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Exhibit r
CONFORMED COPY
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STOCK EXCHANGE AGREEMENT
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Among
SOFAMOR ▇▇▇▇▇ GROUP, INC.
and
ALL OF THE SHAREHOLDERS
OF SOFYC, S.A.
Dated as of January 26, 1998
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TABLE OF CONTENTS
Section Page
ARTICLE I
DEFINITIONS
1.01. Certain Defined Terms............................................. 1
ARTICLE II
TRANSFER AND EXCHANGE
2.01. Transfer and Exchange of the Shares............................... 5
2.02. Purchase Price.................................................... 5
2.03. Closing........................................................... 5
2.04. Closing Deliveries by the Holders................................. 6
2.05. Closing Deliveries by the Issuer.................................. 6
2.06. Holders' Representative........................................... 7
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF THE HOLDERS
3.01. Capacity and Authority of the Holders............................. 8
3.02. Organization, Authority and Qualification of the Company.......... 8
3.03. Capital Stock of the Company; Ownership of the Shares............. 8
3.04. Subsidiaries...................................................... 9
3.05. Corporate Books and Records....................................... 9
3.06. No Conflict....................................................... 9
3.07. Governmental Consents and Approvals............................... 10
3.08. Financial Information............................................. 10
3.09. No Undisclosed Liabilities........................................ 11
3.10. Conduct of Business............................................... 11
3.11. Litigation........................................................ 11
3.12. Certain Interests................................................. 11
3.13. Compliance with Laws.............................................. 11
3.14. Assets............................................................ 11
3.15. Employee Matters.................................................. 11
3.16. Taxes............................................................. 12
3.17. Full Disclosure................................................... 13
3.18. Investment Purpose................................................ 13
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Section Page
3.19. Defaults.......................................................... 13
3.20. Guarantees........................................................ 14
3.21. Brokers........................................................... 14
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF THE ISSUER
4.01. Organization and Authority of the Issuer.......................... 14
4.02. Ownership of Issuer Shares........................................ 14
4.03. No Conflict....................................................... 15
4.04. Governmental Consents and Approvals............................... 15
4.05. Investment Purpose................................................ 15
4.06. Brokers........................................................... 15
ARTICLE V
ADDITIONAL AGREEMENTS
5.01. Conduct of Business Prior to the Closing.......................... 15
5.02. Access to Information............................................. 16
5.03. Retention of Company Equity Assets................................ 16
5.04. NYSE Listing...................................................... 17
5.05 Legend............................................................. 17
5.06 Regulatory and Other Authorizations; Notices and Consents.......... 17
5.07 Notice of Developments............................................. 17
5.08 Further Action..................................................... 17
ARTICLE VI
TAX MATTERS
6.01. Indemnity......................................................... 18
6.02. Returns and Payments.............................................. 19
6.03. Contests.......................................................... 20
6.04. Time of Payment................................................... 21
6.05. Cooperation and Exchange of Information........................... 21
6.06. Conveyance Taxes.................................................. 22
6.07. Miscellaneous..................................................... 22
ARTICLE VII
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Section Page
CONDITIONS TO CLOSING
7.01. Conditions to Obligations of the Holders.......................... 23
7.02. Conditions to Obligations of the Issuer........................... 23
ARTICLE VIII
INDEMNIFICATION
8.01. Survival of Representations and Warranties........................ 24
8.02. Indemnification by the Holders.................................... 25
8.03. Indemnification by the Issuer..................................... 27
8.04. Tax Matters....................................................... 28
ARTICLE IX
TERMINATION AND WAIVER
9.01. Termination....................................................... 29
9.02. Effect of Termination............................................. 29
9.03. Waiver............................................................ 29
ARTICLE X
GENERAL PROVISIONS
10.01. Expenses......................................................... 30
10.02. Notices.......................................................... 30
10.03. Public Announcements............................................. 31
10.04. Headings......................................................... 31
10.05. Severability..................................................... 31
10.06. Entire Agreement................................................. 31
10.07. Assignment....................................................... 32
10.08. No Third Party Beneficiaries..................................... 32
10.09. Amendment........................................................ 32
10.10. Governing Law.................................................... 32
10.11. Counterparts; Governing Language................................. 33
10.12. Specific Performance............................................. 33
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Exhibits and Schedule
Exhibit A Registration Rights Agreement
Exhibit 7.02(c) Opinion of ▇▇▇▇▇▇▇▇ & Associes
Schedule I Calculation of Equity Consideration
Schedule II Company Equity Ownership and Consideration to be Received
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STOCK EXCHANGE AGREEMENT, dated as of January 26, 1998, among YVES
▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇-▇▇▇▇▇▇ ▇▇▇▇▇▇ PLAIS, ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇,
▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇-▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
GAUZAN, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ and ▇▇▇▇▇-▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ MILLIEZ, (each, a
"Holder" and collectively, the "Holders"), and SOFAMOR ▇▇▇▇▇ GROUP, INC., an
Indiana corporation (the "Issuer").
W I T N E S S E T H:
WHEREAS, the Holders own all the issued and outstanding shares (the
"Shares") of capital stock, FF 100 nominal value per share (the "Capital
Stock"), of Sofyc, S.A., a French societe anonyme (the "Company");
WHEREAS, the Holders wish to transfer to the Issuer the Shares, upon
the terms and subject to the conditions set forth herein; and
WHEREAS, the Issuer wishes to exchange shares of its common stock,
no par value (the "Issuer Common Stock") and $1,000,000 (the "Cash
Consideration") for the Shares, upon the terms and subject to the conditions set
forth herein.
NOW, THEREFORE, in consideration of the premises and the mutual
agreements and covenants hereinafter set forth, the Issuer and the Holders
hereby agree as follows:
ARTICLE I
DEFINITIONS
SECTION 1.01. Certain Defined Terms. As used in this Agreement, the
following terms shall have the following meanings:
"Action" means any claim, action, suit, arbitration, inquiry,
proceeding or investigation by or before any Governmental Authority.
"Affiliate" means, with respect to any specified Person, any other
Person that directly, or indirectly through one or more intermediaries,
controls, is controlled by, or is under common control with, such specified
Person.
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"Agreement" or "this Agreement" means this Stock Exchange Agreement,
dated as of January 21, 1998, among the Holders and the Issuer (including the
Schedules and the Exhibits hereto and the Disclosure Schedule) and all
amendments hereto made in accordance with the provisions of Section 10.09.
"Code" means the Internal Revenue Code of 1986, as amended through
the date hereof.
"Company's Accountants" means ▇▇▇▇▇▇ ▇▇▇▇▇ and ▇▇▇▇▇ Soonekindt
(substitute), independent public accountants of the Company.
"Company Equity Asset Valuation" means the product of the
Determination Price times the number of shares of Issuer Common Stock owned by
the Company.
"control" (including the terms "controlled by" and "under common
control with"), with respect to the relationship between or among two or more
Persons, means the possession, directly or indirectly or as trustee or executor,
of the power to direct or cause the direction of the affairs or management of a
Person, whether through the ownership of voting securities, as trustee or
executor, by contract or otherwise, including, without limitation, the
ownership, directly or indirectly, of securities having the power to elect a
majority of the board of directors or similar body governing the affairs of such
Person.
"Determination Price" means $62.95, the average of the closing
prices of the Issuer Common Stock as shown on the New York Stock Exchange
Composite Tape (as reported by The Wall Street Journal or any other
authoritative source) for the 20 consecutive Trading Days ending on the
thirteenth Trading Day prior to the Closing Date.
"Disclosure Schedule" means the Disclosure Schedule attached hereto,
dated as of the date hereof, and forming a part of this Agreement.
"Encumbrance" means any security interest, pledge, mortgage, lien
(including, without limitation, environmental and tax liens), charge,
encumbrance, adverse claim, preferential arrangement or restriction of any kind,
including, without limitation, any restriction on the use, voting, transfer,
receipt of income or other exercise of any attributes of full ownership (pleine
propriete); provided, however, that, Shares held in the usufruit or nue
propriete form shall not be deemed to be encumbered solely because of such form
of ownership.
"Equity Consideration Reduction Amount" means the sum of the Cash
Consideration, the Shareholder Accounts Balance and the Loan Amount (with
respect to the Shareholder Accounts Balance and the Loan Amount, translated into
U.S. dollars at the exchange rate of $1.00 = FF6.1262).
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"Equity Consideration Valuation" means the product of 0.85 times the
Company Equity Asset Valuation.
"Former Subsidiaries" means Interphar, SAPL, Socotrim, S.R.L., Sof.
Inc., Sofamed, Sofasia, Sycot, S.C., Vitane and any other entity that has been a
direct or indirect subsidiary of the Company or in which the Company owned any
equity interest, partnership interest or similar ownership interest.
"Governmental Authority" means any United States federal, state or
local or any foreign government, governmental, regulatory or administrative
authority, agency or commission or any court, tribunal, or judicial or arbitral
body.
"Governmental Order" means any order, writ, judgment, injunction,
decree, stipulation, determination or award entered by or with any Governmental
Authority.
"IRS" means the Internal Revenue Service of the United States.
"Law" means any federal, state, local or foreign statute, law,
ordinance, regulation, rule, code, order, other requirement or rule of law.
"Legal Costs" means $228,719.92, the outstanding legal fees and
expenses incurred as of the date hereof by Shearman & Sterling, counsel to the
Issuer.
"Liabilities" means any and all debts, liabilities and obligations,
whether accrued or fixed, absolute or contingent, matured or unmatured or
determined or determinable, including, without limitation, those arising under
any Law, Action or Governmental Order and those arising under any contract,
agreement, arrangement, commitment or undertaking.
"Loan" means the overdraft drawn down by the Company from Societe
Generale on January 16, 1998.
"Loan Amount" means the outstanding balance, including accrued
interest up to and including the date hereof, of the Loan.
"NYSE" means the New York Stock Exchange, Inc.
"Person" means any individual, partnership, firm, corporation,
association, trust, unincorporated organization or other entity, as well as any
syndicate or group that would be deemed to be a person under Section 13(d)(3) of
the Securities Exchange Act of 1934, as amended.
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"Purchase Price Bank Accounts" means the bank accounts in Paris,
France to be designated by the Holders' counsel in a written notice to the
Issuer at least one Business Day prior to the Closing.
"Registration Rights Agreement" means the registration rights
agreement dated as of the Closing Date among the Issuer and the Holders
substantially in the form of Exhibit A attached hereto.
"Regulations" means the Treasury Regulations (including Temporary
Regulations) promulgated by the United States Department of Treasury with
respect to the Code or other federal tax statutes.
"Shareholder Accounts Balance" means the outstanding balance of the
shareholder accounts of the Company as of the date hereof.
"Shareholders' Agreement" means the Shareholders Agreement dated as
of June 21, 1993 among the Issuer, the Holders, the Company and the other
shareholders signatory thereto.
"Tax" or "Taxes" means any and all taxes, fees, levies, duties,
tariffs, imposts, and other charges of any kind (together with any and all
interest, penalties, additions to tax and additional amounts imposed with
respect thereto) imposed by any government or taxing authority, including,
without limitation: taxes or other charges on or with respect to income,
franchises, windfall or other profits, gross receipts, property, sales, use,
capital stock, payroll, employment, social security, workers' compensation,
unemployment compensation, or net worth; taxes or other charges in the nature of
excise, withholding, ad valorem, stamp, transfer, value added, or gains taxes;
license, registration and documentation fees; and customs duties, tariffs, and
similar charges.
"Tax Affiliate" means any entity that is included or required to be
included in the filing of any tax return with the Company or any entity that has
or could have a tax liability for which the Company could be jointly or
severally liable or any entity for which the Company is liable for a share of
its profits or losses.
"Trading Day" means a day on which the NYSE is open for business.
(b) Each of the following terms is defined in the Section of this
Agreement set forth opposite such term below:
Term Section
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Acquisition Documents 8.01
Capital Stock Recitals
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Cash Consideration Recitals
Closing 2.03
Closing Date 2.03
Company Recitals
Company Equity Assets 3.14
Financial Statements 3.08(a)
Holder Recitals
Holders' Representative 2.06
Issuer Common Stock Recitals
Issuer Shares 2.02
Indemnified Party 8.02(a)
Issuer Recitals
Loss 8.02
Purchase Price 2.02
Returns 6.02(a)
Shares Recitals
Third Party Claims 8.02(b)
ARTICLE II
TRANSFER AND EXCHANGE
SECTION 2.01. Transfer and Exchange of the Shares. Upon the terms
and subject to the conditions of this Agreement, at the Closing, the Holders
shall sell, assign, transfer and deliver to the Issuer, and the Issuer shall
purchase, acquire and accept for delivery from the Holders, the Shares.
SECTION 2.02. Purchase Price. The aggregate purchase price for the
Shares shall be (i) the number of Shares of Issuer Common Stock equal to the
number of shares of Issuer Common Stock held by the Company multiplied by a
fraction, the numerator of which shall be equal to the Equity Consideration
Valuation minus the Equity Consideration Reduction Amount and the denominator of
which shall be equal to the Company Equity Asset Valuation (the "Issuer Shares")
(as such calculation is set forth in Schedule I hereto) and (ii) the Cash
Consideration minus Legal Costs (together, the "Purchase Price"). Each Holder
shall receive the cash and equity components of the Purchase Price in such
amounts as set forth in Schedule II hereto.
SECTION 2.03. Closing. Upon the terms and subject to the conditions
of this Agreement, the sale and purchase of the Shares contemplated by this
Agreement shall take place at a closing (the "Closing") to be held at the
offices of Shearman & Sterling, ▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ at
10:00 A.M. New York time on the later to
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occur of (i) the date hereof and (ii) the fifth Business Day following the
satisfaction or waiver of all other conditions to the obligations of the parties
set forth in Article VII, or at such other place or at such other time or on
such other date as the Holders and the Issuer may mutually agree upon in writing
(the day on which the Closing takes place being the "Closing Date").
SECTION 2.04. Closing Deliveries by the Holders. (a) At the Closing,
the Holders shall deliver or cause to be delivered to the Issuer:
(i) share transfer orders (ordres de mouvement) for all of the
Shares, completed pursuant to the terms hereof, the registre des mouvement
de titres, the comptes d'actionnaires of the Company and any other
documents necessary for the transfer of good and marketable title to the
Shares;
(ii) a receipt for the Purchase Price; and
(iii) the opinion, certificates and other documents required to be
delivered pursuant to Section 7.02.
(b) At the Closing, the Holders and the Issuer shall cause
appropriate entries to be made in the registre des mouvements de titres and the
comptes d'actionnaires to register the consummation of the transactions
contemplated by this Agreement.
SECTION 2.05. Closing Deliveries by the Issuer. (a) At the Closing,
the Issuer shall deliver to the Holders:
(i) stock certificates evidencing the Issuer Shares duly registered
in the respective names of the Holders and in such denominations of Issuer
Common Stock as set forth in Schedule II hereto (or true and correct
photocopies or facsimiles of such stock certificates pending receipt of
the original certificates from the Issuer's stock transfer agent);
(ii) the Cash Consideration by wire transfer in immediately
available funds to the Purchase Price Bank Accounts (or evidence that such
wire transfer has been commenced); and
(iii) the certificates and other documents required to be delivered
pursuant to Section 7.01.
