Offer Document Public Share Buy-Back Offer (Cash Offer) by TAG Immobilien AG Steckelhörn 5, 20457 Hamburg, Germany registered with the commercial register of the Local Court (Amtsgericht) of Hamburg under the registration number HRB 106718 to its shareholders for the acquisition of a maximum of 13,129,831 bearer shares in TAG Immobilien AG representing a notional interest in the share capital of EUR 1.00 each for a cash consideration per no-par value share of at least EUR 8.35 and not more than EUR 9.35 Acceptance Period: September 15, 2014 to October 14, 2014, midnight (CEST) The provisions of the German Securities Acquisition and Takeover Act (Wertpapierwerbs- and Übernahmegesetz) (WpÜG) do not apply to this Share Buy-Back Offer. Shares in TAG Immobilien AG: ISIN DE0008303504 (WKN 830350) Shares in TAG Immobilien AG Tendered for Sale: ISIN DE000A12UQS6 (WKN A12 UQS) Seite 1/35
TABLE OF CONTENTS 1. General Information on the Share Buy-Back Offer...6 1.1 Share Buy-Back Offer and Applicable Law...6 1.2 Publication of the Decision to Make the Share Buy-Back Offer...7 1.3 Publication of the Offer Document...7 1.4 Distribution of the Offer Document...8 1.5 Acceptance of the Offer outside of the Federal Republic of Germany and the United States...9 2. References Regarding the Information Contained in the Offer Document...9 2.1 Status of the Information Contained in the Offer Document...9 2.2 Forward-Looking Statements...9 2.3 No Updating...9 2.4 No Authorization of Third Persons to Make Statements...10 2.5 Banking Day...10 2.6 References...10 3. The Share Buy-Back Offer...10 3.1 Subject of the Offer...10 3.2 Final Purchase Price...11 3.3 Purchase of TAG Shares...14 3.4 Acceptance Period...14 3.5 Amendments to the Offer...14 4. Conditions on which the Validity of the Offer Depends...15 4.1 Offer Conditions...15 4.2 Waiver of Conditions; Stand Still...16 4.3 Satisfaction of Offer Conditions...17 4.4 Publication of the Non-Satisfaction of Offer Conditions, a Waiver of Offer Conditions and a Stand Still...17 5. Acceptance and Settlement of the Share Buy-Back Offer...18 5.1 Settlement Agent; Information Agents...18 5.2 Acceptance Notice and Re-Booking...18 5.3 Additional Declarations in the Course of Acceptance of the Offer... 19 Seite 2/35
5.4 Legal Consequences of Acceptance Notice...20 5.5 Allocation in the Event of an Oversubscription of the Offer...21 5.6 Settlement of the Offer and Payment of the Final Purchase Price... 22 5.7 No Stock Exchange Trading for and no transfer of TAG Shares Tendered for Sale...22 5.8 Reverse Entry in the Case of Non-Satisfaction of Conditions on which the Validity of the Offer Depends...23 5.9 Reverse Entry in the Event of Tenders above the Final Purchase Price and in the Event of an Oversubscription...23 5.10 Right of Rescission of TAG Shareholders Accepting the Offer...24 5.11 Costs for TAG Shareholders Accepting the Offer...25 6. Basis of this Offer...26 6.1 Capital Structure and Authorization to Repurchase Own Shares... 26 6.2 Purpose of this Offer...27 6.3 Possible Future Developments...29 6.4 Funding of Offer...29 6.5 Effects of Successful Offer on the Assets and Financial Situation of the TAG Group...29 7. Information on the Final Purchase Price...31 8. TAG Shareholders who do not Accept the Offer...32 9. Intentions of the Members of the Company s corporate bodies with Regard to the Acceptance of the Offer...33 10. Publications...33 11. Notice Regarding Taxation and Legal Aspects...33 12. Applicable Law; Jurisdiction...34 Seite 3/35
TABLE OF DEFINITIONS TERM PAGE Acceptance Notice 18 Acceptance Period 14 AGM-Authorization 10 Automatic Extension 15 BaFin 6 Banking Day 10 Clearstream 18 Company 6 Compliance Conditions 16 Conditions Precedent Fehler! Textmarke nicht definiert. Custodian Banks 8 Exchange Act 6 Final Purchase Price 11 Final Purchase Price Range 11 First Settlement Date 22 Information Agents 18 ISIN 10 Kempen 18 MAC Condition 16 Maximum Aggregate Extension 14 Maximum Final Purchase Price 11 Minimum Final Purchase Price 11 Non-Satisfaction Notice 17 Offer 6 Offer Condition 15 Offer Conditions 15 Offer Document 6 Price Determined by Offer Tender 12 Price Determined by Shareholder Tender 11 Seite 4/35
TERM PAGE Pro-Forma Financial Information 30 Re-Booked Tendered TAG Shares 24 Relevant Tendered TAG Shares 22 Relevant Tenders 21 Settlement Agent 18 Share Buy-Back Offer 6 Stand Still 17 Stand Still Notice 17 TAG 6 TAG Group 6 TAG Share 6 TAG Shareholders 6 TAG Shares 6 Targeted Repurchase 11 Tender 11 Tenders 11 Trading Condition 16 US GAAP 7 Waiver Notice 17 WKN 10 WpHG 7 WpÜG 6 XETRA 16 Seite 5/35
1. General Information on the Share Buy-Back Offer 1.1 Share Buy-Back Offer and Applicable Law This share buy-back offer (the "Offer" or "Share Buy-Back Offer") by TAG Immobilien AG ("TAG" or the "Company" and together with its fully consolidated subsidiaries the "TAG Group"; the existing shares in TAG the "TAG Shares" and each a "TAG Share"), a German stock corporation incorporated in Germany and governed by German law, having its registered office at Steckelhörn 5, 20457 Hamburg, Germany, and registered with the commercial register of the Local Court (Amtsgericht) of Hamburg under the registration number HRB 106718, is a voluntary public tender offer in the form of an offer for the acquisition of a portion of the Company's own shares. This Offer document will be referred to as the "Offer Document". An English language convenience translation of this Offer Document has been prepared. However, only the original Offer Document in the German language is legally binding. Subject to the terms and provisions provided elsewhere in this Offer Document, this Share Buy-Back Offer is made to all shareholders of TAG ("TAG Shareholders") and relates to the acquisition of a maximum of 13,129,831 TAG Shares for a price of not less than EUR 8.35 and not more than EUR 9.35 per TAG Share. As an offer to buy back TAG's own shares, this Share Buy-Back Offer is, according to a bulletin of the German Financial Supervisory Authority (Bundesanstalt für Finanzdienstleistungsaufsicht) ("BaFin") dated August 9, 2006, not subject to the provisions of the German Securities Acquisition and Takeover Act (Wertpapierwerbs- and Übernahmegesetz) ("WpÜG"). As a consequence, this Share Buy-Back Offer does not purport to comply with the provisions of the WpÜG. For TAG Shareholders resident or otherwise located in the United States: The Offer is being made for the securities of a non-us company and will be subject to the disclosure and procedural laws, standards and practices of the Federal Republic of Germany. The Offer will be made in compliance with the requirements of Regulation 14E promulgated under the US Securities Exchange Act of 1934 (as amended) (the "Exchange Act") and will benefit from certain accommodations available by reason of Rule 14d-1(d) promulgated under the Exchange Act. This Offer Document has not been submitted to BaFin for examination or review and BaFin has not approved the publication of this Offer Document. Furthermore, this Offer Document has not been disclosed to, filed with, reviewed or approved by the US Securities and Exchange Commission (SEC) Seite 6/35
