EXHIBIT 10.44
SUPPLEMENTARY AGREEMENT # 1 TO THE MANAGING DIRECTOR'S
CONTRACT OF EMPLOYMENT DATED NOVEMBER 25, 1997 BETWEEN
STAAR SURGICAL AG AND ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇
No. 1075 of the register of documents for 1997
Negotiated
in Pinneberg
on 25 November 1997
Before me, the officiating notary
▇▇▇▇ ▇▇▇▇▇▇▇
officially based in Pinneberg,
the following appeared today of known identity:
1. ▇▇. ▇▇▇▇▇▇▇▇ Roepstorff, born on 05/08/1945, businessman
resident in Achtern Felln 20, 25474 Hasloh
business address: ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇▇
2. ▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ Anhausser, lawyer
business address: ▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
on the basis of an authorization to be submitted acting for:
a) STAAR SURGICAL AG
Hauptstrabe 104 C81-2560 Nidau
B) HIMSELF regarding the following ' 13
The persons appearing acting as specified requested the officiating notary to
authenticate the following
AGREEMENT
REGARDING THE PURCHASE OF SHARES
and declared:
PREAMBLE
▇▇. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇| is the sole owner and proprietor of all business shares
of Domilens Vertrieb fuer medizinische Produkte GmbH with a nominal capital
totalling DM 1,000,000.00 registered in the commercial register of the Local
Court in Hamburg (HRB 38182). The initial capital contributions for the shares
have been paid in full.
Staar Surgical AG is a joint stock company in accordance with Swiss law. The
joint stock company is represented by ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ (president of the board
of directors) and ▇▇▇▇ ▇▇▇▇ (vice-president of the board of directors).
' 1 OBJECT OF PURCHASE, TRANSFER
(1)
The Seller sells the Buyer the business shares at the par value of
DM 20,000.00
DM 30,000.00
DM 17,000.00
DM 233,000.00 and
DM 300,000.00
with all the appertaining rights to future profits and other ancillary rights
which arise from 05 January 1998 onwards. The aforementioned business shares are
united in a separate deed to form a business share of DM 600,000.00.
(2)
The economic transition deadline for the business shares described in paragraph
1 and for the combined business share is 05 January 1998.
(3)
In his capacity as sole shareholder and managing director, the Seller, ▇▇.
▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇, grants his consent as is required in ' 11 para. 1 of the
Articles, in the version of the Articles changed today before the officiating
notary in register of documents no. 1077/1977.
' 2 PURCHASE PRICE
(1)
The purchase price is DM 7,800,000.00 (in words: seven million eight hundred
thousand Deutschmarks). The purchase price was determined on the basis of the
company valuation executed by the accountant Dipl.-Kauffrau ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇,
Hamburg, of 29/07/97 which is an integral part of the agreement of purchase of
the Company and is enclosed with this agreement as
APPENDIX 1.
The valuation was also based on the Company's audited annual accounts for 1994,
1995, 1996 and the non-audited interim balance sheet for the period January 1997
to 31 October 1997. The estimated further development of sales and profits for
the period 1997 to the year 2000, predicted by the Seller was of decisive
importance for determining the purchase price.
(2)
The purchase price is to be paid as follows: The payment of the purchase price
is to be arranged on 05 January 1998, with the proviso that the proprietorship
of the purchase price objects has been proven by then. The payment is to be
transferred to an account which is still to be named, kept by the attesting
notary in his own name for the Buyer on a trust basis. The notary drew the
parties' attention to the standard deadlines in international payment
transactions. The notary is instructed only to dispose of the purchase price In
favour of the buyer once one of the parties of this agreement has proven that
the buyer has become proprietor of the purchase object mentioned in ' 1 or when
both parties declare this unanimously.
(3)
The Seller has made distributions in advance on the company profits expected for
1997.
If and in so far as these advance distributions should exceed the yields from
the annual statement of accounts of 31/12/1997 applicable for the distribution
of profits, any excess distributions are to be reimbursed without delay.
(4)
Additional uncovered expenses for taxes and contributions due to entering on the
liabilities side in the annual statement of accounts of 31/12/1997 are to be
reimbursed to the Buyer by the Seller. This also applies if this first results
following external audits at a later date.
' 3 GUARANTEES FROM THE SELLER
The Seller guarantees the Buyer as follows:
(1)
The share capital has been paid in full. No repayments from the assets necessary
to maintain the share capital have been made. The shares are not encumbered with
third party's rights.
