EXHIBIT 2.1
STOCK PURCHASE AGREEMENT
among
THE STOCKHOLDERS OF ETABLISSEMENTS BOUTMY S.A.
and
XOMED FRANCE HOLDINGS S.N.C.
December 30, 1998
TABLE OF CONTENTS
1. SALE....................................................................2
1.1 Sale and Purchase of the Shares......................................2
1.2 Prior Events and Delivery of Documents...............................3
1.3 Purchase Price.......................................................4
2. REPRESENTATIONS AND WARRANTIES RELATING TO THE COMPANY..................5
2.1 Corporate Organization...............................................5
2.2 Subsidiaries and Interests...........................................6
2.3 Capitalization.......................................................6
2.4 Consents and Approvals...............................................7
2.5 Effect of the Sale...................................................7
2.6 Financial Statements - Dividends.....................................7
2.7 Prior Management of the Company......................................8
2.8 Compliance with Applicable Regulations...............................9
2.9 Litigation..........................................................10
2.10 Material Contracts.................................................10
2.11 Guarantees and Off-Balance-Sheet Commitments.......................12
2.12 Employees..........................................................12
2.13 Tax, Social Security and Customs...................................13
2.14 Intellectual Property..............................................14
2.15 Real Property and Leases...........................................15
2.16 Tangible Fixed Assets..............................................17
2.17 Intangible Property................................................17
2.18 Condition of Tangible Fixed Assets.................................17
2.19 Stocks.............................................................17
2.20 Environmental, Health and Safety Compliance........................18
2.21 Insurance..........................................................19
2.22 Year 2000 Information Technology Compliance........................19
2.23 Services and Products..............................................20
2.24 Potential Conflicts of Interest....................................20
2.25 Customers and Suppliers............................................21
2.26 Bank Accounts and Powers of Attorney...............................21
2.27 Receivables........................................................21
2.28 Changeover to Euro.................................................22
2.29 Subsidies..........................................................22
2.30 Validity of Representation.........................................22
2.31 Fairness...........................................................22
ARTICLE 3. REPRESENTATIONS AND WARRANTIES BY XOMED.......................23
3.1 Corporate Organization..............................................23
3.2 Authorizations......................................................23
ARTICLE 4 REPRESENTATIONS AND WARRANTIES RELATING TO THE STOCKHOLDERS....23
4.1 Ownership of the Shares.............................................23
4.2 Capacity, Absence of Conflicts......................................24
4.3 Fees................................................................24
ARTICLE 5 INDEMNIFICATION................................................24
5.1 Indemnification by the Stockholders.................................24
5.2 Indemnification Procedures..........................................25
5.3 Limitations.........................................................28
5.4 Indemnification Guarantee on First Demand...........................30
5.5 Interest Payments...................................................31
ARTICLE 6. INTERPRETATION OF THIS AGREEMENT..............................31
6.1 Definitions.........................................................31
6.2 Applicable Law......................................................34
6.3 Arbitration.........................................................34
6.4 Commitments subsequent to the Sale..................................35
6.5 Paragraph and Section Headings......................................35
6.6 Severability........................................................35
ARTICLE 7. NON-COMPETITION................................................35
ARTICLE 8. MISCELLANEOUS..................................................36
8.1 Notices and Communications..........................................36
8.2 Duties and Taxes....................................................37
8.3 Death - Transmission................................................37
8.4 Entire Agreement....................................................37
8.5 Time-limits and Waiver..............................................38
8.6 Counterparts........................................................38
STOCK PURCHASE AGREEMENT
This STOCK PURCHASE AGREEMENT is entered into on December 30, 1998,
by and between:
1. Xx. Xxxxxxxxx Xxxxxx, born in Bourbon l'Archambaut on July 17, 1943, a
French citizen, married under the system of separate estates for husband
and wife, resident at 0 xxx xxx Xxxxxxx Xxxxxxxxxxxx, 00000 Xx Xxxx Xxxxx
en Re;
2. Xxx. Xxxxxx Xxxxxx, nee Bardon, born in Ygrande on August 14, 1945, a
French citizen, married under the system of separate estates for husband
and wife, resident at 0 xxx xxx Xxxxxxx Xxxxxxxxxxxx, 00000 Xx Xxxx Xxxxx
en Re;
3. Xx Xxxx Xxxxxx, born in Bourbon l'Xxxxxxxxxxx on March 18, 1973, a French
citizen, resident at 0 xxx xxx Xxxxxxx Xxxxxxxxxxxx, 00000 Xx Xxxx Xxxxx en
Re;
4. Xx. Xxxxxx Xxxxxxxxx, born in Ygrande on November 9, 1926, a French
citizen, married under the system of a communal estate for husband and
wife, resident at Les Vignes, 03160 Ygrande;
5. Xxx. Xxxxxxxx Xxxxxxxxx, xxx Xxxxxxx, born in Ygrande on March 22, 1924, a
French citizen, married under the system of a communal estate for husband
and wife, resident at Les Vignes, 03160 Ygrande;
6. Xx. Xxx Xxxxxx, born in Bourbon l'Xxxxxxxxxxx on April 4, 1920, a French
citizen, married under the system of community of acquisitions after
marriage, resident at Xx Xxxxx, 03160 Bourbon l'Xxxxxxxxxxx;
7. Xxx. Xxxxxx Xxxxxx, nee Xxxxxxxx, born in Agonges on January 6, 1922, a
French citizen, married under the system of community of acquisitions after
marriage, resident at Xx Xxxxx, 03160 Bourbon l'Xxxxxxxxxxx;
8. Mr. Xxxx-Xxxxxx Avenier, born in Saint Xxxxx le Monial on October 29, 1948,
a French citizen, married under the system of a communal estate for husband
and wife, resident at Le Midi, 03160 Saint Xxxxx le Monial;
9. Xxx. Xxxx Xxxxx Xxx, nee Boutmy, born in Moulins on February 22, 1967, a
French citizen, married under the system of separate estates for husband
and wife, resident at 0 xxx xxx Xxxxxx, 00000 Xxxxxxxxx;
10. Mrs. Brigitte Pinaut, nee Deplessis, born in Ygrande on March 28, 1957, a
French citizen, married under the system of a communal estate for husband
and wife, resident at Les Bruyeres d'Hates, 03160 Bourbon l'Xxxxxxxxxxx;
11. Xx. Xxxx-Xxxxxxxx Xxxxx, born in Bourbon l'Xxxxxxxxxxx on June 30, 1919, a
French citizen, married under the system
of separate estates for husband and wife, resident at 00 xxxxxx xx xx
Xxxxxx, 00000 Nogent sur Marne.
(acting together jointly and severally and referred to collectively hereinafter
as the "STOCKHOLDERS")
ON THE ONE HAND
AND
12. Xomed Holdings SNC, a French SOCIETE EN NOM COLLECTIF with capital of FF.
14,001,000, having its registered office at 0 xxxxxx xx Xxxxxxx, XX xx
Xxxxxxxxxxx, 00000 Villebon-sur-Xxxxxx, registered with the Registry of
Commerce and Companies of Evry under the number B 421 302 449, and
represented by Xx. Xxx X. Xxxxxxxxxx, duly authorized for this purpose,
(referred to hereinafter as "XOMED")
ON THE OTHER HAND,
RECITALS
A. At the date hereof the Stockholders own 1,875 shares (the "SHARES")
representing the entire capital and voting rights of Etablissements Boutmy,
a French SOCIETE ANONYME with capital of FF. 450,000, registered with the
Registry of Commerce and Companies of Moulins under the number B 973 050
193 and with its registered office at Saint Xxxxx le Monial, 03160 Bourbon
l'Xxxxxxxxxxx, France (the "COMPANY").
B. The Stockholders desire to sell the Shares to Xomed which desires to
purchase the Shares for the price and according to the clauses, terms and
conditions set forth hereinafter.
AGREEMENT
1. SALE
1.1 SALE AND PURCHASE OF THE SHARES
According to the terms and conditions hereof and subject thereto,
especially to the provisions of Article 1.2, the Stockholders sell to Xomed and
Xomed, in reliance upon the Stockholders' representations and warranties,
purchases the Shares from the Stockholders on the date hereof, free of all
Liens, rights, pledges, security, preemptive rights, options and any other
rights in favor of third parties.
1.2 PRIOR EVENTS AND DELIVERY OF DOCUMENTS
As of the date hereof, the events described hereafter must have taken
place and the Stockholders shall have given Xomed the following documents:
(a) the Shares transfer forms (ORDRES DE MOUVEMENT) in Xomed's favor,
duly completed and signed by the Stockholders, to effect the transfer of all the
Shares to Xomed, and proof of the registration of the sale in the Company's
share transfer register; the Company's share transfer register; the stockholder
accounts register; complete and up-to-date minutes books of board and
stockholders meetings and the attendance register for board meetings;
(b) an accurate and complete list of all the directors of the Company
who have held office up until the date hereof; the letters of resignation of Xx.
Xxxxxxxxx Xxxxxx, Xxx. Xxxxxx Xxxxxx and Xx. Xxxx Xxxxxx from their positions as
members of the board of directors of the Company specifying that such
resignations shall be effective as of the ordinary general stockholders' meeting
to be held on the date hereof; a certified copy of the minutes of the board of
directors meeting at which it was decided to call an ordinary general
stockholders' meeting to appoint Xx. Xxxxxx Xxxxxxx Xxxxxx, Xx. Xxx X.
