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EXHIBIT 10.11
AMENDED AND RESTATED SHAREHOLDERS' AGREEMENT
This Amended and Restated Shareholders' Agreement
("Agreement"), dated as of October 1, 1998, by and among Bionix, B.V., a
Netherlands corporation (the "Dutch Company"), and each of the shareholders of
the Dutch Company identified on the signature page hereof (the "Shareholders"),
W I T N E S S E T H T H A T
WHEREAS, the Dutch Company is incorporated under the laws of
the Netherlands;
WHEREAS, certain of the shareholders of the Dutch Company are
residents of Finland (the "Finnish Shareholders") and certain of the
shareholders of the Dutch Company are residents of the United States (the "U.S.
Shareholders", and, collectively with the Finnish Shareholders, the
"Shareholders");
WHEREAS, the Dutch Company initially issued to the Finnish
Shareholders, in the aggregate, 390,000 shares of the Class A common stock of
the Dutch Company (the "Old Class A Shares");
WHEREAS, the Dutch Company initially issued to the U.S.
Shareholders, in the aggregate, 120,000 shares of the Class B common stock of
the Dutch Company (the "Old Class B Shares);
WHEREAS, the principal asset of the Dutch Company is 2,684,211
shares of the Common Stock of Bionx Implants, Inc., a Delaware corporation (the
"Company"), such shares being hereinafter referred to as the "Bionx Implants
Shares";
WHEREAS, the parties hereto (excluding Auvo Antero Xxxxxx
Xxxxxxxxx) previously entered into a shareholders' agreement, dated as of
September 5, 1996, which established certain provisions regarding (i) the
Shareholders' rights to obtain distributions of Bionx Implants Shares owned by
the Dutch Company, (ii) certain restrictions on the transfer of the Old Class A
Shares and the Old Class B Shares and (iii) certain voting matters (the "Prior
Contract");
WHEREAS, the Articles of Association of the Dutch Company have
been amended to provide that each Old Class A Share and each Old Class B Share
is entitled to one vote with respect to each matter submitted for a vote of the
shareholders of the Dutch Company;
WHEREAS, the Articles of Association of the Dutch Company have
also been amended (the "Most Recent Amendment") to provide that (a) the 6,620
Old Class B Shares owned by Xxxxx X. Xxxxxxxx have been converted into 6,620
Class C Shares of the Dutch Company (the "Class C Shares"), (b) the 9,640 Old
Class B Shares owned by Bershad Investment Group, LP have been converted into
9,640 Class B Shares of the Dutch Company
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(the "Class B Shares"), (c) the 6,589 Old Class B shares owned by BTAR
Associates L.P. have been converted into 6,589 Class D Shares of the Dutch
Company (the "Class D Shares"), (d) the 5,111 Old Class B Shares owned by Xxxxx
X. XxxXxxxxx have been converted into 5,111 Class E Shares of the Dutch Company
(the "Class E Shares"), (e) the 92,040 Old Class B Shares owned by TDW
Associates, L.P. have been converted into 92,040 Class A Shares of the Dutch
Company (the "Class A Shares"), (f) the 1,452 Old Class A Shares owned by Ole
Bostman have been converted into 1,452 Class F Shares of the Dutch Company (the
"Class F Shares"), (g) the 1,030 Old Class A Shares owned by E. Xxxxxx Xxxxxx
have been converted into 1,030 Class G Shares of the Dutch Company (the "Class G
Shares"), (h) the 1,077 Old Class A Shares owned by Naj Vet, Ltd. have been
converted into 1,077 Class H Shares of the Dutch Company (the "Class H Shares"),
(i) the 4,777 Old Class A Shares owned by Novator have been converted into 4,777
Class I Shares of the Dutch Company (the "Class I Shares"), (k) the 937 Old
Class A Shares owned by Ortho Sci Ltd. have been converted into 937 Class J
Shares of the Dutch Company (the "Class J Shares"), (l) the 937 Old Class A
Shares owned by Esa Partio have been converted into 937 Class K Shares of the
Dutch Company (the "Class K Shares"), (m) the 1,780 Old Class A Shares owned by
Timo Pohjonen have been converted into 1,780 Class L Shares of the Dutch Company
(the "Class L Shares"), (n) the 84,212 Old Class A Shares owned by Xxxxxx
Xxxxxxxx have been converted into 84,212 Class M Shares of the Dutch Company
(the "Class M Shares"), (o) the 234 Old Class A Shares owned by Xxxxx Xxxxxxxx
have been converted into 234 Class N Shares of the Dutch Company (the "Class N
Shares"), (p) the 234 Old Class A Shares owned by Riita Suuronen have been
converted into 234 Class O Shares of the Dutch Company (the "Class O Shares"),
(q) the 31,251 Old Class A Shares owned by Marrku Tamminmaki have been converted
into 31,251 Class P Shares of the Dutch Company (the "Class P Shares"), (r) the
2,389 Old Class A shares owned by Xxxxx Xxxxxxx have been converted into 2,389
Class Q Shares of the Dutch Company (the "Class Q Shares"), (s) the 213,187 Old
Class A Shares owned by Perrti Xxxxxxx have been converted into 213,187 Class R
Shares of the Dutch Company (the "Class R Shares"), (t) the 18,453 Old Class A
Shares owned by Xxxxx Xxxxxxxxxx have been converted into 18,453 Class S Shares
of the Dutch Company (the "Class S Shares") and (u) the 27,522 Old Class A
Shares owned by Xxxxxx Xxxxxxxx have been converted into 27,522 Class T Shares
of the Dutch Company (the "Class T Shares");
WHEREAS, prior to the Most Recent Amendment, Xxxxxx Xxxxxxx
transferred 176 and 352 of his Old Class A Shares to Xxxxxx Xxxxxxxx and Auvo
Antero Xxxxxx Xxxxxxxxx, respectively, and such transferred Old Class A Shares
were converted to Class R Shares upon the filing of the Most Recent Amendment;
WHEREAS, pursuant to the Most Recent Amendment, at the time
that the Most Recent Amendment became effective (the "Effective Time"), the
terms of the Class A Shares, Class B Shares, Class C Shares, Class D Shares,
Class E Shares, Class F Shares, Class G Shares, Class H Shares, Class I Shares,
Class J Shares, Class K Shares, Class L Shares, Class M Shares, Class N Shares,
Class O Shares, Class P Shares, Class Q Shares, Class R Shares, Class S Shares
and Class T Shares (collectively, the "Dutch Shares") were (and continue to be)
identical in all respects;
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WHEREAS, at the Effective Time, the aggregate number of Dutch
Shares outstanding equals nineteen percent (19%) of the aggregate number of
Bionx Implants Shares owned by the Dutch Company;
WHEREAS, the parties hereto desire to enable each of the
Shareholders to control the disposition of a portion of the Bionx Implants
Shares owned by the Dutch Company corresponding to the portion of the Dutch
Shares owned by such Shareholder, to be solely entitled to the net proceeds of
such disposition and to have such net proceeds allocable solely to such
Shareholder;
WHEREAS, the Shareholders desire to amend the Prior Contract
and restate the Prior Contract in its entirety to reflect the Most Recent
Amendment,
NOW THEREFORE, in consideration of the mutual covenants set
forth herein, the parties hereto hereby amend the Prior Contract as of the
Effective Time and restate the Prior Contract in its entirety as of the
Effective Time to reflect such amendments, such amended and restated agreement
to provide in its entirety as follows as of the Effective Time:
1. Definitions. The following terms shall have the
following meanings:
"Finnish Representative" shall mean Xxxxxx Xxxxxxx or
such other person as shall be designated as the "Finnish Representative" by
holders of a majority in interest of the Class F Shares, Class G Shares, Class H
Shares, Class I Shares, Class J Shares, Class K Shares, Class L Shares, Class M
Shares, Class N Shares, Class O Shares, Class P Shares, Class Q Shares, Class R
Shares, Class S Shares and Class T Shares (collectively, the "Finnish Shares")
outstanding.
"Proportionate Share" shall mean a fraction, the numerator
of which shall equal the number of Finnish Shares or U.S. Shares (as defined
herein) owned by a particular Shareholder and the denominator of which shall
equal the aggregate number of Finnish Shares and U.S. Shares owned by all
Shareholders.
"U.S. Representative" shall mean Xxxxxxx X. Xxxxx or such
other person (other than Xxxxx X. Xxxx) as shall be designated as the "U.S.
