Exhibit 10.1
STOCK SALE AND PURCHASE AGREEMENT
DATED 31ST OF OCTOBER 2006
BETWEEN
ALLERGAN HOLDINGS FRANCE, SAS
ALLERGAN, INC.
AND
THE SHAREHOLDERS OF GROUPE CORNEAL LABORATOIRES
STOCK SALE AND PURCHASE AGREEMENT
BETWEEN
ALLERGAN HOLDINGS FRANCE, SAS
ALLERGAN, INC.
AND
THE SHAREHOLDERS OF GROUPE CORNEAL LABORATOIRES
TABLE OF CONTENTS
ARTICLE I DEFINITIONS AND INTERPRETATION
ARTICLE II SALE AND PURCHASE
2.1. Sale and Purchase of the Shares
2.2. Purchase Price; Payment
2.3. Cash Adjustment, Indebtedness Adjustment
ARTICLE III CLOSING
3.1. Closing Date
3.2. Payments on the Closing Date
3.3. Buyer's Additional Closing Date Delivery
3.4. Sellers' Closing Date Deliveries
3.5. Transfer of Title to the Shares
ARTICLE IV CONDITIONS PRECEDENT TO OBLIGATIONS OF BUYER AND SELLERS
4.1. Merger Control Approvals
4.2. Agreement Null and Void
ARTICLE V REPRESENTATIONS, WARRANTIES AND UNDERTAKINGS OF SELLERS
5.1. Organization of Sellers
5.2. Authority of Sellers
5.3. No Violation; Consents and Approvals
5.4. Organization of the Target Company and Subsidiaries
5.5. Financial Statements
5.6. Title
5.7. Inventories
5.8. Subsidies
5.9. Taxes
5.10. Governmental Permits
5.11. Accreditations
5.12. Assets
5.13. Intellectual Property; Software
5.14. Confidential Information
5.15. Disclosure, Assignment and Inventions
5.16. Documentation
5.17. Information Technology
TABLE OF CONTENTS
(CONTINUED)
5.18. No Violation, Litigation or Regulatory Action
5.19. Contracts
5.20. Employee Relations
5.21. Insurance
5.22. Product Liability
5.23. Accounts Receivable
5.24. Compliance with Laws
5.25. Operations Since 30 June 2006
ARTICLE VI REPRESENTATIONS AND WARRANTIES AND UNDERTAKINGS OF
ALLERGAN, INC. AND THE BUYER
6.1. Organization of Buyer
6.2. Authority of Buyer
6.3. No Violation; Consents and Approvals
6.4. No Violation, Litigation or Regulatory Action
6.5. Purchase Price
ARTICLE VII ACTIONS PRIOR TO THE CLOSING DATE
7.1. Conduct of Business
7.2. Financial Reports
7.3. Reorganization of the Target Group
ARTICLE VIII INDEMNIFICATION
8.1. General Indemnity
8.2. Special Indemnities
8.3. Indemnification by Buyer
8.4. Notice of Claims
8.5. Third Party Claims
8.6. Limitations
8.7. Effect of Disclosure
8.8. Mitigation
8.9. Acts of the Indemnified Party
8.10. Change in Legislation
ARTICLE IX ADDITIONAL AGREEMENTS
9.1. Tax Matters
9.2. Confidential Nature of Information
ARTICLE X NON COMPETE AND NON SOLICITATION UNDERTAKINGS
10.1. Non Compete Undertakings
10.2. Non Solicitation Undertakings
ARTICLE XI GENERAL PROVISIONS
11.1. Survival of Representations and Warranties
11.2. No Public Announcement
11.3. Notices
11.4. Assignment; Successors and Assigns; No Third Party Beneficiaries
11.5. Amendments
11.6. Interpretation
ii
TABLE OF CONTENTS
(CONTINUED)
11.7. Extension; Waivers
11.8. Expenses
11.9. Registration Duties
11.10. Severability
11.11. Execution in Counterparts
11.12. Further Assurances
11.13. Governing Law
11.14. Forum
11.15. Entire Agreement
11.16. Language
iii
STOCK SALE AND PURCHASE AGREEMENT
BETWEEN
ALLERGAN HOLDINGS FRANCE, SAS
ALLERGAN, INC.
AND
THE SHAREHOLDERS OF GROUPE CORNEAL LABORATOIRES
PREAMBLE
BETWEEN THE UNDERSIGNED:
1. ALLERGAN HOLDINGS FRANCE SAS, a French Societe Par Actions Simplifiee in
formation, represented by its Founder, ▇▇▇▇▇▇ Medical BV, a Dutch company,
represented by ▇▇. ▇▇▇▇▇ ▇▇▇▇▇▇▇▇, duly authorized for the purpose hereof,
the "BUYER",
2. ALLERGAN, INC., a Delaware corporation with offices at ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇,
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇, ▇▇▇, represented by ▇▇. ▇▇▇▇▇ ▇▇▇▇▇▇▇▇, duly
authorized for the purpose hereof,
AND:
3. ▇▇. ▇▇▇▇▇▇▇▇ ▇▇▇▇, residing ▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇,
the "CONTROLLING SHAREHOLDER",
4. EUROPEAN PRE-FLOTATION FUND II, a Fonds Commun de Placement a Risques
organized under the laws of France, represented by its Societe de Gestion,
EPF Partners, a Societe Anonyme organized under the laws of France,
represented by ▇▇. ▇▇▇▇▇▇▇▇▇ d'Argoubet, duly authorized for the purpose
hereof,
the "FUND SHAREHOLDER",
5. The remaining minority shareholders of Groupe Corneal Laboratoires, a
French Societe Anonyme, whose registered office is located at ▇▇ ▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇ ▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇, registered with the commercial and
companies registry of Paris under No. 443 940 069 (the "TARGET COMPANY"), a
list of whom is included in Schedule 2.2(b), represented by the Controlling
Shareholder, duly authorized for the purpose hereof,
each a "MINORITY SHAREHOLDER" and together the "MINORITY SHAREHOLDERS",
Parties 3 to 5 (inclusive) are referred to herein individually as a "SELLER" and
collectively as the "SELLERS",
each a "PARTY" and together the "PARTIES".
STOCK SALE AND PURCHASE AGREEMENT
BETWEEN
ALLERGAN HOLDINGS FRANCE, SAS
ALLERGAN, INC.
AND
THE SHAREHOLDERS OF GROUPE CORNEAL LABORATOIRES
A. The Buyer is an indirect, wholly-owned subsidiary of Allergan, Inc., a global
specialty pharmaceutical and medical device company that develops and
commercializes innovative products for facial aesthetics and other markets.
B. The Sellers are the sole shareholders of the Target Company, a French Societe
Anonyme that, directly and through the Subsidiaries (as defined below) (the
Target Company and the Subsidiaries are referred to herein collectively as the
"TARGET GROUP") is engaged in the development, manufacture, distribution and
sale of medical devices.
C. Prior to the date hereof, the Buyer received from the Sellers documents and
information so as to perform, a legal, financial and operational due diligence
review of the Target Group with the assistance of external professional
advisers. Based on such due diligence exercise, the Buyer has decided to proceed
with the transaction contemplated therein.
In consideration of the premises and the mutual covenants and agreements
contained in this Agreement, the Parties have agreed as follows:
AGREEMENT
ARTICLE I
DEFINITIONS AND INTERPRETATION
DEFINITIONS. In this Agreement, the following terms have the meanings
specified or referred to below.
"ACTION" means any proceeding or investigation by or before any court,
any governmental or other regulatory or administrative agency or commission or
any arbitration tribunal.
"AGREEMENT" means this Stock Sale and Purchase Agreement, including
its Preamble, Recitals, Exhibits and Schedules.
"AFFILIATE" means, with respect to any Person, any other Person that
directly or indirectly controls, is controlled by or is under common control
with such Person and, with respect to any individual Person, a member of such
Person's family. For the purpose of this Agreement, the term "control" means the
ownership of more than 50% of the voting interests or shares of any person or
the power to direct its business and affairs.
"BANK GUARANTY" is defined in Section 3.4(m).
"BUYER" is defined in the Preamble. Reference to the Buyer shall mean
reference to any Affiliates the Buyer may designate as provided herein.
"CASH BALANCE" means the aggregate amount, at the close of business on
the date for which the determination is made, of (i) cash, cheques less than
three (3) months old and other cash equivalents, (ii) credit balances with
banks, financial or other similar institutions, including interest accrued
thereon, being held by the Target Company and the Subsidiaries and (iii)
marketable securities, short term instruments and deposit accounts held by the
Target Company and the Subsidiaries, all determined in accordance with French
GAAP. For the avoidance of doubt, cash received as advanced payments for
products not yet completed and any items which would otherwise be considered as
cash but which are not available within the next three (3) months shall not be
included in the calculation of the Cash Balance. Additionally, any amount
payable by Inamed Medical Products Corporation (an affiliate of the Buyer) or
its successors and permitted assignees, to Corneal Industrie SAS, a French
Societe Par Actions Simplifiee (that is one of the Subsidiaries), under the
Inamed Distribution Agreements which is overdue on the above date shall be
considered as cash. Any cash amount expressed in currencies other than euro will
be translated into euro at the exchange rate used to determine the respective
balance sheet, in accordance with French GAAP, that includes the reported cash
amount.
"CASH ADJUSTMENT" is defined in Section 2.2(a).
"CLAIM" is defined in Section 8.4(a).
"CLAIM NOTICE" is defined in Section 8.4(a).
"CLOSING" means the effective purchase by the Buyer of the Shares from
the Sellers.
"CLOSING DATE" is defined in Section 3.1.
"CONTRACT" means any contract, agreement, lease, commitment and
arrangement .
"CONTROLLING SHAREHOLDER" is defined in the Preamble.
"CONTROLLING SHAREHOLDER'S KNOWLEDGE" means the knowledge of the
subject matter concerned by ▇▇. ▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇. ▇▇▇▇▇▇▇ ▇▇▇▇ and/or ▇▇.
▇▇▇▇▇▇ ▇▇▇▇▇▇.
"COPYRIGHTS" means copyrights (whether registered or as otherwise
validly identifiable under applicable laws and regulations) and pending
applications to register the same.
"COURT ORDER" means any decision of any foreign, federal, state,
regional, local or other court or tribunal and any award in any arbitration
proceeding that is enforceable notwithstanding appeal.
-2-
"DUE DILIGENCE" means the legal, financial and operational due
diligence review of the Target Company and Subsidiaries performed by the Buyer,
its counsel and accountants as mentioned in Article V below.
"EMPLOYEES" is defined in Section 5.20.
"ENCUMBRANCE" means any lien, claim, charge, security interest,
mortgage, pledge, easement, conditional sale, option to purchase, usufruct or
other title retention agreement, defect in title or other restrictions of a
similar kind.
"ESTIMATED CASH BALANCE" is defined in Section 2.3(a).
"ESTIMATED INDEBTEDNESS" is defined in Section 2.3(a).
"EXPENSES" means any and all reasonable expenses incurred in
connection with investigating, defending or asserting any Action incident to any
matter indemnified against hereunder (including court filing fees, court costs,
arbitration fees or costs and fees and disbursements of legal counsel,
consultants, accountants and other professionals).
"FINAL ADJUSTMENT" is defined in Section 2.3(c).
"FINANCIAL STATEMENTS" means the FY 2005 Financial Statements and the
Interim 2006 Financial Statements.
"FY 2005 FINANCIAL STATEMENTS" is defined in Section 5.5.
"FUND SHAREHOLDER" is defined in the Preamble.
"GAAP" means generally accepted accounting principles in the relevant
jurisdiction, applied (to the extent consistent with such principles) in a
manner consistent with past practices.
"GOVERNMENTAL AUTHORITY" means any foreign, federal, state, regional,
local or other government, governmental, statutory or administrative authority,
regulatory body or commission or any court, tribunal or judicial or arbitral
body.
"GOVERNMENTAL PERMITS" is defined in Section 5.10.
"INAMED DISTRIBUTION AGREEMENTS" mean the agreements entitled
"Development and Distribution Agreement" dated 9 January 2004 between Inamed
Medical Products Corporation and Collagen Aesthetics Australia Pty Ltd.,
affiliates of the Buyer, and Corneal Industrie SAS, a French Societe par Actions
Simplifiee which is one of the Subsidiaries.
"INDEMNIFIED PARTY" is defined in Section 8.4(a).
"INDEMNITOR" is defined in Section 8.4(a).
-3-
"INDEBTEDNESS" means the aggregate amount of:
(i) any and all interest bearing and non-interest bearing debt to
banks, financial or other similar institutions including but not
limited to loans, overdrafts, drawn-down facilities, inventory
financing, discounting or similar facilities, including interest
accrued thereon,
(ii) capitalized leases (including credit-bail agreements) and
financing received through factoring of trade debtors (i.e. the
amount of trade receivables which have been factored but not yet
collected),
(iii) overdue payables, including overdue trade payables, taxes,
remuneration, bonuses and related costs taking into account
specified trade terms and where no specified trade terms are
applicable, the past accounting practice of the relevant Target
Company and/or Subsidiary,
(iv) accrued and unpaid contributions and commitments under pension
and non-pension post-retirement benefit plans,
(v) repayable elements of any government or other grant,
(vi) restructuring costs accrued and not yet paid,
of (or by) the Target Company and the Subsidiaries as at the close of business
on the date for which the determination is made, determined in accordance with
French GAAP. Any Indebtedness in currencies other than the euro will be
translated into euro at the exchange rate used to determine the respective
balance sheet, in accordance with French GAAP, that includes the reported
Indebtedness.
"INDEBTEDNESS ADJUSTMENT" is defined in Section 2.2(a).
"INTELLECTUAL PROPERTY" means Copyrights, Inventions, Patent Rights,
Trademarks and Trade Secrets that are (i) owned or licensed by the Target
Company and the Subsidiaries, (ii) used in the conduct of the business of the
Target Company and the Subsidiaries as currently conducted and/or (iii)
conceived or reduced to practice before the Closing Date, including but not
limited to the Copyrights, Inventions, Patent Rights, Trademarks and Trade
Secrets listed and/or described in Schedule 5.13(a).
"INTERIM 2006 FINANCIAL STATEMENTS" is defined in Section 5.5.
"INTERNAL IT SYSTEM" means the information and communication equipment
and technologies (including software and associated documentation) used by the
Target Company and the Subsidiaries.