(b) In the case of Issuer Shares to be delivered to Holders in
exchange for Shares held, respectively, in usufruit or nue propriete, the Issuer
shall deliver such Issuer Shares to Yves ▇▇▇▇ ▇▇▇▇▇▇ or ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇ and,
in respect thereof, shall register him
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or her in its shareholder's register as nominee for each of such Holders,
pursuant to a nominee agreement entered into separately.
SECTION 2.06. Holders' Representative. Each Holder hereby appoints
▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇ Plais, its legal representative (such Person and any
successor or successors being the Holders' Representative"), as each such
Holder's Attorney-in-Fact and representative, (i) to do any and all things and
to execute any and all documents or other papers, in each such Holder's name,
place and stead, in any way which each such Holder could do if personally
present, in connection with this Agreement and the transactions contemplated
hereby, including, without limitation, to accept on each such Holder's behalf
any Issuer Shares or cash amounts payable to each such Holder under this
Agreement, (ii) to amend, cancel or extend, or waive the terms of, this
Agreement or the Registration Rights Agreement, (iii) to act on behalf of such
Holder with respect to any claims (including the settlement thereof) made by the
Issuer for indemnification pursuant to Articles VI and VIII, (iv) with respect
to any actions to be taken by the Holders pursuant to the Registration Rights
Agreement and (v) to replace the Company as the Designated Representative of the
Holders and other shareholders of the Issuer signatory to the Shareholders'
Agreement and to perform all the outstanding duties and obligations of the
Designated Representative in connection therewith. In the event that the
Holders' Representative becomes unable or unwilling to continue in his capacity
as Holders' Representative under this Agreement, the Holders of a majority of
(A) prior to the Closing, the Shares or (B) after the Closing, the Issuer Shares
then owned by the Holders shall promptly appoint a successor Holders'
Representative, who shall be reasonably acceptable to the Issuer (it being
agreed that any Holder of legal majority age shall be deemed reasonably
acceptable), by written notice to the Issuer. All reference herein to the
"Holders' Representative" shall include any such successor Holders'
Representative. Each Holder hereby consents to the taking by the Holders'
Representative of any and all actions and the making of any decisions required
or permitted to be taken by such Holder under this Agreement or the Registration
Rights Agreement. The Holders shall be bound by all actions taken by the
Holders' Representative in his capacity thereof. The Issuer shall be entitled to
rely, as being binding upon each such Holder, upon any document or other paper
believed by it to be genuine and correct and to have been signed or sent by the
Holders' Representative, and the Issuer shall not be liable to any of the
Holders for any action taken or omitted to be taken by it in such reliance.
Copies of any notice given by the Issuer to the Holders' Representative shall be
provided to each of those persons specified in Section 10.02.
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ARTICLE III
REPRESENTATIONS AND WARRANTIES OF THE HOLDERS
As an inducement to the Issuer to enter into this Agreement, the
Holders hereby represent and warrant, jointly and severally, to the Issuer (and
acknowledge that the Issuer has relied on such representations and warranties)
as follows:
SECTION 3.01. Capacity and Authority of the Holders. The Holders
have the legal capacity to enter into this Agreement and the Registration Rights
Agreement, to carry out their obligations hereunder and thereunder and to
consummate the transactions contemplated hereby and thereby. This Agreement has
been and the Registration Rights Agreement shall be, duly executed and delivered
by the Holders, and (assuming due authorization, execution and delivery by the
Issuer) this Agreement constitutes and the Registration Rights Agreement will
constitute, the legal, valid and binding obligations of the Holders enforceable
against the Holders in accordance with their terms.
SECTION 3.02. Organization, Authority and Qualification of the
Company. The Company is a societe anonyme duly organized and validly existing
under the laws of France and has all necessary power and authority to own the
shares of Issuer Common Stock owned by it. All corporate actions taken by the
Company have been duly authorized, and the Company has not taken any action that
in any respect conflicts with, constitutes a default under or results in a
violation of any provision of its Statuts. A true and correct copy of the
Statuts of the Company, as in effect on the date hereof, has been delivered by
the Holders to the Issuer.
SECTION 3.03. Capital Stock of the Company; Ownership of the Shares.
(a) The Capital Stock of the Company consists of 543,964 shares of Capital
Stock. As of the date hereof, 543,964 shares of Capital Stock are issued and
outstanding, all of which are validly issued, fully paid and nonassessable. None
of the issued and outstanding shares of Capital Stock was issued in violation of
any preemptive rights. There are no options, warrants, convertible securities or
other rights, agreements, arrangements or commitments of any character relating
to the Capital Stock or obligating the Holders or the Company to issue or sell
any shares of Capital Stock or any other interest in, the Company. There are no
outstanding contractual obligations of the Company to repurchase, redeem or
otherwise acquire any shares of Capital Stock or to provide funds to, or make
any investment (in the form of a loan, capital contribution or otherwise) in,
any other Person. The Shares constitute all of the issued and outstanding shares
of Capital Stock and no Person, other than the Holders, owns or has any
interest, whether direct or indirect, in any Capital Stock. Upon consummation of
the transactions contemplated by this Agreement and registration of the Shares
in the name of the Issuer in the stock records of the Company, the Issuer,
assuming it shall have purchased the Shares for value in good faith and without
notice of any
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adverse claim, will own all the issued and outstanding Capital Stock free and
clear of all Encumbrances, other than Encumbrances arising from any action or
agreement of the Issuer. Upon consummation of the transactions contemplated by
this Agreement, the Shares will be fully paid and nonassessable. There are no
voting trusts, stockholder agreements, proxies or other agreements or
understandings in effect with respect to the voting or transfer of any of the
Shares.
(b) The stock registers (registre des mouvements de titres and the
comptes d'actionnaires) of the Company accurately record the name and address
of, and the number of Shares held by, each Person owning rights of any kind in
the Capital Stock.
(c) Schedule I sets out (i) the number of Shares owned by each of
the Holders and the division of the Shares into full ownership (pleine
propriete), usufruit and remainder (nue propriete) interests and (ii) the number
of Issuer Shares to be issued to each such Holder or its nominee (or estimates
of such foregoing amounts (if the Closing Date is not the date hereof) which
estimates will be finalized prior to Closing). Title to the Shares is not
encumbered by any Encumbrance other than those which will be released at or
prior to Closing, and will not result in the incurrence of any claim whatsoever
by any third party.
SECTION 3.04. Subsidiaries. The Company has no subsidiaries
(including, without limitation, any g.i.e. or societe en participation) and no
ownership or other interest in any other Person.
SECTION 3.05. Corporate Books and Records. The attendance register
of the Company's Conseil d'administration, the minutes of the Conseil
d'administration and the shareholders' meetings, the rapports de gerance and the
stock registers (the registre des mouvements de titres and the comptes
d'actionnaires) required by the French Corporation Law of July 24, 1966, as
amended, are up-to-date, have been fully maintained and contain true and
accurate records in all material respects. Complete and accurate copies of all
such minute books and of the stock register of the Company have been provided or
made available by the Company to the Issuer or its representatives.
SECTION 3.06. No Conflict. Assuming that the notification described
in Section 3.07 has been obtained and except as may result from any facts or
circumstances relating solely to the Issuer, the execution, delivery and
performance of this Agreement and the Registration Rights Agreement by the
Holders do not and will not (a) violate, conflict with or result in the breach
of any provision of the Statuts of the Company, (b) conflict with or violate any
Law or Governmental Order applicable to the Holders, the Company or any of their
respective assets, properties or businesses, or (c) conflict with, result in any
breach of, constitute a default (or event which with the giving of notice or
lapse of time, or both, would become a default) under, require any consent
under, or give to others any rights of termination, amendment, acceleration,
suspension, revocation or cancellation of, or result in
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the creation of any Encumbrance on any of the Shares or on any of the assets or
properties of the Holders or the Company pursuant to, any note, bond, mortgage
or indenture, contract, agreement, lease, sublease, license, permit, franchise
or other instrument or arrangement to which any of the Holders or the Company is
a party or by which any of the Shares or any of such assets or properties is
bound or affected.
SECTION 3.07. Governmental Consents and Approvals. The execution,
delivery and performance of this Agreement and the Registration Rights Agreement
by the Holders do not and will not require any consent, approval, authorization
or other order of, action by, filing with or notification to any Governmental
Authority, except for notification to the French Foreign Investment Control
Authorities (Direction du Tresor).
SECTION 3.08. Financial Information. (a) True and complete copies of
(i) the balance sheet of the Company for each of the three fiscal years ended as
of December 31, 1995, December 31, 1996, and December 31, 1997, and the related
statements of income, retained earnings and shareholders' equity, together with
all related notes and schedules thereto, (collectively referred to herein as the
"Financial Statements") have been delivered by the Holders or their counsel to
the Issuer. The Financial Statements (i) were prepared in accordance with the
books of account and other financial records of the Company, (ii) present fairly
the financial condition and results of operations of the Company as of the dates
thereof or for the periods covered thereby, (iii) have been prepared in
accordance with the French Plan Comptable General of 1982 applied on a basis
consistent with the past practices of the Holders and the Company and (iv)
include all adjustments (consisting only of normal recurring accruals) that are
necessary for a fair presentation of the financial condition of the Company and
the results of the operations of the Company as of the dates thereof or for the
periods covered thereby.
(b) The books of account and other financial records of the Company:
(i) reflect all items of income and expense and all assets and Liabilities
required to be reflected therein in accordance with the French Plan Comptable
General of 1982 applied on a basis consistent with the past practices of the
Company, respectively, (ii) are in all material respects complete and correct,
and do not contain or reflect any material inaccuracies or discrepancies and
(iii) have been maintained in accordance with good business and accounting
practices generally accepted in France.
(c) The Shareholder Accounts Balance is equal to FF3,859,715.01 and
the Loan Amount is equal to FF1,815,482.72. The interest rate on the Loan is T4M
plus two percentage points. Interest on the Loan is calculated monthly. The Loan
is an extension of credit to the Company without a specific maturity date
repayable on demand. Other than accruing interest on the principal amount, there
are no other fees, charges or other amounts payable by the Company pursuant to
the Loan.
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SECTION 3.09. No Undisclosed Liabilities. There are no Liabilities
of the Company, other than the Shareholder Accounts Balance and the Loan Amount.
SECTION 3.10. Conduct of Business. Except as disclosed in Section
3.10 of the Disclosure Schedule, since December 31, 1996, the Company has not
conducted any business other than the ownership of shares of Issuer Common Stock
and matters incident thereto.
SECTION 3.11. Litigation. There are no Actions by or against the
Company (or by or against the Holders or any Affiliate thereof and relating to
the Company), pending before any Governmental Authority (or, to the best
knowledge of the Holders after due inquiry, threatened to be brought by or
before any Governmental Authority). None of the Company and the Holders is
subject to any Governmental Order (nor, to the best knowledge of the Holders and
the Company after due inquiry, are there any such Governmental Orders threatened
to be imposed by any Governmental Authority).
SECTION 3.12. Certain Interests. (a) None of the Holders, no officer
or director of the Company, no relative or spouse (or relative of such spouse)
who resides with, or is a dependent of, any such officer or director, and no
Person controlled by any of the foregoing Persons has outstanding any
indebtedness to, or any agreements with, the Company.
(b) Other than the Shareholder Accounts Balance, the Company has no
Liability or any other obligation of any nature whatsoever to any of the
Holders, any officer, director or shareholder of the Company or any relative or
spouse (or relative of such spouse) who resides with, or is a dependent of, any
such officer, director or Holder.
SECTION 3.13. Compliance with Laws. The Company is and has been in
compliance at all material times with all Laws and Governmental Orders
applicable to the Company, and the Company is not in violation of any such Law
or Governmental Order.
SECTION 3.14. Assets. The Company has no assets other than 3,337,272
shares of Issuer Common Stock (the "Company Equity Assets").
SECTION 3.15. Employee Matters. The Company does not have and has
never had any (i) employees, (ii) employee benefit plans (as defined in Section
3(3) of the Employee Retirement Income Security Act of 1974, as amended) or
(iii) bonus, stock option, stock purchase, restricted stock, incentive, deferred
compensation, retiree medical or life insurance, supplemental retirement,
severance or other benefit plans, programs or arrangements, or employment,
termination, severance or other contracts or agreements, whether legally
enforceable or not, to which the Company is a party, with respect to which the
Company has any obligation or which are maintained, contributed to or sponsored
by the
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Company for the benefit of any current or former employee, officer or director
of the Company.
SECTION 3.16. Taxes. (a) (i) All returns and reports in respect of
Taxes required to be filed with respect to the Company and any Tax Affiliate
(including any combined, consolidated or similar return that included the
Company or any Tax Affiliate) have been timely filed; (ii) all Taxes required to
be shown on such returns and reports or otherwise due have been timely paid;
(iii) all such returns and reports (including but not limited to any returns or
reports relating to the activities or income of the Company or any Tax
Affiliate) are true, correct and complete in all material respects; (iv) no
adjustment relating to such returns has been proposed formally or informally by
any Tax authority (including but not limited to adjustments relating to the
activities or income of the Company or any Tax Affiliate or could result in
liability of the Company or any Tax Affiliate on the basis of joint and/or
several liability) and, to the best knowledge of the Holders and the Company
after due inquiry, no basis exists for any such adjustment; (v) there are no
pending or, to the best knowledge of the Holders and the Company after due
inquiry, threatened actions or proceedings for the assessment or collection of
Taxes against the Company or any Tax Affiliate or (including but not limited to
actions or proceedings relating to the activities or income of the Company or
any Tax Affiliate or could result in liability of the Company or any Tax
Affiliate on the basis of joint and/or several liability) any corporation that
was included in the filing of a return with the Company on a consolidated or
combined basis; (vi) no consent under Section 341(f) of the Code has been filed
with respect to the Company or any Tax Affiliate; (vii) there are no Tax liens
on any assets of the Company or any Tax Affiliate; and (viii) neither the
Company nor any Tax Affiliate has been at any time a member of any partnership
or joint venture or the holder of a beneficial interest in any trust for any
period for which the statute of limitations for any Tax has not expired.
(b) Except as disclosed with reasonable specificity in Section 3.16
of the Disclosure Schedule: (i) there are no outstanding waivers or agreements
extending the statute of limitations for any period with respect to any Tax to
which the Company or any Tax Affiliate may be subject; (ii) neither the Company
nor any Tax Affiliate has any income reportable for a period ending after the
Closing Date but attributable to a transaction (e.g., an installment sale)
occurring in or a change in accounting method made for a period ending on or
prior to the Closing Date which resulted in a deferred reporting of income from
such transaction or from such change in accounting method (other than a deferred
intercompany transaction); (iii) there are no requests for information currently
outstanding that could affect the Taxes of the Company or any Tax Affiliate;
(iv) there are no proposed reassessments of any property owned by the Company or
any Tax Affiliate or other proposals that could increase the amount of any Tax
to which the Company or any Tax Affiliate would be subject; and (v) no power of
attorney or other similar legal documents that is currently in force has been
granted with respect to any matter relating to Taxes that could affect the
Company or a Tax Affiliate.