Representative" by holders of a majority in interest of the Class A Shares,
Class B Shares, Class C Shares, Class D Shares and Class E Shares (collectively,
the "U.S. Shares").
2. Certificates Representing Shares of Company Common Stock.
At present, the Dutch Company owns multiple stock certificates representing, in
the aggregate, 2,684,211 Bionx Implants Shares. One such certificate represents
34,842 Bionx Implants Shares and shall hereinafter be referred to as the "Class
C Certificate"; such 34,842 amount represents the Proportionate Share of Xxxxx
X. Xxxxxxxx as of the date hereof multiplied by 2,684,211. One such certificate
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represents 50,736 Bionx Implants Shares and shall hereinafter be referred to as
the "Class B Certificate"; such 50,736 amount represents the Proportionate Share
of Bershad Investment Group, LP as of the date hereof multiplied by 2,684,211.
One such certificate represents 34,679 Bionx Implants Shares and shall
hereinafter be referred to as the "Class D Certificate"; such 34,679 amount
represents the Proportionate Share of BTAR Associates L.P. as of the date hereof
multiplied by 2,684,211. One such certificate represents 26,900 Bionx Implants
Shares and shall hereinafter be referred to as the "Class E Certificate"; such
26,900 amount represents the Proportionate Share of Xxxxx X. XxxXxxxxx as of the
date hereof multiplied by 2,684,211. One such certificate represents 484,421
Bionx Implants Shares and shall hereinafter be referred to as the "Class A
Certificate"; such 484,421 amount represents the Proportionate Share of TDW
Associates, L.P. as of the date hereof multiplied by 2,684,211. One such
certificate represents 7,642 Bionx Implants Shares and shall hereinafter be
referred to as the "Class F Certificate"; such 7,642 amount represents the
Proportionate Share of Ole Bostman as of the date hereof multiplied by
2,684,211. One such certificate represents 5,421 Bionx Implants Shares and shall
hereinafter be referred to as the "Class G Certificate"; such 5,421 amount
represents the Proportionate Share of E. Xxxxxx Xxxxxx as of the date hereof
multiplied by 2,684,211. One such certificate represents 5,668 Bionx Implants
Shares and shall hereinafter be referred to as the "Class H Certificate"; such
5,668 amount represents the Proportionate Share of Naj Vet, Ltd as of the date
hereof multiplied by 2,684,211. One such certificate represents 25,142 Bionx
Implants Shares and shall hereinafter be referred to as the "Class I
Certificate"; such 25,142 amount represents the Proportionate Share of Novator
as of the date hereof multiplied by 2,684,211. One such certificate represents
4,932 Bionx Implants Shares and shall hereinafter be referred to as the "Class J
Certificate"; such 4,932 amount represents the Proportionate Share of Ortho Sci
Ltd. as of the date hereof multiplied by 2,684,211. One such certificate
represents 4,932 Bionx Implants Shares and shall hereinafter be referred to as
the "Class K Certificate"; such 4,932 amount represents the Proportionate Share
of Esa Partio as of the date hereof multiplied by 2,684,211. One such
certificate represents 9,368 Bionx Implants Shares and shall hereinafter be
referred to as the "Class L Certificate"; such 9,368 amount represents the
Proportionate Share of Timo Pohjonen as of the date hereof multiplied by
2,684,211. One such certificate represents 443,221 Bionx Implants Shares and
shall hereinafter be referred to as the "Class M Certificate"; such 443,221
amount represents the Proportionate Share of Xxxxxx Xxxxxxxx as of the date
hereof multiplied by 2,684,211. One such certificate represents 1,232 Bionx
Implants Shares and shall hereinafter be referred to as the "Class N
Certificate"; such 1,232 amount represents the Proportionate Share of Xxxxx
Xxxxxxxx as of the date hereof multiplied by 2,684,211. One such certificate
represents 1,232 Bionx Implants Shares and shall hereinafter be referred to as
the "Class O Certificate"; such 1,232 amount represents the Proportionate Share
of Riita Suuronen as of the date hereof multiplied by 2,684,211. One such
certificate represents 164,479 Bionx Implants Shares and shall hereinafter be
referred to as the "Class P Certificate"; such 164,479 amount represents the
Proportionate Share of Marrku Tamminmaki as of the date hereof multiplied by
2,684,211. One such certificate represents 12,574 Bionx Implants Shares and
shall hereinafter be referred to as the "Class Q Certificate"; such 12,574
amount represents the Proportionate Share of Xxxxx Xxxxxxx as of the date hereof
multiplied by 2,684,211. Two or more such certificates represent, in the
aggregate (including certificates subject to existing pledges), 1,122,037 Bionx
Implants Shares and shall hereinafter be collectively referred to as the "Class
R Certificate"; such 1,122,037 amount represents the Proportionate Share of
Perrti Xxxxxxx as of the date hereof multiplied by 2,684,211. One such
certificate represents 97,121 Bionx Implants Shares and shall hereinafter be
referred to as the "Class S Certificate"; such 97,121 amount represents the
Proportionate Share of
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Xxxxx Xxxxxxxxxx as of the date hereof multiplied by 2,684,211. Two such
certificates represent in the aggregate 145,779 Bionx Implants Shares and shall
hereinafter be collectively referred to as the "Class T Certificate"; such
145,779 amount represents the Proportionate Share of Xxxxxx Xxxxxxxx as of the
date hereof multiplied by 2,684,211. One such certificate represents 1,853 Bionx
Implant Shares and shall hereinafter be referred to as the "Class R-1
Certificate"; such 1,583 amount represents the Proportionate Share of Auvo
Antero Xxxxxx Xxxxxxxxx as of the date hereof multiplied by 2,684,211. The Class
A Certificate, the Class B Certificate, the Class C Certificate, the Class D
Certificate, the Class E Certificate, the Class F Certificate, the Class G
Certificate, the Class H Certificate, the Class I Certificate, the Class J
Certificate, the Class K Certificate, the Class L Certificate, the Class M
Certificate, the Class N Certificate, the Class O Certificate, the Class P
Certificate, the Class Q Certificate, the Class R Certificate, the Class S
Certificate, the Class T Certificate and the Class R-1 Certificate are
hereinafter collectively referred to as the "Company Certificates".
3. Power to Direct the Exchange, Sale and/or Pledge of
Shares. Subject to the provisions hereof, the Dutch Company shall follow the
instructions of the following Shareholders with respect to the exchange, pledge
or sale of the Bionx Implants Shares covered by the following Company
Certificates:
SHAREHOLDER COMPANY CERTIFICATE
Owner of Class A Shares Class A Certificate
Owner of Class B Shares Class B Certificate
Owner of Class C Shares Class C Certificate
Owner of Class D Shares Class D Certificate
Owner of Class E Shares Class E Certificate
Owner of Class F Shares Class F Certificate
Owner of Class G Shares Class G Certificate
Owner of Class H Shares Class H Certificate
Owner of Class I Shares Class I Certificate
Owner of Class J Shares Class J Certificate
Owner of Class K Shares Class K Certificate
Owner of Class L Shares Class L Certificate
Owner of Class M Shares Class M Certificate
Owner of Class N Shares Class N Certificate
Owner of Class O Shares Class O Certificate
Owner of Class P Shares Class P Certificate
Owner of Class Q Shares Class Q Certificate
Owner of Class R Shares (Xxxxxxx) Class R Certificate
Owner of Class R Shares (Kaikkonen) Class R-1 Certificate
Owner of Class R Shares (Viitanen) Class T Certificate
Owner of Class S Shares Class S Certificate
Owner of Class T Shares Class T Certificate
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It is understood that each owner of a specific class of shares of the Dutch
Company shall be solely entitled to the net proceeds resulting from the sale or
exchange of the Bionx Implants Shares represented by that specific Company
Certificate allocable to such class. In the event that a Shareholder instructs
the Dutch Company to exchange, sell or pledge less than all of the Bionx
Implants Shares represented by the Company Certificate over which such
Shareholder is given directional authority pursuant to this Section 3, the
balance certificate received by the Dutch Company upon completion of such
exchange, sale or pledge shall have the same designation as the Company
Certificate so exchanged, sold or pledged. Thus, by way of example, if Xxxxx
Xxxxxxxx were to instruct the Dutch Company to sell (pursuant to Section 8
hereof) a total of 10,000 of the 34,842 Bionx Implants Shares represented by the
Class C Certificate, the Company's transfer agent will return to the Dutch
Company a balance certificate representing 24,842 Bionx Implants Shares and such
balance certificate would thereafter be deemed to be the Class C Certificate for
purposes of this Section 3. In the event that a Lender (as defined herein) or
Secured Party returns to the Dutch Company a certificate representing Bionx
Implants Shares pledged pursuant to Sections 9, 10, 10A or 10B hereof at the
instruction of a Shareholder, the stock certificate returned to the Dutch
Company shall have the same designation hereunder that it had immediately prior
to the time that such pledge was initiated. Thus, by way of example, if Xxxxx
Xxxxxxxx were to instruct the Dutch Company to pledge (pursuant to Section 10
hereof) a total of 10,000 of the 34,842 Bionx Implants Shares represented by the
Class C Certificate and if (as a result of Xxxxx Xxxxxxxx'x repaying the
applicable loan in full without the Lender's being required to foreclose upon
any of the pledged Bionx Implants Shares) the Lender were to return the pledged
Bionx Implants Shares by delivering to the Dutch Company a stock certificate
representing such 10,000 Bionx Implants Shares, such returned stock certificate
would thereafter be deemed to be a Class C Certificate for purposes of this
Section 3.
