	Approvals; waiver

 

a)

For precautionary reasons, each of the Sellers hereby approves the above sales and transfers. A precautionary approval of the Partnership Seller is provided for in the Silent Participation Sale and Purchase Agreement and a further precautionary waiver of Seller 2 in the tbg waiver pursuant to Section R 10.

 

b)

For reasons of utmost precaution, the Sellers hereby waive any and all preemptive rights or rights of first refusal or other rights providing for similar entitlements to Stocks.

 

 

2.1	First Purchase Price

 

The purchase price for the Sold Stocks (the First Purchase Price) shall amount to USD 10 (ten) million to be paid at the Closing Date to the following bank account (the Designated Account) of the Agent:

 

2.2	Second Purchase Price

 

An additional second purchase price (the Second Purchase Price), if any, shall amount up to USD 10 (ten) million and shall be paid at the Second Payment Date in accordance with the calculation principles, the allocation schedule and the payment terms and conditions outlined in EXHIBIT 2.2. The Parties explicitly agree and confirm that the claim for the Second Purchase Price shall become existent (entstehen) not prior to the Second Payment Date.

 

2.3	Third Purchase Price

 

An additional third purchase price (the Third Purchase Price), if any, shall amount up to USD 5 (five) million and shall be paid at the Third Payment Date in accordance with the calculation principles, the allocation schedule and the payment terms and conditions outlined in EXHIBIT 2.3. The Parties explicitly agree and confirm that the claim for the Third Purchase Price shall become existent (entstehen) not prior to the Third Payment Date.

 

 

2.4	Additional Purchase Prices

 

In addition to the purchase prices pursuant to 2.1 to 2.3, the Purchaser shall pay to the Sellers additional purchase prices subject to and upon satisfaction of defined milestones (each a Milestone Payment). The conditions precedent and requirements of each milestone, the calculation principles, the allocation schedule and the payment terms and conditions applying to each relevant Milestone Payment are outlined in EXHIBIT 2.4. The Parties explicitly agree and confirm that each claim for a Milestone Payment shall become existent (entstehen) not prior to such date on which the relevant Milestone is fulfilled (in line with the relevant conditions to the fulfillment of a Milestone).

 

2.5	Call Option

 

Subject to the Purchaser not paying purchase prices timely, the Sellers are entitled to a call option as per se the Call Option Agreement attached hereto as EXHIBIT 2.5.

 

2.6

Payments

 

All payments of purchase prices (including Milestone Payments) shall be effected to the Designated Account. All payments received in the Designated Account shall release the Purchaser in the respective amount from its payment obligations under this Agreement. The Sellers shall be responsible for allocation of received funds amongst the Sellers and the Agent shall be responsible for effecting the payments set out in the Transaction Fee Schedule.

 

If the Purchaser instructs a bank to transfer purchase prices to the Designated Account and the Agent receives timely the instructed amount less banking fees or costs being charged by banks involved in the money transfer or less amounts caused by exchange rates, the relevant payment shall be deemed complete and timely and the Purchaser shall make up the difference within 5 Business after having been notified of the difference by the Sellers Representative by transferring the difference to the Agent.

 

 

The representations and warranties in this Section 3 are not meant at any time as a guarantee (Beschaffenheitsgarantie oder Haltbarkeitsgarantie) within the meaning of Sections 443 and 444 of the German Civil Code (Bürgerliches Gesetzbuch, or BGB), the application of which the Parties hereby exclude. Subject to the foregoing the Sellers Guarantor represents and warrants to the Purchaser in the form of an independent guarantee and irrespective of negligence or fault (selbständiges verschuldensunabhängiges Garantieversprechen pursuant to Section 311 paragraph 1 BGB) that the following statements 3.1 to 3.16 (the Representations) are true and correct as of Signing Date and/or any other date specified hereinafter.

Each Seller furthermore, however each of Seller 2 and Seller 5 only individually (als Teilschuldner), represents and warrants to the Purchaser in the form of an independent guarantee and irrespective of negligence or fault (selbständiges verschuldensunabhängiges Garantieversprechen pursuant to Section 311 paragraph 1 BGB) that the Representations pursuant to Sections 3.1 and, except for Seller 2 and Seller 5, 3.2 are true and correct as of the Signing Date and/or any other date specified hereinafter. Only in relation to Seller 2 and Seller 5 the following shall apply: the Representation pursuant to Section 3.1 b) (III) does, however, not apply to the information arising from Section 7 of the Preamble and, insofar as the Representation pursuant to Section 3.1 b) VI) is concerned, only the Sellers Guarantor shall be liable.

 

The scope and content of each Representation of the Sellers Guarantor or the Sellers contained in this Section 3 as well as the Sellers Guarantor’s or the Seller's liability arising thereunder shall be exclusively defined by the provisions of this Agreement (in particular the limitations on Purchaser's rights and remedies set forth in Sections 4 below), which shall be an integral part of the Representations:

 

 

 

 

 

 

 

 

(ii)

EXHIBIT 3.1.b (ii)___contains complete and correct copies of the Company’s (i) articles of association as in effect as of the Signing Date and (ii) current entry in the commercial register (the Organizational Documents). Except as required under and described in Section 9, there are no shareholder resolutions amending the Organizational Documents that have not yet been registered in the respective competent Commercial Register.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Except for signing addendums to the Restructuring Agreement referred to in Recital 8 hereto, since the Effective Date up to and including Signing Date the Company has conducted its respective business in the ordinary course consistent with past practice. The Company has in particular, but not limited to

 

 

 

 

 

 

(f)

not sold or otherwise transferred any material part of the AdnaGen Business; and

 

 

 

The Company owns, or otherwise has full or sufficient and legally enforceable rights to use all of its assets (moveable, immoveable or mixed, tangible or intangible) necessary for the conduct of, or otherwise material to, the business as conducted up to the Signing Date (the Assets).

