STOCK PURCHASE AGREEMENT
among
XXXXXX SCIENTIFIC INTERNATIONAL INC.,
as Porte-Fort and Guarantor
XXXXXX SCIENTIFIC HOLDINGS FRANCE S.A.
as Buyer
and
CAPIAC, SAPACA 97, SAPCAR 97, SAPPI 97, SAPPEF 00,
XXXXXX XXXXX, XXXX-XXXXXXXXX BLOCK-DERRIEY,
PIERRE-FRANCOIS BLOCK, XXXXXXXX BLOCK
and
MARTHE BLOCK
as Sellers and/or Seller's Guarantors
Dated November 9, 1998
TABLE OF CONTENTS
ARTICLE I Page
SALE AND PURCHASE OF THE SELLERS' SHARES............................. 4
Section 1.1 Sale and Purchase of the Sellers' Shares............... 4
Section 1.2 Closing; Conditions Precedent ......................... 5
ARTICLE II
REPRESENTATIONS AND WARRANTIES OF THE SELLERS........................ 10
Section 2.1 Corporate and Governmental Authorizations.............. 11
Section 2.2 Corporate Existence and Authority; Capital Stock....... 11
Section 2.3 Subsidiaries........................................... 12
Section 2.4 Affiliate Companies and Transactions................... 12
Section 2.5 No Conflicts........................................... 13
Section 2.6 Financial Statements................................... 13
Section 2.7 Absence of Undisclosed Liabilities..................... 14
Section 2.8 Absence of Certain Events.............................. 14
Section 2.9 Assets................................................. 15
Section 2.10 Compliance with Laws and Other Instruments............. 16
Section 2.11 Litigation............................................. 16
Section 2.12 Real Property.......................................... 17
Section 2.13 Environmental Matters.................................. 18
Section 2.14 Employees; Labor Matters; etc.......................... 18
Section 2.15 Taxes and Social Charges............................... 19
Section 2.16 Intellectual Property.................................. 20
Section 2.17 Material Contracts..................................... 20
Section 2.18 Product Liability...................................... 21
Section 2.19 Bank Accounts.......................................... 22
Section 2.20 Brokers................................................ 22
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF XXXXXX AND
THE BUYER............................................................ 22
Section 3.1 Corporate Existence; Authorizations ................... 22
Section 3.2 No Conflicts........................................... 23
Section 3.3 Brokers................................................ 23
ARTICLE IV
COVENANTS............................................................. 24
Section 4.1 Conduct of the Business................................ 24
Section 4.2 Public Announcements and Confidentiality............... 25
Section 4.3 Non-Competition........................................ 26
Section 4.4 Due Diligence Investigations; Information.............. 26
Section 4.5 Further Actions and Assurances......................... 28
Section 4.6 Tender Offer; Other Stock Exchange Transactions........ 28
Section 4.7 Divestiture of Novodirect GmbH......................... 29
ARTICLE V
INDEMNIFICATION....................................................... 29
Section 5.1 Indemnification by Pierre Block........................ 29
Section 5.2 Indemnification by Xxxxxx and the Buyer................ 29
Section 5.3 Survival of Representations and Warranties............. 30
Section 5.4 De Minimus; Limitations; Mitigation; Assignment;
Access to Information.................................. 30
Section 5.5 Calculation of Amount of Loss; Adjustments............. 31
Section 5.6 Indemnification Procedures............................. 32
ARTICLE VI
DEFINITIONS........................................................... 33
Section 6.1 Certain Defined Terms.................................. 33
Section 6.2 Other Defined Terms.................................... 36
ARTICLE VII
MISCELLANEOUS......................................................... 36
Section 7.1 Termination............................................ 37
Section 7.2 Governing Law.......................................... 37
Section 7.3 Arbitration............................................ 37
Section 7.4 Amendments; etc........................................ 38
Section 7.5 Assignment.............................................. 38
Section 7.6 Notices................................................. 38
Section 7.7 Expenses................................................ 39
Section 7.8 Severability............................................ 39
Section 7.9 No Third Party Beneficiaries............................ 39
Section 7.10 Language................................................ 39
Section 7.11 Integration............................................. 40
Section 7.12 Section Headings........................................ 40
Section 7.13 Execution Copies........................................ 40
Section 7.14 Subsequent Ratification by Buyer........................ 40
STOCK PURCHASE AGREEMENT
STOCK PURCHASE AGREEMENT, dated November 9, 1998 (this "Agreement"),
among :
XXXXXX SCIENTIFIC INTERNATIONAL INC. ("Xxxxxx"), a corporation
organized and existing under the laws of Delaware and with its principal office
at Xxxxxxx Xxxx, Xxxxxxx, Xxx Xxxxxxxxx 00000, represented by Xxxxxx Xxxxxxx,
its Vice President-Finance and Treasurer, duly authorized to execute this
agreement;
XXXXXX SCIENTIFIC HOLDINGS FRANCE S.A. (the "Buyer"), a societe
anonyme organized and existing under the laws of France and with its registered
office at 00 xxx xx xx Xxxxx, 00000 Xxxxx, registered with the Commercial
Registry of Paris under number B 398 827 337, represented by Xxxxxxx Xxxxxx,
Chairman of the Board of Directors, duly authorized to execute this agreement;
CAPIAC, a societe civile organized and existing under the laws of
France and with its registered office at 0 xxx xx xx Xxxx x'Xxxx, 00000
Strasbourg, registered with the Commercial Registry of Strasbourg under number D
338 383 797 ("Capiac"), represented by Pierre Block, its Manager (Gerant), duly
authorized to execute this agreement;
SAPACA 97, a societe anonyme organized and existing under the laws
of France, and with its registered office at 00 xxx xx Xxxxx, 00000 Xxxxxxxxx le
Buisson, registered with the Commercial Registry of Evry under number B 414 657
981 ("Sapaca"), represented by Xxxx-Xxxxxxxxx Block-Derriey, Chairman of the
Board of Directors, duly authorized to execute this agreement;
SAPCAR 97, a societe anonyme organized and existing under the laws
of France, and with its registered office at 00 xxx xx Xxxxx, 00000 Xxxxxxxxx le
Buisson, registered with the Commercial Registry of Evry under number B 414 658
344 ("Sapcar"), represented by Xxxxxxxx Block, Chairman of the Board of
Directors, duly authorized to execute this agreement;
SAPPI 97, a societe anonyme organized and existing under the laws of
France, and with its registered office at 00 xxx xx Xxxxx, 00000 Xxxxxxxxx le
Buisson, registered with the Commercial Registry of Evry under number B 414 658
1
203 ("Sappi"), represented by Pierre Block, Chairman of the Board of Directors,
duly authorized to execute this agreement;
SAPPEF 97, a societe anonyme organized and existing under the laws
of France, and with its registered office at 00 xxx xx Xxxxx, 00000 Xxxxxxxxx le
Buisson, registered with the Commercial Registry of Evry under number B 414 658
138 ("Sappef"), represented by Pierre-Francois Block, Chairman of the Board of
Directors, duly authorized to execute this agreement;
Pierre Block, a French citizen residing at 0 xxx xx xx Xxxx x'Xxxx,
Xxxxxxxxxx Meinau, 67100 Strasbourg;
Xxxx-Xxxxxxxxx Block-Derriey, a French citizen residing at 0 xxx xx
xx Xxxx x'Xxxx, 00000 Xxxxxxxxxx;
Pierre-Francois Block, a French citizen residing at 0 xxx Xxxxxx
Xxxxxxxxxx, Xxxxxxxxx, 00000 Xxxxxxxxx;
Xxxxxxxx Block, a French citizen residing at 0 xxx xx xx Xxxx
x'Xxxx, 00000 Strasbourg, and
Xxxxxx Xxxxxxx Block, a French citizen residing at 0 xxx xx xx Xxxx
x'Xxxx, 00000 Xxxxxxxxxx , represented by Pierre Block, duly authorized to
execute this agreement by means of a power of attorney attached hereto as Annex
9.
(Capiac, Sapaca, Sapcar, Sappi, Sappef, Pierre Block and Marthe
Block, being hereinafter individually referred to as a "Seller" and collectively
referred to as the "Sellers" and Pierre Block, Xxxx-Xxxxxxxxx Block-Derriey,
Pierre-Francois Block and Xxxxxxxx Block being hereinafter individually referred
to as a "Seller's Guarantor" and collectively referred to as the "Seller's
Guarantors".)
RECITALS
A. Bioblock Scientific (the "Company") is a societe anonyme organized
and existing under the laws of France, with its registered office at Parc
d'Innovation, Boulevard Xxxxxxxxx Xxxxx, 67400 Illkirch Graffenstaden, and
registered with the Commercial Registry of Strasbourg under number B 778 834
051. The Company has a registered capital of FF 20,475,000, represented by
2,047,500 shares, with a nominal value of FF 10 per share (the "Shares"). The
Company is listed on the
2
Second Market (Le Second Marche) and the Shares are also traded on the Stuttgart
Stock Exchange.
B. The Sellers own, in the aggregate, as of this day, 1,469,132
Shares (the "Sellers' Shares"), representing 71.75% of the Shares; and the
Sellers hold, as of this day, in the aggregate, 2,683,893 voting rights in the
Company, representing approximately 82.06% of the total voting rights in the
Company. The remainder of the Shares and the voting rights in the Company are
held by third parties (the "Public Shares"). Set forth on Annex 1 is a list of
the number of Shares owned, and voting rights in the Company held, by each
Seller and by the other shareholders of the Company.
C. The Company owns all of the shares of the Subsidiaries (as such term
is defined in Article 6), except for a limited number of shares of Avantec Sarl
and Bioblock AG Suisse which are owned by the Sellers or by management employees
of those companies and one quota share (part) of SCI Inno 92 which is owned by
Xxxxxxx Xxxxxx. Set forth on Annex 2 is a list of the number of shares owned by
the Company in each of the Subsidiaries as well as the name of any other
shareholder in each Subsidiary and the number of shares held by each such
shareholder.
X. Xxxxxx and its various subsidiaries throughout the world are
engaged in businesses which are similar to the lines of business conducted by
the Company and its Subsidiaries, and Xxxxxx and the Buyer therefore attribute
additional value to the Sellers' Shares because of the synergistic benefits
which Xxxxxx and Buyer expect to achieve upon combining the businesses of the
Company and the Subsidiaries with the existing activities of Xxxxxx and its
subsidiaries.
E. The Sellers desire to sell all of the Sellers' Shares to the Buyer,
and the Buyer desires to purchase all of the Sellers' Shares from the Sellers,
all upon the terms and conditions set forth in this Agreement. Xxxxxx owns
substantially all of the shares of capital stock of the Buyer, and Xxxxxx
desires for the Buyer to purchase all of the Sellers' Shares, all upon the terms
and conditions set forth in this Agreement. (All capitalized terms used herein
without definition have the respective meanings indicated in Article 6).