4. Shareholder Accounts. The Dutch Company shall maintain an
account (each such account, a "Shareholder Account") for each Shareholder. Each
such account shall reflect the number of Bionx Implants Shares over which the
applicable Shareholder shall have the power to direct the exchange, sale or
pledge thereof pursuant to the terms of this Agreement. For each Shareholder,
the number of Bionx Implants Shares held in such Shareholder's Shareholder
Account shall equal (a) the number of shares initially represented by the
Certificate(s) over which such Shareholder is given directional authority
pursuant to Section 3 hereof less (b) the number of Bionx Implants Shares which
are delivered to such Shareholder pursuant to Section 5 or Section 6 hereof, (c)
the number of Bionx Implants Shares which are sold pursuant to such
Shareholder's directions pursuant to Section 7 or Section 8 hereof, (d) the
number of Bionx Implants Shares which are pledged pursuant to such Shareholder's
directions pursuant to Section 9, 10, 10A or 10B hereof or which have heretofore
been pledged by such Shareholder, (e) the number of additional Bionx Implants
Shares which are pledged pursuant to Section 9.5, 10.5, 10A.5 or 10B.5 hereof
and (f) such Shareholder's Proportionate Share of any Bionx Implants Shares
which are transferred pursuant to Section 11 hereof. In the event that Bionx
Implants Shares pledged pursuant to the direction of a particular Shareholder
pursuant to Section 9, 10, 10A or 10B hereof or heretofore pledged by a
particular Shareholder are returned to the Dutch Company, the number of Bionx
Implants Shares in such Shareholder's Shareholder Account shall be increased by
the number of pledged Bionx Implants Shares so returned.
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5. Exchange of Bionx Implants Shares for Finnish Shares.
Subject to applicable provisions of the laws of the Netherlands and applicable
provisions of the Articles of Association of the Dutch Company as amended from
time to time, the following provisions shall apply in the event that any Finnish
Shareholder notifies the Dutch Company and the Company in writing that such
Shareholder desires to obtain from the Dutch Company, by means of an exchange of
Finnish Shares for Bionx Implants Shares, a number of Bionx Implants Shares (the
number of Bionx Implants Shares to be obtained being hereinafter referred to as
the "Finnish Exchange Number") in an amount up to the number of Bionx Implants
Shares in such Shareholder's Shareholder Account:
5.1 A Finnish Shareholder desiring to effect such an
exchange (the "Exchanging Finnish Shareholder") shall notify the Finnish
Representative in writing of such Shareholder's intention to effect an exchange
pursuant to this Section 5. Such exchange shall not occur unless the Finnish
Representative consents in writing to such exchange. No such consent shall be
granted, and no such exchange shall be effected, in the event that (i) there is
then outstanding any assessment made by the Dutch Company pursuant to Section 12
hereof which the Exchanging Finnish Shareholder has not paid, (ii) such
Exchanging Finnish Shareholder is indebted to the Dutch Company with respect to
any loan made pursuant to the terms of this Agreement, (iii) such Exchanging
Finnish Shareholder has not agreed (in form and substance satisfactory to U.S.
counsel to the Company) to pay to the Dutch Company all withholding taxes
applicable to such exchange concurrently with the consummation of such exchange,
(iv) counsel to the Dutch Company advises the Dutch Company that such exchange
is prohibited by law or by the provisions of the Dutch Company's Articles of
Association as amended from time to time, (v) U.S. counsel to the Company
advises the Company that such transfer will violate any applicable securities
law, (vi) the Dutch Company has not obtained all approvals required by law or
(vii) such Exchanging Finnish Shareholder has not agreed (in form and substance
satisfactory to U.S. counsel to the Company) to reimburse the Company for all
legal, accounting and other professional fees and expenses incurred by the Dutch
Company and/or the Company (collectively, "Professional Expenses") in connection
with the consummation of such exchange.
5.2 In the event that the Finnish Representative
provides such consent and such exchange is effected in accordance with Section
5.1, a closing shall be held promptly thereafter at which the Exchanging Finnish
Shareholder shall deliver to the Dutch Company full ownership rights in a number
of Finnish Shares equal to nineteen percent (19%) of the Finnish Exchange Number
and the Dutch Company shall deliver to such Exchanging Finnish Shareholder full
ownership rights in a number of Bionx Implants Shares equal to the Finnish
Exchange Number.
6. Exchange of Bionx Implants Shares for U.S. Shares. Subject
to applicable provisions of the laws of the Netherlands and applicable
provisions of the Articles of Association of the Dutch Company as amended from
time to time, the following provisions shall apply in the event that any U.S.
Shareholder notifies the Dutch Company and the Company in writing that such
Shareholder desires to obtain from the Dutch Company, by means of an exchange of
U.S. Shares for Bionx Implants Shares, a number of Bionx Implants Shares (the
number of Bionx Implants Shares to be obtained being hereinafter referred to as
the "U.S. Exchange Number") in
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an amount up to the number of Bionx Implants Shares in such Shareholder's
Shareholder Account:
6.1 The U.S. Shareholder desiring to effect such an
exchange (the "Exchanging U.S. Shareholder") shall notify the U.S.
Representative in writing of such Shareholder's intention to effect an exchange
pursuant to this Section 6. Such exchange shall not occur unless the U.S.
Representative consents in writing to such exchange. No such consent shall be
granted, and no such exchange shall be effected, in the event that (i) there is
then outstanding any assessment made by the Dutch Company pursuant to Section 12
hereof which the Exchanging U.S. Shareholder has not paid, (ii) such Exchanging
U.S. Shareholder is indebted to the Dutch Company with respect to any loan made
pursuant to the terms of this Agreement, (iii) such Exchanging U.S. Shareholder
has not agreed (in form and substance satisfactory to U.S. counsel to the
Company) to pay to the Dutch Company all withholding taxes applicable to such
exchange concurrently with the consummation of such exchange, (iv) counsel to
the Dutch Company advises the Dutch Company that such exchange is prohibited by
law or by the provisions of the Dutch Company's Articles of Association as
amended from time to time, (v) U.S. counsel to the Company advises the Company
that such transfer will violate any applicable securities law, (vi) the Dutch
Company has not obtained all approvals required by law or (vii) such Exchanging
U.S. Shareholder has not agreed (in form and substance satisfactory to U.S.
counsel to the Company) to reimburse the Company for all Professional Expenses
incurred by the Dutch Company and/or the Company in connection with the
consummation of such exchange.
6.2 In the event that the U.S. Representative provides
such consent and such exchange is effected in accordance with Section 6.1, a
closing shall be held promptly thereafter in which the Exchanging U.S.
Shareholder shall deliver to the Dutch Company full ownership rights in a number
of U.S. Shares equal to nineteen percent (19%) of the U.S. Exchange Number and
the Dutch Company shall deliver to such Exchanging U.S. Shareholder full
ownership rights in a number of Bionx Implants Shares equal to the U.S. Exchange
Number.