 

 

 

 

 

 

EXHIBIT _3.6 (i)_contains a true and complete list of all agreements entered into by the Company that have at the Signing Date not been completely fulfilled (nicht vollständig erfüllte Verträge), with regard to

 

 

 

 

 

 

 

 

 

 

 

and which have a value exceeding EUR 150,000.00 in each case or per year (the Material Agreements).

 

Unless otherwise disclosed in EXHIBIT _3.6 (ii), (i) all Material Agreements are, to the Guarantors Knowledge, valid and enforceable and no notice of termination has been given with respect to any Material Agreement, (ii) to the Guarantors Knowledge, no termination with respect to any Material Agreement can be given due to the completion of this Agreement (“absence of change of control clauses”) and the enforceability of all Material Agreements will not be affected in any manner by the execution, delivery or performance of this Agreement, and (iii) according to Guarantor’ s Knowledge neither the Company nor any third party to any Material Agreement is in material default or material breach under any such agreement.

 

 

 

 

 

 

 

(f)

The Company owns, or has acquired a valid right or license to use, all computer hardware, software, communication systems, networks and other information technology (the Information Technology) which the Company requires to carry on its business as presently conducted. All Information Technology is adequate and sufficient for the Company’s current business operations.

 

 

In relation to tax matters, EXHIBIT 3.8 sets out the Representations of the Sellers Guarantor.

 

 

 

The insurance coverage of the Company is, in the reasonable view of the Guarantor, adequate and suitable for the business as presently conducted. To Guarantor’s Knowledge, the Company has complied in all material respects with the terms and provisions of all of its insurance policies.

 

 

Except as listed in Exhibit 3.10, there are no lawsuits, court actions or similar proceedings before a court of justice, arbitration panel or an administrative authority pending (rechtshängig) or threatened in writing to be filed against the Company (Litigation).

 

 

To the Guarantor’s Knowledge, the Company obtained, holds and maintains all permits and licenses which are required, if any, under applicable public laws (öffentliches Recht) in order to conduct the business as presently conducted. There are no written threats of any revocation or restriction or subsequent orders (nachträgliche Anordnungen) relating to any such permits or licenses which would materially affect the business of the Company as a whole. To the Guarantor’s Knowledge, the Company has conducted its business in compliance with all material provisions of such permits and licenses and applicable Laws.

 

 

 

 

 

 

 

 

(f)

Compliance with Social Security.  At the Closing Date, the Company has no obligation under applicable social security laws (Sozialversicherungsrecht).

 

 

 

The Company has not directly or indirectly (i) given or agreed to give any illegal gift, contribution, payment or similar benefit to any supplier, customer, governmental official or employee or other person, or (ii) made or agreed to make any illegal contribution, or reimbursed any illegal political gift or contribution made by any other person, to any candidate for federal, state, local or foreign public office, in each case that might subject the Company to any damage or penalty in any civil, criminal or governmental litigation or proceeding.

 

 

The Company is under no obligation to pay any fee, bonus, extra compensation or severance payment to any third party (including the management and the employees of the Company and any member of the supervisory board and/or advisory boards of the Company) or to its shareholders by virtue of this Agreement or consummation of the transactions contemplated under this Agreement (the Transaction Triggered Payments). The agreement contained in EXHIBIT 3.15 (i) (the Bioventures Agreement) is known to the Purchaser.

 

The Company has not made since 31 May 2010 any payments under the Bioventure Agreement and shall not make or agree to make any such payments up to and including Completion. Any and all past and future costs, expenses, obligations and liabilities of the Company under, related to or caused by the Bioventure Agreement shall be borne by the Sellers, and the Sellers shall indemnify the Company from any and all claims or consequences under, related to or caused by the Bioventure Agreement.

 

At the Closing Date, the Agent shall pay the relevant amounts due under the Bioventures Agreement, and any further amounts falling due shall be paid by Sellers.

 

 

 

In relation to Financing and public grant and subsidy matters, the Parties agree - in addition - to the specific indemnification rules contained in the Indemnification section.

 

 

 

Except for claims based on (i) the breach of the Representations and (ii) Indemnifications and except for claims for specific performance (Erfüllungsansprüche) or other claims provided for in this Agreement, all other claims with respect to the sale and transfer of the Stocks and the business of the Company are excluded,– e.g. (i) any right of the Purchaser to rescind (zurücktreten) this Agreement or to require the winding up of the transactions contemplated hereunder (inter alia, by way of Schadenersatz statt der ganzen Leistung), (ii) any claims for breach of pre-contractual obligations (culpa in contrahendo), including claims arising under Section 241, 311 BGB or ancillary obligations, including claims arising under Section 280, 282 BGB, (iii) any claims under the principle of frustration of contract pursuant to Section 313 BGB (Störung der Geschäftsgrundlage), (iv) all remedies of the Purchaser for defects under Section 437 through 441 BGB, (v) tort (Sections 823 et seq. BGB) and (vi) any and all other statutory rights and remedies of the Purchaser, if any, are hereby expressly excluded and waived by the Parties, except for claims based on willful conduct (Vorsatz) or willful deceit (arglistige Täuschung). The Parties are in agreement that the Representations according to Section 3 are only designed for the specific remedies of the Purchaser and the restrictions set forth in this Agreement and shall not serve to provide the Purchaser with any claims other than those set forth in this Agreement.

