<PAGE> 1
EXHIBIT 4.1
[GRAPHIC OMITTED]
AT FRANKFURT AM MAIN ON THIS JUNE 28, 2000
BEFORE ME THE UNDERSIGNED NOTARY PUBLIC
DR. HEINZ L. BAUER
WITH REGISTERED OFFICE AT FRANKFURT AM MAIN
THE FOLLOWING PARTIES APPEARED TODAY:
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Purchase Agreement ADL GmbH Page 2
1. Petra Urban, with business address c/o Bauer Gronen Kiesgen, 60486
Frankfurt am Main, Hamburger Allee 1, demonstrating identity to the
notary public by means of her personal identity card;
hereinafter not acting on her own behalf but representing
a. Franz Maier, Am Haidengraben 7, 79199 Kirchzarten, *2.2.1952
b. Eva Heidt, Stuhlinger Strasse 32, 79106 Freiburg, *23.3.1959
c. Joachim Hevler, Am Haidengraben 11, 79189 Kirchzarten, *24.3.1961
authorized by written Power of Attorney, issued on June 23, 2000,
bearing the seal of the undersigned notary public. The Power of
Attorney was produced to the notary in its original form and a
notarized copy hereof is attached as SCHEDULE 0 hereto.
2. Stephan Schmidt Esquire, with business address c/o SJ Berwin Knopf
Tulloch, 60486 Frankfurt am Main, Hamburger Allee 1, demonstrating
identity to the notary public by means of his personal identity card;
hereinafter not acting on his own behalf but representing
MATRITECH, Inc., with business address at 330 Nevada Street,
Newton MA 02460 USA, authorized by written Power of Attorney,
issued on June 20, 2000, bearing the seal of Julia S. Forbes,
notary public, being certified by Apostille. The Power of Attorney
was produced to the notary in its original form and a notarized
copy hereof is attached as SCHEDULE 1 hereto.
At the request of the persons appearing this notarial deed is executed in the
English language, which the persons appearing are sufficiently capable of.
The notary inquires of the persons appearing whether he has been concerned
with the matter as defined in ss. 3 Abs. 1 Nr. 7 BeurkG. They declare that this
is not the case.
The persons appearing requested notarization of the following
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Purchase Agreement ADL GmbH Page 3
AGREEMENT
for the sale and purchase of the entire shares in
ADL-VERTRIEBSGESELLSCHAFT mbH
GESELLSCHAFT FUR ALLERGIE, DIAGNOSTIKA UND LABORKONZEPTE ("ADL")
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Purchase Agreement ADL GmbH Page 4
TABLE OF CONTENTS
<TABLE>
<CAPTION>
<S> <C>
Article I Recitals................................................................... 5
1 Introduction................................................................... 5
2 Interpretation................................................................. 6
3 Liability...................................................................... 7
Article II Sale and-Purchase......................................................... 7
4 Sale and Assignment, Effective Date............................................ 7
5 Consideration And Call Option.................................................. 8
Article III Representations and Warranties...........................................12
6 General........................................................................12
7 Representations and Warranties of Sellers with respect to
the Shares, ADL and the ADL Business ..........................................12
9 Representations and Warranties of Sellers with respect to
the Acquisition Consideration .................................................27
Article IV Indemnification...........................................................29
10 Indemnification by the Sellers, Payment........................................29
11 Notification of Claims; Election to Defend.....................................31
12 Notification of transfer of shares.............................................32
13 Supplementary Contracts, Ancillary Documentation...............................33
15 Notices........................................................................33
16 Governing Law, Language, Place of Jurisdiction.................................34
17 Announcements..................................................................34
18 Fees and Expenses..............................................................35
19 Loan Agreement.................................................................35
20 Entire Agreement...............................................................36
21 Severability...................................................................36
</TABLE>
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Purchase Agreement ADL GmbH Page 5
ARTICLE I
---------
RECITALS
1 INTRODUCTION
1.1 ADL, which has its corporate domicile at Freiburg, Germany, and is
registered in the Commercial Register of the municipal court of
Freiburg under Ref.-No. HRB 5009 ("ADL"), is engaged in the business
of the import, export and sale of equipment, tests and software for
laboratories in the field of human, veterinary and environmental
analysis especially in the areas of allergy and test-tube
diagnostics, including service support, logistics and sales (the "ADL
BUSINESS").
1.2 Franz Maier, Eva Heidt and Joachim Hevler (collectively, the
"SELLERS") collectively own 100% of the issued share capital of ADL,
which is in the total amount of 200,000DM (the "ADL SHARE CAPITAL").
Each Seller holds property in the following number of shares of the
ADL Share Capital:
<TABLE>
<CAPTION>
-------------------------------------------------------------------------------
NAME OF SHAREHOLDER NUMBER OF SHARES VALUE OF SHARES IN DM
-------------------------------------------------------------------------------
<S> <C> <C>
Franz Maier 1 43,000
-------------------------------------------------------------------------------
1 30,000
-------------------------------------------------------------------------------
1 12,500
-------------------------------------------------------------------------------
1 10,000
-------------------------------------------------------------------------------
1 7,000
-------------------------------------------------------------------------------
3 5,000
-------------------------------------------------------------------------------
1 2,500
-------------------------------------------------------------------------------
Eva Heidt 1 30,000
-------------------------------------------------------------------------------
</TABLE>
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Purchase Agreement ADL GmbH Page 6
<TABLE>
<S> <C> <C>
1 5,000
-------------------------------------------------------------------------------
1 5,000
-------------------------------------------------------------------------------
Joachim Hevler 1 40,000
-------------------------------------------------------------------------------
</TABLE>
1.3 The aforementioned shares represent 100% of the totally paid up and
outstanding share capital of ADL.
1.4 ADL is currently managed by a team made up of Franz Maier, Eva Heidt
and Joachim Hevler.
1.5 MATRITECH, Inc., a corporation organized under the laws of the State
of Delaware, USA (the "PURCHASER" or "MATRITECH") wishes to acquire
all the shares referred to in Section 1.2 hereof (the "SHARES") from
the Sellers by means of this purchase agreement (the "PURCHASE
AGREEMENT") pursuant to the terms and conditions hereof.
2 INTERPRETATION
2.1 In this Purchase Agreement (including the Introduction and the
Schedules), the following expressions shall have the following
meanings:
Business Days means German business days
BGB means the German Civil Code
HGB means the German Commercial Code
Domestic means the Federal Republic of Germany
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Purchase Agreement ADL GmbH Page 7
3 LIABILITY
3.1 The Sellers shall assume collective liability for their respective
obligations incurred under the terms of this Purchase Agreement
according to Sections 421 ff. BGB.
NOW, THEREFORE, in consideration of the mutual covenants, benefits, conditions
and agreements set forth herein, it is hereby agreed as follows:
ARTICLE II
----------
SALE AND PURCHASE
4 SALE AND ASSIGNMENT, EFFECTIVE DATE
4.1 The Sellers hereby sell their respective Shares as set out in Section
1.2. to the Purchaser who agrees to hereby purchase the respective
Shares. The Sellers hereby assign their respective Shares to the
Purchaser as of 12 pm today (the "EFFECTIVE DATE"). The Purchaser
hereby assumes the respective Shares (Annahme der Abtretung) with
effect from the Effective Date. For the avoidance of doubt: Among
other things, all issued share capital and additional equity shall
thereby be transferred to the Purchasers.