-4-
"INVENTION" means any discovery or invention, whether or not
patentable, made by employees, agents or independent contractors of the Target
Company and/or any of the Subsidiaries during the course of performance of their
contract with said Target Company and/or Subsidiary, as well as any discovery or
invention, whether or not patentable, made by the Sellers, related to
cross-linked hyaluronic acid containing products, together with all related
intellectual property rights.
"INVENTORIES" is defined in Section 5.7(a).
"LOCAL GAAP" is defined in Section 5.5.
"LOSSES" means all losses, Expenses, liabilities, settlement payments,
awards, judgments, fines, penalties and damages arising from facts and/or
circumstances occurring prior to or on the Closing Date, it being understood
that Losses shall include all damages recoverable under French law and shall
include amounts that become due or are incurred or suffered before or after the
Closing Date so long as they arise from facts and/or circumstances occurring
prior to or on the Closing Date.
"MATERIAL CONTRACT" means a Contract which involves for any of the
Target Company and/or the Subsidiaries annual revenues in excess of EUR 75,000
(seventy five thousand euros) or, as regards other commercial contracts, an
amount of more than EUR 75,000 (seventy five thousand euros)
"MINORITY SHAREHOLDER" and "MINORITY SHAREHOLDERS" are defined in the
Preamble.
"NET EQUITY DECREASE" means, a reduction in the consolidated net
shareholders equity (capitaux propres consolides) of the Target Group ,
comparing such consolidated net shareholders equity as of and for the period
ending on 31 December 2005 with such consolidated net shareholders equity on the
Closing Date, without taking account of any payments made or due under Article 9
of the Inamed Distribution Agreements.
"PATENT RIGHTS" means any patents, patent registrations, patent
applications, design patents, utility models and patent term extensions.
"PARTY" and "PARTIES" are defined in the Preamble.
"PERMITTED ENCUMBRANCES" means (a) liens for Taxes and other
governmental charges and assessments that are not yet due and payable and other
similar liens arising in the ordinary course of business for sums not yet due
and payable, (b) Encumbrances or imperfections on property that are not material
in amount or do not materially detract from the value of or materially impair
the existing use of the property affected by such Encumbrance or imperfection,
(c) pledges or deposits in connection with worker's compensation, unemployment
insurance and other social security Requirements of Law, (d) deposits to secure
the performance of any or all of the following: bids, public procurements or
trade contracts (other than for borrowed money), leases, statutory obligations
and other obligations of a like nature incurred in the ordinary course of
business, and (e) Encumbrances and/or title exceptions or imperfections created
by any of the documents to be executed in connection with the Closing or this
Agreement whether prior to, at or after the Closing Date.
-5-
"PERSON" means any individual, corporation, partnership, joint
venture, limited liability company, association, joint-stock company, trust,
unincorporated organization or Governmental Authority.
"PREAMBLE" means the preamble of this Agreement.
"PURCHASE PRICE" means the price payable by the Buyer in respect of
the Shares pursuant to Section 2.2.
"REQUIREMENTS OF LAW" means any foreign, federal, state, regional and
local laws, statutes, decrees, regulations, rules, codes, ordinances, orders or
requirements enacted, adopted, issued or promulgated by any Governmental
Authority.
"REVIEW ACCOUNTANTS" is defined in Section 2.3(b).
"SCHEDULES" means the schedules to this Agreement.
"SHARES" means the entirety of the shares and voting rights making up
the share capital of the Target Company.
"SELLER" and "SELLERS" are defined in the Preamble.
"SOFTWARE" means any software and documentation related thereto.
"SUBSIDIARIES" means the subsidiaries of the Target Company as at the
Closing Date which are directly or indirectly owned by the Target Company (as to
more than 50% of the interests or shares and the corresponding voting rights)
and listed in Schedule A (individually a "SUBSIDIARY").
"TARGET COMPANY" is defined in the Preamble.
"TARGET GROUP" means the Target Company and the Subsidiaries.
"TAX" means any and all taxes and social security contributions,
whether direct or indirect, including, but not limited to, income tax (including
income tax required to be deducted or withheld from or accounted for in respect
of any payment), any taxes on distributions, dividend withholding tax,
corporation tax, insurance tax, turnover and/or value added tax, registration
duties, capital tax, property tax, real estate transfer tax, environmental
taxes, custom duties, excise duties, taxes on wages, social security and
retirement contributions, contributions to complementary insurance plans or
charges and any other taxes, levies, duties, charges, imposts, withholdings or
para-fiscal charges of any kind whatsoever, whether at the foreign, federal,
state, regional or local level, together with any interest, penalty or fine
imposed by any taxing authority of any Governmental Authority.
"TAX RETURN" means any return, report, declaration, notice, account or
other similar statement required to be filed, given or delivered by or on behalf
of the company concerned with respect to any Tax (including any attached
schedules), including any information return, claim for refund, amended return
or declaration of estimated Tax.
-6-
"TRADE SECRETS" means trade secrets, know-how, methods, processes,
formulae or other proprietary information that provides the owner with a
competitive advantage.
"TRADEMARKS" means trademarks, service marks, logos, Internet domain
names, trade names and company names including all goodwill associated therewith
and symbolized thereby, and any registrations and applications to register the
foregoing, as well as any renewals for any of the foregoing.
"US GAAP" is defined in Section 7.2(a).
"WORKING CAPITAL" means the amount which results from subtracting (x)
the sum of the Target Company' and Subsidiaries' current liabilities, including
all accounts payable (including without limitation trade, fixed asset and other
payables) and other accrued expenses and potential current liabilities
(including without limitation accrued employee expenses, accrued taxes, accrued
selling, marketing and administrative expenses), from (y) the sum of the Target
Company' and Subsidiaries' current assets net of reserves, including accounts
receivable net of allowances, plus inventory, prepaid expenses and other current
assets, if any, but excluding cash.
ARTICLE II
SALE AND PURCHASE
2.1. SALE AND PURCHASE OF THE SHARES. Subject to the terms and
conditions of this Agreement and in particular to the conditions precedent
set forth in Article IV, the Sellers irrevocably undertake to sell,
transfer, assign, convey and deliver the Shares, free and clear of all
Encumbrances, to the Buyer (and/or the Affiliates the Buyer may chose to
substitute) on the Closing Date and the Buyer (and/or the Affiliates the
Buyer may chose to substitute) irrevocably undertakes to purchase, assume
and acquire the Shares from the Sellers, free and clear of all
Encumbrances, on said Closing Date.
2.2. PURCHASE PRICE; PAYMENT.
(a) The aggregate purchase price for the Shares and the rights
granted hereunder (the "PURCHASE PRICE") shall be equal to (i) EUR 170,000,000
(one hundred seventy million euros), (ii) decreased by the amount (if any) of
the Indebtedness as at the close of business on the last day of the calendar
month ending immediately prior to the Closing Date (the "INDEBTEDNESS
ADJUSTMENT"), determined as provided in Section 2.3, and (iii) increased by the
amount (if any) of the Cash Balance as at the close of business on the last day
of the calendar month ending immediately prior to the Closing Date (the "CASH
ADJUSTMENT"), determined as provided in Section 2.3.
(b) The Purchase Price shall be paid as provided in Section 3.2
and Section 2.3(c) and apportioned among the Sellers pro-rata to the number of
Shares sold by each of them, as provided in Schedule 2.2(b).
-7-
2.3. CASH ADJUSTMENT, INDEBTEDNESS ADJUSTMENT.
(a) Estimated Adjustment. Seven (7) days prior to the Closing
Date, the Sellers shall in good faith provide to the Buyer: (i) their best
estimate of the Indebtedness as of the last day of the second calendar month
prior to the Closing Date (the "ESTIMATED INDEBTEDNESS"); and (ii) their best
estimate of the Cash Balance as of the last day of the second calendar month
prior to the Closing Date (the "ESTIMATED CASH BALANCE"). For example, if the
Closing Date is 2 January 2007, the estimates above shall be made as of 30
November 2006. A trial estimate of the Cash Adjustment and of the Indebtedness
Adjustment, as of 30 June 2006, shall be provided by the Controlling Shareholder
to the Buyer, within two (2) weeks of the date hereof.
Each of these estimates shall be made on a consolidated basis for all entities
in the Target Group, eliminating any inter-company receivables or payables. The
Controlling Shareholder shall advise the Buyer by notice in advance of any event
or circumstance likely to increase or decrease by more than EUR 1,000,000 (one
million euros) the total of the Cash Adjustment and the Indebtedness Adjustment
that is not in the ordinary course of business and that occurs during the
calendar month immediately prior to the Closing Date, and the Estimated
Indebtedness and the Estimated Cash Balance shall be adjusted in good faith in
order to ensure that the Estimated Cash Balance and the Estimated Indebtedness
reflect the Parties' best estimate of the Cash Adjustment and the Indebtedness
Adjustment. Based upon the above estimates, the Parties shall (x) adjust
downwards the Purchase Price by the amount of the Estimated Indebtedness and (y)
adjust upwards the Purchase Price by the amount of the Estimated Cash Balance
(if the amount is positive) or adjust the Purchase Price downwards (if the
amount is negative) so as to determine the estimated amount of the Purchase
Price, which estimated amount will be payable by the Buyer on the Closing Date.
(b) Final Adjustment.
(i) Within one (1) month after the Closing Date, Ernst &
Young shall prepare a report to the Buyer and the Sellers stating the amount of
the Cash Adjustment and the Indebtedness Adjustment. No later than one (1) month
after the receipt of such report or, if such report is not timely received,
within two (2) months after the Closing Date, the Buyer shall notify to the
Sellers whether it objects to the Estimated Indebtedness and to the Estimated
Cash Balance (stating in reasonable details the reasons for such objection).
(ii) If the Buyer does not give notice to the Sellers,
within the time period set forth in Section 2.3(b)(i) after the Closing Date (or
if the Buyer has provided written notice to the Sellers that it has no objection
to the Estimated Indebtedness and the Estimated Cash Balance), the Estimated
Indebtedness and the Estimated Cash Balance shall be deemed to be final and
binding for the purposes of this Section 2.3.
(iii) If the Buyer gives notice to the Sellers that it
objects to the Estimated Indebtedness and to the Estimated Cash Balance, the
Controlling Shareholder and the Buyer shall meet and negotiate in good faith in
order to reach agreement with respect to the amount of the Final Adjustment.
-8-
(iv) If no agreement can be reached within fifteen (15) days
as from notification of the Buyer's objection, the Parties agree to the
appointment of BDO (the "REVIEW ACCOUNTANTS"), said Review Accountants acting as
experts and not as arbitrators, to prepare a final and conclusive determination
of the Indebtedness Adjustment and the Cash Balance Adjustment and of the
adjustment of the Purchase Price required as a result thereof. The Review
Accountants shall render their report within one (1) month of such retention,
which report shall be, one (1) week after it is issued, a final and binding
determination of the amount of the Indebtedness Adjustment, the Cash Balance
Adjustment and the Purchase Price for the purposes of this Section 2.3, absent
gross error or gross negligence on the part of the Review Accountants.
(c) Purchase Price Payment. In the event that the Purchase Price
is modified pursuant to the provisions of this Section 2.3, the amount required
to be paid as a result of such modification by either the Buyer or the Sellers
(as the case may be) (the "FINAL ADJUSTMENT") shall be paid by wire transfer of
immediately available funds within one (1) week of the date on which such
modification becomes final, to such bank accounts as the Buyer or the
Controlling Shareholder and Fund Shareholder, as the case may be, may indicate
by notice no later than three (3) days after the date that such modification
becomes final. Payments due by the Sellers shall be made by the Controlling
Shareholder, (acting for himself and the Minority Shareholders) and the Fund
Shareholder pro rata to the respective shareholdings in the Target Company held
by the Controlling Shareholder and the Minority Shareholders (taken together),
on the one hand, and the Fund Shareholder, on the other hand.
(d) Miscellaneous. The fees and expenses of the Review
Accountants shall be paid in equal parts by the Buyer and the Controlling
Shareholder. The Parties shall use all reasonable endeavors to procure that all
records, working papers, and other information as may be reasonably required for
the purposes of this Section 2.3 (whether in the possession of the Target
Company, and of Subsidiaries or any Party to this Agreement or any professional
advisor of any such Party) shall be made available on request and shall
generally render all reasonable assistance necessary for the preparation of the
report of the Review Accountants.
ARTICLE III
CLOSING
3.1. CLOSING DATE. Except as provided in Section 7.2, the Closing
shall occur effective 12:01 AM Paris time on the first business day of the month
after the month in which the last of the conditions precedent set forth in
Article IV is satisfied (or, where applicable, waived by the Buyer), so long as
such business day is a business day in Paris, France and Irvine, California (or
the next such business day if it is not) and so long as at least one (1) week's
prior notice of the Closing is given, at the offices of ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
in Paris, and no later than 2 April 2007 and no earlier than 2 January 2007, or
at any other time or place or on any other date as shall be agreed upon by the
Parties. The Parties hereby undertake to make their best efforts to allow the
Closing to take place on 2 January 2007. The Parties further agree that they
shall keep
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each other informed of: (i) the progress of the collection of the closing
documents listed in Section 3.3 and Section 3.4; and (ii) the fulfillment of the
conditions precedent referred to in Article IV, on a weekly basis between the
date hereof and the Closing Date. The time and date that the Closing is actually
held are referred to in this Agreement as the "CLOSING DATE".
3.2. PAYMENTS ON THE CLOSING DATE. The Purchase Price shall be
paid on the Closing Date by wire transfer of immediately available funds to such
bank accounts as the Controlling Shareholder (acting for itself and for the
Minority Shareholders) and the Fund Shareholder shall respectively indicate by
notice no later than five (5) days prior to the Closing Date.
3.3. BUYER'S ADDITIONAL CLOSING DATE DELIVERY. Subject to the
delivery by the Sellers of the documents referred to in Section 3.4, the Buyer
shall deliver to the Sellers at the Closing (i) a certificate confirming that
the representations and warranties made in Article VI are true and correct on
the Closing Date as though made on said Closing Date (except to the extent that
they expressly relate to an earlier date), in the form attached in Schedule
3.3(i), signed by a duly authorized signatory of the Buyer and (ii) a duly
signed counterpart of the consulting agreements to be entered into with ▇▇.