 

 

(A)           In case of a breach of any Representations, the Sellers Guarantor or, if the Sellers are concerned in relation to a Representation they assume, the Sellers may attempt to remedy the breach (Naturalrestitution). If the Sellers Guarantor, or, as the case may be, the Sellers fail to remedy the breach within a reasonable period of time, such period not to exceed one month after the Sellers Guarantor has received a written and sufficiently detailed notification as to the breach from the Purchaser (the Claim Notification), the Purchaser shall be entitled to claim from the Sellers Guarantor or, as the case may be, the Sellers compensation in cash (Schadensersatz in Geld) pro rata to the Purchaser’s actual shareholding in the Company at the time of the compensation for any actual losses within the meaning of Sec. 249 et seq. German Civil Code (Bürgerliches Gesetzbuch, BGB) incurred by the Company excluding consequential damages (Folgeschäden), lost profits (entgangener Gewinn) lost opportunities (entgangene Geschäftschancen), frustrated expenses (vergebliche Aufwendungen) within the meaning of Section 284 BGB and internal administration and overhead costs. For the avoidance of doubt, each Seller shall only be liable if and to the extent that the respective Seller is in breach of a Representation it has assumed; Section 4.10 (that extents the liability of the Sellers) remains unaffected.

 

 

 

 

Any liability of the Sellers in connection with Representations shall be excluded or decreased if and to the extent that claims of the Purchaser or the underlying circumstances, respectively, are (i) covered by insurance policies or claims against third parties to the extent such claims against third parties have been collected (at the expense of the Sellers) within 4 months as from the Warranty Notification or (ii)  specifically reserved for in the Financial Statements; (iii) have been specifically disclosed to the Purchaser in this Agreement (including its Exhibits); (iv) has been done or omitted to be done with respect to the subject matter of the claim at the request, or with the approval, of the Purchaser; (v) the result of or are increased by the failure of the Purchaser to mitigate damages; (vi) the result of an Act of God or (vii) the result of or is increased by the passing of, or any change in any law, statute, ordinance, rule, regulation or administrative practice of any competent authority after the Signing Date.

 

 

Unless specifically disclosed in this Agreement (including its Exhibits), claims of the Purchaser based on a breach of any of the Representations are not excluded if a breach or the underlying facts have been known to the Purchaser at any time until Completion. Sec. 442 BGB and Sec. 377 HGB are excluded. The same shall apply mutatis mutandis to Indemnifications, and the Parties agree for the sake of clarity that no specific disclosures are made in context with Indemnifications (unless specifically outlined in Exhibit 5) and Tax Representations (as referred to in Section 3.8.).

 

 

In case of a breach of any Representations (including Tax Representations) and indemnities, which relates to court judgments, public orders or third party claims raised against the Company, the Party or Parties receiving such information shall procure that (i) the Sellers and the Purchaser shall be properly informed, without undue delay, about any claim or proceedings which may give rise to a claim of the Purchaser in relation to the Representations, (ii) no binding declarations shall be made vis-à-vis any court, public authority or third party without the prior written instruction of the Sellers Representative and the Purchaser, (iii) such measures or actions shall be taken or omitted as the Sellers Representative may instruct, at the expense of the Sellers, to avoid, defend, dispute or settle such claim and (iv) for such defense, dispute or settlement action such advisors shall be retained as selected by the Sellers Representative.

 

 

 

To the extent Representations refer to knowledge or Knowledge of the Guarantor or Guarantor’s Knowledge, knowledge or Knowledge of the Guarantor or Guarantor’s Knowledge means the knowledge of each of Dr. Weis and Dr. Hauch acting with the due care of a prudent business man (Sorgfalt eines ordentlichen Kaufmanns), and the knowledge of either of them shall constitute knowledge, Knowledge of the Guarantor or Guarantor’s Knowledge.

 

 

Claims of the Purchaser under, or in connection with, Representations can only be raised if and to the extent that (i) each individual claim, or a series of similar claims, exceeds EUR [**Redacted**] and (ii) the aggregate amount of claims which can be raised pursuant to lit. (i), exceeds EUR [**Redacted**], in which case the Purchaser shall be entitled to claim the full amount (Freigrenze). The before limitations shall not apply in respect of Representations and related claims relating to (i) the title to Stocks, and (ii), for the avoidance of doubt, Indemnifications.