or any other public authority or regulator outside the Federal Republic of Germany. No notifications, registrations, approvals, permissions or authorizations for the Offer Document and/or the Share Buy-Back Offer have been applied for, arranged for, issued or granted. Each agreement with the Company which comes into existence pursuant to the terms of this Offer Document is governed by, and construed in accordance with, the laws of the Federal Republic of Germany. The Company is a German stock corporation incorporated in Germany and governed by German law. All of its directors and its executive officers reside in Germany and thus outside the United States. All of the assets of the Company and such other persons are located outside the United States. As a result, it may not be possible for TAG Shareholders to effect service of process within the United States upon the Company or such other persons or to enforce, in US courts, judgments against them obtained in US courts predicated upon the civil liability provisions of the federal securities laws of the United States. Any financial information made available by the Company will have been prepared in accordance with International Financial Reporting Standards as adopted by the European Union or in accordance with German Accounting Standards which both differ in certain material respects from accounting principles generally accepted in the United States ("US GAAP") and which may not have been subject to external audit. Any such financial information will not have been reconciled to US GAAP. 1.2 Publication of the Decision to Make the Share Buy-Back Offer The Company published its decision to make the Share Buy-Back Offer on September 11, 2014, in an ad hoc disclosure pursuant to section 15 of the German Securities Trading Act (Wertpapierhandelsgesetz) ("WpHG"). The ad hoc disclosure is available under the "Investor Relations" section, subsection "News / Ad hoc announcements" on the website of the Company at www.tag-ag.com. 1.3 Publication of the Offer Document The German language Offer Document was published by TAG in the Federal Gazette (Bundesanzeiger) on September 15, 2014. On the same date, the German language Offer Document was also published, together with a nonbinding English convenience translation, on the internet at www.tag-ag.com under "Investor Relations" section, sub-section "Share Buy-Back Offer". Print copies of the German language Offer Document and of the non-binding Seite 7/35
English convenience translation will be made available, free of costs and expenses, for issuing to the TAG Shareholders by means of counter publicity (Schalterpublizität) by the Information Agents, Kempen & Co N.V., Beethovenstraat, 1077 WZ Amsterdam, Netherlands, telefax: +31 (0)20 348 9549, e-mail: kas@kempen.nl, and Close Brothers Seydler Bank AG, Schillerstraße 27-29, 60313 Frankfurt am Main, telefax: +49 69 920 54 902, e- mail: tag@cbseydler.com. 1.4 Distribution of the Offer Document The publication, dispatch, distribution or dissemination of the Offer Document, any translation thereof, or any other documents related to the Share Buy-Back Offer outside the Federal Republic of Germany and the United States may, as a general rule, result in the applicability of the laws of jurisdictions other than the Federal Republic of Germany and the United States, respectively. The publication, dispatch, distribution or dissemination of the Offer Document in such jurisdictions may be subject to legal restrictions. Hence, the Offer Document, any translations thereof and any other documents related to the Share Buy-Back Offer, notwithstanding their publication on the internet, may not be published, dispatched to, distributed or disseminated in jurisdictions other than the Federal Republic of Germany and the United States. In particular, the Offer Document, any translations thereof and any other documents related to the Share Buy-Back Offer may not be published, dispatched to, distributed or disseminated in Canada. The Company has not authorized any third person to publish, dispatch, distribute or disseminate this Offer Document, any translations thereof or any other documents related to the Share Buy-Back Offer outside of the Federal Republic of Germany and the United States. Neither the Company nor any persons acting for or in concert with the Company are obliged to procure, or bear any liability for, the publication, dispatch, distribution or dissemination of this Offer Document, any translations thereof or any other documents related to the Share Buy-Back Offer outside of the Federal Republic of Germany and the United States being in conformity with the applicable laws of the relevant jurisdiction. Upon request, the Company will make this Offer Document available to the custodian banks and other securities services providers at which TAG Shares are held in custody ("Custodian Banks") for transmission to TAG Shareholders with permanent or habitual residence or domicile in the Federal Republic of Germany or the United States. Apart from this, the Custodian Banks may publish, dispatch, distribute or disseminate this Offer Document only if this is permissible under the applicable laws and the capital market regulations of the relevant jurisdiction. Seite 8/35