NOW, THEREFORE, in consideration of the mutual covenants,
representations and warranties contained herein, the parties hereto agree as
follows:
3
ARTICLE I
SALE AND PURCHASE OF THE SELLERS' SHARES
Section 1.1 Sale and Purchase of the Sellers' Shares. (a) Upon the
terms and subject to the conditions set forth in this Agreement, each Seller
shall sell to the Buyer all the interest of such Seller in the Sellers' Shares,
as set forth on Annex 1, and the Buyer shall purchase from the Sellers all the
interest of such Seller in the Sellers' Shares, at the purchase price of FF 415
per Share, equal to an aggregate purchase price of FF 609,689,780 ("Share
Purchase Price"). On the Closing Date, the Buyer shall pay to each Seller the
following amounts in cash, as the payment of the Share Purchase Price for the
Sellers' Shares owned by such Seller:
FF Amount
---------
For the 492,750 Shares owned by Capiac 204,491,250
For Capiac's remainder interest
(detenues en nue-propriete) in 315,000 Shares 105,525,000
For the 436,216 Shares owned by Pierre Block 181,029,640
For Pierre Block's usufruct (life) interest in 315,000 Shares 25,200,000
For the 49,900 Shares owned by Sapaca 20,708,500
For the 49,900 Shares owned by Sapcar 20,708,500
For the 49,900 Shares owned by Sappef 20,708,500
For the 74,516 Shares owned by Sappi 30,924,140
For the 950 Shares owned by Marthe Block 394,250
-----------
Total for 1,469,132 Sellers' Shares 609,689,780
(b) In the event the Net Excess Cash as of the Closing Date is less
than FF 136 million, the Share Purchase Price shall be reduced by the amount of
such shortfall and the amounts payable to each of the Sellers on the Closing
Date pursuant to Section 1.1(a) shall be reduced accordingly.
(c) Xxxxxx hereby jointly and severally guarantees the payment by
the Buyer of the Share Purchase Price and the performance by Buyer of all of the
4
other obligations of Buyer hereunder, in each case subject to the terms and
condi tions set forth in this Agreement.
(d) Each of the Seller's Guarantors hereby jointly and severally
guarantees the performance of all of the obligations of the Seller listed below
adjacent to the name of such Seller's Guarantor, in each case subject to the
terms and conditions set forth in this Agreement.
Seller whose obligations
are guaranteed by such
Seller's Guarantor Seller's Guarantor
------------------ ------------------
Xxxx-Xxxxxxxxx Block-Derriey Sapaca
Xxxxxxxx Block Sapcar
Pierre Block Sappi
Pierre-Francois Block Sappef
(e) Title to the Sellers' Shares purchased by the Buyer pursuant to
this Agreement shall transfer to the Buyer at the Closing, upon payment of the
Share Purchase Price and registration of the Buyer as the owner of the Sellers'
Shares in the shareholder accounts of the Company, all in accordance with
Section 1.2.
Section 1.2 Closing; Conditions Precedent. (a) The closing (the
"Closing") of the sale and purchase of all of the interests of the Sellers in
the Sellers' Shares shall take place at the offices of Debevoise & Xxxxxxxx, 21
avenue Xxxxxx V, 75008 Paris, on November 27, 1998 or at such other date or
place as the parties may agree, provided that the date of the Closing may be
extended beyond November 27, 1998 at the sole request of Xxxxxx and the Buyer,
pursuant to the terms of Section 1.2(d) below. At or immediately prior to the
Closing:
(i) The Sellers shall transfer the Sellers' Shares to the Buyer,
free and clear of all Liens, in accordance with the applicable provisions
of French law and the articles of association (statuts) of the Company and
evidence shall be delivered to the Buyer of the registration of the Buyer
as the owner of all the Sellers' Shares in the Company's shareholder
accounts (certificat d'inscription en compte).
(ii) The Buyer shall pay to each Seller the amounts set forth in
Sections 1.1(a) in respect of such Seller (subject to adjustment as contem
plated in Section 1.1(b) above), by wire transfer to such bank accounts as
the
5
Sellers shall have designated for this purpose by notice to Buyer at least
three (3) business days prior to the Closing Date.
(b) The obligation of the Sellers to consummate the transactions
contemplated by the Closing shall be subject to the fulfillment, or waiver by
the Sellers, on or prior to the Closing Date, of each of the following
conditions:
(i) All representations and warranties of Xxxxxx and the Buyer
contained in this Agreement shall be true and correct in all material
respects at the time when made and also at and as of the Closing Date, as
if made at and as of the Closing Date;
(ii) Xxxxxx and the Buyer shall have performed and complied in all
material respects with all agreements and covenants to be performed and
complied with by Xxxxxx and the Buyer up to and including the Closing Date
pursuant to the terms of this Agreement; and
(iii) Xxxxxx and the Buyer shall have executed and delivered to the
Sellers certificates in the form of Annexes 3A and 3B, dated the Closing
Date, which confirm the accuracy of the representations and warranties of
Xxxxxx and the Buyer as of the Closing Date, and the performance or compli
ance by Xxxxxx and Buyer with all such agreements and covenants to be
performed or complied with on or before the Closing Date.
(c) The obligations of Xxxxxx and the Buyer to consummate the
transactions contemplated by the Closing shall be subject to the fulfillment, or
waiver by Xxxxxx and the Buyer, on or prior to the Closing Date, of each of the
following conditions:
(i) All representations and warranties of Pierre Block contained in
this Agreement shall be true and correct in all material respects at the
time when made and also at and as of the Closing Date, as if made at and
as of the Closing Date;
(ii) The Sellers and Seller's Guarantors shall have performed and
complied in all material respects with all agreements and covenants to be
performed and complied with by the Sellers and Seller's Guarantors up to
and including the Closing Date pursuant to the terms of this Agreement;
6
(iii) Pierre Block shall have executed and delivered to Xxxxxx and
the Buyer a certificate in the form of Annex 3C, dated the Closing Date,
which confirms the accuracy of the representations and warranties of
Pierre Block as of the Closing Date, and the performance or compliance by
the Sellers and the Seller's Guarantors with all such agreements and
covenants to be performed or complied with on or before the Closing Date;
(iv) The audited consolidated net income (resultat net consolide de
l'exercice certifie par les Commissaires aux Comptes) of the Company and
its Subsidiaries for the fiscal year ending June 30, 1998, shall be equal
to or greater than FF 39.6 million and the auditor of Buyer (Deloitte &
Touche) shall have been given the opportunity to examine the financial
statements of the Company and its Subsidiaries for the fiscal year ending
June 30, 1998 and the opportunity to review those financial statements
with the auditors of the Company and shall not have indicated that, in the
view of Buyer's auditor, the consolidated net income of the Company and
its Subsidiaries for the fiscal year ending June 30, 1998 is less than FF
39.6 million;
(v) As of the Closing Date, the Company and its Subsidiaries shall
have Net Excess Cash in an amount equal to or greater than FF 136 million,
consisting in particular of the short term investment securities indicated
in Schedule 1.2(c)(v), and shall have the free unlimited right to use such
amount of Net Excess Cash; and the Company's auditors shall deliver to the
Buyer a certificate, attesting that, as of the Closing Date, the Company
and its Subsidiaries have Net Excess Cash of not less than such amount,
and that the Company and Subsidiaries have full availability of such
amount of Net Excess Cash;
(vi) The Sellers shall have made available to the Buyer, or Buyer's
legal, accounting and other advisors, for examination, the originals or
true and correct copies of all documents, and shall have provided the
Buyer, or Buyer's legal, accounting and other advisors, all other
information, relating to the business and affairs of the Company and its
Subsidiaries, which the Buyer and its legal, accounting and other advisors
have reasonably requested pursuant to Section 4.4, and no event shall have
occurred, and Xxxxxx and the Buyer shall not have given notice to the
Sellers by no later than the date which is 8 days following the end of the
15 day due diligence period and at the latest by December 2, 1998, of its
discovery of information, which, individually or in the aggregate,
involves or is likely to result in or does result
7
in (a) any diminution or reduction in the value of the consolidated assets
of the Company and its Subsidiaries as at June 30, 1998 and/or the Closing
Date, or any increase in the consolidated liabilities or obligations of
any nature, including contingent liabilities, of the Company and its
Subsidiaries as at June 30, 1998 and/or the Closing Date, in an amount of
more than FF 7,500,000, and/or (b) any reduction in the consolidated
operating profits or consolidated net after-tax profits of the Company and
its Subsidiaries as at June 30, 1998 and/or the Closing Date, in an amount
of more than FF 3,000,000, and/or (c) a material adverse effect on the
operations, business, condition or prospects of the Company and its
Subsidiaries, including without limitation, as a result of an impact on
their relations with their respective suppliers, customers and/or
employees;
(vii) All directors of the Company and its Subsidiaries, other than
Pierre Block, as well as the other officers named by the board of
directors or the shareholders of the Company and its Subsidiaries who are
named in Annex 4, shall submit or have submitted their resignations, or
shall be or have been duly removed from office, effective as of the
Closing Date;
(viii) The persons named in Annex 5 (or such other persons as the
Buyer shall have designated as replacements therefor) shall be or have
been elected or coopted as directors and/or named as officers of the
Company or its Subsidiaries, in each case as specified in Annex 5,
effective as of the Closing Date;
(ix) The Sellers shall have executed, or caused to be executed, the
following employment agreements: an employment agreement between Pierre
Block and Xxxxxx in the form of Annex 6A; an employment agreement between
Xxxx-Xxxxxxxxx Block-Derriey and the Company in the form of Annex 6B; and
an employment agreement between Pierre-Francois Block and the Company in
the form of Annex 6C;
(x) Pierre Block and Xxxx-Xxxxxxxxx Block-Derriey shall have
executed the instruments set forth in Annex 7 in order to transfer to the
Buyer (or such other Person as Xxxxxx shall have designated for this
purpose) all of the ownership interests of the Sellers and their
Affiliates in the trademarks and tradenames used in connection with the
operation of the businesses of the Company and the Subsidiaries, subject
to the right of Xxxxxx and the Buyer not to purchase the Novodirect
trademark;
8
(xi) Pierre Block shall have executed the instrument set forth in
Annex 8 in order to transfer to the Company (or such other Person as
Xxxxxx shall have designated for this purpose), the quota shares (parts)
representing the 7.66% interest in Avantec Sarl heretofore owned by Pierre
Block;
(xii) Following the filing by Xxxxxx and the Buyer on November 6,
1998, with the German Cartel Office, of the pre-notification with respect
to the indirect acquisition by Xxxxxx of the Company and its Subsidiaries,
either the Cartel Office shall have confirmed that it has no opposition to
such acquisition or the relevant waiting period(s) shall have expired
without an opposition to the acquisition having been issued by the Cartel
Office, or Xxxxxx, the Buyer and the Sellers shall have caused the Company
to implement Xxxxxx'x and the Buyer's right to have the shares of
Novodirect GmbH be purchased by a third party in order to permit the
Closing to occur without awaiting the approval (or deemed approval) of the
Cartel Office, pursuant to Section 4.7;
(xiii) The day before the Closing Date, the Sellers shall have
delivered to Xxxxxx and the Buyer the account numbers (and other pertinent
information requested by Xxxxxx and the Buyer) for all bank accounts and
other banking facilities of the Company and the Subsidiaries.
(d) In the event the decision of Xxxxxx and the Buyer based on the
due diligence review results (referenced in Section 1.2(c)(vi)) and/or the
German Cartel Office approval process (referenced in Section 1.2(c)(xii)) have
not been finalized by November 26, 1998, Xxxxxx and the Buyer may elect to
extend the Closing Date by giving written notice that reaches the Sellers on
November 26, 1998, at the latest, and specifying the reasons for this request
for a delay, which reasons must be limited to the response or lack of response
from the German Cartel Office and/or the occurrence of an event or the discovery
of information having or capable of having the effects mentioned above in
Article 1.2(c)(vi). If such notice is given, the Closing shall be organized as a
pre-Closing (the "Pre-Closing") and Closing, to be held on December 2 and 4
respectively.