 

 

The maximum liability of the Sellers for all claims of the Purchaser under, or in connection with, the Representations shall be limited to an amount equal to the following percentages of the purchase price/s paid or fallen due under this Agreement: 20% of the First Purchase Price plus 15% of any further purchase prices (i.e. Second, Third and any and all Milestone Payments). The amount of the maximum liability increases therefore from USD 2 million (maximum liability upon First Purchase Price becoming due) if and to the extent that the Second or Third Purchase Price or Milestone Payments are paid or become due, and such increase(s) however, shall have – for the avoidance of doubt –retroactive effect as from Completion onwards and shall therefore increase any claims of the Purchaser in relation to Representations, not depending when such claim has fallen or becomes due or if such claim has already been paid based on or dismissed due to a originally lower maximum amount of liability. For the avoidance of doubt, the Sellers shall in no event be liable to pay more than they have received as purchase prices. The before limitations shall not apply in respect of claims (i) relating to the title to Stocks, (ii) Tax Representations (for the avoidance of doubt as represented by Sellers Guarantor) and (iii), for the avoidance of doubt, Indemnifications (for the avoidance of doubt as given by Sellers Guarantor); for the avoidance of doubt, Section 4.10 (h) shall remain unaffected. Among the Sellers the following shall apply: Sellers Guarantor has confirmed in a separate agreement between the Sellers, the Silent Partnership Seller and the Agent that Sellers Guarantor has no claims for recourse against Seller 2 and Seller 5 unless Seller 2 and Seller 5 are liable under Section 3 of this Agreement.

 

 

The period of limitation for all Representations and related claims of the Purchaser relating to the title to shares in the Company shall run until the fifteenth (15) anniversary of the Completion; the period of limitation for all other Representations under this Agreement shall run until 30 June 2013, except for the Tax Representations which shall run until the period indicated in Exhibit 5.8. For the avoidance of doubt, the before limitations shall not apply to Indemnifications.

 

 

 

 

 

 

 

 

 

 

 

 

 

To the extent permitted by law, the Parties agree that all payments made in context with Representations and Indemnifications shall be adjustments to the purchase prices for all Tax purposes.

 

 

From and after the Completion, the Sellers Guarantor agrees to indemnify (freistellen) (the Indemnification/s) the Company and/or the Purchaser, as the case may be, from any damages referred to and subject to the regulations set forth in EXHIBIT 5. For the avoidance of doubt, the actual amount of compensation owed by the Sellers Guarantor under this Agreement for any claim will not be increased by the fact that Indemnifications and Representations may relate to the same matter or breach (i.e. no double counting of damages).

 

The Sellers Guarantor shall – as further outlined in Exhibit 5 – in particular indemnify the Company from any and all claims, costs and damages in relation to or caused by claims of [**Redacted**] that were not [**Redacted**], and such indemnification to include in particular to obligate the Sellers Guarantor to pay all costs spent by the Company due to litigation, including fees charged by legal advisors that are in excess of the statutory fee schedule. The Purchaser and the Sellers Guarantor shall negotiate in good faith if and to which extent the indemnification can be limited, considering however that neither the Purchaser nor the Company shall have cash requirements or liabilities with view to [**Redacted**] acting as [**Redacted**] and in context with [**Redacted**] (as outlined in this Agreement), the [**Redacted**] (in particular in context with the [**Redacted**] and all consequences under or caused by that [**Redacted**]) and [**Redacted**] matters.

 

 

 

 

As from the date hereof until and including the Completion the Sellers Guarantor shall, to the extent legally possible, procure that

 

 

 

 

 

 

 

 

 

 

 

 

 

(d)

the management of the Company shall inform the Purchaser in relation to all material matters concerning the operation of the business of the Company; notwithstanding the before, the Parties are in agreement that prior to the Completion, the Company and its management shall exercise, consistent with the terms and conditions of this Agreement, complete control and supervision of its operations.

 

 

 

 

 

 

 

 

If a specific consent of a person is required for the Company to own or use as from the Completion any intellectual property, technology or hardware that is necessary or useful to conduct the business of the Company as currently conducted, the Company shall cooperate with Purchaser to endeavour that the Company obtains such consents prior to the Completion.

 

 

The Parties shall use their best efforts to take, or cause to be taken, all actions and to do, or cause to be done, all things necessary, proper or advisable to consummate and make effective the transactions contemplated hereby. Without limiting the generality of the foregoing, the Parties will, as promptly as practicable make, or cause to be made, all such filings and submissions as are required to be made by it or its related parties under applicable Law, and give such reasonable undertakings as may be required there under, to consummate the transactions contemplated hereby.

 

 

At all times prior to the Completion, each of the Parties shall promptly notify the other Parties in writing of any fact, condition, event or occurrence that could reasonably be expected to (i) result in the failure to be satisfied of any of the conditions contained in this Section promptly upon becoming aware of the same, or (ii) have a Material Adverse Effect on the operations of the respective business of the Company.

 

 

 

The Purchaser hereby guaranties to each of the Sellers by way of an independent promise of guaranty (selbständiges Garantieversprechen) that the statements set forth hereinafter are complete and correct as of Signing and the Closing Date.

 

Existence. The Purchaser has been duly established under the laws of Bermuda. The Purchaser validly exists.

 

Authority. The Purchaser is entitled to enter into this Agreement and to acquire the Sold Stocks without any limitations or restrictions.

 

Any liability of the Purchaser for a breach of one or any of the above guarantees shall be limited to the amount of the First Purchase Price. No further representations or warranties are given by the Purchaser.