1.5 Acceptance of the Offer outside of the Federal Republic of Germany and the United States The Offer can be accepted by all German or foreign TAG Shareholders upon the terms and subject to the conditions of this Offer Document and all applicable laws. However, accepting the Offer outside of the Federal Republic of Germany and the United States may be subject to further restrictions or additional requirements. It is recommended that TAG Shareholders receiving the Offer Document outside of the Federal Republic of Germany or the United States and/or wishing to accept the Share Buy-Back Offer outside of the Federal Republic of Germany or the United States and/or who are subject to the capital market laws, rules or regulations of a jurisdiction other than the Federal Republic of Germany or the United States, inform themselves as to the applicable laws, rules and regulations, and the restrictions and requirements resulting from such other laws, rules and regulations, and comply with them. The Company does not assume any responsibility that the acceptance of the Offer outside of the Federal Republic of Germany and of the United States is permissible under the legal provisions applicable in each particular case. Any liability of the Company and any persons acting in concert with the Company in the case of non-compliance with non-german and non-us legal provisions by third persons is explicitly excluded. 2. References Regarding the Information Contained in the Offer Document 2.1 Status of the Information Contained in the Offer Document Unless explicitly stated otherwise herein, all information and all statements of fact contained herein, and all statements made herein with respect to intentions of TAG are based on the knowledge and/or intentions of the Company as of the date hereof. 2.2 Forward-Looking Statements Certain statements of the Company set out in the Offer Document are forward-looking statements and reflect the Company's assessment as of the date of this Offer Document with regard to potential future developments and events. They are based on current assumptions which may subsequently turn out to be incorrect, and are subject to risks and uncertainties. 2.3 No Updating The Company will only update this Offer Document to the extent it is required to do so under applicable law. Seite 9/35
2.4 No Authorization of Third Persons to Make Statements TAG has not authorized any third person to make any statements in respect of the Share Buy-Back Offer or the Offer Document. If third persons nevertheless make any such statements, these are made without the consent of the Company and are not attributable to the Company. 2.5 Banking Day The term "Banking Day" in this Offer Document means any day (other than a Saturday or Sunday) on which banks in Frankfurt am Main, Germany, are generally open for business. 2.6 References For references in this Offer Document to a specific time or a specific point in time the local time in Frankfurt am Main, Germany (that is Central European Time (CET) or as the case may be Central European Summer Time (CEST)) is decisive. Unless otherwise explicitly stated, any reference herein to a "section" or "sections" means the respective section or sections of this Offer Document. 3. The Share Buy-Back Offer 3.1 Subject of the Offer Upon the terms and subject to the conditions set forth in this Offer Document, TAG hereby offers to all TAG Shareholders to acquire TAG Shares, i.e. bearer shares (International Securities Identification Number ("ISIN") DE0008303504, German Securities Identification Number (Wertpapierkennnummer) ("WKN") 830350) in the Company, each no-par value share representing a notional interest in the share capital of EUR 1.00, in each case including all rights attached thereto, in particular including all dividend rights. For each TAG Share purchased hereunder, the Company offers to TAG Shareholders a consideration equal to the Final Purchase Price (as defined in section 3.2). Based on the authorization resolved by the annual general meeting of the TAG Shareholders of June 13, 2014 (as further described in section 6.1; this authorization the "AGM-Authorization") TAG may buy treasury stock in an amount of up to 10% of the share capital existing upon the authorisation taking effect. As per that date, the share capital, as shown in the commercial register of the Company, amounted to EUR 131,298,317, divided into 131,298,317 TAG Shares. The actual amount of the Company s share capital as per June 13, 2014 was higher as additional shares had been issued from the Seite 10/35
Company s contingent capital which were not yet (and are not at present) reflected in the commercial register. The Company intends to acquire a maximum number of TAG Shares equal to 10% of the share capital as currently shown in the commercial register of the Company, i.e. up to 13,129,831 TAG Shares ( Targeted Repurchase ). Assuming the Offer is fully subscribed for, the Company can purchase up to 13,129,831 TAG Shares under the Offer. The aggregate purchase price which the Company may pay thus ranges, subject to an amendment of this Offer, from EUR 109,634,088.85, in case the Final Purchase Price is equal to the Minimum Final Purchase Price as defined in section 3.2a, to EUR 122,763,919.85, in case the Final Purchase Price is equal to the Maximum Final Purchase Price as defined in section 3.2a. 3.2 Final Purchase Price All TAG Shares purchased by the Company under the Offer will be purchased at the same price per TAG Share (the "Final Purchase Price"). The Final Purchase Price will be calculated by the Company upon consultation with the Settlement Agent (as defined in section 5.1) on the basis of the Tenders by the TAG Shareholders (as defined in section 3.2a)) and will not be less than EUR 8.35 and not exceed EUR 9.35 per TAG Share. Subject to section 3.2b)(ii), the Final Purchase Price will be equal to the lowest price that will allow the Company to purchase 13,129,831 TAG Shares. a) Tenders by TAG Shareholders TAG Shareholders may tender (each such tender that is, in accordance with this Offer, properly and validly made and not properly and validly rescinded in accordance with section 5.10, a "Tender" and together the "Tenders") all or a portion of their TAG Shares by any of the following two ways of (i) a "Price Determined by Shareholder Tender" in which a TAG Shareholder tenders one or more TAG Shares specifying a price per share of not less than EUR 8.35 (the "Minimum Final Purchase Price") and not more than EUR 9.35 (the "Maximum Final Purchase Price", and the range from and including the Minimum Final Purchase Price until and including the Maximum Final Purchase Price the "Final Purchase Price Range"). The price at which TAG Shares are tendered under a Price Determined by Shareholder Tender must be a multiple of EUR 0.05 per TAG Share so tendered. A Price Determined by Shareholder Tender which provides for a price which is not a multiple of EUR 0.05 is deemed to be made at a price equal to the next highest multiple of EUR 0.05. By such Price Determined by Shareholder Tender, the respective TAG Shareholder agrees to sell the tendered TAG Shares at a Final Purchase Price equal to or higher than the price specified in the Price Determined by Share- Seite 11/35