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(c) There are no material adverse tax consequences to the Company
resulting from any prior disposition by the Company of any of the Company's
assets, investments, businesses or subsidiaries.
SECTION 3.17. Full Disclosure. (a) The Holders have not willfully
withheld any facts pertaining to the Company which could materially adversely
affect the Company and which have not been disclosed in this Agreement, the
Disclosure Schedule, the Financial Statements or the Interim Financial
Statements or otherwise disclosed to the Issuer by the Holders in writing.
(b) No representation or warranty of the Holders in this Agreement,
nor any statement or certificate furnished to the Issuer pursuant to this
Agreement, contains or will contain any untrue statement of a material fact, or
omits or will omit to state a material fact necessary to make the statements
contained herein or therein not misleading.
SECTION 3.18. Investment Purpose. Except with respect to any Issuer
Shares to be registered for resale pursuant to the Registration Rights
Agreement, each of the Holders is acquiring the Issuer Shares solely for the
purpose of investment and not with a view to, or for offer or sale in connection
with, any distribution thereof. Each of the Holders has had the opportunity to
(i) make such investigations of the business and property of the Issuer and its
subsidiaries as he or she desired, and (ii) ask questions of management of the
Issuer and its subsidiaries concerning such business and properties. In
addition, each Holder has been furnished with copies of all documents, including
financial statements, and information concerning the business and affairs of the
Issuer and its subsidiaries as that Holder has requested. Each Holder
acknowledges to the Issuer that the Issuer Shares have not been registered under
the Securities Act of 1933, as amended, or any state securities laws. Each
Holder agrees that it shall not at any time sell, transfer or dispose of any
Issuer Shares or any interest therein except in compliance with the provisions
of the Securities Act of 1933, as amended, and the rules and regulations
promulgated thereunder, and other applicable federal or state securities laws
and the rules and regulations promulgated thereunder. Each of the Holders is an
"accredited investor" as such term is defined in Rule 501 under the Securities
Act of 1933, as amended.
SECTION 3.19. Defaults. As of the date hereof, the Company is not in
default with regard to any payments on its debts, is not subject to any
voluntary or involuntary bankruptcy or liquidation proceedings, and is not and
has not been the object of any corporate reorganization other than its
transformation into a societe anonyme. The Company is not and has not been the
object of any early warning procedure (procedure d'alerte) nor any procedure to
invalidate the Company (demande en nullite).
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SECTION 3.20. Guarantees. Except as disclosed in Section 3.20 of the
Disclosure Schedule, the Company is not a guarantor in respect of the debts,
obligations or liabilities of any of the Holders or of any other Person.
SECTION 3.21. Brokers. No broker, finder or investment banker is
entitled to any brokerage, finder's or other fee or commission payable by the
Company in connection with the transactions contemplated by this Agreement based
upon arrangements made by or on behalf of any of the Holders or the Company.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF THE ISSUER
As an inducement to the Holders to enter into this Agreement, the
Issuer hereby represents and warrants to the Holders (and acknowledges that the
Holders have relied on such representations and warranties) as follows:
SECTION 4.01. Organization and Authority of the Issuer. The Issuer
is a corporation duly organized, validly existing and in good standing under the
laws of the State of Indiana and has all necessary corporate power and authority
to enter into this Agreement and the Registration Rights Agreement, to carry out
its obligations hereunder and thereunder and to consummate the transactions
contemplated hereby and thereby. The execution and delivery of this Agreement
and the Registration Rights Agreement by the Issuer, the performance by the
Issuer of its obligations hereunder and thereunder and the consummation by the
Issuer of the transactions contemplated hereby and thereby have been duly
authorized by all requisite action on the part of the Issuer. This Agreement has
been, and upon its execution the Registration Rights Agreement will be, duly
executed and delivered by the Issuer, and (assuming due authorization, execution
and delivery by the Holders) this Agreement constitutes, and upon its execution
the Registration Rights Agreement will constitute, a legal, valid and binding
obligation of the Issuer enforceable against the Issuer in accordance with their
terms.
SECTION 4.02. Ownership of Issuer Shares. Upon consummation of the
transactions contemplated by this Agreement and registration of the Issuer
Shares as appropriate in the names of the Holders in the stock records of the
Issuer, the Holders, assuming the Holders have purchased the Issuer Shares for
value in good faith and without notice of any adverse claim, will own all the
Issuer Shares free and clear of all Encumbrances, other than Encumbrances
arising from any action or agreement of any of the Holders and transfer
restrictions applicable to restricted securities under the Securities Act and
the rules and regulations thereunder. The Issuer Shares will be validly issued,
fully paid and nonassessable and will have the rights applicable to newly issued
Shares of Issuer
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Common Stock, subject to the restrictions and assumptions set forth in the
preceding sentence.
SECTION 4.03. No Conflict. Assuming that the notification described
in Section 4.04 has been obtained and except as may result from any facts or
circumstances relating solely to the Holders, the execution, delivery and
performance of this Agreement and the Registration Rights Agreement by the
Issuer do not and will not (a) violate, conflict with or result in the breach of
any provision of the Certificate of Incorporation or By-laws of the Issuer, (b)
conflict with or violate any Law or Governmental Order applicable to the Issuer
or (c) conflict with, or result in any breach of, constitute a default (or event
which with the giving of notice or lapse or time, or both, would become a
default) under, require any consent under, or give to others any rights of
termination, amendment, acceleration, suspension, revocation, or cancellation
of, or result in the creation of any Encumbrance on any of the assets or
properties of the Issuer pursuant to, any note, bond, mortgage or indenture,
contract, agreement, lease, sublease, license, permit, franchise or other
instrument or arrangement to which the Issuer is a party or by which any of such
assets or properties are bound or affected which would have a material adverse
effect on the ability of the Issuer to consummate the transactions contemplated
by this Agreement or by the Registration Rights Agreement.
SECTION 4.04. Governmental Consents and Approvals. The execution,
delivery and performance of this Agreement and the Registration Rights Agreement
by the Issuer do not and will not require any consent, approval, authorization
or other order of, action by, filing with, or notification to, any Governmental
Authority, except for notification to the French Foreign Investment Control
Authorities (Direction du Tresor).
SECTION 4.05. Investment Purpose. The Issuer is acquiring the Shares
solely for the purpose of investment and not with a view to, or for offer or
sale in connection with, any distribution thereof.
SECTION 4.06. Brokers. No broker, finder or investment banker is
entitled to any brokerage, finder's or other fee or commission in connection
with the transactions contemplated by this Agreement based upon arrangements
made by or on behalf of the Issuer.
ARTICLE V
ADDITIONAL AGREEMENTS
SECTION 5.01. Conduct of Business Prior to the Closing. The Holders
covenant and agree that between the date hereof and the time of the Closing,
none of the
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Holders nor the Company shall engage in any practice, take any action, fail to
take any action or enter into any transaction which could cause any
representation or warranty of the Holders to be untrue or result in a breach of
any covenant made by the Holders in this Agreement. The Issuer covenants and
agrees that between the date hereof and the time of the Closing, the Issuer
shall not engage in any practice, take any action, fail to take any action or
enter into any transaction which could cause any representation or warranty of
the Issuer to be untrue or result in a breach of any covenant made by the Issuer
in this Agreement.
SECTION 5.02. Access to Information. (a) From the date hereof until
the Closing, upon reasonable notice, the Holders shall cause the Company and
each of the Company's officers, directors, agents, representatives, accountants
and counsel to: (i) afford the officers, employees and authorized agents,
accountants, counsel, financing sources and representatives of the Issuer
reasonable access, during normal business hours, to the books and records of the
Company and to those officers, directors, agents, accountants and counsel of the
Company who have any knowledge relating to the Company and (ii) furnish to the
officers, employees and authorized agents, accountants, counsel, financing
sources and representatives of the Issuer such additional financial and
operating data and other information regarding the assets and Liabilities of the
Company (or legible copies thereof) as the Issuer may from time to time
reasonably request.
(b) In order to facilitate the resolution of any claims made against
or incurred by the Holders prior to the Closing, for a period of seven years
after the Closing, the Issuer shall (i) retain the books and records of the
Company relating to periods prior to the Closing in a manner reasonably
consistent with the prior practice of the Company and (ii) upon reasonable
notice, afford the Holders' Representative or its authorized agents and
representatives reasonable access (including the right to make, at the Holders'
expense, photocopies), during normal business hours, to such books and records.
(c) In order to facilitate the resolution of any claims made by or
against or incurred by the Issuer or the Company after the Closing or for any
other reasonable purpose, for a period of seven years following the Closing, the
Holders shall (i) retain the books and records of the Holders which relate to
the Company for periods prior to the Closing and which shall not otherwise have
been delivered to the Issuer or the Company and (ii) upon reasonable notice,
afford the officers, employees and authorized agents and representatives of the
Issuer or the Company reasonable access (including the right to make
photocopies, at the expense of the Issuer or the Company), during normal
business hours, to such books and records.
SECTION 5.03. Retention of Company Equity Assets. From the Closing
to and including June 21, 1998, the Issuer agrees not to redeem or cancel the
Company Equity
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Assets, and shall cause the Company to continue to hold, and to not transfer,
pledge or divest any ownership interest in, the Company Equity Assets.
SECTION 5.04. NYSE Listing. The Issuer shall use its reasonable
efforts to list the Issuer Shares on the NYSE.
SECTION 5.05 Legend. The Holders agree that all certificates
representing the Issuer Shares issued in connection with the transactions
contemplated by this Agreement shall bear the following legend:
THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933 OR THE SECURITIES LAWS OF ANY STATE AND
NEITHER THE SECURITIES REPRESENTED BY THIS CERTIFICATE NOR ANY INTEREST
THEREIN MAY BE SOLD OR OTHERWISE TRANSFERRED IN THE ABSENCE OF SUCH
REGISTRATION OR AN EXEMPTION THEREUNDER.
SECTION 5.06 Regulatory and Other Authorizations; Notices and
Consents. The Holders shall use their reasonable best efforts to obtain (or
cause the Company to obtain) all authorizations, consents, orders and approvals
of all Governmental Authorities and officials that may be or become necessary
for their execution and delivery of, and the performance of their obligations
pursuant to, this Agreement and the Registration Rights Agreement and will
cooperate fully with the Issuer in promptly seeking to obtain all such
authorizations, consents, orders and approvals.
SECTION 5.07 Notice of Developments. Prior to the Closing, the
Holders shall promptly notify the Issuer in writing of (i) all events,
circumstances, facts and occurrences arising subsequent to the date of this
Agreement which could result in any breach of a representation or warranty or
covenant of the Holders in this Agreement or which could have the effect of
making any representation or warranty of the Holders in this Agreement untrue or
incorrect in any respect and (ii) all other material developments affecting the
Company or any of its assets or Liabilities.
SECTION 5.08 Further Action. Each of the parties hereto shall use
all reasonable efforts to take, or cause to be taken, all appropriate action, do
or cause to be done all things necessary, proper or advisable under applicable
Law, and execute and deliver such documents and other papers, as may be required
to carry out the provisions of this Agreement and consummate and make effective
the transactions contemplated by this Agreement.
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ARTICLE VI
TAX MATTERS
SECTION 6.01. Indemnity. (a) The Holders agree to indemnify and hold
the Issuer harmless against, and to pay the following Taxes as well as any loss,
damage, liability or expense, including reasonable fees for attorneys and other
outside consultants, incurred in contesting or otherwise in connection with any
such Taxes: (i) Taxes imposed on the Company or any Tax Affiliate with respect
to taxable periods of such Person ending on or before the Closing Date; (ii)
with respect to taxable periods beginning before the Closing Date and ending
after the Closing Date, Taxes imposed on the Company or any Tax Affiliate which
are allocable, pursuant to Section 6.01(b), to the portion of such period ending
on the Closing Date; (iii) Taxes imposed on any member of any affiliated,
combined or similar group with which any of the Company and the Tax Affiliates
file or have filed a Return on a consolidated, combined or similar basis for a
taxable period ending on or before the Closing Date; (iv) Taxes arising from or
relating to the transactions contemplated by, or undertaken in connection with,
this Agreement, including, without limitation, (x) the transfer of the Company
Equity Assets to the Issuer and their cancellation (to occur as soon as
practicable after June 21, 1998) regardless of whether the cancellation is
treated as a reduction of capital for U.S. tax purposes and (y) the winding up
of the Company as soon as practicable after June 21, 1998, except for a 5%
withholding Tax applicable under French law and any precompte refunded to the
Issuer pursuant to the tax treaty between France and the United States; (v)
Taxes imposed on the Issuer or the Company or any Tax Affiliate as a result of
any breach of warranty or misrepresentation under Section 3.16.
(b) In the case of Taxes that are payable with respect to a taxable
period that begins before the Closing Date and ends after the Closing Date, the
portion of any such Tax that is allocable to the portion of the period ending on
the Closing Date shall be:
(i) in the case of Taxes that are either (x) based upon or related
to income or receipts, or (y) imposed in connection with any sale or other
transfer or assignment of property (real or personal, tangible or
intangible) (other than conveyances pursuant to this Agreement, as
provided under Section 6.06), deemed equal to the amount which would be
payable if the taxable year ended with the Closing Date; and
(ii) in the case of Taxes imposed on a periodic basis with respect
to the assets of the Company or any Tax Affiliate, or otherwise measured
by the level of any item, deemed to be the amount of such Taxes for the
entire period (or, in the case of such Taxes determined on an arrears
basis, the amount of such Taxes for the immediately preceding period),
multiplied by a fraction the numerator of which is the number of calendar
days in the period ending on the Closing Date and the denominator of which
is the number of calendar days in the entire period.
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SECTION 6.02. Returns and Payments. (a) From the date of this
Agreement through and after the Closing Date, the Holders shall prepare and file
or otherwise furnish in proper form to the appropriate Governmental Authority
(or cause to be prepared and filed or so furnished) in a timely manner all Tax
returns, reports and forms ("Returns") relating to the Company and the Tax
Affiliates that are due on or before or relate to any taxable period ending on
or before the Closing Date (and the Issuer shall do the same with respect to any
taxable period ending after the Closing Date). Returns of the Company and the
Tax Affiliates not yet filed for any taxable period that begins before the
Closing Date shall be prepared in a manner consistent with past practices
employed with respect to the Company and the Tax Affiliates (except to the
extent counsel for the Holders or the Company renders a legal opinion that there
is no reasonable basis in law therefor or determines that a Return cannot be so
prepared and filed without being subject to penalties). With respect to any
Return required to be filed by the Issuer or the Holders with respect to the
Company and the Tax Affiliates and as to which an amount of Tax is allocable to
the other party under Section 6.01(b), the filing party shall provide the other
party and its authorized representatives with a copy of such completed Return
and a statement certifying the amount of Tax shown on such Return that is
allocable to such other party pursuant to Section 6.01(b), together with
appropriate supporting information and schedules at least 20 Business Days prior
to the due date (including any extension thereof) for the filing of such Return,
and such other party and its authorized representatives shall have the right to
review and comment on such Return and statement prior the filing of such Return.