Xxxxxxxxxx, Mr. F. Xxxxx Xxxx and Xx. Xxxxxx X. Xxxxxx as new directors;
(c) Xx. Xxxxxxxxx Xxxxxx'x letter of resignation from his position as
chairman of the board of directors and Xxx. Xxxxxx Xxxxxx'x letter of
resignation from her position as general manager of the Company, stating that
the Company does not owe them any money on any grounds whatsoever;
(d) a letter from Xxx. Xxxxxx Xxxxxx confirming her resignation as an
employee of the Company effective July 31, 1997 and stating that the Company
does not owe her any money on any grounds whatsoever;
(e) a certified copy of the minutes of the meeting of the board of
directors approving Xomed's acquisition of the Company pursuant to Article 11 of
the Bylaws of the Company;
(f) a copy of the minutes of the meeting of the workers committee of
the Company at which such committee gave its view over the planned transfer of
the Shares;
(g) a statement from Xx. Xxxxxxxxx Xxxxxx indicating that (i) all of
the agreements governed by Articles 101 ET SEQ. of the French commercial
companies statute of July 24, 1966 which are set forth in SCHEDULE 2.24 hereto,
except for the lease with SCI Simone and Xxxxxxxxx Xxxxxx covering the premises
located at 00 xxx xx Xxxxx, 00000 Xxxxx, have been terminated and that all
payments owed to the Company thereunder have been duly made and that the Company
does not owe any money on any grounds whatsoever; and that (ii) all loans,
guarantees and other credit arrangements between the
Company and its Stockholders, officers and employees have been terminated and
that all sums due to the Company thereunder have been duly paid;
(h) a copy, certified as true by Mr. Boutmy in his capacity as board
chairman, of the full release (ACTE DE MAINLEVEE DE NANTISSEMENT DE FONDS DE
COMMERCE) of the January 6, 1989 pledge of the Company's going concern in favor
of BANQUE NATIONALE DE PARIS;
(i) duly signed originals of the consulting agreements made with each
of Xx. Xxxxxxxxx Xxxxxx and Xxx. Xxxxxx Xxxxxx in the forms attached hereto as
EXHIBIT A and EXHIBIT B;
(j) a document certifying repayment by the Company to Xx. Xxxxxxxxx
Xxxxxx on October 30, 1998 of the latter's stockholder loan to the Company, such
repayment not exceeding FF. 1,612,713.36;
(k) a signed original of the guarantee on first demand issued by
Banque Nationale de Paris pursuant to Article 5.4 hereunder, matching the model
attached as EXHIBIT C hereto;
(l) any document testifying that the "Micro France" trademark, which
has been registered in Canada by Distribution Instrumentarium (Canada) Inc. and
for which an application for registration has been made in the United Sates by
Instrumentarium Surgical Corp., Inc. has been permanently retroceded to the
Company, together with a statement certifying that the Company does not owe any
sums on any grounds whatsoever in connection with this retrocession. The Parties
agree that, in the event that, upon the date hereof, retrocession of the "Micro
France" trademark as described above has not been fully completed and is not
effective with respect to third parties, the Stockholders shall be liable to
Xomed for all sums which Xomed or the Company may be required to pay (including
all procedural costs and fees of lawyers and special counsel) over and above the
FF. 150,000 provision included in the Final Balance Sheet, in order for the
"Micro France" trademark to be permanently retroceded.
1.3 PURCHASE PRICE
(a) The aggregate consideration paid for the Shares is ninety two
million French Francs (FF. 92,000,000) (the "PURCHASE PRICE").
(b) Xomed pays the Purchase Price to the Stockholders by bank check on
the date hereof, for which the Stockholders give Xomed good and valid discharge.
2. REPRESENTATIONS AND WARRANTIES RELATING TO THE COMPANY
The Stockholders represent, warrant and certify as follows:
2.1 CORPORATE ORGANIZATION
(a) The Company is a SOCIETE ANONYME duly organized and validly
existing under the laws of France. Attached hereto as EXHIBIT D is a true,
complete and up-to-date copy of the Company's by-laws ("By-laws"), together with
a company information certificate (EXTRAIT K-BIS) issued by the Registry of
Commerce and Companies of Moulins. All formalities legally required for it to
correctly carry on its existence have been duly and validly carried out. No
resolution has been adopted providing for the amendment of the By-laws or for
the winding-up or liquidation of the Company and no steps have been taken to
this end. All of the company registers, minute books, stockholder accounts,
share transfer registers and other registers and documents of a similar kind
relating to the Company are accurate, up-to-date and faithfully reflect the
decisions taken and conform to all legal and regulatory requirements. The
decisions of the corporate boards and management of the Company have been taken
in compliance with the statutes and regulations in force and in accordance with
the Company's By-laws and are not subject to challenge. There has been no formal
request for the annulment or the winding-up of the Company, nor have any
insolvency proceedings been commenced with respect to the Company, nor any
temporary suspension of claims against the Company or moratorium or like
procedure been ordered, and the Company has never been insolvent. There is no
valid basis currently existing upon which it could be reasonably expected that a
third party could require the winding-up or liquidation of the Company.
(b) The Company is the valid holder of all the approvals, licenses,
permits and authorizations required for carrying on its business in France which
remain in force unchanged.
(c) Except as provided under SCHEDULE 2.1(c), no formality has been
accomplished by the Company or the Stockholders out of the French territory in
order to comply with local regulations applicable for performance of the
Company's activities in foreign countries. The Stockholders acknowledge that
they could be held liable, under the terms and conditions set forth in Article 5
below, if the formalities required by statute for performance of the Company's
activities in foreign countries have not been validly and properly carried in a
timely manner, or if the sale of the Shares has a negative effect in this
respect.
(d) There is no shareholder agreement or other commitments outside the
By-laws regarding the Company, its management or the Shares.
(e) For all decisions and commitments of the Company which require
notice, publication or registration, such notices, publications and
registrations have been timely effectuated in conformity with applicable
statutory and regulatory requirements.
2.2 SUBSIDIARIES AND INTERESTS
The Company holds no interests in any companies other than Micro France
Italia s.r.l., a limited liability company organized under the laws of Italy
("MICRO FRANCE ITALY"). Micro France Italy has been duly and properly organized
in compliance with the rules in force and is the valid holder of all approvals,
licenses, permits and authorizations required under applicable statute for it to
carry on its business. The shares and other securities representing the capital
of Micro France Italia have been validly subscribed for, issued and fully paid
up, or, if they have been purchased, fully paid for, and are owned by the
Company free and clear of any Liens.
2.3 CAPITALIZATION
(a) On the date hereof, the capital stock of the Company consists of
one thousand eight hundred and seventy five (1,875) shares, par value two
hundred and forty French francs (FF. 240) per share. The names of the
Stockholders and the amounts of their holdings in the Company's capital are set
forth in SCHEDULE 2.3.
(b) All the Shares have been validly subscribed for, issued and are
fully paid up, and have not been issued or acquired in violation of any
preemptive or similar rights. The Shares are subject to the same rights, are
subject in all respects to the same obligations and may be transferred or sold
as set forth in the By-laws.
(c) The Stockholders have full and outright ownership of the Shares,
which are free of all Liens, any prior approval which may be required having
been obtained. There exists no basis upon which the Shares may be subject to an
action challenging ownership thereof. All authorizations have been obtained and
all formalities carried out which are a prerequisite for sale of the Shares to
Xomed.
(d) On the date hereof, there are no options, share rights, promises
or other agreements, decisions or commitments, whether written or verbal, under
which the Company could be obliged to issue or allocate, or cause to be issued
or allocated, any shares of capital stock or other securities representing a
part of the Company's capital, or the Stockholders or a third party to subscribe
for such issue in such a way as to have an impact on or modify the Company's
capital or voting rights
(e) Upon completion of the sale of the Shares to Xomed, Xomed shall
have full and outright ownership of the
Company's Shares, free and clear of all Liens, as from the date hereof and
including attached dividends.
2.4 CONSENTS AND APPROVALS
Except as set forth in SCHEDULE 2.4, (i) the signing of this Agreement by
the Stockholders, and (ii) the fulfillment by the Stockholders of their
obligations and commitments hereunder do not require the Company to obtain any
consent, approval or authorization, whether explicit or tacit.
In addition, the Company's workers committee has been duly informed and
consulted.
2.5 EFFECT OF THE SALE
Except as set forth in SCHEDULE 2.5, the mere fact of Xomed's becoming the
owner of the Company's Shares and the performance of their obligations by the
Stockholders' under the Agreement shall not and cannot give rise to:
(a) any right for anyone to terminate earlier any of the Material
Contracts (as such term is defined hereafter in Article 2.10) or any other
agreement to which the Company is party, or to modify the effects thereof, or to
ask the Company to perform prematurely its obligations under the contracts and
agreements to which it is party;
(b) any breach or violation of any statutory or regulatory provisions,
any agreements, commitments, the By-laws or any court or other decision
concerning the Stockholders or the Company;
(c) any right for anyone to modify, cancel or withdraw any approval,
permit, license or authorization required for the Company lawfully to carry on
its business, or to cancel or withdraw favorable tax treatment, regardless of
whether or not this results from any approval, or any subsidy or other public
aid, or to refuse the transfer thereof to the Company.
2.6 FINANCIAL STATEMENTS - DIVIDENDS
(a) The Company's balance sheet, income statement and notes to said
financial statements for the fiscal year ended March 31, 1998 (the "1998
FINANCIAL STATEMENTS"), as delivered to Xomed, and the Final Balance Sheet have
been prepared in accordance with the Accounting Principles and are correct and
fairly reflect the assets, liabilities, financial position and business results
of the Company at each of those dates and for the periods which they cover. All
of these documents, plus the notes and attachments relating thereto, together
with the reports by the Company's statutory auditors and the board of directors,
plus the attachments thereto, have been prepared in accordance with the
Accounting Principles and are contained in SCHEDULE 2.6(a).
(b) The total amount of the dividends distributed for the fiscal year
ended March 31, 1998 is 3,937,500 French francs. All dividends approved for
distribution for such fiscal year have been paid. Since March 31, 1998, no
dividends or interim dividends have been distributed, or approved and not
distributed, for any prior fiscal year, or for the current fiscal year.
(c) All transactions of the Company have been duly and timely recorded
in its accounting books and the Company does not have any debts, obligations,
commitments or liabilities which are not reflected on its Final Balance Sheet,
or which have not been revealed in this Agreement or in the Schedules thereto,
or which do not arise from the ordinary course of business since April 1, 1998
under conditions which conform to the terms of Article 2.7 hereof.
2.7 PRIOR MANAGEMENT OF THE COMPANY
Since April 1, 1998, except as set forth in SCHEDULE 2.7 or as reflected
in the Final Balance Sheet, all Company operations have been carried out as part
of the ordinary course of the Company's business and in accordance with its
customary practice. In particular, the Stockholders represent (without this list
being exhaustive) that since April 1, 1998:
(a) there have been no events and the Company has not performed any
operations likely to have a material adverse impact on the Company's financial
or accounting position or its business, regarding INTER ALIA its assets, results
and relations with its customers and suppliers (an "ADVERSE EFFECT");
(b) the Company has not contracted any financial debts or made any
financial commitments;
(c) the Company has not taken any equity interests in, or made any
loans to, any companies, associations or other legal entities;
(d) the Company has not issued or authorized for issuance any shares,
convertible or exchangeable shares, bonds or any other securities and has not
made any early repayments for any of its debts, nor granted any statutory or
contractual guarantees in connection with the sale of any equity interests;
(e) the Company has not distributed or decided to distribute any
interim dividends, dividends or reserves, nor made or decided to make any
payments on this account, whether in cash or in kind, other than as specified in
ARTICLE 2.6(b)
(f) the Company has not mortgaged, pledged or otherwise encumbered,
voluntarily or involuntarily, any of its assets, nor made any commitment of
similar consequence, other
than in accordance with its prior practice and for amounts similar to those
granted in the past and in the ordinary and usual course of its business;
(g) the Company has not entered into any agreement, contract, lease,
or license involving a commitment amounting to more than two hundred and fifty
thousand French francs (FF. 250,000) or containing provisions which depart from
the ordinary rules of law or fall outside the ordinary course of business and
prior practice;
(h) there has been no termination of or amendment to any agreement to
which the Company is party that is likely to have an Adverse Effect on the
Company's business or results;
(i) the Company has not suffered any loss, destruction or damage to
any of its property, whether or not insured, and the Company has taken all
reasonable measures necessary to protect its assets, and, in particular, the
Company has not modified or terminated the insurance policies covering the
Company's assets and operations, nor made any commitment to such ends;
(j) the Company has not purchased or made any promise to purchase any
assets of any other Person, except in the ordinary and usual course of its
business; all assets sold have been sold under ordinary conditions and no assets
vital for Company business have been sold, mortgaged, pledged or leased and no
limitations placed upon the rights of ownership and enjoyment thereof;
(k) the Company has not requested of any of its creditors the
remission or forgiveness of any debt;
(l) the Company has not granted any license or sublicense of any
rights under or with respect to any Intellectual Property (as defined below);
(m) there have been no strikes, work stoppages or material changes in
the Company's staff, nor any important changes in the terms and conditions of
its employment contracts with its employees;
(n) there have been no changes to any agreements or contracts between
the Company and its managers, officers, Stockholders, agents or any third
parties, and no commitment has been made to make any such change;
(o) the Company has not entered into any cooperation, partnership,
joint venture or similar agreements.