7. Finnish Cash Out Steps. Subject to applicable provisions
of the laws of the Netherlands and applicable provisions of the Dutch Company's
Articles of Association as amended from time to time, the following provisions
shall apply in the event that any Finnish Shareholder notifies the Dutch Company
and the Company in writing that such Shareholder desires to cause the Dutch
Company to (a) sell a specified number of Bionx Implants Shares on such
Shareholder's behalf (the number of such Bionx Implants Shares being hereinafter
referred to as the "Finnish Sale Number") and (b) purchase from such Shareholder
for cash a number of Finnish Shares equal to nineteen percent (19%) of the
Finnish Sale Number, such Finnish Sale Number to be an amount up to the number
of Bionx Implants Shares in such Shareholder's Shareholder Account.
7.1 Such Finnish Shareholder may utilize this Section 7
only in the event that the Finnish Representative grants a written consent to
such Finnish Shareholder upon receipt of written notice from such Finnish
Shareholder that such Finnish Shareholder seeks to avail himself, herself or
itself of this Section 7 procedure. No such consent shall be granted, and no
such transactions shall be effected, in the event that (i) there is then
outstanding any
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assessment made by the Dutch Company pursuant to Section 12 hereof which such
Finnish Shareholder has not paid (unless such Finnish Shareholder agrees, in
form and substance satisfactory to the Dutch Company, to reduce the amount
payable to such Finnish Shareholder pursuant to this Section 7 by the amount of
all of such Finnish Shareholder's unpaid assessments), (ii) counsel to the Dutch
Company advises the Dutch Company that such Finnish Shareholder's utilization of
this Section 7 procedure is prohibited by law or by the provisions of the Dutch
Company's Articles of Association as amended from time to time, (iii) the Dutch
Company is subject to an agreement prohibiting it from selling any of its Bionx
Implants Shares or restricting it from doing so in any material respect, (iv)
U.S. counsel to the Company advises the Company that the transactions
contemplated by this Section 7 will violate any applicable securities law, (v)
upon consummation of such transactions (and any application of the net proceeds
thereof to repay loans made hereunder), such Finnish Shareholder is indebted to
the Dutch Company with respect to any loan made pursuant to the terms of this
Agreement, (vi) the Dutch Company has not obtained all approvals required by
law, or (vii) such Finnish Shareholder has not agreed (in form and substance
satisfactory to U.S. counsel to the Company) to reimburse the Company for all
Professional Expenses incurred by the Dutch Company and/or the Company in
connection with the consummation of such cash out.
7.2 Upon receipt of notification from the Finnish
Representative that it has consented to a request from a Finnish Shareholder
pursuant to this Section 7 and provided that such transaction is effected in
accordance with the provisions of Section 7.1, the Dutch Company shall use its
reasonable efforts to sell a number of Bionx Implants Shares equal to the
Finnish Sale Number. Promptly after the Dutch Company has sold such Bionx
Implants Shares and received the proceeds therefrom, a closing shall be held at
the Dutch Company's headquarters. At such closing, such Finnish Shareholder
shall deliver to the Dutch Company such number of Finnish Shares as shall equal
nineteen percent (19%) of the Finnish Sale Number and the Dutch Company shall
deliver to such Finnish Shareholder the proceeds of such sale, net of the Dutch
Company's expenses and all tax liabilities (including withholding taxes), if
any, resulting from such sale.
8. U.S. Cash Out Steps. Subject to applicable provisions of
the laws of the Netherlands and applicable provisions of the Dutch Company's
Articles of Association as amended from time to time, the following provisions
shall apply in the event that any U.S. Shareholder notifies the Dutch Company
and the Company in writing that such Shareholder desires to cause the Dutch
Company to (a) sell a specified number of Bionx Implants Shares on such
Shareholder's behalf (the number of such Bionx Implants Shares being hereinafter
referred to as the "U.S. Sale Number") and (b) purchase from such Shareholder
for cash a number of U.S. Shares equal to nineteen percent (19%) of the U.S.
Sale Number, such U.S. Sale Number to be an amount up to the number of Bionx
Implants Shares in such Shareholder's Shareholder Account.
8.1 Such U.S. Shareholder may utilize this Section 8
only in the event that the U.S. Representative grants a written consent to such
U.S. Shareholder upon receipt of written notice from such U.S. Shareholder that
such U.S. Shareholder seeks to avail himself, herself or itself of this Section
8 procedure. No such consent shall be granted, and no such transactions shall be
effected, in the event that (i) there is then outstanding any assessment made
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by the Dutch Company pursuant to Section 12 hereof which such U.S. Shareholder
has not paid (unless such U.S. Shareholder agrees, in form and substance
satisfactory to the Dutch Company, to reduce the amount payable to such U.S.
Shareholder pursuant to this Section 8 by the amount of all of such U.S.
Shareholder's unpaid assessments), (ii) counsel to the Dutch Company advises the
Dutch Company that such U.S. Shareholder's utilization of this Section 8
procedure is prohibited by law or by the provisions of the Dutch Company's
Articles of Association as amended from time to time, (iii) the Dutch Company is
subject to an agreement prohibiting it from selling any of its Bionx Implants
Shares or restricting it from doing so in any material respect, (iv) U.S.
counsel to the Company advises the Company that the transactions contemplated by
this Section 8 will violate any applicable securities law, (v) upon consummation
of such transactions (and any application of the net proceeds thereof to repay
loans made hereunder), such U.S. Shareholder is indebted to the Dutch Company
with respect to any loan made pursuant to the terms of this Agreement, (vi) the
Dutch Company has not obtained all approvals required by law, or (vii) such U.S.
Shareholder has not agreed (in form and substance satisfactory to U.S. counsel
to the Company) to reimburse the Company for all Professional Expenses incurred
by the Dutch Company and/or the Company in connection with the consummation of
such cash out.
8.2 Upon receipt of notification from the U.S.
Representative that it has consented to a request from a U.S. Shareholder
pursuant to this Section 8 and provided that such transaction is effected in
accordance with the provisions of Section 8.1, the Dutch Company shall use its
reasonable efforts to sell a number of Bionx Implants Shares equal to the U.S.
Sale Number. Promptly after the Dutch Company has sold the Bionx Implants Shares
and received the proceeds therefrom, a closing shall be held at the Dutch
Company's headquarters. At such closing, such U.S. Shareholder shall deliver to
the Dutch Company such number of U.S. Shares as shall equal nineteen percent
(19%) of the U.S. Sale Number and the Dutch Company shall deliver to such
Finnish Shareholder the proceeds of such sale, net of the Dutch Company's
expenses and all tax liabilities (including withholding taxes), if any,
resulting from such sale.
9. Finnish Pledges. Subject to applicable provisions of the
laws of the Netherlands and applicable provisions of the Articles of Association
of the Dutch Company as amended from time to time, the following provisions
shall apply in the event that any Finnish Shareholder notifies the Dutch Company
and the Company in writing that such Shareholder desires to arrange for the
Dutch Company to (a) borrow funds secured by a number of Bionx Implants Shares
(the "Finnish Pledge Number") in an amount up to the number of Bionx Implants
Shares held in such Shareholder's Shareholder Account and (b) loan such funds to
such Finnish Shareholder pursuant to a loan that is secured by a number of
Finnish Shares equal to nineteen percent (19%) of the Finnish Pledge Number:
9.1 A Finnish Shareholder desiring to borrow money
from the Dutch Company pursuant to this Section 9 (a "Borrowing Finnish
Shareholder") shall notify the Finnish Representative in writing of such
Shareholder's intention to effect a transaction pursuant to which (a) the Dutch
Company shall borrow a specified amount of funds from a third-party (the
"Lender"), such amount of funds being hereinafter referred to as the "Finnish
Gross Amount", (b) the Dutch Company shall pledge a number of Bionx Implants
Shares equal to the Finnish
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Pledge Number to secure such loan from the Lender, (c) the Dutch Company shall
execute such promissory notes and such other loan documents as shall be
acceptable to the Lender and U.S. counsel to the Company, (d) the Dutch Company
shall lend to the Borrowing Finnish Shareholder an amount of funds equal to the
Finnish Gross Amount, (e) the Borrowing Finnish Shareholder shall pledge to the
Dutch Company a number of Finnish Shares equal to nineteen percent (19%) of the
Finnish Pledge Number, (f) the Dutch Company shall deliver to the Borrowing
Finnish Shareholder an amount of cash equal to the Finnish Gross Amount minus
all expenses (including Professional Expenses) incurred by the Dutch Company or
the Company in arranging for such transaction and (g) the Borrowing Finnish
Shareholder and the Dutch Company shall execute such promissory notes
(reflecting terms and interest rates substantially equivalent to the terms and
interest rates provided for in the promissory notes delivered to the Lender,
except that the interest rate per annum shall be 25 basis points higher than the
interest rate on the promissory note given by the Dutch Company to the Lender)
and such other loan documents as shall be acceptable to the U.S. counsel to the
Company and Netherlands counsel to the Dutch Company.
