TRANSLATION FROM FRENCH FOR INFORMATION ONLY
EXHIBIT 2.3
REPRESENTATIONS AND WARRANTIES AGREEMENT
DATED 3 DECEMBER 2001
AMONG THE UNDERSIGNED
Mr. Francois Lafon, an individual born in Paris on October 27, 1944, residing at
41, avenue Foch - 75016 Paris, France
Ms. Andree Carpentier, widow (veuve) of Mr. Louis Lafon, an individual born in
Hanoi (Vietnam) on April 15, 1918, residing at 5, rue Alboni - 75016 Paris,
France
hereinafter together called the "Warrantors"
ON THE ONE HAND,
AND
Cephalon, Inc., organized in the State of Delaware, having its principal place
of business located at 145 Brandywine Parkway, West Chester, Pennsylvania 19380,
United States represented by Mr. Frank Baldino, Chairman and Chief Executive
Officer, thereunto duly authorized by a resolution of Cephalon's Board of
Directors, dated 1st November 2001,
hereinafter called the "The Beneficiary"
ON THE OTHER HAND
Hereinafter together called the "Parties"
and individually a "Party".
WHEREAS
A. In accordance with the provisions of a share purchase agreement signed by
the Warrantors and the Beneficiary of even date herewith (hereinafter
called the "Share Purchase Agreement"), the Warrantors have agreed to sell
to the Beneficiary all of the shares of Financiere Lafon (hereinafter
called the "Financiere Lafon Shares"), a French corporation (societe
anonyme) with a share capital of forty thousand euros (Euro 40,000), having
its registered office located at 12, rue Clement Marot, 75008 Paris,
registered with the
Registry of Commerce and Companies (Registre du Commerce et des Societes)
of Paris under number B 340 102 391 (hereinafter called the "Company"), and
a minimum of 2,556 shares of Organisation de Synthese Mondiale Orsymonde
(hereinafter called the "Orsymonde Shares"), a French corporation (societe
anonyme) with a share capital of one million eight hundred thirty six
thousand euros (Euro 1,836,000), having its registered office located at
12, rue Clement Marot, 75008 Paris, registered with the Registry of
Commerce and Companies of Paris under number 582 079 711 (hereinafter
called "Orsymonde") (the Financiere Lafon Shares and the Orsymonde Shares
are collectively referred to as the "Shares").
Capitalized terms used in this Agreement (hereinafter called this
"Agreement") and not otherwise defined in this Agreement have the
respective meanings set forth in the Share Purchase Agreement.
B. The Company owns directly or indirectly the Subsidiaries.
C. The Beneficiary has requested from the Warrantors, and the Warrantors have
agreed to make, certain representations and warranties for the benefit of
the Beneficiary and to undertake to indemnify it against certain costs,
damages, events, expenses and losses on the terms and conditions set forth
in this Agreement, such indemnification to take the form of a reduction of
the Price.
NOW, THEREFORE, THE PARTIES HAVE AGREED TO THE FOLLOWING:
1. Representations and Warranties of the Warrantors
The Warrantors hereby jointly and severally make the ordinary representations
and those provided by law (declarations ordinaires et de droit) and make the
specific representations and warranties (hereinafter called the "Representations
and Warranties") set forth below. The Warrantors recognize and accept that the
Beneficiary has entered into the Share Purchase Agreement in reliance on the
Representations and Warranties.
1.1 Corporate Existence and Capitalization of the Companies
(i) Each of the Companies has been duly organized and is validly existing
under the laws of its jurisdiction of organization, and has the
registered capital and number of authorized and existing shares shown
on Schedule 1.1, which shares constitute all of the authorized and
existing shares.
(ii) Certified true and up-to-date copies of the articles of association
(statuts) of the Companies are attached as Schedule 1.1 hereto; the
minutes and other corporate records of the Companies are accurate and
up-to-date; the Companies' filings with the Registry of Commerce and
Companies are complete and up-to-date in all respects; the excerpts
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(extraits Kbis) from the Registry of Commerce and Companies regarding
the Companies attached hereto as Schedule 1.1 (and which are dated no
more than three months from the date of this Agreement) are true and
accurate as of their respective dates.
(iii) The Companies are not in a state of insolvency or unable to meet
their payment obligations as they become due (cessation des paiements)
and are not and have never been subject to a judicial reorganisation
(redressement judiciaire) or judicial liquidation (liquidation
judiciaire) proceeding or any receivership or composition with
creditors (reglement amiable) or collective bankruptcy proceedings
provided for by Law No. 84-148 of March 1, 1984, nor have they
requested an extension period (delai de grace) pursuant to Article
1244-1 of the French Civil Code.
(iv) The Companies (i) have the corporate power and authority to hold, and
hold, all governmental and other authorizations and permits allowing
them to own all of their properties and other assets and to carry on
their business as it is currently being conducted, and (ii) are in
compliance with all laws and regulations to which they are subject.
The Companies are not in default with respect to any judgement or
order of any court, arbitration panel, or government department or
agency.
(v) The Subsidiaries are the only direct or indirect subsidiaries of the
Company. Except as listed in Schedule 1.1, none of the Companies has
been over the last five years, directly or indirectly a member of any
partnership (societe en nom collectif), joint venture, economic
interest grouping, or any other organization or structure having
unlimited liability.
(vi) Except as set forth in Schedule 1.1 and other than its Subsidiaries,
none of the Companies has, since January 1, 1996, (i) held any shares
in any corporation or (ii) exercised any office as board member or
manager of any corporation or (iii) acted as de facto manager of any
corporation.
1.2 The Shares
(i) The Shares are fully paid-in and freely transferable, subject only to
receipt of Board of Directors' approval as provided in the statuts of
the Company.
(ii) There exists no agreement or undertaking pursuant to which any person
is, or could become, entitled to request the issuance of new shares by
the Companies. The Companies have not issued any securities which
could give rise to a capital increase or the issuance of securities
granting the right to any amounts which the Companies may distribute
or voting rights, or which could result in any limitation of the
rights attached to the Shares.