(b) The Holders shall pay or cause to be paid when due and payable
all Taxes for which they are liable pursuant to the terms of this Article VI and
the Issuer shall so pay or cause to be paid Taxes when due and payable all Taxes
for which it is liable pursuant to the terms of this Article VI.
(c) The Issuer shall describe the transactions in connection with
the transfer and cancellation of the Company Equity Assets in the Return for
1998 filed with the French Tax authorities. If the 1998 Return is filed by the
Company with the French Tax authorities without a description of such
transactions, the Holders shall not be liable for any penalty due by the Company
that could have been avoided if the Company had filed such description together
with its 1998 Return.
(d) The Issuer shall timely file form RFIBEU No. 5053 or any other
appropriate form for a refund of any precompte paid by the Company (the "Form")
upon distribution of profits or other amounts, whether or not in the context of
a winding up of the Company. The Holders shall bear the costs incurred in
connection with the payment of any precompte by the Company at a rate not
exceeding 1.0 percentage point over 3 months PIBOR (plus any fees paid to the
bank) from and including the date of the payment of the precompte to and
excluding the date of repayment of the precompte by the French Treasury;
provided, however, that the Issuer files the Form through a bank with whom the
Holders
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shall have negotiated the terms of refund of the precompte to be paid as soon as
practicable. Notwithstanding the foregoing, no indemnity shall be due with
respect to the precompte by the Holders in the event that the precompte is not
refunded to the Issuer by reason of negligence of the Issuer or the Issuer or an
affiliate, tax resident in the United States, holding less than 100% of the
capital stock of the Company.
SECTION 6.03. Contests. (a) After the Closing, the Issuer shall
promptly notify the Holders in writing of any written notice of a proposed
assessment or claim in an audit or administrative or judicial proceeding of the
Issuer or of any of the Company and the Tax Affiliates which, if determined
adversely to the taxpayer, would be grounds for indemnification under this
Article VI; provided, however, that a failure to give such notice will not
affect the Issuer's right to indemnification under this Article VI except to the
extent, if any, that, but for such failure, the Holders could have avoided all
or a portion of the Tax liability in question.
(b) In the case of an audit or administrative or judicial proceeding
that relates to periods ending on or before the Closing Date, provided that the
Holders acknowledge in writing their liability under this Agreement to hold the
Issuer and the Company harmless against the full amount of any adjustment which
may be made as a result of such audit or proceeding that relates to periods
ending on or before the Closing Date (or, in the case of any taxable year that
includes the Closing Date, against an adjustment allocable under Section 6.01(b)
to the portion of such year ending on or before the Closing Date), the Holders
shall have the right at their expense to participate in and control the conduct
of such audit or proceeding but only to the extent that such audit or proceeding
relates solely to a potential adjustment for which the Holders have acknowledged
their liability; the Issuer also may participate in any such audit or proceeding
and, if the Holders do not assume the defense of any such audit or proceeding,
the Issuer may defend the same in such manner as it may deem appropriate,
including, but not limited to, settling such audit or proceeding after giving
five days' prior written notice to the Holders setting forth the terms and
conditions of settlement. In the event that issues relating to a potential
adjustment for which the Holders have acknowledged their liability are required
to be dealt with in the same proceeding as separate issues relating to a
potential adjustment for which the Issuer would be liable, the Issuer shall have
the right, at its expense, to control the audit or proceeding with respect to
the latter issues.
(c) With respect to issues relating to a potential adjustment for
which both the Holders (as evidenced by its acknowledgment under this Section
6.03) and the Issuer or the Company could be liable, (i) each party may
participate in the audit or proceeding, and (ii) the audit or proceeding shall
be controlled by that party which would bear the burden of the greater portion
of the sum of the adjustment and any corresponding adjustments that may
reasonably be anticipated for future Tax periods. The principle set forth in the
immediately preceding sentence shall govern also for purposes of deciding any
issue that must be decided
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jointly (including, without limitation, choice of judicial forum) in situations
in which separate issues are otherwise controlled under this Article VI by the
Issuer and the Holders.
(d) Neither the Issuer, the Company nor the Holders shall enter into
any compromise or agree to settle any claim pursuant to any Tax audit or
proceeding which would adversely affect the other party for such year or a
subsequent year without the written consent of the other party, which consent
may not be unreasonably withheld. The Issuer and the Holders agree to cooperate,
and the Issuer agrees to cause the Company to cooperate, in the defense against
or compromise of any claim in any audit or proceeding.
SECTION 6.04. Time of Payment. Payment by the Holders of any amounts
due under this Article VI in respect of Taxes shall be made (i) at least three
Business Days before the due date of the applicable estimated or final Return
required to be filed by the Issuer on which is required to be reported income
for a period ending after the Closing Date for which the Holders are responsible
under Sections 6.01(a) and 6.01(b) without regard to whether the Return shows
overall net income or loss for such period, and (ii) within three Business Days
following an agreement between the Holders and the Issuer that an indemnity
amount is payable, an assessment of a Tax by a taxing authority, or a
"determination" as defined in Section 1313(a) of the Code. If liability under
this Article VI is in respect of costs or expenses other than Taxes, payment by
the Holders of any amounts due under this Article VI shall be made within five
Business Days after the date when the Holders have been notified by the Issuer
that the Holders have a liability for a determinable amount under this Article
VI and is provided with calculations or other materials supporting such
liability.
SECTION 6.05. Cooperation and Exchange of Information. The Holders
and the Issuer shall provide each other with such cooperation and information as
either of them reasonably may request of the other in filing any Return, amended
Return or claim for refund, determining a liability for Taxes or a right to a
refund of Taxes, participating in or conducting any audit or other proceeding in
respect of Taxes or making representations to or furnishing information to
parties subsequently desiring to purchase any of the Company or any part of the
business from the Issuer. Such cooperation and information shall include
providing copies of relevant Returns or portions thereof, together with
accompanying schedules, related work papers and documents relating to rulings or
other determinations by Tax authorities. The Holders shall make their
representatives available on a basis mutually convenient to both parties to
provide explanations of any documents or information provided hereunder. Each of
the Holders and the Issuer shall retain all Returns, schedules and work papers,
records and other documents in its possession relating to Tax matters of the
Company and the Tax Affiliates for each taxable period first ending after the
Closing Date and for all prior taxable periods until the later of (i) the
expiration of the statute of limitations of the taxable periods to which such
Returns and other documents relate, without regard to extensions except to the
extent notified by the other party in writing of such extensions for the
respective Tax periods, or (ii) six years following the due date (without
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extension) for such Returns. Any information obtained under this Section 6.05
shall be kept confidential except as may be otherwise necessary in connection
with the filing of Returns or claims for refund or in conducting an audit or
other proceeding.
SECTION 6.06. Conveyance Taxes. The Holders shall be liable for and
shall hold the Issuer harmless against any real property transfer or gains,
sales, use, transfer, value added, stock transfer, and stamp taxes, any
transfer, recording, registration, and other fees, and any similar Taxes which
become payable in connection with the transactions contemplated by this
Agreement, and shall file (or agree to have filed) such applications and
documents as shall permit any such Tax to be assessed and paid on or prior to
the Closing Date in accordance with any available pre-sale filing procedure. The
Issuer shall execute and deliver all instruments and certificates necessary to
enable the Holders to comply with the foregoing.
SECTION 6.07. Miscellaneous. (a) The Holders and the Issuer agree to
treat all payments made by either of them to or for the benefit of the other
(including any payments to the Issuer or the Company) under this Article VI,
under other indemnity provisions of this Agreement and for any
misrepresentations or breaches of warranties or covenants as adjustments to the
Purchase Price for Tax purposes and that such treatment shall govern for
purposes hereof except to the extent that the Laws of a particular jurisdiction
provide otherwise, in which case such payments shall be made in an amount
sufficient to indemnify the relevant party on an after-Tax basis.
(b) Notwithstanding any provision in this Agreement to the contrary,
the obligations of the Holders to indemnify and hold harmless the Issuer and the
Company pursuant to this Article VI, and the representations and warranties
contained in Section 3.16, shall terminate at the close of business on the 120th
day following the expiration of the applicable statute of limitations with
respect to the Tax liabilities in question (giving effect to any waiver,
mitigation or extension thereof).
(c) From and after the date of this Agreement, the Holders shall not
without the prior written consent of the Issuer (which may, in its sole and
absolute discretion, withhold such consent) make, or cause or permit to be made,
any Tax election that would affect the Company.
(d) For purposes of this Article VI, "the Issuer" and "the Holders",
respectively, shall include each member of the affiliated, combined or similar
group of corporations of which it is or becomes a member (other than the
Company, except to the extent expressly referenced).
(e) The Issuer shall be entitled to recover professional fees and
related costs that it may reasonably incur to enforce the provisions of this
Article VI.
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ARTICLE VII
CONDITIONS TO CLOSING
SECTION 7.01. Conditions to Obligations of the Holders. The
obligations of the Holders to consummate the transactions contemplated by this
Agreement shall be subject to the fulfillment, at or prior to the Closing, of
each of the following conditions:
(a) Representations, Warranties and Covenants. The representations
and warranties of the Issuer contained in this Agreement shall have been true
and correct when made and shall be true and correct as of the Closing, with the
same force and effect as if made as of the Closing Date, other than such
representations and warranties as are made as of another date, and the covenants
and agreements contained in this Agreement to be complied with by the Issuer on
or before the Closing shall have been complied with, and the Holders'
Representative shall have received a certificate of the Issuer to such effect
signed by a duly authorized officer thereof;
(b) No Proceeding or Litigation. No Action shall have been commenced
by or before any Governmental Authority against either the Holders, the Company
or the Issuer, seeking to restrain or materially and adversely alter the
transactions contemplated by this Agreement which, in the reasonable, good faith
determination of the Holders or the Company, is likely to render it impossible
or unlawful to consummate such transactions; provided, however, that the
provisions of this Section 7.01(b) shall not apply if the Company or any of the
Holders have directly or indirectly solicited or encouraged any such Action; and
(c) Registration Rights Agreement. The Issuer shall have executed
and delivered to the Holders' Representative the Registration Rights Agreement.
SECTION 7.02. Conditions to Obligations of the Issuer. The
obligations of the Issuer to consummate the transactions contemplated by this
Agreement shall be subject to the fulfillment, at or prior to the Closing, of
each of the following conditions:
(a) Representations, Warranties and Covenants. The representations
and warranties of the Holders contained in this Agreement shall have been true
and correct when made and shall be true and correct as of the Closing with the
same force and effect as if made as of the Closing, other than such
representations and warranties as are made as of another date, and the covenants
and agreements contained in this Agreement to be complied with by the Holders on
or before the Closing shall have been complied with, and the Issuer shall have
received a certificate of the Holders' Representative to such effect;
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(b) No Proceeding or Litigation. No Action shall have been commenced
or threatened by or before any Governmental Authority against either the
Holders, the Company or the Issuer, seeking to restrain or materially and
adversely alter the transactions contemplated by this Agreement which, in the
reasonable, good faith determination of the Issuer, is likely to render it
impossible or unlawful to consummate such transactions; provided, however, that
the provisions of this Section 7.02(b) shall not apply if the Issuer has
solicited or encouraged any such Action;
(c) Legal Opinion. The Issuer shall have received from ▇▇▇▇▇▇▇▇ &
Associes a legal opinion, addressed to the Issuer and dated the Closing Date,
substantially in the form set forth in Exhibit 7.02(c);
(d) Resignations of the Company's Directors. The Issuer shall have
received the resignations, effective as of the Closing, of all the directors and
officers of the Company, except for such persons as shall have been designated
in writing prior to the Closing by the Issuer to the Holders;
(e) Organizational Documents. The Issuer shall have received a copy
of the Statuts of the Company, certified by the Company's President Director
General as of the Closing Date and a K-Bis with respect to the Company certified
as of a date not earlier than five Business Days prior to the Closing Date;
(f) Minute Books. The Issuer shall have received the minute books
and stock register of the Company, certified by a duly authorized officer of the
Company as of the Closing Date; and
(g) Registration Rights Agreement. Each Holder shall have executed
and delivered to the Issuer the Registration Rights Agreement.
ARTICLE VIII
INDEMNIFICATION
SECTION 8.01. Survival of Representations and Warranties. The
representations and warranties contained in this Agreement, and all statements
contained in this Agreement, Schedule I to this Agreement, the Disclosure
Schedule and any certificate, Financial Statement, Interim Financial Statement
or report or other document delivered pursuant to this Agreement or in
connection with the transactions contemplated by this Agreement (collectively,
the "Acquisition Documents"), shall survive the Closing until the fifth
anniversary of the Closing Date; provided, however, that the representations and
warranties dealing with Tax matters shall survive as provided in Section
6.07(b). Neither the
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period of survival nor the liability of the parties hereto with respect to the
representations and warranties of each party hereto shall be reduced by any
investigation made at any time by or on behalf of the other party hereto. If
written notice of a claim has been given prior to the expiration of the
applicable representations and warranties, then the relevant representations and
warranties shall survive as to such claim, until such claim has been finally
resolved.
SECTION 8.02. Indemnification by the Holders. (a) The Issuer and its
Affiliates, officers, directors, employees, agents, successors and assigns (each
an "Indemnified Party") shall be indemnified and held harmless by the Holders
jointly and severally for any and all Liabilities, losses, damages, claims,
costs and expenses, interest, awards, judgments and penalties (including,
without limitation, reasonable attorneys' and consultants' fees and expenses)
actually suffered or incurred by them or the Company (including, without
limitation, any Action brought or otherwise initiated by any of them or the
Company) (for the purposes of this Section 8.02, a "Loss"), arising out of or
resulting from:
(i) the breach of any representation or warranty made by the Holders
contained in the Acquisition Documents; or
(ii) the breach of any covenant or agreement by the Holders
contained in the Acquisition Documents; or
(iii) other than the Shareholder Accounts Balance and the Loan
Amount, Liabilities of the Company, whether arising before or after the
Closing Date, arising from or relating to the ownership or any action,
inaction, event or condition of the Company or any Former Subsidiary or
the conduct of the business of the Company or any Former Subsidiary prior
to the Closing, including, without limitation, the ownership, disposition
or winding up of any Former Subsidiary (or any businesses thereof)
indirectly or directly by the Company and any loan made to the Company by
any third party (including, without limitation, any loan to the Company
made by Pierre Damide); or
(iv) any and all Losses suffered or incurred by the Issuer or the
Company by reason of or in connection with any claim or cause of action of
any third party to the extent arising out of any action, inaction, event,
condition, liability or obligation of the Company, any Former Subsidiary
or the Holders or the conduct of the business of the Company or any Former
Subsidiary occurring or existing prior to the Closing.
To the extent that the Holders' undertakings set forth in this Article VIII may
be unenforceable, the Holders shall contribute the maximum amount that it is
permitted to contribute under applicable law to the payment and satisfaction of
all Losses incurred by the Issuer and the Company.