4.2 Each Seller hereby undertakes with the Purchaser at the request of
the Purchaser to do or procure to be done all such further acts and
things and execute or procure to be executed all such further deeds
and documents as may be necessary or desirable fully and effectively
to vest in the Purchaser the legal and beneficial ownership of the
Shares and the benefits of this Purchase Agreement and any document
specified herein and, pending such vesting, a Seller shall hold such
Shares and benefits in trust
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Purchase Agreement ADL GmbH Page 8
for the Purchaser and shall receive all monies in connection
therewith as trustee of the Purchaser and shall account to the
Purchaser forthwith on receipt.
ARTICLE III
-----------
ACQUISITION CONSIDERATION
-------------------------
5 CONSIDERATION AND CALL OPTION
5.1. In consideration for the sale and assignment of the Shares to the
Purchaser, the Purchaser shall procure the issue to the Sellers in
proportion of their respective shareholdings in ADL of that number of
shares of the non-registered Common Stock of MATRITECH, $.01 par
value (the "MATRITECH STOCK"), valued at the average of the quoted
closing prices from 18 May 2000 through 16 June 2000 on the NASDAQ
Stock Market (the "MARKET PRICE") at DM240,000 in aggregate (the
"INITIAL CONSIDERATION"). The aggregate Consideration shall be split
so that the Sellers receive MATRITECH Stock in the value of
Franz Maier 144,000DM
Eva Heidt 48,000DM
Joachim Hevler 48,000DM.
At the Effective Date the Purchaser shall pay to the Sellers the
Initial Consideration by means of delivery of the respective share
certificates to the Sellers. For the purposes of establishing the
value of the Consideration in US dollars, the exchange rate is deemed
to be $1 = DM2.0532, being the dollar spot rate published in the
Financial Times newspaper of 16 June 2000.
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Purchase Agreement ADL GmbH Page 9
5.1.1 A second payment (the "ADDITIONAL CONSIDERATION") will be made 60
days after the completion of a financial audit of ADL for the fiscal
year ended December 31, 2000. This payment will be calculated by
multiplying 20% by the increase in year 2000 revenues over year 1999
revenues of DM3,580,000,--. If year 2000 revenues exceed
DM4,395,000,-- the amount of the excess over 4,395,000,-- will be
multiplied by 40% and this result will be added to the Additional
Consideration.
5.1.2 This Additional Consideration, if any, shall be paid to the Sellers
in shares of MATRITECH Stock the number of which shares will be
determined by dividing the payment amount by the same Market Price
used to calculate the payment in Section 5.1, pro rata in the same
proportions as the Initial Consideration is shared among the Sellers.
The Initial Consideration and the Additional Consideration are
collectively referred to as the "CONSIDERATION."
The Sellers agree that they will not sell, assign, transfer, pledge
or otherwise dispose of any of the shares of MATRITECH Stock received
by them under this Purchase Agreement prior to the first anniversary
of the Effective Date or while any of such shares are subject to the
Call Option described in Section 5.2. Thereafter the Sellers agree
that they will only sell or dispose of such shares in accordance with
the terms of this Purchase Agreement and applicable securities laws.
5.2. The Sellers - each separately - herewith grant the Purchaser a call
option (the "CALL OPTION") in the event of them leaving ADL, under
the circumstances described in Section 5.3, as follows:
Conditionally subsequent to and subject to (unter der aufschiebenden
Bedingung) the occurrence of a Trigger Event (as defined below) each
Seller herewith offers for sale to the Purchaser all or part of his
MATRITECH Stock received as the Consideration under the following
terms:
(i) In the event that a Trigger Event occurs with respect to a
Seller on or before the first anniversary of the Effective
Date, the Call Option
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Purchase Agreement ADL GmbH Page 10
will cover all MATRITECH Stock received by that Seller as
Consideration at a price of 5% of the quoted price of such
MATRITECH Stock on the NASDAQ Stock Market at the close of
business on the day the Trigger Event occurs or the next
business day, if such Trigger Event does not occur on a
business day;
(ii) In the event that a Trigger Event occurs with respect to a
Seller after the first anniversary but on or before the
second anniversary of the Effective Date, the Call Option
will cover 67% of all MATRITECH Stock received by that
Seller as Consideration at a price of 5% of the quoted
price of such MATRITECH stock on the NASDAQ Stock Market at
the close of business on the day the Trigger Event occurs or
the next business day, if such Trigger Event does not occur
on a business day;
(iii) In the event that a Trigger Event occurs with respect to a
Seller after the second anniversary but on or before the
third anniversary of the Effective Date, 33% of all
MATRITECH Stock received as Consideration by that Seller at
a price of 5% of the quoted price of such MATRITECH shares
on the NASDAQ Stock Market at the close of business on the
day the Trigger event occurs or the next business day, if
such Trigger Event does not occur on a business day.
All such offers may be accepted by the Purchaser within 4 weeks by
written notice to the Sellers who is subject to the Trigger Event
separately and any sale shall be completed on receipt of such notice.
The Seller shall take all such actions as necessary and or
appropriate to transfer title in such shares to the Purchaser. The
Purchaser shall be entitled, at its sole discretion, to provide any
consideration due to any seller under the Call Option either in kind
by means of delivering MATRITECH stock or by making payments in cash.
MATRITECH stock is to be valued as provided for in 5.2. (i - iii).
The exchange rate for cash shall be the US dollar spot exchange rate
published in the Financial Times newspaper of the day the Trigger
event occurs or of the next business day if such Trigger event does
not occur on a business day.
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Purchase Agreement ADL GmbH Page 11
If a Seller becomes obligated to sell any MATRITECH Stock to the
Purchaser under the Call Option and fails to deliver such MATRITECH
Stock in accordance with the terms of this Purchase Agreement, the
Purchaser may, at its option, in addition to all other remedies it
may have, send to the Seller the purchase price for such MATRITECH
Stock as is herein specified. Thereupon, MATRITECH upon written
notice to the Seller, (a) shall cancel on its books the certificate
or certificates representing the MATRITECH Stock to be sold under the
Call Option and (b) shall issue, in lieu thereof, a new certificate
or certificates representing such MATRITECH Stock, and thereupon all
of the Seller's rights in and to such MATRITECH Stock shall
terminate.
The obligations of the Sellers to transfer title in shares and/or
cash to the Purchaser and the obligations of the Purchaser to
transfer title in shares and/or cash to the Sellers as provided in
this clause 5.2. shall be due 2 weeks following the receipt of the
exercise notice by the Sellers.
In the event of a Call Option being exercised on the MATRITECH Stock
held by a single Seller, the shareholdings of the remaining two
Sellers shall be unaffected.
This Call Option shall expire in its entirety on the first business
day following the third anniversary of the Effective Date.
5.3. A Trigger Event for the purpose of this Purchase Agreement shall be
deemed to occur:
If a Seller ceases to work for or provide services to ADL be it as an
employee, managing director, consultant or in any other comparable
capacity if (1) he leaves of his own accord without the consent of
the Purchaser before the third anniversary of the Effective Date or
(2) ADL terminates the contract or otherwise dismisses such Seller
with good legal reason (wirksame Kundigung) such termination or
dismissal becoming effective before the third anniversary of the
Effective Date. For the avoidance of doubt: In case the shareholders
of the Company resolve to wind up the ADL for other reasons than its
insolvency, or in case of an insolvency caused by
<PAGE> 12
Purchase Agreement ADL GmbH Page 12
the withdrawal of loans or other finance instruments by the Purchaser
before maturity or in violations of a financing agreement, or in case
that ADL closes down its business (Aufgabe des Geschaftsbetriebs)
and the Sellers leave ADL because of such events before the third
anniversary of this Agreement, such events shall not be deemed to
be a Trigger Event.