(i) At the Pre-Closing on December 2, Xxxxxx and the Buyer shall (x)
confirm in writing that all conditions precedent to Closing set forth in
Section 1.2(c) have been satisfied or have been waived in writing and (y)
deposit in escrow with Credit Industriel et Commercial de Paris the full
9
amount of the Share Purchase Price, with the stipulation that such amount
be released to the Sellers at the Closing on December 4, 1998, provided
that the Sellers have voted against the dividend at the Annual
Shareholders Meeting of the Company to be held on December 3 (or that the
Sellers have obtained an adjournement of the Shareholders Meeting, it
being specified that in the event of an adjournment, the new Shareholders
Meeting must be held on a date sufficiently distant to permit the Buyer to
exercise the voting rights attached to the Shares that it shall have
acquired from the Sellers on December 4, pursuant to Section 1.2(d)(ii)),
and be returned to Xxxxxx and the Buyer on December 4, 1998 if a decision
to distribute a dividend is approved at that Shareholders Meeting.
Following the Pre-Closing, and on this same date, the parties shall notify
the CMF of the transactions envisaged by this Agreement and shall file the
request for a suspension of trading with the CMF.
(ii) On December 4, 1998, the Closing shall occur as contemplated
by Section 1.1, automatically and on the sole condition that the divi dend
distribution has not been approved by the Annual Shareholders Meeting of
the Company called for December 3, 1998 (or that such Shareholders Meeting
has been adjourned as provided in Section 1.2(d)(i) above).
(e) If the Closing has not occurred on December 4, 1998 (the
"Termination Date") at the latest, this Agreement shall automatically terminate
and the parties shall have no further obligations hereunder (except for those
set forth in Article 5 and Sections 7.2, 7.3, 7.6, 7.7, 7.8 and 7.10 of this
Agreement, which shall remain in full force and effect) unless the parties
hereto have agreed in writing to extend the Termination Date beyond December 4,
1998.
ARTICLE II
REPRESENTATIONS AND WARRANTIES OF THE XXXXXXX
Xxxxxx Block on behalf of the Sellers hereby represents and warrants
to the Buyer as follows:
Section 2.1 Corporate and Governmental Authorizations. (a) Each
Seller which is not a physical person is a legal entity duly organized and
validly existing under the laws of France; and each of such Sellers has full
power and authority to carry on its business and operations as presently
conducted; and the
10
names of the physical persons having the legal authority to act on behalf of
each of such Sellers are set forth on Schedule 2.1(a). Each Seller has full
power and authority to execute this Agreement and each of the other Transaction
Document(s) to which it is party. The sale of all the interests of each Seller
in the Sellers' Shares and the execution and performance of this Agreement have
been duly authorized by all requisite action of each Seller. The execution and
performance of each other Transaction Document to which any Seller is a party
have been duly authorized by all requisite action of such Seller. This Agreement
constitutes the legal, valid and binding obligation of each Seller and each
Seller's Guarantor, enforceable against each such Seller and each such Seller's
Guarantor in accordance with its terms. Each other Transaction Document, when
executed by each Seller and/or Seller's Guaran tor, party thereto, will
constitute the legal, valid and binding obligation of such Seller and/or such
Seller's Guarantor, enforceable against each such Seller and/or Seller's
Guarantor, in accordance with its terms.
(b) No consent or other authorization of, or filing with, any Person
is required by or on behalf of any Seller and/or Seller's Guarantor, the Company
or any Subsidiary in connection with the (i) valid execution or performance of
this Agreement or any other Transaction Document by any Seller and/or Seller's
Guarantor, the Company or any Subsidiary, or (ii) the consummation by the
Sellers, the Seller's Guarantors, the Company or any Subsidiary of the
transactions contemplated by this Agreement or any other Transaction Document
(except as provided in Section 1.2(c)(xii) above).
Section 2.2 Corporate Existence and Authority; Capital Stock. (a)
The Company is a societe anonyme duly organized and validly existing under the
laws of France. The Company has full power and authority to carry on its
businesses and operations, as presently conducted. The Company has full power
and authority to execute each Transaction Document to which it is party, and the
execution and performance of each such Transaction Document have been duly
authorized by all requisite action of the Company (except as provided in Section
1.2(c)(xii) above). Each Transaction Document to which the Company is a party,
when executed by the Company, will constitute the legal, valid, and binding
obligation of the Company, enforceable against the Company in accordance with
its terms.
(b) The capitalization of the Company consists of 2,047,500 Shares,
with a nominal value of FF 10 per Share. All of the Shares have been duly
authorized and validly issued and are fully paid. Annex 1 sets forth a complete
and correct list of the interests of each Seller in the Sellers' Shares and the
voting rights in
11
the Company held by each Seller. The Sellers own, and on the date of the Closing
will own, all the Sellers' Shares free and clear of all Liens. Except as set
forth on Schedule 2.2(b), there are no outstanding securities, warrants,
options, agreements or other instruments or rights of any kind that may result
in the sale or issuance by the Company or any Seller of any equity interest in
the Company, and no authorization therefor has been given.
Section 2.3 Subsidiaries. Set forth on Schedule 2.3 is a complete
and correct list of each Subsidiary, the capitalization of each Subsidiary, the
stockholders of each Subsidiary and the number of shares of capital stock (or
other equity securities) of each Subsidiary owned by such stockholders
(including the Company). Each Subsidiary is duly organized and validly existing
under the laws of the jurisdiction of its organization. Each Subsidiary has
full authority to carry on its business and its operations as presently
conducted. All of the shares of capital stock of each Subsidiary have been duly
authorized and validly issued and are fully paid. All of the shares of capital
stock of each Subsidiary set forth on Schedule 2.3 as owned by the Company are
so owned, free and clear of all Liens. Except as set forth on Schedule 2.3,
there are no outstanding securities, warrants, options, agreements or other
instruments or rights of any kind that may result in the sale or issuance by any
Seller, the Company or any Subsidiary of any equity interest in any Subsidiary,
and no authorization therefor has been given.
Section 2.4 Affiliate Companies and Transactions. (a) Set forth on
Schedule 2.4(a) is a complete and correct list of each corporation, partnership
or other legal entity that leases or has other interests in any assets or
properties of the Company or any Subsidiary, or has acquired any asset or
obtained any service from or disposed of any asset or furnished any service to,
or entered into any agreement, commitment or understanding with, the Company or
any Subsidiary since July 1, 1996 and in which any Seller or Affiliate of any
Seller owns, directly or indirectly, any shares or other equity interest
("Affiliate Company"). Also set forth on Schedule 2.4(a) is a complete and
correct description of the ownership by each Seller and each Affiliate of each
Seller in the shares or other equity interest of each Affiliate Company.
(b) Since June 30, 1998, neither the Company nor any Subsidiary has,
directly or indirectly, acquired any asset or obtained any services from, or
disposed of any asset or furnished any service to any Seller or any Affiliate of
any Seller other than the acquisitions and dispositions of assets and the
obtaining and
12
furnishing of services which have been effected in the framework of the existing
relations set forth on Schedule 2.4(b).
(c) Except as set forth in Schedule 2.4(c), the Sellers and their
Affiliates own no interest in any assets which have been used by the Company or
the Subsidiaries in the conduct of their respective businesses at any time
during the period commencing July 1, 1996 other than assets which presently are
owned by the Company and the Subsidiaries or are to be transferred to the
Company (or such other Person as Xxxxxx may designate) pursuant to this
Agreement and/or the other Transaction Documents.
(d) Except as set forth in Schedule 2.4(d), all dealings between the
Sellers and/or the Affiliate Companies, on the one hand, and the Company and the
Subsidiaries, on the other hand, during the period commencing July 1, 1996, have
been conducted on the basis of the existing relations set forth on Schedule
2.4(b).
Section 2.5 No Conflicts. (a) The execution and performance of this
Agreement and the other Transaction Documents by the Sellers and the Seller's
Guarantors and the Company and the consummation of the transactions contemplated
hereby and thereby will not violate or conflict with (i) any provision of
the articles of association (statuts) or organizational documents of the Company
or any Subsidiary or the decisions of their respective shareholders or
directors, (ii) any law or regulation applicable to the Company or any
Subsidiary, (iii) any decision or order of any court, tribunal or governmental
authority, or (iv) any agreement or instrument to which the Company or any
Subsidiary is a party.
(b) The execution and performance of this Agreement and the other
Transaction Documents by the Sellers and the Seller's Guarantors and the Company
will not result in the creation of any Lien upon any assets of the Company or
any Subsidiary. The actions contemplated by Section 1.2(c)(xii) above will not
be considered a Lien for purposes of the present Article.
Section 2.6 Financial Statements. (a) The audited financial
statements of the Company and of its Subsidiaries (including the consolidated
financial statements of the Company and its Subsidiaries) for the years ended
June 30, 1996, 1997 and 1998, including all annexes and notes thereto, which
have been delivered to the Buyer by the Sellers, are accurate and present fairly
the financial position and the results of operations of the Company and its
Subsidiaries, at the dates and for the periods to which they relate, have been
prepared in accordance with
13
French GAAP (or German or Swiss GAAP, as the case may be), consistently applied
throughout the periods presented in such financial statements, and reflect all
liabilities and obligations of the Company and its Subsidiaries of any nature
whatsoever, whether accrued or not, required to be recorded thereon or in the
annexes or notes thereto at the respective dates thereof.
(b) Since June 30, 1998, (i) there has been no material change in
the financial situation, the operating results or the business of the Company
and its Subsidiaries compared to the audited financial statements of the Company
and its Subsidiaries as of June 30, 1998, which have been delivered to the Buyer
by the Sellers (the "Financial Statements"), (ii) the Company and its
Subsidiaries have not contracted or incurred any debt, certain or foreseeable,
whether immediately due or not, for which a provision has not been recorded in
the Financial Statements, except current debts which have been incurred in the
normal course of business, in accordance with prior practice, and (iii) the
Company and its Subsidiaries have not acquired, transferred or assigned, in any
manner whatsoever, any securities or other interests, business, real estate
assets or contracts.
Section 2.7 Absence of Undisclosed Liabilities. Neither the Company
nor any Subsidiary has any liability or obligation of any nature, whether
absolute, contingent, accrued or otherwise that could, individually or in the
aggregate, have a Material Adverse Effect, except (i) as set forth in Schedule
2.7, or (ii) as and to the extent reflected in the Financial Statements.
Section 2.8 Absence of Certain Events. (a) Since June 30, 1998, (i)
the Company and each Subsidiary have conducted their businesses and operations
only in the ordinary course and in a manner consistent with past practice, (ii)
to the knowledge of the Sellers and the Seller's Guarantors, no event or
condition has occurred or existed that could, individually or in the aggregate,
have a Material Adverse Effect, and (iii) to the knowledge of the Sellers and
the Seller's Guarantors, no event or condition would reasonably be expected to
occur or exist that could, individually and in the aggregate, have a Material
Adverse Effect.