(iii) Each of the Warrantors has full and valid title to the Shares set out
against his/her name in Schedule 1.1 hereto free from any lien,
charge, or encumbrance, or any other third party rights and at the
Closing Date, such title, as well as title to any Minority Share
transferred, shall be validly transferred to the Beneficiary or to
such person or persons as the Beneficiary may specify pursuant to the
Share Purchase Agreement. All the authorizations
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which must be obtained prior to the transfer of the Shares, as
provided by the Company's or Orsymonde's statuts and by applicable
law, have been or, at the Closing Date, will have been obtained.
(iv) A complete and accurate list of shareholders in each of the Companies,
with an indication of the number of shares or securities held by each
of them, is included in Schedule 1.1.
The Companies have full and valid ownership of the shares and
securities listed in Schedule 1.1. Such shares and securities are free
and clear of all liens, encumbrances, sureties, preferential
acquisition rights, call options, restrictions of any nature
whatsoever on their free transferability (except for any approval
right provided by applicable law or the articles of association, a
copy of which is attached hereto as Schedule 1.1), or claims of any
nature whatsoever, originating prior to, or which may arise as a
result of, the sale provided in the Share Purchase Agreement; such
shares and securities represent the percentages of capital, voting
rights, and dividend rights in each of the corresponding Companies
stated in Schedule 1.1.
The share capital of each of the Companies is as set forth in Schedule
1.1, which also states the number of shares or securities issued by
each of them. All of the shares or securities of each of the Companies
are validly issued and fully paid-up. Except for such shares or
securities, the Companies have not issued any shares, securities,
rights or transferable securities of any nature whatsoever. There are
no options, promises, subscription vouchers or other agreements or
undertakings according to which any of the Companies is obliged, or
may be obliged, to issue any securities, shares, rights or other
transferable securities. None of the securities issued by the
Companies is listed on any stock exchange or unlisted market.
1.3 Effects of the Transfer of the Shares
Except as set forth in Schedule 1.3, the transfer of the Shares to the
Beneficiary as provided in the Share Purchase Agreement will not result in:
(i) any breach of any agreement or undertaking by the Companies;
(ii) the possibility for any person having dealings with the Companies to
terminate any agreement or contract or to modify the effects thereof,
or to claim the reimbursement of any subsidy or grant or loan or
advance;
(iii) the amendment, cancellation or revocation of any permit,
authorization or license of any kind whatsoever, necessary or
desirable for the operations of the Companies' business, or the
amendment, cancellation or revocation of any preferential tax
treatment or subsidy or other assistance granted by governmental or
quasi-governmental authorities;
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(iv) the possibility for a third party to invoke any guarantee, surety,
letter of comfort, or any other document having an equivalent effect
which may have been granted by the Companies;
1.4 Financial Statements of the Companies
(i) The corporate accounts (including balance sheet, income statement, and
notes to the accounts, including off-balance sheet items for the
French companies) of the Companies as of December 31, 1999, and as of
December 31, 2000 (hereinafter together called the "1999 and 2000
Corporate Financial Statements") and the consolidated accounts
(including balance sheet, income statement, cash flow statement, and
notes to the accounts, including off-balance sheet items) of the
Company as of December 31, 1999 and December 31, 2000 (hereinafter
called the "1999 and 2000 Consolidated Financial Statements") are
attached as Schedule 1.4 and are together referred to herein as the
"Financial Statements".
Subject to the provisions set forth in Schedule 1.4:
(ii) The Financial Statements of the French companies have been prepared in
accordance with accounting principles generally accepted in France
(i.e., as set forth in the Nouveau Plan Comptable Francais and in
accordance with the recommendations of the Ordre des
Experts-Comptables Francais and the Conseil National de la
Comptabilite), and such principles have been consistently applied by
the French Companies. This representation and warranty applies mutatis
mutandis to the corporate financial statements for 1999 and 2000 of
the Swiss companies.
(iii) The Financial Statements have been prepared in the form required by
applicable law and present fairly and accurately the Companies'
financial condition at, and the results of their respective operations
for the financial period ended on, the periods there indicated.
(iv) At the dates of closing the Financial Statements, the Companies had no
liabilities or obligations other than those set out in the Financial
Statements as required by applicable regulation.
(v) The reserves for depreciation and other provisions appearing in the
Financial Statements were, as of the dates of closing the Financial
Statements, sufficient and have been determined in accordance with
applicable legislation, and are conservative.
(vi) All the accounts, books and records of the Companies have been fully,
properly and accurately kept and completed, as required by applicable
regulation. In particular, they present fairly and completely the
financial, contractual and business condition of the Companies and of
the plant and machinery, fixed and current assets and liabilities
(actual and contingent), debtors, creditors and inventories and work
in process of the Companies.
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(vii) None of the Companies has any off-balance sheet commitments (within
the meaning of accounting principles generally accepted in France),
except for items mentioned in the Financial Statements and in Schedule
1.4 and, in particular, none of them has granted any guarantees (in
any form whatsoever, including as a comfort letter), sureties or other
commitments having equivalent effect, with regard to the performance
of obligations contracted by third parties (including partners,
shareholders, corporate officers or members of their staff). None of
the Companies is participating in any portage transactions or interest
rate or exchange rate swap agreements, nor are they bound by any
undertakings made on a futures market.
(viii) To the Warrantors' knowledge, the estimate made by the Companies of
thirty million euros (Euro 30,000,000) for the cost of the extension
of the research and development facility in Maisons-Alfort and the new
factory in Mitry-Mory, in light of the information available to the
Sellers, represents a reasonable good faith estimate of the costs of
such construction work.
1.5 Receivables
The trade and other receivables of the Companies as shown in the Financial
Statements are valid and have been collected, or are collectible in full,
within the relevant legal or contractual time-limits in accordance with
past practices (subject to any provision for bad and/or doubtful accounts).