ARTICLE IV
----------
REPRESENTATIONS AND WARRANTIES
(Zusicherungen und Garantieversprechen)
6 GENERAL
6.1 Each representation and warranty in this Purchase Agreement is a
separate and independent representation and warranty in relation to
each of the statements in the representation and warranty and no such
statement shall be limited by reference to any other such statement
or by the other terms of this Purchase Agreement.
6.2 Unless expressly stated to the contrary, each representation and
warranty in this Purchase Agreement shall be deemed given as of the
Effective Date. The same shall apply to the contents of and listings
in the Schedules attached hereto.
7 REPRESENTATIONS AND WARRANTIES OF SELLERS WITH RESPECT TO THE SHARES,
ADL AND THE ADL BUSINESS
7.1 The Sellers, jointly and severally, represent and warrant to
Purchaser each of the representations (Zusicherung einer Eigenschaft)
and warran-
<PAGE> 13
Purchase Agreement ADL GmbH Page 13
ties (selbstandige Garantieversprechen) contained in this Section 7,
each of which shall constitute an independent liability to the
Sellers.
7.2 ADL is a limited liability corporation duly organized and validly
existing under the German GmbH Act. ADL has the requisite corporate
power and authority to carry on the ADL Business as it is currently
conducted and is duly qualified or licensed to do the ADL Business,
in each jurisdiction where the character of its properties owned or
held under lease or the nature of its activities makes such
qualification necessary. Complete and correct copies of the
Certificate of Incorporation (Handelsregisterauszug) and the Articles
of Incorporation of ADL as in effect on the date hereof are attached
as SCHEDULE 7.2 hereto.
7.3 The Sellers have the necessary power and authority to execute and
deliver this Purchase Agreement and to perform the transactions
contemplated hereby. The execution and delivery hereof and the
performance of the transactions contemplated hereby by the Sellers
have been duly authorized and approved by ADL's shareholders, and
no other corporate or shareholder proceedings on the part of ADL, its
management board or the shareholders of ADL is necessary to authorize
or approve this Purchase Agreement or to perform the transactions
contemplated hereunder. This Purchase Agreement constitutes a valid
and binding obligation on each Seller, enforceable against each
Seller in accordance with the terms contained herein.
7.4 The ADL Share Capital consists of DM200,000, all of which is validly
issued and legally and beneficially held by the Sellers. All the ADL
Share Capital was issued in accordance with applicable laws, in
particular the German GmbH Act. There are no options, warrants,
calls, convertible notes, agreements, commitments or other rights
(the "STOCK RIGHTS") outstanding or coming into effect after the
Effective Date that would obligate ADL or any of the Sellers to
issue, deliver or sell shares of the ADL Share Capital, or to grant,
extend or enter into any such Stock Right.
<PAGE> 14
Purchase Agreement ADL GmbH Page 14
7.5 Each Seller represents and warrants that all of the Shares are (i)
validly issued and fully paid up and (ii) free and clear of any lien,
charge, security interest, pledge, option, right of first refusal,
voting proxy or other voting agreement, or encumbrance of any kind or
nature (any of the foregoing, a "LIEN"), as at the Effective Date or
coming into effect after the Effective Date, and no redemption of
share capital pursuant to Section 30 of the German GmbH Act of any
kind whatsoever has occurred from the time of incorporation of ADL to
the Effective Date, and (iii) that the Purchaser will obtain good and
marketable title to the Shares and (iv) that the SCHEDULE 7.5
attached hereto contains a comprehensive and correct description of
the development of shareholding in ADL GmbH including capital in-/
decreases and transfer of shares.
7.6 ADL has no subsidiaries and does not otherwise own or control,
directly or indirectly, any equity interest, or any security
convertible into an equity interest, in any corporation, partnership,
limited liability company, joint venture, association or other
business entity (any of the foregoing, an "ENTITY").
7.7 None of the Sellers or their own family members respectively
(including a spouse, or lineal descendent of any of the foregoing),
has any direct or indirect interest or shareholding in any Person (as
hereinafter defined) or material customer, supplier or competitor of
ADL, or in any Person from whom or to whom ADL leases any real or
personal property, or in any other Person with whom ADL is doing
business whether directly or indirectly (including as a debtor or
creditor), whether in existence as of the Effective Date or proposed,
other than the ownership of stock of a company which is listed on a
recognized stock exchange.
7.8 Neither (i) the execution and delivery of this Purchase Agreement by
the Sellers, (ii) the consummation by the Sellers of the transaction
contemplated hereby nor (iii) compliance by the Sellers with any of
the provisions hereof will
(a) conflict with or violate the Articles of Incorporation of ADL;
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Purchase Agreement ADL GmbH Page 15
(b) result in a violation or breach of, or constitute a default
(or an event that, with notice or lapse of time or both, would
become a default) under, or give to any other party any right
of termination, amendment, acceleration or cancellation of,
any contract, agreement, arrangement, lease, license, permit,
judgment, decree, franchise or other instrument or obligation,
to which ADL is a party or by which ADL or any of its
properties or assets may be bound or affected;
nor, so far as the Sellers are aware after having made all due and
careful enquiry to ascertain, will
(c) result in a violation of any statute, ordinance, rule,
regulation, order, judgment or decree applicable to ADL or any
of the Sellers, or by which ADL or any of its properties or
assets may be bound or affected; nor
(d) require any consent, waiver, license, approval, authorization,
order, permit, registration or filing with, or notification to
(any of the foregoing being a "CONSENT"), (i) any domestic
government or subdivision thereof, or any domestic
administrative, governmental, or regulatory authority, agency,
commission, court, tribunal or body, (any of the foregoing, a
"GOVERNMENTAL ENTITY"); or (ii) any other individual or Entity
(collectively, a "PERSON").
7.9 Sellers have heretofore furnished the Purchaser with a true and
complete copy of:
The unaudited financial statements of ADL for the years ended
1998 and 1999 as well as the unaudited financial statement of
ADL Distribution GmbH 1997
(referred to as the "ADL FINANCIAL STATEMENTS").
Except as disclosed therein, the ADL as well as the merged ADL
Distribution GmbH Financial Statements have been prepared in
accordance with German accounting principles (Grundsatze
ordnungsgemasser Buchfuhrung und Bilanzierung) consistently
followed throughout the peri-
<PAGE> 16
Purchase Agreement ADL GmbH Page 16
ods indicated, and represent fairly, in all material respects, the
financial position and operating results of ADL and ADL Distribution
as of the dates specified above. As far as potential liabilities
(Haftungsverhaltnisse) are not accounted for in the balance sheet,
the amount is reflected otherwise in the financial statements.
