EXHIBIT 2.1
STOCK PURCHASE AGREEMENT
This STOCK PURCHASE AGREEMENT (the "AGREEMENT") is made this 7th day of March
2003, by and among:
1. (a) Ms. Noelle Note, a French national residing at ▇▇, ▇▇▇▇▇▇ ▇▇ ▇▇▇▇▇▇▇▇▇
▇-▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇; (▇) Mr. Druon Note, a French national residing at 45, Montee
du Colombier F-13012 Marseilles; (c) ▇▇. ▇▇▇▇▇▇ Note, a French national residing
at 45, Montee du Colombier F-13012 Marseilles; (d) ▇▇. ▇▇▇▇▇▇ Note, a French
national residing at 45, Montee du Colombier F-13012 Marseilles; (e) ▇▇. ▇▇▇▇▇▇▇
Note, a French national residing at 45, Montee du Colombier F-13012 Marseilles;
(f) ▇▇. ▇▇▇▇▇▇ Note, a French national residing at 45, Montee du Colombier
F-13012 Marseilles; (g) Mr. Christophe Note, a French national residing at 45,
Montee du Colombier F-13012 Marseilles; and (h) ALNO, a company organized and
existing under the laws of France under the form of a "societe civile"
registered with the trade and company register of Marseilles number 442 493
300), having its registered office 45, Montee du Colombier F-13012 Marseilles,
represented by its managing director, Mr. Druon Note (hereinafter referred to an
"ALNO"), whose sole partners are Ms. Noelle and Druon Note who for the purpose
of this Agreement shall be and remain jointly and severally liable with ALNO,
each of the parties listed above, acting jointly and severally for the purpose
of this Agreement with the other parties listed above and being (i) hereinafter
referred to individually as a "SELLER" and collectively with the other parties
as the "SELLERS" and (ii) represented for the purpose of the execution of this
Agreement by Mr. Druon Note pursuant to a power of attorney of which an original
copy is attached hereto as APPENDIX A;
and
2. Pharmion France, a limited liability company organized and existing under the
laws of France under the form of a societe a responsabilite limitee, having its
registered office at 10, place Vendome, F-75008 Paris, represented by its
managing director, ▇▇. ▇▇▇▇▇▇ Bouchara (hereinafter referred to as the "BUYER");
WHEREAS, the Sellers collectively own on the date hereof and shall
collectively own on the Closing Date 2,500 shares (hereinafter referred to as
the "SHARES") representing 100% of the issued and outstanding share capital and
voting rights of Gophar S.A.S.;
WHEREAS, Gophar S.A.S. is a limited liability company organized and
existing under French law under the form of a Societe par Actions Simplifiee,
having its registered office at ▇▇ ▇▇▇ ▇▇▇ ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇▇▇, ▇▇▇▇▇,
▇▇▇▇▇▇ and registered with the Trade Registry of Paris under number 329 859 714
(hereinafter referred to as "GOPHAR" or the "COMPANY");
WHEREAS, Gophar owns on the date hereof and shall solely own on the
Closing Date (i) 228,842 shares representing 100% of the issued and outstanding
share capital and voting rights of Laphal Developpement S.A., a limited
liability company organized and existing under French law under the form of a
societe anonyme, having its registered office at ▇▇▇▇▇▇ ▇▇ ▇▇ ▇▇▇▇▇▇▇▇, ▇-▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇ and registered with the Trade Registry of Marseilles under
number 412 880 882 (hereinafter referred to as the "SUBSIDIARY" and together
with Gophar, the "COMPANIES"), (ii) [_______]shares representing [___]% of the
issued and outstanding share capital and voting rights of France Gelules S.A., a
limited liability company organized under French law under the form of a societe
anonyme, having its registered office at ▇▇▇▇▇▇▇ ▇▇, ▇▇▇▇▇ ▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇ and
registered with the Trade Registry of Marseilles under number 388 713 570,
currently in the course of liquidation and (iii) [_________] shares representing
[___]% of the issued and outstanding share capital and voting rights of
Bioenergies S.A., a limited liability company organized and existing under
French law under the form of a societe anonyme, having its registered office at
▇▇, ▇▇▇▇▇▇ ▇▇▇ ▇ ▇▇▇▇▇▇, ▇-▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇ and registered with the Trade
Registry of Marseilles under number 343 241 089;
WHEREAS, the Subsidiary owns on the date hereof (i) 4,211 shares
representing 100% of the issued and outstanding share capital and voting rights
of Lipogel S.A.R.L., a limited liability company organized and existing under
French law under the form of a societe a responsabilite limitee and (ii) 232
shares representing 10% of the issued and outstanding share capital and voting
rights of Finexsud S.A.S., a limited liability company organized and existing
under French law under the form of a societe par actions simplifiee and (iii)
certain other participations of which a list is attached hereto as APPENDIX B.
WHEREAS, the Sellers have agreed that the participations in Lipogel
S.A.R.L. and Finexsud S.A.S. held by the Subsidiary will be disposed of on or
prior to the Closing Date;
WHEREAS, the operations of the Subsidiary consist in the conception,
marketing, distribution and sale of pharmaceutical products that include
Thalidomide as well as other pharmaceutical products that may properly be
classified as orphan drugs -- i.e. drugs used in the treatment of diseases
affecting relatively small population groups; and
WHEREAS, the Buyer is willing to purchase and the Sellers are willing
to sell the Shares - the number of Shares sold by each of the Sellers being
indicated in respect of its name on APPENDIX C hereto - on the terms and subject
to the conditions set forth in this Agreement.
NOW, THEREFORE, in consideration of the mutual covenants and agreements
set forth in this Agreement, and for other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the parties hereto,
intending to be legally bound, agree as follows:
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ARTICLE 0 - CERTAIN DEFINITIONS
0.1 Defined terms.
For the purpose of the Agreement, the following terms shall have the
meaning set forth below:
"ACCOUNTING PRINCIPLES" shall mean the accounting principles and
methodologies as consistently applied by
each of the Companies in compliance with
French GAAP in the preparation of the
Audited Financial Statements as fully
set forth in EXHIBIT 0.1.1, it being
understood that in case of any
contradiction between the above
accounting principles and methodologies
and French GAAP, French GAAP shall
prevail.
"AFFILIATE" shall mean, in respect of any Person,
any entity which at any time, directly
or indirectly, through one or more
intermediate structures, controls, is
controlled by, or is under common
control with such Person. For the
purpose of this definition, "CONTROL"
means the ownership, directly or
indirectly, through one or more
intermediate structures, of voting stock
bearing in the aggregate at least fifty
percent of the aggregate voting rights
of all classes of all voting stock of a
Person or the right or power in fact to
direct the management of such Person.
"AGGREGATE TERRITORY NET SALES" shall mean, as of any given date
(hereinafter referred to as a
"CALCULATION DATE"), the total Net Sales
in the Territory recorded on the
financial books and records of Pharmion
Corporation and its Affiliates in
respect of the period commencing on the
Closing Date and ending on such
Calculation Date.
"ATU" shall mean, in respect of any medicinal
or pharmaceutical products, a temporary
marketing authorization ("autorisation
temporaire d'utilisation") granted by
the relevant Governmental Entity of
France pursuant to applicable local
regulations.
"AUDITED FINANCIAL STATEMENTS" shall have the meaning set forth in
ARTICLE VII.7.
"BUSINESS DAY" shall mean any day other than a
Saturday, a Sunday or any other day on
which commercial banks in France are
authorized to be closed.
"BUYER'S ACCOUNTANTS" shall mean Ernst & Young.
"CLOSING" shall have the meaning set forth in
ARTICLE V.
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"CLOSING DATE" shall have the meaning set forth in
ARTICLE V.
"CONSOLIDATED CASH" shall mean all (i) available cash
("disponibilites") and cash equivalents
("valeurs mobilieres de placement"),
(ii) trade receivables and (iii)
inventories of the Companies, as
determined on a consolidated basis in
accordance with French GAAP.
"CONSOLIDATED FINANCIAL DEBT" shall mean the Financial Debt of the
Companies determined on a consolidated
basis in accordance with French GAAP,
excluding, however, for the purpose of
such calculation, the Shareholders'
Debt.
"DAMAGES" shall have the meaning set forth in
ARTICLE XI hereof.
"DISPOSALS" shall mean all of the disposals which
the Sellers shall cause the Company and
the Subsidiary to complete prior to the
Closing Date pursuant to ARTICLE IX
hereof.
"ENCUMBRANCE" shall mean any mortgage, easement
("servitude"), charge, claim, condition,
equitable interest, lien ("privilege"),
pledge, security interest, usufruct
("usufruit"), or other community
property interest, as well as any
agreement, option, right of first
refusal, pre-emption right, restriction
or limitation of any kind, including any
restriction on use, voting, receipt of
income, or exercise of any other
attribute of ownership.
"ENVIRONMENTAL LAWS" shall have the meaning set forth in
ARTICLE VII.10 (D).
"FINAL CLOSING PURCHASE PRICE" shall have the meaning set forth in
ARTICLE II.
"FINANCIAL DEBT" shall mean, with respect to any Person,
whether recourse is to all or a portion
of the assets of such Person, (i) the
principal of and premium, if any, and
interest in respect of any indebtedness
of such Person for borrowed money (other
than advances on trade payables), (ii)
the principal, premium, if any, and
interest of such Person with respect to
obligations evidenced by bonds,
debentures, notes or other similar
instruments, including obligations
incurred in connection with the
acquisition of property, assets or
businesses (other than trade payables),
(iii) all obligations of such Person in
respect of bank guarantees, letters of
credit or other similar instruments
(including reimbursement obligations
with respect thereto but excluding
instruments entered into as security for
trade payables) but only to the extent
of drawings thereunder not yet
reimbursed, (iv) all Financial Debt of
other Persons secured by an Encumbrance
on any asset of such Person, (v) all
capital leases, (vi) DRIRE, CNRS and
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ANVAR reimbursable loans, (vii) all
trade payables whether fallen due or not
(including advances on trade payables),
(viii) all other current liabilities not
falling under clauses (i) through (vii)
and (ix) every obligation of the types
referred to in clauses (i) through
(viii) of another Person the payment of
which, in any case, such Person has
guaranteed or for which such Person is
responsible or liable, directly or
indirectly, as obligor, guarantor or
otherwise to be reflected in the
financial statements (including as
off-balance sheet items) of such Person
in accordance with French GAAP.
"FRENCH GAAP" shall mean generally accepted accounting
principles in France.
"GOVERNMENTAL AUTHORIZATION" shall mean any approval, consent,
license, permit, waiver, or any other
authorization issued, granted, given, or
otherwise made available by or under the
authority of any Governmental Entity.
"GOVERNMENTAL ENTITY" shall mean any governmental, regulatory
or administrative authority, any court
of competent jurisdiction or any
judicial authority, administrative
agency, department or commission, or
subdivision thereof, whether local,
regional, national, European or foreign,
including, without limitation, any
legislative body, administrative agency,
court, commission, council or other
instrumentality of the European Union.
"JUDGMENTS" shall mean any judgments, orders,
injunctions, writs, decrees, rulings or
awards of any court, arbitrator or other
Governmental Entity.
"LAW" shall mean any law, decree or regulation
of any court or Governmental Entity.
"MAJOR CLIENTS" shall mean the fifteen (15) largest
clients of the Subsidiary in terms of
turnover generated during the period
from January 1, 2002 to December 31,
2002.
"MAJOR SUPPLIERS" shall mean the fifteen (15) largest
suppliers or service providers (in terms
of gross payables) of the Subsidiary for
the period from January 1, 2002 to
December 31, 2002.
"MARKETING AUTHORIZATION" shall mean any marketing authorization
("autorisation de mise sur le marche")
and/or any ATU granted by any competent
European or French Governmental Entity.
"MATERIAL ADVERSE EFFECT" shall mean any facts, circumstances,
conditions, events or transactions of
any kind which have had, or may be
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reasonably expected to have, a material
adverse effect on (i) the assets,
business, results, operations,
properties, prospects, profits or
condition (financial or otherwise) of
each of the Companies or (ii) the
ability of a Party to perform on a
timely basis any material obligation
under the Agreement or to consummate the
transactions contemplated hereby.
"NET FINANCIAL DEBT" shall mean, on any given date of
calculation, the amount by which either
the Consolidated Financial Debt exceeds
the Consolidated Cash or, alternatively,
the Consolidated Cash exceeds the
Consolidated Financial Debt.
"NET SALES" shall mean invoiced sales price of
Thalidomide products (including
Thalidomide products distributed under
the current Laphal presentation or under
any presentation containing the same
active ingredient) and Products listed
in EXHIBIT 0.1.2 billed by Pharmion
Corporation and its Affiliates to non
Affiliate customers, less: (i) to the
extent such amounts are included in the
invoiced sales price, allowances and/or
charge-backs for spoiled, damaged,
out-dated and returned product, (ii)
quantity and other trade discounts and
early settlement discounts (where such
discounts are effectively
non-discretionary and are given as a
matter of course) allowed, (iii)
transportation, insurance and handling
expenses to the extent chargeable to
such sales, (iv) sales, value-added and
other direct Taxes incurred, (v) customs
duties and surcharges and other
governmental charges incurred in
connection with the exportation or
importation of any such product, and
(vi) legally or contractually mandated
rebates, if any.
"ORGANIZATIONAL DOCUMENTS" shall mean with respect to each of the
Company and the Subsidiary, when
applicable, the certificate of
incorporation ("extrait Kbis") and the
by-laws ("statuts"), the register of the
minutes of the shareholders meetings
("registre des assemblees
d'actionnaires"), the attendance sheets
of the shareholders meetings ("feuilles
de presence"), the register of the
minutes of the meetings of the board of
directors ("registre des deliberations
du conseil d'administration"), the
register of attendance at the board
meetings ("registre de presence"), the
register of the minutes of the decisions
of the President ("registre des
deliberations du president"), the
register of share transfers ("registre
des mouvements de titres") and the
individual shareholder's accounts
("comptes d'actionnaires").
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"PERSON" shall mean a natural person, company,
partnership, economic interest group,
trust or unincorporated organization, or
a government or any agency or political
subdivision thereof.
"PRESIDENT" shall mean the president of Gophar.
"PROCEEDINGS" shall mean any claim, action, suit,
dispute or legal, administrative,
arbitration or other alternative dispute
resolution proceeding or investigation
(whether civil, criminal or
administrative).
"REPRESENTATIVE" shall mean with respect to any Person,
any director, officer, employee or agent
of such Person.
"SELLERS' AUDITORS" shall mean ACE.
"SHARES" shall mean 2,500 shares representing on
the date hereof and on the Closing Date
100% of the issued and outstanding share
capital and voting rights of Gophar.
"SHAREHOLDERS' DEBT" shall mean the outstanding principal
amount of, and all accrued but unpaid
interest on, the shareholders loans
granted by the Sellers and/or Affiliates
of the Sellers to any of the Companies
as well as, if any, all payables owed by
any of the Companies to the Sellers
and/or Affiliates of the Sellers, of
which loans and payables a complete list
is attached hereto on EXHIBIT 0.1.3.
"SPECIFIC CONTRACTS" shall mean any contract referred to in
ARTICLE VII 16(B).
"SUBSIDIARY'S BOARD" shall mean the board of directors of
Laphal Developpement S.A.
"TAX" or "TAXES" shall mean taxes, duties, levies, fees,
assessments and governmental charges of
any kind, whether payable directly or by
withholding, including without
limitation, income, franchise, property,
sales, customs, value added, employment,
gains, and social security taxes and
charges (including in respect of pension
and retirement contributions, family
allowance contributions and all other
contributions assessed on salaries),
together with any interest, penalties or
additions to tax with respect thereto,
imposed by any Governmental Entity.
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"TERRITORY" shall mean France (including ▇▇▇-▇▇▇),
Belgium, The Netherlands, Luxembourg,
Germany, Algeria, Tunisia and Morocco.