(2)
The annual statements of accounts on which the valuation of the Company is based
have been drawn up according to the principles of proper accounting and the
continuity of balance sheet preservation. They reflect the actual state of the
Company with regard to their assets, income and financial situation. Any
write-offs, devaluations, valuation adjustments and operating reserves,
especially for taxes, were made in the sufficient amount.
(3)
The Seller has not concluded any agreements between him and the Company apart
from the contract of employment as Managing Director, including any which affect
the partnership beyond 31/12/97. There are also no agreements with the
shareholder ECC GmbH who has withdrawn and the shareholders who are legally and
financially behind ECC.
Agreements regarding cooperations, joint ventures etc were also not concluded.
(4)
There are no letters of support in favour of third parties.
(5)
The purchase of the initial contributions by the Buyer is not classified as
taking over the property of another person as defined by ' 419 German Civil
Code. The Seller assures that he additionally owns other actual net assets which
are worth at least 20% of the purchase price agreed.
(6)
There are no preemptive rights, option rights or other purchase rights
governing the object of purchase.
(7)
The fixed assets which were taken into consideration in the company valuation
and are included in the list of the development of the fixed assets of
01/01/1996 and are handed over as
APPENDIX 2
are in the unrestricted possession of the Company and are also available for the
unlimited use of the Company with the exception of disposals caused by
operational use.
(8)
All objects to be found in the Company are capable of being used without any
limitations.
(9)
Existing delivery and performance commitments can be met.
(10)
The brands and trademarks listed in
APPENDIX 3
are due only to the Company without any restrictions. They are not encumbered
with any rights of third parties. In particular no third parties hold usufructs
for these trademarks and brands. No licenses have been awarded to third parties.
Al1 brands and trademarks are valid. These rights have not been challenged by
third parties. As far as the Seller is aware, no industrial property rights of
third parties have been violated by the use of the brands and trademarks.
Measures required to maintain the proper rights have without exception been
initiated in good time and sufficient provisions have been made to guarantee
that the property rights are upheld.
Finally, all fees which are due have also been paid in full.
(11)
No other distribution agreements have been made with manufacturers apart from
those listed in
APPENDIX 4
of this agreement. The texts of the agreements have been enclosed in full. There
are no supplementary stipulations, side letters etc. In so far as no written
agreements were made the agreements have been fully and correctly transcribed.
The agreements and oral agreements do not affect the interests of STAAR
SURGICAL.
The Seller further assures that there are no sales representatives or - from the
Company's viewpoint - similar persons who are entitled to represent the Company
in connection with the sales and distribution of their products or otherwise
result in financial commitments or temporal obligations for the Company.
(12)
The fixed assets and inventories are free of rights of third parties. In
particular they have neither been attached nor has their ownership been
transferred by way of security.
(13)
The Seller commits himself in good time before his withdrawal to train a
successor for the management of the Company and to pass on to him/her all
contacts with people, companies and institutions which are of importance for the
management, in particular for sales and distribution, so that these can be
implemented in the Company without any problems.
(14)
The orders on hand can be processed smoothly without exception. The individual
orders are reasonably priced in accordance with the business procedures of the
Company exercised to date. The orders are processed in accordance with the
agreement. There are no deals pending which are connected with particular risks.
The Seller is not aware of any other circumstances which could conceal the risk
of permanently negatively affecting the intrinsic value or the earning power of
the Company.
(15)
The list of customers which is submitted as
APPENDIX 5
is complete. The gross margins stated in it are correct.
(16)
There are no restrictions from authorities, judicial or neighbourly measures on
the business currently practised. By conducting this business, as far as the
Seller knows, no regulations of industrial law, criminal law or any other public
legal matters are being violated.
(17)
The list of the company's liabilities which is submitted as
APPENDIX 6
is complete and correct.
The Company has fulfilled all its financial obligations punctually.
(18)
The Company does not receive any investment subsidies or other subsidies.
(19)
The Company is neither involved in a law suit or execution proceedings, nor is
there any risk of a law suit or execution proceedings being lodged. An exception
in this case is the legal action with the customer Morawetz GmbH against which
claims to the amount of approx. DM 18,000.00 have been lodged. Bankruptcy
proceedings have been petitioned for this customer's assets.
(20)
All known fiscal commitments have been fully met.
(21)
The list of stock in hand "Inventory October 1997 of 03/11/97" which has been
submitted by the Seller and enclosed as
APPENDIX 7
contains the complete inventory. The values specified are the net purchase
prices. The objects are at the free disposal of and unencumbered proper of the
Company. The purchase prices have been paid. All inventories are fully
functional and vendible.
Therefore no value adjustment was necessary.
(22)
There are no legal disputes between the (previous) shareholders and the Company.