7.10 Since December 31, 1999
(a) ADL has not entered into any transaction that was not in the
ordinary course of business (gewohnlicher Geschaftsgang);
(b) except for sales of goods and services in the ordinary course
of business, there has been no sale, assignment, transfer,
mortgage, pledge, encumbrance or lease of any material asset
or property of ADL;
(c) there has been (i) no declaration or payment of a dividend, or
any other declaration, payment or distribution of any type or
nature to any Seller in respect of his share, whether in cash
in DM or in property, and (ii) no purchase or redemption of
any share of the share capital of ADL;
(d) there has been no declaration, payment, or commitment for the
payment by ADL of a bonus or other additional salary,
compensation, severance, or benefit to any employee of ADL
that was not in the ordinary course of business, except for
normal year-end bonuses paid in the ordinary course of
business and disclosed in writing to the Purchaser;
(e) there has been no release, compromise, waiver or cancellation
of any debt to or claim by ADL, or waiver of any right of ADL
in excess of 5.000DM in the aggregate;
(f) there have been no capital expenditures in excess of 5.000DM
for any single item, or 50.000DM in the aggregate;
(g) so far as the Sellers are aware after having made all due and
careful enquiry to ascertain, there has been no change in
accounting meth-
<PAGE> 17
Purchase Agreement ADL GmbH Page 17
ods or practices or revaluation of any asset of ADL in excess
of 5.000DM for any single asset, or 25.000DM in the aggregate;
(h) there has been no material damage, or destruction to, or loss
of, physical property (whether or not covered by insurance)
adversely affecting the ADL Business or the operations of ADL;
(i) there has been no loan by ADL, or guarantee by ADL of any
loan, to any employee, manager or officer of ADL or to any
other person or Entity;
(j) ADL has not ceased to transact business with any customer that
represented more than 5% of the annual gross revenues of ADL,
nor has ADL received notice from, or become otherwise aware
that, any such customer intends to cease transacting business
with ADL;
(k) there has been no termination of employment or resignation of
any key employee or key freelancer, manager or officer of ADL,
and, so far as the Sellers are aware after having made all due
and careful enquiry to ascertain, no such termination or
resignation is likely or threatened;
(l) there has been no amendment or termination of any material
oral or written contract, agreement or license related to the
ADL Business, to which ADL is a party or by which it is bound,
except in the ordinary course of business, or except as
expressly contemplated hereby;
(m) ADL has not failed to satisfy any of its debts, obligations or
liabilities related to the ADL Business or the assets of ADL
as the same become due and owing (except for ADL Accounts
Payable (as defined in Section 7.27 hereof) payable in
accordance with past practices and in the ordinary course of
business);
(n) there has been no agreement or commitment by ADL to do any of
the foregoing; and
(o) so far as the Sellers are aware after having made all due and
careful enquiry to ascertain, there has been no other event or
condition of any character pertaining to and materially and
adversely affecting (or
<PAGE> 18
Purchase Agreement ADL GmbH Page 18
which could be reasonably be expected to materially and
adversely affect) the assets, business or financial position
of ADL.
7.11 Except as set forth on SCHEDULE 7.11 hereto, ADL has no debt,
liability or obligation of any kind, whether accrued, absolute or
otherwise, including, but not limited to, any liability or obligation
on account of taxes, to the social security system or any
governmental charge or penalty, interest or fine.
In addition, Franz Maier agrees to indemnify as of the Effective Date
the Purchaser and/or ADL as required for any existing or future
liabilities to MBG or any third party arising out of the loan
facility for DM 100,000 granted by Mittelstandige
Beteiligungsgesellschaft Baden-Wurtemberg mbH, Stuttgart (MBG) to ADL
that took effect from 1 June 1999 (the "MBG Loan"). Such
indemnification covers re-payments of both capital and interest and
any other charges levied in connection with the MBG Loan, and shall
continue to apply if the MBG Loan is terminated or called in at short
notice for whatever reason.
7.12 Except as provided for in SCHEDULE 7.12, ADL has good and marketable
title to all tangible property and assets used in the ADL Business,
and good and valid title to its leasehold interests in such property
and assets, in each case, free and clear of any and all Liens.
7.13 The Sellers have furnished to the Purchaser in contemplation of the
entering into of this Purchase Agreement a true, correct and up to
date list of all items of tangible personal property (including
technical and computer hardware) necessary for or used in the
operation of the ADL Business in the manner in which it has been and
is now operated by ADL (the "ADL EQUIPMENT"), except for personal
property having a net book value of less than 1.000 DM. Each material
item of ADL Equipment is in good condition and repair, ordinary wear
and tear excepted.
7.14 The Sellers have furnished to the Purchaser in contemplation of the
entering into of this Purchase Agreement a true, complete and up to
date list of all material proprietary technology, patents, patent
rights, trademarks,
<PAGE> 19
Purchase Agreement ADL GmbH Page 19
trademark rights, trade names, trade name rights, service marks,
service mark rights, and copyrights (and all pending applications for
any of the foregoing) used by ADL in the conduct of the ADL Business
together with trade secrets and know how used in the conduct of the
ADL Business (the "ADL INTELLECTUAL PROPERTY RIGHTS"). ADL owns, or
is validly licensed or otherwise has the right to use or exploit, as
currently used or exploited, all of the ADL Intellectual Property
Rights, free of any obligation to make any payment (whether of a
royalty, license fee, compensation or otherwise). No claims are
pending or, so far as the Sellers are aware after having made all
reasonable enquiry to ascertain, are threatened that ADL is
infringing or otherwise adversely affecting the intellectual property
rights of any Person. So far as the Sellers are aware after having
made all reasonable enquiry to ascertain, no Person is infringing the
rights of ADL with respect to any ADL Intellectual Property Right.
Neither the Sellers, nor ADL or so far as the Sellers are aware after
having made all due and careful enquiry to ascertain, any employee,
agent or independent contractor of ADL, in connection with the
performance of such Person's services with ADL, has used,
appropriated or disclosed, directly or indirectly, any trade secret
or other proprietary or confidential information of any other Person,
or otherwise violated any confidential relationship with any other
Person.
7.15 The Sellers have furnished to the Purchaser in contemplation of the
entering into of this Purchase Agreement a true, complete and up to
date list of all material computer software used by ADL in the
conduct of the ADL Business (the "ADL SOFTWARE"). ADL currently
licenses, or otherwise has the legal right to use, all of the ADL
Software (including any upgrade, alteration or enhancement with
respect thereto), and all of the ADL Software is being used in
compliance with any applicable license or other agreement.
7.16 SCHEDULE 7.16 hereto sets forth a list of all leases pursuant to
which ADL leases, as lessor or lessee, real or personal property used
in operating the ADL Business or otherwise (the "ADL LEASES"). Copies
of the ADL Leases, all of which have previously been provided to
Purchaser, are true,
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Purchase Agreement ADL GmbH Page 20
complete and up to date copies thereof. All of the ADL Leases are
valid, binding and enforceable against ADL and, so far as the Sellers
are aware after having made all due and careful enquiry to ascertain,
against the other parties thereto, in accordance with their
respective terms, and there is not under any such ADL Lease any
existing default by ADL, or, so far as the Sellers are aware after
having made all due and careful enquiry to ascertain, by any other
party thereto, or any condition or event that, with notice or lapse
of time or both, would constitute a default. ADL has not received
notice that the lessor of any of the ADL Leases intends to cancel,
suspend or terminate such ADL Lease or to exercise or not exercise
any option thereunder.