(b) Since June 30, 1998, the Company and its Subsidiaries have (i)
not paid any dividend (or been the object of a shareholder decision authorizing
the payment of a dividend), advance on dividend, or other distribution on any
capital stock of the Company or any Subsidiary, or purchased or redeemed,
directly and indirectly, any shares of their capital stock (or other equity
interest), except for (x) the shareholders meeting of Avantec Sarl which has
decided to distribute a dividend
14
of FF 2,550,000 for the year ending June 30, 1998, and (y) the purchase and sale
of Shares on the stock market by the brokerage firm du Bouzet S.A. pursuant to
the market-making agreement (contrat d'animation) between the Company and du
Bouzet S.A., (ii) not incurred or committed to incur any indebtedness for
borrowed money in excess of FF 500,000, nor made or committed to make any
capital investment in excess of FF 500,000 (excluding VAT), for any given
capital investment, either in a single expenditure or a series of related
expenditures, (iii) not incurred, assumed, guaranteed or otherwise become
directly or indirectly liable with respect to any liability or obligation of any
Seller or any Affiliate of any Seller, (iv) not forgiven, canceled, waived or
released any debt, claim or right against any Seller or any Affiliate of any
Seller, except for the termination of the Armenonville 10,(v) not modified,
amended or supplemented any agreement or understanding, or any provision or term
of any agreement or understanding, with any Seller or any Affiliate of any
Seller,(vi) not made any payment, in cash or other assets, to any Sellers or any
of their Affiliates, other than ordinary compensation in their capacity as
officers or employees of the Company and the Subsidiaries, in each case only in
accordance and consistent with past practice, and (vii) have continued to pay
their suppliers and receive payments from their clients in accordance with past
practices.
Section 2.9 Assets. The Company and its Subsidiaries have good
title to, or in the case of leased assets a valid leasehold interest in, all the
assets (real or personal, tangible or intangible, including intellectual
property rights) that are material to the conduct of their businesses and
operations, as presently conducted, including all such assets reflected in the
Financial Statements (other than those disposed of since then in the ordinary
course of business), in each case free and clear of all Liens, except for (a)
the two guarantees granted by the Company, the first to Credit Industriel
d'Alsace et de Xxxxxxxx and the second to Banque Populaire de la Region
Economique de Strasbourg , respectively on January 19 and 22, 1998, in
connection with the loans subscribed to on said dates by Inno 92 with said two
banking entities, and (b) the authorization given by the Company to the American
company Xxxx-Xxxxxx Instrument Company to register the trademark POLYSTAT in the
U.S.A., and Liens that would not, individually and in the aggregate, materially
detract from the value of such assets or materially interfere with the use of
such assets in the conduct of the business and operations of the Company and its
Subsidiaries. The Company and the Subsidiaries have maintained all their
tangible assets in good and normal operating condition, and all such assets are
free and clear from defects in all material respects, ordinary wear and tear
expected.
15
Section 2.10 Compliance with Laws and Other Instruments. (a) Except
for violations or defaults that could not, either individually or in the aggre-
gate, have a Material Adverse Effect, neither the Company nor any Subsidiary is
in violation of or default under (i) any provision of its articles of
association (statuts) or organizational documents or any decision of its
shareholders or directors, or any provision of any applicable law or regulation
or judicial determination or (ii) any agreement or instrument to which it is a
party.
(b) Except as set forth on Schedule 2.10(b), the Company and its
Subsidiaries have all permits, licenses and other authorizations of governmental
and self-regulatory authorities and have made all filings and notifications that
are required in connection with the conduct of their businesses and operations,
as presently conducted, including all permits, licenses or other authorizations
relating to health and safety matters, environmental protection, pollution
control, sale and distribution of products and employee matters. Except as set
forth on Schedule 2.10(b), the Company and its Subsidiaries are, and at all
times since June 30, 1996 have been, in compliance with the provisions of all
such permits, licenses and other authorizations and all such filings and
notifications, except for such non-compliance that could not, either
individually or in the aggregate, have a Material Adverse Effect.
Section 2.11 Litigation. Except as set forth in Schedule 2.11, there
is no claim, action, proceeding or investigation pending, or (to the knowledge
of the Sellers, the Seller's Guarantors, the Company or any Subsidiary)
threatened, against or involving the Company or any Subsidiary before any court,
arbitral or other tribunal or governmental authority (i) which may seek to
prohibit the consummation of the transactions contemplated by this Agreement or
any other Transaction Document, or (ii) which, if adversely determined, could,
individually or in the aggregate, have a Material Adverse Effect (without regard
to whether the matter in question is covered by insurance or any other
arrangement by or with any other Person). There are no outstanding orders,
judgments, decrees, awards or injunctions which have been issued by any court,
arbitral or other tribunal or governmental authority against the Company, any
Subsidiary or any of their respective assets and which might have an impact on
the activities of the Company or any Subsidiary.
Section 2.12 Real Property. (a) Set forth on Schedule 2.12(a) is a
complete and correct list and description of all real property (including land,
buildings and fixtures) owned by the Company or any Subsidiary. The Company and
its
16
Subsidiaries have good, valid and marketable title to all such real property, in
each case free and clear of all Liens.
(b) Set forth on Schedule 2.12(b) is a complete and correct list of
all real property leases, subleases and occupancy agreements to which the
Company or any Subsidiary is a party (whether as lessee or lessor) or pursuant
to which the Company or a Subsidiary uses or occupies any real property in
connection with the business and operations of the Company and its Subsidiaries
(the "Leases"); and the Seller has delivered to the Buyer complete and correct
copies of all such Leases. Each Lease to which the Company or a Subsidiary is
party as tenant grants the Company or such Subsidiary, as the case may be, the
exclusive right to use and occupy the premises relating thereto; and the Company
and each Subsidiary enjoys peaceful and undisturbed possession of each of such
premises.
(c) There are no proceedings in eminent domain or other similar
proceedings pending or, to the knowledge of the Sellers and the Seller's
Guarantors, threatened with respect to any real property (or any portion
thereof) owned or leased by the Company or any Subsidiary.
(d) The use and operations of any real property owned or leased by
the Company or any Subsidiary (or any portion thereof) does not violate any
agreement, commitment or understanding (whether written or oral) affecting such
real property. There is no violation of any covenant, condition, restriction or
agreement, or order, judgment or award of any court, tribunal or governmental
authority, that affects the real property owned or leased by the Company or any
Subsidiary. No current use by the Company or a Subsidiary of its owned or leased
real property (or any portion thereof) is dependent on a nonconforming use or
other similar consent or authorization of, or filing with or notice to, a
governmental authority, the absence of which would limit the use of any property
or assets of the Company or any Subsidiary. No damage or destruction has
occurred with respect to any real property owned or leased by the Company or any
Subsidiary (or any portion thereof) that, individually or in the aggregate,
could have or result in a Material Adverse Effect (without regard to whether the
property in question is covered by insurance).
Section 2.13 Environmental Matters. Except as set forth on Schedule
2.13, no condition or circumstance has existed or exists, and neither the
Sellers, any Affiliate of the Sellers, the Company nor any Subsidiary has caused
or taken any action, that (i) to the knowledge of the Sellers and the Seller's
Guarantors,
17
would result in any liability or obligation on the part of the Company or any of
its Subsidiaries relating to environmental conditions on any real property,
including the air, soil and groundwater conditions at any real property owned or
used by the Company or any of its Subsidiaries, whether currently or in the
past, or (ii) would result in any liability or obligation on the part of the
Company or any of its Subsidiaries relating to the past or present use,
handling, transport, storage or release of pollutants, chemicals or industrial,
toxic or hazardous substances or wastes, except for such liability or obligation
that could not, individually or in the aggregate, have a Material Adverse
Effect.
Section 2.14 Employees; Labor Matters; etc. (a) Except as set forth
on Schedule 2.14(a), during the period commencing June 30, 1995, the Company and
its Subsidiaries have not experienced any collective labor dispute, strike,
slowdown, picketing, work stoppage, concerted refusal to work overtime or
collective resignation, and there is no complaint pending or threatened against
the Company or its Subsidiaries by any of their respective past or present
employees, trade unions or other representative labor bodies, which could have
or result in a Material Adverse Effect.
(b) Schedule 2.14(b) sets forth a true and complete list of all
collective bargaining agreements and other company labor agreements applicable
to the Company and each of its Subsidiaries, respectively (all of such
agreements being hereinafter collectively referred to as the "Collective Labor
Agreements"). True and complete copies of all such Collective Labor Agreements
have been delivered to the Buyer. The Company and its Subsidiaries have
complied, in all respects, with all applicable laws and regulations pertaining
to the employment or termination of employment of their respective past or
present employees, including, without limitation, all such laws and regulations
relating to labor relations, prohibition of discrimination and safety and health
of employees (except as set forth in Schedule 2.14(b)), as well as with the
Collective Labor Agreements, except for any failure so to comply that, both
individually and in the aggregate, could not have or result in a Material
Adverse Effect. The Company and its Subsidiaries have, pursuant to applicable
laws and regulations, and the Collective Labor Agreements, paid in full all
wages, salaries, bonuses, vacation pay and other direct and indirect
compensation earned by, or otherwise due and payable to, all current and former
employees and managers of the Company and its Subsidiaries.
(c) The Company and the Subsidiaries have complied with all
requirements pursuant to applicable laws and regulations, and the Collective
Labor
18
Agreements, with respect to employee representation, including those provisions
relating to the organization of elections for a workers' council (comite
d'entreprise) and the election of employee representatives (delegues du
personnel). To the extent that there is no workers' council and/or no employee
representative due to the absence of candidates, the Company and its
Subsidiaries have full documentation of such absence of candidates (constat de
carence) and these have been filed in compliance with applicable labor laws and
regulations.
(d) Except as set forth on Schedule 2.14(d), no employment agreement
in effect with the Company or a Subsidiary contains provisions regarding
employment compensation, advance notice of departure or departure payments in
excess of those required by the relevant laws and regulations and the Collective
Labor Agreements. Except the plans provided for by applicable laws and regula-
tions, or the Collective Labor Agreements, the Company and its Subsidiaries do
not maintain any other pension schemes or profit-sharing plans, or any other
employee benefit plans, and are not required to contribute to any such plans.
Except as set forth on Schedule 2.14(d), there exists, as of the date hereof, no
obligation with respect to current and former managers (mandataires sociaux) of
the Company and its Subsidiaries;
Section 2.15 Taxes and Social Charges. (a) Except as set forth on
Schedule 2.15, the Company and its Subsidiaries have duly and timely filed all
returns relating to Taxes and Social Charges required to be filed by the Company
and its Subsidiaries and all such returns were correct and complete in all
material respects. The Company and its Subsidiaries have duly and timely paid
all Taxes and Social Charges that are due and payable by the Company and its
Subsidiaries and have duly accrued all Taxes and Social Charges which are not
yet payable.
(b) The Company and its Subsidiaries have duly and timely withheld
all Taxes and Social Charges required to be withheld from employees in
connection with their businesses and operations; and such withheld Taxes and
Social Charges have been either duly and timely paid to the proper governmental
authorities or properly set aside in their accounts for such purpose.
(c) Set forth on Schedule 2.15(c) are (i) copies of any assessments
and other audit related documents resulting from each most recent Tax audit and
most recent Social Charges audit for the Company and each Subsidiary, and (ii)
copies of the documents which reflect the resolution of such assessments,
including
19
the pleadings filed by the parties in any administrative or legal appeals
concerning such assessments.