1.6 Inventories
Except as set forth in Schedule 1.6:
The inventories reflected in the Financial Statements consist of usable
articles which, with respect to their quality and quantity, can be sold in
the normal course of business at a price at least equal to the value at
which they appear in the Financial Statements, namely the lower of cost and
net realizable value. The Companies do not hold in their inventories any
products on consignment which belong to third parties, or which are subject
to a title retention clause, and no undertakings have been given to take
back the inventories of any agents, distributors or other representatives
of the Companies. The current levels of inventories are adequate for the
present and anticipated requirements of the Companies.
1.7 Taxes and Similar Charges
Except as set forth in Schedule 1.7:
(i) The Companies are in compliance, and have always complied, with all
applicable tax or customs regulations.
(ii) The provisions for taxes and the provisions for social and similar
charges (including, but not limited to, social security contributions,
and contributions to complementary welfare
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and pension schemes) which appear in the Financial Statements, as
required by applicable regulations, are sufficient for the payment of
all taxes, social and similar charges due or accrued at December 31,
2000 (regardless of the date of the event which is the origin of the
taxes, social or similar charges and regardless of the date on which
payment thereof is due). The Companies have filed all national,
departmental and local tax and social security returns at the required
time and have kept copies of the originals filed. All national,
departmental and local taxes, and duties (including, but not limited
to, company tax, value added tax, business tax, registration tax, land
tax and customs duties) and all social and similar charges owed by the
Companies or payable at the date of this Agreement have been paid
within the legal time limits.
(iii) The Companies have available all documents needed to justify the
information contained in the returns or documents mentioned in
paragraph (ii) hereinabove, as well as their compliance with
applicable tax or customs regulations. The Companies have available
all documents necessary to justify the existence and the amount of any
tax losses to be carried forward (whether concerning an ordinary loss
or deferred depreciation, regardless of the original fiscal year), of
any tax credits or claims they may have against any tax or
administrative authority whatsoever either for refunds already
obtained from such authorities, or for refunds to be obtained in the
future. More generally, the Companies have complied with, and will
remain in a position to comply with, their obligations concerning time
limits in which to retain documents in particular, as regards the
French companies, as required by Article L 102 B of the Code of Tax
Procedure.
(iv) The Companies have withheld all tax and/or social or similar charges
to be withheld by them as required by applicable regulation.
(v) The interest paid to the Companies' shareholders prior to the date of
this Agreement has never exceeded the maximum authorized by Articles
39-1 3(degree) and 212 of the General Tax Code.
(vi) None of the Companies is subject of any inspection or inquiry, nor has
received any request for information or notice from the tax or social
security authorities or any similar bodies. To the Warrantors' best
knowledge, no such inspections or inquiries are anticipated. No amount
is due by the Companies with respect to the letters of comments issued
in connection with the URSAAF audit which gave rise to the assessment
statements (controle et etats des redressements URSAAF) attached in
Schedule 1.7.
(vii) With the exception of Lafon Pharma SA and Genelco SA, the Companies
are, and always have been, exclusively residents of France.
(viii) The tax valuation of assets and liabilities at the date the
Financial Statements were prepared have been calculated in accordance
with applicable regulations. The Companies do not benefit from, nor
have they benefited from, except, as the case may be, in connection
with tax consolidation, a suspension, postponement or deferral of tax,
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especially by reason of a reorganization transaction (for example,
merger or partial spin-off of assets) made prior to the Date of this
Agreement.
(ix) None of the Companies has ever been party to a transfer, sale,
exchange, contribution of any sort whatsoever for which it did not pay
registration, contribution or transfer taxes, stamp duties, real
estate publication taxes or others, that it is legally or
contractually liable to pay.
(x) As at the date of this Agreement, the Companies mentioned in Schedule
1.7 are members of a tax group formed as provided under Article 223 A
of the French tax code (hereinafter called the "Tax Group Companies")
and have entered into a tax consolidation agreement. The Tax Group
Companies have always complied with the French tax regulations
applicable to consolidated tax groups (including all rules concerning
the election for the tax group, the filing of the tax group returns,
and the computation of the Tax Group income). Since their election for
the tax group, no de-grouping event has occurred that could affect
either the tax group as whole or one of the Tax Group Companies as a
single member of the tax group. The Tax Group Companies should not
bear any additional tax liability as a consequence of their departure
from the tax group, other than the normal tax liabilities they would
have borne in the normal course of their business, should they never
have been a member of the tax group, as provided under applicable
French regulations.
1.8 Ownership of Assets
(i) Real Estate
Except as set forth in Schedule 1.8:
(a) Each of the Companies has appropriate facilities at its disposal
for purposes of carrying out its activities, and is either the
owner, the tenant, the credit-lessor ("credit-preneur"), or
otherwise legitimate occupant of all of the buildings existing
now or to be constructed which are necessary for the conduct of
its operations. Such buildings as well as those owned by any of
the Companies, but which are not necessary for the conduct of its
operations, are hereinafter collectively referred to as the
"Buildings" and are listed in Schedule 1.8 hereto. None of the
Buildings purchased by any of the Companies is the subject of a
title retention clause. Those Buildings existing now or which may
be constructed which are used by the Companies and of which they
are not the owners are leased by the Companies under the terms of
valid leases giving them either commercial ownership rights or an
option to acquire the Buildings upon expiration of the lease, as
the case may be. The Buildings are not the subject of any
expropriation or total or partial requisition measures, or of any
other administrative measures which may materially adversely
affect their value, nor are they the subject of any encumbrances
which may affect their use, or of any mortgages, pledges, liens
or inscriptions whatsoever to the benefit of any third parties.
The Buildings already constructed comply with urbanization
regulations and applicable safety standards;
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the relevant certificates of compliance have been issued. The
Buildings are in a normal condition of use, maintenance and
repair.