"TRANSITION SERVICES AGREEMENT" shall mean the agreement to be entered
into on the Closing Date in the form
attached as EXHIBIT V.2(A)(VI) between
the Companies and the Sellers and/ or
Affiliates of the Sellers for the
provision to the Companies of certain
administrative and other support
services.
0.2 Interpretation.
For purposes of the Agreement:
(a) References in the Agreement to Articles and Exhibits are to
articles in, and exhibits to, the Agreement, unless otherwise indicated.
(b) The meanings of the defined terms are applicable to both the
singular and plural forms thereof.
(c) Any agreement defined or referred to in the above definitions or in
any provision of the Agreement shall include any amendment, modification and
supplement thereto and waiver thereof which may become effective from time to
time, unless otherwise indicated.
(d) Any term defined by reference to any document shall have the
meaning ascribed to it therein.
(e) The words "hereof", "hereunder" and similar words shall be
construed as references to the Agreement as a whole and not limited to the
particular article or provision in which the relevant reference appears and the
word "including" shall be deemed to be followed by the phrase "without
limitation" in each instance it is used herein.
(f) References to any document being in "agreed form" is to a document
in the form signed or initialed by or on behalf of the Parties for
identification.
(g) When calculating the period of time within which or following which
any act is to be done or step taken, the date which is the reference day in
calculating such period shall be excluded and if the last day of such period is
not a Business Day, the period shall end on the next day which is a Business
Day.
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ARTICLE I - SALE OF SHARES
Upon the terms and in reliance upon the representations, warranties and
covenants set forth in this Agreement, including the satisfaction of all
conditions precedent set forth in Article X hereof, the Sellers undertake to
sell to Buyer, and Buyer or its assignee(s) undertake to acquire from the
Sellers, on the Closing Date all and not less than all of the Shares with full
title therein, free and clear of any Encumbrances and together with all rights
now and hereafter attached to the property of the Shares, including the right to
any dividend or any other amount declared or distributed as from the date of the
Agreement.
ARTICLE II - PURCHASE PRICE
Subject to the terms and conditions of the Agreement, the
aggregate consideration for the Shares shall be equal to the sum of (i) the Base
Purchase Price (as defined in ARTICLE II.1 below) adjusted, as the case may be,
in accordance with the provisions of ARTICLE II.2 through ARTICLE II.5 below and
(ii) the additional Purchase Price elements as specified in ARTICLE II.6 below
provided, however, that all conditions to the payment of such additional
Purchase Price elements set forth in this ARTICLE II.6 are satisfied.
II.1 Base Purchase Price. Subject to adjustment in accordance with the
provisions of ARTICLE II.2 through ARTICLE II.5 below, the aggregate
consideration for the Shares shall be equal to (Euro) 11,650,000 (eleven million
and six hundred fifty thousand Euro), such amount being hereinafter referred to
as the "BASE PURCHASE PRICE".
II.2 Determination of the Closing Purchase Price. On the Closing Date,
the Base Purchase Price shall be (i) reduced on a euro for euro basis by an
amount equal to all sums to be paid prior to Closing by the Subsidiary to
certain employees of the Subsidiary (hereinafter referred to as the "CONCERNED
SUB'S EMPLOYEES") increased by the amount of all social charges due in
connection therewith, all as determined in accordance with applicable laws and
described in EXHIBIT II.2, and (ii) further reduced on a euro for euro basis by
an amount equal to all sums required to repay the Shareholders Debt in full
(including any accrued but unpaid interest thereon) on the Closing Date in
accordance with the provisions of ARTICLE V.2(B)(I), and (iii) further reduced
(if such amount is negative) or increased (if such amount is positive) by the
amount of the Estimated Net Financial Debt (as defined in ARTICLE II.3 below),
the net amount of the adjustments resulting from (i), (ii) and (iii) being
hereinafter referred to as the "INITIAL ADJUSTMENT AMOUNT" and the Base Purchase
Price adjusted by the Initial Adjustment Amount being hereinafter referred to as
the "CLOSING PURCHASE PRICE".
II.3 Sellers' Certificate. For the purpose of the determination of the
Closing Purchase Price, the Sellers shall, not less than five (5) days prior to
the Closing Date, deliver to the Buyer a certificate (hereinafter referred to as
the "SELLERS' CERTIFICATE") setting forth the following amounts determined by
the Sellers as of the Closing Date on the basis of the financial information
then available to the Sellers:
(i) the amounts to be paid to the Concerned Sub's Employees on the
Closing Date increased by the amount of all social charges
resulting thereof, whether payable by the
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Subsidiary itself or by the Concerned Sub's Employees
themselves - but withheld, and paid, by the Subsidiary on
their behalf -, all such amounts to be hereinafter referred to
as the "CONCERNED SUB'S EMPLOYEES TOTAL AMOUNT";
(ii) the amounts required to repay the Shareholders Debt (including
any accrued but unpaid interest thereon) in full on the
Closing Date;
(iii) the amount of the Net Financial Debt as estimated by the
Sellers on the Closing Date (hereinafter referred to as the
"ESTIMATED NET FINANCIAL DEBT"), with the indication in
reasonable detail of all loans and other indebtedness taken
into account for this estimate and the identity of the
corresponding lenders; and
(iv) on the basis of the amounts set forth therein in clauses (i)
to (iii), the amount of the Initial Adjustment Amount and the
Closing Purchase Price.
II.4 Final Closing Purchase Price. After the Closing, the Closing
Purchase Price shall be (i) reduced on a euro for euro basis by the amount by
which the Net Financial Debt as of the Closing Date (as finally determined in
accordance with ARTICLE II.5 below) exceeds the Estimated Net Financial Debt, or
alternatively, as the case may be, (ii) increased on euro for euro basis by the
amount by which the Estimated Net Financial Debt exceeds the Net Financial Debt
as of the Closing Date, the Closing Purchase Price, as so reduced or increased,
being hereinafter referred to as the "FINAL CLOSING PURCHASE PRICE".
II.5 Determination of Final Closing Purchase Price. The Parties shall
cause the Companies to provide, as soon as reasonably practicable and by no
later than thirty (30) days after the Closing Date, a consolidated balance
sheet, a consolidated profit and loss statement and related financial statements
for the Companies as at the Closing Date (but excluding any post-Closing
transactions) (hereinafter referred to as the "CONSOLIDATED CLOSING FINANCIAL
STATEMENTS") prepared in accordance with the Accounting Principles (as if such
Consolidated Closing Financial Statements were being prepared as of the close of
an annual fiscal year). As soon as practicable and no later than thirty (30)
days after the Consolidated Closing Financial Statements have been made
available to the Buyer, the Buyer shall deliver to the Sellers a certificate
(hereinafter referred to as the "ADJUSTMENT CERTIFICATE"), signed by an
authorized representative of the Buyer, setting forth the amount of any
adjustment, if any, to the Closing Purchase Price (hereinafter referred to as
the "NET ADJUSTMENT AMOUNT") as well as in reasonable detail a computation of
the Net Financial Debt at the Closing Date based on the information set forth in
the Consolidated Closing Financial Statements.
As from the date of the receipt of the Adjustment Certificate
(such date being hereinafter referred to as the "ADJUSTMENT CERTIFICATE DELIVERY
DATE"), the Sellers shall be entitled to, at their expense, conduct or cause to
be conducted by the Sellers' Auditors a review of the Adjustment Certificate for
the purpose of verifying the Net Adjustment Amount set forth in the Adjustment
Certificate. Such review shall be finally completed by no later than thirty (30)
days after the Adjustment Certificate Delivery Date. The Sellers' Auditors shall
have all reasonable access to the accounting and other relevant books, accounts,
records, contracts and other documents of the Companies as reasonably required
in connection with their review of the audited Consolidated Closing Financial
Statements and the Adjustment Certificate.
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The Sellers may deliver a written notice (the "DISPUTED ITEMS
NOTICE") to the Buyer within thirty (30) days after the Adjustment Certificate
Delivery Date stating the Sellers' objections to the Net Adjustment Amount set
forth in the Adjustment Certificate, specifying in reasonable detail the basis
for such objections and setting forth the Sellers' computation of the Net
Adjustment Amount. Any Disputed Items Notice shall be accompanied by the
related report of the Sellers' Auditors confirming such objections and their
computation of the Net Adjustment Amount. In the event that the Sellers do not
deliver a Disputed Items Notice to the Buyer within thirty (30) days after the
Adjustment Certificate Delivery Date, the Net Adjustment Amount set forth in
the Adjustment Certificate shall be deemed to be finally determined and binding
on the Sellers upon the expiration of such thirty-day period. Upon delivery of
a Disputed Items Notice, the Buyer and the Sellers (with the assistance, at the
option of the Party concerned, of the Buyer's Accountants or the Sellers'
Auditors) shall use all reasonable efforts to meet and discuss the objections
of the Sellers and to resolve the disputed items, draw up the definitive
audited Consolidated Closing Financial Statements and finally determine the Net
Adjustment Amount (if any) as promptly as practicable.
If the Sellers and the Buyer are unable to reach a final
agreement within fifteen (15) Business Days after the Buyer's receipt of the
Disputed Items Notice, the matters remaining in dispute shall be referred to a
mutually agreeable international independent accounting firm with proven
expertise in French accounting principles and methods, appointed as independent
auditor (hereinafter referred to as the "INDEPENDENT AUDITOR"), it being
specified that, notwithstanding that dispute, the fraction of the Net
Adjustment Amount (if any) which is not then in dispute will be immediately
paid to the Buyer by the Sellers or to the Sellers by the Buyer, as applicable.
If the Parties are unable to agree within fifteen (15) days on the identity of
the independent auditor to be appointed in accordance with this Article II.5,
each of the Sellers or the Buyer may by summary proceedings ("refere") request
the President of the Commercial Court of Paris to appoint an international
independent accounting firm with proven expertise in French accounting
principles and methods to act as Independent Auditor.
The fees and expenses of the Independent Auditor shall be
borne in such proportion by the Sellers and the Buyer as shall be decided by
the Independent Auditor who shall base his decision upon the relative extent to
which the Buyer's and the Sellers' respective positions are upheld in the final
determination of the Independent Auditor.
The Sellers and the Buyer shall each promptly (and in any
event within five (5) Business Days after the expiration of the aforesaid ten
(10) Business Day period) prepare a written statement on the matters in dispute
(together with the relevant supporting documents) which shall be submitted to
the Independent Auditor for final determination. No matters other than those
listed in such statements shall be within the terms of reference of the
Independent Auditor.
The Independent Auditor shall (i) review and resolve only
those matters in dispute between the Sellers and the Buyer, (ii) determine the
Net Adjustment Amount, and (iii) deliver to the Parties thirty (30) days at the
latest after the date of its appointment, its final report (hereinafter
referred to as the "EXPERT'S LETTER") which shall indicate its determination of
the Net Adjustment Amount.
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The Net Adjustment Amount set forth in the Expert's Letter
(and the Independent Auditor's allocation among the Parties of the Independent
Auditor's fees and expenses) shall be final and binding on the Parties. The
Independent Auditor shall act in its capacity of an arbitrator ("tiers arbitre
mandataire") in accordance with the provisions of Article 1592 of the French
Civil Code.
For the purpose of the determination of the Net Adjustment
Amount, the Parties, the Buyer's Accountants, the Sellers' Auditors and the
Independent Auditor shall be bound by and shall apply the terms of the
Agreement and the Accounting Principles. For the avoidance of doubt, the final
determination of the Net Adjustment Amount shall be made exclusively in
accordance with this ARTICLE II.5.
In the event that the Net Adjustment Amount as finally
determined pursuant to this ARTICLE II.5 is payable to the Buyer, the amount
thereof shall be paid by the Sellers to the Buyer and, alternatively, in the
event that the Net Adjustment Amount as finally determined pursuant to this
ARTICLE II.5 is payable to the Sellers, the amount thereof shall be paid by the
Buyer to the Sellers, in each case by wire transfer of immediately available
funds within five (5) Business Days after such final determination.
II.6 Additional Purchase Price Elements. The Sellers shall be entitled
to receive, in addition to the Final Closing Purchase Price, payment of certain
additional purchase price elements (hereinafter referred to as the "ADDITIONAL
PURCHASE PRICE ELEMENTS") at such time as (i) the Concerned Sub's Employees
Total Amount payments result in an effective reduction in corporate income tax
(any resulting payment being hereinafter referred to as a "TAX ELEMENT PAYMENT")
and/or (ii) the Aggregate Territory Net Sales are at least equal to (Euro)
30,000,000 and (Euro) 45,000,000, respectively, provided that such amounts are
achieved prior to the tenth (10th) anniversary of the Closing Date (all
resulting payments being hereinafter referred to collectively as the "SALES
ELEMENT PAYMENTS" -or individually as a "SALES ELEMENT PAYMENT" -and together
with the "Tax Element Payment", as the "ADDITIONAL PURCHASE PRICE ELEMENT
PAYMENTS").
II.6.A Tax Element Payment. The Tax Element Payment shall be equal to
the exact amount resulting from the product of the Concerned Sub's Employees
Total Amount multiplied by the then applicable rate of the company's income tax
and shall be payable in full upon complete and final realization of the
effective reduction in corporate income tax resulting from the payment on the
Closing Date of the Concerned Sub's Employees Total Amount. Such Tax Element
Payment shall be deemed to be an adjustment to the Final Closing Purchase Price.
II.6.B Sales Elements Payments.
(a) The Sales Element Payments shall be calculated according to the
following parameters and procedures:
(i) Simultaneously with the delivery by Buyer to the Sellers
of a Sales Performance Adjustment Certificate (as defined
below in ARTICLE II.6.B(B)) showing Aggregate Territory Net
Sales of at least (Euro) 30,000,000, the Buyer shall, for the
benefit of the Sellers, make a Sales Element Payment of
(Euro) 4,000,000; and
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(ii) Simultaneously with the delivery by Buyer to the Sellers
of a Sales Performance Adjustment Certificate (as defined
below in ARTICLE II.6.B(B)) showing Aggregate Territory Net
Sales of at least (Euro) 45,000,000, the Buyer shall, for the
benefit of the Sellers, make a Sales Element Payment of
(Euro) 4,000,000;
and each such Sales Element Payment shall be deemed to be an adjustment to the
Final Closing Purchase Price.
If none of the Aggregate Territory Net Sales target amounts
are reached prior to the tenth (10th) anniversary of the Closing Date, the two
Sales Element Payments shall not be due and shall not be paid by the Buyer to
the Sellers and the Sellers and the Buyer shall proceed as set forth in Article
II.6.B (i) below .
For the avoidance of doubt, if only the first Aggregate
Territory Net Sales target amount has been reached on the tenth (10th)
anniversary of the Closing Date, only one Sales Element Payment shall be due
and payable to the Seller, without any further obligation for the Buyer to pay
the second Sales Element Payment.
(b) The Buyer shall within thirty (30) days after the end of each
calendar quarter, commencing with the first calendar quarter beginning after the
Closing Date, prepare a certificate (hereinafter referred to as a "SALES
PERFORMANCE ADJUSTMENT CERTIFICATE") setting forth the Aggregate Territory Net
Sales for such period and, if any, the resulting Sales Element Payment.
(c) As from the date of delivery of the Sales Performance Adjustment
Certificate (hereinafter referred to as a "SALES PERFORMANCE ADJUSTMENT
CERTIFICATE DELIVERY DATE"), the Sellers shall have thirty (30) days to review
the Sales Performance Adjustment Certificate in order to verify the stated
amount of Aggregate Territory Net Sales and the amount of the Sales Element
Payment. The Sellers may deliver written notice (hereinafter referred to as an
"ADJUSTMENT DISPUTE NOTICE") to the Buyer within thirty (30) days after the
Sales Performance Adjustment Certificate Delivery Date, stating that they object
to the amounts of the Aggregate Territory Net Sales and of the Sales Element
Payment set forth in the Sales Performance Adjustment Certificate, together with
a detailed explanation of the reasons thereof. If the Sellers have not delivered
the Adjustment Dispute Notice to the Buyer within thirty (30) days after the
Sales Performance Adjustment Certificate Delivery Date, the amounts of the
Aggregate Territory Net Sales and of the Sales Element Payment, if any, set
forth in the Sales Performance Adjustment Certificate shall be conclusively
presumed to be true and correct in all respects and shall be binding on the
parties and may not be disputed by them in any forum.