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(b) An Indemnified Party shall give the Holders notice of any matter
which an Indemnified Party has determined has given or could give rise to a
right of indemnification of an Indemnified Party under this Agreement, within 60
days of such determination, stating the amount of the Loss, if known, and method
of computation thereof, and containing a reference to the provisions of this
Agreement in respect of which such right of indemnification is claimed or
arises. The obligations and Liabilities of the Holders under this Section 8.02
with respect to Losses arising from claims of any third party which are subject
to the indemnification provided for in this Section 8.02 (for the purposes of
this Section 8.02, "Third Party Claims") shall be governed by and contingent
upon the following additional terms and conditions: if an Indemnified Party
shall receive notice of any Third Party Claim, the Indemnified Party shall give
the Holders notice of such Third Party Claim within 30 days of the receipt by
the Indemnified Party of such notice; provided, however, that the failure to
provide such notice shall not release the Holders from any of their obligations
under this Article VIII except to the extent the Holders are materially
prejudiced by such failure or to the extent that the Holders have demonstrated
bad faith of the Issuer and shall not relieve the Holders from any other
obligation or Liability that they may have to any Indemnified Party otherwise
than under this Article VIII. If the Holders acknowledge in writing their
obligation to indemnify the Indemnified Party hereunder against any Losses that
may result from such Third Party Claim, then the Holders shall be entitled to
assume and control the defense of such Third Party Claim at their expense and
through counsel of their choice if they give notice of their intention to do so
to the Indemnified Party within ten Business Days of the receipt of such notice
from the Indemnified Party; provided, however, that if there exists or is
reasonably likely to exist a conflict of interest that would make it
inappropriate in the reasonable judgment of the Indemnified Party for the same
counsel to represent both the Indemnified Party and the Holders, then the
Indemnified Party shall be entitled to retain its own counsel, in each
jurisdiction for which the Indemnified Party reasonably determines counsel is
required, at the expense of the Holders. In the event the Holders exercise the
right to undertake any such defense against any such Third Party Claim as
provided above, the Holders shall keep the Indemnified Party reasonably informed
on a periodic basis as to the status of the Third Party Claim and shall consult
with the Indemnified Party on a periodic basis and the Indemnified Party shall
cooperate with the Holders in such defense and make available to the Holders, at
the Holders' expense, all witnesses, personnel, pertinent records, documents,
materials and information in the Indemnified Party's possession or under the
Indemnified Party's control relating thereto as is reasonably required by the
Holders in connection with such Third Party Claim, subject always to keeping the
same confidential other than as required in connection with the defense of the
Third Party Claim or as required by law or legal process. Similarly, in the
event the Indemnified Party is, directly or indirectly, conducting the defense
against any such Third Party Claim, the Indemnified Party shall keep the
Holders' Representative reasonably informed on a periodic basis as to the status
of the Third Party Claim and shall consult with the Holders' Representative on a
periodic basis and the Holders shall cooperate with the Indemnified Party in
such defense and make available to the Indemnified Party, at the Indemnified
Party's expense, all witnesses,
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personnel, pertinent records, documents, materials and information in the
Holders' possession or under the Holders' control relating thereto as is
reasonably required by the Indemnified Party in connection with such Third Party
Claim, subject always to keeping the same confidential other than as required in
connection with the defense of the Third Party Claim or as required by law or
legal process. No such Third Party Claim may be settled by the Holders without
the prior written consent of the Indemnified Party.
SECTION 8.03. Indemnification by the Issuer. (a) Each Holder shall
be indemnified and held harmless by the Issuer for any and all Liabilities,
losses, damages, claims, costs and expenses, interest, awards, judgments and
penalties (including, without limitation, reasonable attorneys' and consultants'
fees and expenses) actually suffered or incurred by such Holder (including,
without limitation, any Action brought or otherwise initiated by the Holders'
Representative on behalf of the Holders) (hereinafter, for the purposes of this
Section 8.03, a "Loss"), arising out of or resulting from:
(i) the breach of any representation or warranty made by the Issuer
contained in the Acquisition Documents; or
(ii) the breach of any covenant or agreement by the Issuer contained
in the Acquisition Documents.
To the extent that the Issuer's undertakings set forth in this Section 8.03 may
be unenforceable, the Issuer shall contribute the maximum amount that it is
permitted to contribute under applicable law to the payment and satisfaction of
all Losses incurred by each such Holder.
(b) The Holders' Representative shall give the Issuer notice of any
matter which the Holders' Representative has determined has given or could give
rise to a right of indemnification of a Holder under this Agreement, within 60
days of such determination, stating the amount of the Loss, if known, and method
of computation thereof, and containing a reference to the provisions of this
Agreement in respect of which such right of indemnification is claimed or
arises. The obligations and Liabilities of the Issuer under this Section 8.03
with respect to Losses arising from claims of any third party which are subject
to the indemnification provided for in this Section 8.03 (for the purposes of
this Section 8.03, "Third Party Claims") shall be governed by and contingent
upon the following additional terms and conditions: if a Holder shall receive
notice of any Third Party Claim, the Holders' Representative shall give the
Issuer notice of such Third Party Claim within 30 days of the receipt by the
Holder of such notice; provided, however, that the failure to provide such
notice shall not release the Issuer from any of its obligations under this
Article VIII except to the extent the Issuer is materially prejudiced by such
failure or to the extent that the Issuer has demonstrated bad faith of the
Holder or the Holders' Representative and shall not relieve the Issuer from any
other obligation or Liability that they may have to
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any Holder otherwise than under this Article VIII. If the Issuer acknowledges in
writing its obligation to indemnify the Holder against any Losses that may
result from such Third Party Claim, then the Issuer shall be entitled to assume
and control the defense of such Third Party Claim at its expense and through
counsel of its choice if the Issuer gives notice of its intention to do so to
the Holders' Representative within 10 Business Days of the receipt of such
notice from the Holders' Representative; provided, however, that if there exists
or is reasonably likely to exist a conflict of interest that would make it
inappropriate in the reasonable judgment of the Holders' Representative for the
same counsel to represent both the Holder and the Issuer, then the Holder shall
be entitled to retain its own counsel, in each jurisdiction for which the Holder
reasonably determines counsel is required, at the expense of the Issuer (it
being understood that to the extent that any additional counsel is so required,
the same such counsel shall represent each Holder party to the Third Party Claim
requiring additional counsel). In the event the Issuer exercises the right to
undertake any such defense against any such Third Party Claim as provided above,
the Issuer shall keep the Holders' Representative reasonably informed on a
periodic basis as to the status of the Third Party Claim and shall consult with
the Holders' Representative on a periodic basis and the Holder shall cooperate
with the Issuer in such defense and make available to the Issuer, at the
Issuer's expense, all witnesses, personnel, pertinent records, documents,
materials and information in the Holder's possession or under the Holder's
control relating thereto as is reasonably required by the Issuer in connection
with such Third Party Claim, subject always to keeping the same confidential
other than as required in connection with the defense of the Third Party Claim
or as required by law or legal process. Similarly, in the event the Holder is,
directly or indirectly, conducting the defense against any such Third Party
Claim, the Holders' Representative shall keep the Issuer reasonably informed on
a periodic basis as to the status of the Third Party Claim and shall consult
with the Issuer on a periodic basis and the Issuer shall cooperate with the
Holder in such defense and make available to the Holder, at the Holder's
expense, all witnesses, personnel, pertinent records, documents, materials and
information in the Issuer's possession or under the Issuer's control relating
thereto as is reasonably required by the Holder in connection with such Third
Party Claim, subject always to keeping the same confidential other than as
required in connection with the defense of the Third Party Claim or as required
by law or legal process. No such Third Party Claim may be settled by the Issuer
without the prior written consent of the Holder or the Holders' Representative.
SECTION 8.04. Tax Matters. Anything in this Article VIII (except for
the specific reference to Tax matters in Section 8.01) to the contrary
notwithstanding, the rights and obligations of the parties with respect to
indemnification for any and all Tax matters shall be governed by Article VI.
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ARTICLE IX
TERMINATION AND WAIVER
SECTION 9.01. Termination. This Agreement may be terminated at any
time prior to the Closing:
(a) by the Issuer if, between the date hereof and the time scheduled
for the Closing: (i) any representation or warranty of the Holders contained in
this Agreement shall not have been true and correct when made, (ii) the Holders
shall not have complied with any covenant or agreement to be complied with by
them and contained in this Agreement; or (iii) any of the Holders or the Company
makes a general assignment for the benefit of creditors, or any proceeding shall
be instituted by or against any of the Holders or the Company seeking to
adjudicate any of them a bankrupt or insolvent, or seeking liquidation, winding
up or reorganization, arrangement, adjustment, protection, relief or composition
of its debts under any Law relating to bankruptcy, insolvency or reorganization;
or
(b) by either the Holders or the Issuer if the Closing shall not
have occurred by June 30, 1998; provided, however, that the right to terminate
this Agreement under this Section 9.01(b) shall not be available to any party
whose failure to fulfill any obligation under this Agreement shall have been the
cause of, or shall have resulted in, the failure of the Closing to occur on or
prior to such date; or
(c) by either the Issuer or the Holders in the event that any
Governmental Authority shall have issued an order, decree or ruling or taken any
other action restraining, enjoining or otherwise prohibiting the transactions
contemplated by this Agreement and such order, decree, ruling or other action
shall have become final and nonappealable; or
(d) by the mutual written consent of the Holders and the Issuer.
SECTION 9.02. Effect of Termination. In the event of termination of
this Agreement as provided in Section 9.01, this Agreement shall forthwith
become void and there shall be no liability on the part of either party hereto
except (a) as set forth in Section 10.01 and (b) that nothing herein shall
relieve either party from liability for any breach of this Agreement.
SECTION 9.03. Waiver. Either party to this Agreement may (a) extend
the time for the performance of any of the obligations or other acts of the
other party, (b) waive any inaccuracies in the representations and warranties of
the other party contained herein or in any document delivered by the other party
pursuant hereto or (c) waive compliance with any of the agreements or conditions
of the other party contained herein. Any such extension or waiver shall be valid
only if set forth in an instrument in writing signed by the party to be
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bound thereby. Any waiver of any term or condition shall not be construed as a
waiver of any subsequent breach or a subsequent waiver of the same term or
condition, or a waiver of any other term or condition, of this Agreement. The
failure of any party to assert any of its rights hereunder shall not constitute
a waiver of any of such rights.
ARTICLE X
GENERAL PROVISIONS
SECTION 10.01. Expenses. Except as otherwise specified in this
Agreement or the Registration Rights Agreement, all costs and expenses of the
Issuer and the Holders, including, without limitation, fees and disbursements of
counsel, financial advisors and accountants, incurred in connection with this
Agreement and the Registration Rights Agreement and the transactions
contemplated hereby and thereby shall be paid by the Holders (or the Holders'
Representative on behalf of the Holders), whether or not the Closing shall have
occurred.
SECTION 10.02. Notices. All notices, requests, claims, demands and
other communications hereunder shall be in writing and shall be given or made
(and shall be deemed to have been duly given or made upon receipt) by delivery
in person, by courier service, by cable, by telecopy, by telegram, by telex or
by registered or certified mail (postage prepaid, return receipt requested) to
the respective parties at the following addresses (or at such other address for
a party as shall be specified in a notice given in accordance with this Section
10.02):
(a) if to the Holders or to any Holder, in care of the Holders'
Representative:
▇▇▇▇▇-▇▇▇▇▇▇ ▇▇▇▇▇▇ Plais
La Canadienne
Avenue ▇.▇. ▇▇▇▇▇▇▇
▇▇▇▇▇ ▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇
Telecopy: 011-33-3-21-05-91-79
with a copy to:
▇▇▇▇▇▇▇▇ & Associes
▇▇ ▇▇▇ ▇▇ ▇▇▇▇▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇
Telecopy: 011-33-1-53-83-74-01
Attention: ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
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(b) if to the Issuer:
Sofamor ▇▇▇▇▇ Group, Inc.
▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇.▇. ▇▇▇▇▇▇▇
with a copy to:
Shearman & Sterling
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇▇▇▇▇ O'▇. ▇▇▇▇▇▇, Esq.
SECTION 10.03. Public Announcements. Except as may be required by
law, no party to this Agreement shall make, or cause to be made, any press
release or public announcement in respect of this Agreement or the transactions
contemplated hereby or otherwise communicate with any news media without the
prior written consent of the other party, and the parties shall cooperate as to
the timing and contents of any such press release or public announcement.
SECTION 10.04. Headings. The descriptive headings contained in this
Agreement are for convenience of reference only and shall not affect in any way
the meaning or interpretation of this Agreement.
SECTION 10.05. Severability. If any term or other provision of this
Agreement is invalid, illegal or incapable of being enforced by any Law or
public policy, all other terms and provisions of this Agreement shall
nevertheless remain in full force and effect so long as the economic or legal
substance of the transactions contemplated hereby is not affected in any manner
materially adverse to any party. Upon such determination that any term or other
provision is invalid, illegal or incapable of being enforced, the parties hereto
shall negotiate in good faith to modify this Agreement so as to effect the
original intent of the parties as closely as possible in an acceptable manner in
order that the transactions contemplated hereby are consummated as originally
contemplated to the greatest extent possible.
SECTION 10.06. Entire Agreement. This Agreement and the Registration
Rights Agreement constitute the entire agreement of the parties hereto with
respect to the
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subject matter hereof and thereof and supersede all prior agreements and
undertakings, both written and oral, between the Holders and the Issuer with
respect to the subject matter hereof and thereof.
SECTION 10.07. Assignment. This Agreement may not be assigned by
operation of law or otherwise without the express written consent of the Holders
and the Issuer (which consent may be granted or withheld in the sole discretion
of the Holders or the Issuer); provided, however, that the Issuer may assign
this Agreement to an Affiliate of the Issuer without the consent of the Holders.
SECTION 10.08. No Third Party Beneficiaries. Except for the
provisions of Article VIII relating to Indemnified Parties, this Agreement shall
be binding upon and inure solely to the benefit of the parties hereto and their
permitted assigns and nothing herein, express or implied, is intended to or
shall confer upon any other Person any legal or equitable right, benefit or
remedy of any nature whatsoever under or by reason of this Agreement.
SECTION 10.09. Amendment. This Agreement may not be amended or
modified except (a) by an instrument in writing signed by, or on behalf of, the
Holders and the Issuer or (b) by a waiver in accordance with Section 10.03.
SECTION 10.10. Governing Law. (a) This Agreement shall be governed
by the laws of the State of New York, excluding (to the greatest extent
permissible by law) any rule of law that would cause the application of the laws
of any jurisdiction other than the State of New York.
(b) Each Holder hereby (i) submits to the exclusive jurisdiction of
the state courts of the State of New York located in New York County and the
United States Federal District Court for the Southern District of New York for
the purpose of any Action arising out of or based upon this Agreement or the
Registration Rights Agreement or the subject matter hereof or thereof brought by
the Issuer or any other Indemnified Party or their respective heirs, legal
representatives, successors or assigns and (ii) waives, and agrees not to assert
by way of motion, as a defense, or otherwise, in any such Action any claim that
it is not subject personally to the jurisdiction of the above-named courts, that
its property is exempt or immune from attachment or execution, that the Action
is brought in an inconvenient forum, that the venue of the Action is improper,
or that this Agreement, the Registration Rights Agreement or the subject matter
hereof or thereof may not be enforced in or by such court. Each Holder hereby
irrevocably appoints CT Corporation System as its authorized agent to receive
service of process on its behalf with respect to any such Action, which service
may be made on such agent in accordance with legal procedures prescribed by such
courts. Each Holder agrees that service of process upon CT Corporation System
and
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written notice of said service to the Holders' Representative shall be deemed in
every respect valid service of process upon such Holder in any such Action and
shall be taken and held to be valid personal service upon such Holder. Each
Holder further agrees to take any and all action, including the execution and
filing of any and all such documents and instruments, as may be necessary to
continue such designation and appointment of CT Corporation System in full force
and effect until the sixth anniversary of the Closing Date.