(b) The Companies have received no notice with respect to Buildings
they use or own of any actions for hidden defects, failure to
comply with regulations or actions invoking the builders'
liability.
(c) The business carried on in those Buildings covered by leases or
credit-leasing ("credit-bail") agreements is duly authorized by
such agreements. Such agreements do not provide that the lessee
shall be responsible for the cost of any work required to bring
the Buildings into compliance with applicable regulations. The
rent has been revised in accordance with legislation, applicable
regulations, and contractual provisions, and there has been no
notice of their termination or exchange of correspondence
concerning such termination.
(d) None of the Buildings already constructed and owned by the
Companies has been built on land not owned by the Companies.
(e) The Companies have received no notice of any decision by any
competent authority which may restrict or modify the permitted
use of any of the Buildings used by any of the Companies.
(ii) Movable Property and Businesses ("Fonds de Commerce")
Except as set forth in Schedule 1.8:
(a) All movable property, materials, installations and equipment used
by the Companies or owned by any one of them are in a normal
state of use, maintenance and repair, are free from material
defects, have been maintained in accordance with normal industry
practice, and all applicable legislative or regulatory provisions
have been complied with. Such movable property, materials,
installations and equipment are either fully owned by the
Companies and are not subject to any liens, pledges, third party
rights or agreements whatsoever, or are used or retained by the
Companies under the terms of a valid lease.
(b) The Companies' businesses ("fonds de commerce") have been
operated in a normal manner, in accordance with applicable laws
and regulations, so as to maintain their activities and safeguard
their existence. The Companies have full ownership of such
businesses, which are not the subject of any liens, pledges,
third party rights or agreements whatsoever, nor of any claims or
actions of any nature whatsoever.
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1.9 Leases
Except as set forth in Schedule 1.9:
(i) No leases made with third parties to which the Companies are a party
contains any unusual provision. All facilities in which the Companies
conduct their operations under terms of a commercial lease are subject
to the provisions of the Decree of September 30, 1953, and are
registered at the Registry of Commerce and Companies.
(ii) No notice to terminate has been given to the Companies in respect of
any of the leases, and the Companies have not been responsible for any
act or omission which could justify the lessor in terminating any such
lease.
1.10 Intellectual Property
(i) Schedule 1.10 contains a list of the patents and published patent
applications, trademarks, tradenames, copyright, logos, designs,
software (other than current), and other intellectual property rights
(hereinafter together called the "Rights") used by the Companies and
which are necessary to make, use or sell any products currently sold
or under development by any of the Companies.
Except as set forth in Schedule 1.10:
(ii) The Rights are owned by the Companies as indicated in Schedule 1.10
free from any charge or encumbrance, or are used pursuant to valid
licenses from third parties of which details are given in the said
Schedule 1.10. Schedule 1.10 also identifies each license or other
agreement pursuant to which any of the Companies has licensed,
distributed or otherwise granted any rights to any third party with
respect to any Rights.
(iii) To the Warrantors' knowledge, the Companies have not infringed, and
are not infringing, any rights belonging to any third party relating
to any patent, trademark, trade name, copyright, logo, design or
software or any other intellectual property rights belonging to third
parties.
(iv) None of the present or former corporate officers ("mandataires
sociaux") or employees of the Companies owns, directly or indirectly,
in whole or in part, any Right, nor do they have the right to
compensation or remuneration in connection with any such Right.
(v) The Companies have the unfettered right to use their corporate and
trade names of which they have full title and enjoyment, without
paying any royalty to a third party.
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1.11 Contracts
Subject to the contents of Schedule 1.11:
(i) None of the Companies has (a) entered into any material contract which
gives rise to duties or liabilities which are unusual in relation to
the normal rules of proper management of a company in the industry
involved, and (b) is in breach of any of its obligations under any
material contract.
(ii) All of the contracts made by the Companies are valid and enforceable.
None has been entered into in violation of applicable laws or
regulations, and the Companies and the other contracting parties have
respected their obligations thereunder. No such contract made by the
Companies was entered into outside the normal course of business.
(iii) The transfer of the Shares on the Closing Date to the Beneficiary
will not result in the accelerated maturity of any loan or guarantee
agreement, or any other payment to be made to any third party under
any contract.
(iv) The execution and performance of this Agreement (a) do not and will
not result in the termination of any contract, (b) do not and will not
conflict with, or result in any violation or breach by the Company or
any Subsidiary of any contract, and (c) will not grant to any other
contracting party the right to terminate or modify any such contract.
(v) Neither the Warrantors, nor the Companies has received any notice
whatever pursuant to which any of the ten (10) largest customers of,
or suppliers or lenders to, the Companies has disclosed its intention
to cease or substantially reduce its commercial relationship with the
Companies for any reason whatsoever including, without limitation, as
a result of the transfer of the Shares to the Beneficiary.
(vi) None of the Companies is bound, except for intercompany agreements, by
any contract directly or indirectly with any of the Warrantors or any
of their spouses, parents or children or any legal entity controlled
by any of them.
(vii) All of the contracts have been made on terms and conditions
consistent with practices existing in the industry involved and the
Companies' normal and usual business practices. More specifically no
contract requires one of the Companies to accept purchase prices which
could be imposed on it in the future, otherwise than as permitted by
applicable regulations.
(viii) None of the Companies has been informed of any intent on the part of
its suppliers or customers to terminate or reduce their business
relationship, where such termination or reduction would significantly
affect the relevant Company's ability to supply its commercial outlets
or its financial position.
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(ix) The Companies have received no payment of any royalty under agreements
made (a) between Laboratoires L. Lafon and Laboratoires Roger Bellon,
dated January 20, 1981, for the use of a trademark in Iran and Libya,
and (b) between Laboratoires L. Lafon and Vetoquinol, dated September
14, 2000, for the sale and promotion of products in Afghanistan,
Burma, North Korea, Cuba, Iran, Iraq, Libya, Sierra Leone, and the
Sudan.