2.8 COMPLIANCE WITH APPLICABLE REGULATIONS
Except as set forth on Schedule 2.8:
(a) the Company has complied with the statutes, orders, regulations
and decisions to which it is or has been subject and, to the Stockholders'
knowledge, there is no reason to fear any change in such statutes, orders,
regulations and decisions likely to have an Adverse Effect on the transaction
covered by this Agreement;
(b) the Company has not received any communication from any Public
Authority that alleges that it is not in compliance with any statutes, orders,
rules, orders or relevant decisions, and/or which threaten it with legal
proceedings. At the present time, there are no enquiries or proceedings in
progress against the Company, at the request of any Public Authority, regarding,
INTER ALIA, safety or compliance of any of its products with applicable
standards;
(c) the approvals, permits, licenses and authorization required for
the Company to own and possess its property and carry on its business have been
duly obtained and are in force, and the Stockholders are not aware of any
possible changes. The Company has not been denied any permits or licenses
required for it to possess its property and carry on its business. The Company
has received satisfactory approvals in all inspection reports by external
monitoring and certification agencies.
2.9 LITIGATION
(a) Except as disclosed in SCHEDULE 2.9, the Company is not currently
involved in any way whatsoever in any governmental, judicial or arbitration or
conciliation proceedings, or any suits or claims, any enquiries, offenses or any
other disputes whatsoever. The Company has not received any correspondence
informing it of an inquiry or an inspection or threatening it with legal
proceedings in connection with a dispute which, if the Company were
unsuccessful, would have an Adverse Effect.
(b) The Company is not and shall not be held liable for payment of any
damages, for an amount greater than that for which provision has been made in
the Final Balance Sheet, to compensate any Person for damages caused by products
manufactured before the date of sale and marketed by the Company.
2.10 MATERIAL CONTRACTS
SCHEDULE 2.10 lists:
(a) agreements (or groups of agreements) relating to loans, guarantees
or similar agreements, amounting in any fiscal year to more than one hundred
French francs (FF. 100,000) or the equivalent thereof in any other currency, or
under which the Company has imposed a security interest or any other Lien on any
of its assets, tangible or intangible;
(b) agreements providing for exclusivity or relating to distribution
or commercial representation or preventing the Company from engaging in any
competing activity for a period of greater than six (6) months or concerning an
obligation of confidentiality;
(c) cooperation, partnership, joint venture and similar agreements;
(d) agreements covering arrangements for holding the capital or
control of any company or business with one or more third parties, and
arrangements for managing said company or business;
(e) agreements (or groups of agreements) for the lease of personal
property to or from any person or entity providing for lease payments in excess
of one hundred thousand French francs (FF. 100,000) per annum;
(f) agreements (or groups of agreements) for the sale or purchase of
raw materials, commodities, supplies and other personal property, or for the
furnishing or purchase of services, which (i) are to be performed over periods
of more than one year, (ii) result in a loss to the Company, or (iii) involve
total consideration in excess of two hundred thousand French francs (FF.
200,000); (g) license, franchise, distribution and commercial representation
agreements, written or verbal, which the Company has entered into and which
depart from ordinary trade practices, involve exclusivity, or require more than
three (3) months' notice or the payment of compensation in the event of
termination;
(h) agreements for which the outstanding term of performance exceeds
twelve (12) months and which do not contain clauses for early termination
without payment of indemnities.
(i) agreements which cannot be terminated unless more than three (3)
months' notice is given, or, as far as employment contracts are concerned, which
require notice in excess of that provided by statute and applicable collective
bargaining agreements or the payment of indemnities greater than those provided
by statute and applicable collective bargaining agreements;
(j) agreements setting forth the conditions which the Company must
fulfill in order to receive any aid or any subsidies from any Public Authority;
(k) agreements entered into outside the Company's ordinary course of
business or contrary to its customary practice in the past for similar amounts.
The foregoing agreements (whether written or verbal) are referred to herein
as "COMPANY MATERIAL CONTRACTS". Except as set forth in SCHEDULE 2.10, on the
date hereof (i) none of the
Company Material Contracts may be terminated by the counter party as a result of
the change in control of the Company, (ii) none of the Company Material
Contracts violates any mandatory provisions of any statutes or regulations, and
(iii) no correspondence has been exchanged in connection with discussions for
purposes of amending any of the Company Material Contracts, and the Company is
in a position to demand that such Company Material Contracts be performed in
accordance with the terms and conditions thereof.
Each Company Material Contract is valid, and in full force and effect on
the date hereof.
2.11 GUARANTEES AND OFF-BALANCE-SHEET COMMITMENTS
Except as disclosed in SCHEDULE 2.11, or in the Final Balance Sheet, the
Company is not bound by any off-balance-sheet commitments and has not given any
guarantees, endorsements, or comfort letters or any other security guaranteeing
third party commitments.
2.12 EMPLOYEES
(a) SCHEDULE 2.12(a) sets forth (i) an accurate and complete list of
the "key employees" identified by the Company prior to the date hereof, and (ii)
an accurate and complete list of the collective bargaining agreements
(CONVENTIONS COLLECTIVES) applicable to the Company's employees. Except as
otherwise set forth in SCHEDULE 2.12(a), none of the employment contracts signed
by such "key employees" contains any non-competition clause.
(b) SCHEDULE 2.12(B) sets forth (i) the number of Company employees,
and (ii) a complete list of all employees of the Company and the Subsidiaries
entitled to a gross annual salary or other compensation in excess of FF. 200,000
(the "LISTED EMPLOYEES"). The employment and employment contracts of all the
Company's Employees comply in all respects with the regulations in force and,
except as set forth in SCHEDULE 2.12(b), no employment contract or agreement
relating to Employees departs from the collective bargaining agreements in
force, including on the basis of any agreement or commitment covering
individuals only, and in particular concerning length of notice and the amount
of indemnities payable upon dismissal or departure.
(c) Since April 1, 1998, except to the extent set forth in SCHEDULE
2.12(c), the Company has not (i) hired any additional employees, (ii) paid or
agreed to pay any bonuses (except with respect to bonuses as set forth in
SCHEDULE 2.12(b)(II)), or any indemnities for severance of contract, retirement
or ceasing work, or any stock options or other kinds of benefits, nor made or
agreed to make any pay increases, nor changed or agreed to change the terms of
the employment contracts of any of its directors, officers or Employees, or
(iii) changed its hiring or dismissal policies or practices in any material
respect.
(d) The Company has complied with all statutory and regulatory
provisions with regard to the setting up and operation of staff representative
bodies and labor unions. There are no negotiations pending with representatives
of the labor union of the Company regarding the implementation of a "CONVENTION
D'ENTREPRISE".
(e) The Company is in compliance with all legislation relating to the
implementation and organization of profit sharing agreements and schemes and
collective savings schemes. There are no profit sharing schemes or agreements
other than those shown in SCHEDULE 2.12 (e).
(f) Except as shown in SCHEDULE 2.12(f), no contracts or agreements
relating to Company officers, managers or employees contains any provisions to
the effect that a change in the control of the Company would cause them to
terminate or the terms thereof to be modified.
(g) The Company has organized elections to staff representative bodies
within the time-limits and in the manner set by statute. Where the Company had
no candidates for such elections, minutes attesting to such deficiency have been
recorded, duly posted and forwarded to the employment authorities.
2.13 TAX, SOCIAL SECURITY AND CUSTOMS
(a) The Company has filed on a timely basis all tax, social security
and customs returns and reports for which there is a statutory or regulatory
filing requirement. Such returns were correct and complete on the dates they
were made. The results of the URSSAF audit in 1997 and the customs audit in 1998
are set forth in SCHEDULE 2.13(a).
(b) All taxes, contributions and other duties of any nature
whatsoever, imposed by or owed to a Public Authority, including social security
organizations and any other bodies responsible for collecting social security
contributions, whether it be by roll call, by withholding or any other system
(hereafter the "TAXES"), have been either timely and fully paid or fully
provided for in the Company's accounts. The provisions for taxes shown in the
Final Balance Sheet should suffice to entirely cover all Taxes due or likely to
become due, as the case may be, for each prior fiscal year.
(c) The Company has not received notice of any tax or social security
adjustments, reassessments or proceedings relating to the Company and, to the
Stockholders' knowledge, there are no facts existing which may constitute the
basis for any such adjustments, reassessments or proceedings.
(d) SCHEDULE 2.13(d) sets forth the list of all the tax, social
security and customs benefits received by the Company. The sale of the Shares
will not result in the loss of any such tax, social security and customs
benefits.
(e) The Company has not entered into any agreements setting dates for
payment of any taxes, contributions or any other charges.
(f) The Company has never been a party to any agreement with any
Person with respect to tax consolidation. The Company does not benefit from any
favorable tax treatment in return for commitments by which it is still bound. In
particular, the Company has not agreed to hold the securities of another
Company, or any other assets, for any duration. In the event of a sale of the
Shares of the Company or any other assets, the capital gain resulting therefrom
shall be calculated according to the value appearing in the financial statements
of the Company on the basis of which the Final Balance Sheet has been prepared.
2.14 INTELLECTUAL PROPERTY
(a) SCHEDULE 2.14 sets forth an accurate and complete list of:
(i) all trademarks owned by the Company as a result of their
having been correctly registered or acquired, and all names and logos
representing the Company's activities, mentioning the origin and value thereof,
and all registrations or applications for registration in any country where they
are used ("TRADEMARKS");
(ii) all patentable inventions, discoveries, improvements,
ideas, know-how, processes, technology, computer programs and all patents
resulting therefrom ("PATENTS");
(iii) trade secrets, including confidential and other
non-public information, and the right to limit the use or disclosure thereof
("TRADE SECRETS");
(iv) designs, models and software programs which have been
registered or for which registration is in progress and all rights connected
thereto ("DESIGNS AND MODELS");
(v) databases (including a list of customers and/or
suppliers) and all rights in the databases ("DATABASES");
(vi) intellectual property licenses, approvals and
authorization which the Company requires for carrying on its business
("LICENSES");
(the Trademarks, Patents, Trade Secrets, Designs and Models,
Databases and Licenses being referred to hereinafter collectively as
"INTELLECTUAL PROPERTY").