▇▇▇▇▇▇▇▇ ▇▇▇▇ and ▇▇. ▇▇▇▇▇▇▇ ▇▇▇▇ (the "Consulting Agreements").
3.4. SELLERS' CLOSING DATE DELIVERIES. Subject to the delivery by
the Buyer of the documents referred to in Section 3.3, the Sellers shall deliver
to the Buyer all of the following at the Closing:
(a) A certificate signed by the Controlling Shareholder, in the
form attached in Schedule 3.4 (a), (w) confirming that the representations and
warranties made by the Controlling Shareholder in Article V are true and correct
on the Closing Date as though made on said Closing Date (except to the extent
that they expressly relate to an earlier date and subject to any updating of the
Schedules according to the terms of the draft certificate attached as Schedule
3.4 (a)) and (x) confirming the absence, as at the Closing Date, of any Net
Equity Decrease;
(b) A certificate signed by the Fund Shareholder, in the form
attached in Schedule 3.4 (b) (y) confirming that the representations and
warranties made by the Fund Shareholder in Article V are true and correct on the
Closing Date as though made on said Closing Date (except to the extent that they
expressly relate to an earlier date), and (z) confirming the absence, as at the
Closing Date, of any Net Equity Decrease;
(c) Certificates signed by each of the Minority Shareholders, in
the form attached in Schedule 3.4(c), confirming that the representations and
warranties made by each of them in Article V are true and correct on the Closing
Date as though made on said Closing Date (except to the extent that they
expressly relate to an earlier date);
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(d) Where applicable, share transfer forms, notarial deeds and/or
certificates related to the Shares duly executed and drawn up in favor of the
Buyer (and/or the Affiliates the Buyer may chose to substitute) as set out in
Schedule 3.4(d);
(e) Where required under applicable laws, minutes of board of
directors and/or shareholders' meetings of the Subsidiaries approving the
transfer of all outstanding shares held by third parties, in particular by the
directors of each relevant Subsidiary;
(f) Copies of requests for consent and any replies received from
the competent Persons in relation to the contracts listed in Schedule 3.4(f) to
the effect that said Persons consent to the sale and purchase of the Shares and
agree not to exercise any right (whether of termination or otherwise) arising by
reason of such transaction, pursuant to any authorization or Contract containing
change of control/management provisions or which legal regime requires a prior
approval in case of change/management of control; the Controlling Shareholder
shall make his best efforts to obtain such consents of said Persons;
(g) Evidence or written confirmation of the cancellation and
release of any and all (i) guarantees granted by the Target Company and the
Subsidiaries to any entity not a member of the Target Group and (ii) obligations
to Imatrade Inc. with respect to the negotiation, preparation and signature of
agreement(s) entered into by the Target Company and/or any of the Subsidiaries
with Inamed Medical Products Corporation and its Affiliates;
(h) The transfer agreements, notarial deeds and share transfer
forms whereby the Sellers purchased any and all outstanding Shares and
outstanding shares in the Subsidiaries held by third parties, and in particular
by the directors of each relevant company, as at the date hereof, all duly
completed and signed;
(i) Except as may otherwise be agreed, resignation letters
(confirming the absence of any outstanding claim against the relevant Target
Company and the Subsidiaries), effective as at the Closing Date, of all
mandataires sociaux of the Target Company and the Subsidiaries and of any
members of the Controlling Shareholder's family who are employees of Target
Company or any of its Subsidiaries, without any indemnity or payment other than
accrued remuneration and benefits through the Closing Date;
(j) The convening letters for shareholders' and board meetings
which will appoint the persons designated by the Buyer in replacement of the
legal representatives and directors of the Target Company and the Subsidiaries
having resigned pursuant to Section 3.4(i);
(k) A certified copy of the minutes (confirming, if necessary
under applicable Requirements of Law, a positive opinion) with respect to the
information and/or consultation of the Target Company' and the Subsidiaries'
employee representatives, if any, in connection with the transaction hereof;
(l) The up-to-date originals of the share transfer register, the
shareholders' accounts, as well as the minutes of the board of directors'
meetings and the
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shareholders' meetings of the Target Company and the Subsidiaries or any other
similar corporate secretarial documentation (including all documents evidencing
ownership title to the shares of the relevant company and all relevant
documentation pertaining to the conversion of the Target Company into a French
Societe Par Actions Simplifiee and the mergers of Laboratoires d'Esthetique
Appliquee S.A. with Corneal Industrie S.A.S. and Corneal Technologies with
Corneal Industrie, pursuant to Section 7.3 below);
(m) A duly executed counterpart of a bank guaranty to be issued
by a bank of first rank international reputation substantially in the form
attached hereto as Schedule 3.4(m) (the "BANK GUARANTY"). The Bank Guaranty
shall be a Demand Guarantee governed by the Uniform Rules for Demand Guarantees
of the International Chamber of Commerce (Publication No. 458) and shall provide
for payment on first demand upon presentation of a written demand for payment
and such accompanying documents as are provided for in Schedule 3.4(m). The Bank
Guaranty shall provide for aggregate maximum payments of EUR 30,000,000 (thirty
million euros) and, as provided therein, such aggregate maximum payment amount
shall be reduced by EUR 10,000,000 (ten million euros) on each of the following
dates: (i) the first anniversary of the Closing Date, (ii) eighteen (18) months
after the Closing Date, and (iii) twenty-four (24) months after the Closing
Date, in each case subject to such amounts not being required to satisfy Claims
made in a Claim Notice or deemed made by the Buyer as provided by the Bank
Guaranty prior to such dates;
(n) Documentation setting forth any confidential manufacturing
know-how, procedures or techniques used by Target Company and/or its
Subsidiaries, in detail sufficient to allow uninterrupted use of such know-how,
procedures or techniques notwithstanding the departure from the Target Group of
any of the employees or officers thereof and to be made available to the Buyer
for review at least one (1) week prior to the Closing Date (provided that the
Parties have effectively determined such Closing Date), in the Target Company's
premises; and
(o) A duly signed counterpart of the Consulting Agreements.
It is expressly understood and agreed that the delivery by the Sellers to the
Buyer at the Closing of the documents listed in Sections 3.4(a), 3.4(d), 3.4(f),
3.4(l), 3.4(m), and 3.4(n) above constitutes a substantial and determining
condition to the Buyer's decision to purchase the Shares, without which the
Buyer would not have entered into this Agreement. If any of such documents are
not delivered by Seller at Closing, the terms of Section 4.2 shall apply.
3.5. TRANSFER OF TITLE TO THE SHARES. Title and possession of the
Shares shall pass from the Sellers to the Buyer (and/or the Affiliates the Buyer
may chose to substitute) on the Closing Date upon the exchange of the documents
referred to in Section 3.3 and Section 3.4, and confirmation that irrevocable
orders have been given for the payment of the Purchase Price as provided for in
Section 3.2 as well as receipt by the Controlling Shareholder (for themselves
and acting as agents for the other Sellers) of satisfactory proof of the
payments to be made by the Buyer under Section 3.2.
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ARTICLE IV
CONDITIONS PRECEDENT TO OBLIGATIONS OF BUYER AND SELLERS
The obligations of the Buyer and the Sellers under this Agreement shall be
subject to the satisfaction, on or prior to the Closing Date, of the following
condition:
4.1. MERGER CONTROL APPROVALS.
(a) The Parties shall have received all approvals (whether tacit
or express and without significant conditions) that are necessary to consummate
the transaction contemplated by this Agreement from the following competent
Governmental Authorities pursuant to applicable merger control regulations: the
German Federal Cartel Office and the Spanish competition authorities.
(b) The Buyer undertakes to take, or cause to be taken, all
actions, and to do, or cause to be done, all things necessary, proper or
advisable in order to enable the completion of the condition precedent set out
in Section 4.1(a) above as soon as possible in order that the Closing Date fixed
by the Parties pursuant to Section 3.1 may be met. The Buyer shall inform the
Sellers on a timely manner of the progress made in this respect and shall
immediately notify them of the completion of this condition precedent.
(c) The Sellers undertake to fully cooperate with the Buyer in
order to enable the completion of the condition precedent set out in Section
4.1(a) above as soon as possible, in order that the Closing Date fixed by the
Parties pursuant to Section 3.1 may be met. The Sellers shall provide the Buyer
with all useful information and documents for this purpose.
4.2. AGREEMENT NULL AND VOID. If on 4 April 2007 at the latest
(or on any other date as shall be agreed upon by the Parties), the above
condition precedent have not been fulfilled, this Agreement shall lapse and
become null and void (except as concerns the confidentiality obligation) and no
expenses or damages of any kind shall be due by the Buyer to the Sellers or by
the Sellers to the Buyer (other than in case of breach by one of the Parties of
its obligations hereunder which results in the Closing failing to take place by
such date).
ARTICLE V
REPRESENTATIONS, WARRANTIES AND UNDERTAKINGS OF SELLERS
In the context of the Due Diligence, the Buyer and its counsel and accountants
have been granted by the Sellers access, in a data room held at ▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇ Torre law offices from 26 June 2006 to 12 July 2006 and 5 October 2006
to 13 October 2006, to documents relating to the Target Company and of the
Subsidiaries and their operations; they have been able to proceed with site
visits and to meet with certain senior managers of the Target Company and of the
Subsidiaries. More generally, they have been able, in the context of the Due
Diligence, to make further inquiry which they have deemed useful or necessary
prior to entering into this Agreement.
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In this context, the Buyer has carried out accounting, financial, legal and tax
reviews of the Target Company and the Subsidiaries. Having reviewed the
information and documents so provided, the Buyer has thus confirmed its
intention to purchase the Shares.
The Controlling Shareholder covenants with the Buyer as provided in this Article
V and represents and warrants to the Buyer that each of the statements set forth
below is true and correct on the date hereof and will be true as of the Closing
Date. The Fund Shareholder and each of the Minority Shareholders represent and
warrant to the Buyer that each of the statements set forth in Section 5.1,
Section 5.2, Section 5.3 and paragraphs (a) to (h) of Section 5.4 is true and
correct as concerns each of them on the date hereof and will be true as of the
Closing Date.
For the avoidance of doubt, the Parties expressly agree that the Controlling
Shareholder makes no representation or warranty with respect to (i) the future
relations of the Target Company or any of the Subsidiaries with any customers or
suppliers subject to provisions of Section 5.19 below, (ii) the validity or tax,
labor, financial or any other impact of the operations to be completed prior to
the Closing Date pursuant to Section 7.3 below, nor (iii) with regard to the
financial or business prospects of the Target Company or any of the
Subsidiaries.
The Buyer is not aware of any facts or circumstances not disclosed to the
Sellers on the basis of which the Buyer could make an immediate Claim.
5.1. ORGANIZATION OF SELLERS. The Sellers are individuals with
full power to sell their shares or are duly organized or incorporated legal
entities, validly existing under their respective laws, with full power to
conduct their respective businesses as conducted at the date of this Agreement.
5.2. AUTHORITY OF SELLERS.
(a) The execution, delivery and performance of this Agreement by
the Sellers, if not individuals, have been duly authorized and approved by the
Sellers' respective corporate bodies and do not require any further
authorization or consent of the Sellers or their respective shareholders.
(b) This Agreement and the attached agreements which are to be
entered into by the Sellers will, when executed, constitute valid and binding
obligations of the Sellers.
5.3. NO VIOLATION; CONSENTS AND APPROVALS.
(a) Neither the execution nor the delivery of this Agreement or
the other agreements referred to herein nor the performance by the Sellers of
their obligations under this Agreement shall, whether by the giving of notice or
upon the expiration of a time-limit, or both, conflict with any other agreement,
result in a default or loss of rights of any kind, or result in the creation of
any Encumbrance and/or in the creation or increase of any contractual obligation
to any third party.
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(b) In particular, neither the execution nor the delivery of this
Agreement or the other agreements referred to herein, nor the performance by the
Sellers of their obligations under the Agreement, shall terminate or otherwise
diminish any rights (including but not limited to indemnification rights and
Governmental Permits) granted to the Sellers, the Target Company and/or the
Subsidiaries.
(c) Subject to the fulfillment of the conditions precedent,
neither the execution and the delivery of this Agreement, nor its performance by
the Sellers shall contravene or violate any Requirements of Law and/or Court
Orders of any Governmental Authority.
(d) Other than as referred to in this Agreement:
(i) no announcements, consultations, notices, reports or
filings are required to be made by any of the Sellers, any Target Company and/or
any Subsidiary in connection with the performance of the obligations of the
Sellers under this Agreement or in connection with the performance of the
obligations of any Sellers, the Target Company and/or the Subsidiaries under the
Agreement and/or the related documents; and
(ii) no consents, approvals, registrations, authorisations
or permits are required to be obtained by the Sellers, any Target Company and/or
any Subsidiary in connection with the execution and performance of this
Agreement and/or any documents related hereto.
5.4. ORGANIZATION OF THE TARGET COMPANY AND SUBSIDIARIES.
(a) The Target Company and the Subsidiaries are companies validly
incorporated, registered and existing under the laws of the jurisdiction of
their incorporation. The Target Company and the Subsidiaries have the corporate
power and authority to own or lease and operate their assets and their business
in the manner operated prior to the date hereof.
(b) Subject to the provisions of Schedule 5.4 (b), the Shares
shall represent the entirety of the issued and outstanding share capital and
voting rights of the Target Company. The shares in the Subsidiaries held
collectively by the Target Company and other Subsidiaries shall, on the Closing
Date, represent the entirety of the issued and outstanding share capital and
voting rights of the Subsidiaries.
(c) All the Shares and all the shares of the Subsidiaries shall
have been validly issued and fully paid under the applicable legislation in the
jurisdiction of incorporation of the relevant Target Company or Subsidiary.
(d) There is no liability to pay any additional contributions on
the Shares and/or on the shares of the Subsidiaries.
(e) Except pursuant to capital increases of Subsidiaries
described in Schedule 5.6(a) and which will be subscribed exclusively by
companies of the Target Group, no person has the right (exercisable now or in
the future and whether contingent or not) to call for the issue of any share or
loan capital in any Target Company and/or any Subsidiary.