 

 

The Sellers Guarantor and the Purchaser hereby agree to the non-compete contained in EXHIBIT 8., and shall execute such non-compete agreement at the Closing Date.

 

 

 

The consummation of the Sale and Purchase (the Closing) shall take place at the offices of the Company five (5) business days after the date on which the CPs have been fulfilled or waived, or at any other time or place which the Parties will mutually agree upon in writing (such date the Closing Date).

 

 

The obligation of the Purchaser to carry out the Closing shall be subject to the fulfilment and satisfaction, on or prior to the Closing Date, of each of the following conditions precedent (aufschiebende Bedingungen) (the CP’s) any or all of which may be waived by the Purchaser in whole or in part to the extent permitted by applicable Law:

 

 

 

 

 

 

Each of the Purchaser and the Sellers shall have the right to withdraw from this Agreement by written notice by the withdrawing party to the respective other party if the CPs have not been satisfied, at the latest, on 30 November 2010.

 

 

At the Closing Date, the following actions shall be effected in the stated order:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(o)

The supervisory board of the Company shall, upon Sellers’ receipt of payment of the First Purchase Price, register the Purchaser as new stockholder in relation to the Sold Stocks.

 

 

 

 

The regulations regarding the Second and Third Payment Dates are set out in Exhibits 2.2 and 2.3.

 

 

 

 

For purposes of this Agreement (including its Exhibits), the following terms shall have the meanings specified in this Section:

 

“Affiliate” shall mean, 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 specified Person, where “control” (including the terms “controlled by” and “under common control with”) means the possession, directly or indirectly, of the power to direct or cause the direction of the affairs or management of a Person, whether through the ownership of voting securities, as trustee or executor, by contract or otherwise

 

“Business Day” means any day of the year on which national banking institutions in Frankfurt am Main, Germany, and in Boston, MA, USA are open to the public for conducting business and are not required or authorized to close.

 

“Law/s” means all applicable provisions of all (a) constitutions, treaties, statutes, laws (whether federal, state or local law (including the common and civil law)), codes, rules, regulations, ordinances or orders of any Governmental Authority, (b) Governmental Approvals, (c) orders, decisions, injunctions, judgments, awards and decrees of or agreements with any Governmental Authority and (d) any administrative rule or order of general application issued by any Governmental Authority.

 

“Lien” means any mortgage, pledge, deed of trust, hypothecation, right of others, claim of any nature (contingent or otherwise), security interest, encumbrance, burden, title defect, title retention agreement, lease, sublease, license, occupancy agreement, easement, covenant, condition, encroachment, ownership limitation, voting trust agreement, interest, option, right of any other Person, negotiation or refusal, proxy, lien, charge or other restrictions or limitations of any nature whatsoever or any rights of third parties, including but not limited to such Liens as may arise under any contract.

 

“Material Adverse Effect” means (x) any material violation of any of the covenants contained in Section 6.1, (y) any event, occurrence, fact, condition, change, development or effect that could reasonably be expected to result in a liability or diminution in value of the Company in excess of EUR 2,000,000 (in word: Euro two million) or (z) any event that is or may materially affect the Business Intellectual Properties, including the Company being sued for Infringements.

 

“Person” means any individual, partnership, firm, corporation, association, trust, unincorporated organization, joint venture, limited liability company, governmental authority or other entity.

 

“Related Party/ies” shall mean (i) any Affiliate, shareholder, director or officer of the Company, (ii) any director or officer of any Person that, alone or in concert with any other Person, exercises direct or indirect control (as such term is defined in the definition of “Affiliate” hereinabove) of the Company and/or (iii) any family member or other relative (Angehörige in the sense of Sec. 15 Abgabenordnung) or related persons (Nahestehende Personen in the sense of Sec. 138 Abs. 1 AO) of each Seller and/or an affiliated enterprise (verbundenes Unternehmen) of each Seller.

 

 

Further definitions are set out in this Agreement and its Exhibits, and such definitions shall also apply to the entire Agreement including all of its Exhibits.

 

 

The Parties each agree to enter into such other documents or agreements and to take such other action as may be reasonably necessary or desirable for the implementation of this Agreement and the consummation of the transactions contemplated hereby.

 

 

The Purchaser may at its discretion convert the Company in any legal form providing, under German law, for a limitation of the shareholders’ liability for liabilities of the company (in particular GmbH or KG) and may amend or replace the current articles of association.

 

 

All notices and other communications which are required or permitted to be given under this Agreement, shall be in writing (including email unless stated otherwise in this Agreement) and shall be deemed given when delivered as follows:

 

if to any or all of the Sellers or the Sellers Guarantor, or if by any or all of the Sellers or the Sellers Guarantor, exclusively to or by the Sellers Representative. The Sellers Representative shall be Dr. Alexander Weis

 

c/o AdnaGen AG,

 

with copy (for information purposes) to

 

Seller 2 (tbg), attention Ulrich Wendt, address as specified in the parties section of this Agreement,

 

if to the Purchaser or to the Alere Guarantor, to

Alere Inc.