1.12 Personnel
(i) Set forth in Schedule 1.12 is:
(a) a list of all the employees of the Companies including their age,
seniority and present annual compensation (including any right to
bonus, fringe benefits, profit sharing) and, for persons having
an employment contract for a definite period, the date of
expiration of the contract. No person not shown on such list may
claim employment with any of the Companies;
(b) a list of all pension benefits offered by the Companies to any of
its/their present or former employees or corporate officers;
(c) a list of temporary personnel, of outside collaborators, of sales
representatives (VRPs) and any other persons who do not have the
status of salaried employees but who regularly collaborate in the
operations of the Companies;
(d) a list of the collective bargaining and other collective
agreements applicable to the personnel of the Companies
(including any agreement relating to bonuses, pensions, deferred
compensation, profit sharing or share option schemes);
(e) a list of practices in effect and particular to one of the
Companies and which provide benefits which are greater than those
required by applicable law or the collective bargaining or other
collective agreements;
(f) model employment contracts for an indefinite term on a full time
basis made by Orsymonde and Laboratoire L. Lafon and a list of
all benefits (including, but not limited to, increased severance
pay, extended notice periods, fringe benefits, pensions) granted
to employees or officers which are (i) greater than those
provided with respect to their level under the applicable
collective bargaining and other collective agreements and usage
listed in Schedule 1.12 and (ii) which are not otherwise
indicated in such Schedule, or in the above-described model
employment agreements.
(g) a list of all commitments made vis-a-vis present or former
employees or corporate officers.
(h) a list of current labor litigation or with former or present
officers (mandataires sociaux), indicating the parties thereto,
the subject matter of the dispute, the
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amount claimed from the Companies, and the provisions made in the
Financial Statements in connection therewith.
Subject to the contents of Schedule 1.12:
(i) None of the Companies is the subject of any particular
proceedings by the Labor Inspectorate (Inspection du Travail) for
failure to comply with labor legislation.
(j) Neither the Warrantors nor any of the Companies have undertaken
to grant any benefits to any employees or corporate officers of
the Companies as a result of the completion of the sale of the
Shares contemplated in the Share Purchase Agreement.
(k) The Warrantors have ensured that the central workers' committee
of Laboratoire L. Lafon has been informed of, and consulted in
connection with, the conclusion of the sale transaction set forth
in the Share Purchase Agreement and the transactions related
thereto which are required to be made known to employee
representatives.
(l) None of the Companies has made any undertakings within the
context of any redundancy plan ("plan social") which has not been
performed in full, nor has any of the Companies granted any
promises in connection with any collective dismissal.
(m) All of the Companies are now and have been in compliance with all
provisions of labor and social security legislation, including
without limitation legislation concerning employee
representation, the collective bargaining agreements applicable
to the Companies, and individual employment contracts.
(ii) To the best of the knowledge of the Warrantors, none of the employees
of the Companies has made it known that he/she intends to terminate
his/her employment agreement.
(iii) The Warrantors are not aware, with respect to the Companies, of any
threatened strikes, lock-outs, pickets, sit-ins, or other industrial
action at any of the premises of the Companies.
1.13 Insurance
(i) The activities of the Companies and all the assets used by them are
validly insured with reputable companies. A list of insurance policies
taken out by the Companies in connection with their businesses is set
forth in Schedule 1.13. The terms of the policies are such as would be
acceptable to a normally prudent business person carrying on a similar
business with similar assets.
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(ii) The Companies have fulfilled all of their obligations pursuant to the
above-described insurance policies, in particular with respect to the
declarations of risks and claims and the payment of premiums relating
to such policies. As at the date of this Agreement, none of the
Companies has received or given any notice of termination or
non-renewal of any such policies, or received any notice from any of
the relevant insurance companies of their intention substantially to
increase the premiums due, or to raise the deductibles or to reduce
the coverage provided.
1.14 Product Liability
(i) No claim has been made against any of the Companies since January 1,
1996 in respect of damage suffered resulting from a defect in any
product manufactured, assembled or sold, and no product manufactured,
assembled or sold by the Companies has any latent defect or other
defect likely to result in a claim for damages from a purchaser or
user of the product or a third party.
(ii) No incidents of a medical nature have been reported since January 1,
1996, that put into question the continued manufacture and sale of the
Companies' products or indicate that the Companies may face liability
based on such incidents or the matters therein reported.
1.15 Environment, Health and Safety
Subject to the information set forth in Schedule 1.15:
(i) The Companies' operations have always been, and are being, conducted
in compliance with the applicable laws and regulations in force
concerning the protection of the environment and occupational health
and safety, and no product manufactured, assembled or sold or any
service supplied by the Companies is in violation of such laws and
regulations.
(ii) The Companies have at all times obtained and complied with all
authorizations, licenses and other approvals required by the laws and
regulations in force. No notice has been received from any competent
body to the effect that any such authorization, license or approval
has not been complied with or has been withdrawn.
(iii) To the Warrantors' knowledge, (a) no leak or spill or disposal of any
substance, material or waste which is regulated as "toxic" or
"hazardous" under any applicable environmental regulation has occurred
on any real property currently owned or occupied by the Companies, (b)
none of the Companies is obligated or reasonably likely to become
obligated to clean up or otherwise remediate any contaminated surface
water, ground water or soil, and (c) it is not reasonably foreseeable
that it will be so obligated.
(iv) The Companies do not use, for their current operations, products or
substances which are not currently used for equivalent operations and
are not in compliance with the applicable legislation.
14
(v) The Warrantors have no knowledge of any environmental damage related
to the Companies' operations or their operation of sites which they
own or lease.