7.17 The Sellers have been provided with a Due Diligence Request List (the
"DD-List", SCHEDULE 7.17.1), dated June 2/3, 2000 and have thereupon
declared that the issues crossed out in this List are not applicable
as to the business and or the shares of ADL. The handwritten remarks
have been made on behalf of the Sellers. They have provided
subsequently all the documents listed in the Due Diligence Documents
Received List ("DDDR-List", SCHEDULE 7.17.2). True and complete
copies of all material ADL Contracts (or a true and complete
narrative description of any oral ADL Contract) have previously been
provided to the Purchaser. Any Distributorship or Agency Agreement
entered into by or on behalf of ADL which is still in force shall be
deemed a material ADL Contract. Neither ADL nor, so far as the
Sellers currently are aware, any other party to any of the ADL
Contracts are in default under (nor does there exist any condition
that, with notice or lapse of time or both, would cause such a
default under) any of the ADL Contracts. Neither ADL nor, so far as
the Sellers currently are aware after having made all reasonable
enquiry to ascertain, any other party to any of the ADL Contracts
have waived any right they may have under any of the ADL Contracts,
the waiver of which would have a material adverse effect on the
business, assets or financial condition or prospects of ADL. All of
the ADL Contracts constitute valid and binding obligations of ADL,
enforceable in accordance with their respective terms, and,
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Purchase Agreement ADL GmbH Page 21
so far as the Sellers currently are aware after having made all
reasonable enquiry to ascertain, of the other parties thereto.
7.18 SCHEDULE 7.18 hereto sets forth a list of the name of each manager
and officer of ADL and the position(s) held by each.
7.19 The Sellers have previously provided the Purchaser with a true and
complete copy of the payroll report of ADL dated May 24, 2000,
showing all employees of ADL and their levels of compensation as at
such date, other than bonuses and other extraordinary payments, all
of such bonuses and extraordinary payments are set forth in SCHEDULE
7.19.1 hereto. ADL has paid all compensation required to be paid to
employees of ADL on or prior to the Effective Date other than
compensation accrued in the current pay period as specified in
SCHEDULE 7.19.2 hereto.
7.20 There is no suit, action, claim, investigation or proceeding, pending
or, so far as the Sellers are aware after having made all due and
careful enquiry to ascertain, threatened against or affecting ADL or
the ADL Business, nor is there any judgment, decree, injunction or
order of any applicable domestic Governmental Entity or arbitrator
outstanding against ADL.
7.21 Except as disclosed in SCHEDULE 7.21 hereto, there are no employee
benefit plans, agreements or arrangements maintained by ADL,
including (i) pension schemes (Pensionszusagen); (ii) current or
deferred compensation, pension, profit sharing, vacation or severance
plans or programs; or (iii) medical, hospital, accident, disability
or death benefit plans (collectively, "ADL BENEFIT PLANS"). All ADL
Benefit Plans are administered in accordance with, and are in
material compliance with, all applicable laws and regulations. No
default exists with respect to the obligations of ADL under any ADL
Benefit Plan.
7.22 There are no labor disputes, grievances, controversies, strikes or
requests for union representation pending, or, so far as the Sellers
are currently aware, threatened, relating to or affecting the ADL
Business. So far as the Sellers are aware after having made all due
and careful enquiry to ascer-
<PAGE> 22
Purchase Agreement ADL GmbH Page 22
tain, no event has occurred that could give rise to any such dispute,
controversy, strike or request for representation.
7.23 ADL has duly and timely filed all federal, state and local income,
wage, franchise, excise, real and personal property and other tax and
social security returns and reports, including extensions, required
to have been filed by ADL on or prior to the Effective Date. ADL has
duly and timely paid all taxes and other governmental or social
security charges, and all interest and penalties with respect
thereto, required to be paid by ADL on or prior to the Effective Date
(whether by way of withholding or otherwise) to any federal, state,
local or other taxing or social security authority (except to the
extent the same are being contested in good faith, and adequate
reserves therefor have been provided in the ADL Financial
Statements). The Sellers warrant and represent that the company has
not paid any amounts that could be regarded as hidden profit
distribution. Further, the sellers warrant and represent a total loss
carry forward for corporation tax purposes available to ADL GmbH for
the year 2000 onwards in the amount of DM 655.000 and for trade tax
purposes in the amount of DM 200.000,-- until December 31, 1998. ADL
was duly and timely eligible to any and all VAT-input tax (Vorsteuer
nach ss. 15 Umsatzsteuergesetz) whether resulting in a VAT-refund or
in a reduction of ADL's VAT liability filed in preliminary or
annual VAT-returns of ADL on or prior to the Effective Date. As of
the Effective Date, all deficiencies proposed as a result of any
audit have been paid or settled.
7.24 ADL holds all material permits, licenses, variances, exemptions,
orders and approvals of all domestic Governmental Entities necessary
to own, lease or operate all of the assets and properties of ADL, as
appropriate, and to carry on the ADL Business as now conducted (the
"ADL PERMITS"). ADL in all material respects complies with all
applicable laws, ordinances and regulations and the terms of the ADL
Permits. SCHEDULE 7.24 hereto sets forth a true, complete and up to
date list of all ADL Permits, true and complete copies of which have
previously been provided by the Sellers to the Purchaser, and unless
otherwise indicated, none of the ADL Permits
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Purchase Agreement ADL GmbH Page 23
are affected by the entering into of this Purchase Agreement and the
performance of the transactions contemplated hereunder.
7.25 No broker or finder is entitled to any broker's or finder's fee or
other commission payable by ADL in connection with the
transactions contemplated hereunder.
7.26 All accounts, notes, contracts and other receivables of ADL
(collectively, "ADL ACCOUNTS RECEIVABLE") (alle Vermogensgegenstande
des Umlaufvermogens gemass ss. 266 Abs. 2 B. II, III. 3. und IV.
HGB von ADL) were acquired by ADL in the ordinary course of business
arising from bona fide transactions. So far as the Sellers are
currently aware, there are no set-offs, counterclaims or disputes
asserted with respect to any ADL Accounts Receivable that would
result in claims in excess of the reserve for bad debts set forth on
the ADL Financial Statements and, subject to such reserve, and so far
as the Sellers are aware after having made internal enquiry to
ascertain, all ADL Accounts Receivable are collectible in full.
7.27 All material accounts, notes, contracts and other amounts payable of
ADL (collectively, "ADL ACCOUNTS PAYABLE") (alle Verbindlichkeiten
gemass ss. 266 Abs. 3 C. HGB von ADL) are currently within their
respective terms, and are neither in default nor otherwise overdue by
more than 90 days with exception of issues listed in SCHEDULE 7.27..
The Sellers have previously provided the Purchaser with a true and
complete aged debtor report prepared as of 30 June 1998 which shows
the time elapsed since the invoice date for all ADL Accounts Payable
as at that date.
7.28 The insurance policies of ADL, in full force and effect, (the "ADL
INSURANCE POLICIES") are listed on SCHEDULE 7.28 hereto and ADL
(a) is not in default regarding the provisions of any ADL
Insurance Policy;
(b) has paid all premiums due thereunder; and
(c) has not failed to present any notice or material claim
thereunder in a due and timely fashion.
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Purchase Agreement ADL GmbH Page 24
7.29 ADL has not filed a petition or request for reorganization or
protection or relief under the bankruptcy laws of the Federal
Republic of Germany, made any general assignment for the benefit of
creditors, or consented to the appointment of a receiver or trustee,
whether such receiver or trustee is appointed in a voluntary or
involuntary proceeding.
7.30 As of the Effective Date, the ADL Debt is not in excess of DM635,000.
7.31 For the period commencing on 31 December 1999 and ending on the
Effective Date ADL has not directly or indirectly incurred any debt
or made any guarantee outside its ordinary course of business
exceeding the amount of 5.000 DM in aggregate.