(b) Within the Company there is no infringement of any patents,
trademarks, designs or copyrights held by third parties. There are no
proceedings, actions or claims
concerning infringement which have already been brought or risk being brought
which involve or could involve the Company.
(c) Except as specified in SCHEDULE 2.14(c), the Company is not
currently obligated or under any existing liability to make royalty or other
payments to any owner of, licensor of, or other claimant to, any Intellectual
Property, for using such Intellectual Property in connection with its business.
No director, officer, employee, contractor, consultant, agent or other
representative of the Company has violated any employment agreement,
confidentiality clause or agreement or obligation (contractual or otherwise)
which he or she had with a previous employer with respect to the intellectual
property of such employer, and is not involved in, or likely to become involved
in, a dispute relating to Intellectual Property.
(d) Except as specified in SCHEDULE 2.14(d), no former or present
directors, officers, employees, contractors, consultants, agents or other
representatives of the Company holds any rights, title or interest, directly or
indirectly, in whole or in part, in or to any Intellectual Property and the
agreements made with Company employees provide that the Company shall have full
ownership of any Intellectual Property developed by any employees, contractors
or agents.
(e) The Company has duly maintained the registration of its
Intellectual Property and this property is free and clear of all Liens. None of
the Company's Intellectual Property has been the subject of any claims or
applications for cancellation or withdrawal for lack of use. All Taxes required
to be paid in order for registrations to be maintained, have been duly and
timely paid. No third party or parties have been granted any license(s),
sub-license(s), usage right(s) or any other right(s) in any Intellectual
Property owned by the Company under the terms hereof.
(f) No industrial property other than the Intellectual Property is
necessary for the conduct of the business of the Company, as conducted as of the
date hereof.
2.15 REAL PROPERTY AND LEASES
2.15.1 REAL PROPERTY.
(a) The Company owns real property located at Saint Xxxxx-Le-Monial,
03160 Bourbon L'Xxxxxxxxxxx. The Company has good, proper and unchallenged title
to the real property. Copies of the title deeds of all real property owned by
the Company, duly registered, are provided in SCHEDULE 2.15.1(a).
(b) None of the Company's real property is subject to any compulsory
purchase order, easements, mortgages, registrations or other rights in favor of
third parties, as shown in a certificate issued by the relevant mortgage
registry (CONSERVATION DES HYPOTHEQUES) dated December 1, 1998, to be found in
SCHEDULE 2.15.1.(b), and except as set
forth in such SCHEDULE. There are no measures, regulations or agreements which
prevent the Company from disposing of or selling the real property or limiting
its rights to do so.
(c) All governmental permits and authorizations necessary for the
occupancy and usage of said real property have been obtained. All occupation and
usage of the real property owned and/or used by the Company complies with
applicable customs, statutes and regulations, including health and safety
regulations.
(d) Such real property is not subject to any order of condemnation nor
have the occupants been required to vacate the premises.
(e) There are no zoning laws or other regulations which could
significantly affect the overall market value of the real property owned by the
Company.
(f) Except as set forth in SCHEDULE 2.15.1(f), all necessary
authorization and, as the case may be, compliance certificates and building
permits have been obtained for all work ordered by governmental authorities
and/or carried out in or on the real property. All work on the real property has
been finished and the corresponding certificates of completion issued.
2.15.2 COMMERCIAL LEASES - REAL PROPERTY LEASING AGREEMENTS -
TRADING LEASES
(a) The Company has free use as tenant of all real property required
for its operations. A list of such real property is set forth in SCHEDULE
2.15.2(a).
(b) There are no real estate leasing contracts, building leases or
other agreements entered into by the Company which provide that the Company
could become the owner of, or would have use of, any real property.
(c) Copies of the leases in which the Company is tenant are to be
found in SCHEDULE 2.15.2(c). All of these leases are regulated by the decree of
September 30, 1953.
(i) The Company has not received any notices of increases in rent
or charges other than those increases resulting from indexation to the INSEE
construction index, or of non-renewal or termination of any lease.
(ii) The Company has always complied with the terms and
conditions of the leases and paid on time all rent, charges, local taxes and
other sums owed by it and payable under such leases.
(iii) No consent is required from any of the lessors for the
purpose of the sale of the Shares.
(d) The Company has not granted any sublet or domiciliation relating
to the premises covered by the leases.
(e) The Company has not assigned any lease held by it and has not made
any commitment to do so.
2.16 TANGIBLE FIXED ASSETS
(a) SCHEDULE 2.16(a) sets forth a true and complete list of the
tangible property and rights necessary for the Company's business as of the date
hereof. These assets are free of all priorities, mortgages, pledges, security,
easements and other rights in favor of third parties. No attachment or
compulsory purchase of such assets has been ordered.
(b) The Company holds, rents or owns all the assets necessary to carry
out its business.
(c) There is no likelihood of any event, in particular a change of
control, undermining the Company's ownership, use and enjoyment of the assets
necessary for its operations, or causing any increase in rents, fees, licenses
or other amounts due by the Company for use of said assets.
2.17 INTANGIBLE PROPERTY
The Company has outright ownership of the business it operates, which is
not subject to any pledges, guarantees or security, except for the pledge
mentioned in Article 1.2(h), the full release of which has been obtained
(subject to the formality of canceling the registration with the clerk's office
at the relevant commercial court (TRIBUNAL DE COMMERCE)). The Company has
neither taken nor granted a manager lease (LOCATION-GERANCE) or free lease
(LOCATION LIBRE) on any business.
2.18 CONDITION OF TANGIBLE FIXED ASSETS
The assets set forth in SCHEDULE 2.16(a) (subject to what is specified in
SCHEDULE 2.20) are in good operating condition and repair, have been
appropriately maintained, are suited for the activity for which they were
acquired, are used in an appropriate way in the course of the Company's
business, and comply with the regulations in force which apply to them.
2.19 STOCKS
(a) The stocks and goods in process shown in the inventory as of
November 30, 1998 attached as SCHEDULE 2.19(a) satisfies, quantitatively and
qualitatively, the Company's ordinary needs as arising from its current
industrial and commercial policy and may be marketed under normal conditions.
Such stocks consist of merchantable products which may be used normally or sold
for a price greater or equal to their value when acquired, subject to the
provisions shown in the Final
Balance Sheet. The size of such stocks is not excessive in the light of the
Company's current commercial and industrial policy.
(b) Items of stock which are unsaleable, obsolete or, more generally,
for which provisions should have been made in the accounts as of November 30,
1998, have been sufficiently provided for using applicable accounting methods.
More precisely, as of November 30, 1998, no item of stock was obsolete or
unsaleable or should have been the subject of a provision, and as a consequence
no provision has been recorded to this end in the Final Balance Sheet, in
accordance with SCHEDULE 2.19(b).
(c) All stocks have been physically listed using the procedure set
forth in SCHEDULE 2.19(c) and have been valued in the accounts using the same
methods as those applied by the Company in previous fiscal years.
2.20 ENVIRONMENTAL, HEALTH AND SAFETY COMPLIANCE
(a) The Company has obtained all permits, licenses and other
authorizations that are required for the construction, use and operation of its
industrial sites and complies with the terms thereof. Under the conditions in
which production facilities are currently used, which comply with the statutes
and regulations in force, no hazardous substance, hazardous waste, contaminant,
pollutant or toxic substance has been or can be released from any land or
premises which the Company uses or has used or owns or has owned.
(b) The Company has not been the subject of any governmental
proceedings (including any inquiry, notice or report) for violating regulations
currently applicable to the industrial sites it operates concerning the
environment, noise, or protection of water and air. SCHEDULE 2.20(b) contains
copies of all correspondence since January 1, 1998 between the Company and any
Public Authority responsible for ensuring compliance with environmental
regulations.
(c) Except as provided for in SCHEDULE 2.20(b), and subject to the
yearly control of APAVE and the occasional need to change a clicking press, the
Company is not legally required to take any steps or make any investment to
bring its industrial sites into conformity with currently applicable
environmental, health and safety regulations, or with regard to air, water and
noise requirements, other than within the limits of the provisions included for
this purpose in the Final Balance Sheet.
(d) None of the land or premises used by the Company or its
predecessors, or the surface or ground water in such places, has given rise to,
or can give rise to, any release or deposit of hazardous substances, pollutants
or contaminants.
(e) Other than as provided in SCHEDULE 2.20(e), none of the land or
premises used or owned by the Company contains (a) underground storage tanks,
(b) material containing asbestos in any form, (c) materials or equipment
containing polychlorinated biphenyl, or (d) landfills, waste tips and areas for
storing refuse.
(f) None of the employees or former employees of the Company has been
exposed to hazardous substances within the scope of his or her activity in the
Company, its being said that the polishing and dry grinding activities have been
provided with regularly maintained particle suction facilities at the Company's
instigation.
(g) The Company is validly insured against any risk of accidental
pollution.
2.21 INSURANCE
(a) The Company is duly insured, for sufficient amounts, with
insurance companies having sufficient capital resources, against the
consequences of the deeds of its employees, the risks affecting property it owns
or rents, and the risks arising from its operations (loss of business, physical
or bodily harm) and especially those relating to its status as manufacturer and
distributor. The insurance policies which have been taken out cover the cost of
replacing such property and the financial consequences of the Company's possible
liability and that of its officers, particularly in the case of civil liability
subsequent to delivery (civil liability for products). These policies are in
keeping with those which are customary in the profession.
(b) The Company is up-to-date in the payment of the premiums due for
the corresponding policies and has complied with the declaration requirements of
said policies.
(c) No premium has been increased for the last 3 (three) fiscal years
due to particular incidents or claims.
(d) The Company has performed no actions that could have rendered or
could render any of the insurance policies null or void or allow them to be
terminated. The policies are in force and, except as indicated in SCHEDULE
2.21(d), the insurers have not informed the Company of any intention to
terminate them or amend the amount of the premium or the coverage.
(e) No claims have been brought or are likely to be brought in
connection with said policies. SCHEDULE 2.21(e) gives an exact and complete list
of claims made by the Company to its insurers since January 1, 1998.
2.22 YEAR 2000 INFORMATION TECHNOLOGY COMPLIANCE
All items, products, programs, software, components and systems used by
the Company (the "COMPONENTS") for commercial
and accounting management which incorporate the processing of dates or
date-related data have been audited by CCMX and an agreement has been drawn up
for bringing them into compliance during the first quarter of 1999. The audit
report and the costs estimate are set forth in SCHEDULE 2.22.
2.23 SERVICES AND PRODUCTS
(a) All services provided and products sold by the Company are of merchantable
quality and fit for the purpose for which they are manufactured and sold.