General Counsel

Ellen V. Chiniara -

51 Sawyer Road, Suite 200

Waltham, MA  02453

USA

 

with copy (for information purposes) to

 

Rechtsanwalt Klaus Mohr

c/o Meurer Mohr & Partner Rechtsanwälte Partnerschaftsgesellschaft

Westendstraße 16-22

60325 Frankfurt am Main

Germany

 

or to such other address or to such other person as the Purchaser, the Alere Guarantor or the Sellers (including the Sellers Guarantor) respectively hereto shall have last designated by notice to the other Parties pursuant to this provision, understood however that the Sellers must designate one person authorized to receive notices for all Sellers.

 

All such notices and other communications shall be deemed to have been received (i) if by personal delivery on the day after such delivery and (ii) if by overnight courier, on the day delivered.

 

 

Each Party agrees to keep confidential and not to disclose to any person any written or oral confidential information provided to it by or on behalf of any other Party, or otherwise obtained by such Party, as the case may be, without the prior consent of the relevant Party from whom the confidential information was obtained and/or to whom it relates. Nothing contained in this Section 10.5 shall prevent any Party from disclosing such confidential information to (i) any of its affiliates (provided such Party informs each such affiliate that is a recipient of confidential information and the restrictions in respect thereof and is responsible for any disclosure or use of such confidential information by such affiliates in breach of the terms hereof, (ii) any member of the board of directors of such Party, or (iii) to any person if required by applicable Law or stock exchange rules.

 

No announcements or press releases in relation to this Agreement or the underlying transaction shall be made without the prior written approval of the Purchaser.

 

 

If any provision of this Agreement is or becomes invalid, ineffective or unenforceable, in whole or in part, or if it contains a gap, this shall not affect the validity, effectiveness or enforceability of the remaining provisions hereof. The parties are obligated to cooperate in replacing the invalid, ineffective or unenforceable provision by a valid, effective or enforceable provision, which most nearly achieves the commercial result of what was originally intended.  In the event that there is a gap, the parties are obligated to fill such a gap by a provision, which, had the parties been aware of such a gap, the parties would have reasonably inserted when entering into this Agreement.

 

 

The table of contents, headings and sub-headings of this Agreement are for reference purposes only and are to be given no effect in the construction or interpretation of this Agreement. Any references to Clauses, Exhibits or Annexes in this Agreement shall refer to Clauses and Exhibits of and Annexes to this Agreement unless otherwise indicated.

 

 

 

Save as expressly provided herein, each Party shall pay its own costs and expenses relating to the negotiations, preparation, execution and implementation of this Agreement, whether or not the transactions contemplated by this Agreement are consummated. Any other charges and costs which result from required filings or other regulatory requirements shall be borne by the Purchaser, except for filings with the commercial register or tax office which shall be borne by the Company. It is being understood that the Sellers may not affirmatively elect (optieren) in connection with this Agreement to VAT. The Parties each shall bear their own costs, expenses and the fees for legal and financial advisors and other representatives, incurred in connection with the transactions contemplated by this Agreement.

 

 

If a Party fails to pay any sum payable by it under this Agreement on the due date for payment, it shall pay interest at the statutory interest rate for delayed payments (Verzug) pursuant to Section 288 para. 2 BGB on such sum for the period from and including the due date up to the date of actual payment (after as well as before judgement) unless otherwise provided in this Agreement. The interest will accrue from day to day and shall be payable on demand in monthly installments and shall be compounded monthly in arrears.

 

 

This Agreement is written in the English language (except that Exhibits may be partly in the German language). Terms to which a German translation has been added shall be interpreted throughout this Agreement in the meaning assigned to them by the German translation.

 

 

This Agreement (except for Exhibit 8) shall be governed by and construed in accordance with the laws of the Federal Republic of Germany, without giving effect to its principles or rules of conflict of laws to the extent such principles or rules are not mandatorily applicable by statute and would require the application of the laws of another jurisdiction. Exhibit 8 and the non-compete agreement contained therein shall be exclusively governed by the laws of Delaware.

 

 

 

(b)

The preceding paragraph (a) shall not apply to Exhibit 8. The non-competition agreement contained in Exhibit 8 shall form, in particular for purposes of arbitration and procedural rules in general, an independent contract and shall be subject to the US arbitration rules contained therein.

 

 

This Agreement (including the Exhibits hereto) represents the entire understanding and agreement between the parties hereto with respect to the subject matter hereof.  Amendments and alterations of this Agreement must be in writing. This shall also apply to a waiver of the written form.

 

 

This Agreement shall be binding upon and inure to the benefit of the parties to the Agreement and their respective successors and permitted assigns. No assignment of this Agreement or of any rights or obligations hereunder may be made by either any of the parties (by operation of law or otherwise) without the prior written consent of the other parties hereto and any attempted assignment without the required consents shall be void except that the Purchaser shall be entitled without approval of any other party to this Agreement to assign any and all rights and obligations including its entire position as a party to the Agreement to one or more Affiliates or Affiliates of the Alere Guarantor and such enterprises or companies being referred to as “Nominee” or “Nominees”.

 

The Alere Guarantor hereby guarantees the due and timely fulfillment by the Purchaser, the Nominee or Nominees of any and all obligations under this Agreement.

 

Further, assignments in favor of Alere’s Guarantors group financing banks are permitted without approval of any party.

 

 

The Exhibits identified in this Agreement are incorporated herein by reference and made an integral part hereof.