Section 2.16 Intellectual Property. Set forth on Schedule 2.16 is a
list of all trademarks and tradenames used in connection with the conduct of the
businesses of the Company and each Subsidiary. Except as otherwise indicated on
Schedule 2.16, all of such trademarks and tradenames are owned by the Company or
by the Subsidiaries. Except as set forth in Schedule 2.16, the conduct of the
businesses of the Company and the Subsidiaries does not require the ownership
of, or usage rights for, any trademarks, tradenames, patents or copyrights
(including software rights) other than the trademarks, tradenames, patents and
copyrights (including software rights) which are owned by the Company and the
Subsidiaries or are being transferred to the Company and the Subsidiaries
pursuant to this Agreement and/or the Transaction Documents. To the knowledge
of the Sellers and the Seller's Guarantors, there has been no (i) notice, claim
or other indication that the rights of the Company or any Subsidiary in the
trademarks, tradenames and software (including software developed by the Company
or its Subsidiaries) used by the Company and the Subsidiaries in the conduct of
their businesses and operations are not valid or enforceable, (ii) notice, claim
or other indication that any other party would be entitled to any additional
fees or compensation in respect of such trademarks, tradenames or software as a
result of the consummation of the transactions contemplated by this Agreement or
upon the use by Affiliates of Xxxxxx of such trademarks, tradenames or software
after the consummation of the transactions contemplated by this Agreement, or
(iii) infringement upon or conflict with any intellectual or industrial property
owned or used by any Person by the Company and the Subsidiaries. Neither the
Sellers, nor the Sellers' Guarantors are aware of any infringement by any Person
of any trademarks, tradenames or software (including software developed by the
Company or its Subsidiaries) used by the Company and the Subsidiaries.
Section 2.17 Material Contracts. (a) Set forth on Schedule 2.17 is a
complete and correct list or description of all written agreements, commitments
and understandings to which the Company or any Subsidiary is a party or to which
any of their assets are bound which constitute (i) contracts (other than
purchase or sales orders in the ordinary course of business, consistent with
past practice, of an annual amount of less than FF 2.5 million excluding VAT
during the calendar year 1997 and, for 1998, up to October 30 of that
year)relating to the purchase or sale of goods or services, involving the
payment of FF 1,000,000; (ii) any agreements in the nature of a joint venture
agreement or partnership agreement; (iii) any agreements involving
20
a confidentiality or non-competition obligation on the part of the Company or
any of its Subsidiaries or providing for any exclusive rights granted to or by
the Company or any Subsidiary; (iv) any agreements involving indebtedness for
borrowed money, including bank overdrafts; (v) any financial or operating leases
of real property, and any financial or operating leases of personal property
involving payments over their term of FF 1 million or more; (vi) any guarantees,
comfort letters or similar obligations for the payment or performance by
another party of its obligations; and (vii) any other agreements not otherwise
disclosed in the Schedules to this Agreement which relate to transactions which
by their nature, by the amounts in question or by their duration, must be
considered as agreements entered into other than in the day to day management of
the Company or the Subsidiary which is party thereto, consistent with past
practice (collectively, the "Material Contracts"). All Material Contracts are in
full force and effect in all material respects and there does not exist any
material default or event or condition that, after notice or lapse of time or
both, would constitute a default thereunder by the Company or any Subsidiary or,
to the knowledge of the Sellers and the Seller's Guarantors, by any other party
thereto. True and complete copies of all Material Contracts have been delivered
to Xxxxxx and the Buyer or will be made available to their advisors during the
15 day due diligence investigation period.
(b) To the knowledge of the Sellers and the Seller's Guarantors,
none of the rights of the Company or any Subsidiary under any Material Contract
will be subject to termination or modification as a result of the transactions
contemplated by this Agreement or any other Transaction Document, and no other
party to any Material Contract would be entitled to any additional fees or
payments as a result of the consummation of the transactions contemplated by
this Agreement or any other Transaction Document.
Section 2.18 Product Liability. To the knowledge of the Sellers and
the Seller's Guarantors, neither the Company nor any Subsidiary has any
obligation of any nature (whether based on strict liability, negligence, breach
of warranty, breach of contract or otherwise) in respect of any product sold,
packaged, repackaged or labeled by the Company or any Subsidiary that (i) is not
fully and adequately covered by insurance policies, except for any thresholds
(franchises) in such policies which do not exceed those customary in the
business, and (ii) is not otherwise fully and adequately reserved against in
accordance with French GAAP (or German or Swiss GAAP, as the case may be),
applied on a basis consistent with their most recent financial statements.
21
Section 2.19 Bank Accounts. Set forth on Schedule 2.19 is a complete
and correct list of each bank or other financial institution in which a line of
credit, checking or other account or safe deposit box is maintained by or for
the Company or any Subsidiary, a description of the nature of the financial
services provided to the Company or a Subsidiary by such financial institutions
and the name of each Person authorized to draw upon the accounts or have access
to the safe deposit boxes at such financial institutions.
Section 2.20 Brokers. No investment banker, finder, broker or other
intermediary has been retained by or has acted for or on behalf of the Sellers,
any Affiliate of the Sellers, the Company or any of its Subsidiaries who might
be entitled to any fee or commission from the Company or any Subsidiary upon the
consummation of the transactions contemplated by this Agreement or any other
Transaction Document.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF XXXXXX AND THE BUYER
Xxxxxx and the Buyer, jointly and severally, represent and warrant
to the Sellers as follows:
Section 3.1 Corporate Existence; Authorizations. (a) Xxxxxx is a
corporation duly organized and validly existing under the laws of Delaware.
Xxxxxx has full power and authority to execute this Agreement and each other
Transaction Document to which it is party, to perform its obligations hereunder
and thereunder and to consummate the transactions contemplated hereby and
thereby. The execution and performance of this Agreement and each other
Transaction Document to which Xxxxxx is party and the consummation by Xxxxxx of
its obligations hereunder and thereunder have been duly authorized by all
requisite action of Xxxxxx. This Agreement constitutes the legal, valid and
binding obligation of Xxxxxx, enforceable against Xxxxxx in accordance with its
terms. Each other Transaction Document to which Xxxxxx is party, when executed
by Xxxxxx, xxxx constitute the legal, valid and binding obligation of Xxxxxx,
enforceable against Xxxxxx in accordance with its terms.
(b) The Buyer is a societe anonyme duly organized and validly
existing under the laws of France, and substantially all of the shares of its
capital stock are owned, directly or indirectly, by Xxxxxx. The Buyer has full
power and authority to execute this Agreement and each other Transaction
Document to which
22
it is party, to perform its obligations hereunder and thereunder and to
consummate the transactions contemplated hereby and thereby. The purchase of the
Sellers' Shares, the execution and performance of this Agreement and each other
Transaction Document to which the Buyer is party and the consummation of the
transactions contemplated hereby and thereby have been duly authorized by all
requisite action of the Buyer. This Agreement constitutes the legal, valid and
binding obligation of the Buyer, enforceable against the Buyer in accordance
with its terms. Each other Transaction Document to which the Buyer is party,
when executed by the Buyer, will constitute the legal, valid and binding
obligation of the Buyer, enforceable against the Buyer in accordance with its
terms.
(c) Except as set forth on Schedule 3.1(c), no consent or other
authorization of, or filing with, any Person is required by or on behalf of
Xxxxxx or the Buyer in connection with (i) the valid execution or performance of
this Agreement or any other Transaction Document by Xxxxxx and the Buyer or
(ii) the consummation by Xxxxxx and the Buyer of the transactions contemplated
by this Agreement or any other Transaction Document.
Section 3.2 No Conflicts. Except as set forth on Schedule 3.2, the
execution and performance of this Agreement and the other Transaction Documents
by Xxxxxx and the Buyer and the consummation by Xxxxxx and the Buyer of the
transactions contemplated hereby and thereby will not violate or conflict with
(i) any provision of the certificate of incorporation, articles of association
(statuts), by-laws or other organizational documents of Xxxxxx or the Buyer,
(ii) any law or regulation applicable to Xxxxxx or the Buyer, (iii) any decision
of any court, tribunal or governmental authority, or (iv) any agreement or
instrument to which Xxxxxx or the Buyer is a party.
Section 3.3 Brokers. No investment banker, finder, broker or other
intermediary has been retained by or has acted for or on behalf of Xxxxxx or the
Buyer or any of their Affiliates who might be entitled to any fee or commission
from the Sellers or any of their Affiliates upon the consummation of the
transactions contemplated by this Agreement or any other Transaction Document.
23
ARTICLE IV
COVENANTS
Section 4.1 Conduct of the Business. From the date hereof to the
Closing Date, the Sellers and the Seller's Guarantors shall cause the Company
and its Subsidiaries to conduct their business and operations only in the
ordinary course of business and in a manner consistent with past practice.
Without limiting the generality of the foregoing, from the date hereof to the
Closing Date, except as otherwise expressly consented to by Xxxxxx or the Buyer,
the Sellers and the Seller's Guarantors shall cause the Company and its
Subsidiaries:
(a) not to pay (or be the object of a shareholder decision to pay)
any dividend, advance on dividend, or other distribution on any capital stock of
the Company or any Subsidiary, or purchase or redeem, directly and indirectly,
any shares of their capital stock (or other equity interest), except that (i)
the shareholders of Avantec Sarl may decide to distribute and Avantec Sarl may
distribute a dividend in a total amount of up to FF 2,550,000; (ii) the stock
brokerage firm Entreprise d'Investissements Du Bouzet S.A. may continue to
acquire or sell Shares for the account of the Company, as contemplated by the
market-making agreement (Contrat d'Animation) between such firm and the Company,
and (iii) the Company may distribute a dividend of up to FF 12 per share in the
circumstances contemplated by Section 1.2(e) above,
(b) not to incur or commit to incur any indebtedness for borrowed
money in excess of an aggregate amount of FF 500,000, and not to make or commit
to any capital investment in excess of FF 500,000 (excluding VAT), either in a
single transaction or a series of transactions relating to a given capital
investment,
(c) not to incur, assume, guaranty or otherwise become directly or
indirectly liable with respect to any liability or obligation of any Seller or
any Affiliate of any Seller,
(d) not to conclude any new agreement or understanding with any
Seller or any Affiliate of any Seller,
(e) not to forgive, cancel, waive or release any debt, claim or
right against any Seller or any Affiliate of any Seller,
24
(f) not to modify, amend or supplement any agreement or
understanding, or any provision or term of any agreement or understanding, with
any Seller or any Affiliate of any Seller,
(g) not to make any payment, in cash or other assets, to any Sellers
or any of their Affiliates, other than ordinary compensation in their capacity
as officers or employees of the Company and the Subsidiaries, in each case only
in accordance and consistent with past practice,
(h) to continue to pay their suppliers and receive payments from
their clients in accordance with past practices,
(i) not to enter into any agreement which would constitute a
Material Contract.
The Sellers and Seller's Guarantors shall promptly advise Xxxxxx and
the Buyer of any event, occurrence or condition that, individually or in the
aggregate, could have a Material Adverse Effect or that could result in a
failure to comply with any of the provisions of clauses (a) through (i) of this
Section 4.1.