(vi) No dangerous or toxic wastes or substances are being stored or treated
on land belonging to, or leased or used by, the Companies, nor, to the
Companies' knowledge, has there been. None of the Companies has
transported or caused to be transported any dangerous or toxic wastes
or substances otherwise than in compliance with applicable
regulations. None of the Companies, either directly or through a third
party, has disposed of wastes from any product or packaging whatsoever
otherwise than in compliance with applicable regulations.
1.16 Litigation
(i) Save for the cases brief details of which are set out in Schedule
1.16, there is no current, threatened or pending litigation,
arbitration, claim, administrative proceeding, administrative or tax
investigation or any other action or proceeding pending or
contemplated whether as plaintiff or defendant in relation to the
Companies relating to costs, damages, expenses or losses of amounts in
excess of twenty thousand euros (Euro 20,000), and the Warrantors are
unaware of any facts which might give rise to any such action or
proceeding.
(ii) No administrative, judicial or arbitration decisions have been
rendered against any of the Companies which may significantly and
adversely affect its financial or economic situation and prospects.
1.17 Relations with Warrantors
Except as otherwise stated in Schedule 1.17, neither the Warrantors, nor any
members of their families, nor any entity controlled by the Warrantors or
members of the family of the Warrantors, in all cases either directly or
indirectly:
(i) hold, either together or separately, in whole or in part, any
property, assets or rights whatsoever, which the Companies are to use
or of which they are a beneficiary for purposes of conducting all or
part of their operations, nor do they hold any right of any kind
related thereto, or any interest in the Companies;
(ii) is a creditor or debtor of the Companies as a result of any
undertaking whatsoever, or, more generally, has any present or future
rights against the Companies; or
(iii) has granted any guarantees or security interest for any of the
Companies' obligations, or is the beneficiary of any guarantee granted
by one of the Companies as security for any of their obligations.
15
1.18 Loans
Except for the loans listed in Schedule 1.18, loans made in connection with 1%
construction, loans made to other Companies, and loans previously made and
completely repaid (principal and interest), the Companies have not granted any
loans to any individual or to any legal entity.
1.19 Expenses Relating to the Sale of the Shares
(i) Except as otherwise provided in this Agreement and/or in the Share
Purchase Agreement, none of the Companies has borne, nor is required
to pay, amounts relating to the sale of the Shares set forth in the
Share Purchase Agreement;
(ii) Except as otherwise set forth in this Agreement and/or the Share
Purchase Agreement, what is set forth in Schedule 1.19, and what has
been reserved for in the Companies' financial statements as of
December 31, 2000, neither the Warrantors nor Companies have made any
agreements with any intermediaries or advisors whatsoever which would
require one of the Companies to pay, as from January 1, 2001, either
directly or indirectly, any compensation, commissions or fees as a
result of the signature of this Agreement or the Share Purchase
Agreement, or the performance of the transactions contemplated
therein.
1.20 Compliance with Legislation and Regulations
Subject what is set forth in Schedule 1.20:
(i) All governmental, administrative or regulatory approvals, consents,
permits or other authorizations (hereinafter called the
"Authorizations") required for the performance of each of the
Companies' activities have been obtained and are in full force and
effect, including without limitation those relating to activities of
pharmaceutical companies and the sale of pharmaceutical products, and
the activities of the Companies are carried out in accordance with
such Authorizations. All such Authorizations are described in Schedule
1.20.
(ii) No proceedings of any nature whatsoever have been undertaken which may
result in the withdrawal, suspension or amendment of any of the
Authorizations, nor are any such proceedings threatened, to the
Warrantors' best knowledge.
(iii) The Companies are in compliance, and shall continue to comply, with
all legislation, regulations or recommendations of any administrative
bodies or authorities which may be applicable to them. In particular,
they have not granted to any doctor or pharmacist benefits which are
in violation of the procedure provided in Article L. 4113-6 of the
Public Health Code (Code de la Sante Publique); all advertising for
pharmaceutical products of establishments made by or on behalf of the
Companies complies with the applicable provisions of Article L 5122-1
et seq. of such Code, and the Companies have complied with all
applicable requirements as concerns adverse reaction reporting
("pharmacovigilence") under Article L. 5144-17 of such Code.
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(iv) All clinical trials were, and if still pending, are, being conducted
in a manner that (a) follows, in all material respects, protocols,
procedures and controls generally used by qualified experts in
clinical studies, (b) has been duly notified to all competent review
boards and authorities, (c) are covered by insurance policies of the
types and in the amounts required by applicable laws and regulations,
and (d) are consistent in all material respects will all applicable
regulations.
(v) The Companies have complied with the provisions of the Convention (and
any amendments thereto) entered into pursuant to Article L. 162-17-4
of the Code de la securite sociale. A complete copy of such agreement
and any amendment or proposed amendment thereto are set forth in
Schedule 1.20. The Companies have made no commitments to any public
authority other than those provided for in such Convention, as
amended.