 

 

The parties have participated jointly in the negotiation and drafting of this Agreement.  In the event an ambiguity or question of intent or interpretation arises, this Agreement shall be construed as if drafted jointly by the parties and no presumption or burden of proof shall arise favoring or disfavoring any party by virtue of the authorship of any of the provisions of this Agreement.

 

 

Number	Name
1.	OncoVista Innovative Therapies Inc., 14785 Omicron Drive Suite 104, San Antonio, TX, USA
2.	tbg Technologie Beteiligungs-Gesellschaft mbH (“tbg”), Ludwig-Erhard-Platz 1-3, 53179 Bonn
3.	Rose Nominess Ltd, P.O. BOX 25, Regency Court, Glategny Esplanade, St. Peter Port, Guernsey, GY1 3 AP
4.	Rob Cawthorne, Innisfree, 36 South Road, Warwick, WK02, Bermuda
5.	FELICITAS Beteiligungsgesellschaft Hannover mbH (formerly: Biomed). Aegidientorplatz 1, 30159 Hannover
6.	Axel Deuring, Buchenweg 6a, 30900 Wedemark
7.	Dr. Eckhart Schnakenberg, Kesener Weserstr. 4 B, 28832 Achim
8.	Hans-Peter Winkelmann, Tostedter Weg 11, 21244 Buchholz
9.	Hans Winkelmann, Am Anger 14, 31535 Neustadt
10.	Marion Buchwald, Effertzfeld 8, 41564 Kaarst
11.	Michael Winkelmann, Hagenerstr. 52 e, 31535 Neustadt
12.	Stefan Schröder, Breite Straße 2, 30159 Hannover
13.	Tim Freise, Gartenstr. 107, 60596 Frankfurt
14.	Dr. Silke Lankiewicz, An der Garather Motte 23, 40595 Düsseldorf
15.	Alere Holdings Bermuda Limited Canon's Court, 22 Victoria Street, Hamilton HM12, Bermuda
16.	Alere, Inc., 51 Sawyer Road, Suite 200, Waltham, MA 02453 USA

 

***

 

 

 

 

 

 

 

 

 

 

 

Gross Revenues shall have the following meaning: total net sales (Umsatzerlöse) calculated according to Sec 275 para. 3 number 1 HGB, proceeds from public grants up to a maximum grant amount of 10% of the Revenue Milestone, license income (royalties or up-front payments) – excluding Category 3 Payments, subject however to the Allocation Option - within the Milestone Period up to and including the Target Date. The Sellers shall have the following option (the Allocation Option): if the Company receives within the Milestone Period payments under Category 3 of Exhibit 2.4 (royalties and up-front payments from a pharmaceutical alliance) (Category 3 Payments), the Sellers Representative can opt within the Milestone Period in writing to attribute all Category 3 Payments received from a pharmaceutical alliance to the Gross Revenues: if the Sellers Representative opts accordingly, the relevant Category 3 Payments will not be considered under Category 3 of Exhibit 2.4. In other words: the Sellers Representative can decide to consider all Category 3 Payments received from a pharmaceutical alliance either in Schedule 2.4 as royalties/up-front payments or – if opted - in Schedule 2.2 as Gross Revenues.

Positive Net Income shall have the following meaning: the total of the net income of the Company achieved within the Milestone Period up to and including the Target Date (Net Income) must amount to at least EUR 1 (in words: One Euro) whilst the Net Income shall be calculated as if the annual net income (Jahresüberschuß in the sense of Sec. 275 para. 3 number 19 HGB would be calculated for the relevant period up to the Target Date excluding, for the avoidance of doubt, (i) any compensation of losses (Verlustausgleiche) under enterprise agreements (Unternehmensverträge) or (ii) loss reducing contributions or (iii) dissolutions of reserves that reduces losses. In addition, the following extraordinary positions (revenues and costs) shall not be considered in the calculation of the Net Income:

 

No Debt shall have the following meaning: within a period of 12 months prior to the Target Date and at the Target Date, the Company shall not have established (begründet) liabilities in the sense of Sec. 266 para. 3 C. numbers 2, 5, 6, 7 HGB.

As from the transfer of the silent partnerships of Seller 2 and the Partnership Seller to the Purchaser, the relevant silent partnership amounts shall not constitute debt for the purposes of the No Debt definition. The same shall apply to debts that (i) the Purchaser forces the Company to take outside the commercial needs of the Company, or (ii) that are caused by the corporate structuring of the Cash Injection 1, the Cash Injection 2 or an Additional Cash Injection or a Conflict Cash Injection (as defined in the SPA) provided to the Company.

 

 

 

 

 

 

 

 

 

 

 

 

the Second Purchase Price shall irrevocably be deemed to be achieved in full and the payment of the Second Purchase Price shall become payable on the Second Payment Date unless the Sellers Representative had agreed in writing to such measure. The Parties agree that the change of Company’s products trade-names and in particular trading the Company’s products under Alere-group trademarks shall in no event be deemed as a Purchaser’s Adverse Action.

 

 

 

 

 

 

 

 

All payments of the Second Purchase Price (less deductions as outlined) shall be effected by the Purchaser in USD to the Designated Account.

 

 

 

 

 

AdnaGen to receive [**Redacted**] for either (i) the [**Redacted**] or (ii) the [**Redacted**]. Up to the Third Payment Date plus a grace period of 5 Business Days, the Third Purchase Price shall bear no interest.