(d) If the Sellers and the Buyer are unable to agree upon the amounts
of the Aggregate Territory Net Sales and of the Sales Element Payment within
five (5) days after the delivery of the Adjustment Dispute Notice, the Buyer and
the Sellers shall each have the right to request that a mutually agreeable
international independent accounting firm with proven expertise in French
accounting principles and methods, be appointed as independent auditor (the
"INDEPENDENT ADJUSTMENT AUDITOR"), to (i) resolve the disputed items set forth
in the Adjustment Dispute Notice and (ii) make a final determination of the
amount of the Sales Performance Payment, if any, based on its resolution of such
disputed items. If the Parties are unable to agree upon such independent auditor
within twenty (20) days after the delivery of the Adjustment Dispute
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Notice, any of the Sellers or the Buyer may via a refere proceeding request the
President of the Commercial Court of Paris to appoint an international
independent accounting firm with proven expertise in French accounting
principles and methods as Independent Adjustment Auditor.
(e) The Independent Adjustment Auditor shall not review any item other
than those required to resolve the disputed items set forth in the Adjustment
Dispute Notice which the Buyer has not accepted in writing nor proceed with any
further investigations, but shall base its decision exclusively on the materials
and arguments presented by the parties and their respective Accountants. The
parties shall, and the parties shall cause the Companies to, cooperate with the
Independent Adjustment Auditor. The Independent Auditor shall deliver to the
Sellers and to the Buyer a letter (the "ADJUSTMENT AUDITOR'S LETTER") setting
forth its final determination of the Sales Element Payment within the shortest
practicable time and shall use its best efforts to do so within ten (10) days
after its appointment, and such final determination shall be final and binding
on the parties hereto. The fees, costs and expenses of the Independent
Adjustment Auditor so selected will be borne equally between the Sellers, on the
one hand, and the Buyer, on the other hand.
(h) If a Sales Element Payment is due to the Sellers, the Buyer shall
pay such amount within ten (10) days after the date on which the amount of the
Sales Element Payment is finally determined pursuant to this ARTICLE II.6.B. The
payment of any Sales Element Payment shall be made by wire transfer of
immediately available funds to such accounts as the Sellers may specify in
writing and any Sales Element Payment shall bear interest until paid in full at
a rate per annum equal to EURIBOR 6 month plus three hundred (300) basis points,
such interest being calculated from the 40th day after the date on which the
amount of the Sales Element Payment is finally determined pursuant to this
ARTICLE II.6.B.
(i) If on the tenth (10th) anniversary of the Closing Date, none of the
Aggregate Territory Net Sales target amounts has been reached and no Sales
element Payment is consequently due and payable to the Sellers, the Sellers and
the Buyer shall discuss in good faith with a view to negotiate the terms of some
reasonable alternative solution that would partially compensate the Sellers, it
being understood that the Parties shall have no obligation to agree upon such
reasonable alternative solution and should the Parties fail to agree upon such
alternative solution, the Final Closing Purchase Price shall be and remain equal
to the Closing Purchase Price adjusted, as the case may be, in accordance with
ARTICLE II.5 AND ARTICLE II.6.A.
(j) If pursuant to ARTICLE XI, the Buyer is entitled to receive
indemnification for damages, as a result of a binding settlement or other
agreement, a judgment of a court, or a decision arbitral tribunal, and the
Sellers do not pay the indemnification as provided by ARTICLE XI, any Sales
Element Payment, if any, payable to the Seller, shall be automatically reduced
on a euro for euro basis by the amount of such damages. In such case,
concomitant with the payment of the reduced Sales Element Payment, if any, the
Buyer shall deliver to the Sellers a notice stating that such Sales Element
Payment shall be reduced by the amount of all damages remaining unpaid by the
Sellers, such reduction being in lieu of payment of the damages having remained
unpaid.
II.6.C Transfer of Obligations regarding Additional Purchase Price
Element Payments. In the event where the Buyer would sell the shares held by the
Company in the Subsidiary or would transfer or assign the business developed as
at the Closing Date by the Subsidiary by way of a share sale or by way of a
merger, or a sale of the on-going business ("cession de fonds de
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commerce") or otherwise, Buyer shall obtain from the concerned purchaser the
undertaking that it will assume all obligations in respect of the Additional
Purchase Price Element Payments vis-a-vis the Sellers under the terms and
pursuant to the conditions of this Article II.6.
ARTICLE III - PAYMENT OF THE PURCHASE PRICE
On the Closing Date, the Buyer shall pay to the Sellers the amount of the
Closing Purchase Price by wire transfer of immediately available funds to such
bank account or accounts of the Sellers as the Sellers shall have designated in
writing to Buyer at least five days prior to the Closing Date.
ARTICLE IV - DELIVERY OF SHARES
On the Closing Date, the Sellers shall deliver to the Buyer stock
transfer forms ("ordres de mouvement") for the transfer as of the Closing Date
of all and not less than all of the Shares and full and complete title therein
to the Buyer.
ARTICLE V - CLOSING
V.1 Closing. Subject to the terms and conditions hereof, the sale and the
purchase of the Shares pursuant to this Agreement (hereinafter referred to as
the "CLOSING") shall take place at the offices of ▇▇▇▇▇▇▇ ▇▇▇▇ & ▇▇▇▇▇▇▇▇▇,
▇▇-▇▇, ▇▇▇ ▇▇ ▇▇ ▇▇▇▇▇ ▇'▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇ or at such other place as
the Buyer and the Sellers shall mutually agree, on March 31, 2003 at 9:00 a.m.
Paris time or, if all conditions precedent set forth in ARTICLE X of this
Agreement have not been satisfied or waived by the appropriate Party by such
time of day on such date, at 9:00 a.m. on the fifth (5th) Business Day following
the date on which the last of the conditions precedent set forth in ARTICLE X
BELOW shall have been fulfilled or waived, the date on which the Closing shall
take place being hereinafter referred to as the "CLOSING DATE".
V.2 Closing Actions. At the Closing, the following actions shall take
place:
(a) The Sellers shall deliver or cause to be delivered to the
Buyer:
(i) a certificate in the forms attached as EXHIBIT V.2.A
(I), executed by each of the Sellers representing and
warranting to the Buyer that each of the Sellers'
representations and warranties set forth in the
Agreement is true, complete and accurate in all
respects as of the Closing Date as if each such
representation or warranty was made on the Closing
Date;
(ii) a letter of resignation signed by the President and
by each member of the Subsidiary's Board, in each
case, effective upon the appointment of the new
President and of the new members of the Subsidiary's
Board in accordance
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with paragraph (iii) hereafter together with a
written waiver and release from each such resigning
President and member of the Subsidiary's Board in
respect of any existing or potential claims against
the Company or the Subsidiary, respectively, relating
to his or her mandate as President or as a member of
the Subsidiary's Board;
(iii) a copy of the notification and the minutes of a duly
called meeting of the shareholders of each of the
Companies, a decision of the President and a meeting
of the Subsidiary's Board (a draft of which shall
have been prepared and delivered by the Buyer
reasonably in advance of the Closing Date), including
provisions with respect to the appointment of the new
President and the new members of the Subsidiary's
Board designated by the Buyer;
(iv) the Organizational Documents of the Company
(reflecting the transfer of the Shares);
(v) a copy of the notification sent to the President on
the transfer of the Shares and the minutes of a duly
called meeting of the shareholders of the Company
authorizing the sale of the Shares to the Buyer in
accordance with the by-laws of the Company;
(vi) an original copy of each of the documents, agreements
or corporate resolutions of which a list is attached
hereto as EXHIBIT V.2.A(VI) executed in each case by
all concerned parties in the agreed form attached
hereto as EXHIBIT V.2.A(VI), evidencing that each of
the covenants listed under ARTICLE IX below to be
performed by the Sellers prior to the Closing, has
been fully and validly performed; and
(vi) an original copy of each of the documents evidencing
that each of the conditions precedent to the Closing
listed under ARTICLE X below has been satisfied,
including, without limitation, of the non-compete
agreement executed by Laphal Industrie pursuant to
ARTICLE X.1(IV) below.
(b) The Buyer shall:
(i) make available to each of the Companies by wire
transfer of immediately available funds the funds
necessary to repay in full the Shareholders' Debt
owing as at the Closing Date (which repayment the
Sellers represent and confirm, as set forth in
ARTICLE VII.23, is not subject to any prepayment
penalties or similar charges), and subject to the
Buyer's making such funds available, the Sellers
shall procure that at the Closing the Shareholders'
Debt is repaid in full and that acknowledgment of
such repayment in full, in a form satisfactory to
Buyer, is delivered to the Buyer by the appropriate
Persons at the Closing; and
(ii) pay the Closing Purchase Price to the Sellers in
accordance with ARTICLE II.2.
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All matters at the Closing will be considered to take place
simultaneously, and no delivery of any document will be deemed complete until
all transactions and deliveries of documents required by this Agreement are
completed.
ARTICLE VI - REPRESENTATIONS AND WARRANTIES
OF THE SELLERS RELATING TO SELLERS.
Each of the Sellers hereby severally represents and warrants to the Buyer
that as of the date hereof and as of the Closing Date, each and every statement
set out in the present ARTICLE VI is true, compete and correct in all respects.
VI.1 Ownership of Securities. Each of the Sellers is the legal owner of
the Shares set forth next to her/his name on APPENDIX B and has, and shall
transfer to the Buyer, good title to such Shares, free and clear of any and all
Encumbrances and restrictions on transfer. Other than this Agreement, there are
no outstanding options, warrants, agreements, conversion rights, preemptive
rights or other rights to subscribe for, purchase or otherwise acquire any of
her/his Shares. There are no restrictions on transfer with respect to her/his
Shares.
VI.2 Authority. Each of the Sellers has full legal right, power and
authority to execute and perform this Agreement and the transactions
contemplated hereby.
VI.3 Consents and Approvals. The execution by the Sellers of this
Agreement, the performance by the Sellers of their obligations hereunder and the
consummation by the Sellers of the transactions contemplated hereby do not
require the Sellers to obtain any consent, approval or action of, or make any
filing with or give any notice to, any Person, and without limiting the
foregoing, if the Sellers are married, no authorization or consent of such
Sellers' spouses is required for the sale of such Sellers' Shares hereunder.
VI.4 Absence of Defaults, Conflicts. The execution and delivery of this
Agreement do not, and the fulfillment of the terms hereof by the Sellers will
not, result in a breach or violation of any of the terms, conditions or
provisions of, or constitute a default under, (i) any contract, instrument or
agreement to which any Seller is a party, or (ii) any Law applicable to any of
the Sellers' properties or businesses.
ARTICLE VII - REPRESENTATIONS AND WARRANTIES
OF THE SELLERS RELATING TO THE COMPANIES.
Each of the Sellers hereby jointly and severally represents and warrants
to, and agrees with, the Buyer that as of the date hereof and as of the Closing
Date, each and every statement set out in the present ARTICLE VII is true,
complete and correct in all respects.
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VII.1 Corporate Existence of the Companies. The Company is a limited
liability company duly organized and validly existing and in good standing under
the laws of France under the form of a Societe par Actions Simplifiee and the
Subsidiary is a limited liability company duly organized and validly existing
and in good standing under the laws of France under the form of a Societe
Anonyme. Each of the Companies have full corporate power and authority and all
licenses, permits and Governmental Authorizations necessary to conduct their
respective businesses and to own, use, lease and operate the properties and
assets owned, used, leased and operated by them in connection with their
respective businesses. A copy of the Organizational Documents and certificates
of Encumbrance ("etat des privileges et nantissement") of the Companies, in each
case updated and accurate as of the date hereof, are attached hereto as EXHIBIT
VII.1. Each of the Companies is not a member of, or a participant in, any
economic interest group ("GIE"), professional association, partnership,
joint-venture, "societe civile", "societe en participation", "societe en nom
collectif" or similar entity or organisation (whether or not incorporated) in
respect of which it has any obligations or potential liabilities, including any
obligations to fund or participate in the debts of any of the foregoing entities
and organizations.
VII.2 Share capital of the Company. The authorized share capital of the
Company consists solely of two thousand five hundred (2,500) shares of common
stock with a nominal value of (Euro) 15.2449 each, all of which are validly
issued and outstanding. The delivery of a share transfer form ("Ordres de
Mouvement") at the Closing Date shall transfer good, marketable and valid title
to the Shares and title guarantee ("en pleine propriete") therein to the Buyer.
VII.3 Subsidiaries of the Company and subsidiaries of the Subsidiary.
The Company has no other subsidiary than the Subsidiary and does not hold any
participation of any nature whatsoever in any legal entity, venture or business
of any nature or kind. The Subsidiary, of which an updated excerpt of the Trade
Registry is attached hereto as EXHIBIT VII.3, has an authorized share capital of
(Euro) 3,432,630 consisting of 228,842 shares of common stock with a nominal
value of (Euro) 15 each, all of which are validly issued and outstanding. On the
date of execution of this Agreement, the participations held by the Subsidiary
consist exclusively of (i) 4,212 shares representing 100% of the issued and
outstanding share capital of Lipogel S.A.R.L., (ii) 232 shares representing 10%
of the issued and outstanding share capital of Finexsud SAS, (iii) 4 shares
representing 0.53% of the issued and outstanding share capital of SCI Golfpart,
(iv) 10 shares representing 10% of the issued and outstanding share capital of
SCI Gramenoue and (v) 207 shares representing [____]% of the issued and
outstanding share capital of Banque Populaire Provencale et Corse, all of which
are reflected on the audited Financial Statements of the Subsidiary as of
December 31, 2002.
VII.4 No Conflicts. Neither the execution and delivery of the
Agreement, nor the consummation or performance of any of the transactions
contemplated in the Agreement and the other documents contemplated herein will:
(a) result in a breach, default or violation of, or conflict with any
provision of the Organizational Documents of each of the Companies;
(b) result in a breach, default or violation of, or conflict with, any
resolution adopted by the Board or the shareholders of each of the Companies;
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(c) constitute a violation by each of the Companies of any Law or any
Judgment or otherwise result in a cancellation, modification, revocation or
suspension of any permits or licenses granted by or obtained from a Governmental
Entity or any Governmental Authorization, including but not limited to, the
Subsidiary ATU in France and equivalent authorization in other European
countries, relating to each of the Companies or to the business or assets of
each of the Companies;
(d) violate or constitute a default under, or be the grounds for
termination in accordance with the terms of, or give rise to any right to modify
or accelerate any obligations or rights under, any contracts entered into by
each of the Companies;
(e) cause each of the Companies to lose the benefit of any governmental
or supra-governmental subsidies or financial assistance or favorable tax
treatment; or
(f) preclude each of the Companies from conducting its respective
business and owning, using, leasing and operating the tangible and intangible
properties and assets owned, used, leased and operated by it in connection with
its business.
VII.5 Governmental Approvals and Filings. No filing with or notice to
any Governmental Entity is required in connection with the execution, delivery
and performance of this Agreement or the consummation of the transactions
contemplated hereby or thereby.
VII.6 Books and Records. The accounting books, Organizational Documents
and other official records of each of the Companies are complete and correct and
have been maintained in accordance with sound business practices and the
requirements of French law. The minute books of each of the Companies contain a
true, accurate and complete record of all meetings held by the respective
shareholders of each of the Companies, the President of the Company and the
Board of the Subsidiary, and all such meetings have been transcribed in the
appropriate minute books and registers of each of the Companies and filed with
the appropriate registry of commerce and companies as required by French law.