9.2 Such loan transaction shall not occur unless the
Finnish Representative consents in writing to such loan transaction. No such
consent shall be granted, and no such transaction shall be effected, in the
event that (i) there is then outstanding any assessment made by the Dutch
Company pursuant to Section 12 hereof which such Borrowing Finnish Shareholder
has not paid (unless such Borrowing Finnish Shareholder agrees, in form and
substance satisfactory to the Dutch Company, to reduce the amount delivered to
such Borrowing Finnish Shareholder pursuant to this Section 9 by the amount of
all such Borrowing Finnish Shareholder's unpaid assessments), (ii) counsel to
the Dutch Company advises the Dutch Company that such Borrowing Finnish
Shareholder's utilization of this Section 9 procedure is prohibited by law or by
the provisions of the Dutch Company's Articles of Association as amended from
time to time, (iii) the Dutch Company is subject to an agreement prohibiting it
from pledging any of its Bionx Implants Shares or restricting it from doing so
in any material respect, (iv) U.S. counsel to the Company advises the Company
that the transactions contemplated by this Section 9 will violate any applicable
securities law, (v) U.S. counsel to the Company advises the Company that the
documentation relating to the above-mentioned loan transactions is not
acceptable to either the Lender, such counsel to the Company or the Dutch
Company's Netherlands counsel, (vi) the Dutch Company has not obtained all
approvals required by law, (vii) such Borrowing Finnish Shareholder has not
entered into an agreement, in form and substance satisfactory to the Finnish
Representative, the U.S. Representative and U.S. counsel to the Company and for
the benefit of each of the Shareholders other than such Borrowing Finnish
Shareholder, pursuant to which such Borrowing Finnish Shareholder has agreed to
allow the Dutch Company to reacquire, in cancellation of such indebtedness or a
portion thereof, a number of Finnish Shares equal to nineteen percent (19%) of
the number of Bionx Implants Shares sold by the Lender to protect its interests
as a secured party, or (viii) such Borrowing Finnish Shareholder has not entered
into an agreement (in form and substance satisfactory to U.S. counsel to the
Company) pursuant to which such Borrowing Finnish Shareholder has agreed to
pre-pay the first year's interest on the Finnish Main Loan (as defined in
Section 9.4 hereof) within thirty (30) days of receiving the funds from the
Dutch Company.
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9.3 Upon receipt of notification from the Finnish
Representative that it has consented to a request from a Finnish Shareholder
pursuant to this Section 9 and provided that such transaction is effected in
accordance with Sections 9.1 and 9.2, the Dutch Company shall use its reasonable
efforts to borrow funds from a Lender and lend funds to such Finnish Shareholder
in accordance with this Section 9.
9.4 It is understood that the Dutch Company will rely
upon the payments of principal and interest due from a Borrowing Finnish
Shareholder to repay the loan made to the Dutch Company at the request of the
Borrowing Finnish Shareholder (the "Finnish Main Loan"). It is further
understood that if a Borrowing Finnish Shareholder fails to make any such
payments when due, then the Dutch Company may cause some or all of the Bionx
Implants Shares securing the Finnish Main Loan to be sold in order to provide
the funds necessary to make payments of principal and interest on the Finnish
Main Loan. In order to protect each of the Shareholders other than the Borrowing
Finnish Shareholder, in the event of such a sale, the Dutch Company shall be
deemed to have repurchased from such Borrowing Finnish Shareholder (without any
payment other than the cancellation of indebtedness) a number of Finnish Shares
pledged by such Borrowing Finnish Shareholder equal to nineteen percent (19%) of
the number of Bionx Implants Shares so sold.
9.5 It is understood that pursuant to the terms of a
Borrowing Finnish Shareholder's Finnish Main Loan, it may be necessary for the
Dutch Company to increase the number of Bionx Implants Shares pledged to secure
such Finnish Main Loan. Each Shareholder acknowledges the risk of such a
required increase, which would likely occur with respect to pledged shares in
the event of a material decline in the market price of Bionx Implants Shares. In
the event that such an increase is required pursuant to the terms of the Finnish
Main Loan, the number of Finnish Shares pledged to secure the Borrowing Finnish
Shareholder's corresponding loan from the Dutch Company shall be increased by a
number of Finnish Shares equal to nineteen percent (19%) of the number of Bionx
Implants Shares added to the pledge under such Finnish Main Loan.
10. U.S. Pledges. Subject to applicable provisions of the laws
of the Netherlands and applicable provisions of the Articles of Association of
the Dutch Company as amended from time to time, the following provisions shall
apply in the event that any U.S. Shareholder notifies the Dutch Company and the
Company in writing that such Shareholder desires to arrange for the Dutch
Company to (a) borrow funds secured by a number of Bionx Implants Shares (the
"U.S. Pledge Number") in an amount up to the number of Bionx Implants Shares
held in such Shareholder's Shareholder Account and (b) loan such funds to such
U.S. Shareholder pursuant to a loan that is secured by a number of U.S. Shares
equal to the U.S. Pledge Number:
10.1 A U.S. Shareholder desiring to borrow money from
the Dutch Company pursuant to this Section 10 (a "Borrowing U.S. Shareholder")
shall notify the U.S. Representative in writing of such Shareholder's intention
to effect a transaction pursuant to which (a) the Dutch Company shall borrow a
specified amount of funds from a Lender, such amount of funds being hereinafter
referred to as the "U.S. Gross Amount", (b) the Dutch
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Company shall pledge a number of Bionx Implants Shares equal to the U.S. Pledge
Number to secure such loan from the Lender, (c) the Dutch Company shall execute
such promissory notes and such other loan documents as shall be acceptable to
the Lender and U.S. counsel to the Company, (d) the Dutch Company shall lend to
the Borrowing U.S. Shareholder an amount of funds equal to the U.S. Gross
Amount, (e) the Borrowing U.S. Shareholder shall pledge to the Dutch Company a
number of U.S. Shares equal to nineteen percent (19%) of the U.S. Pledge Number,
(f) the Dutch Company shall deliver to the Borrowing U.S. Shareholder an amount
of cash equal to the U.S. Gross Amount minus all expenses (including
Professional Expenses) incurred by the Dutch Company or the Company in arranging
for such transaction and (g) the Borrowing U.S. Shareholder and the Dutch
Company shall execute such promissory notes (reflecting terms and interest rates
substantially equivalent to the terms and interest rates provided for in the
promissory notes delivered to the Lender, except that the interest rate per
annum shall be 25 basis points higher than the interest rate on the promissory
note given by the Dutch Company to the Lender) and such other loan documents as
shall be acceptable to the U.S. counsel to the Company and Netherlands counsel
to the Dutch Company.
10.2 Such loan transaction shall not occur unless the
U.S. Representative consents in writing to such loan transaction. No such
consent shall be granted, and no such transaction shall be effected, in the
event that (i) there is then outstanding any assessment made by the Dutch
Company pursuant to Section 12 hereof which such Borrowing U.S. Shareholder has
not paid (unless such Borrowing U.S. Shareholder agrees, in form and substance
satisfactory to the Dutch Company, to reduce the amount delivered to such
Borrowing U.S. Shareholder pursuant to this Section 10 by the amount of all such
Borrowing U.S. Shareholder's unpaid assessments), (ii) counsel to the Dutch
Company advises the Dutch Company that such Borrowing U.S. Shareholder's
utilization of this Section 10 procedure is prohibited by law or by the
provisions of the Dutch Company's Articles of Association as amended from time
to time, (iii) the Dutch Company is subject to an agreement prohibiting it from
pledging any of its Bionx Implants Shares or restricting it from doing so in any
material respect, (iv) U.S. counsel to the Company advises the Company that the
transactions contemplated by this Section 10 will violate any applicable
securities law, (v) U.S. counsel to the Company advises the Company that the
documentation relating to the above-mentioned loan transactions is not
acceptable to either the Lender, such counsel to the Company or the Dutch
Company's Netherlands counsel, (vi) the Dutch Company has not obtained all
approvals required by law, (vii) such Borrowing U.S. Shareholder has not entered
into an agreement, in form and substance satisfactory to the Finnish
Representative, the U.S. Representative and U.S. counsel to the Company and for
the benefit of each of the Shareholders other than such Borrowing U.S.