 

No Third Purchase Price shall fall due if the Clearance Milestone is not achieved within the Milestone Period.

 

 

 

 

 

The payment of the Third Purchase Price (less deductions as outlined) shall be effected by the Purchaser in USD to the Designated Account.

 

 

 

 

 

 

 

 

16.	The Targets fall into 4 categories, each with their own specific requirements, that are:

 

 

Category 1 Requirements: Regulatory Clearance means obtaining the approval of the relevant product for the general sale and/or distribution to professional users in the relevant territory by the relevant authority (i.e. [**Redacted**]) within in the Target Period. The relevant Targets (of Category 1) are set out in the following Target Table 1:

 

Target	Territory	Cash Payment	Timeline (as from Completion)
Regulatory clearance of following developed test in the required territory		Up to $28M (cap)
[**Redacted**]	[**Redacted**]	$6M	36 Months
[**Redacted**]	[**Redacted**]	$8M	36 Months
[**Redacted**]	[**Redacted**]	$1M	36 Months
[**Redacted**]	[**Redacted**]	$3M	36 Months
[**Redacted**]	[**Redacted**]	$3M	36 Months
[**Redacted**]	[**Redacted**]	$2M	36 Months
[**Redacted**]	[**Redacted**]	$3M	36 Months
[**Redacted**]	[**Redacted**]	$1M	36 Months
[**Redacted**]	[**Redacted**]	$1M	36 Months

 

 

 

Category 2 Requirements: Endorsement of Test means receiving active support for the general use of the respective test by [**Redacted**] in a form that is directed to and visible for potential professional users of such test, i.e. by inclusion of the test in [**Redacted**] guidelines as a recommended test, within the Milestone Period. The relevant tests (of Category 2) are set out in the following Target Table 2:

 

Target	Territory	Cash Payment	Timeline (as from Completion)
Endorsement of test		Up to $20M (cap)
[**Redacted**]	[**Redacted**]	$7M	36 Months
[**Redacted**]	[**Redacted**]	$5M	36 Months
[**Redacted**]	[**Redacted**]	$7M	36 Months
[**Redacted**]	[**Redacted**]	$5M	36 Months
[**Redacted**]	[**Redacted**]	$2M	36 Months
[**Redacted**]	[**Redacted**]	$2M	36 Months
[**Redacted**]	[**Redacted**]	$5M	36 Months

 

 

Category 3: Validation of IP; Pharmaceutical Alliances; [**Redacted**] and [**Redacted**].

 

Category 3 Requirements are:

 

 

 

 

 

 

 

 

The relevant amount of a Target Payment depends on the amount of the received up-front payment. The relevant figures are set out in the following Target Table 3. For each received upfront amount, just one “Cash Payment” (as referred to in the table) falls due being determined on the basis of the received upfront amounts from a pharmaceutical alliance, i.e. the “Cash Payment” amounts in the table are not to be summed up in case a received upfront amount equals or exceeds USD 2 million. The Parties explicitly acknowledge that a difference of USD 1 in relation to received upfront-payments can therefore cause a “Cash Payment” difference of up to USD 2.5 million, i.e. in case of an upfront payment received in the amount of USD 10 million the “Cash Payment” will be in total USD 5 million (rather than in total USD 2.5 million in case of an upfront payment received in an amount of USD 10 million less USD 1). If more than one upfront amount is received from the same pharmaceutical alliance within the relevant “Timeline”, such amounts are to be summed up and the respective total amount shall form the basis for determining the “Cash Payment”.

 

Target		Cash Payment	Timeline (as from Completion)
Validation of IP – Pharmaceutical alliances – [**Redacted**] and [**Redacted**]		Unlimited
Upfront amounts received:
-$1 - < $2M		$500k	36 Months
-≥ $2 – < $5M		$1M	36 Months
-≥ $5 – < 10M		$2.5M	36 Months
-≥ $10M+		$5M (maximum / cap)	36 Months

 

Category 3 Payments (as defined in Exhibit 2.2) that are attributed to Gross Revenues due to the Sellers Representative exercising the Allocation Option (as defined in Exhibit 2.2) shall be disregarded in respect to Category 3 Targets, i.e. such Category 3 Payments will not be considered as royalties or up-front-payments in this Exhibit 2.4 but only as Gross Revenues in Exhibit 2.2. The amount of a Target Payment shall be calculated and agreed by the Parties immediately following expiration of the Target Period; the above Clause 3 shall apply to the payment terms.

 

 

Category 4 Requirements are:

 

 

 

 

 

The relevant amount of the Target Payment shall be 35% of the amount of the up-front payment or milestone payment received by the Company (net of costs for all activities related to or caused by the pharmaceutical alliance to the Alere-group including the Company) in a calendar year by the Company, the last calendar year however being 2016. As from 1 January 2017 onwards, no claims for Target Payments for Category 4 Requirements shall arise. The amount of the relevant Target Payment shall be calculated and agreed by the Parties on an annual basis immediately following the end of a calendar year; the above Clause 3 shall apply to the payment terms.

 

An additional USD 2 million Target Payment falls due if and when [**Redacted**] including the [**Redacted**] Company’s product is approved by [**Redacted**] anytime; the above Clause 3 shall apply to the payment terms. A claim for this Target Payment expires automatically on 31 December 2016.