SECTION 10.11. Counterparts; Governing Language. (a) This Agreement
may be executed in one or more counterparts, and by the different parties hereto
in separate counterparts, each of which when executed shall be deemed to be an
original but all of which taken together shall constitute one and the same
agreement.
(b) The parties acknowledge that, at the request and for the benefit
of the Holders, this Agreement may be translated into French. The parties agree
that this English version shall in all respects be the controlling version of
this Agreement.
SECTION 10.12. Specific Performance. The parties hereto agree that
irreparable damage would occur in the event any provision of this Agreement was
not performed in accordance with the terms hereof and that the parties shall be
entitled to specific performance of the terms hereof, in addition to any other
remedy at law or equity.
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IN WITNESS WHEREOF, the Holders and the Issuer have caused this
Agreement to be executed in New York, New York as of the date first written
above by their respective officers thereunto duly authorized.
/s/ Yves ▇▇▇▇ ▇▇▇▇▇▇
--------------------------------------
Yves ▇▇▇▇ ▇▇▇▇▇▇
*
--------------------------------------
▇▇▇▇▇-▇▇▇▇▇▇ ▇▇▇▇▇▇ Plais
*
--------------------------------------
▇▇▇▇▇ ▇▇▇▇▇▇
*
--------------------------------------
▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ Sandere
*
--------------------------------------
▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
*
--------------------------------------
▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
*
--------------------------------------
▇▇▇▇-▇▇▇▇▇ ▇▇▇▇▇▇
*
--------------------------------------
▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ Gauzan
*
--------------------------------------
▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
*
--------------------------------------
▇▇▇▇▇-▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ Milliez
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*By: /s/ Yves ▇▇▇▇ ▇▇▇▇▇▇
--------------------------------
Yves ▇▇▇▇ ▇▇▇▇▇▇
Attorney-in-fact
SOFAMOR ▇▇▇▇▇ GROUP, INC.
By: /s/ J. ▇▇▇▇ ▇▇▇▇▇▇▇
----------------------------------
Name: J. ▇▇▇▇ ▇▇▇▇▇▇▇
Title: Vice President and Treasurer
SOFYC, S.A., as Designated Representative of the shareholders signatory to the
Shareholders' Agreement, solely to consent to Section 2.06(v) hereof
By: /s/ ▇▇▇▇▇-▇▇▇▇▇▇ ▇▇▇▇▇▇ Plais
------------------------------------
Name: ▇▇▇▇▇-▇▇▇▇▇▇ ▇▇▇▇▇▇ Plais
Title: President
41
Exhibit A
REGISTRATION RIGHTS AGREEMENT, dated as of January 26, 1998 (this
"Agreement"), among SOFAMOR ▇▇▇▇▇ GROUP, INC., an Indiana corporation (the
"Company"), the shareholders listed on the signature pages of this Agreement
(each, a "Holder" and, collectively, the "Holders"), and ▇▇▇▇▇-▇▇▇▇▇▇ ▇▇▇▇▇▇
PLAIS, as designated representative of the Holders (the "Holders'
Representative").
W I T N E S S E T H:
WHEREAS, the Company and the Holders have entered into a Stock
Exchange Agreement, dated as of January 26, 1998 (the "Stock Exchange
Agreement"), which provides, upon the terms and subject to the conditions
thereof, for the purchase by the Company from the Holders of all the outstanding
capital stock of Sofyc, S.A., a French societe anonyme; and
WHEREAS, as a condition to the consummation of transactions
contemplated under the Stock Exchange Agreement, the parties thereto have agreed
to enter into this Agreement.
NOW, THEREFORE, in consideration of the foregoing and the mutual
covenants and agreements contained herein, and intending to be legally bound
hereby, the parties hereto agree as follows:
ARTICLE I
CERTAIN DEFINITIONS
SECTION 1.01. Certain Defined Terms. As used in this Agreement, the
following capitalized terms shall have the following respective meanings:
"Affiliate" means, with respect to any specified Person, any other
Person that directly, or indirectly through one or more intermediaries,
controls, is controlled by or is under common control with such specified
Person.
"Alternative Family Demand" has the meaning specified in Section
2.13.
"Beneficially Own" and "Beneficial Ownership", with respect to any
securities, mean having beneficial ownership as determined pursuant to Rule
13d-3 under the Exchange Act, including pursuant to any agreement, arrangement
or understanding, whether or not in writing.
42
-2-
"Company Common Stock" means the common stock, no par value, of the
Company.
"Cotrel Registrable Securities" means the number of shares of Common
Stock owned by Yves ▇▇▇▇ ▇▇▇▇▇▇ and ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇ as of the date hereof
minus their share of the Family Registrable Securities (after giving effect to
the transactions contemplated by the Stock Exchange Agreement), together with
any securities which may be issued or distributed in respect thereof by way of
stock dividend or stock split or other distribution, recapitalization or
reclassification. The Cotrel Registrable Securities shall cease to be Cotrel
Registrable Securities when a Registration Statement with respect thereto shall
have become effective under the Securities Act, they shall have been sold,
transferred or assigned to any Person or they shall have ceased to be
outstanding.
"Exchange Act" means the Securities Exchange Act of 1934, as
amended, and the rules and regulations thereunder.
"Family Registrable Securities" means 1,600,000 shares of Company
Common Stock received by the Holders pursuant to the transactions contemplated
by the Stock Exchange Agreement, together with any securities which may be
issued or distributed in respect thereof by way of stock dividend or stock split
or other distribution, recapitalization or reclassification. The Family
Registrable Securities shall immediately cease to be Family Registrable
Securities when a Registration Statement with respect thereto shall have become
effective under the Securities Act, they shall have been sold, transferred or
assigned to any Person or they shall have ceased to be outstanding. The
allocation of the Family Registrable Securities among the Holders is attached
hereto as Exhibit A.
"Fourth Anniversary" has the meaning specified in Section 2.01(b).
"Person" shall mean any individual, partnership, joint venture,
corporation, trust, unincorporated organization or government or any department
or agency thereof.
"Postponement Period" has the meaning set forth in Section 2.01(b).
"Prospectus" means the prospectus included in a Registration
Statement, as amended or supplemented by any prospectus supplement with respect
to the terms of the offering of any portion of the Registrable Securities
covered by such Registration Statement and all other amendments or supplements
to the Prospectus, including post-effective amendments, and all material
incorporated, or deemed to be incorporated, by reference in such Prospectus.
"Registrable Securities" means the Cotrel Registrable Securities and
the Family Registrable Securities.
43
-3-
"Registration" has the meaning specified in Section 2.01(a).
"Registration Statement" means a registration statement on Form S-3
under the Securities Act which covers any Registrable Securities filed by the
Company pursuant to the provisions of this Agreement, including the Prospectus
contained therein, any amendments and supplements to such Registration
Statement, including post-effective amendments, and all exhibits and all
material incorporated, or deemed to be incorporated, by reference in such
Registration Statement.
"SEC" shall mean the Securities and Exchange Commission or any other
federal agency at the time administering the Securities Act or the Exchange Act.
"Securities Act" shall mean the Securities Act of 1933, as amended,
and the rules and regulations thereunder.
"Selling Holders" shall mean such Holders or Holder of Registrable
Securities being registered in connection with a Registration Statement pursuant
to this Agreement.
ARTICLE II
REGISTRATION RIGHTS
SECTION 2.01. Registration Rights. (a) The Company agrees to use its
reasonable efforts to effect the registration of the Family Registrable
Securities under and in accordance with the provisions of the Securities Act
(the "Family Registration") so that such registration is effective under the
Securities Act, subject to market conditions and the advice of the managing
underwriter, as soon as reasonably practicable. The Family Registration shall be
pursuant to an underwritten public sale.
(b) At any time following the first anniversary of the closing of
the offering effected in connection with the Family Registration and prior to
the fourth anniversary of such closing (the "Fourth Anniversary"), Yves ▇▇▇▇
▇▇▇▇▇▇ and ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, acting together or the survivor of them, may
make one written request to the Company for registration of the Cotrel
Registrable Securities (the "Cotrel Registration", and together with the Family
Registration (including any registration pursuant to an Alternative Family
Demand), the "Registrations", or individually, a "Registration") under and in
accordance with the Securities Act. Anything in this Agreement to the contrary
notwithstanding, the Company shall be entitled to postpone and delay the Cotrel
Registration up to two times for a period of 90 days each (in each case, a
"Postponement Period") if the Company reasonably determines that an offering at
such time would have an adverse effect on the Company under the circumstances
then outstanding; provided, however, that if any
44
-4-
Postponement Period extends to or beyond the Fourth Anniversary, then, on the
day immediately following the last day of such Postponement Period, the
registration right of Yves ▇▇▇▇ ▇▇▇▇▇▇ and ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇ under this
Section 2.01(b) shall be reinstated for a period equal to the number of days of
the Postponement Period falling prior to the Fourth Anniversary. No extension of
the registration right of Yves ▇▇▇▇ ▇▇▇▇▇▇ and ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇ under this
Section 2.01(b) shall result from any postponement by the Company if the
Postponement Period with respect thereto terminates prior to the Fourth
Anniversary. The method of distribution of the Cotrel Registrable Securities
(i.e., underwritten public sale, block trades or otherwise) will be determined
jointly by ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇ and the Company, subject to
Section 2.12, on terms agreeable to all such parties.
(c) The Company agrees to use its reasonable efforts to keep any
Registration continuously effective until the conclusion of the distribution of
the Registrable Securities covered by such Registration.
(d) If the managing (or sole) underwriter of any Registration
informs the Holders' Representative that the total number of Registrable
Securities intended to be included by the Selling Holders is such as to affect
adversely the success of such offering, then such Registration shall include the
number of Registrable Securities which, in the opinion of such underwriter, can
be sold without adversely affecting the success of the offering. In the case of
a Family Registration, such Registrable Securities to be included in the
Registration shall be allocated (i) pro rata among the Selling Holders on the
basis of the relative number of shares of the Company Common Stock which each
such Selling Holder has requested be sold pursuant to the Family Registration or
(ii) in such other manner as the Holders' Representative shall specify in
writing to the Company.
(e) Securities not held or otherwise Beneficially Owned by the
Holders (including securities to be originally offered by the Company) may be
included in a Registration Statement covering a Registration; provided, however,
that any such securities may be included only to the extent that, in the opinion
of the managing (or sole) underwriter of such registration, the total amount of
the securities to be so registered, when added to the total amount of
Registrable Securities to be registered, will not adversely affect the success
of the offering.
SECTION 2.02. Registration Procedures. In connection with the
Company's Registration obligations pursuant to this Article II, the Company
shall use its reasonable efforts to effect such registration to permit the sale
of Registrable Securities in accordance with the intended method of disposition
thereof, and, pursuant thereto, the Company shall:
(a) prepare and file with the SEC a Registration Statement, and use
its reasonable efforts to cause such Registration Statement to become
effective;
45
-5-
(b) prepare and file with the SEC such amendments and post-effective
amendments to the Registration Statement as may be necessary to keep such
Registration Statement effective for the applicable period; cause the
Prospectus to be supplemented by any required Prospectus supplement, and
as so supplemented to be filed pursuant to Rule 424 under the Securities
Act; and comply with the provisions of the Securities Act with respect to
the disposition of all securities covered by such Registration Statement
during the applicable period in accordance with the terms of the offering;
(c) notify promptly the Holders' Representative (who, in turn, shall
notify counsel for the Selling Holders) and the managing (or sole)
underwriter (i) when the Prospectus or any supplement or amendment has
been filed and, with respect to the Registration Statement or any
post-effective amendment to the Registration Statement, when the same has
become effective, (ii) of any request by the SEC for amendments or
supplements to the Registration Statement or Prospectus or for additional
information or any receipt of SEC comments, (iii) of the issuance by the
SEC of any stop order suspending the effectiveness of the Registration
Statement or the initiation of any proceedings for any such purpose, (iv)
of the receipt by the Company of any notification with respect to the
suspension of the qualification of any of the Registrable Securities for
sale in any jurisdiction or the initiation or threat of any proceedings
for such purpose, (v) of the happening of any event which requires the
making of any changes in the Registration Statement or Prospectus so that
such documents shall not contain any untrue statement of a material fact
or omit to state any material fact required to be stated therein or
necessary to make the statements therein not misleading and (vi) of the
Company's determination that a post-effective amendment to the
Registration Statement would be appropriate;
(d) use its reasonable efforts to prevent the issuance of any stop
order suspending the effectiveness of the Registration Statement or of any
order preventing or suspending the use of the Prospectus and, if any such
order is issued, to obtain the withdrawal of any such order;
(e) furnish to the Holders' Representative (for distribution to each
Selling Holder) and the managing (or sole) underwriter at least one signed
copy of the Registration Statement and any post-effective amendment
thereto, including financial statements and schedules, all documents
incorporated therein by reference and all exhibits (including those
incorporated by reference);
(f) deliver to the Holders' Representative (for distribution to each
Selling Holder), to such counsel as designated by the Holders'
Representative on behalf of the Selling Holders and to any underwriter as
many copies of the Prospectus (including each preliminary Prospectus) and
any amendment or supplement thereto as such
46
-6-
Persons may reasonably request (the Company consents to the use of the
Prospectus or any amendment or supplement thereto by each of the Holders'
Representative, the Selling Holders and any underwriters in connection
with the offering and sale of the Registrable Securities covered by the
Prospectus or any amendment or supplement thereto);
(g) prior to any public offering of Registrable Securities, register
or qualify or cooperate with the Holders' Representative, the Selling
Holders, any underwriter and their respective counsel in connection with
the registration or qualification of such Registrable Securities for offer
and sale under the securities or blue sky laws of such jurisdictions as
the underwriters reasonably request; keep each such registration or
qualification effective during the period the Registration Statement is
required to be kept effective and do any and all other acts or things
necessary or advisable to enable the disposition in such jurisdictions of
the Registrable Securities covered by the Registration Statement; provided
that the Company shall not be required to qualify generally to do business
in any jurisdiction where it is not then so qualified or to take any
action which would subject it to general service of process or taxation in
any such jurisdiction where it is not then so subject;
(h) cooperate with the Holders' Representative, the Selling Holders
and the managing (or sole) underwriter to facilitate the timely
preparation and delivery of certificates representing Registrable
Securities to be sold and not bearing any restrictive legends; and enable
such Registrable Securities to be in such denominations and registered in
such names as any such underwriter may request;
(i) upon the occurrence of any event contemplated by Section
2.02(c)(v), prepare a supplement or post-effective amendment to the
Registration Statement or Prospectus or any document incorporated therein
by reference or file any other required document so that, as thereafter
delivered to the purchasers of the Registrable Securities being sold
thereunder, such Prospectus shall not contain an untrue statement of a
material fact or omit to state any material fact necessary to make the
statements therein not misleading;
(j) enter into an underwriting agreement having customary terms
(including, in the opinion of the Company, customary underwriting
discounts or commissions);
(k) make available (during normal business hours and upon reasonable
notice) for inspection by (i) the Holders' Representative (on behalf of
the Selling Holders), (ii) any underwriter participating in any
disposition pursuant to the Registration and (iii) any attorney,
accountant or other agent retained by the Holders' Representative, such
Selling Holders or underwriter, all financial and other records,
47
-7-
pertinent corporate documents and properties of the Company, and cause the
Company's officers, directors and employees to supply all information
reasonably requested by any such representative, underwriter, attorney,
accountant or other agent in connection with the Registration;
(l) use its reasonable efforts to insure the success of the
offering, including, without limitation, participation by the executive
officers of the Company in "road shows" or other marketing activities if
reasonably requested by the managing (or sole) underwriter; and
(m) use its reasonable efforts to list such Registrable Securities
on the New York Stock Exchange, Inc.