Section 4.2 Public Announcements and Confidentiality. (a) The
Sellers and Seller's Guarantors and Xxxxxx and the Buyer shall cooperate and
consult with each other before issuing any press release or otherwise making any
public statement with respect to this Agreement or the other Transaction
Documents or the transactions contemplated hereby or thereby. Without limiting
the foregoing sentence, without the prior consent of the other party, neither
the Sellers or the Seller's Guarantors nor Xxxxxx or the Buyer shall, and the
Sellers and Seller's Guarantors shall cause the Company not to, issue any press
release or otherwise make any public statement with respect to the transactions
contemplated by this Agreement and the other Transaction Documents, or disclose
the existence of this Agreement or the other Transaction Documents or the
contents hereof or thereof, except as required by applicable laws and
regulations, in which case the party required to disclose shall promptly notify
the other party and the parties shall cooperate and consult with each other to
the maximum extent possible.
(b) The Sellers and Seller's Guarantors shall not, and shall cause
their Affiliates not to, use or disclose to any Person any proprietary or
confidential information relating to the Company or any Subsidiary, their
business and operations, or any of their assets, except with the prior consent
of Xxxxxx or the Buyer or as
25
required by applicable laws or regulations, in which case such Person shall
provide Xxxxxx and the Buyer prompt notice of such requirement.
(c) It is understood and agreed that the parties hereto remain bound
by the Confidentiality Agreement dated as of September 10, 1996, provided,
however, that Xxxxxx and the Buyer may disclose such information concerning the
transactions contemplated by this Agreement and the other Transaction Documents
as may be necessary or useful in connection with obtaining the financing for the
transactions contemplated hereby.
Section 4.3 Non-Competition. Prior to the third anniversary of the
Closing Date, none of the Sellers and none of the Seller's Guarantors shall,
directly or indirectly, own, manage, operate, join, control, participate or have
any interest in or be connected with, as a partner, shareholder, director,
officer, employee, advisor or consultant, any Person that is conducting an
activity of distribution, marketing or sale of laboratory supplies, chemicals or
instruments or any other categories of products presently marketed by the
Company or its Subsidiaries, or the after sales service of laboratory
instruments, anywhere in the territory consisting of France, Germany and
Switzerland; except that, with respect to Pierre-Francois Block and
Xxxx-Xxxxxxxxx Block-Derriey, the non-competition agreement of this Article 4.3
is limited solely to the French territory; provided that this Section 4.3 shall
not prohibit (i) the Sellers or the Seller's Guarantors from owning, solely as
an investment, securities of a publicly-traded company so long as no Sellers or
Seller's Guarantor individually owns or controls more than 2% of the voting
stock of such company and (ii) Pierre Block from carrying out the functions
listed on Schedule 4.3.
Section 4.4 Due Diligence Investigations; Information. From the date
hereof to the Closing Date, the Sellers and Seller's Guarantors shall (i) make
available to Xxxxxx, the Buyer, and their legal, accounting and other advisors
which shall have signed in advance a confidentiality undertaking containing
reasonable terms and conditions, all the financial, legal, and operating data
and other documents and information with respect to (a) the business, operations
and properties of the Company and its Subsidiaries as well as (b) the business
relations existing between, on the one hand, the Company and each of the
Subsidiaries and, on the other hand, the Affiliate Companies, as Xxxxxx, the
Buyer and their legal, accounting and other advisors shall from time to time
reasonably request in advance for the purpose of having full and accurate
knowledge of the business, legal and financial situation of the Company and its
Subsidiaries as well as the business relations existing between, on the one
hand, the Company and each of the Subsidiaries and, on the other hand,
26
the Affiliate Companies, except that the documents and information that may be
requested with respect to the study of the business relations existing between,
on the one hand, the Company and each of the Subsidiaries and, on the other
hand, the Affiliate Companies, may not include the corporate books and financial
accounts of the Affiliate Companies, (ii) instruct the legal and accounting
advisors of the Company and its Subsidiaries and the Affiliate Companies
(including without limitation Xxxxxxx Xxxxxx, the Chief Financial Officer of the
Company), to cooperate with Xxxxxx, the Buyer and their legal, accounting and
other advisors, in connection with their investigations of the Company and its
Subsidiaries as well as the business relations existing between, on the one
hand, the Company and each of the Subsidiaries and, on the other hand, the
Affiliate Companies, and (iii) keep Xxxxxx, the Buyer and their legal,
accounting and other advisors, generally informed as to the business and
operations of the Company and its Subsidiaries as well as the state of the
business relations existing between, on the one hand, the Company and each of
the Subsidiaries and, on the other hand, the Affiliate Companies. Any
investigation conducted by Xxxxxx, the Buyer and their legal, accounting and
other advisors pursuant to this Section 4.4 shall be conducted in such manner as
not to interfere unreasonably with the conduct of the business and operations of
the Company and its Subsidiaries and the Affiliate Companies. In principle, all
such investigations shall be conducted outside the premises of the Company and
the Subsidiaries, provided that environmental and/or other consultants selected
by Xxxxxx will be allowed to visit the premises of the Company and/or
Subsidiaries to the extent necessary to conduct their investigations, provided
that when they are within such premises they shall identify themselves as
consultants of the Company. The legal, financial, accounting and tax
investigations will be conducted at one or more off-site data rooms, it being
understood that the two individuals (other than Pierre Block) having the
greatest knowledge of the legal, tax, accounting and administrative aspects of
the Company and its Subsidiaries and the Affiliate Companies will be made
available to respond to the questions of the advisors of Xxxxxx and the Buyer as
follows: (i) Xx. Xxxxxx, the Chief Financial Office of the Company shall be
available for essentially all of his working time for a fifteen day period and
will have available a lap-top computer through which he will have remote access
to the information system of the Company, and will thus permit the advisors of
Xxxxxx and the Buyer to have access to all the accounting and financial records
of the Company and the Subsidiaries as well as the business relations existing
between, on the one hand, the Company and each of the Subsidiaries and the
Affiliate Companies, on the other hand; and (ii) Xx. Xxxxx, the statutory
auditor of the Company, will be available approximately half of his working time
during such fifteen day period. Pierre Block will make himself available for
meetings with executives of Xxxxxx to discuss the business and prospects
27
of the Company and its Subsidiaries and the Affiliate Companies, it being under-
stood that such meetings should in principle be limited to two and should not
occupy Mr. Block for the entire working day. No copies of documents will be
provided outside the due diligence review of the Company; and in the event the
Closing does not occur, all documents including the Schedules to this Agreement
which have been communicated to Xxxxxx and the Buyer and their advisors shall be
destroyed.
Section 4.5 Further Actions and Assurances. (a) Each of the parties
shall use its best efforts and shall cooperate with each other to take or cause
to be taken all actions necessary or desirable to consummate the transactions
contemplated by this Agreement and the other Transaction Documents, including
the satisfaction by the Sellers and the Seller's Guarantors of all the
conditions contained in Section 1.2(c) and the satisfaction by Xxxxxx and the
Buyer of all conditions contained in Section 1.2(b).
(b) From time to time after the Closing, the Sellers and the
Seller's Guarantors, and Xxxxxx and the Buyer shall, each at its own expense,
execute and deliver, or cause to be executed and delivered, such additional
documents and instruments, or take such other actions, as may be reasonably
requested by the other party to render effective the consummation of the
transactions contemplated by this Agreement and the other Transaction Documents
or otherwise to carry out the intent and purposes of this Agreement and the
other Transaction Documents.
Section 4.6 Tender Offer; Other Stock Exchange Transactions. (a)
Following the Closing or Pre-Closing, as applicable, of the transaction
contemplated by this Agreement, the Buyer shall file with the CMF a request to
be authorized to carry out a tender offer (offre publique d'achat - "tender
offer") by implementing the procedure for maintaining an offer to purchase the
Public Shares at the same price as the price paid for Seller's Shares hereunder
(or such lower price as may has been agreed with the CMF) (garantie de cours),
pursuant to Section 5-3-5 of the Reglement General of the CBV (the "Tender
Offer").
(b) Pierre Block shall use his best efforts to assist Xxxxxx and the
Buyer in their efforts to acquire more than 95% of the outstanding shares and
voting rights of the Company by way of the Tender Offer.
Section 4.7 Divestiture of Novodirect GmbH. If Xxxxxx and the Buyer
believe that the Closing might need to be delayed as a result of the time needed
to obtain the approval (or deemed approval) of the German Cartel Office and
28
wish to have the Company divest Novodirect GmbH so as to permit the Closing to
occur without such delay, Xxxxxx and the Buyer may so notify the Sellers and
Seller's Guarantors, in which case the Sellers and Seller's Guarantors shall
cause the Company to sell, as soon as possible, all of the shares of Novodirect
GmbH to such party or parties as Xxxxxx and the Buyer shall designate for this
purpose and to effect such sale for such price as shall have been approved by
the independent expert retained for the requirements of the Tender Offer.
ARTICLE V
INDEMNIFICATION
Section 5.1 Indemnification by Pierre Block. Pierre Block shall
xindemnify and hold harmless the Buyer from and against any and all claims, in-
creases in liabilities (augmentations de passifs) reductions in assets
(diminutions d'actifs), losses, damages, costs and expenses (including interest,
penalties and reasonable attorneys' and accountants' fees and disbursements)
with respect to the Company or any of its Subsidiaries (or any of their
successor entities), whether or not resulting from third party claims (each of
the foregoing being referred to herein individually as a "Loss", and
collectively as "Losses"), arising out of or as a result of (i) any inaccuracy
of or omission in any representation or warranty made by Pierre Block in this
Agreement or any other Transaction Document, (ii) any breach by any of the
Sellers or their Affiliates of any covenant or obligation of the Sellers in this
Agreement or any other Transaction Document and/or (iii) Losses experienced by
the Company or its Subsidiaries as a result of claims asserted by any
shareholders of the Company other than the Sellers, arising out of or related to
an event which occurred or circumstances which existed on or before the Closing
Date.
Section 5.2 Indemnification by Xxxxxx and the Buyer. Xxxxxx and the
Buyer shall, jointly and severally, indemnify and hold harmless the Sellers from
and against any and all claims, increases in liabilities, reductions in assets,
losses, damages, costs and expenses (including interest, penalties and
reasonable attorneys' and accountants' fees and disbursements) arising out of or
as a result of (i) any inaccuracy of or omission in any representation or
warranty made by Xxxxxx or the Buyer in this Agreement or any other Transaction
Document, or (ii) any breach by Xxxxxx or the Buyer of any covenant or
obligation of Xxxxxx or the Buyer in this Agreement or any other Transaction
Document.
29
Section 5.3 Survival of Representations and Warranties. Any and all
claims for indemnification arising out of or as a result of any inaccuracy of
any representation or warranty contained in this Agreement may be made until
December 31, 2001, provided that claims relating to the obligations of the
Company and/or the Subsidiaries with respect to Taxes and Social Charges shall
only expire on March 31, 2002, provided that the period for making claims
relating to Taxes and Social Charges shall not expire on that date if the
Sellers or Sellers' Guarantors had knowledge of the possibility of such a claim
and omitted to notify Xxxxxx and the Buyer of such fact.