(23)
The accounts receivables list which is submitted as
APPENDIX 8
is complete and correct. The claims are all good with the exception of the above
mentioned claim against Morawetz GmbH. The Seller guarantees that he is not
aware of any conditions, and there are also no signs of any which could make the
ability of the claims listed to be collected questionable.
(24)
The Company has sufficient own financial funds to maintain the business
operation as it has in the past and make the targeted profits.
(25)
No bad debt losses due to short term expiry of the limitation of action have to
be dealt with.
(26)
There are only loan commitments to Bankhaus Wolbern & Co., Hamburg. A credit
limit of DM 1.5 million has been granted which has been taken advantage of to
the amount of DM 1,242,467.86 as of 14/11/97. The details of the loan commitment
are outlined in the bank's letter of 23 July 97 which is submitted as
APPENDIX 9.
The credit balances are listed in the "Daily bank statement" lists,
APPENDIX 10.
(27)
None of the existing sales agreements are in conflict with the interests of the
Buyer.
' 4 EMPLOYMENT
(1)
In
APPENDIX 11
all employees are listed with which written or oral contracts of employment have
been made. Without any exceptions, identical contracts of employment have been
concluded with the employees. Solely the wage agreements are different. With the
sales representatives the employment form was concluded in each case which is
submitted as
APPENDIX 12
With the other employees, a contract of employment was concluded subject to the
proviso of the contract text enclosed as
APPENDIX 13.
The sample contracts of employment duly reflect the full agreements.
(2)
The list Appendix 11 referred to above specifies in full the total gross
emoluments including bonuses, commissions and shares in profits. After the
agreement has been concluded the contracts of employment are only concluded,
changed or terminated with the prior approval of the Buyer.
(3)
Within the past 12 months no pay or wage increases have been made or assured by
the Seller which have not been recorded in the payroll - Appendix 11. The
increases which were expressed or assured therefore have no influence on the
total payroll. Neither were agreements made to the effect that employees are
entitled to old age or survivors' pensions. Assurances with regard to this were
also not made.
There are no financial commitments made on the basis of Company practice.
Employees who have left the company and their dependants have not been made any
undertakings that they should receive pensions or other payments.
The exception here is the Seller. As managing director he has been made a
pension undertaking to receive a gross pension of DM 8,000.00 monthly. This
undertaking does not however represent any financial burden for the Company with
the exception of the contributions for the direct insurance as well as the
employer's pension liability insurance. The financial commitments in the insured
event are covered by an adequate employer's pension liability insurance.
(4)
Binding collective wage agreements, works agreements and commitments on the
basis of Company practice to a degree of financial importance do not exist apart
from Christmas and holiday pay.
(5)
The Seller will prevent, that after the agreement has been concluded new
contracts for the Company will be concluded with today's shareholders or their
near relatives without the Buyer issuing its prior approval.
' 5 MANAGING DIRECTOR CONTRACT OF EMPLOYMENT OF THE SELLER
(1)
The current contract of employment of the Seller is continued basically at the
same financial conditions, however is considerably changed in the layout as is
evident from
APPENDIX 14
The Seller receives an annual gross salary of DM 450,000.00 plus a share in
profits of 5% of the annual net profit.
The Buyer's decision to buy is considerably based on the future trustworthy
cooperation with the Seller. Additionally, that the succession of the Company is
secured. On the basis of the latter, the Seller has agreed in ' 3 item 13 to
train a successor in good time before he withdraws.
To cover the financial risk of the Company in the event of the Seller suddenly
withdrawing due to death of the Seller, the Company will take out a term life
Insurance policy on the life of the Seller ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇. The Company in
doing so is granted an irrevocable preemptive right. The sum insured will be DM
5.0 million. The policy will run for 10 years. If the event insured occurs, the
sum insured received by the Company is left out of count when determining the
amount of compensation for the Seller's business share in the Company.
(2)
The gross remuneration of the Seller is to be adapted to the modified situations
of the Company. The details are regulated by the modified Managing director
contract of employment in force from 05/01/1998.
(3)
The pension agreement is not affected by the paragraphs above.
(4)
The Seller will repay all financial commitments which he has towards the Company
which result from
APPENDIX 15
by 31/12/1997 at the latest.
Additionally the company has extended other loans to third parties the current
standing of which can be seen in
APPENDIX 16
The Seller guarantees that these loans will be paid back by 31/12/1997 at the
latest.