The employee representatives (if any) and the statutory auditors of each of the
Companies have received notices of all Board and shareholders meetings in the
manner required by law. At Closing, all of those books, registers and records
will be in the possession of the Companies.
VII.7 Financial Statements and Condition.
(a) Attached hereto as EXHIBIT VII.7(A) are true and complete copies of
the audited financial statements (balance sheet, profit and loss statement and
notes thereto together with a report thereon of the statutory auditor) of each
of the Companies as well as, where applicable on a consolidated basis for each
of the fiscal years ended on December 31, 2000, December 31, 2001 and December
31, 2002 (hereinafter collectively referred to as the "AUDITED FINANCIAL
STATEMENTS"), except that the Audited Financial Statements for the fiscal year
ended on December 31, 2002 will be attached hereto after the date hereof but
prior to the Closing Date in substitution of those financial statements for the
fiscal year ended on December 31, 2002 attached hereto which have not been
audited. The Audited Financial
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Statements have been certified without qualification by the Companies' statutory
auditor and are completely accurate and sincere in accordance with the Companies
books and records. The Audited Financial Statements were prepared in accordance
with the Accounting Principles consistently applied and French GAAP, and give a
true and fair view (sont reguliers et sinceres et donnent une image fidele) of
the financial position and results of operations of each of the Companies as of
each such date and for the period then ended.
(b) There are no off-balance sheet items (engagements hors bilan) or
any other indebtedness or liability, absolute or contingent, known or unknown
(including any liabilities relating to factoring or credit-bail arrangements),
which will not be fully accrued or provisioned for in the Audited Financial
Statements. All legal or contractual employee pensions are adequately
provisioned for in the Audited Financial Statements. Neither of the Companies is
directly or indirectly liable upon or with respect to (by discount, repurchase
agreements or otherwise), or obligated in any other way to provide funds in
respect of, or to guarantee or assume, any debt, obligation or dividend of any
person, except endorsements in the ordinary course of business in connection
with the deposit of items for collection.
(c) Neither of the Companies has granted any guaranty, charge or other
real or personal security for its own liabilities and liabilities of any Person,
including the Sellers.
(d) Neither of the Companies has at any time within the past five (5)
years suspended the payment of its debts as they fall due ("cessation de
paiements") or been declared in judicial liquidation ("liquidation judiciaire"),
or made an amicable settlement with its creditors ("reglement amiable"), or been
declared in judicial reorganization ("redressement judiciaire"), or been
declared under the threat of any such proceedings.
(e) There is no indebtedness of any kind, including any account advance
or cash pooling agreement, existing or to be incurred on or prior to the Closing
Date payable by the Sellers to either of the Companies or their Affiliates or by
either of the Companies to the Sellers or their Affiliates except for the
Shareholders Debt to be repaid by the Companies at Closing as identified in
EXHIBIT 0.1.4.
(f) Except as set forth in EXHIBIT VII.7(F), there are no business
transactions or other arrangements between the Sellers (and/or their Affiliates)
and either of the Companies.
(g) Except for the execution and delivery of this Agreement and the
transactions to take place pursuant hereto on or prior to the Closing Date,
since December 31, 2002, (i) neither of the Companies has taken any action of a
type referred to in ARTICLE IX.1 below that would have required the consent of
the Buyer if such action were to have been taken during the period between the
date hereof and the Closing; and (ii) each of the Companies has conducted its
business in the ordinary course consistent with past practice, and no change,
situation, development or other event having or which will have a Material
Adverse Effect has occurred. Neither the Sellers nor each of the Companies knows
or has reason to know of any change, situation, prospective development or other
event which threatens or may threaten to have a Material Adverse Effect.
VII.8 Taxes and social contributions.
(a) Each of the Companies has always complied with all legal and
regulatory requirements regarding all Taxes and social security contributions.
Each of the Companies has
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duly and in a timely manner filed with the appropriate Governmental Entities all
Tax and social returns and has declared accurately and completely all its
taxable income and every operation that may result in a right to collect any Tax
or social security contribution. Any payment that each of the Companies had or
has the obligation to make pursuant to any Tax and social security
contributions, and any action that it has undertaken to make as a result of any
operation resulting in a Tax and social security contributions on or prior the
date hereof, has been made in a timely manner, or has been duly reserved for in
the Audited Financial Statements in accordance with the Accounting Principles
and French GAAP. All Taxes and social security contributions that each of the
Companies is or was required to withhold or collect have been duly withheld or
collected.
(b) Except as disclosed in EXHIBIT VII.8(B), no Proceedings,
investigation or claim is presently pending or, likely to occur with respect to
assessment and collection of any Tax or social security contributions of each of
the Companies. There are no Encumbrances for Taxes or social security
contributions upon the assets of each of the Companies.
(c) There are no facts existing which may constitute the basis of an
audit or investigation to be initiated, relating to Taxes and social security
contribution, by any Governmental Entity.
(d) Reserves ("provisions") for Taxes or for social security
contributions reflected in the Audited Financial Statements are sufficient for
the payment of every Tax or social security contribution due by each of the
Companies.
(e) The sale of the Shares will not result in a modification or loss of
any favorable tax regime. Each of the Companies does not benefit from any
favorable tax treatment depending on undertakings of the Companies which will
continue to bind such Companies after the Closing Date. In particular, each of
the Companies is not bound by an undertaking to retain any shares or of any
other asset for any period of time. In the event of sale or disposition of the
securities owned by each of the Companies or any other asset, the capital gain
("plus-value") resulting from such sale or disposition will be calculated by
reference to the corresponding value appearing in the Audited Financial
Statements.
(f) All transactions between each of the Companies, on the one hand,
and any Seller or any of the Sellers' Affiliates, on the other hand, were
effected on prices, terms and conditions which were no less favorable to the
Companies than would be negotiated in an arm's length transaction with
independent third parties.
VII.9 Legal Proceedings. Except as disclosed in Exhibit VII.9:
(a) There are no Proceedings pending that may affect either of the
Companies or any of its assets and properties in any respect and no event has
occurred that may give rise to a basis for the commencement of any such
Proceedings;
(b) Each of the Companies is in full compliance with all of the terms
and requirements of each Judgment to which they is or has been subject and no
event has occurred that may constitute or result in a violation of any term or
requirement of any such Judgment.
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VII.10 Compliance With Law.
(a) Except as disclosed in EXHIBIT VII.10 (A), neither of the Companies
is in violation of or in default under any Law applicable to it or to any of its
assets and properties in the conduct of its business.
(b) Except as disclosed in EXHIBIT VII.10 (B), no notification has been
received by either of the Companies relating to compliance with any Laws or any
Judgments.
(c) Each of the Companies holds all Governmental Authorizations
necessary for its business. EXHIBIT VII.10 (C) contains a complete and accurate
list of each such Governmental Authorization. All such Governmental
Authorizations are valid and in full force and effect and each of the Companies
is, and at all times has been, in full compliance with all of the terms and
requirements of each Governmental Authorization and no event has occurred that
may result or threaten to result in a violation of any term or requirement of
any Governmental Authorization or result or threaten to result in the
revocation, withdrawal, suspension or modification of, any Governmental
Authorization. Each of the Companies has not received any notice regarding any
violation of any term or requirement of any Governmental Authorization, or any
revocation, withdrawal, suspension of, or modification to any Governmental
Authorization.
(d) Each of the Companies is in compliance with all applicable Laws,
including Laws regarding (i) emissions, discharges or wastes in the environment
(including without limitation ambient air, surface water, ground water or land)
or otherwise regulating the manufacturing, processing, distribution, use,
treatments, storage, disposal, transport or handling of pollutants,
contaminants, asbestos, chemicals or toxic or hazardous substances or wastes or
environmental protection and (ii) health and safety of persons or property,
including the protection of the health and safety of employees (hereinafter
collectively referred to as "ENVIRONMENTAL LAWS"). Neither any Seller nor each
of the Companies have received a written notice from any Governmental Entity of
any violation of the Environmental Laws.
(e) Except as disclosed in EXHIBIT VII.10 (E), there is no pending or
threatened Proceedings or claim against either of the Companies with respect to
the violation of any public health, safety or Environmental Law. Neither of the
Companies has received written notice from any person alleging that it is in
violation of any applicable public health, safety or Environmental Laws.
(f) Neither of the Companies is required to complete or to have
completed any improvements or undertake any capital investments to bring the
properties or assets in conformity with any Environmental Laws. Each of the
Companies has not received any notice, order or other communication from a
Governmental Entity, failure to comply with which would constitute a breach of
any Environmental Laws or compliance with which could be secured by further
proceedings.
VII.11 Real Property and Tangible and Intangible Personal Property.
(a) EXHIBIT VII.11 (a) contains a complete and detailed list of all
real property used, occupied or leased by each of the Companies. There is no
real property asset used, occupied or leased by each of the Companies other than
those listed in EXHIBIT VII.11 (a). None of the
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Companies has entered into any real estate leasing agreement or other contract
pursuant to which they could become the owner of real estate, or obtain any
title or ownership rights including usufruct ("usufruit") of a real estate
property. The list of all lease agreements and other title documents by which
each of the Companies has the right to use or to occupy such real property or
otherwise relating to its real property is attached in EXHIBIT VII.11 (A)
hereto, and the corresponding documents, are accurate, complete and in full
force and effect. Except as disclosed in EXHIBIT VII.11 (A), each of the
Companies owns a valid title, free and clear of all Encumbrances, for all real
property used in the conduct of its business and/or reflected in the Audited
Financial Statements. Each of the Companies has all easements and rights of
ingress and egress necessary for utilities and services and for all operations
conducted on its real property. No amount due under the leases but not reflected
in the Audited Financial Statements remains unpaid. No party to any of the above
referred to leases has made a claim with respect to any breach under such lease,
the consequences of which, individually or in aggregate, might result in the
termination or modification of such lease and no consent of lessors there under
is required upon occurrence of a change of control of each of the Companies.
(b) Except as disclosed in EXHIBIT VII.11 (B), neither of the Companies
has received, with respect to any site, notification, and to the Sellers'
knowledge there is no threatened notification, that it is in violation of any
applicable building, zoning, subdivision, health or other law, ordinance or
regulation and, with respect to all such properties and buildings, no such
violations exist. Except as disclosed in EXHIBIT VII.11(B), no condemnation,
expropriation proceeding, or restrictive proceeding is pending or threatened
which could preclude or impair the use of any real property by either of the
Companies.
(c) Except as disclosed in EXHIBIT VII.11 (C), each of the Companies
has the right to renew all commercial leases and all present commercial lease
arrangements have neither been renounced nor are likely of being renounced.
(d) All leased locations are fully operational and there has been no
notification imposing the completion of any additional work in order to comply
with any Law or Governmental Authorization.
(e) EXHIBIT VII.11 (E) contains a list which enumerates and describes
in reasonable detail all the fixed assets (including tangible and intangible
assets) used in the operation of the business of each of the Companies, whether
owned or leased by each of the Companies.
(f) As of the date hereof, each of the Companies owns outright and has
good and marketable title, free and clear of any Encumbrances, or has valid
leasehold interests in or valid rights under contract to use, all machinery,
equipment, furniture, fixtures, inventory (including any inventory physically
held by third parties), receivables and other tangible or intangible personal
property which is used in the conduct of the respective business of each of the
Companies including all of such items reflected in Audited Financial Statements,
and all such items purchased or otherwise acquired by each of the Companies
since December 31, 2002 (except for sales and dispositions in the ordinary
course of business of any such items purchased or acquired since December 31,
2002). As of the Closing Date, each of the Companies will own outright and have
good and marketable title, free and clear of any Encumbrances, to all the
machinery, equipment, furniture, fixtures, inventory (including any inventory
physically held by third parties), receivables
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and other tangible or intangible personal property reflected in the Final
Consolidated Closing Financial Statements.
(g) The machinery, equipment, furniture, fixtures and other items of
tangible personal property owned, leased or used by each of the Companies are
sufficient and adequate to allow each of the Companies to carry on its business
as presently conducted and all such items are in good working condition and
repair and are in the possession and under the control of each of the Companies.
VII.12 Accounts Receivable - Payable.
(a) Except as set forth in EXHIBIT VII.12 (A), all accounts receivable
of the Companies as of December 31, 2002 are reflected for their accurate value
in the Audited Financial Statements of each of the Companies and all accounts
receivable of each of the Companies as of the Closing Date shall be reflected
for their accurate value in the Consolidated Closing Financial Statements. All
accounts receivable of each of the Companies represent products, services or
asset sales actually made in the ordinary course of business and represent the
legal, valid and binding obligations of the obligors thereon and are all fully
collectible at the recorded aggregate amount thereof (subject to reasonable
allowance or discounts consistent with past practice). Such accounts receivable
are not subject to any counter claims or set-offs. All accounts receivable of
each of the Companies are current and collectible for their full value in the
ordinary course of business (without litigation).
(b) Except as set forth in EXHIBIT VII.12 (B), all accounts payable of
each of the Companies as of December 31, 2002 are reflected for their accurate
value in the Audited Financial Statements of each of the Companies and accounts
payable of each of the Companies shall as of the Closing Date be reflected for
their accurate value in the Consolidated Closing Financial Statements.
VII.13 Inventory.
(a) All inventory reflected in the Audited Financial Statements is free
from defects and has been accurately valued in accordance with French GAAP and
the Accounting Principles on the basis of consistent prior practice and the
evaluation thereof accurately reflects inventory that is damaged, obsolete,
defective, unsuitable for its intended use, and all such inventory may be sold
in the ordinary course of business in accordance with past practice and for a
price at least equal to the value for which such inventory is reflected in the
Audited Financial Statements.
(b) (i) The inventory of Thalidomide products of the Subsidiary
(including raw materials, packaging materials or semi-finished products held
physically by third parties together with the inventory held by Affiliates of
the Sellers, and any other inventory under consignment, if any) as of the date
hereof as set forth (in numbers of units and category of products) in EXHIBIT
VII.13(B) is sufficient and adequate with respect to known or anticipated
requirements for the supply of such Thalidomide products in the Territory for
the period through the fourth month following the date hereof and (ii) firm
written orders of Thalidomide finished products of which copies are attached
hereto as EXHIBIT VII.13(B) have been passed by the Subsidiary with its current
suppliers, which orders have been accepted and confirmed in writing by such
suppliers,
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in such quantities that as of December 31, 2003, the inventory of Thalidomide
products of the Subsidiary (including raw materials, packaging materials or
semi-finished products held physically by third parties together with the
inventory held by Affiliates of the Sellers, and any other inventory under
consignment, if any) will be sufficient and adequate (when added with the
inventory mentioned under (i)) with respect to known or anticipated requirements
for the supply of Thalidomide products in the Territory for the period through
the first anniversary of this Agreement.
(c) Since December 31, 2002, the sales of inventory by each of the
Companies have been effected in the ordinary course of business and consistent
with past practices and the supply requirements for such products for the period
through the first anniversary of this Agreement shall remain reasonably
consistent with past practices.
(d) All inventory of the Companies (including raw materials or
semi-finished products but excluding packaging held physically by third parties,
together with the inventory held by Affiliates of the Sellers and any other
inventory under consignment, if any) may be validly sold, in accordance with
applicable regulation at this date, by each of the Companies for a period of at
least two (2) years from the Closing Date except for those products of which a
list is attached hereto as Exhibit VII.13(d) which may not be sold more than
twelve months after they have been manufactured.
(e) EXHIBIT VII.13 (E) contains a complete list of each of the
Companies' inventory, as of the date hereof, whether located within the premises
of the Companies or located within the premises of the Companies'
co-contractors.
VII.14 Financial Debt.
EXHIBIT VII.14 contains a complete list and description in reasonable detail
(including name and address of each entity to which amounts are owed and the
terms and conditions of the obligations) of all liabilities of each of the
Companies towards any financial institutions including, without limitation,
towards CNRS, DRIRE and ANVAR as of the date hereof but excluding liabilities
arising under the Shareholders'Debt.
VII.15 Intellectual Property Rights.