SCHEDULE 2.23(a) sets forth the standard terms and conditions for production,
manufacture and sale of the Company's products.
(b) Products marketed by the Company which were manufactured before
the date of sale comply with all applicable laws in France and in European Union
territory and in particular with special manufacturing standards. Prior to being
distributed on the market, these products have received the qualifying
certificates and approvals required under statute and regulations applicable in
France and in European Union territory. In particular, the Company has always
complied with the provisions of Article L.665 of the French Public Health Code
(CODE DE LA SANTE PUBLIQUE) and Decree no. 96-32 of January 15, 1996 for
products subject to these regulations. Except as provided in SCHEDULE 2.23(b),
no steps have been taken by the Company or the Stockholders outside European
Union territory for the purpose of complying with local regulations with respect
to sales or imports of the products manufactured by the Company. Notwithstanding
the foregoing, the Stockholders acknowledge that they can be held liable, under
the conditions and in accordance with the terms of Article 5 below, if the
products sold outside European Union territory do not comply with said local
statutes and regulations, provided these products were manufactured prior to the
date hereof.
(c) All products have been manufactured, sold, leased or delivered by
the Company in conformity with the Company's contractual commitments and the
express or legally implied warranties connected therewith. Except as set forth
in SCHEDULE 2.23(a), no product manufactured, sold or delivered by the Company
is accompanied by any warranty of any kind which is broader in scope than
applicable statutory and regulatory warranties.
(d) Other than as set forth in SCHEDULE 2.23(d), the Company has no
knowledge that, nor has it received any claims from clients or distributors
indicating that, such services or products are defective or unfit for normal
use.
2.24 POTENTIAL CONFLICTS OF INTEREST
As of the date hereof, except as disclosed in SCHEDULE 2.24, none of the
Stockholders, nor any of the Company's senior management staff, affiliates or
direct family relatives of any of the aforementioned persons:
(i) possesses jointly or individually, in full or in part, any of
the property or assets, nor holds any rights, which the Company must use or
exercise in order to carry out its activities in France or other countries;
(ii) is a creditor or debtor of the Company or, more generally, has
the possibility of exercising a right against the Company, or is bound by any
obligation towards it;
(iii) is a party to any contract which is in any way binding upon,
or in any way imposes an obligation upon, the Company or one or more of them;
(iv) has purchased from the Company or sold to it, jointly or
separately, since January 1, 1998, all or part of any property or assets.
The statutory auditors have been informed of decisions which require
authorization or ratification by corporate organs, in particular agreements
coming within the scope of Articles 101 ET SEQ. of the French business companies
Act of July 24, 1966, and such agreements have been authorized or certified in
accordance with the statutes and regulations in force, customs and guidelines
from relevant authorities.
2.25 CUSTOMERS AND SUPPLIERS
SCHEDULE 2.25 sets forth a true and complete list of (i) the twenty (20)
largest customers of the Company in terms of sales for the fiscal year ended
March 31, 1998, and (ii) the twenty (20) largest suppliers and service providers
for the fiscal year ended March 31, 1998, together with a list of the agreements
entered into with such customers, suppliers and service providers. Except as set
forth in SCHEDULE 2.25, none of such customers, suppliers or service providers
has (i) broken off or significantly changed its relations with the Company, or
(ii) notified the Company in writing or verbally that it intends to break off or
significantly change its relations with the Company.
2.26 BANK ACCOUNTS AND POWERS OF ATTORNEY
(a) SCHEDULE 2.26 sets forth a true and complete list of the banks and
financial institutions with which the Company collaborates and with which it has
accounts, plus a list of the persons authorized to operate such accounts.
(b) Other than as mentioned in SCHEDULE 2.26(b), the Company has not
empowered any Person to sign bank documents.
2.27 RECEIVABLES
All receivables originated before November 30, 1998 have, if need be, been
properly provided for in the Final Balance Sheet and, subject to such
provisions, may be
collected in accordance with the terms thereof within eighteen (18) months of
the date hereof with respect to debts owed by public hospitals, and nine (9)
months with respect to any other debts. All receivables dating from after
November 30, 1998 are legally valid and may be recovered in their entirety from
the original debtors or third parties within the same time-limits as mentioned
above. Except as described in SCHEDULE 2.27, there has been no offsetting or
request for offsetting of such receivables.
From the date hereof, Xomed undertakes that the collection of the
receivables concerned will be followed up actively and on a regular basis.
Should the Xomed Indemnitee (as defined in Article 5.1 hereafter) be
indemnified by the Stockholders on account of failure to collect a receivable
within the above-mentioned time-limits (it being understood that the amount of
the Indemnification may be set after deducting any possible tax reduction or
saving, as the case may be, in accordance with Article 5.3(d)), the Xomed
Indemnitee must in any event repay to the Stockholder the amount of such
Indemnification, to the extent of the amount recovered if less than the
Indemnification and after taking account of the tax borne on the amount
collected, in the event that, after the Indemnification has been paid, the
receivable is finally collected in full or in part, irrespective of the date on
which it is finally collected.
2.28 CHANGEOVER TO EURO
There are no provisions in any agreements according to which any contract
or agreement to which the Company is party will be terminated upon the
implementation of the Euro.
2.29 SUBSIDIES
The Company receives no subsidies other than as mentioned in SCHEDULE
2.10.
2.30 VALIDITY OF REPRESENTATION
Each of the signatories to this Agreement signing in the name and on
behalf of another Person or acting as representative of another Person is fully
empowered to do so, having carefully and scrupulously complied with all
applicable statutory requirements for this purpose.
2.31 FAIRNESS
This Agreement, the schedules provided herewith and the other written
documents delivered to Xomed by or on behalf of the Company, or by the
Stockholders, do not contain any untrue or false statements relating to a
material fact and do not omit to state a material fact which, by not being
revealed, would make the statements contained in this Agreement or the
Schedules thereto clearly misleading. To the Stockholders' knowledge, this
Agreement does not omit any fact which (i) may materially adversely affect the
business, property, assets or financial position of the Company or (ii) would
have been considered by a reasonable purchaser as pertinent information to be
taken into account in deciding upon this Agreement.
ARTICLE 3. REPRESENTATIONS AND WARRANTIES BY XOMED
Xomed represents, warrants and certifies as follows:
3.1 CORPORATE ORGANIZATION
Xomed is a French SOCIETE EN NOM COLLECTIF, duly and properly formed, and
all legal formalities required for it to continue correctly its existence have
been validly and properly performed within the time-limits set. Xomed is
indirectly controlled by Xomed Surgical Products, Inc.
3.2 AUTHORIZATIONS
The conclusion of this Agreement and fulfillment by Xomed of the
obligations relating thereto have been validly authorized by the relevant bodies
of Xomed and Xomed Surgical Products, Inc. and Xx. Xxx X. Xxxxxxxxxx is fully
empowered to conclude and sign this Stock Purchase Agreement in the name of and
on behalf of Xomed.
Except as set forth in SCHEDULE 3.2, Xomed does not have to obtain any
authorizations, consent or approval, whether express or tacit, notably from any
Public Authorities, for the purpose of purchasing the Shares or fulfilling its
commitments and obligations arising from this Agreement.
Xomed undertakes to make a declaration to the French Treasury, in
accordance with applicable regulations.
ARTICLE 4. REPRESENTATIONS AND WARRANTIES RELATING TO THE STOCKHOLDERS
Each of the Stockholders represents, warrants and certifies as follows:
4.1 OWNERSHIP OF THE SHARES
Each Stockholder has full and outright ownership of the Shares in the
proportions mentioned in EXHIBIT D. Apart from the obligations arising from the
terms hereof and what is mentioned in EXHIBIT D, there are no options, share
rights, conversion rights, preemptive rights, transfer restrictions or voting
agreements encumbering or relating to the Shares, and the Company has made no
commitment to create any such options, agreements or rights. The Shares may be
freely transferred and are free and clear of any priorities, pledges, Liens and
other rights to the benefit of third parties.
4.2 CAPACITY, ABSENCE OF CONFLICTS
Each Stockholder has the full right and capacity to sell the Shares to
Xomed. The sale of the Shares to Xomed and all legal operations accomplished for
the purpose of completing such sale do not violate any applicable statutory or
regulatory provisions or any provisions of the Company's By-laws or other
corporate documents or any agreement or deed to which the Stockholders or the
Company are/is parties/y or any governmental or judicial decision of which they
may be the subject. The sale of the Shares to Xomed and all legal operations
accomplished for the purpose of completing such sale have been duly authorized
by all such corporate decisions as are required.
4.3 FEES
The Company does not owe any fees or commission to any brokers or other
intermediaries on account of or in connection with the present Agreement and the
operations contemplated by this Agreement.
ARTICLE 5. INDEMNIFICATION
5.1 INDEMNIFICATION BY THE STOCKHOLDERS
The Stockholders undertake - which is not accompanied by joint and several
liability, except in the case of Xx. Xxxxxxxxx Xxxxxx and Xxx. Xxxxxx Xxxxxx,
who shall be jointly and severally and indivisibly liable for the entire amount
due by the Stockholders - to indemnify Xomed (the "INDEMNIFICATION") or any of
its Subsidiaries (including, upon execution of this Agreement, the Company) and,
if need be, their respective directors, officers, employees and agents
(collectively, the "XOMED INDEMNITEE"), for the entire amount of:
(i) any and all increase in liabilities or decrease in assets of the
Company based on or arising out of an event or circumstance occurring or
existing prior to November 30, 1998 and which has not been addressed or allowed
for, or has been insufficiently addressed or allowed for, in the Final Balance
Sheet, and all loss, damage, tax consequence, claim or expenditure, including
but not limited to procedural costs and reasonable attorneys' fees, resulting
directly or indirectly from said event, circumstance or occurrence, incurred by
the Xomed Indemnitee;
(ii) any and all losses borne or incurred by the Xomed Indemnitee,
including fines, indemnities and interest on late payments, of any nature,
deriving from any request or reassessment concerning tax (general or specific),
customs, social security and, more generally, of a governmental or regulatory
nature, covering any date prior to the date hereof and not provided for, or
insufficiently provided for, in the Final Balance Sheet; and
(iii) all financial consequences to the Xomed Indemnitee for any
breach of, or omission or inaccuracy in, any of the representations, warranties
and covenants made in this Agreement and not addressed by paragraphs (i) to (ii)
hereinabove.
A "LOSS" shall be and mean any one or more of the events set forth in
paragraphs (i) to (iii) above.
It is expressly agreed that in the event the present guarantee is
implemented, the Stockholders shall not, in any manner or in any way, be
exempted in whole or in part from their indemnification obligations hereunder on
the basis that the Xomed Indemnitee, either through investigations which
he/she/it carried out or had carried out, or through the information that was
communicated to him/her/it prior to the date hereof, was aware or could have
been aware of the items of information or submissions of whatsoever nature
relating to the claim in question.