' 6 COMPETITION CLAUSE
(1)
The Seller will not enter into competition neither indirectly nor directly with
the Buyer, the Company or a company affiliated with these for the duration of 12
years from the day of the conclusion of this agreement. This prohibition to
compete is limited to the field of ophthalmology. This mean: that for the
relationship after the contract, a post-contractual prohibition to compete will
exist for two years.
(2)
The Seller understands that the restrictions on competition were a decisive
factor for the Buyer when concluding this agreement.
(3)
The Seller is aware that the Buyer supplies customers in Germany directly. Even
after this agreement has been concluded and enforced, the Buyer may supply the
customer Benemed without any restrictions. For the rest, the Buyer will
terminate its other existing customer relations within an appropriate period
from the enforcement of the agreement.
(4)
The Seller will ensure and commits itself, if necessary to agree at a
shareholders' meeting that the Company ends the business relations with other
suppliers within an appropriate period in accordance with an agreement having
been made, in so far as they supply products which could be supplied by the
Buyer, its parent company or subsidiaries.
(5)
The buyer intends to grant the Company the exclusive sales rights for Germany at
a point in time which cannot yet be defined.
' 8 RESPONSIBILITY FOR TAXES, CONTRIBUTIONS AND OTHER CHARGES TO BE PAID
(1)
Any payment of taxes from the period up to 31/12/1997, if these are not listed
in the balance sheet, reduce the purchase price in so far as they are based on
expenditure of the Seller or members of his family which are not recognized as
business expenses or other hidden profit distributions.
(2)
The payments for income tax on wages and salaries and social insurance
contributions due before the transfer deadline for the employees have been or
will be correctly determined, cleared and paid.
(3)
All tax returns have been given in correctly and punctually.
(4)
The buyer will inform the Seller without delay of a pending fiscal audit and
give the Seller the opportunity to defend itself against this.
' 9 LEGAL PROCEEDINGS
The Seller once again expressly assures that there are no pending legal
proceedings against the Company and that there are no claimed or threatened
legal or contractual claims against the Company with the exception of the claims
expressly mentioned in this agreement.
' 10 CONSEQUENCES IN THE EVENT OF BREACH OF AGREEMENT
(1)
If the Seller should not meet his obligations taken on with this agreement at
all or in full or does not meet them in keeping with the agreement in any other
way, the Buyer is entitled to set a reasonable period of grace to give the
Seller the opportunity to create the state as conformable to the agreement. The
period of grace should be no less than two weeks. It is however dispensable if
the state as conformable to the agreement cannot be created or the Seller
refuses performance or if this is unreasonable for the Buyer.
(2)
If the state as conformable to the agreement is not created within the time set
or if the period of grace is dispensable, the Buyer can either demand that the
financial prejudice sustained be made good or make use of the legally available
rights with the exception of rescission.
(3)
The following applies for the compensation for financial prejudice sustained:
To be compensated is the expense of the Buyer, which is required to create the
state as conformable to the agreement, or which results from the state as
conformable to the agreement not being able to be created at all, in full
permanently or only temporarily.
The expense proven by the Buyer is to be compensated. Advantages in excess what
is required are duly taken into account. For the rest, the Buyer is to be
financially reimbursed so that it is in the same position financially as it
would be if the undertakings were correct or as it would be if the obligations
had been executed as stipulated by the agreement.
' 11 COST OF THE AGREEMENT
The notary's office's costs for the authentication of this agreement are to be
equally borne by both parties of this agreement. For the rest, each party pays
for its own consulting costs separately.
' 12 PURCHASE THROUGH TRUSTEES
(1)
Both parties are in agreement that the shares will be purchased through ▇▇
▇▇▇▇▇▇ D. Anhausser, lawyer in Karlsruhe, as trustee for the Buyer. This is
because both parties consider it to be wise that it does not become known on the
relevant market that the Buyer has shares in the Company.
(2)
Furthermore both parties are in agreement that, even if the purchase takes place
through the trustee, the contractual parties treat each other as if the Buyer
were the direct contractual partner.
(3)
This agreement is also met and enforced with the authentication of the
assignment of the shares to the amount of DM 600,000.00 by the Swiss notary ▇▇
▇▇▇▇▇ on Friday 21 November 1997.
(4)
Dr Anhausser (lawyer) enters into this agreement as party in so far as he
commits himself to purchase the business shares for the Buyer as a trustee.
' 13 ASSIGNMENT OF THE SHARES
(1)
The Seller herewith declares the assignment of the shares listed in ' 1 para. 1
which following the agreement made with ECC GmbH still have to be formally
assigned to him.
(2)
▇▇ ▇▇▇▇▇▇ D. Anhausser, lawyer, accepts the assignment in his own name, however
as trustee of the Buyer, STAAR SURGICAL AG, Nidau, Switzerland.