Shareholder, pursuant to which such Borrowing U.S. Shareholder has agreed to
allow the Dutch Company to reacquire, in cancellation of such indebtedness or a
portion thereof, a number of U.S. Shares equal to nineteen percent (19%) of the
number of Bionx Implants Shares sold by the Lender to protect its interests as a
secured party, or (viii) such Borrowing U.S. Shareholder has not entered into an
agreement (in form and substance satisfactory to U.S. counsel to the Company)
pursuant to which such Borrowing U.S. Shareholder has agreed to pre-pay the
first year's interest on the U.S. Main Loan (as defined in Section 10.4 hereof)
within thirty (30) days of receiving the funds from the Dutch Company.
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10.3 Upon receipt of notification from the U.S.
Representative that it has consented to a request from a U.S. Shareholder
pursuant to this Section 10 and provided that such transaction is in accordance
with Sections 10.1 and 10.2, the Dutch Company shall use its reasonable efforts
to borrow funds from a Lender and lend funds to such U.S. Shareholder in
accordance with this Section 10.
10.4 It is understood that the Dutch Company will rely
upon the payments of principal and interest due from a Borrowing U.S.
Shareholder to repay the loan made to the Dutch Company at the request of the
Borrowing U.S. Shareholder (the "U.S. Main Loan"). It is further understood that
if a Borrowing U.S. Shareholder fails to make any such payments when due, then
the Dutch Company may cause some or all of the Bionx Implants Shares securing
the U.S. Main Loan to be sold in order to provide the funds necessary to make
payments of principal and interest on the U.S. Main Loan. In order to protect
each of the Shareholders other than the Borrowing U.S. Shareholder, in the event
of such a sale, the Dutch Company shall be deemed to have repurchased from such
Borrowing U.S. Shareholder (without any payment other than the cancellation of
indebtedness) a number of U.S. Shares pledged by such Borrowing U.S. Shareholder
equal to nineteen percent (19%) of the number of Bionx Implants Shares so sold.
10.5 It is understood that pursuant to the terms of a
Borrowing U.S. Shareholder's U.S. Main Loan, it may be necessary for the Dutch
Company to increase the number of Bionx Implants Shares pledged to secure such
U.S. Main Loan. Each Shareholder acknowledges the risk of such a required
increase, which would likely occur with respect to pledged shares in the event
of a material decline in the market price of Bionx Implants Shares. In the event
that such an increase is required pursuant to the terms of the U.S. Main Loan,
the number of U.S. Shares pledged to secure the Borrowing U.S. Shareholder's
corresponding loan from the Dutch Company shall be increased by a number of U.S.
Shares equal to nineteen percent (19%) of the number of Bionx Implants Shares
added to the pledge under such U.S. Main Loan.
10A. Other Finnish Extensions of Collateral. Subject to
applicable provisions of the laws of the Netherlands and applicable provisions
of the Articles of Association of the Dutch Company as amended from time to
time, the following provisions shall apply in the event that any Finnish
Shareholder notifies the Dutch Company and the Company in writing that such
Shareholder desires to cause the Dutch Company to pledge, to a third party to
whom such Shareholder is indebted (a "Secured Party"), a number of Bionx
Implants Shares (the "Finnish Collateral Number") in an amount up to the number
of Bionx Implants Shares held in such Shareholder's Shareholder Account, such
pledge to be secured by a number of Finnish Shares equal to nineteen percent
(19%) of the Finnish Collateral Number:
10A.1 A Finnish Shareholder desiring to cause the
Dutch Company to make a pledge pursuant to this Section 10A (a "Pledging Finnish
Shareholder") shall notify the Finnish Representative in writing of such
Shareholder's intention to effect a transaction pursuant to which (a) the Dutch
Company shall pledge a number of Bionx Implants Shares equal to the Finnish
Collateral Number to the Secured Party designated by the Pledging Finnish
Shareholder
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to secure an existing indebtedness of the Pledging Finnish Shareholder to such
Secured Party, (b) the Dutch Company shall execute such documents reflecting
such pledge as shall be acceptable to the Pledging Finnish Shareholder, such
Secured Party and U.S. counsel to the Company and(c) the Pledging Finnish
Shareholder shall pledge to the Dutch Company a number of Finnish Shares equal
to nineteen percent (19%) of the Finnish Collateral Number and enter into an
agreement, in form and substance satisfactory to the U.S. counsel to the Company
and for the benefit of each of the Shareholders other than such Pledging Finnish
Shareholder, such that to the extent that such Secured Party sells any of the
Bionx Implants Shares pledged to such Secured Party pursuant to this Section
10A, the Dutch Company shall be deemed to have acquired from the Pledging
Finnish Shareholder, for no additional consideration, a number of the Finnish
Shares pledged pursuant to this Section 10A equal to 19% of the Bionx Implants
Shares sold by such Secured Party.
10A.2 Such pledge transaction shall not occur unless the
Finnish Representative consents in writing to such loan transaction. No such
consent shall be granted, and no such transaction shall be effected, in the
event that (i) there is then outstanding any assessment made by the Dutch
Company pursuant to Section 12 hereof which such Pledging Finnish Shareholder
has not paid, (ii) counsel to the Dutch Company advises the Dutch Company that
such Pledging Finnish Shareholder's utilization of this Section 10A procedure is
prohibited by law or by the provisions of the Dutch Company's Articles of
Association as amended from time to time, (iii) the Dutch Company is subject to
an agreement prohibiting it from pledging any of its Bionx Implants Shares or
restricting it from doing so in any material respect, (iv) U.S. counsel to the
Company advises the Company that the transactions contemplated by this Section
10A will violate any applicable securities law, (v) U.S. counsel to the Company
advises the Company that the documentation relating to the above-mentioned
pledge transaction is not acceptable to either the Secured Party, such counsel
to the Company or the Dutch Company's Netherlands counsel, (vi) the Dutch
Company has not obtained all approvals required by law or (vii) such Pledging
Finnish Shareholder has not agreed (in form and substance satisfactory to U.S.
counsel to the Company) to reimburse the Company for all Professional Expenses
incurred by the Dutch Company and/or the Company in connection with the
consummation of such pledge transaction.
10A.3 Upon receipt of notification from the Finnish
Representative that it has consented to a request from a Finnish Shareholder
pursuant to this Section 10A and provided that such transaction is effected in
accordance with Sections 10A.1 and 10A.2, the Dutch Company shall use its
reasonable efforts to effect the pledge requested by the Pledging Finnish
Shareholder in accordance with this Section 10A.
10A.4 It is understood that the Secured Party may cause
the sale of some or all of the Bionx Implants Shares pledged to it pursuant to
this Section 10A. In order to protect each of the Shareholders other than the
Pledging Finnish Shareholder, in the event of such a sale, the Dutch Company
shall be deemed to have acquired from such Pledging Finnish Shareholder (without
any payment) a number of Finnish Shares pledged by such Pledging Finnish
Shareholder equal to nineteen percent (19%) of the number of Bionx Implants
Shares so sold.
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10A.5 It is understood that pursuant to the terms of a
pledge to a Secured Party, it may be necessary for the Dutch Company to increase
the number of Bionx Implants Shares pledged to such Secured Party. Each
Shareholder acknowledges the risk of such a required increase, which would
likely occur with respect to pledged shares in the event of a material decline
in the market price of Bionx Implants Shares. In the event that such an increase
is required pursuant to the terms of such pledge, the number of Finnish Shares
pledged by the Pledging Finnish Shareholder pursuant to this Section 10A shall
be increased by a number of Finnish Shares equal to nineteen percent (19%) of
the number of Bionx Implants Shares added to the pledge to the Secured Party.
10B. Other U.S. Extensions of Collateral. Subject to
applicable provisions of the laws of the Netherlands and applicable provisions
of the Articles of Association of the Dutch Company as amended from time to
time, the following provisions shall apply in the event that any U.S.