SECTION 2.03. Information from Selling Holders. It shall be a
condition precedent to the obligations of the Company to take any action
pursuant to this Article II that the Holders' Representative on behalf of the
Selling Holders shall furnish to the Company such information regarding such
Selling Holders and the Registrable Securities held by them as the Company and
the managing (or sole) underwriter may from time to time request.
SECTION 2.04. Discontinuance of Dispositions. Upon the happening of
any event of the kind described in Section 2.02(c)(ii), (iii), (iv), (v) or
(vi), the Company shall give notice of such event to the Holders'
Representative, who shall, as soon as practicable, give such notice to the
Selling Holders. Each Selling Holder agrees that, upon receipt of such notice
from the Holders' Representative or from the Company, such Selling Holder shall
forthwith discontinue disposition of the Registrable Securities pursuant to the
Registration Statement until such Selling Holder's receipt of the copies of a
supplemented or amended Prospectus, or until it is advised in writing by the
Company that the use of the Prospectus may be resumed, and has received copies
of any additional or supplemental filings which are incorporated, or deemed to
be incorporated, by reference in the Prospectus, and, if so directed by the
Holders' Representative or the Company, such Selling Holder shall deliver to the
Company all copies, other than permanent file copies then in such Selling
Holder's possession, of the Prospectus covering such Registrable Securities
current at the time of receipt of such notice.
SECTION 2.05. Indemnification by the Company. The Company agrees to
indemnify and hold harmless, to the full extent permitted by law, the Holders'
Representative, each Selling Holder, each Affiliate of such Selling Holder, and
each of their respective officers, directors, employees and agents and each
Person who controls the Holders' Representative or such Selling Holder or
Affiliate (within the meaning of either Section 15 of the Securities Act or
Section 20 of the Exchange Act) from and against all losses, claims, damages,
liabilities and expenses (including reasonable counsel fees and expenses)
arising out of or relating to (i) any untrue or alleged untrue statement of a
material
48
-8-
fact contained in any Registration Statement or Prospectus (as amended or
supplemented if the Company shall have furnished any amendments or supplements
thereto) or in any preliminary Prospectus or (ii) any omission or alleged
omission to state therein a material fact required to be stated therein or
necessary to make the statements therein (in the case of a Prospectus, in the
light of the circumstances under which they were made) not misleading, except
insofar as such losses, claims, damages, liabilities and expenses arise out of
or relate to any information relating to Selling Holders.
SECTION 2.06. Indemnification by Selling Holders. Each Selling
Holder agrees, severally but not jointly, to indemnify and hold harmless, to the
full extent permitted by law, the Company, its directors, its officers who sign
the Registration Statement and each Person who controls the Company (within the
meaning of Section 15 of the Securities Act or Section 20 of the Exchange Act)
from and against any losses, claims, damages, liabilities and expenses
(including reasonable counsel fees and expenses) arising out of or relating to
(i) any untrue or alleged untrue statement of a material fact contained in any
Registration Statement or Prospectus (as amended or supplemented if such Selling
Holder shall have furnished any amendments or supplements thereto) or in any
preliminary Prospectus or (ii) any omission or alleged omission to state therein
a material fact required to be stated or necessary to make the statements
therein (in the case of a Prospectus, in the light of the circumstances under
which they were made) not misleading, to the extent, but only to the extent,
that such untrue statement or omission is contained in any information
concerning, or undertaking furnished by or on behalf of, such Selling Holder in
the Registration Statement or Prospectus, or any amendment or supplement
thereto, or any preliminary Prospectus.
SECTION 2.07. Delivery of Prospectus. The indemnity provisions in
Section 2.05 are subject to the condition that, insofar as they relate to any
untrue statement (or alleged untrue statement) or omission (or alleged omission)
made in a preliminary Prospectus or Prospectus but which was subsequently
eliminated or remedied in any amended Prospectus on file with the SEC at the
time the registration statement becomes effective or any amended Prospectus
filed with the SEC pursuant to Rule 424(b) or 424(c) (the "Final Prospectus"),
such indemnity provisions shall not inure to the benefit of any underwriter, or
any Selling Holder if the Company has previously delivered copies of such Final
Prospectus to such underwriter or the Holders' Representative (on behalf of such
Selling Holder) and if a copy of the Final Prospectus was not furnished to the
Person or entity asserting the loss, liability, claim or damage at or prior to
the time such action is required by the Securities Act.
SECTION 2.08. Conduct of Indemnification Proceedings. Any Person
entitled to indemnification hereunder (the "indemnified party") shall (i) give
prompt notice to the Person against whom such indemnity is sought (the
"indemnifying party") of any claim with respect to which such indemnification is
sought and (ii) permit such indemnifying party to assume the defense of such
claim with counsel reasonably satisfactory to the indemnified
49
-9-
party; provided, however, that any indemnified party entitled to indemnification
hereunder shall have the right to employ separate counsel and to participate in
the defense of such claim, but the fees and expenses of such counsel shall be
paid by such indemnified party unless (a) the indemnifying party has agreed to
pay such fees or expenses, (b) the indemnifying party shall have failed to
assume the defense of such claim and employ counsel reasonably satisfactory to
such indemnified party or (c) in the reasonable judgment of the indemnified
party and the indemnifying party, based upon advice of their respective counsel,
a conflict of interest may exist between such indemnified party and the
indemnifying party with respect to such claims (in which case, if the
indemnified party notifies the indemnifying party in writing that such
indemnified party elects to employ separate counsel at the expense of the
indemnifying party, the indemnifying party shall not have the right to assume
the defense of such claim on behalf of such indemnified party). If such defense
is not assumed by the indemnifying party, the indemnifying party shall not be
subject to any liability for any settlement made without its consent, which
shall not be unreasonably withheld. An indemnifying party who is not entitled
to, or elects not to, assume the defense of a claim shall not be obligated to
pay the fees and expenses of more than one counsel for all indemnified parties
indemnified by such indemnifying party with respect to such claim, unless, in
the reasonable judgment of any indemnified party or indemnifying party based
upon advice of their respective counsel, a conflict of interest may exist
between such indemnified party and any other of such indemnified parties with
respect to such claim, in which event the indemnifying party shall be obligated
to pay the fees and expenses of one additional counsel.
SECTION 2.09. Contribution. (a) If the indemnification provided for
in Sections 2.05 and 2.06 from the indemnifying party is unavailable to an
indemnified party hereunder in respect of any losses, claims, damages,
liabilities or expenses referred to therein, then the indemnifying party, in
lieu of indemnifying such indemnified party, shall contribute to the amount paid
or payable by such indemnified party as a result of such losses, claims,
damages, liabilities or expenses in such proportion as is appropriate to reflect
the relative fault of the indemnifying party and indemnified parties in
connection with the actions which resulted in such losses, claims, damages,
liabilities or expenses, as well as any other relevant equitable considerations.
The relative fault of such indemnifying party and indemnified parties shall be
determined by reference to, among other things, whether any action in question,
including any untrue or alleged untrue statement of a material fact or omission
or alleged omission to state a material fact, has been made by, or relates to
information supplied by, such indemnifying party and indemnified parties, and
the parties' relative intent, knowledge, access to information and opportunity
to correct or prevent such action. The amount paid or payable by a party as a
result of the losses, claims, damages, liabilities and expenses referred to
above shall be deemed to include, subject to the limitations set forth in
Section 2.08, any legal or other fees or expenses reasonably incurred by such
party in connection with any investigation or proceeding.
50
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(b) The parties hereto agree that it would not be just and equitable
if any contribution pursuant to this Section 2.09 were determined by pro rata
allocation or by any other method of allocation which does not take into account
the equitable considerations referred to in Section 2.09(a). No Person guilty of
fraudulent misrepresentation (within the meaning of Section 11(f) of the
Securities Act) shall be entitled to contribution from any Person who was not
guilty of such fraudulent misrepresentation.
SECTION 2.10. Selection of Investment Banks. The Company shall have
the right to select the investment banker or banks and managers to administer
and underwrite any offering required pursuant to the terms hereof.
SECTION 2.11. Limitations on Participation. No Holder may
participate in any underwritten registration hereunder unless such Holder (a)
agrees to sell such Holder's securities on the basis provided in any
underwritten arrangements approved by the Company and (b) completes and executes
all questionnaires, powers of attorney, indemnities, underwriting agreements,
custody agreements and other documents required under the terms of such
underwriting arrangements.
SECTION 2.12. Registration Expenses. All Registration Expenses
incurred in connection with any Registration pursuant to this Agreement
(including any attempted, withdrawn, postponed or delayed Registration) shall be
paid by the Selling Holders on whose behalf such Registration is made or
attempted; provided, however, that if securities other than Registrable
Securities are included in a Registration Statement then the Selling Holders
shall only pay their proportional interest of the total Registration Expenses.
For purposes of this Agreement, "Registration Expenses" shall mean any and all
expenses incurred in connection with any Registration (or any attempted,
withdrawn, postponed or delayed Registration) or otherwise incident to the
performance of or compliance with this Article II, including, without
limitation, (i) all SEC and stock exchange registration and filing fees, (ii)
all fees and expenses of complying with state securities or blue sky laws, (iii)
all fees and disbursements of counsel for any underwriter (including, without
limitation, fees and disbursements of counsel for any underwriter in connection
with blue sky qualifications of Registrable Securities and determination of the
eligibility of Registrable Securities for investment under the laws of such
jurisdiction as the managing underwriter or the Company may indicate), (iv) all
printing, messenger and delivery expenses, (v) all fees and expenses incurred in
connection with the listing of Registrable Securities on the New York Stock
Exchange, Inc., (vi) all fees and disbursements of counsel for the Company and
of its independent public accountants, and (vii) underwriting discounts and
commissions, brokerage fees and transfer taxes, if any. The Selling Holders will
in any event pay all fees and disbursements of counsel, accountants or other
experts or advisors to the Selling Holders.
SECTION 2.13. Alternative Family Registration. (a) If the Family
Registration is not effective under the Securities Act on or prior to June 30,
1998 (including
51
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by reason of the Holders withdrawing from the Family Registration prior to the
effectiveness of the Registration Statement after determining, in their
reasonable opinion after consultation with the managing underwriter, that the
likely price or volume of the offering would be unsatisfactory given the
circumstances at such time), then the Holders' Representative, on behalf of the
Holders of the Family Registrable Securities, may make one written request to
the Company for registration of the Family Registrable Securities under and in
accordance with the provisions of the Securities Act on substantially equivalent
terms as set forth herein, to be negotiated by the parties at such time in light
of the circumstances then existing (the "Alternative Family Demand"). The method
of distribution of the Family Registrable Securities pursuant to a Registration
effected as a result of an Alternative Family Demand (i.e., underwritten public
sale, block trades or otherwise) will be determined jointly by the Holders'
Representative and the Company, subject to Section 2.12, on terms agreeable to
both parties.
(b) If (i) a Registration is requested by the Holders'
Representative pursuant to the Alternative Family Demand, but is not effective
at a time reasonably prior to the date the Holders are required to pay capital
gains taxes in France for the 1998 tax year, and (ii) the failure of such
Registration to be effective results from a postponement of such Registration
requested by the Company pursuant to its rights relating to such demand, then
the Company shall assist the Holders in obtaining third-party financing on
commercially reasonable terms for the capital gains tax liability of the Holders
for the 1998 tax year arising from the transactions contemplated by the Stock
Exchange Agreement and the Company shall pay the borrowing costs incurred in
connection with such financing.
ARTICLE III
GENERAL PROVISIONS
SECTION 3.01. Notices. All notices and other communications given or
made pursuant hereto shall be in writing (including telecopier or facsimile or
similar writing) and shall be sent to the parties at the following addresses or
telecopier numbers (or at such other address or telecopier number for a party as
shall be specified by like notice, provided that notices of changes of address
or telecopier numbers shall be effective only upon receipt):
52
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(a) if to the Company:
Sofamor ▇▇▇▇▇ Group, Inc.
▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇.▇. ▇▇▇▇▇▇▇,
President and
Chief Executive Officer
with copies to:
Shearman & Sterling
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇▇▇▇▇ O'▇. ▇▇▇▇▇▇
(b) if to any Holder, in care of the Holders' Representative:
▇▇▇▇▇-▇▇▇▇▇▇ ▇▇▇▇▇▇ Plais
La Canadienne
Avenue ▇.▇. ▇▇▇▇▇▇▇
▇▇▇▇▇ ▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇
Telecopy: 011-33-3-21-05-91-79
with copies to:
▇▇▇▇▇▇▇▇ & Associes
▇▇ ▇▇▇ ▇▇ ▇▇▇▇▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇
Telecopy: 011-33-1-53-83-74-01
Attention: ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
53
-13-
(c) if to the Holders' Representative:
▇▇▇▇▇-▇▇▇▇▇▇ ▇▇▇▇▇▇ Plais
as aforesaid
with copies to:
▇▇▇▇▇▇▇▇ & Associes
as aforesaid
Such notices and other communications shall be deemed to have been duly given or
made as of the date delivered, mailed or sent if delivered personally or by
courier, mailed by registered or certified mail (postage prepaid, return receipt
requested) or sent by telecopier.
SECTION 3.02. Headings. The headings contained in this Agreement are
for reference purposes only and shall not affect in any way the meaning or
interpretation of this Agreement.
SECTION 3.03. Severability. If any term or other provision of this
Agreement is invalid, illegal or incapable of being enforced by any rule of law
or public policy, all other conditions and provisions of this Agreement shall
nevertheless remain in full force and effect so long as the economic or legal
substance of the transactions contemplated hereby is not affected in any manner
adverse to any party. Upon such determination that any term or other provision
is invalid, illegal or incapable of being enforced, the parties hereto shall
negotiate in good faith to modify this Agreement so as to effect the original
intent of the parties as closely as possible in a mutually acceptable manner in
order that the transactions contemplated hereby be consummated as originally
contemplated to the greatest extent possible.
SECTION 3.04. Entire Agreement. This Agreement and the Stock
Exchange Agreement constitute the entire agreement of the parties hereto with
respect to the subject matter hereof and supersede all prior agreements and
undertakings, both written and oral, except as otherwise expressly provided
herein.