5.2 INDEMNIFICATION PROCEDURES
(a) In the event that (A) Xomed had been aware of any tax or social
security inspection, any reassessment and/or any claim, of whatsoever nature,
brought by any individual or legal entity, governmental authority or body
who/which presents itself as a creditor of the Company (a "THIRD PARTY Claim"),
which could give rise to a Loss, or (B) Xomed Indemnitee should make a claim,
distinct from a Third Party Claim, to receive repayment of all or part of the
Purchase Price or to be indemnified for the Loss suffered (a "DIRECT CLAIM"),
Xomed shall (x) in the case of a Third Party Claim, within fifteen (15) days of
receipt by the Xomed Indemnitee of such Third Party Claim, and (y) in the case
of a Direct Claim, with reasonable promptness (as from Xomed's becoming aware of
the event or circumstance giving rise thereto), send to Xx. Xxxxxxxxx Xxxxxx on
behalf of the Stockholders (the "STOCKHOLDERS' AGENT") a written notice (the
"CLAIM NOTICE") specifying the nature of such claim or demand, details of the
person making the claim if need be, and the amount of the Loss suffered (stated
in French francs or in euros), allowing the Stockholders to assess the merits of
the claim and the estimated amount of the Loss. Xomed shall submit along with
such Claim Notice all relevant evidence, documentation and information in
support of the Claim Notice in question (such estimate being given subject to
the Xomed Indemnitee's right subsequently to alter the amount of the loss and,
accordingly, the amount of the Claim Notice).
(b) In the event of a Direct Claim, the Stockholders' Agent shall have
forty five (45) days following receipt of the relevant Claim Notice (the "DIRECT
CLAIM REVIEW PERIOD") to carry out, with the assistance of the Company and
Xomed, such investigations as he shall consider necessary. If, prior to the date
of the expiration of the Direct Claim Review Period, the Parties agree upon the
validity and amount of such Direct Claim, the Stockholders' Agent shall pay to
the
Xomed Indemnitee, within fifteen (15) days following the date of such agreement,
the entire amount indicated in the Direct Claim (or, if such be the case, the
undisputed part of the amount mentioned in such Direct Claim). In the event the
Stockholders' Agent fails to notify the Xomed Indemnitee, before expiry of the
Direct Claim Review Period, that he objects to the Stockholders' liability under
such Direct Claim, the Stockholders shall be deemed to have acknowledged their
liability under such Direct Claim and the Indemnification shall thus be
immediately payable. Payment of the Indemnification is guaranteed by Banque
Nationale de Paris which has given the Indemnification Guarantee on First Demand
under the conditions set forth in Article 5.4 below. If the Parties are unable
to reach an agreement prior to the expiration of the Direct Claim Review Period
or if the Stockholders' Agent notifies the Xomed Indemnitee during the Direct
Claim Review Period that he objects to the Stockholders' liability under such
Direct Claim, the Xomed Indemnitee shall have thirty (30) days as from the date
on which he/she/it receives notice of the above-mentioned objection in which to
serve a notice on the Stockholders' Agent demanding referral to an arbitrator as
provided by Article 6.3 of this Agreement. Failure to serve such notice as
described will result in all Xomed Indemnitee's rights under such Direct Claim
being forfeited.
In the event an objection is to be settled pursuant to Article 6.3
herebelow, the Indemnification shall be payable only after notice has been given
of an enforceable decision (which may be a decision for immediate provisional
enforcement) against the Stockholders or Xx. Xxxxxxxxx and Xxx.
Xxxxxx Xxxxxx.
(c) In the event of a Third Party Claim, the Stockholders' Agent
shall have forty-five (45) days following receipt of the Claim Notice (the
"THIRD PARTY CLAIM REVIEW PERIOD") to carry out such investigations as he
considers necessary and, if need be, to notify the Xomed Indemnitee of his
observations or objections, giving the reasons therefor. If, prior to the date
of expiration of the Third Party Claim Review Period, the Parties agree upon the
validity and amount of the Third Party Claim, the Stockholders' Agent shall pay
to the Xomed Indemnitee, within fifteen (15) days following the date of such
agreement, the entire amount indicated in the Third Party Claim (or, if such be
the case, the undisputed part of the amount mentioned in such Third Party
Claim). If the Stockholders' Agent fails to notify the Xomed Indemnitee prior to
the expiry of the Third Party Claim Review Period that he objects to the
Stockholders' liability under
such Third Party Claim, the Stockholders shall be deemed to have acknowledged
their liability under such Third Party Claim and the Indemnification shall thus
be immediately payable. Payment of the Indemnification is guaranteed by Banque
Nationale de Paris which has given the Indemnification Guarantee on First Demand
under the conditions set forth in Article 5.4 below. In the event the
Stockholders' Agent notifies the Xomed Indemnitee prior to the expiry of the
Third Party Claim Review Period that he objects to the Stockholders' liability
under such Third Party Claim, the Xomed Indemnitee shall have thirty (30) days
after receiving such notification to serve a notice on the Stockholders' Agent
demanding referral to an arbitrator as provided in Article 6.3 of this
Agreement. Failure to serve such notice as described will result in all Xomed
Indemnitee's rights under such Claim Notice being forfeited. In the event of an
objection by the Stockholders' Agent, the Parties shall come together in order
to seek a mutually agreeable solution or a way of proceeding, as appropriate,
concerning such Third Party Claim. The Stockholders shall have the right, if
they so notify the Xomed Indemnitee in writing within ten (10) days of receipt
of the Claim Notice, to attend and participate in, or be represented at, any
meetings or discussions, at their own expense, so as to assert whatever means of
defense they consider appropriate, so long as the Stockholders' requests and
means of defense are not clearly unreasonable or contrary to the interests of
the Company. They shall have access to all documents necessary for defending
their interests which the Company or the Xomed Indemnitee may have and legally
be able to provide. Such access shall be granted during normal working hours and
shall not interfere with conduct of business by Xomed Indemnitee. The
Stockholders and their counsel shall keep confidential all information of which
they may become aware. The three periods of forty-five (45) days, thirty (30)
days and ten (10) days mentioned above shall, as the case may be, be limited to
the time allowed to the Company or the Xomed Indemnitee for responding to the
Third Party Claim.
The indemnification shall become payable only after notice has been given
of an enforceable decision, which may be a decision for immediate provisional
enforcement, against the Company.
In any event:
With respect to Third Party Claims from governmental authorities, the
Company shall, if it considers it to be reasonable and necessary and if the
Stockholders have so requested as a means of defense in connection with the
procedure provided in paragraph (c) above and in accordance with the terms of
said paragraph, endeavor to obtain a suspension of payment. In this case, the
Stockholders shall provide any guarantee and security which may be necessary for
the purpose of obtaining such suspension. If the governmental authority requests
that the guarantee or security be provided by the Company itself, the
Stockholders shall counter-guarantee the latter.
The Xomed Indemnitee may not, in the case of a Third Party Claim, negotiate
a settlement or arrangement or refrain from pursuing legal action or remedies
against a judgment, unless such judgment be final, without the prior consent of
the Stockholders' Agent. Nevertheless, the Stockholders' Agent will be deemed to
have approved the terms of a settlement, arrangement or any other measure which
the Xomed Indemnitee decides to submit to him, if he does not reply in
writing within 30 Business Days (or a shorter time if required by circumstances)
from the date of receiving the written request from the Xomed Indemnitee. The
sole consequence of entering into or concluding any such arrangement or
settlement, without complying with the provisions of this paragraph, shall be
that the Stockholders' Agent shall not be required to pay Indemnification
amounting to the Loss resulting from such arrangement or settlement. However,
the Stockholders' Agent shall be released from liability for Indemnification for
Loss only if the Xomed Indemnitee, in failing to comply with the provisions of
this paragraph, deprived him of a genuine chance of reducing or altogether
eliminating the amount of such Indemnification. If a settlement offer is
received from the third party from which the Third Party Claim originates and
which the Stockholders' Agent, but not the Xomed Indemnitee, is willing to
accept, it shall be possible for the Xomed Indemnitee to oppose the Third Party
Claim alone, at his/her/its own expense, it being understood that, in this case,
any sums which are to be borne by the Stockholders under such Third Party Claim
shall be limited to the lesser of the following: (i) the amount of Loss
determined as if the Third Party Claim had been settled in accordance with the
terms of the settlement offer or (ii) the amount of Loss actually suffered by
the Party, as resulting from a decision in connection with proceedings relating
to such Third Party Claim.
If the Xomed Indemnitee obtains relief from a governmental authority or a
reimbursement of sums paid to a third party after Indemnification has already
been paid by the Stockholders in connection therewith, the Xomed Indemnitee
shall reimburse the Stockholders for the sums unduly paid hereunder.
(d) In the event any decision, negotiation, or proceedings brought
against the Xomed Indemnitee relating to Loss for which the Stockholders have
already paid Indemnification should result in the cancellation or reduction of
such Loss, the Xomed Indemnitee shall reimburse the Stockholders for the sums
unduly paid by them for such Loss.
5.3 LIMITATIONS
(a) No Indemnification may be claimed unless the aggregate amount
claimed for any Loss is at least seven hundred and fifty thousand French francs
(FF. 750,000) (the "MINIMUM AMOUNT"). This Minimum Amount shall constitute a
deductible. Accordingly, the Stockholders shall be liable for Indemnification
only for the part exceeding seven hundred and fifty thousand French francs (FF.
750,000). The total amount of Indemnification paid under this Agreement may not
exceed an amount equal to 40% of the Purchase Price for claims notified during
the first two years of the present indemnification guarantee. For claims
notified after the aforementioned
period and up to the expiry of the guarantee period in accordance with the terms
of paragraphs 5.3.c(x) and 5.3.c(y), this Indemnification cap shall be reduced
to 20% of the Purchase Price. Accordingly, the aforementioned cap of 20% of the
Purchase Price shall be reduced by any Indemnification paid for sums claimed
during the first two(2)-year period, and if the Indemnification paid for sums
claimed during the first two-year period is greater than or equal to 20% of the
Purchase Price, no other Indemnification shall be due for claims notified after
the expiry of said two-year period. The provisions of this Article 5.3(a) shall
not apply to any Indemnification request based on the provisions of Article
1.2(l), for which there is no threshold nor any deductible for the Stockholders.
In addition, in deciding whether the Indemnification cap has been reached, no
account shall be taken of any Indemnification paid by the Stockholders on the
basis of the provisions of Article 1.2(l).
(b) Adjustments and back payments called for by tax, customs and
social security authorities which are due simply to the time-lag before Taxes
are paid, notably as a result of applying the principle of symmetric corrections
as affirmed by case law, shall not be deemed to be Loss giving rise to
Indemnification. The same shall apply to adjustments in connection with
amortizations, inventory and provisions. Nevertheless, a mere time-shift shall
give rise to Indemnification for the amount of Loss resulting from (x) a
difference in tax rate, (y) adjustments relating to the opening balance sheet
for the first fiscal year, pursuant to the tax principle of the intangibility of
the opening balance sheet as affirmed by case law, if the time allowed for such
adjustments has not run out, or any other similar provision existing in any
country other than France, or (z) increases in duties, interest on late payments
and penalties, of any nature whatsoever.