(a) EXHIBIT VII.15(A) contains a list of all (i) validly registered
intellectual property rights owned or for which each of the Companies has an
unrestricted right to use, free of charge and clear of any rights or claims of
third parties, (ii) pending trademark applications and applications for
registrations of other intellectual property rights filed by each of the
Companies, (iii) unregistered and/or unprotected names and trademarks used by
each of the Companies and (iv) all licenses and other restricted rights related
to each of the Companies' business granted by the Sellers or by any third party
all of which are or will be valid and enforceable in accordance with their
terms.
(b) No former or present directors, employees, contractors,
consultants, agents or other representatives of either of the Companies hold any
right or interest directly or indirectly, in whole or in part, in or to any of
either of the Companies' intellectual property rights.
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(c) There is no event on basis upon which a third party's claim of
infringement of proprietary rights can be asserted.
(d) Neither of the Companies has granted any intellectual property
rights owned or for which each of the Companies has a right to use to any third
party, included the Sellers or the Sellers' Affiliates.
(e) Except as indicated on EXHIBIT VII.15 (E), all the material records
and systems (including but not limited to computer systems), data and
information of each of the Companies is recorded or stored by the Companies and
are under the exclusive possession and control of each of the Companies and are
not wholly or partly dependent on any facilities which are not under the
exclusive ownership and control of each of the Companies. Each of the Companies
has the right by contract or otherwise to use without the consent of any third
party, all computer software, software systems and databases and all other
information systems as currently used by the Companies. None of the Companies
has entered into any contract for the maintenance of its information system.
(f) Each of the Companies has taken all necessary steps and made all
necessary arrangements to protect the trade secrets, know-how and proprietary
information related to its activity including the Files and Data (as defined in
ARTICLE IX.6 below).
(g) Each of the Companies owns without restriction of any nature
whatsoever or has the right to use without any restriction of any nature
whatsoever all intellectual property, including the Files and Data (as defined
in ARTICLE IX.6 below) necessary to its operations as currently conducted.
VII.16 Contracts.
(a) EXHIBIT VII.16 (A) contains a true and complete list of (i) all
contracts entered into by the Subsidiary with Major Clients and (ii) all
contracts entered into by the Subsidiary with Major Suppliers and contracts with
suppliers and subcontractors that contain, for any such contract, aggregate
future liabilities of and/or obligations for the Subsidiary in excess of (Euro)
20,000. All existing supply and manufacturing agreements entered into by the
Subsidiary with third parties and/or with any entity held directly or indirectly
by the Sellers reflect arm's length terms and conditions and shall remain
enforceable until December 31, 2003.
(b) EXHIBIT VII.16 (B) contains a complete and accurate list and
summary descriptions of all the contracts of each of the Companies in respect of
which the performance of this Agreement would constitute a default, or an event
of acceleration, or would require an approval or notification, or otherwise
grant the other contracting party thereto a right to terminate, renegotiate or
amend such Contracts (hereinafter referred to as the "SPECIFIC CONTRACTS").
(c) [VOLUNTARILY LEFT EMPTY]
(d) EXHIBIT VII.16 (D) contains a true and complete list of all
contracts entered into by each of the Companies with any Seller and/or one or
more of any Seller's Affiliates.
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(e) Except as set forth in EXHIBIT VII.16 (E):
(i) no breach of any contract under which either of the
Companies is bound (either by the Company or the
Subsidiary as the case may be or by the other party)
has occurred which may entail its termination or
cause any prejudice to either of the Companies;
(ii) no event has occurred or circumstance exists that may
result in a violation of any contract, and neither of
the Companies has given or received from any other
person any notice or information regarding violation
of any contract;
(iii) no provisions contained in any of the contracts under
which each of the Companies is bound may prevent or
limit in any way (A) the activity as of the Closing
Date of either of the Companies, the Buyer or their
respective Affiliates or (B) either of the Companies,
the Buyer or their respective Affiliates from
engaging in or competing in any line of business; and
(iv) as a consequence of the foregoing, all arrangements
necessary to satisfy the Companies' current business
requirements on an ongoing basis shall remain in full
force and effect.
VII.17 Insurance.
(a) Except as set forth in EXHIBIT VII.17 (A), each of the Companies'
insurance policies maintain all coverage, including but not limited to, adequate
product liability coverage, which is (i) required by applicable legal or
regulatory requirements, (ii) adequate to meet the risks insured, (iii) normal
and customary for the business of the size and type as that of the respective
company and (iv) applicable after the Closing Date to products manufactured
and/or marketed by each of the Companies prior to the Closing Date.
(b) Each of the Companies' insurance and the group insurance policies
of the Sellers' Affiliates are in full force and effect, underwritten by
financially sound and reputable insurance carriers and all premiums due and
payable through the date hereof have been paid and there is no claim, denial of
coverage and/or full or partial termination of any such insurance coverage
outstanding there under, and each of the Companies has always complied with the
terms of such policies. Each of the Companies has timely served or filed proper
and accurate claims or notice of all events and information required in
connection with such insurance policies. As of the date hereof, neither any
Seller nor any of the Companies has received any written notice from or on
behalf of any insurance carrier issuing such policies that insurance rates will
hereafter be substantially increased (except to the extent that insurance rates
may be increased for all similarly situated risks), that there will hereafter be
a cancellation, or an increase in a deductible (or an increase in premiums in
order to maintain an existing deductible) or non-renewal of existing policies,
or that alteration of any equipment or any improvements to real estate owned or
operated by or leased to or by each of the Companies or modification of any of
the methods of doing business of each of the Companies will be required or
suggested. Each of the Companies
-27-
has not taken or failed to take any action, which action or failure would enable
the insurer of one or more of its insurance policies to contest or to refuse the
coverage granted by such policies and/or increase the applicable premiums. No
operation contemplated herein shall terminate the coverage granted by such
policies or enable the insurer to contest or to refuse the coverage granted by
such policies.
VII.18 Labor Relations.
(a) EXHIBIT VII.18 (A) contains a list (i) identifying by age,
seniority, classification, remuneration (including fringe benefits), other
benefits and status of employment of all employees of each of the Companies;
(ii) of all modifications of more than five per cent (5%) since January 1, 2003
in the general level of compensation paid to the employees; and (iii) of a
summary of benefits to employees currently in force, including benefits in kind,
pension and retirement benefits, bonus, profit sharing, stock purchase and stock
option plans, company savings plan or employee funds.
(b) The Sellers hereby represent and warrant to the Buyer that each of
the Companies has complied with all labor laws and regulations, including any
applicable collective bargaining agreements and that each of the Companies has
never been in material violation of any labor or social security law
requirements or any agreement providing for employee benefits. In particular,
each of the Companies is in material compliance with all applicable requirements
regarding health, safety, working conditions and employee representatives and
all other requirements set forth in Laws, and collective bargaining agreements.
There is no action, investigation or other Proceedings by any Governmental
Entity pending or threatened against either of the Companies regarding the
conditions of use and/or employer representatives. No event has occurred or is
likely to occur that may hinder the continuity of work or may result in a work
stoppage or any other employment dispute.
(c) Except as set forth in EXHIBIT VII.18 (C):
(i) there are no agreements or arrangements with any
present or former employees of either of the
Companies;
(ii) there is no employee whose termination would require
payment by either of the Companies of an amount
exceeding that provided by Law or by the applicable
collective bargaining agreement or that provided by
the standard employment practices of either of the
Companies;
(iii) there are no Proceedings pending or threatened,
against either of the Companies, in connection with
any employee or former employee; and
(iv) there is no financial debt, outstanding loan or open
account advance payable to either of the Companies by
any currently or former Representative of either of
the Companies, and there are no guarantees,
endorsements or other obligations of either of the
Companies with respect to any indebtedness,
obligation or liability of any of the foregoing
Persons.
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(d) EXHIBIT VII.18(D) contains a list of employees' representatives of
each of the Companies ("delegues du personnel") specifying their date of
election and length of office.
(e) The collective bargaining agreement applicable to the employees of
each of the Companies is the "Convention Collective Nationale de l'Industrie
Pharmaceutique".
(f) The "Accord d'entreprise" currently in force in each of the
Companies is set out in EXHIBIT VII.18(F) and there is no "reglement interieur"
currently in effect.
(g) None of the Companies has entered into any voluntary profit sharing
scheme, arrangement or agreement ("Accord de participation" or "Accord
d'interessement"). An "Accord de modulation des horaires", a copy of which is
set out in EXHIBIT VII.18(G), has been entered into and communicated to the
locally competent labor administration representatives in accordance with
applicable French regulations.
(h) The rates of social contributions for pension schemes of the
employees are not different from those provided by Law and/or set out in the
applicable collective bargaining agreement. Each of the Companies appropriately
provides in accordance the Accounting Principles as an off-balance sheet item in
their respective Audited Financial Statements for all sums to be paid to
employees at the time of their retirement ("indemnites de depart en retraite").
The favorable regime of social contributions ("▇▇▇ ▇▇ ▇▇▇▇▇▇") currently in
effect at the Subsidiary shall expire on December 31, 2003.
VII.19 Product warranty and product recalls.
All raw materials, packaging, semi-finished and finished goods and
inventories of each of the Companies comply in all material respects with the
health and safety law and regulations of all Governmental Entities in the
European Union and France, are not altered or misbranded within the meaning of
such laws and do not contain a misbranded hazardous substance or a banned
hazardous substance. There is no action, investigation or other Proceedings by
any Governmental Entity pending or threatened against either of the Companies
relating to the safety, efficacy or compliance of any of its products. Except as
set forth in EXHIBIT VII.19, there have been no recalls or post-sale warnings
conducted in with respect of the products supplied by either of the Companies
during the five (5) year period preceding the date hereof.
VII.20 Marketing Authorizations and ATUs.
(a) A list of Marketing Authorizations and ATUs granted to the
Subsidiary with respect to the products marketed by the Subsidiary is attached
hereto in EXHIBIT VII.20(A).
(b) The Marketing Authorizations and ATUs dossiers have been accurately
prepared, whether scientifically or with respect to the applicable regulatory
requirements, by the Subsidiary and its co-contractors and were filed with the
competent Governmental Entity in compliance with applicable regulations. Each
Marketing Authorization and ATUs held and/or used by the Subsidiary is valid and
in full force and effect and is validly renewable at its term. There is no fact
or event which could give grounds to a refusal, withdrawal or suspension of such
Marketing Authorizations and ATUs or any other approval with respect of the
products by any Governmental Entity, except if a Marketing Authorization is
delivered to the Subsidiary or the
-29-
Buyer. There is no fact or event which could give grounds to a refusal of a
renewal of such Marketing Authorizations and ATUs at their term or any other
approval with respect of the products marketed by the Subsidiary by any
Governmental Entity.
(c) The products not yet commercialized by the Subsidiary as at the
date hereof, including those having obtained a Marketing Authorization or an ATU
or for which a Marketing Authorization or an ATU is being requested and those
being developed ("produits en developpement") are listed in EXHIBIT VII.20(C).
(d) The list of products whose Marketing Authorization or ATU has been
suspended is attached as EXHIBIT VII.20(D).
VII.21 Bank accounts and Powers of attorney.
EXHIBIT VII.21 hereto sets forth the name of each person holding a
proxy, general or special power of attorney, or other similar instrument from
each of the Companies. EXHIBIT VII.21 identifies each bank or other financial
institution at which each of the Companies has an account and the names of all
persons having signature authority over any such account.
VII.22 Rights to the Going Concern.
Except as set forth in EXHIBIT VII.22 and subject to ARTICLE IX.12
hereof, each of the Companies has owned and continues to own full rights to the
going concern of its businesses, as well as tangible and intangible assets
related to its businesses, in each case free and clear of any Encumbrances. Each
of the Companies has not leased or otherwise assigned, in whole or in part, any
rights to such going concerns, whether through location-gerance, location libre
or otherwise.
VII.23 Repayment of the Shareholders Debt.
The Sellers represent and warrant that the repayment of the
Shareholders Debt to be made at the Closing in accordance with ARTICLE V.2
(B)(I) will not be subject to any prepayment penalties or similar charges.
VII.24 Accuracy of Information.
None of the Sellers' representations, warranties or statements
contained in the Agreement, or in the exhibits hereto, contains any untrue,
inaccurate or incomplete statement of a material fact or omits to state any
material fact necessary in order to make any of such representations, warranties
or statements not misleading. All information relating to each of the Companies
which is known or would on reasonable inquiry be known to the Sellers or to each
of the Companies and which may be material to a Buyer for value of the share
capital of each of the Companies has been disclosed in writing to the Buyer and
any such information arising on or before the Closing Date will forthwith be
disclosed in writing to the Buyer.
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ARTICLE VIII - REPRESENTATIONS AND WARRANTIES OF BUYER
Buyer represents and warrants to the Sellers as follows:
VIII.1 Organization. Buyer is and will on the Closing Date be a French
limited liability company duly organized, validly existing and in good standing
under the laws of France.
VIII.2 Authority. Buyer has full corporate power, right and authority
to enter into, execute and deliver this Agreement and the documents required or
contemplated herein to be executed and to perform its obligations hereunder and
to consummate the transactions contemplated hereby. The execution and delivery
of this Agreement and the consummation of the transactions contemplated hereby
have been duly and validly authorized, and no other corporate proceedings on the
part of Buyer or its shareholders are necessary to authorize the execution and
delivery of this Agreement or to consummate the transactions so contemplated.
This Agreement has been duly and validly executed and delivered by Buyer and
constitutes, and each of the other documents to be executed by Buyer hereunder
shall constitute, the legal, valid and binding obligation of Buyer, each
enforceable against it in accordance with its terms except as may be limited by
bankruptcy rules.
VIII.3 Consents and Approvals; No Violations. No filing with or notice
to any Governmental Entity is required by the Buyer in connection with the
execution, delivery and performance of this Agreement or the consummation of the
transactions contemplated hereby.
ARTICLE IX - COVENANTS
IX.1 Conduct of Business.