SECTION 3.05. Amendment; Waiver. This Agreement may not be amended
or modified except by an instrument in writing signed by the Company and the
Holders' Representative. Waiver of any term or condition of this Agreement shall
only be effective if in writing and shall not be construed as a waiver of any
subsequent breach or waiver of the same term or condition, or a waiver of any
other term or condition of this Agreement.
54
-14-
SECTION 3.06. Successors, Assigns and Transferees. This Agreement
shall be binding upon and shall inure to the benefit of the parties hereto and
their respective heirs, successors and permitted assigns. No Holder or the
Holders' Representative may assign this Agreement without the prior written
consent of the Company.
SECTION 3.07. Governing Law. (a) This Agreement shall be governed by
the laws of the State of New York, excluding (to the greatest extent permissible
by law) any rule of law that would cause the application of the laws of any
jurisdiction other than the State of New York.
(b) Each Holder hereby (i) submits to the exclusive jurisdiction of
the state courts of the State of New York located in New York County and the
United States Federal District Court for the Southern District of New York for
the purpose of any action or proceeding arising out of or based upon this
Agreement or the subject matter hereof brought by the Company, its directors,
its officers who sign the Registration Statement and each Person who controls
the Company (within the meaning of Section 15 of the Securities Act or Section
20 of the Exchange Act or their respective heirs, legal representatives,
successors or assigns) and (ii) waives, and agrees not to assert by way of
motion, as a defense, or otherwise, in any such action or proceeding any claim
that it is not subject personally to the jurisdiction of the above-named courts,
that its property is exempt or immune from attachment or execution, that the
action or proceeding is brought in an inconvenient forum, that the venue of the
action or proceeding is improper, or that this Agreement or the subject matter
hereof or thereof may not be enforced in or by such court. Each Holder hereby
irrevocably appoints CT Corporation System as its authorized agent to receive
service of process on its behalf with respect to any such action or proceeding,
which service may be made on such agent in accordance with legal procedures
prescribed by such courts. Each Holder agrees that service of process upon CT
Corporation System and written notice of said service to the Holders'
Representative shall be deemed in every respect valid service of process upon
such Holder in any such action or proceeding and shall be taken and held to be
valid personal service upon such Holder. Each Holder further agrees to take any
and all action, including the execution and filing of any and all such documents
and instruments, as may be necessary to continue such designation and
appointment of CT Corporation System in full force and effect until the sixth
anniversary of the Closing Date.
SECTION 3.08. Counterparts; Governing Language. (a) This Agreement
may be executed in one or more counterparts, and by the different parties hereto
in separate counterparts, each of which when executed shall be deemed to be an
original but all of which taken together shall constitute one and the same
agreement.
(b) The parties acknowledge that, at the request and for the benefit
of the Holders, this Agreement may be translated into French. The parties agree
that this English version shall in all respects be the controlling version of
this Agreement.
55
-15-
SECTION 3.09. The Holders' Representative. Each Holder hereby
acknowledges that he or she has in the Stock Exchange Agreement duly appointed
the Holders' Representative as its attorney-in-fact to act on its behalf and to
take any and all actions required or permitted to be taken by the Holders'
Representative under this Agreement. The Company shall be entitled to rely, as
being binding upon each Holder, upon any document or other paper believed by it
to be genuine and correct and to have been signed or sent by the Holders'
Representative, and the Company shall not be liable to any of the Holders for
any action taken or omitted to be taken by it in such reliance. All fees and
expenses of the Holders' Representative shall be paid by the Holders. The
Company shall in no event incur any liability for (i) any such fees or expenses
or (ii) any losses, damages or expenses arising from or related to, directly or
indirectly, any action (or failure to act) by the Holders' Representative.
56
-16-
IN WITNESS WHEREOF, the Company, the Holders' Representative and the
Holders have caused this Agreement to be executed as of the date first written
above in their individual capacities or by their respective representatives
thereunto duly authorized, as applicable.
------------------------------------
Yves ▇▇▇▇ ▇▇▇▇▇▇
*
------------------------------------
▇▇▇▇▇-▇▇▇▇▇▇ ▇▇▇▇▇▇ Plais
*
------------------------------------
▇▇▇▇▇ ▇▇▇▇▇▇
*
------------------------------------
▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ Sandere
*
------------------------------------
▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
*
------------------------------------
▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
*
------------------------------------
▇▇▇▇-▇▇▇▇▇ ▇▇▇▇▇▇
57
-17-
*
------------------------------------
▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ Gauzan
*
------------------------------------
▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
*
------------------------------------
▇▇▇▇▇-▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ Milliez
*By:
--------------------------------
Yves ▇▇▇▇ ▇▇▇▇▇▇
Attorney-in-fact
SOFAMOR ▇▇▇▇▇ GROUP, INC.
By
--------------------------------
Name: J. ▇▇▇▇ ▇▇▇▇▇▇▇
Title: Vice President and Treasurer
▇▇▇▇▇-▇▇▇▇▇▇ ▇▇▇▇▇▇ PLAIS, as the
Holders' Representative
------------------------------------
Name: ▇▇▇▇▇-▇▇▇▇▇▇ ▇▇▇▇▇▇ Plais
58
EXHIBIT A
ALLOCATION OF FAMILY REGISTRABLE SECURITIES
Allocation of
Holder Securities
------ -------------
Yves ▇▇▇▇ ▇▇▇▇▇▇ & ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇ 648,981
▇▇▇▇▇ ▇▇▇▇▇▇ 123,266
▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ 123,266
▇▇▇▇▇-▇▇▇▇▇▇ ▇▇▇▇▇▇ Plais 120,611
▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ 114,415
▇▇▇▇-▇▇▇▇▇ ▇▇▇▇▇▇ 117,365
▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ Gauzan 123,266
▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ 114,415
▇▇▇▇▇-▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ Milliez 114,415
Total 1,600,000
59
Exhibit 7.02(c)
Form of Opinion of ▇▇▇▇▇▇▇▇ & Associes
1. To such counsel's knowledge, the Holders have the legal capacity
to enter into the Stock Exchange Agreement and the Registration Rights
Agreement, to carry out their obligations hereunder and thereunder and to
consummate the transactions contemplated hereby and thereby. The Stock
Exchange Agreement and the Registration Rights Agreement have been duly
executed and delivered by the Holders, and (assuming due authorization,
execution and delivery by the Issuer), the Stock Exchange Agreement and
the Registration Rights Agreement constitute the legal, valid and binding
obligations of the Holders enforceable against the Holders in accordance
with their terms, subject to the effect of any applicable bankruptcy,
insolvency (including, without limitation, all laws relating to fraudulent
transfers), reorganization, moratorium or similar law affecting creditors'
rights generally and subject, as to enforceability, to the effect of
general principles of equity, including, without limitation, concepts of
materiality, reasonableness, good faith and fair dealing (regardless of
whether such enforceability is considered in a proceeding in equity or at
law).
2 The Stock Exchange Agreement validly appoints the Holders'
Representative to act on each such Holder's behalf in accordance with
Section 2.06 of the Stock Exchange Agreement.
3. The Company is a societe anonyme duly organized and validly
existing under the laws of France and has all necessary power and
authority to own the shares of Issuer Common Stock owned by it.
4. The authorized capital stock of the Company consists of 543,964
shares of Capital Stock. As of the date hereof, 543,964 shares of Capital
Stock are issued and outstanding, all of which are validly issued and
shown as fully paid on the Company's accounts. Pursuant to such counsel's
review of the Company's stock registers and other corporate records, none
of the issued and outstanding shares of Common Stock was issued in
violation of any statutory preemptive rights. There are no options,
warrants, convertible securities or, to such counsel's knowledge, other
rights, agreements, arrangements or commitments of any character relating
to the Capital Stock or obligating the Holders or the Company to issue or
sell any shares of Capital Stock or any other interest in the Company. To
such counsel's knowledge, there are no outstanding contractual obligations
of the Company to repurchase, redeem or otherwise acquire any shares of
Capital Stock or to provide funds to, or make any investment (in the form
of a loan, capital contribution or otherwise) in, any other Person. The
Shares constitute all the outstanding Capital Stock and, to such
60
2
counsel's knowledge, no Person, other than the Holders, owns or has any
interest, whether direct or indirect, in any Capital Stock. Upon
consummation of the transactions contemplated by the Stock Exchange
Agreement and registration of the Shares in the name of Issuer in the
stock records of the Company, the Issuer, assuming it shall have purchased
the Shares for value in good faith and without notice of any adverse
claim, will own all the outstanding Capital Stock free and clear of all
Encumbrances. Upon consummation of the transactions contemplated by the
Stock Exchange Agreement, the Shares will be fully paid and nonassessable.
To such counsel's knowledge, other than the Stock Exchange Agreement, the
Registration Rights Agreement and certain nominee agreements relating to
the allocation of usufruit and nue propriete interests in the Shares among
the Holders (which agreements have been previously provided to the
Issuer), there are no voting trusts, stockholder agreements, proxies or
other agreements or understandings in effect with respect to the voting or
transfer of any of the Shares.
5. Assuming that any required notification to the French Foreign
Investment Control Authorities (Direction du Tresor) has been made, the
execution, delivery and performance of the Stock Exchange Agreement and
the Registration Rights Agreement by the Holders do not and will not (i)
violate, conflict with or result in the breach of any provision of the
Statuts of the Company, (ii) conflict with or violate any Law or, to such
counsel's knowledge, any Governmental Order applicable to the Holders, the
Company, or any of their respective assets, properties or businesses, or
(iii) to such counsel's knowledge, conflict with, result in any breach of,
constitute a default (or event which with the giving of notice or lapse of
time, or both, would become a default) under, require any consent under,
or give to others any rights of termination, amendment, acceleration,
suspension, revocation or cancellation of, or result in the creation of
any Encumbrance on any of the Shares or on any of the assets or properties
of the Holders or the Company pursuant to, any note, bond, mortgage or
indenture, contract, agreement, lease, sublease, license, permit,
franchise or other instrument or arrangement to which the Holders or the
Company is a party or by which any of the Shares or any of such assets or
properties is bound or affected.
6. The execution, delivery and performance of the Stock Exchange
Agreement and the Registration Rights Agreement by the Holders do not
require any consent, approval, authorization or other order of, action by,
filing with or notification to, any French Governmental Authority, except
for notification to the French Foreign Investment Control Authorities
(Direction du Tresor)
7. To such counsel's knowledge, (i) there are no Actions by or
against the Company or any subsidiary (or by or against the Holders or any
Affiliate thereof and relating to the Company), pending before or
threatened to be brought by or before
61
3
any French Governmental Authority and (ii) none of the Company and the
Holders is subject to any Governmental Order nor are there any
Governmental Orders threatened to be imposed against the Company or any
Holder by any French Governmental Authority.
In rendering such opinion, such counsel may state that they express
no opinion as to the laws of any jurisdiction other than the laws of France.
62
SCHEDULE I
Certificate as to Calculation of Equity Consideration
Assuming a closing date of January 21, 1998, the Determination Price
would equal $62.95 (the average of the closing prices of SDG common stock for
the 20 consecutive trading days ending on the tenth trading day prior to the
closing date) (see Exhibit A).
The formula for the number of shares of SDG to be issued in the swap
is as follows:
No. of SDG shares * 0.85 * (No. of SDG Shares held by Sofyc *
held by Sofyc Determination Price) - (Cash Consideration
+ Shareholder Accounts + Loan Amount)
------------------------------------------------------
(No. of SDG Shares held by Sofyc *
Determination Price)
3,337,272 * 0.85 * (3,337,272 * 62.95) - (1,000,000 +
630,034.12(1) + 296,347.28(2))
-------------------------------------------
(3,337,272 * 62.95)
3,337,272 * 0.85 * (210,081,272.40) - (1,926,381.40)
-------------------------------------------
(210,081,272.40)
3,337,272 * (178,569,081.50) - (1,926,381.40)
-------------------------------------------
(210,081,272.40)
3,337,272 * 176,642,700.10
-------------------------------------------
210,081,272.40
3,337,272 * 0.840830304 = 2,806,079.43 ~ 2,806,080
=========
--------
(1) Assumes Shareholder Accounts of FF3,859,715.01. Translated into US$ at the
noon buying rate quoted by the Federal Reserve Bank of New York on January
16, 1998 (US$1.00 = FF6.1262).
(2) Assumes Loan Amount of FF1,815,482.72. Translated into US$ at the noon
buying rate quoted by the Federal Reserve Bank of New York on January 16,
1998 (US$1.00 = FF6.1262).
63
SCHEDULE II
Company Equity Ownership
and Consideration to be Received
=======================================================================================
Cash Consideration
Number of Shares Issuer Shares (Minus Legal Costs)
Holder to be Exchanged to be Received to be Received
------ ---------------- -------------- --------------
---------------------------------------------------------------------------------------
Yves ▇▇▇▇ ▇▇▇▇▇▇ 135,218(1) 697,532 $191,724.00
---------------------------------------------------------------------------------------
▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇ 135,218(1) 697,532 $191,724.00
---------------------------------------------------------------------------------------
▇▇▇▇▇ ▇▇▇▇▇▇ 34,191(2) 176,377 $ 48,479.01
---------------------------------------------------------------------------------------
▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ Sandere 34,191(2) 176,377 $ 48,479.01
---------------------------------------------------------------------------------------
▇▇▇▇▇-▇▇▇▇▇▇ ▇▇▇▇▇▇ Plais 34,191(2) 176,377 $ 48,479.01
---------------------------------------------------------------------------------------
▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ 34,191(2) 176,377 $ 48,479.01
---------------------------------------------------------------------------------------
▇▇▇▇-▇▇▇▇▇ ▇▇▇▇▇▇ 34,191(2) 176,377 $ 48,479.01
---------------------------------------------------------------------------------------
▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ Gauzan 34,191(2) 176,377 $ 48,479.01
---------------------------------------------------------------------------------------
▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ 34,191(2) 176,377 $ 48,479.01
---------------------------------------------------------------------------------------
▇▇▇▇▇-▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ Milliez 34,191(2) 176,377 $ 48,479.01
---------------------------------------------------------------------------------------
Total 543,964 2,806,080 $771,280.08
=======================================================================================
--------
(1) With respect to each of Yves ▇▇▇▇ ▇▇▇▇▇▇ and ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, 81,130
of such shares are being transferred in pleine propriete and 54,088 of
such shares are being transferred solely as usufruit interests.
(2) In addition to such shares being transferred in pleine propriete, each
such Holder is also transferring the nue propriete interests in 13,522
shares (108,176 nue propriete interests, the total of all such nue
propriete interests (13,522 * 8) corresponds to the usufruit interests
being transferred by Yves ▇▇▇▇ ▇▇▇▇▇▇ and ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇). The
transfer of the nue propriete interests, taken together with the transfer
of the corresponding usufruit interests being transferred by Yves ▇▇▇▇
▇▇▇▇▇▇ and ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, transfers to the Issuer pleine propriete
interests in the 108,176 shares. Under the terms of this Agreement, the
transfer of nue propriete interests, unlike the transfer of pleine
propriete and usufruit interests, does not entitle a Holder to a greater
participation in the cash or equity consideration being paid by the
Issuer.