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(f) The Sellers are the sole legal and beneficial owners of the
Shares and are entitled to transfer or procure the transfer of the full
ownership of the Shares, free and clear of all Encumbrances, to the Buyer on the
terms set out in this Agreement. The Target Company and the Subsidiaries, as the
case may be, are the sole legal and beneficial owners of the shares of the
Subsidiaries, said shares being free and clear of all Encumbrances. There is no
pending or threatened claim or litigation with respect to such ownership of
shares of the subsidiaries.
(g) The copies of the organizational documents of the Target
Company and the Subsidiaries, as well as the excerpts from the competent
companies or trade registry of said Target Company and Subsidiaries are true,
complete, up-to-date and said documents comply with the relevant Requirements of
Law.
(h) All returns, resolutions and other documents to be filed with
or delivered to the competent companies or trade registry of the Target Company
and the Subsidiaries pursuant to applicable Requirements of Law, have been
correctly drawn up and duly filed by the appropriate due dates.
(i) The Target Company's and the Subsidiaries' corporate records
and other registers to be kept pursuant to applicable Requirements of Law are
up-to-date, have been properly kept.
(j) The Target Company and the Subsidiaries have drawn up all
accounts, ledgers and other financial records according to GAAP and pursuant to
applicable Requirements of Law.
(k) The Target Company and the Subsidiaries have not acted (x) as
directors or legal representatives of any company, other than the Target Company
or any Subsidiary, as the case may be, and (y) as de facto managers of any
company.
(l) Except as set forth in Schedule 5.4 (l), the Target Company
and the Subsidiaries have not been the subject of any criminal penalty related
to the conduct of their business activities. To the Controlling Shareholder's
Knowledge, no acts or deeds is likely to result in criminal sanctions being
imposed on the Target Company and/or the Subsidiaries.
(m) Except as set forth in Schedule 5.4 (m), the Target Company,
the Subsidiaries and their respective legal representatives and employees have,
in the conduct of their activities, complied with all material Requirements of
Law, and have, where necessary, obtained all requisite authorizations or
exemptions.
(n) The Target Company and the Subsidiaries do not own any equity
interests in any other company, any partnership, trust and/or joint venture. The
Target Company and the Subsidiaries do not own any equity interests in any other
entity in which their liability may be unlimited and never held any such equity
interests.
(o) Except as set forth in Schedule 5.4 (o), the Target Company
and the Subsidiaries are not in a state of cessation of payments (cessation de
paiements), have not suspended their payments and are not subject to any
court-ordered reorganization, insolvency, liquidation or other similar
proceedings under any relevant jurisdiction. To the Controlling Shareholder's
Knowledge, no events have occurred which, under applicable
-16-
laws, are likely to justify any such proceedings being instigated against the
Target Company and/or the Subsidiaries. Neither Target Company nor any
Subsidiary has made any voluntary arrangement with any of its creditors or is
insolvent or unable to pay its debts as they fall due.
(p) Except as set forth in Schedule 5.4 (p), all corporate
reorganizations concerning the Target Company and/or the Subsidiaries and
implemented over the last five years have been validly implemented and no
liability (notably Tax liability) may arise as a result therefrom for the Target
Company and/or the Subsidiaries.
5.5. FINANCIAL STATEMENTS.
(a) The Controlling Shareholder and the Buyer have initialed for
identification the audited financial statements of the Target Company and of the
Subsidiaries as at and for the period ending 31 December 2005 (the "FY 2005
FINANCIAL STATEMENTS" such as set out in Schedule 5.5 (a)) which include (1) the
audited consolidated financial statements with all required notes and appendixes
for the Target Group, in accordance with French GAAP, and (2) a balance sheet
and an income statement, with appropriate notes and appendixes, in accordance
with the relevant country's GAAP ("LOCAL GAAP") for the Target Company and each
Subsidiary.
(b) The FY 2005 Financial Statements have been prepared in
accordance with GAAP and the Requirements of Law and, are in all material
respects, complete and presented in accordance with French and Local GAAP as the
case may be. More specifically, the FY 2005 Financial Statements give, in
relation to the Target Company and/or the Subsidiaries, a true and fair view of
the state of affairs of the Target Company and/or Subsidiaries and/or their
assets and liabilities as at 31 December 2005 and of the results thereof for the
financial year ended on 31 December 2005. The accounts for each of the last
three (3) financial years ended on 31 December were prepared in accordance with
the Requirements of Law and French and Local GAAP, as the case may be.
(c) The Controlling Shareholder and the Buyer have initialed for
identification the consolidated financial statements of the Target Group,
including appropriate notes, as at 30 June 2006 (the "INTERIM 2006 FINANCIAL
STATEMENTS" such as set out in Schedule 5.5 (c)).
(d) The Interim 2006 Financial Statements have been prepared in
accordance with the Requirements of Law, are, in all material respects, complete
and presented in accordance with French GAAP. More specifically, the Interim
2006 Financial Statements give, in relation to the Target Group, a true and fair
view of the state of affairs of such Target Group and/or its assets and
liabilities as at 30 June 2006 and of the results thereof for the financial
period ended on 30 June 2006.
(e) For the period subsequent to the respective financial period
being reported and except as set forth in Schedule 5.5 (e), the Target Company
and/or the Subsidiaries have not incurred any liabilities which are not
reflected or reserved against in the FY 2005 Financial Statements and have not
incurred any liabilities which are not be reflected or reserved against in the
Interim 2006 Financial Statements, except for liabilities incurred in the
ordinary course of business.
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5.6. TITLE.
(a) The Shares are freely transferable. Except as set forth in
Schedule 5.6 (a), the Target Company and the Subsidiaries have not issued any
shares of any kind whatsoever which may give rise, directly or indirectly, to
any increase in capital, the issue of shares creating an entitlement to any sum
the Target Company and/or the Subsidiaries may distribute, voting rights or
rights which may give rise to any restriction on the rights relating to the
Shares and/or the shares of the Subsidiaries. Subject to the provisions of
Section 3.4(e), any authorizations necessary prior to the transfer of the Shares
and/or the indirect transfer of the shares of the Subsidiaries have been
obtained.
(b) No outstanding payments, damages and/or indemnifications of
any kind are due by the Sellers and/or any of the Target Company and the
Subsidiaries with respect to the acquisition of the Shares and/or the shares of
the Subsidiaries, and there is no basis for any claim against the Target Company
or any of the Subsidiaries for any payments, damages and/or indemnifications
with respect to the acquisition of the Shares and/or the shares of the
Subsidiaries.
(c) The Target Company and the Subsidiaries have good and
marketable title to all of the assets reflected in the Financial Statements and,
except as set forth in Schedule 5.6 (c), all assets acquired by them after 31
December 2005 (except for any assets disposed of after 31 December 2005 in the
ordinary course of business consistent with past practices) are free of all
Encumbrances, except for Permitted Encumbrances.
5.7. INVENTORIES.
(a) The inventories (the "INVENTORIES") which appear in the FY
2005 Financial Statements and which appear in the Interim 2006 Financial
Statements represent all of the Target Company's and the Subsidiaries'
inventories as of 31 December 2005 and 30 June 2006, respectively.
(b) The Inventories correspond to the Target Company's and the
Subsidiaries' business needs in the ordinary course of business and are made up
of articles which, in view of their quality and quantity, can be sold or used,
once they have become finished goods, in the ordinary course of business and at
a price at least equal to their value and consistent with Local GAAP and past
practice, after provisions, as set out in the Target Company's and the
Subsidiaries' books. The Target Company and the Subsidiaries have not kept in
their Inventories consigned merchandise belonging to third parties, and the
Target Company and the Subsidiaries have made no undertakings to take back the
inventories of their customers, agents, distributors or other representatives.
(c) The Inventories have not been pledged and the Target Company
and the Subsidiaries have full ownership thereof. No securities or sureties have
been granted on the Inventories.
(d) Except as set forth in Schedule 5.7 (d), none of the Target
Company and the Subsidiaries' Inventories are held on consignment by third
parties.
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5.8. SUBSIDIES. Subject to the provisions of Schedule 5.8, no
Target Company and/or Subsidiary has ever received, nor is any Target Company
and/or Subsidiary proposing to receive, any aid or subsidy from any Governmental
Authority.
5.9. TAXES.
(a) All Taxes due by the Target Company and by the Subsidiaries
have been or shall be timely paid in full and, in the case of unpaid taxes, have
been sufficiently provided for in the FY 2005 Financial Statements and the
Interim 2006 Financial Statements.
(b) The Target Company and the Subsidiaries have properly and in
due time filed all Tax Returns required to have been filed on or before the date
hereof and the Target Company and the Subsidiaries have kept copies of the filed
originals.
(c) Except as set forth in Schedule 5.9 (c), there is no action,
suit, investigation, audit, claim or assessment pending with respect to the
Taxes or Tax Returns referred to in clauses (a) and (b), there is no amount due
by the Target Company and/or the Subsidiaries as a result of any examination of
the Tax Returns referred to in clause (b) by a taxing Governmental Authority.
(d) There are no liens for Taxes upon the assets of the Target
Company and/or the Subsidiaries.
(e) The Target Company and the Subsidiaries have not entered into
any agreements stipulating a delay for the payment of any Taxes.
(f) No Target Company and/or Subsidiary has been involved in any
agreements or arrangements which has given rise to a liability for the payment
of any Taxes on any of the Target Company and/or Subsidiaries other than Taxes
arising from transactions entered into by them in the ordinary course of
business.
(g) Except as set forth in Schedule 5.9 (g), all transactions
between any members of the Target Group have been and are on fully arm's length
terms. Except as set forth in Schedule 5.9 (g), there are no circumstances which
could cause any tax Governmental Authority to make any adjustment for Tax
purposes, or require any such adjustment to be made, to the terms of such
transaction, and no such adjustment has been made or attempted in fact.
(h) All Tax liabilities were recorded in the FY 2005 Financial
Statements and have been properly accrued since then in accordance with
applicable GAAP. As at the Closing Date, all Tax liabilities shall have been
recorded in the Interim 2006 Financial Statements and shall have properly
accrued thereafter in accordance with applicable GAAP.
(i) No action, outside the ordinary course of business, has been
taken since 31 December 2005 to reduce availability of tax losses carried
forward of the Target Company and/or the Subsidiaries.
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5.10. GOVERNMENTAL PERMITS.
(a) The Target Company and the Subsidiaries own, hold or possess
all required permits, approvals and other authorizations from any competent
Governmental Authority that are necessary to entitle said Target Company and
Subsidiaries to continue to own, lease or use their assets and to operate their
business as operated immediately prior to the date of this Agreement (together,
the "GOVERNMENTAL PERMITS").
(b) The Target Company and the Subsidiaries have complied in all
material respects with the terms and conditions of the Governmental Permits. The
Governmental Permits are in full force and effect and are not subject to any
unusual or onerous conditions.
(c) The Target Company and the Subsidiaries have not received any
notice of any claim which is pending in relation to any Governmental Permit and
to the Controlling Shareholder's Knowledge, no such claim has been threatened in
writing.
5.11. ACCREDITATIONS. The Target Company and the Subsidiaries
have received all required accreditations to carry out their activities and sell
their products, said accreditations having been duly renewed as necessary and
the Target Company and the Subsidiaries having always in all material respects
complied with said accreditations. No accreditation will be affected by or
terminated due to the direct or indirect change of control of the Target Company
and/or the Subsidiaries.
5.12. ASSETS.
(a) Except as set forth in Schedule 5.12 (a), the Target Company
and the Subsidiaries have full title, free of any Encumbrances, to all of the
assets (whether real, tangible or intangible) that they own or that are
necessary to conduct their business activities as consistently conducted under
past practices up to the date hereof.
(b) All assets (including plants, vehicles, installations,
equipment and inventories) necessary to conduct the activities of the Target
Company and of the Subsidiaries are in good working order, ordinary wear and
tear excepted, and comply with health and safety standards in all material
respects.
(c) Schedule 5.12(c) contains a list of all the real and personal
property assets owned or leased by the Target Company and the Subsidiaries; such
list is true and complete.
(d) Except as set forth in Schedule 5.12 (d), there are no claims
or Actions relating to any of the assets owned or leased by the Target Company
and/or by the Subsidiaries or which may negatively affect their normal use,
occupation or value.
(e) The Target Company and the Subsidiaries have not entered into
or granted any option or right to purchase, lease or occupy, except to the
Target Company and/or Subsidiaries, as the case may be, the assets which they
own or lease, nor are the Target Company and/or the Subsidiaries party to any
option or agreement requiring or entitling them to acquire or lease any assets
other than those which they currently own or lease.
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(f) Except as set forth in Schedule 5.12 (f), the premises in
which the Target Company and the Subsidiaries conduct their business pursuant to
commercial leases or sub-leases are validly occupied and registered with the
competent registry or other Governmental Authorities to the extent applicable
under local Requirements of Law.
(g) No Target Company and/or Subsidiary depends in any material
respect on the use of assets owned by, or facilities and services provided by
the Sellers.
(h) No Subsidiary has received a notice from any Governmental
Authority (or, to the Controlling Shareholder's Knowledge, have been threatened
thereof) of expropriation relating to the real property assets it owns.
(i) Except as set forth in Schedule 5.12 (i), where any assets
are used but not owned by the relevant Target Company and/or Subsidiary or any
facilities or services are provided to any of the Target Company and/or
Subsidiaries by any third party, there has not occurred any event of default or
any other event or circumstance which entitles any third party to terminate any
material agreement or license in respect of the provision of such assets,
facilities or services.
(j) Any lease of the assets of the Target Company and/or the
Subsidiaries is in a form and on terms which are not contrary to the corporate
interests of the Target Company and/or of the Subsidiaries and do not constitute
an abnormal management decision.
5.13. INTELLECTUAL PROPERTY; SOFTWARE.
(a) The Target Company and the Subsidiaries either validly own
the entire right, title and interest in and to the Intellectual Property and
Software actually used in the conduct of their business as currently conducted,
free and clear of any Encumbrances other than a Permitted Encumbrance, or have a
valid and enforceable contractual right or license to use the same in the
conduct of their business as currently conducted. Such Intellectual Property and
Software, and the names of the corresponding owners and applicants, is contained
in Schedule 5.13(a). All material transactions relating to them have been
registered within applicable time limits;
(b) All applications, filings, registrations and renewals for the
Intellectual Property and Software have been made and to the Controlling
Shareholder's Knowledge, all Taxes, fees or duties due for payment at the date
hereof have been paid in this respect;
(c) None of the operations of the Target Company and/or the
Subsidiaries infringes or is likely to infringe the rights of any other Person.