1.21 Absence of Changes
Except as set forth in Schedule 1.21, since December 31, 2000 and up to the date
of this Agreement there has not been in relation to the Companies:
(i) any change in the financial condition, the assets, liabilities,
business or operations otherwise than in the normal course of
business;
(ii) any change in the customary terms of payment offered with respect to
accounts receivable, or offering third parties any incentive (other
than discount terms equal to those customarily offered to customers)
to make accelerated payments of accounts receivable of the Companies;
(iii) any acceptance of terms with respect to accounts payable which vary
from those customarily offered or postponing the payment of any
accounts payable past the due date hereof;
(iv) any offer of terms, discounts or taking of any other action which
results in customers increasing their levels of inventories of
products of the Companies beyond what is customary with respect to
such products or necessary for the proper conduct of the business;
(v) any declaration or payment of any dividend or any other distribution
of profits or reserves;
(vi) any damage, destruction or other loss (whether or not covered by
insurance) likely adversely to affect their assets (real or personal,
tangible or intangible);
(vii) any purchase or sale of securities by any of the Companies, any
issuance by any of them of shares or other securities, rights or
options to purchase or subscribe for shares in any of the Companies,
or which carry the right to acquire or subscribe for securities which
represent an interest in the share capital of any of the Companies;
17
(viii) any loan incurred, granted, promised or secured by any of the
Companies in excess of one hundred thousand euros (Euro 100,000);
(ix) the assumption of an obligation or liability other than current
obligations or liabilities incurred in the normal course of business;
(x) any termination, waiver, amendment of, or default in relation to, any
contract, undertaking or arrangement other than in the normal course
of business;
(xi) except for increases granted in the normal course of business and,
especially, cost-of-living allowances or increases required by
applicable labor law, any collective bargaining or other collective
agreement or usage, any increase or promised increase in the
compensation of employees, agents, sales representatives or corporate
officers or in any of their benefits;
(xii) any sale, lease or transfer of any tangible or intangible assets, nor
any cancellation or waiver of any receivables otherwise than in the
normal course of business;
(xiii) any guarantee, surety or letter of comfort in respect of the
obligations of third parties;
(xiv) any lien, security interest, pledge, mortgage, easement, or other
charge or encumbrance granted over any tangible or intangible assets;
(xv) any acquisition of inventory not consisting of articles usable or
which cannot be sold in the normal course of business;
(xvi) any account receivable which is not valid and has not been collected,
or is not completely collectible, within the time period provided by
law or contract, consistent with past practices; or
(xvii) any labor unrest, conflict, strike, lock-out, sit-in or similar
event.
1.22 Lists
Set out in Schedule 1.22 are lists showing the following information:
(i) the name of each person who has received general or special
powers-of-attorney for the Companies;
(ii) banks and bank accounts and credit lines showing (a) the names of
people with power of signature, (b) the amount of each credit line and
the level of utilization and any long, medium or short term credit or
any other financing agreement;
(iii) all guarantees, sureties or endorsements granted in favor of third
parties in excess of ten thousand euros (Euro 10,000) individually;
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(iv) all agency, license, distribution or representation agreements as well
as commercial agreements related to the aforementioned agreements
(indicating the parties' respective names).
1.23 General Matters
(i) All the information contained in this Agreement, including the
recitals and the Schedules hereto and the Share Purchase Agreement, is
complete and accurate in all respects.
(ii) There is no existing fact or event known to the Warrantors which is
likely to have a material and adverse effect on the business or
financial condition of the Companies and which has not been disclosed
to the Beneficiary in writing by, or on behalf of, the Warrantors. For
the sake of good order, it is hereby noted that the Representations
and Warranties may be affected by the transactions set forth in
Schedule 5(b) to the Share Purchase Agreement.
(iii) For the purposes of paragraph (ii) above, more generally, the
Warrantors shall be deemed to "have knowledge of" a fact or event for
purposes of this Agreement, if any one of them or any of the persons
listed in Schedule 1.23 had knowledge thereof, or would, having made
reasonable enquiry as a normally prudent business person in connection
with his/her responsibilities, have had, knowledge thereof.
1.24 Authority Relative to this Agreement and the Share Purchase Agreement
(i) The execution and performance of this Agreement and of the Share
Purchase Agreement by the Warrantors do not and will not conflict
with, or result in, any violation or breach of, or any default under,
any law or any obligation of the Warrantors, or any of them, or any
other agreement to which any of them is a party, nor is there any
litigation current or pending involving any of the Warrantors which
could prevent or hinder their execution and performance of this
Agreement and the Share Purchase Agreement.
(ii) The Warrantors have full individual power, authority and right to
enter into this Agreement and the Share Purchase Agreement and to
consummate the transactions contemplated in this Agreement and Share
Purchase Agreement which concern them.
2. Representations and Warranties of the Beneficiary
The Beneficiary hereby makes the ordinary representations and those provided by
law (declarations ordinaires et de droit) and makes the specific representations
warranties (hereinafter called the "Beneficiary's Representations and
Warranties") set forth below. The Beneficiary recognizes and accepts that the
Warrantors have entered into the Share Purchase Agreement and the
Representations and Warranties Agreement in reliance on the Beneficiary's
Representations and Warranties.
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2.1 The Beneficiary is a corporation duly incorporated, validly existing and in
good standing under the laws of its jurisdiction of incorporation.
2.2 The Beneficiary has full power and authority to execute and perform this
Agreement and the Share Purchase Agreement. The execution and delivery of
this Agreement and of the Share Purchase Agreement have been duly
authorized by all necessary corporate action on the part of the
Beneficiary. This Agreement and the Share Purchase Agreement have been duly
executed and delivered by the Beneficiary. The Beneficiary's obligations
under this Agreement and under the Share Purchase Agreement constitute
valid and binding obligations of the Beneficiary enforceable in accordance
with their terms.
2.3 The Beneficiary is not currently, and has not been in the past, the subject
of any proceedings with a view to the prevention or resolution of business
difficulties (or any similar proceedings), or an order of dissolution, and
there do not exist any reasons justifying such procedures.
2.4 The execution and delivery of this Agreement and the Share Purchase
Agreement by the Beneficiary and the performance of its obligations
thereunder (a) are not in violation or breach of, and will not conflict
with or constitute a default under, any of the terms of the Beneficiary's
by-laws, or any material contract, agreement or commitment binding upon the
Beneficiary, or any of its assets or properties; (b) will not result in the
creation or imposition of any lien, encumbrance, equity or restriction in
favor of any third party upon any of the assets or properties of the
Beneficiary; and (c) will not conflict with or violate any applicable law,
rule, regulation, judgment, order or decree of any government having
jurisdiction over the Beneficiary.
3. Indemnification
3.1 The Warrantors jointly and severally undertake to indemnify the
Beneficiary, by way of reduction in the Price, or, if the Beneficiary so
wishes, the Company or any relevant Subsidiary for the full amount of any
damage, loss, liability or expense of any kind (including without
limitation amounts paid in settlement, interest, court costs, costs of
investigators, fees and expenses of attorneys, accountants, financial
advisors and other experts, and other expenses) (hereinafter, the "Damage")
which results from:
(i) any breach by the Warrantors of their obligations hereunder or under
the Share Purchase Agreement; or
(ii) any inaccuracy, misrepresentation, error or omission in the
Representations and Warranties.