(c) The Indemnification commitments made by the Stockholders in this
Agreement may be called into play during a period of two (2) years as from the
date hereof, other than (x) with respect to sums which may be due to tax, social
security and customs authorities, which may be validly claimed up until the
later of (i) the date on which the aforementioned two-year period expires, (ii)
the date on which the relevant statute of limitation expires, and (iii) ninety
(90) days after a final governmental or judicial decision relating to tax,
social security or customs matters; (y) with respect to sums resulting from the
implementation of the guarantee under Article 2.23 hereof, which may be validly
claimed during a period which shall expire on the third anniversary date of this
Agreement; and (z) sums resulting from the implementation of the guarantee under
Article 4.1 hereof, which may be validly claimed during a period which shall
expire on the thirtieth anniversary date of this Agreement.
(d) The amount of any Indemnification shall be reduced by the actual
reduction in taxes due by the Company or any tax saving or tax credit, provided
such tax reduction, saving or credit results directly and undeniably from such
Loss and the Xomed Indemnitee is not taxed for such Indemnification (it being
understood, however, that if, subsequently, such deduction is rejected by the
authorities or such Indemnification is taxed, the Stockholders shall pay to
Xomed Indemnitee the amount by which the Indemnification has been reduced
pursuant to the present Article).
(e) In addition, the amount of any Indemnification shall, if such be
the case, be reduced by the amount of any full or partial recharge of a
provision recorded in the Final Balance Sheet made during the year the Xomed
Indemnitee sends its Claim Notice, after the date of the Final Balance Sheet and
on the basis of the balance sheet item which was the subject of the
Indemnification Claim.
Where a Loss gives rise to indemnification by an insurance company, the
indemnification that such insurance company has agreed in writing to remit to
the Company shall be taken into account in determining the amount of the
Indemnification to be paid by the Stockholders for a sum amounting to the
indemnification paid by the insurance company, net of tax due by the beneficiary
of such indemnification for such indemnification. However, if the insurance
company does not pay the agreed indemnification within six (6) months of the
date on which the Company informs the insurance company of its claim, the
Stockholders must indemnify the Xomed Indemnitee for the amount of Loss
determined pursuant to the rules set forth in this Article 5. Within ten (10)
Business Days of receipt by the Company of the indemnity from the insurance
company concerned, Xomed Indemnitee shall pay an amount equal to the amount by
which the amount of the Stockholders' indemnity would have been reduced if the
insurance company had paid the indemnification within the aforementioned
six(6)-month period.
(f) Under no circumstances will the Indemnification obligation be
reduced, limited or affected in any way whatsoever by the mere fact that Xomed
or any other person has had any investigation, audit or any other measure
carried out with respect to Company or has approved the Company's accounts or
given full discharge to any of its directors at a meeting or otherwise.
5.4 INDEMNIFICATION GUARANTEE ON FIRST DEMAND
Except for claims made pursuant to Article 4.1 above, all sums due to
Xomed Indemnitee under this Article 5 may be claimed from Banque Nationale de
Paris on the basis of the guarantee on first demand for a maximum amount of
9,200,000 French francs, the text of which is set forth in Exhibit C
(hereinafter, the "INDEMNIFICATION GUARANTEE ON FIRST DEMAND"), insofar as the
Indemnification shall have become payable in accordance with the provisions of
Article 5.3 above. It is agreed among the Parties that all commissions, costs
and fees in connection with the Indemnification Guarantee on
First Demand shall be borne by the Stockholders. If it is considered that the
Indemnification Guarantee on First Demand has been unduly called by the Xomed
Indemnitee, because the sums called were not due or payable in the meaning of
this Agreement, Xomed Indemnitee shall, as a penalty, be liable for a sum
amounting to 25% of the amount of the sum unduly called. Xomed Indemnitee
undertakes, in the event the Indemnification Guarantee on First Demand is
called, to inform the Stockholders' Agent thereof as soon as the Indemnification
Guarantee on First Demand is called and no later than two (2) Business Days
after it has been called.
5.5 INTEREST PAYMENTS
Interest shall accrue to all sums owed by the Stockholders to the Xomed
Indemnitee for a Loss at a rate of EURIBOR + 100 base points (one percent), as
from (i) the 46th day after notice is given of the Direct Claim as described in
Article 5.2(a) above in the case of Indemnification based on a Direct Claim, and
(ii) the date on which Xomed Indemnitee pays out money or incurs a permanent
debt in the case of Indemnification based on a Third Party Claim, and up until
the date of full and actual payment of the Indemnification.
ARTICLE 6. INTERPRETATION OF THIS AGREEMENT
6.1 DEFINITIONS
Certain frequently used terms herein are defined in this Article 6.1.
References to Articles, paragraphs and Schedules, without any other indication,
are to those of this Agreement. Any term defined through reference to a document
other than this Stock Purchase Agreement shall have the meaning given in such
document. The use of "including", "in particular", "notably", "INTER ALIA",
"especially" implies that the list which follows is by no means exhaustive. In
the formulae defined hereinafter, reference to the excess of one term over
another always implies that such excess, if negative, is considered to be equal
to zero.
1998 FINANCIAL STATEMENTS: is defined in Article 2.6(a).
ACCOUNTING PRINCIPLES: shall mean the accounting rules and
principles defined in SCHEDULE 2.6(a) which comply with the "PLAN COMPTABLE
GENERAL" applicable in France on the date hereof, as applied on a consistent
basis by the Company and its Subsidiaries during the past three fiscal years.
ADVERSE EFFECT: is defined in Article 2.7(a).
AGREEMENT: shall mean this agreement and its Schedules.
BUSINESS DAY: shall mean a day other than a Saturday, Sunday,
public holiday in Paris or other day during all or part of which banks do not
transfer funds to Paris. Any day which is not called a Business Day is a
calendar day.
BY-LAWS: is defined in Article 2.1(a).
CLAIM NOTICE: is defined in Article 5.2(a).
COMPANY: is defined in the Recitals to this Agreement.
COMPANY MATERIAL CONTRACT: is defined in Article 2.10.
COMPONENT: is defined in Article 2.22.
AGREEMENT: means this stock purchase agreement and its Schedules.
DATABASE: is defined in Article 2.14(a)(v).
DESIGNS AND MODELS: is defined in Article 2.14(a)(iv).
DIRECT CLAIM: is defined in Article 5.2(a).
DIRECT CLAIM REVIEW PERIOD: is defined in Article 5.2(b).
FINAL BALANCE SHEET: shall mean the balance sheet and income
statement of the Company as of November 30, 1998.
INDEMNIFICATION: is defined in Article 5.1.
INDEMNIFICATION GUARANTEE ON FIRST DEMAND: shall mean the
Indemnification First Demand Guarantee the model of which is attached as
Exhibit C.
INTELLECTUAL PROPERTY: is defined in Article 2.14(a).
LICENSE: is defined in Article 2.14(a)(vii).
LIEN: shall mean, for assets, especially a share or equity interest,
any security, claim, priority, pledge, easement, charge or restriction of any
kind whatsoever, promise to sell or buy, option or preemptive right relating
thereto or any other right or obligation of whatsoever nature affecting the
ownership, or transferability thereof, or the exercise of any other right
arising therefrom, excluding however any charges connected with retention of
ownership clauses or charges created directly by statute without any
intervention or deed by anyone for this purpose, such as those resulting from
the priority enjoyed by a transporter.
LISTED EMPLOYEES: is defined in Article 2.12(b).
LOSS: is defined in Article 5.1.
XXXX: is defined in Article 2.14(a)(i).
MINIMUM AMOUNT: is defined in Article 5.3(a).
PARTY: shall mean Xomed or the Stockholders.
PATENTS: is defined in Article 2.14(a)(ii).
PERSON: shall mean any natural person or legal entity of a
private or public nature, including any grouping, company, association,
partnership or trust.
PUBLIC AUTHORITY: shall mean any national or local government
authority, any authority competent on the basis of an international treaty,
especially the Commission of the European Community, courts, validly formed
arbitral colleges and any body, commission, agency, authority or department
which has powers of a public nature.
PURCHASE PRICE: is defined in Article 1.3.
SHARES: is defined in the Recitals to this Agreement.
STOCKHOLDERS: is defined in the preamble to this Agreement.
STOCKHOLDERS' AGENT: is defined in Article 5.2(a).
STOCKHOLDERS' KNOWLEDGE: shall mean the knowledge that any officer
or manager of the Company must have after seeking to inform him or herself,
within the scope of his or her ordinary duties, about the facts relating to the
declaration to which the expression applies.
SUBSIDIARY of a Person shall mean any SOCIETE ANONYME, SOCIETE A
RESPONSABILITE LIMITEE, SOCIETE CIVILE, ASSOCIATION, GIE or any other comparable
entity organized within or outside of France, in which the Person owns, directly
or indirectly, more than 10% of the voting rights in the case of a SOCIETE
ANONYME, or more than 10% of the equity interests, in the case of a SOCIETE A
RESPONSABILITE LIMITEE, SOCIETE CIVILE, ASSOCIATION, GIE, SOCIETE EN
PARTICIPATIONS, SOCIETE EN NOM COLLECTIF, SOCIETE EN COMMANDITE PAR ACTION or
any similar entity. In this meaning, the term PERSON shall mean any natural
person or legal entity, of a private or public kind, including any grouping,
company, association, partnership or conglomerate.
TAXES: shall mean all taxes, contribution and other duties imposed
by or owing to a Public Authority, by way of roll call, deduction at source or
any other manner, including any income tax, value added tax, tax on sales or
wages, registration duties, customs duties, social security contributions on
whatever grounds, including retirement, together with all interest and penalties
for late payment relating thereto.
TRADE SECRETS: is defined in Article 2.14(a)(iii).
THIRD PARTY CLAIM: is defined in Article 5.2(a).
THIRD PARTY CLAIM REVIEW PERIOD: is defined in Article 5.2(c).
XOMED: is defined in the preamble to this Agreement.
XOMED INDEMNITEE: is defined in Article 5.1.
6.2 APPLICABLE LAW
This Agreement shall be governed by and construed in accordance with the
laws of France.
6.3 ARBITRATION
All disputes relating to the existence, validity, interpretation or
performance of this Agreement which are not resolved by mutual agreement between
the Parties shall be settled by arbitration. The arbitral tribunal shall consist
of three (3) arbitrators. Xomed and the Stockholders' Agent shall each appoint
an arbitrator and shall inform each other, by registered letter with return
receipt requested, of the name of the arbitrator they each choose, together with
the questions which they wish to refer to arbitration. The two thus-appointed
arbitrators shall appoint a third arbitrator to be chairperson of the arbitral
tribunal within fifteen (15) days of the appointment of the second arbitrator.