No claim has been made by a third party which alleges that the operations of a
Target Company and/or a Subsidiary infringe, or are likely to infringe, the
rights of any other Person or which otherwise disputes the right of a Target
Company and/or a Subsidiary to use the Intellectual Property and Software owned
or used by the Target Company and by the Subsidiaries and/or the Controlling
Shareholder's Knowledge, no circumstances are likely to give rise to such
claims;
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(d) To the Controlling Shareholder's Knowledge and subject to the
provisions of Schedule 5.13(d), there exists no infringement by any Person of
the Intellectual Property and Software of the Target Company and the
Subsidiaries;
(e) No proceedings are pending nor, to the Controlling
Shareholder's Knowledge, have any been threatened in writing against the Target
Company and/or the Subsidiaries that challenge the validity, ownership or right
to use any Intellectual Property and Software owned or used by them and, to the
Controlling Shareholder's Knowledge, there is no basis for such proceedings; and
(f) Except as set forth in Schedule 5.13 (f), the Target Company
and/or the Subsidiaries have not granted licences on any Intellectual Property
or Software owned or used by them other than, in the ordinary course of
business, to their customers. Where said Target Company and/or Subsidiaries
benefit from such licences, said licences have been granted under terms that are
not contrary to the corporate interests of the Target Company and/or the
Subsidiaries and do not constitute abnormal management decisions, and the Target
Company and/or Subsidiaries are not in material breach of any of their
obligations thereunder.
5.14. CONFIDENTIAL INFORMATION.
(a) To the Controlling Shareholder's Knowledge, except as set
forth in Schedule 5.14 (a), all material confidential information of the Target
Company and/or the Subsidiaries, or which has been used by the Target Company
and/or the Subsidiaries, has been kept confidential and has not been disclosed
to third parties, except in the ordinary course of business and subject to
written confidentiality obligations from the third party and except as possibly
disclosed to the Buyer in the context of the negotiations of the Agreement. To
the Controlling Shareholder's Knowledge, the confidentiality obligations of the
Target Company and/or the Subsidiaries have not been breached in any material
respects.
(b) To the Controlling Shareholder's Knowledge, none of the
operations of the Target Company and/or the Subsidiaries involves the
unauthorised use of confidential information disclosed in circumstances which
might entitle a third party to make a claim against a Target Company and/or a
Subsidiary.
5.15. DISCLOSURE, ASSIGNMENT AND INVENTIONS.
(a) Except as set forth in Schedule 5.15 (a), each of the
employees, mandataires sociaux and independent contractors of the Target Company
and/or the Subsidiaries who, either alone or with others, has created, developed
or invented Intellectual Property and Software for the Target Company and/or the
Subsidiaries has entered into a written agreement which obliges them to assign
the Intellectual Property Rights and Software to the Target Company and/or the
Subsidiaries, as the case may be; any such employees, mandataires sociaux and
independent contractors who are Sellers hereby agree, if and to the extent
necessary, to make such assignments that the Buyer or its Affiliates may request
in the future.
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(b) No claims have been made, or to the Controlling Shareholder's
Knowledge, threatened in writing, by present or former mandataires sociaux,
employees or independent contractors of the Target Company and/or the
Subsidiaries and are outstanding in any jurisdiction for inventor compensation
or anything similar.
5.16. DOCUMENTATION. Records, files and documents have been
accurately maintained for all material Intellectual Property owned or used by
the Target Company and the Subsidiaries and the records, files and documents are
in the possession of the Target Company and the Subsidiaries or under their
control.
5.17. INFORMATION TECHNOLOGY.
(a) Except as set forth in Schedule 5.17 (a), the Internal IT
Systems are either owned by, or properly licensed or leased from a third party
(which, for the avoidance of doubt, does not include a Seller) to, the Target
Company and/or the Subsidiaries. Except as set forth in Schedule 5.17 (a), the
relevant Target Company and/or Subsidiaries are not in default of any material
obligation under the licences or leases and, to the Controlling Shareholder's
Knowledge, there are no grounds on which they are likely to be terminated;
(b) Except as set forth in Schedule 5.17 (b), the Internal IT
Systems of the relevant Target Company and/or Subsidiaries are operated by each
relevant Target Company or Subsidiary;
(c) The Target Company and/or the Subsidiaries have binding and
sufficient maintenance and support contracts with third parties for the Internal
IT Systems;
(d) To the Controlling Shareholder's Knowledge, the Internal IT
Systems have not failed to any material extent, over the last twelve months.
5.18. NO VIOLATION, LITIGATION OR REGULATORY ACTION.
(a) There are no Actions pending, and/or to the Controlling
Shareholder's Knowledge, threatened in writing against any of the Sellers that
could impair the ability of any of the Sellers to sell the Shares to the Buyer
and perform their obligations under this Agreement.
(b) As of the date hereof, except as set forth in Schedule 5.18
(b), there are no Actions pending, and/or to the Controlling Shareholder's
Knowledge, threatened against the Target Company and/or the Subsidiaries.
5.19. CONTRACTS.
(a) Except as set forth in Schedule 5.19(a), the Target Company
and/or the Subsidiaries are not a party to:
(i) Any Contract providing for the payment by the Target
Company and/or the Subsidiaries to any Employee of any severance payment or any
other financial compensation in the event of the change in control of the Target
Company and indirect change of control of the Subsidiaries;
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(ii) Any Contract prohibiting any of the Target Company
and/or the Subsidiaries from engaging in any line of business or competing with
any Person;
(iii) any commercial Contract which involves or is likely to
involve expenditures exceeding, annually, the amount of EUR 75,000 (seventy five
thousand euros);
(iv) Any Material Contract which may not be terminated with
more than a six-month prior notice and/or any Contract which could give rise to
any penalty or damages being paid as a result of such a termination;
(v) Any Contract rendering any of the Target Company and/or
Subsidiaries liable, by guaranty, suretyship agreement, indemnification
agreement, earn-out provision or otherwise in excess of EUR 75,000 (seventy five
thousand euros);
(vi) Any Contract with the respective legal representatives
of the Target Company and/or the Subsidiaries (or with any entity in which said
legal representatives have a similar position), except for the obligation to pay
compensation and reimburse ordinary and necessary expenses, as regards
individuals, incurred in connection with their duties and/or under any valid
employment contract entered into by the Target Company and/or the Subsidiaries,
as the case may be;
(vii) Any Contract with distributors or other sales
representatives in connection with the sale of any products or services of the
Target Company and/or the Subsidiaries;
(viii) Any Contract containing restrictions with respect to
the payment of dividends or any other distribution with respect to the Shares
and/or the shares of the Subsidiaries;
(ix) Any Contracts not entered into in the ordinary course
of business or in conformity with the corporate interests of the Target Company
and/or of the Subsidiaries or that constitute abnormal management decisions; and
(x) Any Contract granting any guarantee or security of any
kind to any of the Sellers or their Affiliates.
(b) Set out in Schedule 5.19(b) is a list of each of the Material
Contracts other than Contracts with Employees. All of the Material Contracts are
valid and binding in accordance with their respective terms. The Target Company
and the Subsidiaries are not materially in default or in arrears, or accused
thereof in writing, under any of the terms thereof. No default by any other
party to any Material Contract is known or claimed by the Target Company and the
Subsidiaries to exist. Subject to the provisions of Schedule 5.19(b), none of
the Material Contracts have been modified as compared with the versions thereof
reviewed by the Buyer in the course of its pre-acquisition review.
(c) During the last twelve (12) months, no material customer of
or supplier to any Target Company and/or Subsidiary:
(i) has ceased to deal with a Target Company and/or a
Subsidiary; or
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(ii) has indicated in writing an intention to cease to deal
with such Target Company and/or Subsidiary, either in whole or in part as a
result of this Agreement or otherwise.
For the purposes of this provision, "material" customer or supplier shall mean
customers and suppliers for which annual sales or purchases by a given Target
Company or Subsidiary amount to more than EUR 75,000 (seventy five thousand
euros) in respect of the above twelve (12) month period.
(d) No guarantees granted by any of the Target Company and/or
Subsidiaries remain in force.
5.20. EMPLOYEE RELATIONS.
(a) Set out as Schedule 5.20(a) is the list of all employees
working for the Target Company and the Subsidiaries (including temporary
personnel and their employer, annual base salary, title and date of hire, bonus
packages and benefits in kind (all such employees are referred to as the
"EMPLOYEES"). There are no consultants or other persons who do not have the
status of salaried employees but who regularly collaborate in the operations of
any of the Target Company and/or Subsidiaries other than external professional
advisers.
(b) Except as set forth in Schedule 5.20 (b), none of the
Employees whose annual gross base salary exceeds EUR 60,000 (sixty thousand
euros) has made it known to the Target Company and/or the Subsidiaries that
he/she intends to terminate his/her employment contract, in particular as a
result of the transfer of the Shares to the Buyer.
(c) Except as set forth in Schedule 5.20 (c), the Target Company
and the Subsidiaries have complied in all material respects with all obligations
imposed on them by the Requirements of Law, collective agreements and all
contractual obligations owed to or in respect of the Employees, temporary
personnel and former employees, in particular in terms of employment, dismissal,
working conditions, including working hours, and employee representation.
(d) The Target Company and the Subsidiaries have submitted in a
timely manner all social security declarations and all social security or labor
Taxes and charges owed by them have been paid on their due date and for those
which are not yet due, are sufficiently reserved in the FY 2005 Financial
Statements and the interim 2006 Financial Statements.
(e) There are no on-going social plans ("plan de sauvegarde de
l'emploi" in France) in the Target Company or any of the Subsidiaries and,
except as set forth in Schedule 5.20 (e), all past restructurings, collective
dismissals and social plans have been validly implemented and may not give rise
to any liability of the Target Company and/or Subsidiaries.
(f) Except as set forth in Schedule 5.20 (f), none of the Target
Company and/or Subsidiaries has received written notice of any claim (whether
statutory or contractual) nor has any liability for breach of contract been
incurred in relation to any Employee or former employee of the Target Company
and/or the Subsidiaries.
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(g) No strike or other industrial action exists between any of
the Target Company and/or Subsidiaries and its Employees, workers'
representatives and/or a trade union representing the Employees and to the
Controlling Shareholder's Knowledge, the latter have not notified their
intention to engage in any such strikes or actions.
(h) Since 1 January 2006, except as set forth in Schedule 5.20
(h), no written proposal has been made and no agreement has been reached by the
Target Company and/or the Subsidiaries regarding any terms of employment in
respect of any of the Employees or to increase the remuneration and/or benefits
in kind of the Employees and/or directors and legal representatives, except in
the ordinary course of business or pursuant to any Requirements of Law.
(i) No Target Company and/or Subsidiary has in existence, or is
proposing to introduce, any share incentive scheme, share option scheme or
profit sharing, bonus, commission or other such incentive scheme for any
director, legal representative or Employees, other than the applicable schemes
required under the Requirements of Law.
(j) The Target Company and/or the Subsidiaries are party to
formal signed contracts of employment with all of the Employees.
(k) Except as set forth in Schedule 5.20 (k), the Target Company
and/or the Subsidiaries have maintained, adequate and suitable records regarding
the service of each Employee and regarding the termination of employment of any
former employee.
(l) Except as necessary under the Requirements of Law, there are
not in existence any retirement, death or disability schemes for legal
representatives, directors or Employees or any obligations to or in respect of
any present or past legal representatives, directors or employees with regard to
retirement, redundancy, death, sickness or disability pursuant to which any
Target Company and/or Subsidiary is or may become liable to make any payments
other than provided under Requirements of Law.
(m) All amounts payable by the relevant Target Company and/or
Subsidiaries under the schemes described in subparagraph (l) above have been
timely paid by the relevant Target Company and/or Subsidiaries and for those not
yet due are sufficiently provided for in the FY 2005 Financial Statements and,
the Interim 2006 Financial Statements.
(n) Save for advances on Employees' bonuses (a list of which is
attached as Schedule 5.20(n) and business expenses, there are no loans owing to
any Target Company and/or Subsidiary by any director, legal representative,
Employee or former employee.
(o) Except as set forth in Schedule 5.20 (o), the Target Company
and/or the Subsidiaries are in compliance with all applicable material health
and safety Requirements of Law and are not liable to any Employee or former
employee in respect of any accident, injury and/or sickness.
(p) Except as set forth in Schedule 5.20 (p), the Target Company
and the Subsidiaries have not granted any significant benefits in kind to their
Employees (and/or past employees) other than company cars to members of the top
management and
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the sales representatives and have not allowed any Employees to carry forward
vacation benefits exceeding ten (10) days from prior periods.
(q) Except as set forth in Schedule 5.20 (q), the amount of
bonuses granted by the Target Company and the Subsidiaries to the Employees over
the last three (3) fiscal years never exceeded EUR 6,000 (six thousand euros) in
aggregate, per annum, and such amount shall not significantly vary in 2006;
(r) ▇▇▇. ▇▇▇▇▇▇▇ ▇▇▇▇ and ▇▇. ▇▇▇▇▇▇ Kita are the sole members of
the Controlling Shareholder's family who are currently employed in the Target
Group.
5.21. INSURANCE.
(a) Schedule 5.21(a) contains the list of all insurance policies
in force taken out by the Target Company and/or the Subsidiaries in the context
of their business. No notice of termination of any such policy has been
received. The Target Company and/or the Subsidiaries are properly insured in
respect of their activities in line with normal industry practice applicable to
such activities.
(b) All insurance premiums payable by the Target Company and/or
by the Subsidiaries have been paid by the relevant Target Company and/or
Subsidiaries and the Closing will not have the effect of terminating, or
entitling any insurer to terminate, cover under any such insurance.
(c) No claim in excess of EUR 25,000 (twenty five thousand euros)
is outstanding by any of the Target Company and/or Subsidiaries under any such
policy of insurance and, to the Controlling Shareholder's Knowledge, there are
no circumstances giving rise to such a claim.
5.22. PRODUCT LIABILITY.
(a) To the Controlling Shareholder's Knowledge, no product
manufactured, by the Target Company and/or the Subsidiaries has any defect
capable of giving rise to an Action by a purchaser or user of the product or by
a third party, for bodily injury or material damage.
(b) Except as set forth in Schedule 5.22 (b), there exists no
product liability claim or Action against any of the Target Company and /or
Subsidiaries.