holder Tender. Please note that while a TAG Shareholder, by making a Price Determined by Shareholder Tender, is able to prevent the sale of TAG Shares at a price which the respective TAG Shareholder deems to be too low, it may have the effect that the respective TAG Shareholder s Tender will not be considered and such TAG Shareholder s TAG Shares are excluded from the Offer; or (ii) a "Price Determined by Offer Tender" in which a TAG Shareholder tenders one or several TAG Shares at the Final Purchase Price (i.e., without specifying a price) in which case the TAG Shares of the TAG Shareholder will be purchased, subject to the terms of this Offer Document, at the Final Purchase Price. Please note that while a TAG Shareholder, by making a Price Determined by Offer Tender, is able to maximize the probability that the Company will purchase TAG Shares tendered under this Offer, Price Determined by Offer Tenders may have the effect of lowering the overall Final Purchase Price and could result in the tendered TAG Shares being purchased by the Company at the Minimum Final Purchase Price. TAG Shareholders may also tender a part of their TAG Shares as a Price Determined by Shareholder Tender and part of their TAG Shares as a Price Determined by Offer Tender. In addition, with respect to tendering TAG Shares by way of a Price Determined by Shareholder Tender, TAG Shareholders may tender different TAG Shares at different prices, in which case each tendering of TAG Shares at a different price constitutes a Price Determined by Shareholder Tender and accordingly a Tender for the purposes of this Offer. The Company reserves the right to change the Final Purchase Price Range one or more times in accordance with section 3.5 by increasing the Maximum Final Purchase Price and/or increasing the Minimum Final Purchase Price, subject to the restrictions contained in the authorization of the Company to buy back shares (see section 6.1). A reduction of the Minimum Final Purchase Price or the Maximum Final Purchase Price is not permissible. In the event the Company amends the Final Purchase Price Range by increasing the Minimum Final Purchase Price of EUR 8.35, all Price Determined by Shareholder Tenders providing for a purchase price per TAG Share equal to, or higher than, the initial Minimum Final Purchase Price of EUR 8.35 per TAG Share but lower than the final Minimum Final Purchase Price, i.e., the Minimum Final Purchase Price as amended by the Company from time to time applicable at the time of the end of the Acceptance Period, are deemed to be made at a purchase price per TAG Share equal to that final Minimum Final Purchase Price. Seite 12/35
b) Determination of the Final Purchase Price The Final Purchase Price will be calculated by the Company upon consultation with the Settlement Agent as defined in section 5.1 promptly after the expiration of the Acceptance Period in accordance with the following rules: (i) The Final Purchase Price is equal to the lowest price within the Final Purchase Price Range at which the Company can, based on the Tenders, purchase 13,129,831 TAG Shares (subject to section 5.5). Example (for illustrative purposes only) In the event TAG Shareholders tender 6,000,000 TAG Shares at a price of EUR 8.35 per share, 8,500,000 TAG Shares at a price of EUR 8.50 per share, 3,000,000 TAG Shares at a price of EUR 9.00 per share, and 4,300,000 TAG Shares at a price of EUR 9.35 per share, the Final Purchase Price would be equal to EUR 8.50 as this is the lowest price per share at which the Company could acquire TAG Shares in a number equal to the Targeted Repurchase. Hence the Company would purchase 13,129,831 TAG Shares at EUR 8.50 per share. In the event that all Tenders are made in the form of Price Determined by Offer Tenders, the Final Purchase Price is equal to the Minimum Final Purchase Price. (ii) In the event that, based on the Tenders, the Company can only acquire a number of TAG Shares lower than the Targeted Repurchase (because the number of TAG Shares which are validly tendered at a price within the Final Purchase Price Range and not properly and validly rescinded is lower than the Target Repurchase), the Final Purchase Price is equal to the highest price (within the Final Purchase Price Range) set forth in any of the Tenders, and the Company will buy all the TAG Shares properly tendered. It is expected that within four (4) Banking Days of the expiration of the Acceptance Period, the Company will publish the Final Purchase Price so determined under "Investor Relations" section, sub-section "Share Buy-Back Offer" on its website at www.tag-ag.com and in the Federal Gazette (Bundesanzeiger). Seite 13/35
3.3 Purchase of TAG Shares Subject to proration as set forth in section 5.5, the Company will purchase and acquire upon the terms and subject to the conditions of this Offer all TAG Shares tendered at prices equal to or less than the Final Purchase Price. All TAG Shares tendered at prices higher than the Final Purchase Price will not be purchased and will be re-booked in accordance with section 5.9. 3.4 Acceptance Period The period of acceptance of the Offer starts on and ends on September 15, 2014, upon publication of the Offer Document in the Federal Gazette (Bundesanzeiger) October 14, 2014, midnight (CEST). The Company reserves the right to extend the period of acceptance one or more times in its sole discretion by not less than five (5) Banking Days. Such extensions of the acceptance period, taken together with any extensions resulting from amendments pursuant to section 3.5, may not extend the acceptance period by more than twenty (20) Banking Days in total (the "Maximum Aggregate Extension"). As a result, the Acceptance Period will end at the latest on November 11, 2014, midnight (CET). For an extension to be effective, it must be published prior to the expiration of the period of acceptance. The period of acceptance of the Share Buy-Back Offer, where applicable as extended in accordance with the terms of this Offer Document, is referred to herein as "Acceptance Period". 3.5 Amendments to the Offer The Company reserves the right to amend the Offer one or more times to the extent an amendment is reasonable and in the opinion of the Management Board in the interest of the Company and does not result, and cannot reasonably be expected to result, in a situation where the Offer, or the agreements which will come into existence upon its acceptance, would, as of the end of the day immediately preceding the First Settlement Date, violate any law, rule or regulation applicable to the Company. All amendments must be in conformity with the AGM-Authorization (as further described in section 6.1). In particular, amendments can be made with respect to the Final Purchase Price Range in accordance with section 3.2a) and the Acceptance Period in Seite 14/35