The arbitral tribunal shall be validly formed as soon as the three arbitrators
accept their terms of reference. In the event the Parties do not appoint their
respective arbitrators or the two arbitrators the third arbitrator within the
aforementioned time-limits, the lacking arbitrator(s) shall be appointed by the
President of the Paris District Court (TRIBUNAL DE GRANDE INSTANCE) in summary
proceedings at the request of the Party or the arbitrator which/who is first to
act and after hearing the Parties. If any of the arbitrators is prevented from
performing his or her duties, abstains therefrom, departs or dies, such
arbitrator shall be replaced in the manner set forth above. The arbitral
tribunal shall sit in Paris. The procedure shall be that provided in Book IV of
the French New Code of Civil Procedure (NOUVEAU CODE DE PROCEDURE CIVILE) and
French law alone shall apply. The award shall be delivered as soon as possible
and no more than three (3) months after the formation of the arbitral tribunal.
The arbitral tribunal's decision shall be final.
6.4 COMMITMENTS SUBSEQUENT TO THE SALE
The Parties shall be required to sign all documents and carry out all
formalities necessary for fulfilling their respective obligations arising from
this Agreement. In particular, the Stockholders shall refrain from making any
remarks to third parties, in any form whatsoever, which are likely to harm the
Company or Xomed with respect to third parties, with respect to the Company's
customers and its suppliers and, more generally, in its business relations, or
cause such persons to break off or change their relationship with the Company.
6.5 PARAGRAPH AND SECTION HEADINGS
The headings of the sections and subsections of this Agreement are
inserted for convenience only and may under no circumstances be relied upon for
interpreting said Agreement.
6.6 SEVERABILITY
The invalidity, for whatever cause, of any of the obligations arising
herefrom shall not affect the validity of the other obligations arising
herefrom, whatever they may be, provided the overall balance of the Agreement is
maintained.
ARTICLE 7. NON-COMPETITION
It is expressly agreed between the Parties that this obligation not to
engage in competing activities is an essential part of the consideration for the
purchase of the Shares.
As a consequence, Xx. Xxxxxxxxx Xxxxxx and Xxx. Xxxxxx Xxxxxx shall, from
the date this Agreement is signed and until June 30, 2004 (the "RESTRICTED
PERIOD") refrain from carrying on or developing in any way whatsoever, directly
or indirectly, on their own account or that of a company or any other
organization, as consultant, agent, officer, administrator, shareholder,
partner, investor or in any other role, any of the activities carried on by the
Company, Xomed or any other entity affiliated to them, or any other related or
similar activity (the "ACTIVITY") over the entire territory in which the
Activity is carried on.
During the Restricted Period, Xx. Xxxxxxxxx Xxxxxx and Xxx. Xxxxxx Xxxxxx
shall refrain from (i) employing, for their own account or that of any third
party, any officer or employee of the Company, Xomed or any other entity
affiliated to them, even in the event such officer or employee has resigned or
been dismissed; (ii) encouraging such persons to break off or change their
relations with the Company, Xomed or any other entity affiliated to them; and
(iii) both during the Restricted Period and after it has expired, acting in any
form whatsoever which may harm the Company, Xomed or any other entity affiliated
to them with respect to any third parties,
their customers, suppliers and, more generally, their business relations,
regardless of how their relations were created.
ARTICLE 8. MISCELLANEOUS
8.1 NOTICES AND COMMUNICATIONS
(a) Notices and communications provided in this Agreement shall be
validly sent to their addressee by being delivered by hand in return for an
acknowledgment of receipt dated and signed by the addressee, or sent by
registered mail with return receipt requested, or by overnight courier, or by
fax, to the following addresses:
FOR XOMED:
Xomed Surgical Products, Inc.
0000 Xxxxxxxxxx Xxxxx X.
Xxxxxxxxxxxx, Xxxxxxx 00000-0000
XXX
Fax: 0.000.000.0000
Attention: General Counsel
with a copy by fax to:
Xxxxxxx Xxxx & Xxxxxxxxx
00-00 xxx xx xx Xxxxx x'Xxxxxx
00000 Xxxxx, Xxxxxx
Fax: 00.00.00.00.00
Attention: Maitre Xxxxxx Xxxxx
or at such other address as Xomed may have indicated to the Stockholders in
writing; and
FOR ANY OF THE STOCKHOLDERS OR THE STOCKHOLDERS' AGENT, at the address
given at the headings of this Agreement beside the name of such Stockholder, or
such other address as the Stockholder may have indicated to Xomed in writing,
with a copy by fax to:
Xxxxxxxxxx, Le Quintrec, Veersamy
00, xxx xx Xxxxxxx Xxx
00000 Xxxxx
Xxxxxx
Fax: 00 00 00 00 00
Attention: Maitre Xxxxxxx Xxxxxxxxxx
or at such other address as the Stockholders' Agent may have indicated
to Xomed in writing.
(b) Any notice shall be deemed to have been received: if delivered
by hand, on the date of such delivery; if sent by overnight delivery, on the
second Business Day following the date of such
mailing; if mailed by registered mail, on the third Business Day after the date
of such mailing; and if sent by fax, on the date on which such fax is sent,
unless such date is not a Business Day, in which case such notice shall be
deemed to have been received on the next succeeding Business Day.
8.2 DUTIES AND TAXES
Each of the Parties shall bear all the costs incurred by it in connection
with this Agreement, including, amongst other things, fees and expenses of
attorneys, investment bankers and other consultants. It is expressly agreed that
Xomed shall under no circumstances be required to pay the costs and fees
incurred by the Company or the Stockholders in connection with this Agreement,
including, amongst other things, fees and commission paid to a broker or other
intermediary in accordance with the provisions of Article 4.3. The provisions of
this Article 8.2 shall prevail over those of any other prior agreements or
contracts relating to the payment of costs and fees arising in connection with
the present transaction.
8.3 DEATH - TRANSMISSION
The successors, heirs and assigns of a Stockholder shall be bound by the
obligations of the latter under this Agreement following the death of such
Stockholder. The rights and obligations arising from this Agreement may not be
transferred by the Stockholders, their successors, heirs or assigns without
Xomed's prior written agreement.
This Agreement shall bind all of Xomed's successors and assigns under the
same conditions as Xomed.
The Stockholders agree here and now that Xomed may transfer the benefit of
this Agreement to any company which is directly or indirectly controlled by, or
which controls, or which is under joint control with, Xomed Surgical Products,
Inc. and to which all or part of the Shares are transferred or contributed.
8.4 ENTIRE AGREEMENT
This Agreement and its Schedules fully reflect the entirety of the
agreements between the Parties concerning the transaction which it covers. It
fully and permanently supersedes all other documents, contracts, agreements,
offers and other written items which may have been prepared, sent or agreed by
and between the Parties or any of their Affiliates, or by and between any other
persons in connection therewith or relating thereto, prior to the signing of
this Agreement, including INTER ALIA the letter dated November 3, 1998 sent by
Xomed to Banexi, the Stockholders' investment advisor. This Agreement may be
amended and a Party thereto may waive any right arising therefrom only if a
written agreement to this effect is signed by the Parties.
8.5 TIME-LIMITS AND WAIVER
The Parties acknowledge that all time-limits herein have been set after
concerted steps to fix the duration thereof. The Parties accept the consequences
of abiding or not by these time-limits, including when this results in a Party's
being barred from acting in a certain way. Subject to such consideration,
failure to exercise in part or in full any of the rights arising from the
provisions hereof cannot amount to the waiver of such right for the future or of
any other right arising therefrom.
8.6 COUNTERPARTS
This Agreement may be executed in one or more counterparts, each of which
shall be deemed an original and all of which together shall be considered one
and the same agreement. Any signature to this Agreement sent by fax shall have
the same legal force as if inscribed upon an original copy. This Agreement is
signed in three originals: one for Xx. Xxxxxxxxx Xxxxxx and Xxx. Xxxxxx Xxxxxx,
whose interest therein is deemed to be, and acknowledged by them to be, one and
the same, in the meaning of Article 1325 of the French Civil Code; one for the
other Stockholders, whose interest therein is deemed to be, and acknowledged by
them to be, one and the same, in the meaning of Article 1325 of the French Civil
Code; and one for Xomed Holdings France SNC.
IN WITNESS WHEREOF, the Parties hereto have signed this Agreement in
three originals, to which two sets of Schedules are attached: one for Xomed
Holdings France SNC and one for the Stockholders' Agent.
XOMED FRANCE HOLDINGS, SNC
Name:
---------------
Title:
--------------
THE STOCKHOLDERS:
-------------------- --------------------
Xxxxxxxxx Xxxxxx Xxxxxx Xxxxxx
-------------------- --------------------
Xxxx Xxxxxx, represented for Rose Xxxxx Xxx, represented
the present purpose by Mr. for the present purpose by
Xxxxxxxxx Xxxxxx Xx. Xxxxxxxxx Xxxxxx
-------------------- --------------------
Xxxxxx Xxxxxxxxx, represented Xxxxxxxx Xxxxxxxxx,
for the present purpose by represented for the present
Xx. Xxxxxxxxx Xxxxxx purpose by Xx. Xxxxxxxxx
Xxxxxx
-------------------- ---------------------
Max Boutmy, represented for Xxxxxx Xxxxxx, represented
the present purpose by for the present purpose by
Xx. Xxxxxxxxx Xxxxxx Xx. Xxxxxxxxx Xxxxxx
-------------------- ----------------------
Xxxx-Xxxxxx Avenier, represented Xxxx-Xxxxxxxx Xxxxx,
for the present purpose by represented for the present
Xx. Xxxxxxxxx Xxxxxx purpose by Xx. Xxxxxxxxx
Xxxxxx
-----------------------
Brigitte Pinaut, represented
for the present purpose by Xx.
Xxxxxxxxx Xxxxxx
SCHEDULE 2.3
----------------------------------------------------------------------------
NAME NUMBER OF PERCENTAGE OF THE TOTAL NUMBER
SHARES OF SHARES (%)
----------------------------------------------------------------------------
Xxxxxxxxx Xxxxxx 1166 62.18
----------------------------------------------------------------------------
Xxxxxx Xxxxxx 605 32.26
----------------------------------------------------------------------------
Xxxx Xxxxxx 45 2.4
----------------------------------------------------------------------------
Rose Xxxxx Xxx 45 2.4
----------------------------------------------------------------------------
Xxxxxx Xxxxxxxxx 2 0.1067
----------------------------------------------------------------------------
Xxxxxxxx Xxxxxxxxx 2 0.1067
----------------------------------------------------------------------------
Max Boutmy 2 0.1067
----------------------------------------------------------------------------
Xxxxxx Xxxxxx 2 0.1067
----------------------------------------------------------------------------
Xxxx-Xxxxxx Avenier 2 0.1067
----------------------------------------------------------------------------
Brigitte Pinaut 2 0.1067
----------------------------------------------------------------------------
Xxxx-Xxxxxxxx Pinaut 2 0.1067
----------------------------------------------------------------------------