5.23. ACCOUNTS RECEIVABLE.
(a) Attached hereto, for information purposes as Schedule
5.23(a), is a list of the accounts receivable of the Target Company and
Subsidiaries as at 30 June 2006, indicating the amount of any provisions for bad
debts (to the extent made consistently with past practice) with respect thereto.
(b) All of the accounts receivable of the Target Company and the
Subsidiaries as of the last day of the month immediately preceding the Closing
Date are valid and, except as set forth in Schedule 5.23(b)(i), will be paid no
later than twelve (12) months after their due date under their specified trade
terms or, where no specified trade terms are applicable, the past accounting
practice of the relevant Target Company and/or Subsidiary, net of any reserves
made in accordance with past practices (to the extent
-27-
consistent with applicable GAAP). For purposes of the indemnification provisions
of Article VIII, (i) the difference (if any) between the aggregate amounts of
such accounts receivable and the amounts actually collected within such periods
shall be treated as a single Claim (as defined in Section 8.4) even if more than
one request for payment of amounts due is made, and (ii) accounts receivable
shall be taken into account for this purpose only if the Buyer or its Affiliates
(including the Target Company and the Subsidiaries after the Closing) have
attempted to obtain collection of such accounts receivable using collection
procedures at least equivalent to those described in Schedule 5.23(b)(ii). The
Controlling Shareholder shall provide the Buyer, not more than forty-five (45)
days after the Closing Date, with a list of the accounts receivable as of the
last day of the month immediately preceding the Closing Date and reserves made
with respect thereto, certified by Ernst & Young to be accurate, complete and
consistent with past practices (to the extent consistent with applicable GAAP).
For this purpose, the Controlling Shareholder shall have reasonable access to
the relevant documentation and to the employees in the Target Group who assisted
with the preparation of the list of accounts receivable and reserves.
(c) Until the Closing Date, all inter-company trade payables and
all inter-company trade receivables, as the case may be, payable by or to the
Target Company and/or the Subsidiaries shall continue to be paid on their due
date and under normal commercial terms.
5.24. COMPLIANCE WITH LAWS.
(a) Each of the Target Company and/or Subsidiaries has conducted
its business and corporate affairs in accordance with its memorandum and
articles of association, by-laws or other equivalent constitutional documents in
the relevant jurisdiction and in all material respects in accordance with all
applicable Requirements of Law and/or Court Orders of the relevant
jurisdictions.
(b) The Target Company and/or the Subsidiaries are not the
subject of any Actions relating to non-compliance with national or European
Union Requirements of Law applicable with respect to competition and commercial
law and to the Controlling Shareholder's Knowledge, no such Actions have been
threatened against the Target Company and/or the Subsidiaries on that basis.
5.25. OPERATIONS SINCE 30 JUNE 2006. Except for changes in the
ordinary course of business, since 30 June 2006, except as set forth in Schedule
5.25, there have been no material changes in the assets, liabilities, results of
operations or financial condition of the Target Company and/or Subsidiaries.
Since 30 June 2006, the Target Company and/or the Subsidiaries have conducted
their business in the ordinary course and consistently with past practices and,
in particular, have not taken any action with the purpose of and resulting and
negatively affecting the Working Capital in an unusual way in light of past
practices.
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ARTICLE VI
REPRESENTATIONS AND WARRANTIES AND UNDERTAKINGS OF
ALLERGAN, INC. AND THE BUYER
Allergan, Inc. and the Buyer hereby represent and warrant to the Sellers as
follows:
6.1. ORGANIZATION OF BUYER. The Buyer is now in formation and
will be at Closing a duly organized and registered company and validly existing
under the laws of France. The statuts of the Buyer will expressly provide for
this Agreement to be assumed by the Buyer upon its registration at the
commercial and companies registry.
6.2. AUTHORITY OF BUYER.
(a) The execution, delivery and performance of this Agreement by
the Buyer and Allergan, Inc. have been duly authorized and approved by their
corporate bodies and do not require any further authorization or consent of
Allergan, Inc., the Buyer or their shareholders.
(b) This Agreement and the attached agreements which are to be
entered into by Allergan, Inc. and the Buyer will, when executed, constitute
valid and binding obligations of Allergan, Inc. and the Buyer.
6.3. NO VIOLATION; CONSENTS AND APPROVALS.
(a) Neither the execution nor the delivery of this Agreement or
the other agreements referred to herein nor the performance by Allergan, Inc.
and/or by the Buyer of its obligations under this Agreement shall, whether by
the giving of notice or upon the expiration of a time-limit, or both, conflict
with any other agreement, result in a default or loss of rights of any kind, or
result in the creation of any Encumbrance.
(b) Neither the execution and the delivery of this Agreement, nor
its performance by Allergan, Inc. and/or by the Buyer shall contravene or
violate any Requirements of Law or Court Orders of any Governmental Authority.
(c) Other than required under applicable Requirements of Law:
(i) no announcements, consultations, notices, reports or
filings are required to be made by Allergan, Inc. and/or by the Buyer in
connection with the performance of the obligations of Allergan, Inc. and/or of
the Buyer under this Agreement or in connection with the performance of the
obligations of Allergan, Inc. and/or of the Buyer under the Agreement and/or the
related documents; and
(ii) no consents, approvals, registrations, authorisations
or permits are required to be obtained by Allergan, Inc. and/or by the Buyer in
connection with the execution and performance of this Agreement and/or any
documents related hereto.
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6.4. NO VIOLATION, LITIGATION OR REGULATORY ACTION. As of the
date hereof, there are no Actions pending or, to the knowledge of Allergan, Inc.
and of the Buyer, threatened against Allergan, Inc. and/or the Buyer that are
reasonably expected to materially impair the ability of Allergan, Inc. and/or of
the Buyer to perform its obligations hereunder or prevent the consummation of
any of the transactions contemplated hereby.
6.5. PURCHASE PRICE. Allergan Inc. and the Buyer have (and on the
Closing Date will have) immediately available on an unconditional basis (subject
only to Closing) the necessary cash resources to pay the Purchase Price and meet
their other obligations under this Agreement.
ARTICLE VII
ACTIONS PRIOR TO THE CLOSING DATE
7.1. CONDUCT OF BUSINESS.
Between the date hereof and until the Closing Date, except as provided in
Section 7.3, the Controlling Shareholder shall cause the Target Company and the
Subsidiaries to operate their business in the ordinary course and consistently
with past practices. In particular, the Target Company and the Subsidiaries
shall not without the Buyer's prior written consent:
(a) Sell, assign, transfer or lease any of their real property,
tangible or intangible assets, or enter into any agreement or other arrangement
for the acquisition or sale of such assets or properties, other than in the
ordinary course of business;
(b) Make or agree to make any payment other than in the ordinary
and usual course of trading;
(c) Settle or enter into any settlement with respect to any
claim, suit or cause of action other than in the ordinary course of business or
involving an amount of more than EUR 75,000 (seventy-five thousand euros) per
settlement and, as concerns Employees, EUR 25,000 (twenty five thousand euros)
per settlement;
(d) Hire or dismiss any senior Employee and/or a substantial
amount of Employees, grant to any Employee any option rights and/or any special
benefits other than provided by Requirements of Law;
(e) Acquire any shares, equity interests or other interests in
any company, partnership, trust, joint venture or other entity the partners of
which are unlimitedly liable;
(f) Except pursuant to capital increases of Subsidiaries
described in Schedule 5.6(a), issue or agree to issue any share or loan capital
or other similar interest;
(g) Decide any distribution of dividends or interim dividends to
the benefit of their shareholders, or pay them, and/or any Seller or any of
their Affiliates, bonuses, option rights, royalties or special benefits;
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(h) Enter into any Contract (or series of related Contracts)
which is of a long term or unusual nature (a "long term nature" meaning that the
Contract, liability or commitment is not capable of performance within twelve
(12) months after the date on which it is entered into or undertaken or cannot
be terminated on less than six (6) months' notice except those involving a
liability of less than EUR 35,000 (thirty five thousand euros); or involving an
obligation of a material nature or magnitude (a liability for expenditure in
excess of EUR 75,000 (seventy five thousand euros) being included as material
for this purpose); and
(i) Take any actions with a purpose of and/or resulting in
negatively affecting the Working Capital in an unusual way in light of past
practices.
7.2. FINANCIAL REPORTS.
(a) The Parties acknowledge and agree that the Buyer will need to
prepare financial statements and reports concerning Buyer's consolidated
operations and reportable segments and product lines on a quarterly basis, in
conformity with generally accepted accounting principles in the United States of
America ("US GAAP") and requirements of the U.S. Securities and Exchange
Commission and the New York Stock Exchange, and that it is an essential and
determining condition of the Buyer's agreements hereunder that it be in a
position to do so with respect to the activities and products of the acquired
Target Group after the Closing Date. For this purpose, the Sellers have agreed
to implement, beginning 25 October 2006, in cooperation with the Buyer and its
advisors, a program described in Schedule 7.2 to allow the Buyer to prepare the
financial information and reports described in such Schedule. Such program will
be implemented by Deloitte, in accordance with the work program described in
Schedule 7.2 and in cooperation with personnel of the Target Company. The
Parties' obligations, in particular those of the Buyer under this Agreement,
shall not be affected by the contents of the accounts to be prepared under such
program. The fees and expenses of Deloitte in connection with such program shall
be borne entirely by the Buyer.
(b) The Controlling Shareholder and the Buyer undertake to take,
or cause to be taken, all actions, and to do, or cause to be done, all things
necessary, proper or advisable in order to enable the timely preparation of the
financial reports mentioned in Section 7.2(a) above. In particular, the Sellers
will ensure that the Target Group provides prompt and complete access to its
personnel and facilities for the purpose of the program described in Schedule
7.2, including work space for a maximum of ten (10) individuals.
(c) The Buyer shall inform the Sellers should any matter arise
that would prevent the timely preparation of the financial reports mentioned in
Section 7.2(a) above. Should any such matter be identified, the Buyer and the
Controlling Shareholder shall consult concerning potential remedial steps. The
Parties acknowledge and agree that it will be possible to proceed with the
Closing on 2 January 2007 only if Step 8.0 in the program described in Schedule
7.2 is completed prior to 22 December 2006. In the event that such Step is not
completed by this date, for reasons that are not attributable to the Buyer or
its advisors, the Buyer and the Controlling Shareholder shall meet and agree in
good faith within one (1) week on a deferred Closing Date, which will be
determined in light of the then-anticipated completion date of the program
described in Schedule 7.2 (it being understood that the Buyer may only request
one deferral of the Closing Date to the earliest possible date pursuant to this
Section 7.2 and may not further defer the Closing
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Date, even if the program described in Schedule 7.2 is not completed, without
limitation on the obligations of the Sellers under Section 7.2(b)).
7.3. REORGANIZATION OF THE TARGET GROUP.
As requested by the Buyer, between the date hereof and 31 December 2006:
(a) The Target Company shall be duly converted from its current
organization as a French Societe Anonyme to a French Societe Par Actions
Simplifiee, with all the rights and privileges thereof; and
(b) The Subsidiary Laboratoires d'Esthetique Appliquee S.A. shall
be merged with the Subsidiary Corneal Industrie S.A.S. so that Corneal Industrie
S.A.S. will be the surviving entity; it being understood that the merger shall
be deemed realized upon the expiration of the thirty (30) day period for
opposition by the merged Subsidiary's creditors; and
(c) The Subsidiary Corneal Industrie SAS shall purchase 100% of
the shares of the Subsidiary Corneal Technologies from the Target Company and
immediately after such purchase, the Subsidiary Corneal Technologies shall be
merged with the Subsidiary Corneal Industrie SAS so that Corneal Industrie SAS
will be the surviving entity; it being understood that the merger shall be
deemed realized upon the expiration of the thirty (30) day period for opposition
by the merged Subsidiary's creditors.
Without limitation on Schedule 8.2(c), all costs and expenses associated with
the operations described in Section 7.3(a) and Section 7.3(b) above shall be
borne by the relevant Target Companies. The Sellers shall promptly notify the
Buyer in writing of any and all delays or difficulties in the implementation of
said operations. The Buyer and the Sellers shall then cooperate to resolve any
such delays or difficulties. It is expressly understood and agreed that the
Sellers will not indemnify the Buyer and/or the Target Company or any of the
Subsidiaries for any Loss arising directly from the operations described in
Section 7.3(a) and Section 7.3(b).
ARTICLE VIII
INDEMNIFICATION
8.1. GENERAL INDEMNITY.
(a) The Controlling Shareholder, the Fund Shareholder and each of
the Minority Shareholders undertake to indemnify and hold harmless the Buyer
and/or the Target Company and the Subsidiaries from and against (i) any and all
Losses incurred by the Buyer and/or the Target Company and/or any of the
Subsidiaries resulting from any breach, inaccuracy of, or omission in, any
representation or warranty mentioned in Section 5.1, Section 5.2, Section 5.3
and paragraphs (a) to (h) of Section 5.4 of this Agreement, and/or (ii) any
breach by any of the Sellers of, or failure by any of the Sellers to perform,
any of the undertakings or obligations pursuant to this Agreement, in proportion
of their respective shareholding in the Target Company.
(b) The Controlling Shareholder undertakes to indemnify and hold
harmless the Buyer and/or the Target Company and the Subsidiaries from and
against any
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and all Losses incurred by Buyer and/or the Target Company and/or any of the
Subsidiaries resulting from (i) any breach, inaccuracy of, or omission in, any
representation or warranty of the Controlling Shareholder contained in Sections
5.4 to 5.25 of this Agreement and/or the certificate issued pursuant to Section
3.4(a), or (ii) any breach by any of the Sellers of, or failure by any of the
Sellers to perform, any of the undertakings or obligations pursuant to this
Agreement.
(c) The indemnification provided for in Section 8.1(a) and
Section 8.1(b) shall, save as otherwise provided in Section 8.2, terminate on
the second anniversary date of the Closing Date (and no claims shall, save as
otherwise provided in Section 8.2, be made by the Buyer under Section 8.1(a) or
Section 8.1(b) thereafter), except that the indemnification by the Sellers shall
continue as to any Losses of which the Buyer has notified the Sellers in
accordance with the requirements of Section 8.4 or Section 8.5, as the case may
be, on or prior to the end of such two-year period, as to which the obligation
of the Sellers shall continue solely with respect to the specific matters in
such notice until their liability shall have been determined pursuant to this
Article VIII and the Buyer shall have received any indemnification required in
accordance with this Article VIII.