accordance with section 3.4. In addition, a waiver of certain Offer Conditions will, subject to section 4.2, result in an extension of the Acceptance Period. For an amendment to be effective, unless explicitly stated otherwise in this Offer Document (see section 4.2), it must be published in accordance with section 10 prior to the expiration of the Acceptance Period. In the case of an expiration of the Acceptance Period on October 14, 2014, midnight (CEST), amendments must therefore be published prior to October 14, 2014, midnight (CEST). Amendments which are published within the last eleven (11) Banking Days of the Acceptance Period automatically trigger an extension of the Acceptance Period by such a number of days that the Acceptance Period remains open for eleven (11) Banking Days following the publication of the respective amendment by the Company (an "Automatic Extension"). If an amendment would trigger an Automatic Extension it is only valid if that Automatic Extension together with any prior Automatic Extensions and any extensions pursuant to section 3.4 do not exceed the Maximum Aggregate Extension (see section 3.4). 4. Conditions on which the Validity of the Offer Depends 4.1 Offer Conditions The Offer as well as the agreements with the TAG Shareholders which will come into existence upon its acceptance are neither subject to any governmental approvals or authorizations nor are they conditioned on any minimum number of TAG Shares being tendered. The consummation of this Share Buy-Back Offer, and the agreements with the TAG Shareholders which will come into existence upon its acceptance are, however, subject to the satisfaction of the following conditions precedent (each such condition an "Offer Condition", and together the "Offer Conditions"). The Offer Conditions are satisfied if a) as of the end of the day immediately preceding the First Settlement Date (as defined in Section 5.6), no ruling, temporary restraining order, preliminary or permanent injunction or other order issued by a court or other governmental entity of competent jurisdiction has been notified to the Company and remains outstanding which has the effect of making the Offer, or agreements which will come into existence upon its acceptance, illegal, void or otherwise prohibit their consummation; b) the consummation of the Offer does not violate, or the agreements which will come into existence upon its acceptance do not violate, as of the end of the day immediately preceding the First Settlement Date, any Seite 15/35
law, rule or regulation applicable to the Company, in particular, the Company would be in a position to set up a provision for own shares in the amount required under German law in order to purchase and acquire the TAG Shares hereunder (the Offer Conditions under lit. a) and b) the "Compliance Conditions"); c) until the end of the day immediately preceding the First Settlement Date, no general suspension of trading in securities on any regulated market in Germany has been ordered (the "Trading Condition"); and d) until the end of the day immediately preceding the First Settlement Date, the volume weighted average price of TAG Shares on the electronic trading system XETRA of the Frankfurt Stock Exchange ("XETRA") on any three (3) consecutive trading days since the start of the Acceptance Period is not less than EUR 7.50 (the "MAC Condition"). 4.2 Waiver of Conditions; Stand Still The Company may waive any or all of the Offer Conditions by publishing a Waiver Notice in accordance with section 4.4 prior to the end of the day immediately preceding the First Settlement Date. A waiver is deemed equivalent to the definite satisfaction of the relevant Offer Condition. In addition, upon the settlement of this Offer (as described in section 5.6), all Offer Conditions for which no Non-Satisfaction Notice (as defined in section 4.4) has been published shall be deemed to have been validly waived by the Company. A waiver by the Company of a Compliance Condition or the Trading Condition which is published prior to the expiration of the Acceptance Period is deemed to constitute an amendment of the Offer (as described in section 3.5). Consequently, the publication of a waiver of a Compliance Condition or the Trading Condition within the last eleven (11) Banking Days prior to the expiration of the Acceptance Period (i) triggers an Automatic Extension of the Acceptance Period (see section 3.5) and (ii) only results in a valid waiver of the relevant Offer Condition if the Automatic Extension triggered thereby (together with any prior Automatic Extensions and any extension pursuant to section 3.4) does not exceed the Maximum Aggregate Extension (see section 3.4). A waiver of a Compliance Condition or the Trading Condition after the expiration of the Acceptance Period or a waiver of the MAC-Condition do not constitute an amendment of the Offer within the meaning of section 3.5 and as a result, do not trigger an extension of the Acceptance Period. Seite 16/35