(a) From and after the date hereof until the earlier of the Closing
Date or the termination of the Agreement under ARTICLE X hereof, the Sellers
shall cause each of the Companies to operate its business in the ordinary course
consistent with past practices without change of policy or procedure, and
without material interruption in nature, scope or manner, to preserve its
existing business and goodwill and its relationships with employees, suppliers
and others having business dealings with it, in each case as a bon pere de
famille. Without limiting the foregoing, the Sellers will not, without, in each
instance, the prior written consent of the Buyer (which may not be unreasonably
withheld), cause or permit either of the Companies to take any of the following
actions:
(i) amend its Organizational Documents;
(ii) declare, set aside, make or pay any dividend or other
distribution in respect of, or redeem any of, its
share capital (in cash or otherwise);
(iii) Except as provided by ARTICLE IX.2 hereof, enter into
extraordinary transactions, including acquisitions,
mergers ("fusion"), spin-offs or split-offs
("scissions ou apports partiels d'actifs"), on-going
business sales ("cession de fonds de commerce") or
business rental agreements ("location gerance");
-31-
(iv) enter into any joint venture or similar arrangement;
(v) incur or assume any indebtedness for borrowed money
or vary in any manner the terms of its existing
indebtedness (including any Shareholders Debt);
(vi) make any change in its accounting methods, procedures
or practices unless provided for by Law;
(vii) incur, assume or guarantee any loans, borrowings,
indebtedness (including any Shareholders Debt) or
other form of funding or financial facility or
assistance, or enter into any foreign exchange
contracts, interest rate swaps, guarantees or
agreements or other interest rate instruments;
(viii) cancel, discount, factor, sell or assign (including
via "Cession Dailly") any of its receivable or debt
(including any debt owed by the Affiliates of each of
the Companies);
(ix) repay or discharge any obligations or liabilities to
creditors (including trade creditors), demand or
collect payment of trade receivables, write-down the
value of any inventory or write-off as
non-collectable any accounts receivable, or otherwise
manage debtors, creditors and inventory, other than
in the ordinary course of business (which includes
payment of any account payable and/or trade creditors
as of their due date) all of such consistent with
past practices;
(x) except as provided by ARTICLE IX.9 enter into,
terminate or amend any inter-company agreement with
any of the Sellers or their Affiliates;
(xi) amend, enter into, assume, terminate or fail to
perform any material contract;
(xii) subject any of its asset or any part thereof, to any
Encumbrance other than such Encumbrances that may
arise in the ordinary course of business consistent
with past practice or by operation of Law;
(xiii) enter into any new (or amend any existing) employee
benefit plan, grant any general increase in the
compensation (including bonus and profit sharing
plan) of, or increase the duration of any employment
contracts with its management or employees except as
required by Law, except as described on EXHIBIT II.2;
(xiv) enter into an employment contract with any new
employee and/or amend any existing employment
contract of any existing employee of each of the
Companies;
(xv) terminate the employment or office of any of its
officers or key employees or appoint any new officer
or key employee or materially alter the employment or
engagement of any officer or key employee;
(xvi) enter into any arrangement, commitment or agreement
creating any Encumbrance in the Shares or limiting or
restricting in any manner the
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transferability of the Shares, or providing for the
voting of the Shares, options, warrants, or other
rights to purchase any of such securities from any
third party;
(xvii) acquire, by merger, consolidation, purchase of stock
or assets or otherwise, any corporation, partnership,
association or other business organization;
(xviii) issue any securities or options, warrants or other
rights to purchase any Securities of each of the
Companies;
(xix) reorganize, dissolve or enter into any plan of
liquidation or dissolution or similar proceeding;
(xx) acquire or agree to acquire any assets with an
aggregate acquisition cost in excess of (Euro)10,000
other than inventory in the ordinary course of
business consistent with past practices;
(xxi) sell, transfer, lease or agree to sell, transfer,
lease any assets used in connection with its
business, tangible or intangible, other than sale of
inventory in their ordinary course of business and
consistent with past practices;
(xxii) cancel or terminate any insurance policy or fail to
maintain any insurance policy in an amount and scope
comparable to current coverage, except if replaced by
a new insurance policy providing for at least the
same coverage at premiums not materially higher than
the insurance policy being replaced;
(xxiii) amend, voluntarily terminate or fail to perform any
contract and commence, compromise or discontinue any
Proceedings (other than routine debt collection);
(xxiv) increase whether directly or indirectly the level of
rebates and/or discounts made to its customers,
distributors and wholesalers by more than 3% in the
aggregate of the level applicable as of December 31,
2002;
(xxv) unless required to do so by the French health
authorities, amend any Marketing Authorization and/or
ATU for products of the Subsidiary, change any
specifications for its products, or make any
submission to a health authority other than routine
updates without the prior review and approval by the
Buyer; or
(xxvi) otherwise take any action which would result in any
representation and warranty contained in ARTICLE VII
not to be true and correct as of the Closing Date.
Subject to ARTICLE IX.2 hereof, after the date hereof and until the
Closing, the Sellers shall procure that their Affiliates (other than the
Companies) conduct their respective business dealings with each of the Companies
only in the ordinary course of business on a basis consistent with past
practices (except as and only to the extent required by (i) applicable Law, or
(ii) by the
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terms of legally binding obligations in existence on the date hereof, and, in
each such case, which has been specifically disclosed to the Buyer in the
Exhibits to the Agreement as giving rise to such an obligation).
(b) The Sellers undertake to make their best efforts to obtain from the
statutory auditors of each of the Companies that they tender their resignation
at latest upon the date of their respective annual shareholders' meetings
approving the annual financial statements for the year ending on December 31,
2002.
IX.2 Transfer of Shares, Trademarks and Assets prior to Closing.
(a) The Sellers undertake that as of the Closing Date, they shall have
caused (i) the disposal of all shares held by the Subsidiary in Lipogel S.A.RL,
SCI Gramenoue, SCI Golfpart and Finexsud S.A.S. (such shares being hereinafter
referred to as the "DIVESTED SHARES") with no adverse Tax consequences
whatsoever for the Subsidiary including any payment of corporate income Tax
("impot sur les societes") and in such a way that after the Closing Date neither
the Company nor the Subsidiary shall suffer any liability in connection with the
Divested Shares, including by not having the Subsidiary granting any
representations or warranties in relation with the disposal of the Divested
Shares, (ii) the transfer to the acquirors of the shares held by the Subsidiary
in Lipogel of all outstanding obligations under (a) the share purchase agreement
dated October 13, 1999 among Laboratoires Laphal, as purchaser, and ▇▇.
▇▇▇▇-▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ and ▇▇. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, as sellers, relating to Lipogel
and (a) the license agreement dated November 27 and December 16, 1996 among,
Laboratoires Laphal, as licensee, and CNRS, as licensor, relating to Lipase and
(iii) the repayment to the Subsidiary of all loans, advances and any other
monies lent by Laphal Developpement to Lipogel S.A.R.L, Finexsud S.A.S and SCI
Golfpart.
(b) The Sellers undertake that as of the Closing Date, the Subsidiary
shall have executed an undertaking to offer to transfer, with no adverse Tax
consequences whatsoever for the Subsidiary including any payment of corporate
income Tax ("impot sur les societes"), the Laphal trademark pursuant to the
terms set forth in EXHIBIT IX.2 (B).
(c) The Sellers undertake that as of the Closing Date, the Subsidiary
shall have (i) transferred to Finexsud S.A.S, Lipogel S.A.R.L, Laphal Industrie
S.A.S and ALNO, with no adverse Tax consequences whatsoever for the Subsidiary
including any payment of corporate income Tax ("impot sur les societes"), the
assets which are listed in EXHIBIT IX.2 (C) to this Agreement, in such a way
that after the Closing Date neither the Company nor the Subsidiary shall suffer
any liability in connection with the divested assets, including by not having
the Subsidiary granting any representations or warranties in relation with their
disposal and (ii) settled any outstanding payables and receivables existing
between the Subsidiary and Laphal Industries as more specifically described in
EXHIBIT IX.2 (C) to this Agreement.
(d) The Sellers undertake to make their best efforts to cause the
disposal on or prior to the Closing Date by the Company of all shares held by
the Company in France Gelules SA and
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Bioenergies SA with no adverse Tax consequences whatsoever for the Company
including any payment of corporate income Tax ("impot sur les societes") and in
such a way that after the Closing Date the Company shall suffer any liability in
connection with the shares so divested, including by not having the Company
granting any representations or warranties in relation with the disposal of
these shares.
IX.3 Access - Notifications prior to Closing
(a) From the date hereof until the earlier of the Closing Date or the
termination of the Agreement under ARTICLE X hereof, the Sellers shall permit
the Buyer and its Representatives full access during normal business hours to
the premises, books and records (including any financial or commercial
information related to the business of each of the Companies), senior management
and statutory auditors of each of the Companies (provided such access shall not
unreasonably interfere with the respective normal business and operation of each
of the Companies).
(b) From the date hereof until the earlier of the Closing Date or the
termination of the Agreement under ARTICLE X hereof, the Sellers shall promptly
notify (hereinafter referred to as a "NOTICE OF BREACH") the Buyer in writing if
the Sellers become aware of any fact or condition that causes or constitutes a
breach of any of the Sellers' representations and warranties or any covenants
herein. Notwithstanding the Sellers' obligation to indemnify Buyer for such
breach in accordance with the terms and obligations of the Agreement, should any
such fact or condition require any change in any Exhibit, the Sellers will
promptly deliver to Buyer a supplement to such Exhibit specifying such change,
provided, however, that the Sellers shall provide to Buyer amended Exhibits no
less than five (5) Business Days prior to the Closing Date.
IX.4 No Negotiations.
From and after the date hereof until the earlier of the Closing Date or
the termination of the Agreement under ARTICLE X hereof, none of the Sellers,
their Affiliates or officers or directors of their Affiliates nor anyone acting
on behalf of the Sellers or such persons shall, directly or indirectly,
encourage, solicit, engage in discussions or negotiations with, or provide any
information to, any Person (other than the Buyer or its Representatives)
concerning any merger, sale of substantial assets, purchase or sale of interests
in the share capital of any of the Companies or any similar transaction
involving any of the Companies. The Sellers shall promptly communicate to the
Buyer any inquiries or communications concerning any such transaction which it
may receive or of which it may become aware.
IX.5 Consents and Approvals; Specific Contracts.
(a) The Sellers (i) shall use their best efforts to obtain all
Governmental Authorizations and third party consents which are reasonably
required in connection with the entering into and performance by the Sellers of
the Agreement, and (ii) shall diligently assist and cooperate with the Buyer in
preparing and filing all documents required to be submitted by the Buyer to any
Governmental Entity in connection with the transactions contemplated by the
Agreement and in obtaining any Governmental Authorizations, including any
Governmental Authorizations relating to the transfer of pharmaceutical product
Marketing Authorizations and ATU and pharmaceutical products, sale, marketing
and manufacturing authorizations, which
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may be reasonably required to be obtained by the Buyer in connection with such
transactions (which assistance and cooperation shall include timely furnishing
to the Buyer of all information concerning the Sellers, the Companies and their
respective Affiliates which the Buyer reasonably determines is required to be
included in such documents or would be helpful in obtaining any such
Governmental Authorization).
(b) The Sellers have informed the Buyer that the Specific Contracts
referred to in ARTICLE VII.16 contain a "change of control" clause or an
"intuitu personae" provision. The Sellers shall, prior to the Closing, obtain a
satisfactory waiver of any rights or other consent (in form satisfactory to the
Buyer) to the transactions contemplated by the Agreement, including the transfer
of ownership in the Shares, from each third party who is a party to a Specific
Contract, provided, however, that such consents, waivers or approvals, as the
case may be, shall be obtained without incurring any cost, liability or
contractual obligation to each of the Companies.
IX.6 Production Files and Clinical Data and Studies. The Sellers shall
provide to the Buyer, at the Closing Date, an accurate and complete copy of all
the production files, clinical data and studies relating to products, in
particular Thalidomide, for which the Subsidiary has obtained, acquired or filed
a Marketing Authorization and/or an ATU or has the right to use any of them, all
of the preceding being hereinafter collectively referred to as the "FILES AND
DATA". The Files and Data include all the information, including regulatory
information, (i) necessary for the design, manufacturing or marketing of each
such pharmaceutical product and (ii) pertaining to any medical studies or
research whatsoever conducted on any number of patients using or having used any
such pharmaceutical products.
IX.7 Resignations. At the Closing, the Sellers shall cause to be
delivered to Buyer duly signed resignations, effective immediately after the
Closing, of those directors and alternate directors of each of the Companies who
have been appointed by the Sellers and not identified in writing by the Buyer in
accordance with ARTICLE X.1(VI).
IX.8 Change of the Subsidiary's Corporate Name. Buyer covenants that it
will call an ordinary shareholders' meeting of the Subsidiary within (30) thirty
days after the Closing, in order to change the corporate name of the Subsidiary
so that it does not make reference to the name "LAPHAL".
IX.9 Use of the name "LAPHAL" by Laphal Industrie. Buyer agrees that
Laphal Industrie shall have the right to continue using the name "Laphal" as
part of its corporate name as long as Laphal Industrie shall remain exclusively
involved in the manufacturing of parmaceutical products.
IX.10 Use of the Premises. Except as regards the premises leased by the
Company and the Subsidiary in Paris at ▇▇ ▇▇▇, ▇▇▇ ▇▇▇ ▇▇▇▇▇▇ Feuilles F-75116,
pursuant to lease agreements the terms of which shall be amended prior to the
Closing Date substantially in the form of the amendment attached hereto as
EXHIBIT V.2(A)(VI) hereto so that each of the Company and the Subsidiary shall
be allowed to vacate them at no cost as of January 1, 2004 provided that notice
of termination shall have been given by July 1, 2003 at the latest, Buyer
expressly covenants that it will not cause the Subsidiary to vacate those
premises located at Allauch, avenue de Provence
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F-13190, in which each of the Companies is currently a sub-lessee (hereinafter
referred to as the "PREMISES") without respecting the terms and conditions of
the existing lease.
IX.11 Transition Services Agreement. On or prior to the Closing Date,
the Sellers shall cause the Subsidiary and Finexsud S.A.S to enter, subject to
Buyer's prior approval, into the Transition Services Agreement substantially in
the form attached hereto as EXHIBIT V.2(A)(VI) whereby they will agree to
terminate the services agreement currently in effect between Finexsud S.A.S and
the Subsidiary and enter in a short term services agreement limited to certain
administrative services.
IX.12 Manufacturing and Distribution Agreements between the Subsidiary
and Laphal Industries. On or prior to the Closing Date, the Sellers shall cause
(i) the Subsidiary and Laphal Industries to enter into the Manufacturing and
Supply Agreement and the Distribution Agreement in the forms attached hereto as
EXHIBIT V.2(A)(VI) amending the existing manufacturing agreement and
distribution agreement and (ii) the Subsidiary to accept the termination by ▇▇.
▇▇▇▇▇▇ Note in the form attached hereto as EXHIBIT V.2(A)(VI) of the contract
entered into on June 15, 2002 between himself and the Subsidiary.
IX.13 No Encumbrances on the Going Concern ("fonds de commerce"). The
Sellers undertake that as of the closing Date, each of the Companies will own
full rights to the going concern of their respective businesses, as well as
tangible and intangible assets related to their businesses, in each case free
and clear of any Encumbrances.
ARTICLE X - CONDITIONS PRECEDENT - TERMINATION
X.1 Condition Precedent. The Buyer's obligation to purchase the Shares
and to consummate the transactions contemplated in the Agreement at Closing
shall be subject to the fulfillment of each of the following conditions:
(i) all the representations and warranties of the Sellers
contained in the Agreement shall be accurate in all
respects as of the date hereof and as of the Closing
Date, except for such inaccuracies or breaches
specifically waived in writing by Buyer;
(ii) the Sellers shall have performed and complied with
all agreements, covenants and undertakings (including
all covenants set forth in ARTICLE IX HEREOF)
required by the Agreement to be performed or complied
with by the Sellers, prior to or at the Closing Date;
(iii) the Sellers shall have caused the Subsidiary to
deliver to the Buyer all of the Subsidiary's
employment agreements and the Buyer shall have been
satisfied that these agreements do not create
liabilities for the Subsidiary which are not
customary and reasonable for a company of that size
with that principal place of business in the
pharmaceutical industry in respect of employees such
as those with whom these agreements have been entered
into;
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(iv) from the date hereof to the Closing Date, no Material
Adverse Effect and no material disruption or change
in the regulatory conditions or requirements
applicable to each of the Companies shall have
occurred;
(v) the Buyer and Laphal Industrie will have entered into
a non-compete agreement in the form attached as
EXHIBIT X.1.(V) pursuant to which Laphal Industrie
shall undertake that, except for sales to the Buyer
and/or any of its Affiliates or the Subsidiary as
contemplated by the manufacturing agreement between
Laphal Industrie and the Subsidiary, Laphal Industrie
shall not, directly or indirectly, develop,
manufacture market, distribute and/or sell
Thalidomide in any form or presentation including
unfinished product or active ingredient, in any
country of the world for a period of ten (10) years
after the Closing Date;
(vi) the Buyer and ▇▇▇ Publimepharm shall have entered
into a trademark sale and purchase agreement pursuant
to which ▇▇▇ Publimepharm shall sell to Buyer or its
assignee the trademark "Triacana" in the form
attached hereto as EXHIBIT X.1(VI); and
(vii) all Governmental Entity approvals and third party
consents required in connection with the performance
of the Agreement, including the consents referred to
in ARTICLE VII.16, shall have been duly obtained and
in full force and effect on Closing Date.
X.2 Termination.