(d) By way of exception to the principles set forth in Section
8.1(c), the Sellers' indemnification obligation related to any Tax and labor
matters shall terminate six (6) months after the expiry of the relevant statute
of limitations in each jurisdiction concerned.
(e) Misrepresentations which do not create a Loss shall not
trigger a right of indemnification. A misrepresentation or breach of warranty
shall create a right of indemnification hereunder only if the misrepresentation
or breach arises from facts and circumstances occurring prior to or on the
Closing Date.
8.2. SPECIAL INDEMNITIES.
The Controlling Shareholder undertakes to indemnify and hold harmless
the Buyer and/or the Target Company and the Subsidiaries from and against any
and all Losses incurred by Buyer and/or the Target Company and/or any of the
Subsidiaries resulting from the matters described in Schedule 8.2.
Notwithstanding any provision of this Agreement to the contrary:
(a) with respect to the matters described in Schedule 8.2(a), a
Claim Notice may be notified to the Controlling Shareholder at any time prior to
the second (2nd) anniversary of the Closing Date and the Controlling Shareholder
shall indemnify and hold harmless the Buyer and/or the Target Company and the
Subsidiaries only for 50% (fifty percent) of the Losses incurred, and the
obligation of the Controlling Shareholder to indemnify and hold harmless the
Buyer and/or the Target Company and the Subsidiaries shall not be subject to the
limitations set forth in Section 8.6(a); and
(b) with respect to the matters described in Schedule 8.2(b), a
Claim Notice may be notified to the Controlling Shareholder at any time prior to
the fourth (4th) anniversary of the Closing Date, and the obligation of the
Controlling Shareholder to indemnify and hold harmless the Buyer and/or the
Target Company and the Subsidiaries shall not be subject to the limitations set
forth in Section 8.6(a) and Section 8.6(b).
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(c) with respect to the matters described in Schedule 8.2(c), a
Claim Notice may be notified to the Controlling Shareholder at any time prior to
the applicable statute of limitations, and the obligation of the Controlling
Shareholder to indemnify and hold harmless the Buyer and/or the Target Company
and the Subsidiaries shall not be subject to the limitations set forth in
Section 8.6(a).
(d) with respect to the matters described in Schedule 8.2(d), a
Claim Notice may be notified to the Controlling Shareholder at any time prior to
the first (1st) anniversary of the Closing Date, and the obligation of the
Controlling Shareholder to indemnify and hold harmless the Buyer and/or the
Target Company and the Subsidiaries shall not be subject to the limitations set
forth in Section 8.6(a).
8.3. INDEMNIFICATION BY BUYER.
(a) The Buyer and Allergan, Inc. agree to indemnify and hold
harmless the Sellers (in proportion of their respective shareholding in the
Target Company) from and against any and all Losses incurred by the Sellers in
connection with or arising from (i) any breach, inaccuracy of, or omission in,
any representation or warranty of the Buyer or Allergan, Inc. contained in this
Agreement and/or the certificate referred to in Section 3.3, and (ii) any breach
by the Buyer or Allergan, Inc. of, or failure by the Buyer or Allergan, Inc. to
perform, any of the undertakings or obligations contained in this Agreement.
(b) The indemnification provided for in Section 8.3(a) shall,
except as otherwise provided in this Agreement, terminate on the second (2nd)
anniversary date of the Closing Date (and no claims shall, except as otherwise
provided in this Agreement, be made by the Sellers under Section 8.3(a)
thereafter), except that the indemnification by the Buyer and Allergan, Inc.
shall continue as to any Losses of which any of the Sellers has notified the
Buyer and Allergan, Inc. in accordance with the requirements of Section 8.4 or
Section 8.5, as the case may be, on or prior to the end of such two (2) year
period, as to which the obligation of the Buyer shall continue solely with
respect to the specific matters in such notice until the liability of the Buyer
or Allergan, Inc. shall have been determined pursuant to this Article VIII, and
the Buyer or Allergan, Inc. shall have indemnified the Sellers in accordance
with this Article VIII.
8.4. NOTICE OF CLAIMS.
(a) Within thirty (30) days after the Buyer or any of the Sellers
seeking indemnification hereunder (the "INDEMNIFIED PARTY") becomes aware of the
facts giving rise to such claim for indemnification (a "CLAIM"), the Indemnified
Party shall give to the Party to which such claim for indemnification is made
(the "INDEMNITOR") a notice of claim (a "CLAIM NOTICE"). The Claim Notice shall
describe in reasonable detail the facts giving rise to the claim for
indemnification hereunder and shall include (if then known) the amount or
estimated amount as well as the method of computation of the amount or estimated
amount of such claim, and a reference to the provision of this Agreement upon
which such claim is based.
(b) To the extent that any breach by the Sellers of the
representations and warranties contained herein, or any liability referred to in
this Article VIII is capable of remedy, the Buyer shall afford the Sellers a
reasonable opportunity to remedy such breach or liability prior to pursuing a
Claim. The amount of
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indemnification to which an Indemnified Party shall be entitled under this
Article VIII shall be determined: (i) by the written agreement between the
Indemnified Party and the Indemnitor; or (ii) failing such agreement within
thirty (30) days of receipt of a Claim Notice, by a decision of a court of
competent jurisdiction that is enforceable notwithstanding appeal. The amount of
indemnification shall be paid by the Indemnitor to the Indemnified Party by wire
transfer of immediately available funds (i) if said amount is determined by a
court of competent jurisdiction, no later than one (1) month after receipt by
the Indemnitor of notice from the Indemnified Party of the amount due, including
in such notice a copy of the decision of the court in question or (ii) if said
amount is agreed between the Parties, within one (1) month after final agreement
has been reached in this respect. The Indemnitor shall pay interest on the
amount of indemnification due for a Loss (such as a payment to a third party)
from the date such Loss is actually suffered until the date payment of the
indemnification due is made, at the French legal rate of interest as from time
to time in effect, unless a higher amount of interest is included in a decision
of a court determining the amount of indemnification due, or in such a decision
the court expressly determines that no interest is payable.
(c) The Indemnified Party shall have the burden of proof in
establishing the amount of Losses suffered by it.
8.5. THIRD PARTY CLAIMS.
(a) In the case of a claim or demand of any kind made by any
third party (including in Tax and labor related matters), the Indemnified Party
shall notify the Indemnitor in writing, and in reasonable detail (including a
copy of any written notice of such claim), of the third party claim within
thirty (30) days after receipt by such Indemnified Party of written notice of
the third party claim (including any pending or threatened Tax or labor or
social security related audits, examinations or assessments that may materially
affect the liabilities for which the Sellers might be required to indemnify the
Buyer pursuant to this Article VIII), or, if the time limit to answer to said
third party claim is less than said period, prior to the expiration of one half
of such period. Thereafter, the Indemnified Party shall deliver to the
Indemnitor, within one (1) month after the Indemnified Party's receipt thereof,
copies of all notices and documents (including court papers) received relating
to the third party claim, or, if the time limit to answer to said third party
claim is less than said period, within one half thereof. Any Claim Notice
pursuant to this Section 8.5 by reason of any of the representations, warranties
or covenants contained in this Agreement shall contain a reference to the
provision of this Agreement upon which such claim is based, the facts giving
rise to an alleged basis for the Claim and the amount of the liability asserted
against the Indemnitor by reason of the Claim.
(b) In the event of the initiation of any legal proceeding
against the Indemnified Party (and, as regards the Buyer, any of the Target
Company or Subsidiaries) by a third party, the Indemnitor agrees to cooperate
fully with the Indemnified Party in order to defend against, negotiate, settle
or otherwise resolve or dispose of any proceeding, claim or demand that relates
to any Losses to be indemnified against hereunder; the Indemnitor may
participate in any such proceeding with counsel of its choice and at its
expense, it being specified that the Indemnified Party shall control the defense
of the relevant proceeding. To the extent the Indemnified Party elects not to
defend such proceeding, claim or demand, and the Indemnitor defends against or
otherwise seeks to resolve or dispose of any such proceeding, claim or demand,
the Indemnitor may retain counsel and control the defense of such proceeding.
The Controlling Shareholder may not
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settle any such proceeding, claim or demand which settlement obligates the
Indemnified Party to perform obligations or to admit liability, without the
express, prior written consent of the Indemnified Party, which consent shall not
be unreasonably delayed or denied, and the Indemnified Party may not settle any
proceeding, claim or demand without first consulting with the Indemnitor. The
amount of the indemnification shall be paid by wire transfer no later than one
(1) month after (a) any final judgment or a award enforceable notwithstanding
appeal shall have been rendered by a court, arbitration tribunal or
administrative agency of competent jurisdictions or (b) the settlement entered
into as provided in this Section 8.5 has been duly and validly executed.
8.6. LIMITATIONS.
(a) Without prejudice to anything in this Agreement to the
contrary in particular with respect the Special Indemnities, the Indemnified
Party shall not be entitled to any indemnification under this Article VIII:
(i) in respect of any individual Claim for an amount of less
than EUR 75,000 (seventy five thousand euros) (de minimis threshold), it being
specified that a series of Claims that are directly related to a single set of
facts or circumstances shall be combined for the calculation of the
aforementioned de minimis threshold; and/or
(ii) unless and until the aggregate amount of all Claims
exceeds the amount of EUR 1,000,000 (one million euros), which may only be
applied once and shall apply cumulatively to all claims made under this Article
VIII, it being specified that once this amount is reached, only the portion of
Losses suffered by the Indemnified Party which exceeds the amount of said amount
shall be indemnified.
(b) Without prejudice to the provisions of this Agreement
concerning Special Indemnities, the Sellers shall be required to indemnify and
hold harmless under Section 8.1 with respect to Losses only up to a maximum
aggregate amount of EUR 30,000,000 (thirty million euros).
(c) The Buyer and Allergan, Inc. shall be required to indemnify
and hold harmless under Section 8.3 with respect to Losses incurred by the
Indemnified Party only up to a maximum aggregate amount of EUR 15,000,000
(fifteen million euros).
(d) In any case where the Indemnified Party (and, as regards the
Buyer, any of the Target Company or the Subsidiaries) recovers from third
parties any amount in respect of a matter with respect to which the Indemnitor
has indemnified it pursuant to this Article VIII, such Indemnified Party shall,
as soon as possible and no later than fifteen (15) days as from recovery of such
amount, pay over to the Indemnitor the amount so recovered (after deducting
therefrom the reasonable Expenses incurred by it in procuring such recovery),
but not in excess of the sum of any amount previously so paid by the Indemnitor
to or on behalf of the Indemnified Party in respect of such matter.
(e) The amount of the indemnity due by the Sellers shall be
calculated as follows:
- Any insurance compensation actually paid to the Target Company or
the Buyer, as applicable, in respect of the indemnification of a
Loss shall be deducted from the amount of said Loss.
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- If an amount of VAT is recoverable, any reassessment in this
regard will only give rise to an obligation to indemnify to the
extent of the penalties, late payment interest and associated
sums;
- Any timing difference in respect of tax, customs or social
security charges shall not constitute a Loss subject to the
penalties and late payment penalties due by the Target Company
and/or any of the Subsidiaries;
- Any Tax saving relating to a given Loss shall be deducted from
the amount of said Loss;
- No matter shall be the subject of a Claim to the extent that a
specifically identified and sufficient allowance, provision or
reserve in respect of such matter shall have been made by the
Sellers for such matter (with a specific reference to the matter
in question) in the Interim 2006 Financial Statements. Should the
amount of such allowance, provision or reserve be insufficient to
cover the entirety of the Claim, the Indemnified Party shall
remain entitled to be indemnified for the portion of the Claim
not covered by said allowance, provision or reserve.
(f) The Buyer and Sellers agree that, for purposes of computing
the amount of any indemnification payment under this Article VIII, any such
indemnification payment shall be treated as an adjustment to the Purchase Price
for all Tax purposes.
8.7. EFFECT OF DISCLOSURE. Except as concerns the Special
Indemnities, the Buyer shall not be entitled to claim that any fact, matter or
circumstance causes any of the representations and warranties of the Sellers
under this Agreement to be breached if disclosed under a corresponding Schedule
to this Agreement in relation to each representation and warranty (meaning that
no fact, matter or circumstance disclosed under a Schedule relating to a given
representation and warranty shall constitute a disclosure in relation to any
other representations and warranties of the Sellers under this Agreement).
8.8. MITIGATION. Each of the Parties agrees to take all
reasonable steps to mitigate their respective Losses upon and after becoming
aware of any event or condition that could reasonably be expected to give rise
to any Losses and Expenses that are indemnifiable hereunder.
8.9. ACTS OF THE INDEMNIFIED PARTY.
(a) The Indemnified Party shall not be entitled to any
indemnification under this Section to the extent that its Claim is attributable
to any voluntary act, omission, transaction or arrangement carried out at the
written request of or with the written consent of the Indemnified Party on or
before the Closing Date.
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(b) The Sellers hereby specifically acknowledge that the fact
that the financial accounts for the fiscal year 2006 of the Target Company or
any of the Subsidiaries are approved by the Buyer (and/or the Affiliates it may
chose to substitute) in its capacity as direct or indirect shareholder of the
Target Company and the Subsidiaries shall not affect in any way the
indemnification rights of the Buyer under this Article VIII.
8.10. CHANGE IN LEGISLATION. No liability shall arise in respect
of this Agreement to the extent such liability occurs or is increased directly
or indirectly as a result of any change in or introduction of any legislation
not in force on or prior to the Closing Date. In the case of a liability being
increased as a result of such change, the Indemnified Party shall remain
entitled to be indemnified for the liability concerned up to and excluding the
amount of the resulting increase.
ARTICLE IX
ADDITIONAL AGREEMENTS
9.1. TAX MATTERS. After the Closing Date, the Buyer and the
Sellers shall (and shall cause their respective Affiliates to) provide
information as reasonably required by the other Party in connection with the
preparation of any Tax Returns, which such other Party is responsible for
preparing and filing, Tax enquiries, and Tax audits.