In the event circumstances occur on or after the First Settlement Date and prior to the settlement pursuant to section 5.6, which would have resulted in a non-satisfaction of a Compliance Condition had they existed as of the end of the day immediately preceding the First Settlement Date (see section 4.1), the Company may postpone the consummation of this Offer, and the settlement pursuant to section 5.6, until such circumstances no longer exist (a "Stand Still"), provided that the Stand Still ends at the earlier of: (i) a notice by the Company that the relevant circumstances no longer exist and that the Stand Still has therefore ended; or (ii) at the end of November 11, 2014. TAG Shareholders have no claims against the Company for late payment or otherwise on account of the Stand Still. If the Company has published a Stand Still Notice but has not published the end of the Stand Still (both as described in section 4.4) prior to the end of November 11, 2014, the relevant Compliance Condition is deemed to have definitely not been satisfied and no agreements will come into existence as a result of this Offer. 4.3 Satisfaction of Offer Conditions The Share Buy-Back Offer and the agreements entered into upon its acceptance are only valid if all Offer Conditions pursuant to section 4.1 are satisfied or are deemed to have been satisfied pursuant to section 4.2. For detailed information with respect to the unwinding procedures in the case of a non-satisfaction of Offer Conditions, see section 5.8. 4.4 Publication of the Non-Satisfaction of Offer Conditions, a Waiver of Offer Conditions and a Stand Still The Company will promptly, in any event within three (3) Banking Days, publish (i) (ii) (iii) a notice regarding a waiver of any of the Offer Conditions (a "Waiver Notice"); or a notice regarding the fact that an Offer Condition has definitely not been satisfied so that the Offer has become definitely invalid and no agreements will come into existence as a result of this Offer (the "Non-Satisfaction Notice"); in case of a Stand Still, the Company will promptly publish a notice regarding a Stand Still (a "Stand Still Notice") as well as a notice if the Stand Still ends. All afore-mentioned publications will be made by the Company under "Investor Relations" section, sub-section "Share Buy-Back Offer" on its website at www.tag-ag.com and in the Federal Gazette (Bundesanzeiger). Seite 17/35
The Company will not announce the satisfaction of Offer Conditions. 5. Acceptance and Settlement of the Share Buy-Back Offer 5.1 Settlement Agent; Information Agents The Company has instructed Kempen & Co N.V., Beethovenstraat, 1077 WZ Amsterdam, Netherlands, telefax +31 20 348 9549, e-mail kas@kempen.nl ("Kempen"), as settlement agent to perform the technical processing of this Share Buy-Back Offer (the "Settlement Agent"). The Company has instructed Kempen and Close Brothers Seydler Bank AG, Schillerstraße 27-29, 60313 Frankfurt am Main, telefax +49 69 920 54 902, e-mail: tag@cbseydler.com, as information agents in this Share Buy-Back Offer (the "Information Agents"). 5.2 Acceptance Notice and Re-Booking TAG Shareholders may accept this Offer only by giving written notice to their relevant Custodian Bank, including one or, in case different TAG Shares are tendered at different prices, several Price Determined by Shareholder Tenders and/or a Price Determined by Offer Tender (each as defined in section 3.2a) (the "Acceptance Notice"). For the Acceptance Notice to be effective, it must be given prior to the expiration of the Acceptance Period. For the determination of whether or not the Acceptance Notice has been made in time, the receipt of the Acceptance Notice by the Custodian Bank shall be decisive. In addition, an Acceptance Notice shall only become effective upon rebooking in due time of the TAG Shares into ISIN DE000A12UQS6 (WKN A12 UQS) at Clearstream Banking AG, Frankfurt am Main ("Clearstream"). The re-booking is the responsibility of, and has to be arranged for by, the relevant Custodian Bank following receipt of the Acceptance Notice. The rebooking of the TAG Shares tendered into ISIN DE000A12UQS6 (WKN A12 UQS) will be deemed to have been made in due time if it has been effected at the latest by 6:00 p.m. local time in Frankfurt am Main, Germany, on the second Banking Day after expiration of the Acceptance Period. The Company does not assume any responsibility for the actions and omissions of the Custodian Banks in connection with TAG Shareholders accepting the Offer. In particular, the Company may not be held liable should any Custodian Bank fail to duly and timely notify the Settlement Agent of any TAG Shareholder accepting the Offer or to duly and timely book tendered TAG Shares into ISIN DE000A12UQS6 (WKN A12 UQS). Seite 18/35
5.3 Additional Declarations in the Course of Acceptance of the Offer By giving an effective Acceptance Notice, the relevant TAG Shareholders accept the Offer for the number of TAG Shares specified in the Acceptance Notice in accordance with the provisions of this Offer Document, and instruct their Custodian Bank to re-book the TAG Shares specified in the Acceptance Notice into ISIN DE000A12UQS6 (WKN A12 UQS) at Clearstream, however, to leave such shares initially in their own securities custody account and to forward the Acceptance Notice to the Settlement Agent upon its request; instruct their Custodian Bank to instruct and authorize Clearstream, taking into account a possible proration in case of an oversubscription of the Offer, the TAG Shares tendered with the ISIN DE000A12UQS6 (WKN A12 UQS) remaining in the securities custody accounts of the Custodian Bank, upon expiration of the Acceptance Period, presumably at the earliest on the fifth, but presumably no later than the tenth Banking Day after the end of the Acceptance Period and only in case of the satisfaction of the Conditions Precedent pursuant to section 5.4, to make available to the Settlement Agent in its security account number 7619 at Clearstream for transfer of title; instruct and authorize the Custodian Bank as well as the Settlement Agent, releasing them, as a matter of precaution, from the restrictions set forth in section 181 of the German Civil Code (BGB) or similar restrictions under applicable laws of other jurisdictions, to take all action required or appropriate for the settlement of the Offer and to make or accept delivery of any statements and declarations, including, but not limited to statements and declarations pursuant to this section 5.3, and, in particular, to effect the transfer of title to the respective TAG Shares; instruct their Custodian Bank to instruct and authorize Clearstream accordingly to provide to the Information Agents and the Company, directly or through the Custodian Bank, on each exchange trading day, all information which might be relevant for the results of this Offer, in particular the number of TAG Shares being booked on the securities account of the Custodian Bank at Clearstream into ISIN DE000A12UQS6 (WKN A12 UQS) and the price at which the TAG Shares have been tendered; declare that they accept the Offer to enter into a purchase contract (which contract comes into existence as a consequence of the declaration of acceptance; cf. section 5.4) for the TAG Shares tendered by the Acceptance Notice in accordance with this Offer Document deposited Seite 19/35