Section 5.4 De Minimus; Limitations; Mitigation; Assignment; Access
to Information. (a) Pierre Block shall not be obligated to indemnify and hold
harmless the Buyer pursuant to Section 5.1 unless and until the aggregate amount
of all claims against Pierre Block under Section 5.1 exceeds FF 7,500,000, and
then only to the extent such aggregate amount exceeds FF 7,500,000.
(b) The aggregate amount which Pierre Block shall be obligated to
indemnify and hold harmless the Buyer pursuant to clause (i) of Section 5.1
shall not exceed thirty five percent (35%) of the aggregate of the Share
Purchase Price paid to all of the Sellers.
(c) The obligation of Pierre Block to indemnify and hold harmless
the Buyer pursuant to clause (i) of Section 5.1 with respect to any Loss will be
limited to 71.75% of such Loss.
(d) Any party entitled to indemnification under this Article 5 shall
use commercially reasonable efforts to mitigate any liability, loss, damage,
cost and expense for which indemnification is sought hereunder.
(e) All indemnification payments made by Pierre Block pursuant
hereto shall be treated by both parties, except as otherwise required by law, as
a reduction in the purchase price paid by the Buyer for the Sellers' Shares.
(f) The Buyer shall provide to Pierre Block and to the legal and
accounting advisors of Pierre Block (including Xxxxxxx Xxxxxx and Xxxxxx Xxxxx)
and the Seller's Guarantors access to the books and records of the Company and
its Subsidiaries, during normal business hours and so long as it does not
unreasonably interfere with the business and operations of the Company and its
Subsidiaries, in connection with the matters for which any payment is sought
under Section 5.1;
30
provided that, Pierre Block and such advisors shall utilize the information so
obtained only for the purpose of evaluating the claim and, where applicable,
preparing the defense against a claim asserted by a third party and shall not
use any of such information for any other purpose or divulge any such
information to any other party without the prior written agreement of Xxxxxx and
the Buyer.
Section 5.5 Calculation of Amount of Loss; Adjustments. (a) The
amount of any indemnity payment by Pierre Block under Section 5.1 shall be
limited to the amount of the actual Loss sustained by the Buyer, as adjusted
pursuant to this Section 5.5, and subject to the provisions of clause (c) of
Section 5.4.
(i) The amount of the Loss to be taken into account when deter-
mining the payment due by Pierre Block pursuant to Section 5.1 shall be
reduced (but not below zero) by an amount equal to the Tax benefits
(economies d'impots), if any, attributable to the Loss giving rise to such
payment, but only to the extent such Tax benefits (economies d'impots)
have actually been realized by the Company or the Subsidiary which
experienced such Loss (or the tax-consolidated group of which they form a
part) or are certain to be realized, taking into account the expected
positive after tax income of the relevant entity (or tax-consolidated
group of which it is a part) for the tax year in question and the
availability of such Loss as a tax deductible expense for such year. The
timing of any indemnity payment due from Pierre Block to the Buyer under
this Article 5 shall not be affected by the possible realization of any
Tax benefits; Pierre Block shall, within the timeframe provided in Section
5.6 below, pay indemnity payments pursuant to this Article 5, and if and
when the Company or a Subsidiary (or a consolidated tax group of which
they are part) subsequently realizes a Tax benefit (economie d'impots),
attributable to Losses in respect of which indemnity payments had been
made without a deduction for such Tax benefit, the Buyer shall pay to
Pierre Block the net amount of such Tax benefit (economie d'impots).
(ii) Pierre Block shall not be required to make any indemnity
payment to the Buyer under this Article 5 with respect to any loss which
is covered by any insurance policy of the Company or any Subsidiary or any
indemnification obligation of another Person to the Company or any Subsid-
iary until the Company or Subsidiary has made a claim for payment under
such insurance policy or indemnification obligation and (x) such claim has
been the object of a written refusal by the insurer (or other indemnifying
31
party) which the Company or Subsidiary and Pierre Block, after receiving
sufficient advance notice thereof, have decided not to contest or (y) the
courts have determined that no recovery is available under such insurance
(or other indemnification obligation).
(b) The amount of any indemnity payment under Section 5.2 shall be
limited to the amount of the actual liability, loss, damage, costs and expenses
sustained by the Sellers.
Section 5.6 Indemnification Procedures. (a) For the purposes of this
Section 5.6, the party seeking indemnification shall be known as the "Indemni-
fied Party", and the party from whom indemnification is sought shall be known as
the "Indemnifying Party". If and when an Indemnified Party becomes aware of a
Loss for which he expects the Indemnifying Party to be liable under this Article
5, such Indemnified Party shall immediately give notice thereof (the
"Indemnification Notice") to the Indemnifying Party. The Indemnification Notice
shall state the reason for the indemnification claim and the amount or estimate
of the amount that may be due under this Article 5, and shall provide relevant
documentary evidence regarding such claim and the proposed indemnification
amount. The failure of any Indemnified Party to give such notice or a delay in
giving such notice shall not relieve the Indemnifying Party of its
indemnification obligations under this Article 5, except to the extent such
failure or delay results in a lack of actual notice to the Indemnifying Party
and the Indemnifying Party is prejudiced as a result of the failure to receive
such notice or the delay in receipt of such notice. Within 30 days of receipt of
an Indemnification Notice in accordance with this Section 5.6, the Indemnifying
Party shall pay the Indemnified Party the amount specified in such
Indemnification Notice, unless the Indemnifying Party delivers a notice of
disagreement with the relevant indemnification claim within 15 days of its
receipt of such Indemnification Notice.
(b) In the case of any claim asserted by a third party, the Indemni-
fied Party shall (i) promptly deliver the Indemnification Notice to the
Indemnifying Party, it being understood that Pierre Block shall be deemed to
have received promptly from Xxxxxx and the Buyer an Indemnification Notice in
respect of any claim which is asserted by a third party at a time Pierre Block
holds the position of President Directeur General of the Company (and, to the
extent such third party claim is asserted against a Subsidiary, has management
responsibility for the supervision of such Subsidiary), and (ii) permit the
Indemnifying Party, at its option and expense, to take over and assume the
defense of any such claim by counsel
32
satisfactory to the Indemnified Party (it being that the law firms Xxxxxxx &
Xxxxxxx Xxxxxx and Xxxxxxxxx & Xxxxxxxx are considered satisfactory for these
purposes) and to settle or otherwise dispose of the same; provided that the
Indemnified Party may at its discretion at all times participate, at its own
expense, in such defense by counsel of its own choice. The Indemnifying Party
shall not, in defense of any such claim, except with the prior written consent
of the Indemnified Party, enter into any settlement that does not include, as an
unconditional term thereof, the giving by the claimant or plaintiff in question
to the Indemnified Party and its Affiliates a release of all liabilities in
respect of such claims.
(c) If the Indemnifying Party does not elect to assume the defense
of any claim within 30 days of delivery of the Indemnification Notice, the
Indemnified Party shall have the right to take over and assume the defense of
any such claim. If the Indemnifying Party thus omits to assume the defense of a
claim, the Indemnified Party shall be entitled to settle or agree to pay in
full any such claim; provided that (i) the Indemnified Party shall not settle
such claims without the prior written consent of the Indemnifying Party,
provided that such consent cannot be unreasonably withheld and (ii) the
Indemnified Party shall, at all times and to the maximum extent possible, keep
the Indemnifying Party informed of the status of such claim and the proceedings
related thereto.
ARTICLE VI
DEFINITIONS
Section 6.1 Certain Defined Terms. The following terms, as used in
this Agreement, have the following meanings:
"Affiliate" means, with respect to any Person, any other Person
directly or indirectly controlling, controlled by or under common control with,
such Person. Control of any Person shall be deemed to exist upon the ownership
of securities entitling the holder thereof to exercise more than 50% of the
voting power in the election of directors of such Person (or other persons
performing similar functions). Prior to the Closing, each Seller shall
constitute an Affiliate of the Company (and of each Subsidiary) and the Company
shall constitute an Affiliate of each Seller (and of each Subsidiary). Each
Seller shall constitute an Affiliate of each other Seller, and in the event the
Sellers and their Affiliates jointly (but not individually) control a Person,
each Seller shall constitute an Affiliate of such Person.
33
"CBV" means the Conseil des Bourses de Valeurs
"CMF" means the Conseil des Marches Financiers.
"Closing Date" means the date of the Closing in accordance with
Section 1.2.
"COB" means the Commission des Operations de Bourse.
"FF" means the lawful currency of France.
"French GAAP", "German GAAP" and "Swiss GAAP" means the accounting
principles and practices generally accepted from time to time in France, Germany
and Switzerland, respectively.
"Lien" means any mortgage, lien, pledge, charge, security interest,
encumbrance or other adverse claim.
"Material Adverse Effect" means any event or circumstance which,
individually or in the aggregate, involves or is likely to result in or does
result in (i) any diminution or reduction in the value of the consolidated
assets of the Company and its Subsidiaries as at June 30, 1998 and/or the
Closing Date, or any increase in the consolidated liabilities or obligations of
any nature, including contingent liabilities, of the Company and its
Subsidiaries as at June 30, 1998 and/or the Closing Date, in an amount of more
than FF 7,500,000, and/or (ii) any reduction in the consolidated operating
profits or consolidated net after-tax profits of the Company and its
Subsidiaries as at June 30, 1998 and/or the Closing Date, in an amount of more
than FF 3,000,000.
"Net Excess Cash" means, on a consolidated basis among the Company
and its Subsidiaries, the (a) aggregate amount of (i) cash (disponibilites) (ii)
short term investment securities (valeurs mobilieres de placement), excluding
any shares of the Company which are owned by the Company, which short term
investment securities shall be valued for these purposes at their market value
as of the Closing Date, and (iii) the shares of the Company which are owned by
the Company, but only to the extent the total number of outstanding shares of
the Company (including the shares owned by the Company) do not exceed a total of
2,047,500 shares, which shares of the Company shall be valued for these purposes
at the historical cost price thereof as paid by the Company, less (b) the
aggregate amount of
34
(i) convertible bond debentures and other loan debentures (emprunts obligataires
convertibles et autres emprunts obligataires), (ii) bank borrowings (emprunts et
dettes aupres des etablissements de credit), including short-term borrowings
(concours bancaires courants et soldes crediteurs de banque) and (iii) other
long-term liabilities (emprunts et dettes financieres diverses).
"Person" means an individual, corporation, trust or other entity,
including a governmental or political subdivision or an agency or
instrumentality thereof.
"SBF" means the Societe des Bourses Francaises.
"Social Charges" means any social security, unemployment, old age
pension, pension scheme, family allocation and other social charges or
contributions, to the extent any of the foregoing are required by applicable
laws, regulations or collective bargaining agreements.
"Subsidiary" means any corporation, partnership or other Person in
which the Company owns or controls, directly or indirectly, capital stock or
other equity interests representing more than 50% of the outstanding voting
securities or other equity interests.
"Taxes" means any income, profits, receipts, sales, value added,
transfer, registration, business, franchise, capital, withholding, payroll,
employment, property or customs tax, duty, governmental fee or other like
assessment or charge, together with any interest or penalty, imposed by any
governmental authority, or liability for the payment of any of the foregoing
(including as a result of any obligation to indemnify any other Person with
respect to any such taxes, duties, fees, assessments or charges).