(a) The Agreement may be terminated at any time prior to the Closing
Date:
(i) by the written agreement of the Buyer and the Sellers;
(ii) by the Buyer, as a right, with no judicial formality:
1. if any of the conditions to Closing set
forth in ARTICLE X.1 shall have become
incapable of satisfaction or fulfillment,
and shall not have been waived in writing by
the Buyer; and
2. following the occurrence of a change,
situation, development or other event having
a Material Adverse Effect; and
3. following receipt of a Notice of Breach in
respect of a material breach of any of the
Sellers' representations and warranties or
any covenants herein;
(iii) by the Sellers if any of the conditions to Closing
set forth in ARTICLE X.1 shall have become incapable
of satisfaction or fulfillment as a result of a
breach of the Agreement by the Buyer; and
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(iv) by either the Buyer or the Sellers, if the Closing
Date shall not have occurred for any reason on or
prior to April 30, 2003, without prejudice to the
right of any Party to obtain damages on account of
the breach by any other Party or Parties of any of
the agreements or covenants herein to be performed or
observed by such other Party or Parties prior
thereto.
In the event of termination of the Agreement by the Sellers or the
Buyer pursuant to any of the clauses (ii) through (iv) above, written notice
thereof shall promptly (and when a specific time period is set forth therefore,
within such time period) be given to the other Parties and the transactions
contemplated by the Agreement shall be terminated, without further action by any
of the Parties, except as stated in clause (iv).
(b) If the Agreement is terminated as authorized above in clauses (i)
and (iv), no Party shall have any liability or further obligation to any other
Party or any Affiliate, shareholder, director, officer or Representative of such
Party except for any liabilities arising from a willful breach of the Agreement,
except for the obligations set forth in ARTICLE XII.1 which will survive the
termination hereof. Notwithstanding anything herein to the contrary, any Party
which improperly purports to terminate the Agreement shall remain liable for all
consequences and damages in connection therewith.
ARTICLE XI - INDEMNIFICATION
XI.1 Undertaking to Indemnify. The Sellers shall jointly and severally
indemnify Buyer, (hereinafter referred to as the "INDEMNIFIED PARTY"), and to
hold harmless the Indemnified Party from, any and all liabilities, obligations,
losses (including losses resulting from third party claims), damages, penalties,
claims, actions, suits, judgments, settlements, and, upon evidence, expenses
(including reasonable attorney's fees) and disbursements (hereinafter
collectively referred to as the "DAMAGES"), asserted against, suffered or
incurred by the Buyer and/or the Companies arising, directly or indirectly, from
or in connection with:
(a) any breach or inaccuracy of any of the Sellers' representations or
warranties contained herein, whether made as of the date hereof or as of the
Closing Date (without giving effect to any change or supplement to the Exhibits
hereto made after the date hereof) or any agreement, certificate or other
document delivered pursuant hereto;
(b) any liability or loss whatsoever (whether accrued, absolute,
contingent or otherwise) or any decrease in assets of the Companies with a cause
or origin in facts, events or transactions arising on or before the Closing,
including any pension liabilities or any Tax incurred by the Companies, or any
loss by the Companies of a Tax advantage due to any fact, event or transaction
having arisen prior to the Closing, and any expense, including fines, late
payment penalties borne by the Companies as a result of any Tax, customs or
labor assessment and, more generally, of any Tax Proceeding which is not fully
reflected or provided for in the Audited Financial Statements (whether or not
known to the Companies, the Sellers or the Buyer); or
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(c) any breach of, or failure of the Sellers to duly perform or observe, any
term, provision, covenant, agreement or condition of the Sellers to be performed
or observed in accordance with the Agreement or any agreement, certificate or
other document delivered pursuant hereto as well as any liability or loss
whatsoever (whether accrued, absolute, contingent or otherwise) or any decrease
in assets of the Companies arising before, on or after the Closing in connection
with the Disposals or the acquisition of the trademark "Triacana", including any
Tax liability incurred by the Companies as a consequence of the Disposals or the
acquisition of the trademark "Triacana"; or
(d) any product designed, manufactured, marketed or sold, or services
rendered, by the Companies prior to the Closing Date.
The Buyer shall not be chargeable with knowledge or notice of the
content of any documents or other information pertaining to the Companies which
are not expressly contained in the Exhibits as of the date hereof and shall be
entitled to rely exclusively on the accuracy of representations and warranties
of the Sellers set forth herein, it being understood that the disclosure of
reserves or allocations for contingent liabilities and Proceedings in the
Exhibits shall not mitigate the Sellers' obligations with respect to any
Indemnifiable Losses related thereto. The Sellers' obligations under this
ARTICLE XI shall not be affected, in any manner whatsoever, by the conduct of an
audit or due diligence examination of the Companies by representatives of the
Buyer.
Notwithstanding anything to the contrary, in the event where a claim
would be made by the Buyer after January 31, 2007 against any of the Sellers and
such claim would exclusively relate to his or her good and valid title to the
Shares sold to the Buyer, none of ▇▇. ▇▇▇▇▇▇ Note, ▇▇. ▇▇▇▇▇▇ Note, ▇▇. ▇▇▇▇▇▇▇
Note, ▇▇. ▇▇▇▇▇▇ Note and Mr. Christophe Note, shall be held jointly and
severally liable in connection with such a claim as the liability of each of
them shall be restricted, but only in the event of a claim made after January
31, 2007 in relation to title to Shares, to claims relating to the Shares each
of them shall have sold to the Buyer.
XI.2 Deductible and Cap. Subject to ARTICLE XI.10, the Sellers shall
not be obligated to indemnify the Indemnified Party against Damages asserted
against, suffered or incurred by the Buyer and/or the Companies arising,
directly or indirectly, from or in connection with Article XI.1(a) unless and
until:
(a) Damages taken individually or collectively reach fifty thousand
Euro ((Euro) 50,000), (the "DEDUCTIBLE") it being understood that if the amount
of such Damages shall exceed the Deductible, the Sellers' repayment obligation
shall be limited to the amount in excess of the Deductible, subject, however to
clause (b) below; and
(b) The Sellers' indemnification obligation is limited to a maximum
aggregate amount equal to (i) forty per cent (40%) of the amount which is equal
to the sum of the Final Closing Purchase Price and the Additional Purchase Price
Elements for a period ending on the second anniversary of the Closing Date and,
thereafter, to (ii) twenty-five per cent (25%) of the amount which is equal to
the sum of the Final Closing Purchase Price and the Additional Purchase Price
Elements (such maximum amount being hereinafter referred to as the "CAP").
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XI.3 Notice of Claims. Each written notice of claim (a "CLAIM NOTICE")
shall state precisely its grounds to the extent known to the Indemnified Party
and, if reasonably ascertainable, the amount of Damages claimed (which estimate
shall not be conclusive of the final amount of such claim and demand) and such
available information as may reasonably be required by the Sellers to assess the
merits of the claim and the computation or estimate of the Damages.
Each Claim Notice shall be notified by Buyer to each of the Sellers
with reasonable promptness in view of the circumstances following the date on
which the Indemnified Party first becomes aware of any loss or damage which
gives rise to a claim.
If, after having been notified of a claim by Buyer, the Sellers do not
contest, by written notice to Buyer, the validity of the claim within thirty
(30) days after delivery to the Sellers of such notice from Buyer (the "DIRECT
CLAIM REVIEW PERIOD") the Sellers shall be deemed to have accepted the claim so
notified. During the Direct Claim Review Period Sellers may proceed with such
investigation of the underlying claim as it considers necessary or desirable
and/or if the parties agree, on or prior to the expiration of the Direct Claim
Review Period, upon the validity and amount of such claim, the Sellers shall pay
to the Indemnified Party, within fifteen (15) days following the date of such
agreement or the expiry of the Direct Claim Review Period, the full amount of
such claim. If the parties are unable to reach agreement on or prior to the date
of the expiration of the Direct Claim Review Period or if the Sellers notify the
Indemnified Party during the Direct Claim Review Period that it disputes its
liability to the Indemnified Party in respect of the underlying claim, setting
forth the reasons for such objection, the Indemnified Party may initiate
proceedings against the Indemnifying Party in accordance with ARTICLE XII.10 of
this Agreement.
XI.4 Payment of Indemnification. Payments to be made to the Buyer
and/or the Companies shall, to the extent permissible by applicable law, be
deemed a reduction of the Final Closing Purchase Price. Upon Sellers' acceptance
of a claim or upon determination of the amount of any disputed claim, Buyer
shall request payment by Sellers of the amount of the Damages, including
interest if applicable, which payment shall be made in immediately available
funds.
Any and all amounts payable by the Sellers in respect of the indemnity
due to an Indemnified Party under this ARTICLE XI shall be paid in EURO free and
clear of all deductions or withholdings whatsoever, and shall bear interest
until paid in full at a rate per annum equal to EURIBOR 6 month plus three
hundred (300) basis points, calculated from the date which 40 days after the
date of payment by the Buyer or the Companies of the corresponding Damages to
any third party or, where no such payment to a third party is involved, such
date as may be agreed by the parties or otherwise determined by the competent
judicial authority until the effective date of payment of the indemnity. Where
any such sums are subject to taxation in the hands of the recipient Indemnified
Party, the Sellers expressly agree that the amounts payable shall be grossed up
so as to leave the recipient Indemnified Party, after such taxes have been paid,
with the same amount as the recipient Indemnified Party would have received in
the absence of such taxes.
XI.5 Compensation of Indemnification. In case of non-payment by the
Sellers of the amount of Damages accepted or otherwise finally determined in the
delays set forth hereof, the Buyer shall be entitled to reduce the Additional
Purchase Price Elements Payments payable to the Sellers (if any) as set forth in
ARTICLE II.6.B (J).
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XI.6 Time for Claims. A claim may give rise to an indemnification
provided that it has been notified by Buyer to the Sellers:
(i) for any claim relating to Tax, on or prior to January 31, 2007;
(ii) until the tenth anniversary of the Closing Date for any claim
relating to title to any of the Shares; and
(iii) until the third anniversary of the Closing Date for any other
claim.
For the avoidance of doubt it is specified that no claim may be made
after these dates but that the right of indemnification of the Buyer shall be
entirely maintained after these dates for any claim which notified by the Buyer
to the Sellers prior to these dates.
XI.7 Third-Party claims. In the event that any claim, demand or
Proceedings is asserted or instituted by any Person other than the parties
hereto and their respective Affiliates (hereinafter referred to as a "THIRD
PARTY") which could give rise to Damages for which the Sellers would be liable
to an Indemnified Party hereunder (any such claim, demand or Proceedings, being
hereinafter referred to as a "THIRD PARTY CLAIM"), the Indemnified Party shall
send to the Sellers a Claim Notice in respect of the Third Party Claim.
The Indemnified Party shall send a Third Party Claim Notice within
fifteen (15) days of receipt of actual notice of such Third Party Claim;
provided, however, that a failure by the Indemnified Party to comply with these
notice periods shall have no consequences on its ability to claim under the
Agreement to the extent that such failure has not caused the Damages for which
the Indemnifying Party is obligated to it to be greater than they would have
been had the Indemnified Party given timely notice (it being agreed that the
Damages for which the Indemnifying Party may be obligated shall be reduced to
the extent of any such prejudice). In the event of summary proceedings
("procedure de refere") against any of the Companies or a claim by the tax
authorities against any of the Companies for payment of additional taxes, the
Indemnified Party shall send the Third Party Claim Notice within a time period
compatible with defense rights and at the latest within seven (7) days of the
receipt of the claim in the event of a claim by the tax authorities.
The Sellers shall have thirty (30) days following its receipt of the
Third Party Claim Notice (hereinafter referred to as the "THIRD PARTY CLAIM
REVIEW PERIOD") to make such investigation of the underlying claim as it
considers necessary or desirable and to notify the Indemnified Party whether or
not it disputes its liability to the Indemnified Party in respect of such Third
Party Claim. If the Sellers do not notify the Indemnified Party during the Third
Party Claim Review Period that it disputes its liability to the Indemnified
Party in respect of the relevant Third Party Claim, the Sellers shall be deemed
to have acknowledged its liability to the Indemnified Party in respect of such
Third Party Claim. If the Sellers notify the Indemnified Party during the Third
Party Claim Review Period that it disputes its liability to the Indemnified
Party in respect of the relevant Third Party Claim, setting forth the reasons
for such objection, the Indemnified Party may initiate proceedings against the
Indemnifying Party as provided by ARTICLE XII.10 of the Agreement.
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The Indemnified Party shall conduct the defense of each such Third Party
Claim diligently and in good faith using all reasonable means and defenses
available to it or to the Companies (having regard for the interests of the
Companies) until such time, if any, as it is determined or agreed that the
Sellers have no liability to the Indemnified Party in respect of a particular
Third Party Claim. The Sellers shall have the right, if it so notifies the
Indemnified Party with reasonable promptness after receipt of the Claim Notice,
to be consulted in respect of such Third Party Claim and to participate at its
own expense and with counsel of its choice in the defense thereof by the
Indemnified Party (or in the case of a Third Party Claim against the Companies,
by the Companies).
In such event, the Indemnified Party shall afford the Sellers and its
counsel the opportunity to comment and the right to object (which right shall
not be unreasonably exercised) with respect to the conduct of the defense of the
claim. The Indemnified Party shall keep the Sellers reasonably informed of the
progress of any Third Party Claim and its defense, and shall with reasonable
promptness provide the Sellers with copies all material notices, written
communications and filings (including court papers) made by or on behalf of any
of the parties to the underlying claim.
The Sellers shall not be liable for any Third Party Claim settled or
otherwise compromised without its prior written consent (which consent shall not
be unreasonably withheld). In such connection, if the Indemnified Party shall
receive from a Third Party or if the Indemnified Party shall propose to make to
a Third Party an offer of settlement of such Third Party Claim (hereinafter
referred to as a "SETTLEMENT OFFER"), the Indemnified Party shall notify the
Sellers of such Settlement Offer promptly upon receipt thereof from the Third
Party and reasonably in advance of responding thereto, or reasonably in advance
of making such Settlement Offer, and shall provide with such notice all related
supporting documentation reasonably required to enable the Sellers to assess the
relative merits of the Settlement Offer. At the reasonable request of either of
the parties, the parties will consult in good faith with respect to any such
Settlement Offer. The Sellers shall then determine in the exercise of its own
business judgment whether or not to consent to the Settlement Offer, but shall
not unreasonably withhold any such consent. If a Settlement Offer is received,
which the Sellers, but not the Indemnified Party, are willing to accept, the
Indemnified Party may elect to continue the defense of such claim at its own
expense, in which case the liability of the Sellers shall be limited to the
lesser of: (i) Damages calculated as if the Third Party Claim were settled in
accordance with the proposed Settlement Offer, and (ii) the Damages actually
suffered by the Indemnified Party taking into account the final determination of
the Third Party Claim.
No amount shall become payable by the Sellers to an Indemnified Party
in respect of any Third Party Claim unless and to the extent that the
Indemnified Party is under the obligation to pay the relevant Damages to the
relevant third party as a result of any judgment of a court of competent
jurisdiction, a decision of an arbitral tribunal or a binding settlement or
other agreement among the relevant parties.
XI.8 Consistency of the Damages. Any tax reassessment (i) having as sole
consequence the transfer of the expense of one fiscal year to another fiscal
year or (ii) pertaining to a tax which may be recovered, such as the value added
tax, shall only give rise to an indemnification insofar as the Companies are
subject to the payment of penalties or late-payment interest in this respect.