in the deposit of the Custodian Bank upon the terms of this Offer Document (as amended from time to time) and subject to the Conditions Precedent as set forth in section 5.4 at a purchase price per tendered TAG Share equal to the Final Purchase Price. If and insofar as the shareholder has made one or more Price Determined by Shareholder Tenders (as defined in section 3.2a)) at a price higher than the Final Purchase Price, the acceptance shall not have any legal effect; declare that they transfer title to the TAG Shares tendered, including all rights attached thereto, to the Company in accordance with the provisions of this Offer Document concurrently (Zug-um-Zug) against payment of the Final Purchase Price for the relevant number of TAG Shares tendered to the account of the respective Custodian Bank at Clearstream; and declare that, at the time of transfer of title to the Company, they are the sole owners of the TAG Shares tendered and that these shares are free of any rights and claims of third parties and not subject to any restrictions on disposal. In order to facilitate a smooth and expeditious settlement of the Offer, the afore-mentioned instructions and authorizations shall be irrevocably granted or issued and shall only cease to apply in the event of (i) the non-satisfaction of the Conditions Precedent set forth in section 5.4; or (ii) a rescission of the acceptance of the Offer and of the agreements entered into by acceptance of this Offer which rescission can only be made in the circumstances described in section 5.10. 5.4 Legal Consequences of Acceptance Notice By accepting this Offer, each accepting TAG Shareholder enters into an agreement with the Company on the sale and transfer of the TAG Shares tendered in accordance with the provisions of this Offer Document, subject to the following conditions precedent (i) (ii) (iii) the satisfaction of the Offer Conditions (as defined in section 4.1 and section 4.2); in case the shareholder has made a Price Determined by Shareholder Tender (as defined in section 3.2a)), the Final Purchase Price being equal to, or higher than, the price set forth in the Acceptance Notice; and in case of an oversubscription of the Offer, the tendered TAG Shares being taken into account in accordance with the proration procedure set out in section 5.5 Seite 20/35
(jointly the "Conditions Precedent"). Furthermore, by accepting the Offer, the accepting TAG Shareholder makes the declarations, instructions, orders and authorizations set out in section 5.3. The TAG Shareholders who transfer their TAG Shares to the Company pursuant to this Offer will not receive any dividends for these TAG Shares on or after the date on which this Offer is settled pursuant to section 5.6. 5.5 Allocation in the Event of an Oversubscription of the Offer The Offer is limited to the acquisition of a maximum of 13,129,831 TAG Shares. In the event the total number of TAG Shares which are validly tendered at a price equal to, or lower than, the Final Purchase Price exceeds the Targeted Repurchase, the (i) Tenders which constitute a Price Determined by Shareholder Tender at a price equal to, or lower than, the Final Purchase Price or (ii) Tenders which constitute a Price Determined by Offer Tender (the "Relevant Tenders"), will be accounted for on a pro rata basis. The number of TAG Shares accounted for per Relevant Tender will be equal to the TAG Shares included by such Relevant Tender multiplied with the Targeted Repurchase in the amount of 13,129,831, divided by the total number of TAG Shares which are the subject of all Relevant Tenders. The number of TAG Shares which will be acquired per Relevant Tender in accordance with the Offer will be rounded down to the next full number. As a result of the proration, and the necessary rounding in connection therewith, the total number of TAG Shares validly tendered and taken into account may be lower than the Targeted Repurchase. Example (for illustrative purposes only): In case Relevant Tenders were made in relation to 14,500,000 TAG- Shares, the acceptance ratio in relation to each Relevant Tender is equal to the ratio of the Targeted Repurchase (13,129,831) and the total number of TAG Shares which are the subject of all Relevant Tenders (14,500,000), i.e. 1 to 0.90550559. A TAG Shareholder who made a Relevant Tender in relation to 1,000 TAG Shares would thus be considered in the ratio of 1 to 0.90550559 (i.e. 1,000 TAG Shares multiplied by 0.90550559 = 905.51 TAG Shares); since fractional amounts would be rounded down to the next full number the shareholder would be able to sell 905 TAG Shares under the Offer. The TAG Shares of a shareholder for which that shareholder's Tender is taken into account in accordance with the foregoing proration (if applicable) and Seite 21/35
which are purchased by the Company upon the terms and subject to the conditions of this Offer Document are also referred to herein as "Relevant Tendered TAG Shares". 5.6 Settlement of the Offer and Payment of the Final Purchase Price The transfer to the Company of the Relevant Tendered TAG Shares shall be effected in each case concurrently (Zug-um-Zug) with the payment of the Final Purchase Price for the Relevant Tendered TAG Shares to the account of the respective Custodian Bank at Clearstream. The payment of the Final Purchase Price for the Relevant Tendered TAG Shares to the account of the respective Custodian Bank at Clearstream will be made no earlier than on the fifth Banking Day (the "First Settlement Date") and is expected to be made no later than on the tenth Banking Day, after the expiration of the Acceptance Period. If the Company has published a Stand Still Notice in accordance with section 4.4, the First Settlement Date is expected to be the fifth Banking Day at the earliest and the tenth (10) Banking Day at the latest, in each case after the date on which the notice regarding the end of the Stand Still has been published by the Company in accordance with section 4.4. Clearstream will make book-entries for the Relevant Tendered TAG Shares acquired by the Company under this Share Buy-Back Offer into the Settlement Agent's depositary account at Clearstream. Upon credit of the Final Purchase Price for the Relevant Tendered TAG Shares to the account of the respective Custodian Bank at Clearstream the Company has fulfilled its obligation to pay the consideration. It is the responsibility of the respective Custodian Bank to credit the consideration to the individual accepting TAG Shareholder. 