7.32 No statement of fact by any Seller contained herein and no written
statement of fact furnished by ADL or any Seller to Purchaser in
connection herewith contains any untrue statement of a material fact
or omits to state a material fact necessary in order to make the
statements herein or therein contained not materially misleading.
7.33 As of 31.12.1999, the Equity Deficit (der durch Eigenkapital nicht
gedeckte Fehlbetrag) was DM 257. 056, 94. The Adjusted Equity Deficit
as of Effective Date (as defined in Schedule 7.33) is not greater
than DM110,000.
7.33.1 As of the Effective Date, there are no environmental hazards
(Altlasten), contaminations of any kind, or other hazards as
addressed in BBodSchG (jegliche relevante Beeintrachtigungen im
Sinne des Bundesbodenschutzgesetzes) of or on the premises of ADL.
8 REPRESENTATIONS AND WARRANTIES OF PURCHASER WITH RESPECT TO THE
ACQUISITION CONSIDERATION
8.1 The Purchaser represents and warrants, to each of the Sellers
individually, the following representations and warranties contained
in this Section 8.
8.2 The Purchaser is a corporation duly organized, validly existing and
in good standing under the laws of the State of Delaware, USA. The
Purchaser
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Purchase Agreement ADL GmbH Page 25
has the requisite corporate power and authority to carry on its
business as it is currently conducted and is duly qualified or
licensed to do business, and is in good standing, in each
jurisdiction where the character of its properties owned or held
under lease or the nature of its activities makes such qualification
necessary, except where the failure to be so qualified or licensed
would not have a material adverse effect on the Company.
8.3 The Purchaser has the necessary corporate power and authority to
execute and deliver this Purchase Agreement and to perform the
transactions contemplated hereby. The execution and delivery hereof
and the performance of the transactions contemplated hereby by
Purchaser have been duly and validly authorized and approved by its
board of directors, and no other corporate or shareholder proceedings
on the part of the Purchaser, or its board of directors or
shareholders, are necessary to authorize or approve this Purchase
Agreement or to perform the transactions contemplated hereby. This
Purchase Agreement constitutes a valid and binding obligation on the
Purchaser, enforceable against the Purchaser in accordance with its
terms, subject, in each case, to bankruptcy, insolvency,
reorganization, moratorium and similar laws of general application
relating to or affecting creditors' rights and to general principles
of equity, including principles of commercial reasonableness, good
faith and fair dealing.
8.4 The execution and delivery of this Purchase Agreement by the
Purchaser, the performance by the Purchaser of the transactions
contemplated hereby, or compliance by the Purchaser with any of the
provisions hereof, will not in any material sense:
(a) conflict with or violate the Certificate of Incorporation or
Bylaws of the Purchaser;
(b) result in a violation of any statute, ordinance, rule,
regulation, order, judgment or decree applicable to the
Purchaser, or by which the Purchaser or its properties or
assets may be bound or affected;
(c) result in a violation or breach of, or constitute a default
(or an event that, with notice or lapse of time or both, would
become a default)
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Purchase Agreement ADL GmbH Page 26
under, or give to others any rights of termination, amendment,
acceleration or cancellation of, any note, bond, mortgage,
indenture, or any material contract, agreement, arrangement,
lease, license, permit, judgment, decree, franchise or other
instrument or obligation to which the Purchaser is a party or
by which the Purchaser or its properties may be bound or
affected;
(d) result in the creation of any Lien on any of the property or
assets of the Purchaser.
8.5 As of the date hereof, the authorized capital stock of Purchaser
consists of 40,000,000 shares of Common Stock, $01 par value, of
which 24,908,635 shares were issued and outstanding as of 31 March
2000, and 4,000,000 shares of Preferred Stock, $1.00 par value, of
which no shares are issued and outstanding.
8.6 When delivered to the Sellers in accordance with the terms hereof,
the MATRITECH Stock will be (i) duly authorized, fully paid and
non-registered and (ii) free and clear of all Liens other than
restrictions imposed by this Purchase Agreement and by US federal and
state securities laws.
8.7 Purchaser has not filed a petition or request for reorganization or
protection or relief under the bankruptcy laws of the United States
or any state or territory thereof, made any general assignment for
the benefit of creditors, or consented to the appointment of a
receiver or trustee, including a custodian under the United States
bankruptcy laws, whether such receiver or trustee is appointed in a
voluntary or involuntary proceeding.
8.8 The Purchaser warrants that it will, not later than the first
business day following the first anniversary of the Effective Date,
do all such things necessary to permit the Sellers to sell on the
NASDAQ Stock Market or otherwise transfer the shares of MATRITECH
Stock received under this Purchase Agreement, if and when such shares
cease to be subject to any Call Option, in particular by doing away
with any stop orders with
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Purchase Agreement ADL GmbH Page 27
MATRITECH's transfer agent and, if such shares are not eligible for
resale on the NASDAQ Stock Market under Rule 144, Regulation S or
other applicable exemption under the U.S. Securities Act of 1933 (the
"SECURITIES ACT"), by registering such shares for resale under the
Securities Act.
9 REPRESENTATIONS AND WARRANTIES OF SELLERS WITH RESPECT TO THE
ACQUISITION CONSIDERATION
9.1 Each Seller represents that he
(a) is a German national and not a "U.S. person" as such term is
defined in Section 7701(a)(30) of the U.S. Internal Revenue
Code of 1986 or in the rules under the Securities Act, nor is
the Seller located in the United States and or acquiring the
shares of MATRITECH Stock for the account or benefit of a U.S.
person; the Seller has not offered, sold, or entered into any
transaction (e.g., the purchase of any put or sale of any
call) involving the sale or potential sale of any of the
shares in the United States or to U.S. persons;
(b) has been offered and is acquiring the MATRITECH Stock outside
the United States and solely for his own account and benefit
for investment and not with a view to, or for sale in
connection with, any distribution thereof; and
(c) will not, directly or indirectly, offer, transfer, sell,
pledge, hypothecate or otherwise dispose of any MATRITECH
Stock (or solicit any offers to buy, purchase or otherwise
acquire or take a pledge of any such shares) in the United
States or to or for the benefit or account of any U.S. person,
or otherwise, or conduct any hedging transaction involving
MATRITECH Stock, except in compliance with the Securities Act
and Regulation S or the other rules and regulations
thereunder, and other applicable laws, rules and regulations.
It is understood and agreed by the parties hereto that
MATRITECH is required to refuse to register any transfer of
MATRITECH Stock not made in accordance with the provisions of
said Regulation S, or pur-
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Purchase Agreement ADL GmbH Page 28
suant to registration under the Securities Act or to an
exemption therefrom.
9.2 Each Seller acknowledges that
(a) the MATRITECH Stock received by him hereunder has not been
registered under the Securities Act;
(b) the MATRITECH Stock may be required to be held for a period of
up to three years, and he must continue to bear the economic
risk of the investment in such shares unless such shares are
subsequently registered under the Securities Act or Regulation
S or another exemption from such registration is available;
(c) restrictive legends shall be placed on the certificates
representing MATRITECH Stock; and
(d) a notation shall be made in the appropriate records of the
Purchaser's transfer agent indicating that the shares of
MATRITECH Stock issued under this Purchase Agreement are
subject to restrictions on transfer and appropriate
stop-transfer instructions will be issued to such transfer
agent with respect to such shares of MATRITECH Stock.