Shareholder notifies the Dutch Company and the Company in writing that such
Shareholder desires to cause the Dutch Company to pledge, to a third party to
whom such Shareholder is indebted (a "Secured Party"), a number of Bionx
Implants Shares (the "U.S. Collateral Number") in an amount up to the number of
Bionx Implants Shares held in such Shareholder's Shareholder Account, such
pledge to be secured by a number of U.S. Shares equal to nineteen percent (19%)
of the U.S. Collateral Number:
10B.1 A U.S. Shareholder desiring to cause the Dutch
Company to make a pledge pursuant to this Section 10B (a "Pledging U.S.
Shareholder") shall notify the U.S. Representative in writing of such
Shareholder's intention to effect a transaction pursuant to which (a) the Dutch
Company shall pledge a number of Bionx Implants Shares equal to the U.S.
Collateral Number to the Secured Party designated by the Pledging U.S.
Shareholder to secure an existing indebtedness of the Pledging U.S. Shareholder
to such Secured Party, (b) the Dutch Company shall execute such documents
reflecting such pledge as shall be acceptable to the Pledging U.S. Shareholder,
such Secured Party and U.S. counsel to the Company and(c) the Pledging U.S.
Shareholder shall pledge to the Dutch Company a number of U.S. Shares equal to
nineteen percent (19%) of the U.S. Collateral Number and enter into an
agreement, in form and substance satisfactory to the U.S. counsel to the Company
and for the benefit of each of the Shareholders other than such Pledging U.S.
Shareholder, such that to the extent that such Secured Party sells any of the
Bionx Implants Shares pledged to such Secured Party pursuant to this Section
10B, the Dutch Company shall be deemed to have acquired from the Pledging U.S.
Shareholder, for no additional consideration, a number of the U.S. Shares
pledged pursuant to this Section 10B equal to 19% of the Bionx Implants Shares
sold by such Secured Party.
10B.2 Such pledge transaction shall not occur unless the
U.S. Representative consents in writing to such loan transaction. No such
consent shall be granted, and no such transaction shall be effected, in the
event that (i) there is then outstanding any assessment made by the Dutch
Company pursuant to Section 12 hereof which such Pledging U.S. Shareholder has
not paid, (ii) counsel to the Dutch Company advises the Dutch Company that such
Pledging U.S. Shareholder's utilization of this Section 10B procedure is
prohibited by law or by the provisions of the Dutch Company's Articles of
Association as amended from time to time, (iii) the Dutch Company is subject to
an agreement prohibiting it from pledging any of its
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Bionx Implants Shares or restricting it from doing so in any material respect,
(iv) U.S. counsel to the Company advises the Company that the transactions
contemplated by this Section 10B will violate any applicable securities law, (v)
U.S. counsel to the Company advises the Company that the documentation relating
to the above-mentioned pledge transaction is not acceptable to either the
Secured Party, such counsel to the Company or the Dutch Company's Netherlands
counsel. (vi) the Dutch Company has not obtained all approvals required by law
or (vii) such U.S. Shareholder has not agreed (in form and substance
satisfactory to U.S. counsel to the Company) to reimburse the Company for all
Professional Expenses incurred by the Dutch Company and/or the Company in
connection with the consummation of such pledge transaction.
10B.3 Upon receipt of notification from the U.S.
Representative that it has consented to a request from a U.S. Shareholder
pursuant to this Section 10B and provided that such transaction is effected in
accordance with Sections 10B.1 and 10B.2, the Dutch Company shall use its
reasonable efforts to effect the pledge requested by the Pledging U.S.
Shareholder in accordance with this Section 10B.
10B.4 It is understood that the Secured Party may cause
the sale of some or all of the Bionx Implants Shares pledged to it pursuant to
this Section 10B. In order to protect each of the Shareholders other than the
Pledging U.S. Shareholder, in the event of such a sale, the Dutch Company shall
be deemed to have acquired from such Pledging U.S. Shareholder (without any
payment) a number of U.S. Shares pledged by such Pledging U.S. Shareholder equal
to nineteen percent (19%) of the number of Bionx Implants Shares so sold.
10B.5 It is understood that pursuant to the terms of a
pledge to a Secured Party, it may be necessary for the Dutch Company to increase
the number of Bionx Implants Shares pledged to such Secured Party. Each
Shareholder acknowledges the risk of such a required increase, which would
likely occur with respect to pledged shares in the event of a material decline
in the market price of Bionx Implants Shares. In the event that such an increase
is required pursuant to the terms of such pledge, the number of U.S. Shares
pledged by the Pledging U.S. Shareholder pursuant to this Section 10B shall be
increased by a number of U.S. Shares equal to nineteen percent (19%) of the
number of Bionx Implants Shares added to the pledge to the Secured Party.
11. Dutch Company Transfers. The Dutch Company shall not
transfer any of its Bionx Implants Shares unless either (a) such transfer is
provided for in, and made in accordance with, any one of Sections 5 ,6, 7, 8, 9,
10. 10A or 10B hereof or (b) such transfer is consented to in writing by both
the U.S. Representative and the Finnish Representative. No such consent shall be
granted, and no such transaction shall be effected, in the event that (i) there
is then outstanding any assessment made by the Dutch Company pursuant to Section
12 hereof which any Shareholder has not paid (unless any such Shareholder
agrees, in form and substance satisfactory to the Dutch Company, to reduce the
amount payable to such Shareholder pursuant to such transaction by the amount of
all of such Shareholder's unpaid assessments), (ii) counsel to the Dutch Company
advises the Dutch Company that such transfer is prohibited by law or by the
provisions of the Dutch Company's Articles of Association as amended from time
to time, (iii) the Dutch Company is subject to an agreement prohibiting it from
transferring any of its Bionx
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Implants Shares or restricting it from doing so in any material respect, (iv)
counsel to the Company advises the Company that the proposed transaction will
violate any applicable securities law, (v) at or prior to the execution of such
grant, the Finnish Representative and the U.S. Representative do not execute an
amendment to this Agreement satisfactory to both such representatives to give
effect to such transaction or (vi) the Dutch Company has not obtained all
approvals required by law.
12. Assessments. It is understood that the Dutch Company is a
holding company that has no means of generating revenues other than through the
sale of its Bionx Implants Shares. It is further understood that while the Dutch
Company is not expected to have substantial expenses, it will have certain
administrative expenses for which cash will be required in order to make
payments. The parties hereto agree that in the event that the Dutch Company
requires cash to meet expenses, the Shareholders will pay such expenses in
accordance with the following provisions:
12.1 The Dutch Company shall prepare an annual budget
setting forth anticipated expenses for the following fiscal year.
12.2 From time to time, the Dutch Company shall review
actual experience against such budget and shall determine the amount of cash it
is expected to require in order to meet its expenses. The Dutch Company shall
then send a letter to each Shareholder assessing such Shareholder such
Shareholder's Proportionate Share of the expected expenses.
12.3 No Shareholder shall be required to pay an
assessment with respect to any period after such Shareholder ceases being a
shareholder of the Dutch Company.
12.4 It shall be a condition to any transfer of U.S.
Shares or Finnish Shares that the transferee executes an agreement, in form and
substance satisfactory to the Dutch Company and U.S. counsel to the Company,
pursuant to which such transferee agrees to be bound by the terms of this
Agreement with respect to periods after such transferee becomes a shareholder of
the Dutch Company.
13. Restriction on Pledges. Except as set forth in Sections
9, 10, 10A and 10B hereof, no Shareholder shall pledge or encumber any of his
Finnish Shares or U.S. Shares without the approval of the Finnish Representative
and the U.S. Representative.
14. Voting by Shareholders. The U.S. Shareholders, the Finnish
Shareholders and the Dutch Company agree that with respect to any matter to be
voted on by the shareholders of the Company, to the extent legally permissible,
they will cause the Dutch Company to vote, in accordance with the instructions
of each Shareholder, a number of Bionx Implants Shares equal to (a) the number
of shares in such Shareholder's Account plus (b) the number of Bionx Implants
Shares pledged pursuant to Section 9, 10, 10A or 10B hereof (or otherwise) at
such Shareholder's request (provided that the voting rights applicable to such
pledged shares are retained by the Dutch Company) (collectively, the shares
referred to in clauses (a) and (b) of this Section 14 are hereinafter referred
to as the "Controlled Voting Shares"). In the event that any Finnish
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Shareholder fails to provide such instructions to the Dutch Company in writing
within such time period as the Dutch Company shall reasonably define, the Dutch
Company will (subject to the limitations set forth in the first sentence of this
Section 14) vote such Finnish Shareholder's Controlled Voting Shares in
accordance with the instructions of the Finnish Representative. In the event
that any U.S. Shareholder fails to provide such instructions to the Dutch
Company in writing within such time period as the Dutch Company shall reasonably
define, the Dutch Company will (subject to the limitations set forth in the
first sentence of this Section 14) vote such U.S. Shareholder's Controlled
Voting Shares in accordance with the instructions of the U.S. Representative.