5.7 No Stock Exchange Trading for and no transfer of TAG Shares Tendered for Sale TAG Shares tendered for sale cannot be traded on the regulated market (regulierter Markt) (Prime Standard) of the Frankfurt Stock Exchange (Frankfurter Wertpapierbörse) or any other organized or regulated market from the time they are booked into ISIN DE000A12UQS6 (WKN A12 UQS) at Clearstream onwards and for as long as they are not re-booked into ISIN DE0008303504 (WKN 830350) in accordance with this Offer Document. As a consequence, trading in, or the sale of, tendered TAG Shares through a stock exchange is, in principle, excluded. Furthermore, these TAG Shares cannot be transferred to security deposits with other Deposit Banks. Seite 22/35
TAG Shares not tendered for sale may still be traded on the stock exchange under ISIN DE0008303504 (WKN 830350) and remain transferable. Shareholders who wish to sell their tendered TAG Shares other than under the Offer or to transfer their tendered TAG Shares to other Deposit Banks, therefore, need to rescind their acceptance of the Offer in accordance with section 5.10. In case of a rescission the tendered TAG Shares will be rebooked by the Custodian Bank from ISIN DE000A12UQS6 (WKN A12 UQS) into ISIN DE0008303504 (WKN 830350) (see section 5.10). Following such re-booking the relevant TAG Shares can be traded again on the regulated market (regulierter Markt) (Prime Standard) of the Frankfurt Stock Exchange (Frankfurter Wertpapierbörse). For the further consequences of a rescission see section 5.10; in particular, by exercising their right of rescission the relevant TAG Shareholders rescind the agreement on the sale and transfer of the tendered TAG Shares entered into with the Company by accepting this Share Buy-Back Offer and hence cannot sell their TAG Shares under this Offer (unless they validly submit a new Tender pursuant to this Offer Document). 5.8 Reverse Entry in the Case of Non-Satisfaction of Conditions on which the Validity of the Offer Depends The Share Buy-Back Offer will not be consummated, and the Company will not be obligated to acquire TAG Shares tendered for sale and to pay the Final Purchase Price, if any of the Offer Conditions has not been and is not deemed to have been satisfied, as described in sections 4.1 and 4.2. In this case, the agreements entered into by accepting this Offer will not become effective and title to the TAG Shares tendered for sale will not transfer to the Company. Instead, the Custodian Banks will arrange for re-booking of the relevant TAG Shares tendered for sale into ISIN DE0008303504 (WKN 830350) without undue delay. The Settlement Agent will instruct Clearstream to effect such re-booking within two (2) Banking Days after publication of a Non- Satisfaction Notice pursuant to section 4.4. After re-booking, the TAG Shares may again be traded under their original ISIN DE0008303504 (WKN 830350). The re-booking will be effected without costs for the TAG Shareholders. However, any taxes arising under any laws other than the laws of Germany, or any costs and charges levied by Custodian Banks subject to any laws other than the laws of Germany which have no reciprocal account relationship with Clearstream are to be borne by the respective TAG Shareholders. 5.9 Reverse Entry in the Event of Tenders above the Final Purchase Price and in the Event of an Oversubscription Seite 23/35
The Offer will not be consummated with respect to, and the Company will not be obliged to acquire and to pay the Final Purchase Price for, TAG Shares tendered hereunder which (i) (ii) in case of a Price Determined by Shareholder Tender, are tendered at a price that exceeds the Final Purchase Price; and in case of an oversubscription of the Offer, are not taken into account in accordance with section 5.5 (the "Re-Booked Tendered TAG Shares"). With respect to the Re-Booked Tendered TAG Shares, the agreements entered into by accepting this Offer will not become effective, and title to the Re-Booked Tendered TAG Shares will not transfer to the Company. Instead, the Custodian Banks will arrange for re-booking of the Re-Booked Tendered TAG Shares into ISIN DE0008303504 (WKN 830350) without undue delay. Such re-booking will be effected, in case of the foregoing (i), presumably within five (5) Banking Days and, in case of the foregoing (ii), presumably within nine (9) Banking Days after the expiration of the Acceptance Period respectively. After re-booking, the TAG Shares may again be traded under their original ISIN DE0008303504 (WKN 830350). The re-booking will be effected without costs for the TAG Shareholders. However, any taxes arising under any laws other than the laws of Germany, or costs and charges levied by Custodian Banks subject to any laws other than the laws of Germany which have no reciprocal account relationship with Clearstream are to be borne by the respective TAG Shareholders. 5.10 Right of Rescission of TAG Shareholders Accepting the Offer TAG Shareholders who have accepted the Share Buy-Back Offer are entitled to rescind their acceptance of the Offer until the expiration of the Acceptance Period in accordance with this section 5.10. In the event a shareholder has submitted several Tenders (i.e., he has submitted Price Determined by Shareholder Tenders at different prices for different TAG Shares or a combination of one or several such Price Determined by Shareholder Tenders with a Price Determined by Offer Tender), the shareholder can rescind his acceptance for one, several or all of his Tenders. In order to be valid, the rescission must be effected by written notice to the Custodian Bank of the rescinding TAG Shareholder within the Acceptance Period and by re-booking the relevant TAG Shares tendered for sale by the Custodian Bank from ISIN DE000A12UQS6 (WKN A12 UQS) into ISIN Seite 24/35