9.3 Each Seller represents and warrants that
(a) his financial situation is such that he can afford to bear the
economic risk of holding the MATRITECH Stock acquired by him
hereunder for an indefinite period;
(b) he can afford to suffer the complete loss of such MATRITECH
Stock; and
(c) he has been granted the opportunity to ask questions of, and
receive answers from, representatives of the Purchaser
concerning the terms and conditions of the issuance of
MATRITECH Stock hereunder and to obtain any additional
information that he deems necessary;
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Purchase Agreement ADL GmbH Page 29
(d) his knowledge and experience in financial business matters is
such that he is capable of evaluating the merits and risk of
ownership of the MATRITECH Stock.
ARTICLE V
INDEMNIFICATION
10 INDEMNIFICATION BY THE SELLERS, PAYMENT
10.1 The Sellers, jointly and severally, shall indemnify and hold the
Purchaser and/or, at the discretion of Purchaser, ADL harmless from
and against, and agree to defend promptly the Purchaser and/or, at
the discretion of Purchaser, ADL from and reimburse the Purchaser
and/or, at the discretion of Purchaser, ADL, for, any and all losses,
damages, costs, expenses, liabilities, obligations and claims of any
kind (including reasonable attorneys' fees according to domestic
standards and other legal costs and expenses) that the Purchaser
and/or ADL may at any time suffer or incur, or become subject to
(collectively, the "PURCHASER LOSS") [Schadensersatz gemass
ss.ss. 249 ff BGB], as a result of or in connection with:
(a) any breach or any inaccuracy of any of the representations and
warranties [sollte ein garantierter oder zugesicherter Umstand
nicht, nicht im angegebenen Umfang oder zu dem vorausgesetzten
Zeitpunkt vorliegen] made by the Sellers in or pursuant
hereto, or in any instrument, certificate or affidavit
delivered by any of the same in accordance with the provisions
hereof;
(b) any failure by the Sellers to carry out, perform, satisfy and
discharge any of their respective covenants, agreements,
undertakings, liabili-
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Purchase Agreement ADL GmbH Page 30
ties or obligations hereunder or under any of the documents
and materials delivered by the Sellers pursuant hereto; and
(c) any suit, action or other proceeding arising out of, or in
any way related to, any of the matters referred to in this
Section 10.
(d) and unknown or contingent liability which becomes known after
the Effective Date but which arose prior to the Effective
Date.
10.2. Without prejudice to the foregoing, in the event of any violation of
the any representations and warranties relating tax, social security
payment or other mandatory contributions the sellers will indemnify the
Purchaser and/or at the discretion of the Purchaser ADL for the full
amount required to put the Purchaser and/or ADL in the position in
which they would have been had the violation not occurred i.e. to put
them - as the Purchasers may choose - in a position as if any
additional taxes or social security contributions arising in the future
had been properly reflected in the balance sheet as of December 31,
1999 or to put them in a position as if the loss carry forward
warranted had existed as warranted or as if payments which are regarded
a constructive dividend had not been paid or made in accordance with
the applicable law. Interest assessed on such taxes and social security
contributions must be paid by the seller. Any claim arising from or in
connection with the tax indemnification clauses hereof shall expire 6
months after a final and binding assessment notice issued by the tax-
or social security authorities, following upon a final tax- and social
security audit.
10.3. Any Purchaser Loss as defined in 10.1. or 10.2. shall be indemnified
with respect to the amount due in cash in DM or, at the sole discretion
of the indemnified party, in MATRITECH Stock as valued at the close of
trading at the NASDAQ stock exchange and in accordance with the US
dollar spot exchange rate published in the Financial Times newspaper of
the day on the last business day prior to the date such payment is to
be made. The aggregate of any such indemnification payable is capped at
a figure of DM1,075,000,--. The Sellers shall not be liable for
indemnification payments under Section 10.1 and 10.2. unless the
aggregate amount of Purchaser Loss (determined without regard to any
materiality qualification contained in
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Purchase Agreement ADL GmbH Page 31
any representations, warranties or covenants giving rise to the claim
for indemnity) exceeds DM 5,000,-- and then to the full extent of such
Purchaser Loss. The warranty and indemnification relating to loss carry
forward and constructive dividends shall not be subject to this
provision. Instead, as regards the warranty of a loss carry forward of
DM 655,000,-- in clause 7.24 and as regards the warranty that there
have been no constructive dividends (verdeckte Gewinnausschuttungen)
the Sellers shall not be liable for indemnification payments under
Section 10.1 and 10.2. unless the aggregate amount of Purchaser Loss
p.a. for this warranty exceeds DM 10,000,-- and then to the full extent
of such Purchaser Loss.
10.4. To the extend not provided otherwise in clause 10.2. all claims arising
under the warranties and representations except such warranties and
representations provided for in 7.5. shall expire 5 years from the
Effective Date.
11 NOTIFICATION OF CLAIMS; ELECTION TO DEFEND
11.1 A party entitled to be indemnified pursuant to Section 10 hereof,
(the "INDEMNIFIED PARTY"), shall notify the party liable for such
indemnification (the "INDEMNIFYING PARTY") in writing of any claim or
demand (a "CLAIM") that the Indemnified Party has determined, has
given or could give rise to a right of indemnification hereunder.
Subject to the Indemnifying Party's right to defend in good faith
third party claims as hereinafter provided, the Indemnifying Party
shall satisfy its obligations under this Article V within 30 days
after the receipt of written notice thereof from the Indemnified
Party. Any amounts paid thereafter shall include interest thereon for
the period commencing at the end of such 30-day period and ending on
the actual date of payment, at a rate of 10% per annum.
11.2 If the Indemnified Party shall notify the Indemnifying Party of any
Claim pursuant to Section 12.1 hereof, and if such Claim relates to a
Claim asserted by a third party against the Indemnified Party that
the Indemnifying Party acknowledges is a Claim for which it must
indemnify or hold harmless the In-
<PAGE> 32
Purchase Agreement ADL GmbH Page 32
demnified Party under Section 10 or 11 hereof, as the case may be, the
Indemnifying Party shall have the right, at its sole cost and expense,
to employ counsel of its own choosing to defend any such Claim asserted
against the Indemnified Party.
ARTICLE IIII
ADDITIONAL AGREEMENTS
12 NOTIFICATION OF TRANSFER OF SHARES
12.1 The notary public is hereby instructed by the parties to notify
the sale and purchase of the Shares to ADL pursuant to Section 16
of the German GmbH Act.
12.2 Prior to the above notification, the Sellers shall not, directly or
indirectly, adopt any shareholder resolutions in ADL or make any such
resolutions, actions or the like, in particular but not limited to
shall they not:
(a) resolve on the payment of, or pay, any dividend on, or make
any other distribution in respect of, any of the Shares, or
split, combine, redeem or reclassify any of the Shares, or
issue or authorize the issuance of any other securities in
respect of, in lieu of or in substitution for, the Shares;
(b) issue, deliver, sell, pledge or otherwise encumber any of the
Shares, any other voting security issued by ADL or any
security convertible into, or any right, warrant or option to
acquire any such share or voting security;
(c) amend the Articles of Incorporation of ADL or any other
comparable organizational document;
(d) subject to a Lien or sell, lease or otherwise dispose of any
of its properties or assets;
(e) incur any indebtedness for borrowed money or guarantee any
such indebtedness of another Person or issue or sell any debt
security of
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Purchase Agreement ADL GmbH Page 33
ADL or guarantee any debt security of another Person, make any
loan, advance or capital contribution to, or investment in,
any other Person, or settle or compromise any material claim
or litigation; or
(f) authorize any of, or commit or agree to take any of, the
foregoing actions.