"Transaction Documents" means this Agreement, the employment
agreement between Pierre Block and Xxxxxx in the form of Annex 6A, the employ-
ment agreement between Xxxx-Xxxxxxxxx Block-Derriey and the Company in the form
of Annex 6B, the employment agreement between Pierre-Francois Block and the
Company in the form of Annex 6C, the trademark and tradename transfer
instruments between Pierre Block and Xxxx-Xxxxxxxxx Block-Derriey and the
Company (or such other Person as Xxxxxx shall have designated) in the form of
Annex 7, the quota share (parts) transfer instrument relating to the 7.66%
interest in Avantec Sarl between Pierre Block and the Company (or such other
Person as Xxxxxx
35
shall have designated) in the form of Annex 8; and "Transaction Document" means
any of the foregoing.
Section 6.2 Other Defined Terms. Each of the following terms is
defined in the section set forth below opposite such term:
Affiliate Company....................................................Section 2.4
Agreement...........................................................Introduction
Buyer...............................................................Introduction
Closing..............................................................Section 1.2
Collective Labor Agreements......................................Section 2.14(b)
Company................................................................Recital A
Financial Statements..............................................Section 2.6(b)
Xxxxxx..............................................................Introduction
ICC Rules.........................................................Section 7.3(a)
Indemnification Notice...............................................Section 5.6
Indemnified Party....................................................Section 5.6
Indemnifying Party...................................................Section 5.6
Leases...........................................................Section 2.12(b)
Loss(es).............................................................Section 5.1
Material Contract(s)................................................Section 2.17
Principal Minority Shareholders...................................Section 4.6(c)
Public Shares..........................................................Recital B
Sellers.............................................................Introduction
Seller's Guarantors.................................................Introduction
Sellers' Shares........................................................Recital B
Shares.................................................................Recital A
Share Purchase Price..............................................Section 1.1(a)
Tender Offer......................................................Section 4.6(a)
ARTICLE VII
MISCELLANEOUS
Section 7.1 Termination. (a) This Agreement may be terminated at any
time prior to Closing:
36
(i) By the written agreement of Pierre Block, Xxxxxx and the Buyer;
and
(ii) If Xxxxxx and/or the Buyer, on the one hand, or the Sellers, on
the other hand, commit a material breach of any provision of this
Agreement or any other Transaction Document and such breach or default is
not cured within ten days of delivery of notice thereof by the opposite
party, upon notice by such opposite party to the breaching party.
(b) Notwithstanding any termination of this Agreement by one of the
parties pursuant to Section 7.1(a)(ii), Article 5 and Sections 7.2, 7.3, 7.6,
7.7, 7.8 and 7.10 shall remain in full force and effect.
Section 7.2 Governing Law. This Agreement shall be governed by and
construed in accordance with French law.
Section 7.3 Arbitration. (a) In the event the parties are not able
to settle amicably any dispute arising in connection with this Agreement, such
dispute shall be finally settled under the Rules of Conciliation and Arbitration
of the International Chamber of Commerce (the "ICC Rules") in effect on the
date hereof, except as modified herein.
(b) The arbitration shall be conducted by three arbitrators
appointed in accordance with such ICC Rules. Each of the arbitrators shall be
fluent in English and French and shall have a working knowledge of French law.
For purposes of appointing arbitrators hereunder, Xxxxxx and the Buyer shall be
considered one party and the Sellers shall jointly be considered one party. The
arbitration shall be held in Paris. Arbitration proceedings shall be conducted
in English and French, and the parties may submit testimony or documentary
evidence in English or French.
(c) Any award rendered by the arbitrators shall be in writing and
shall be final and binding upon the parties. Judgment upon the arbitration award
rendered or any order for enforcement may be entered in any court having
jurisdiction. The costs of the arbitration and the enforcement of the award
shall be borne by the party against whom the arbitration award was rendered (as
such issue is determined by the arbitration panel).
Section 7.4 Amendments; etc. This Agreement, or any term hereof, may
be amended only by a written instrument signed by all the parties hereto.
37
Notwithstanding anything to the contrary in the foregoing, each of Sellers other
than Pierre Block hereby irrevocably appoint Pierre Block to take any and all
actions on their behalf in connection with this Agreement and the Transaction
Documents; and Xxxxxx and the Buyer may act and rely upon any statement,
agreement or action given, made or taken by Pierre Block on behalf of any Seller
with respect to this Agreement and the other Transaction Documents and the
transactions contemplated hereby and thereby, and any such statement, agreement
or action by Pierre Block shall be binding upon each Seller.
Section 7.5 Assignment. Given that the Sellers have only agreed to
the transactions contemplated by this Agreement based upon the specific identity
of Xxxxxx, this Agreement may not be assigned or otherwise transferred by any
party hereto without the prior written consent of the other parties, provided
that Xxxxxx and the Buyer have the right to designate another subsidiary of
Xxxxxx established in France to acquire the Sellers' Shares pursuant to the
terms of this Agreement and in the event they exercise this right, such other
subsidiary of Xxxxxx shall thereby assume all of the rights and obligations of
the Buyer hereunder and Xxxxxx shall thereby become the joint and several
guarantor of the due performance of such obligations by such other subsidiary
pursuant to the terms of Section 1.1(c) above.
Section 7.6 Notices. All notices, consents, requests and other
communications provided for in this Agreement shall be in writing and shall be
deemed validly given upon personal delivery or one day after being sent by
telecopy (so long as for notices sent by telecopy, a copy is also sent on the
same day by registered mail, acknowledgment of receipt requested), at the
following address or telecopy number, or at such other address or telecopy
number as a party may designate by written notice to the other party:
(a) If to any Seller, at:
c/o Xx. Xxxxxx Block
0 xxx xx xx Xxxx x'Xxxx
00000 Xxxxxxxxxx
(Xxxxxx)
Telecopy: (00) 0-00-00-00-00
38
(b) If to Xxxxxx or the Buyer, at:
Xxxxxx Scientific International Inc.
Xxxxxxx Xxxx
Xxxxxxx, Xxx Xxxxxxxxx 00000
(U.S.A.)
Telecopy: (0-000) 000-0000
Attention: General Counsel
Section 7.7 Expenses. The Sellers, on the one hand, and Xxxxxx and
the Buyer, on the other hand, shall bear and pay all their own respective costs
and expenses in connection with the consummation of the transactions
contemplated by this Agreement and the other Transaction Documents, including
the fees and expenses of any legal counsel, accountant, broker, financial or
other advisor engaged by such parties. The Sellers agree that in no event shall
the Company or any Subsidiaries pay for or incur any costs or expenses as a
result of the transactions contemplated by this Agreement or any other
Transaction Document, other than remuneration due pursuant to the employment
agreements with the Company.
Section 7.8 Severability. If any provision of this Agreement is
held to be invalid or unenforceable for any reason, it shall be adjusted rather
than voided, if possible, in order to achieve the intent of the parties to this
Agreement to the maximum extent possible. In any event, the invalidity or
unenforceability of any provision of this Agreement in any jurisdiction shall
not affect the validity or enforceability of the remainder of this Agreement in
that jurisdiction or the validity or enforceability of this Agreement, including
that provision, in any other jurisdiction.
Section 7.9 No Third Party Beneficiaries. Nothing in this Agreement
shall be construed as giving any Person, other than the parties hereto and their
successors and permitted assignees, any right, remedy or claim under or in
respect of this Agreement or any provision hereof.
Section 7.10 Language. Xxxxxx and the Buyer have relied upon the
English language version of this Agreement in the course of their negotiations
with the Sellers, whereas the Sellers have relied upon the French language
version of this Agreement in the course of such negotiations. As a negotiated
concession, Xxxxxx and the Buyer have agreed that the French language version
shall be given predominant weight when interpreting the intentions of the
parties as expressed in this Agreement. Nonetheless, the Sellers and Seller's
Guarantors have agreed to initial
39
the English language version of this Agreement and have further agreed that
Xxxxxx and the Buyer shall have the right to introduce into evidence the
initialed English language version of this Agreement in order to document their
own understanding of the provisions of this Agreement.
Section 7.11 Integration. This Agreement and the other Transaction
Documents (including the annexes, schedules and exhibits hereto and thereto),
the Confidentiality Agreement executed among the parties as of September 10,
1996 and the other documents delivered pursuant hereto and thereto constitute
the full and entire understanding and agreement of the parties and supersede any
and all prior agreements, arrangements and understandings relating to the
subject matters hereof and thereof.
Section 7.12 Section Headings. The section headings of this
Agreement are for convenience of reference only and are not to be considered in
construing this Agreement.
Section 7.13 Execution Copies. This Agreement shall be executed in
two original copies, each of which shall be an original, the first of which
shall be retained by Xxxxxx and the Buyer and the second of which by the Sellers
and the Sellers' Guarantors. The parties to this Agreement expressly authorize
their respective counsel, to wit Xxxxxxxxx Xxxxxxx, counsel to Sellers and
Sellers Guarantors, and Xxxxx X. Xxxxx, counsel to Xxxxxx and the Buyer, to
initial on their behalf the Annexes and Schedules to this Agreement.
Section 7.14 Subsequent Ratification by Buyer. On the signature date
of this Agreement, Xxxxxx shall sign on its own behalf and as porte fort and
joint and several guarantor of Buyer, even though Buyer shall sign and thereby
ratify this Agreement only at a later date. Xxxxxx undertakes as porte fort to
cause the Buyer to ratify and sign this Agreement, and in any event this
Agreement shall come into full force and effect upon the signature of this
Agreement by Xxxxxx, on the one part, and all of the Sellers and Seller's
Guarantors, on the other part.
40
IN WITNESS WHEREOF, the parties hereto have duly executed this
Agreement at the date first above written.
XXXXXX SCIENTIFIC INTERNATIONAL INC.
By: /s/ Xxxxxx Xxxxxxx
--------------------------------------
Xxxxxx Xxxxxxx
Vice President-Finance and Treasurer
XXXXXX SCIENTIFIC HOLDINGS FRANCE S.A.
By: /s/ Xxxxxxx Xxxxxx
--------------------------------------
Xxxxxxx Xxxxxx
Chairman of the Board of Directors
CAPIAC
By: /s/ Pierre Block
--------------------------------------
Pierre Block
Manager (Gerant)
SAPACA 97
By: /s/ Xxxx-Xxxxxxxxx Block-Derriey
--------------------------------------
Xxxx-Xxxxxxxxx Block-Derriey
Chairman of the Board of Directors
SAPCAR 97
By: /s/ Xxxxxxxx Block
--------------------------------------
Xxxxxxxx Block
Chairman of the Board of Directors
41
SAPPI 97
By: /s/ Pierre Block
--------------------------------------
Pierre Block
Chairman of the Board of Directors
SAPPEF 97
By: /s/ Xxxxxx Xxxxxxxx Block
--------------------------------------
Pierre-Francois Block
Chairman of the Board of Directors
Pierre BLOCK
/s/ Pierre Block
--------------------------------------
Xxxx-Xxxxxxxxx BLOCK-DERRIEY
/s/ Xxxx-Xxxxxxxxx Block-Derriey
--------------------------------------
Pierre-Francois BLOCK
/s/ Xxxxxx Xxxxxxxx Block
--------------------------------------
42
Xxxxxxxx BLOCK
/s/ Xxxxxxxx Block
--------------------------------------
Xxxxxx Xxxxxxx BLOCK
/s/ Xxxxxx Xxxxxxx Block
--------------------------------------
represented by Xxxxxx XXXXX
00