15. Indemnification. The Finnish Shareholders hereby jointly
and severally agree to indemnify, defend and hold the U.S. Shareholders harmless
with respect to any tax liability imposed under the tax laws of the United
States or any State thereof as a result of any exchange, sale or pledge of Bionx
Implants Shares effected by any Finnish Shareholder pursuant to Sections 5, 7,
9, 10A or 11 hereof or otherwise. The U.S. Shareholders hereby jointly and
severally agree to indemnify, defend and hold the Finnish Shareholders harmless
with respect to any tax liability imposed under the tax laws of Finland as a
result of any exchange, sale or pledge of Bionx Implants Shares effected by any
U.S. Shareholder pursuant to Sections 6, 8, 10, 10B or 11 hereof or otherwise.
16. Governing Law; Jurisdiction; Service of Process. This
Agreement shall be governed by and construed in accordance with the laws of the
State of Delaware, without application of the conflict of laws principles
thereof. Any legal action, suit or other proceeding arising out of, or in any
way connected with, the enforcement of any award described in Section 17 hereof
may be brought in the courts of the State of New Jersey, or in the United States
courts for the District of New Jersey. With respect to any such proceeding in
any such court: (a) each party hereto generally and unconditionally submits
itself and its property to the non-exclusive jurisdiction of such court; (b)
each party hereto waives, to the fullest extent permitted by law, any objection
it has or hereafter may have to the venue of such proceeding, as well as any
claim it has or may have that such proceeding is in an inconvenient forum; and
(c) process may be served on any party hereto anywhere in the world, by regular
mail, sent to such party's address as set forth in Exhibit O annexed to the
Reorganization Agreement executed by the parties hereto in connection with the
formation of the Dutch Company and the Company, or to such other address as
shall be provided by a party to both the U.S. Representative and the Finnish
Representative.
17. Dispute Resolution. Any controversy or claim arising out
of or relating to this Agreement, or the alleged breach thereof, shall be
resolved by arbitration before a panel of three arbitrators (one of whom shall
be selected by the U.S. Representative, one of whom shall be selected by the
Finnish Representative and one of whom shall be selected by the other two
arbitrators) in accordance with the Commercial Arbitration Rules of the American
Arbitration Association. The arbitration shall take place at a mutually
acceptable location. The arbitration shall be conducted using the Expedited
Procedures of the Commercial Arbitration Rules, regardless of the amount in
dispute. The parties hereto shall bear their own attorneys' fees and costs in
connection with any such arbitration, and shall share equally the arbitrators'
compensation charges and the administrative fees of the American Arbitration
Association. The
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award rendered by the arbitrators shall be final and binding upon the parties
involved in such arbitration, and judgment upon the award may be entered in any
court of competent jurisdiction.
18. Term. This Agreement shall terminate (i) upon the mutual
written consent of the Finnish Representative and the U.S. Representative, (ii)
upon the liquidation of the Dutch Company or (iii) at such time as the Dutch
Company no longer owns any Bionx Implants Shares.
19. Headings. All headings in this Agreement are for
convenience only and do not affect the meaning of any provision.
20. Successors or Assigns; No Third Party Rights. This
Agreement is binding upon and inures to the benefit of the parties hereto and
their permitted successors and assigns. This Agreement may not be assigned by
any party hereto without the prior written consent of the U.S. Representative
and the Finnish Representative. Notwithstanding the foregoing, in the event that
any Dutch Shares pledged hereunder are sold by the Dutch Company upon a breach
of the applicable loan documentation, it is understood that the Finnish
Representative and the U.S. Representative will amend this Agreement to afford
to the purchaser of such Dutch Shares the same rights that such purchaser would
have enjoyed had such purchaser owned the Dutch Shares as of the date hereof.
Nothing in this Agreement confers, or is intended to confer, expressly or by
implication, any rights or remedies upon any person not a party hereto.
21. Complete Agreement; Modifications. This Agreement
constitutes the entire agreement among the parties hereto with respect to the
subject matter hereof and supersedes all prior agreements and understandings
with respect to the subject matter hereof. This Agreement may not be amended or
modified in any way, nor may noncompliance with its terms be waived, except
pursuant to (i) a written instrument signed by the party to be charged or (ii)
an amendment executed by the U.S. Representative (who is hereby granted the
power and authority by the U.S. Shareholders to approve amendments hereof on
behalf of each of the U.S. Shareholders) and the Finnish Representative (who is
hereby granted the power and authority by the Finnish Shareholders to approve
amendments hereof on behalf of each of the Finnish Shareholders). This Agreement
shall be amended by the U.S. Representative and the Finnish Representative to
effect any equitable adjustment necessitated by a stock dividend, stock split or
like transaction involving the Bionx Implants Shares, the Finnish Shares or the
U.S. Shares.
22. Severability. Any provision of this Agreement that is
prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction,
be ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining provisions hereof; any such prohibition or
unenforceability shall not invalidate or render unenforceable such provision in
any other jurisdiction.
23. Counterparts. This Agreement may be executed by the
parties hereto in separate counterparts, each of which when so executed and
delivered shall be deemed an original. All such counterparts together constitute
but one and the same instrument.
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24. Construction. It is understood that this Agreement is not
intended to be construed against the party that drafted this Agreement merely by
virtue of the fact that such party was responsible for the drafting hereof. It
is further intended that the terms of this Agreement (specifically in Sections
9, 10, 10A and 10B hereof) that provide for the pledge of Finnish Shares or U.S.
Shares to the Dutch Company and that provide for the reacquisition of such
shares by the Dutch Company without any further payment upon the sale of Bionx
Implants Shares by or on behalf of a Lender or Secured Party are intended for
the benefit of each of the Shareholders other than the Shareholder requesting
such pledge; each of the Shareholders consents to any such reacquisition in
order to assure that the number of Finnish Shares or Dutch Company shares
outstanding will be appropriately reduced whenever Bionx Implants Shares pledged
pursuant to this Agreement are sold by or on behalf of a Lender or Secured
Party.
25. Effective Time. The Prior Contract shall be deemed amended
by this Agreement as of the Effective Time.
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IN WITNESS WHEREOF, the parties hereto have executed this
Agreement as of the date first set forth above.
BIONIX, B.V.
By:
---------------------------------
Xxxxx X. Xxxxxxxx
-----------------------------
Xxxxx X. Xxxxxxxx
BERSHAD INVESTMENT GROUP, LP
By:
---------------------------------
Xxxxx X. Xxxxxxx, General Partner
BTAR ASSOCIATES, L.P.
By: STRATEGIC CONCEPTS, INC.,
general partner
By:
---------------------------------
Xxxxxxx X. Xxxxx, President
------------------------------
Xxxxx X. XxxXxxxxx
TDW ASSOCIATES, L.P.
By: TDW III, INC.,
general partner
By:
---------------------------------
Xxxxx X. Xxxx, President
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------------------------------
Ole Bostman
------------------------------
E. Xxxxxx Xxxxxx
NAJ VET LTD.
By:
---------------------------------
NOVATOR
By:
---------------------------------
ORTHO SCI LTD.
By:
---------------------------------
-------------------------------
Esa Partio
-------------------------------
Timo Pohjonen
-------------------------------
Xxxxxx Xxxxxxxx
-------------------------------
Xxxxx Xxxxxxxx
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-------------------------------
Riita Suuronen
-------------------------------
Marrku Tamminmaki
-------------------------------
Xxxxx Xxxxxxx
-------------------------------
Perrti Xxxxxxx
-------------------------------
Xxxxx Xxxxxxxxxx
-------------------------------
Xxxxxx Xxxxxxxx
--------------------------------
Auvo Antero Xxxxxx Xxxxxxxxx
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