13 SUPPLEMENTARY CONTRACTS, ANCILLARY DOCUMENTATION
13.1 Following the consummation of this Purchase Agreement each Seller
hereby agrees to enter into a service or employment, as the case may
be, contract with ADL for a minimum term of three years from the
Effective Date [according to the terms set out in the master
employment contract attached in SCHEDULE 13.1 hereto].
14 CONSENT
14.1 The Board of Directors of Purchaser has approved this Purchase
Agreement, upon the terms and subject to the conditions set forth
herein.
14.2 The Sellers, hereby acting in their capacity of being the sole
shareholders in ADL, hold a shareholder meeting, waive all
requirements of form and notice and adopt a shareholder resolution
and unanimously declare their respective consent to this Purchase
Agreement, as required by law and by ADL's Articles of
Incorporation.
14.3 The Sellers hereby waive all and any preemption rights or other
rights which they have in respect of the Shares and in accordance
with Section 16 of ADL's Articles of Incorporation.
15 NOTICES
15.1 All notices or other communications under this Purchase Agreement
shall be in writing and shall be given (and shall be deemed to have
been duly given
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Purchase Agreement ADL GmbH Page 34
upon receipt) by delivery in person, by telecopy (with confirmation of
receipt), by courier service, or by registered or certified mail,
postage prepaid, return receipt requested, at the address specified on
the first and second page of this notarial deed or to such other
address as any party may have furnished to the other parties in writing
in accordance with this Section.
16 GOVERNING LAW, LANGUAGE, PLACE OF JURISDICTION
16.1 This Purchase Agreement and all documents supplemental thereto are
governed in all respects by and are to be construed in accordance with
the laws of the Federal Republic of Germany, except for the provisions
in this Purchase Agreement covering the Consideration (other than
Purchaser's warranties and representations in this regard), which shall
be governed in all respects by and are to be construed in accordance
with the internal laws of the State of Delaware, USA.
16.2 The English language text of this Purchase Agreement is definitive,
provided, however, that German wording or a legal term which is
incorporated in parentheses in the terms of this Purchase Agreement
shall be for the avoidance of doubt regarded as a definition of any
English language or term to which the German wording or legal term is
adhered to and such German wording or legal term shall prevail the
English language or term in order to determine the applicable German
legal principles and rules.
16.3 The place of jurisdiction shall be Freiburg, Germany.
17 ANNOUNCEMENTS
17.1 The parties agree that, except as may otherwise be required to comply
with applicable laws and regulations (including applicable securities
laws) or to obtain consents required hereunder, public disclosure of
the transactions contemplated hereby or any announcement to a third
party shall be made only upon or after the consummation of this
Purchase Agreement.
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Purchase Agreement ADL GmbH Page 35
Any such disclosure or announcement shall be coordinated by Purchaser,
and none of the Sellers or ADL shall make any such disclosure or
announcement without the prior written consent of Purchaser.
18 FEES AND EXPENSES
18.1 Each of the Parties is to be solely responsible for the payment of all
of its costs and fees incurred in the negotiation and completion of
this purchase agreement and in all matters arising from it. Any
notarial fees payable will be split equally between the Purchaser and
the Sellers.
19 LOAN AGREEMENT
19.1 By an agreement (the "LOAN AGREEMENT") made 30 June 1998 Franz Maier
(the "VENDOR") as majority shareholder and sole managing director of
ADL consolidated previous loans made by him and third parties to ADL
and debts to ADL acquired by him with a further loan. At 1 July 1998
ADL's indebtedness to Franz Maier was DEM 178,589.72. A list with the
history of the Loan Agreement is attached hereto as Schedule 19.1. The
Loan is subordinated in accordance with the subordination agreement
dated 23 March 2000 (Schedule 19.2.).
19.2. The Vendor herewith assigns to the Purchaser (and the Purchaser accepts
such assignment) the Loan Agreement, in particular the rights, title
and interest in all monies payable under the Loan Agreement and any
previous loan agreements and all interest and other money (if any) now
due and subsequently to become due in respect thereof (the "DEBTS")
absolutely free and clear of any rights of third parties, all
mortgages, charges, pledges, liens, trusts, claims and other interests.
In addition, the Vendor assigns the Subordination Agreement dated 23
March 2000 (Schedule 19.2) to the Purchaser since it forms part of the
terms and conditions of the loan. The Vendor warrants that the loan
assigned is absolutely free and clear of any rights of third parties,
all mortgages, charges, pledges, liens, trusts, claims and other
interests.
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Purchase Agreement ADL GmbH Page 36
19.3. In consideration for the assignment the Purchaser shall pay to the
Vendor DEM200.000 but not in cash but in MATRITECH Stock valued at the
Market Price determined in accordance with Section 5.1. To effect such
payment the Purchaser shall procure the issue to the Vendor of that
number of shares of non-registered MATRITECH Stock valued at the Market
Price at DEM200.000 (the "LOAN CONSIDERATION").
19.4 If the Purchaser exercises its Call Option, as provided for in Sections
5.2. and 5.3. hereof, with respect to the shares held by the Vendor,
such Call Option shall also apply to the Loan Consideration.
19.5 The Vendor, in his capacity as sole Managing Director of ADL herewith
gives the consent of ADL to such assignment.
20 ENTIRE AGREEMENT
This Purchase Agreement and the documents, Schedules and instruments
referred to herein and to be delivered pursuant hereto constitute the
entire agreement between the parties pertaining to the subject matter
hereof, and supersede all other prior agreements and understandings,
both written and oral, among the parties, or any of them, with respect
to the subject matter hereof. There are no other representations or
warranties, whether written or oral, between the parties in connection
the subject matter hereof, except as expressly set forth herein.
21 SEVERABILITY
21.1 If any term or other provision hereof is invalid, illegal or incapable
of being enforced by any rule of law or public policy, all other
conditions and provisions hereof shall nevertheless remain in full
force and effect so long as the economics or legal substance of the
transactions contemplated hereby are not affected in any manner
materially adverse to any party. Upon determination that any term or
other provision hereof is invalid, illegal or incapable of
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Purchase Agreement ADL GmbH Page 37
being enforced, the invalid, illegal or incapable term or other
provision is substituted by such valid, legal or capable term or other
provision so as to effect the original intent of the parties as closely
as possible to the fullest extent permitted by applicable law in an
acceptable manner to the end that the transactions contemplated hereby
are fulfilled to the extent possible.
21.2 The provisions in Section 21.1 shall apply accordingly should this
Purchase Agreement contain any lacuna. In order to fill the lacuna any
such legal or capable term or other provision shall apply that comes
nearest to what the parties have agreed upon or would have agreed upon
had they considered this fact.
THIS NOTARIAL DEED together with the Schedules attached hereto was read out by
the notary public to the persons present, the contents of which was approved by
them, and then signed by them and the notary public, each in his own hand.
/s/ Petra Urban /s/ Stephan Schmidt
------------------------------- ------------------------------------
Petra Urban Stephan Schmidt
/s/ Dr. Heinz L. Bauer
------------------------------------
Dr. Heinz L. Bauer
notary public