(3)
The agreement is subject to the condition precedent that the Seller purchases
from the current copartner ECC GmbH the shares described in detail in ' 1 of
this document by 10 December 1997. The assignment becomes effective with the
assignment of the shares to the Buyer.
' 14 CHOICE OF LAW AND JURISDICTION
(1)
This agreement including all appendices, additional agreements and ancillary
agreements is subject to German law. The parties are in agreement that the
uniform UN law on the sale of goods should not apply.
(2) A court of arbitration decides about all legal disputes from this agreement
and from all existing and future additional agreements and ancillary agreements
ousting the jurisdiction of normal courts subject to the proviso of the
arbitration agreement concluded in a separate deed.
' 15 LIMITATION OF ACTIONS
The parties agree a uniform limitation period of 4 years for all claims
resulting from this contractual relationship.
' 16 OPTION TO BUY
For each sale, the parties agree a right of first refusal. In this instance, it
is of no consequence whether the shares in the Company are being sold in pad or
in full. The purchase price at which the shares are to be offered is to be
determined with binding force for both parties by the Chamber of Auditors based
in Dusseldorf.
(2)
The Seller's obligation to offer the shares for sale also exists if the parties
unanimously establish that a further cooperation is no longer possible. In this
case, a purchase price should if possible be determined by mutual agreement.
Each contractual party can force the other to sell at a price which corresponds
to 120% of the determined value of the shares.
(3)
If a third party with the approval of the board of directors of the Buyer's
parent company should purchase shares in the parent company, which constitute a
controlling interest, the Seller has the right to sell his shares in the
Company. if in this case, he no longer wishes to continue the cooperation. This
is to be assumed if either the majority of the shares issued which are freely
traded on the market, *verb is missing* or in the case the assets are purchased
or through a merger. The same applies if a share majority is acquired with which
a decisive change in the executive management of the parent company (Staar
Surgical Company) is enforced. The Buyer itself or a third pad to be named by
it, in this case has the obligation to buy the shares at the determined value of
the shares.
If the third party is not a buyer which was approved by the board of directors
of the parent company, the Buyer or a third party to be named by it, must buy
the shares at a price which constitutes 150% of the determined value if the
Seller wishes to terminate cooperation (with the Company) in this case.
' 17 WRITTEN FORM
Changes and supplements to this agreement require the written form and if
legally required an additional notary's authentication. This also applies to a
change of this written form clause. The written form clause should not be
contracted out of the agreement formlessly, especially not orally.
' 18 ESCAPE CLAUSE
(1)
If clauses of this agreement or a clause included in it in future are fully or
partially legally invalid or not executable or later lose their validity or
practicability, the validity of the other clauses is not affected. The same
applies if it should be shown that the agreement has a gap in the regulations.
(2)
In place of the invalid or impracticable clause or to fill the gap an
appropriate regulation should apply which in so far as legally possible is as
nearest to what the parties desired or would have wanted defined by and for the
purpose of the agreement in so far as they had considered the matter on
concluding the agreement or when later including a point.
(3)
The same also applies if the invalidity of a clause is based on a measure of
performance or time (deadline) specified in the agreement; in this case the
legally permissible measure of performance or time (deadline) as near to the one
desired should apply.
(4)
The parties are obliged to lay down whatever is valid according to paragraphs
1-3 through a formal modification or supplement to the text of the agreement in
proper form.
PARTS OF THE AGREEMENT
This agreement was concluded with reference to the following appendices:
Appendix 1: Company valuation of accountant ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Appendix 2: List of the development of the fixed assets as of 01/01/1996
Appendix 3: Copies of brand and trademark registrations
Appendix 4: Sales agreements with manufacturers
Appendix 5: List of customers
Appendix 6: List of liabilities
Appendix 7: List of stock in hand
Appendix 8: List of accounts receivables
Appendix 9: Letter from Bankhaus Wolbern of 23/07/97
Appendix 10: List of "Daily bank statements"
Appendix 11: List of employees with wage/salary specifications
Appendix 12: Sample contract of employment sales representatives
Appendix 13: Sample contract of employment in-house staff
Appendix 14: Modification to the Managing director contract of employment
Appendix 15: List of liabilities of the Seller owed to the Company as well
as loans to third parties
The following negotiation was read out to those appearing, approved by them and
signed by their own hand as follows:
signed ▇. ▇▇▇▇▇▇▇▇▇▇
signed ▇▇▇▇▇▇ ▇. Anheuser L.S.
signed Mallick, notary