9.2. CONFIDENTIAL NATURE OF INFORMATION. Each Party agrees that
it will treat in confidence all documents, materials and other information which
it shall have obtained regarding the other Party during the course of the
negotiations leading to the consummation of the transaction contemplated hereby
(whether obtained before or after the date of this Agreement), the investigation
provided for herein and the preparation of this Agreement and other related
documents, and, in the event the transaction contemplated hereby shall not be
consummated, each Party will return to the other Party all copies of non-public
documents and materials which have been furnished in connection therewith and
shall return or destroy all analyses, compilations, studies or other documents
prepared from such information (and confirm to the other Party in writing that
it has done so). Such documents, materials and information shall not be
communicated to any third Person (other than, in the case of the Buyer, to its
counsel, accountants, financial advisors, and in the case of the Sellers, to its
counsel, accountants or financial advisors, the Target Company and/or the
Subsidiaries). No Person shall use any confidential information in any manner
whatsoever except solely for the purpose of evaluating the proposed purchase and
sale of the Shares or the negotiation or enforcement of this Agreement or any
agreement contemplated hereby; provided that after the Closing, the Buyer, the
Target Company and/or the Subsidiaries may, in addition, use or disclose any
confidential information related to said Target Company and/or Subsidiaries
and/or their assets or business. The obligation of each Party to treat such
documents, materials and other information in confidence shall not apply to any
information which is or becomes lawfully available to such Party from a source
other than the furnishing Party, is or becomes available to the public other
than as a result of disclosure by such Party or its agents, is required to be
disclosed under applicable law or judicial processor or such Party reasonably
deems necessary to disclose to obtain any of the consents or approvals
contemplated hereby.
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ARTICLE X
NON COMPETE AND NON SOLICITATION UNDERTAKINGS
10.1. NON COMPETE UNDERTAKINGS.
(a) The Controlling Shareholder and the other Sellers who are
members of his family (other than ▇▇. ▇▇▇▇▇▇ Kita), undertake, in favor of
Allergan, Inc. and its Affiliates not to compete, directly or indirectly, as
from Closing Date with the activities of the Target Company and the
Subsidiaries, in the territories in which such companies conduct their business
(directly or indirectly), for a period expiring on the third anniversary date of
the Closing Date. In particular, such Sellers agree not to use any hyaluronic
acid technology or any other technology owned by the Target Company or the
Subsidiaries or used by them as at the Closing Date in any kind of activities
whatsoever.
(b) ▇▇. ▇▇▇▇▇▇ Kita undertakes not to set-up directly or
indirectly a company having the activities competitive with those of the Target
Company and the Subsidiaries, and not to be employed by or provide services to a
company organized after the date hereof having the activities competitive with
those of the Target Company and the Subsidiaries, for a period expiring on the
third anniversary date of the Closing Date.
10.2. NON SOLICITATION UNDERTAKINGS.
The Controlling Shareholder and the other Sellers who are members of
his family undertake, for a period expiring on the third anniversary date of the
Closing Date, not to hire away in any capacity whatsoever, directly or
indirectly, any employee or executive of the Target Company and/or any of the
Subsidiaries
ARTICLE XI
GENERAL PROVISIONS
11.1. SURVIVAL OF REPRESENTATIONS AND WARRANTIES. All
representations and warranties contained in this Agreement shall survive the
consummation of the transactions contemplated by this Agreement through the
period during which claims for indemnification may be made pursuant to Article
VIII.
11.2. NO PUBLIC ANNOUNCEMENT. Neither the Buyer nor any of the
Sellers shall, without the approval of the other, make any press release or
other public announcement concerning the transactions contemplated by this
Agreement, except as and to the extent that any such Party shall be so obligated
by law, in which case the other Party shall be advised and the Parties shall use
their reasonable efforts to cause a mutually agreeable release or announcement
to be issued; provided, however, that the foregoing shall not
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preclude communications or disclosures necessary to implement the provisions of
this Agreement or to comply with the rules of any stock exchange.
11.3. NOTICES. All notices or other communications required or
permitted hereunder shall be in writing and shall be deemed given or delivered
(a) when delivered personally, (b) if transmitted by facsimile when confirmation
of transmission is received by the sending Party, said facsimile to be confirmed
by registered mail or reputable overnight courier, (c) if sent by registered or
certified mail, postage prepaid, return receipt requested, on the third business
day after mailing or (d) if sent by reputable overnight courier when received;
and shall be addressed to the Parties as follows:
If to the Buyer, to:
ALLERGAN HOLDINGS FRANCE, S.A.
▇/▇ ▇▇▇▇▇▇▇▇ ▇▇▇.
▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇ International
▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇ ▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Attention: General Counsel Eurasia
Telephone: + ▇▇ (▇) ▇▇▇▇ ▇▇▇▇▇▇
Facsimile: + ▇▇ (▇) ▇▇▇▇ ▇▇▇▇▇▇
E-mail: ▇▇▇▇▇▇▇▇_▇▇▇▇▇▇▇@▇▇▇▇▇▇▇▇.▇▇▇
ALLERGAN, INC.
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇,
▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
▇▇▇
Attention: General Counsel
Telephone: __________
Facsimile: __________
E-mail: ▇▇▇▇▇▇_▇▇▇▇@▇▇▇▇▇▇▇▇.▇▇▇
with a copy to:
Dechert
▇, ▇▇▇▇▇ ▇'▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇ & ▇▇▇▇▇ ▇▇▇▇▇▇▇
Telephone: ▇▇▇ ▇ ▇▇ ▇▇ ▇▇ ▇▇
Facsimile: ▇▇▇ ▇ ▇▇ ▇▇ ▇▇ ▇▇
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E-mail: ▇▇▇▇▇▇▇▇.▇▇▇▇▇@▇▇▇▇▇▇▇.▇▇▇
If to the Controlling Shareholder or the Minority Shareholders, to:
▇▇. ▇▇▇▇▇▇▇▇ ▇▇▇▇
▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇
with a copy to:
▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Telephone: ▇▇▇ ▇ ▇▇ ▇▇ ▇▇ ▇▇
Facsimile: ▇▇▇ ▇ ▇▇ ▇▇ ▇▇ ▇▇
E-mail: ▇▇▇▇▇▇▇▇@▇▇▇.▇▇
If to the Fund Shareholder, to:
EUROPEAN PRE-FLOTATION FUND II
▇ ▇▇▇ ▇▇ ▇▇▇▇▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇
Attention to Christian d'Argoubet
Telephone: ▇▇▇ ▇ ▇▇ ▇▇ ▇▇ ▇▇
Facsimile: ▇▇▇ ▇ ▇▇ ▇▇ ▇▇ ▇▇
E-mail: ▇▇▇▇▇▇▇▇▇.▇▇▇▇▇▇▇▇▇@▇▇▇-▇▇▇▇▇▇▇▇.▇▇▇
with a copy to:
▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Telephone: ▇▇▇ ▇ ▇▇ ▇▇ ▇▇ ▇▇
Facsimile: ▇▇▇ ▇ ▇▇ ▇▇ ▇▇ ▇▇
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E-mail: ▇▇▇▇▇▇▇▇@▇▇▇.▇▇
or to such other address as such Party may indicate by a notice delivered to the
other Party five (5) days in advance.
The Fund Shareholder and each of the Minority Shareholders each hereby
irrevocably grants powers to the Controlling Shareholder (or either of them),
who accept, to represent them in connection with the performance of this
Agreement and in particular acknowledge and agree that any and all notices sent
by or received by the Controlling Shareholder shall constitute a valid and
binding notice issued by or received by the Fund Shareholders and any and all of
the Minority Shareholders, and that the Controlling Shareholder may generally
take all action necessary or appropriate to implement the provisions of this
Agreement.
11.4. ASSIGNMENT; SUCCESSORS AND ASSIGNS; NO THIRD PARTY
BENEFICIARIES.
(a) Without prejudice to the terms and conditions of Section
8.6(d) above, the rights, interests or obligations of any of the Parties under
this Agreement, shall not be assignable or transferable, in whole or in part,
prior to or after the Closing Date without the express prior written consent of
the other Party (which shall not be unreasonably withheld), provided, however
that the Buyer may assign its rights and obligations hereunder in whole or part
to one or more of its Affiliates, upon not less than one (1) week's prior notice
to the Sellers, on the condition that the Buyer guarantees the timely and
complete performance by such Affiliate(s) of any and all of the obligations of
Buyer so assigned.
(b) This Agreement shall be binding upon and inure to the benefit
of the Parties and their respective and permitted successors and assigns.
Nothing in this Agreement, expressed or implied, is intended or shall be
construed to confer upon any Person other than the Parties and successors and
assigns permitted by this Section 11.4 any right, remedy or claim under or by
reason of this Agreement.
(c) Allergan, Inc. guarantees the timely and complete performance
by the Buyer of any and all of the obligations of the Buyer under this
Agreement.
11.5. AMENDMENTS. This Agreement shall not be amended, modified
or supplemented except by a written instrument signed by an authorized
representative of each of the Parties.
11.6. INTERPRETATION. This Agreement shall be interpreted and
construed to the maximum extent possible so as to uphold the enforceability of
each of the terms and provisions hereof, it being understood and acknowledged
that this Agreement was entered into by the Parties after substantial
negotiations and with full awareness by the Parties of the terms and provisions
hereof and the consequences hereof. The Schedules referred to herein shall be
construed with and as an integral part of this Agreement to the same extent as
if they were set forth verbatim herein. The titles to Articles and headings of
Sections
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contained in this Agreement have been inserted for convenience of reference only
and shall not be deemed to be a part of or to affect the meaning or
interpretation of this Agreement.
11.7. EXTENSION; WAIVERS. Any term or provision of this Agreement
may be waived, or the time for its performance may be extended, by the Party or
Parties entitled to the benefit thereof. Any such extension or waiver shall be
validly and sufficiently authorized for the purposes of this Agreement if, as to
any Party, it is authorized in writing by an authorized representative of the
Party entitled to the benefits of any such waived term or provision. The failure
or delay of any Party to assert or enforce at any time any provision of, or any
of its rights under, this Agreement shall not be construed to be a waiver of
such provision, nor in any way to affect the validity of this Agreement or any
part hereof or the right of any Party thereafter to enforce each and every such
provision. No waiver of any breach of this Agreement shall be held to constitute
a waiver of any other or subsequent breach.
11.8. EXPENSES.
(a) Without prejudice to its ability to recover for any Losses or
Expenses relating to any dispute, claim or controversy arising out of or
relating to this Agreement and notwithstanding anything to the contrary in this
Agreement, each Party shall pay all costs and expenses incident to its
negotiation, preparation, signature and implementation of this Agreement and the
Controlling Shareholder shall pay all costs and expenses incident to the
negotiation, preparation and signature of the agreements entered into by the
Target Company and/or any of the Subsidiaries with Inamed Medical Products
Corporation and its Affiliates, including the legal, financial and operational
review performed in connection therewith and the fees, expenses and
disbursements of its counsel and advisers. In particular, the fees of
PricewaterhouseCoopers Corporate Finance shall be paid in full by the Sellers,
and none of the above costs and expenses relating to this Agreement shall be
paid by the Target Company or any of the Subsidiaries.
(b) The Controlling Shareholder hereby agrees to indemnify and
hold harmless the Target Company and the Subsidiaries, upon their written
request, for and against the full amount of any Loss or Expense arising from or
relating to all such costs or expenses.
11.9. REGISTRATION DUTIES. The registration of any agreements
made in furtherance of the provisions hereof shall be made by the Buyer and
registration duties and stamp taxes relating thereto shall be paid by the Buyer.
11.10. SEVERABILITY. Wherever possible, each provision of this
Agreement shall be interpreted in such a manner as to be effective and valid
under applicable law, but in case any one or more of the provisions contained in
this Agreement shall, for any reason, be held to be invalid, illegal or
unenforceable in any respect, such provision shall be ineffective to the extent,
but only to the extent, of such invalidity, illegality or unenforceability
without invalidating the remainder of such invalid, illegal or unenforceable
provision or provisions or any other provisions hereof, unless such a
construction would be unreasonable.
11.11. EXECUTION IN COUNTERPARTS. This Agreement shall be
executed in five counterparts. The Schedules shall be executed in two
counterparts, one for the Buyer and one for the Controlling Shareholder.
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11.12. FURTHER ASSURANCES. On and after the Closing Date, each
Party shall take such other actions and execute such other documents and
instruments of conveyance and transfer as may be reasonably requested by the
other Party from time to time to transfer the Shares to the Buyer in accordance
with the terms of this Agreement.
11.13. GOVERNING LAW. This Agreement shall be governed by and
construed in accordance with French law.
11.14. FORUM. Any disputes arising from or relating to the
negotiation, signature, performance or termination of the Agreement shall be
submitted to the exclusive jurisdiction of the Paris Tribunal de commerce,
without limitation on the right of any Party to seek interim or conservatory
measures from any court of competent jurisdiction.
11.15. ENTIRE AGREEMENT. The Schedules referred to herein shall
be construed with and as an integral part of this Agreement to the same extent
as if they were set forth verbatim herein. This Agreement, its Schedules as well
as the documents delivered pursuant hereto or in connection herewith contain the
entire understanding of the Parties with regard to the subject matter contained
in this Agreement or the documents so delivered, and supersede all prior
agreements, negotiations, discussions, representations, warranties,
understandings or letters of intent between or among any of the Parties.
11.16. LANGUAGE. This Agreement is executed in English (except
for some Schedules which are in French). A translation into the French language
shall be agreed upon by the Parties and their advisors before the Closing Date.
Such translation shall be used in case of litigation or dispute relating to this
Agreement before the Paris Tribunal de commerce
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In Paris,
On October 31, ▇▇▇▇,
▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, SAS
By: /s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇
-----------------------------------
▇▇. ▇▇▇▇▇ ▇▇▇▇▇▇▇▇, Duly Authorized
ALLERGAN, INC.
By: /s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇
-----------------------------------
▇▇. ▇▇▇▇▇ ▇▇▇▇▇▇▇▇, Duly Authorized
▇▇. ▇▇▇▇▇▇▇▇ ▇▇▇▇, in his name and as the duly authorized representative of the
Minority Shareholders:
/s/ ▇▇▇▇▇▇▇▇ ▇▇▇▇
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EUROPEAN PRE-FLOTATION FUND II
By: /s/ Christian d'Argoubet
-----------------------------------
Christian d'Argoubet, Duly Authorized
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