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For the purposes of the calculation of the indemnity due by the
Sellers, the amount of the relevant prejudice shall be:
(i) calculated by deducting the amount of any net Tax benefit or
Tax savings actually realized by the Companies as a result of
the tax deductibility of the concerned loss, provided that
such Tax reduction results directly and unequivocally from
such Damages and only to the extent that the payments made in
respect of such Damages are not taxable to the Buyer and
provided further that should any such Tax reduction be
disallowed or such payments to the Buyer be taxed, in full or
in part, by the relevant Governmental Entities, the Sellers
shall be obligated to pay to the Buyer the amount by which the
partial repayment of Final Closing Purchase Price shall have
been reduced in accordance with this ARTICLE XI.8(i); and
(ii) reduced by any indemnity paid to the Companies under the terms
of insurance policies, as well as by the amount of any other
compensatory payment of the prejudice justifying the claim
directly relating to each Damage (net of any costs of
collection or increased insurance premiums). If the Sellers
pay an indemnity pertaining to a prejudice and if the
Companies recover or may subsequently recover all or part of
the amount of said indemnity from a third party (in particular
an insurance company or the tax or social security
authorities), related directly to each Damages (net of any
costs of collection or increased insurance premiums), the
Buyer shall take or shall ensure that the Companies take the
necessary measures which may reasonably be taken for the
purpose of recovering this amount and, within 15 days after
such amount shall have been recovered, Buyer shall pay to the
Sellers the amount thus recovered.
XI.9 Causes of exemption or reduction. The Sellers shall not be
compelled to indemnify insofar as the prejudice with respect to which an
indemnity is claimed is exclusively imputable to Buyer and/or the Companies
after the Closing Date.
The Sellers shall not be compelled to indemnify by reason of the
incorrectness of one of the representations made insofar as such incorrectness
results from the coming into force of a new Law after the Closing Date which has
a retroactive effect.
The Sellers shall not be compelled to indemnify for Damages with
respect to items which have been validly reserved against in the Audited
Financial Statements of the Companies, up to the amount of such reserves.
XI.10 Indemnification for Breach of Covenants or Representations
Relating to Taxes, Product Liability and Employees.
(a) Notwithstanding any disclosures made in the Exhibits or the
limitations set forth in ARTICLE XI.2, the Sellers shall fully indemnify, defend
and hold harmless the Buyer and the Companies from and against all Damages
resulting from or arising out of (i) any breach by the Sellers of the covenants
herein, (ii) Taxes, (iii) product liability and product recall claims relating
to products designed, manufactured, or marketed, or services rendered before the
Closing Date which become due and payable by the Companies after the date of the
Agreement and/or (iv)
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any claim made by an employee of the Companies or a Governmental Authority in
relation with a breach of laws applicable to employees, and/or social security
obligations, of any of the Companies.
XI.11 Reduction of the Purchase Price. The Sellers and the Buyer agree
that any amount paid by the Sellers or any of them to the Buyer in accordance
with the provisions of this Article XI shall, for all purposes, be deemed to be
a reduction of the purchase price and be treated accordingly from accounting and
tax purposes.
ARTICLE XII - MISCELLANEOUS
XII.1 Confidentiality. The Agreement and its Annexes and Exhibits and
the various covenants contemplated therein, including without limitation, the
Performance Adjustment Certificate, and any information included herein are
strictly confidential. Except as required by applicable Law or pursuant to any
applicable stock exchange regulations, no announcement or other disclosure will
be made about the content of, or in relation to, the Agreement, except with the
written and common approval of the Parties. The Sellers and the Buyer agree that
no public release or announcement concerning the transactions contemplated
hereby shall be issued by any party without the prior written consent of the
other parties (which consent shall not be unreasonably withheld), except as such
release or announcement may be required by an applicable Law (including in
respect of any "comites d'entreprise", if applicable) in which case the party
required to make the release of announcement shall, where applicable, allow the
other party reasonable time to comment on such release or announcement in
advance of such issuance; provided, however, that the Buyer may make internal
announcements to its employees and the Sellers to the employees of the
Companies, subject to prior consultation with the other Parties regarding the
content of such announcement.
XII.2 Covenant not to compete.
(a) For a period of ten (10) years after the Closing Date (the
"RESTRICTED PERIOD"), neither the Sellers, nor any Affiliate of the Sellers,
shall participate or engage, directly or indirectly, for itself or on behalf of
or in conjunction with any third party, whether as agent, shareholder, partner,
joint venturer, investor or otherwise, in any activities related to or
incidental to, inter alia, the development, manufacturing, marketing,
distributing or sale to any customer or distributors of (i) pharmaceutical
products, sold by the Companies on or before the Closing Date for the treatment
of orphan diseases; and (ii) Thalidomide, under any form or presentation
whatsoever, including without limitation the active ingredients and raw
materials used in the manufacturing of Thalidomide, except for sales to the
Buyer and/or any of its Affiliates or the Subsidiary as contemplated by the
manufacturing agreement between Laphal Industries and the Subsidiary.
(b) During the Restricted Period, no Sellers shall, whether for its own
account or for the account of any other individual, partnership, firm,
corporation or other business organization, directly or indirectly, solicit,
endeavor to entice away from the Companies or otherwise directly or indirectly
adversely interfere with the relationship of the Companies with any third party
who
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is (or was at any time since December 31, 2002) employed by or otherwise
engaged, whether under a contract or no, to perform services for the Companies
or who is, or was for the ten most recent fiscal years of each of the Companies,
a customer whose purchases exceeded 1% of the aggregate net sales of any of the
Companies or Major Supplier of the Companies.
(c) The Parties acknowledge that the foregoing restrictions are
reasonable in scope, are necessary for the Companies' business and goodwill and
form an essential part of the consideration for which Buyer is willing to enter
into the Agreement. It is the intent of the parties hereto that the provisions
of this ARTICLE XII.2 be enforced to the fullest extent permissible under the
Laws and public policies applicable in each jurisdiction in which enforcement is
sought. Accordingly, if any provision of this ARTICLE XII.2 shall be adjudicated
to be invalid, ineffective or unenforceable, the remaining provisions shall not
be affected thereby. The invalid, ineffective or unenforceable provision shall,
without further action by the parties, be amended automatically to effect the
original purposes and intent of the invalid, ineffective or unenforceable
provision; provided, however, that any such amendment shall apply only with
respect to the operation of such provision in the particular jurisdiction with
respect to which such adjudication is made. Without limiting the generality of
the foregoing, if any provision of this ARTICLE XII.2 is invalid in part, it
shall be curtailed, as to scope, time and location, to the minimum extent
required for its validity in the jurisdiction in which such provision is
challenged, and shall be binding and enforceable with respect to the Sellers as
so curtailed.
(d) Without intending to limit the remedies available to the Buyer, the
Sellers acknowledge for themselves and on behalf of their Affiliates that a
breach of any covenant contained in this ARTICLE XII.2 may cause material
irreparable harm and that a monetary remedy for a breach thereof may be
inadequate and impracticable. Each of the Companies or the Buyer shall therefore
be entitled to obtain temporary and permanent injunctive relief without the
necessity of proving actual damages or posting any bond. In the event of such a
breach or threat of breach, the Sellers acknowledge on their behalf and on
behalf of their Affiliates that Buyer shall be entitled to such injunctive
relief, including temporary restraining orders, preliminary injunctions and
permanent injunctions as a court of competent jurisdiction shall determine.
XII.3 Waiver. Any Party may, by written notice to another Party, extend
the time for the performance of any of the obligations or other actions of such
other Party; waive any inaccuracies in the representations of such other Party
contained in the Agreement, or waive compliance with any of the provisions
contained in the Agreement or waive or consent to the modification of
performance of any of the obligations of such other Party. No other action taken
pursuant to the Agreement, nor a failure or delay by either Party to enforce any
provision of the Agreement shall be deemed to constitute a waiver by such Party
of compliance with any representation, warranty, condition or agreement
contained herein.
XII.4 Entire Agreement. This Agreement may only be modified by a
written instrument executed by authorized representatives of the Sellers and the
Buyer. This Agreement constitutes the sole understanding and agreement between
the Sellers and Buyer with respect to the subject matter hereof, and supersedes
any prior oral or written agreement by and between the parties hereto with
respect to the subject matter hereof.
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XII.5 Notices. Notices or other communications required or permitted
hereunder shall be in writing and shall be deemed to have been duly given (a)
when personally delivered or sent by telecopier (as evidenced by a "transmission
result report" or other confirmation printed by the sender's fax machine), or
(b) three business days after being sent by internationally-recognized overnight
courier, to the following addresses, or to such other address as such party may
request by written notification to the other party hereto at least five business
days in advance of the effective date of such change:
BUYER Pharmion ▇▇▇▇▇▇
▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇
Tel: ▇▇ ▇▇▇▇ ▇▇▇▇
Fax: ▇▇ ▇▇▇▇ ▇▇▇▇
Attention: The Managing Director
with copy (which shall not constitute a notice) to:
Pharmion Coporation
▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇
Attention: The President
Fax: ▇▇▇ ▇▇▇ ▇▇▇▇
Tel: ▇▇▇ ▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇ & ▇▇▇▇▇▇▇▇▇
▇▇-▇▇ ▇▇▇ ▇▇ ▇▇ ▇▇▇▇▇ ▇'▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇▇▇▇▇
Facsimile No: ▇▇.▇.▇▇.▇▇.▇▇.▇▇
SELLERS Mr. Druon Note
45, ▇▇▇▇▇▇ ▇▇ ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇
Tel: ▇▇ ▇▇▇▇ ▇▇▇▇
Fax: ▇▇ ▇▇▇▇ ▇▇▇▇
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with copy (which shall not constitute a notice) to:
Bignon Lebray Delsol & Associes
▇▇, ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇
Attention: ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
Facsimile No: ▇▇.▇.▇▇.▇▇.▇▇.▇▇
XII.6 Sellers' Agent.
(i) Each of the Sellers hereby irrevocably appoints M. Druon Note
(hereinafter referred to as, together with his successors, the "SELLERS' AGENT")
as his or her Agent and attorneys-in-fact to take any action required to be
taken by the Sellers under the terms of this Agreement, including, without
limiting the generality of the foregoing, the giving and receipt of any notices
to be delivered or received by or on behalf of any or all of the Sellers and the
right to waive, modify or amend any of the terms of this Agreement, and agrees
to be bound by any and all actions taken by such Sellers' Agent on her/his
behalf. The Buyer shall be entitled to rely exclusively upon any communications
given by the Sellers' Agent, and the Buyer shall not be liable in any manner
whatsoever for any action taken or not taken in reliance upon the actions taken
or not taken or communications made by the Sellers' Agent, as the case may be.
The Buyer shall be entitled to disregard any notices or communications given or
made by the Sellers unless given or made through the Sellers' Agent.
(ii) In the event of the death or incapacity of the Sellers' Agent or
his inability to perform his functions hereunder, the Sellers shall promptly
appoint another person to serve as the Sellers' Agent. Such appointment shall be
deemed to have been made when the identity of the new Agent has been
communicated to the Buyer in writing.
(iii) The manner and form by which the Sellers shall decide upon any
new agent and attorney-in-fact and the manner in which such decisions are to be
communicated to the Sellers shall be decided solely by the Sellers. The Sellers
recognize, and hereby acknowledge, that the Sellers' Agent has an interest in
the subject matter of this Agreement and that the appointment of such Agent as
the Sellers' Agent constitutes an irrevocable power-of-attorney coupled with an
interest.
(iv) The Sellers shall jointly and severally indemnify and hold
harmless the Sellers' Agent from and against any loss or cost which he may
sustain or incur while acting as Sellers' Agent except that the Sellers' Agent
shall bear his own liability and expense arising out of activities that are
fraudulent or grossly negligent.
XII.7 Severability. If any provision of this Agreement shall be
determined by a court of competent jurisdiction to be invalid or unenforceable
in any jurisdiction, such determination shall not affect the validity or
enforceability of the remaining provisions of this Agreement in such
jurisdiction nor affect the validity or enforceability of such provision in any
other jurisdiction and the Parties agree to negotiate in good faith to adapt
such provision, its application and/or the
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Agreement generally only to the extent necessary to render the Agreement valid
and enforceable in a manner that most closely and practicably respects the
original intent of the Parties.
XII.8 Binding Nature. This Agreement shall be binding upon and inure to
the benefit of the parties hereto and their respective legal representatives,
successors and assigns.
XII.9 Language. This Agreement has been negotiated, written and signed
in English which shall be the sole controlling version, irrespective of
translation into French which may have been prepared for the convenience of the
parties. For purposes of ensuring compliance with the Sellers' obligations under
French law, a French language version of this Agreement may also be prepared and
signed. Notwithstanding, this English version of this Agreement shall control in
any dispute between the Sellers and Buyer.
XII.10 Governing Law; Jurisdiction. This Agreement shall be governed by
the laws of France. Any dispute or controversy which may arise from the
Agreement or any further agreement resulting thereof shall be submitted to the
exclusive jurisdiction of the Commercial Court of Paris.
XII.11 Expenses.
(a) Whether or not the transactions contemplated hereby are
consummated, each Party hereto shall pay its own respective expenses (including
advisors and attorneys' fees), except as otherwise contemplated by ARTICLE II
and ARTICLE XI hereof.
(b) The Sellers represent and warrant to the Buyer that they have not
employed the services of a broker or finder in connection with the Agreement or
any of the transactions contemplated hereby. The Sellers shall indemnify and
defend and hold the Buyer and the Companies harmless against and in respect of
all claims, losses, liabilities and expenses which may be asserted against the
Buyer (or any Affiliate of the Buyer) by any broker or other person who claims
to be entitled to an investment banker's, financial advisor's, broker's,
finder's or similar fee or commission in respect of the execution of the
Agreement, or the consummation of the transactions contemplated hereby, by
reason of his acting at the request of the Sellers.
XII.12 Further Assurances. Upon request of Buyer, the Sellers shall
make, execute and deliver, or cause to be made, executed and delivered, any and
all such further acts, instruments and assurances as reasonably may be necessary
or proper to carry out the provisions of this Agreement and otherwise to
effectuate the intent hereof; provided that the Sellers shall not be obligated
to expend any money or incur any costs other than a reasonable cost, in
connection with any request for further assurances by Buyer.
XII.13 No Assignment. This Agreement shall not be assigned by either
Party without the prior written consent of the other, provided, however, that
(a) Each of the Sellers may assign this Agreement to any family
member or to any French company which is controlled
exclusively by members of the Note Family provided, however,
that the Sellers shall remain jointly and severally liable
without any restriction or limitation with any such assignee
in respect of each and any of their obligations here under ;
and
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(b) Buyer shall have the right to (i) assign this Agreement to an
Affiliate of Buyer without the prior written consent of,
and/or (ii) delegate ("delegation imparfaite conditionnelle")
or otherwise assign or transfer the right to receive any
partial repayment of the Final Closing Purchase Price (as
provided in ARTICLE XI) for the benefit of any direct or
indirect lender having financed part of the acquisition of the
Shares at Closing (which assignment shall be expressly
accepted by the Sellers who undertake to sign and deliver any
documents required to perform such assignment) provided,
however, that Pharmion Coporation shall remain jointly and
severally liable without any restriction or limitation with
any such assignee in respect of each and any of its
obligations here under.
This Agreement shall be binding upon and inure to the benefit of the
parties and their respective successors and assigns (but only if the
assignment was properly consented to by the non-assigning party, if
such consent is necessary).
IN WITNESS WHEREOF, the parties have caused this Agreement to be signed
by their duly authorized representatives on the date first above written.
Sellers
/s/ D. Note
--------------------------------
Ms. Noelle Note
Represented by Mr. Druon Note
/s/ D. Note
--------------------------------
Mr. Druon Note
/s/ D. Note
--------------------------------
▇▇. ▇▇▇▇▇▇ Note
Represented by Mr. Druon Note
/s/ D. Note
--------------------------------
▇▇. ▇▇▇▇▇▇ Note
Represented by Mr. Druon Note
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/s/ D. Note
--------------------------------
▇▇. ▇▇▇▇▇▇▇ Note
Represented by Mr. Druon Note
/s/ D. Note
--------------------------------
▇▇. ▇▇▇▇▇▇ Note
Represented by Mr. Druon Note
/s/ D. Note
--------------------------------
Mr. Christophe Note
Represented by Mr. Druon Note
/s/ D. Note
--------------------------------
Societe Alno
Represented by Mr. Druon Note, its Managing Director
Buyer
/s/ M. Bouchara
--------------------------------
Pharmion France
By ▇▇. ▇▇▇▇▇▇ Bouchara, its Managing Director
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