3.2 Save for claims in respect of tax or similar charges or social security
matters which may be made up to the expiry of the relevant statute of
limitations period, and for claims in respect of environmental matters
which may be made up to three (3) years following the Closing Date, any
claim for indemnification pursuant to paragraph 3.1 hereof must be made not
20
later than two (2) years following the Closing Date by notice in writing to
the Warrantors (hereinafter called the "Claim"). The Claim shall provide
the relevant facts and an estimate of the Damage. For the sake of good
order, it is understood and agreed that indemnification shall be due, if
the Claim is made within the relevant period, even if the quantification of
the Damage does not take place until after the expiration of such period.
3.3 Notice of any Claim shall be given to the Warrantors within thirty (30)
days of the Beneficiary becoming aware of the fact or circumstance giving
rise to such Damage. Notwithstanding the foregoing, any Claim relating to
tax or similar charges or social security, or, more generally, resulting
from a demand or claim made by a third party shall be notified to the
Warrantors within fifteen (15) days from the Beneficiary becoming aware of
the fact or circumstance giving rise to such Damage. Failure to give notice
of a Claim within the above-specified time periods shall not relieve the
Warrantors of their obligation to indemnify. However, any delay shall be
remedied by an award of damages on behalf of the Warrantors, if such delay
has hindered their defense, or, more generally, injured their rights under
this Agreement, to the extent of the damage thus shown, with the amount of
Damage being reduced thereby.
3.4 The Beneficiary shall provide the Warrantors with complete information on
the fact or circumstance giving rise to the Claim and shall enable them to
respond thereto, among other things by providing to the Warrantors, or
their counsel, access, at the Company's registered office or any other
place mutually agreed, on reasonable prior notice and for a reasonable
time, to all information and documents necessary for such purpose.
In connection with a Claim, or audit or any other proceeding at the behest
of, or against, a third party (hereinafter called the "Proceedings") the
Warrantors, if they so wish, shall have the right, at their own expense, to
join in the defense, directly or through their counsel, or the conclusion,
by way of amicable agreement, of any Proceedings. The Warrantors may, after
reviewing the documents and information made available to them, recommend
any step they deem appropriate, consistent with the Companies' corporate
interests, for the purpose of reducing or eliminating the Damage.
It is understood that the Companies will be responsible for their own
defense in connection with the Proceedings. However, the Beneficiary
agrees, both on its own behalf and on behalf of the Companies, not to
pursue any Proceeding, in particular not to enter into a settlement or
amicable agreement in such connection, without giving prior notice thereof
to the Warrantors and enabling them to make recommendations as provided in
the foregoing paragraph.
The Warrantors shall be relieved of their obligation to indemnify any
Damage, if the recommendations they make are not implemented, except where
the Beneficiary has conducted the Proceedings involved in a prudent and
appropriate manner consistent with the corporate interests of the Company
involved.
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3.5 All payments due under this Article 3 shall be made within one (1) month
from:
- the notice of the final judgment of any court having jurisdiction, if
the Damage relates to a claim by a third party, or the award of an
arbitration panel (without the need to obtain enforcement thereof), or
the final settlement setting forth the real and final nature of the
Damage;
- in all other cases, the date on which notice of the Claim is given by
the Beneficiary to the Warrantors or, if later, from the date on which
the Damage is quantified,
provided, however, that, in both cases, and assuming the Warrantors
challenge the Claim, payment shall be made within one (1) month from the
notice of the final judgment of the courts having jurisdiction, of an
arbitration award (without the need to obtain enforcement thereof), or the
final settlement relating to the dispute involved.
3.6 The obligation to indemnify may be enforced against the Warrantors only if:
- the Damage is greater than thirty-five thousand US dollars ($ 35,000),
provided, however, that the amount of a series of Damages resulting
from the same or similar fact or circumstance shall be added together
to calculate this minimum $ 35,000 amount; and
- to the extent the total value of the Damage is greater than three
million US dollars ($ 3,000,000), this obligation being applicable
only to the portion of the indemnification which is above such three
million US dollar ($ 3,000,000) amount, which shall be a deductible
amount. It is understood and agreed that Damage of less than the
minimum amount of $ 35,000 shall not be taken into consideration in
the determination of this deductible.
The maximum total amount which may be paid by the Warrantors to the
Beneficiary under this Article 3, shall, in any event, be limited to:
(i) the amount of the Price, i.e., four hundred and fifty million US
dollars (US$ 450,000,000) in case of fraudulent misrepresentation or
fraud by the Warrantors, or
(ii) one hundred and eighty U.S. Dollars ($ 180,000,000) in all other
cases,
provided, however, that all amounts paid under the Share Purchase Agreement
shall reduce such limits.
3.7 For the determination of the amount of the Damage, it is agreed that:
3.7.1 any tax assessments leading to a simple transfer of income or
expenses from one fiscal year to another, as well as any assessment,
especially relating to value added tax, which does not give rise to
any additional tax burden for the Companies shall
22
only be taken into consideration to the extent of penalties, interest,
or indemnities which may be involved;
3.7.2 if a specific amount of a reserve as set forth in the Financial
Statements or the Closing Accounts becomes irrelevant prior to the
determination of the amount of the Damage, the amount thereof shall be
calculated after deducting the amount of such reserve, with each
reserve which becomes irrelevant to be thus deducted only once;
3.7.3 any benefit of any kind, obtained or which may be obtained by the
Companies as a result of any Damage, such as, for example, (i)
reduction or savings or refund of taxes, (ii) creation or increase of
reportable losses, (iii) indemnification under any insurance policy,
shall be deducted;
3.7.4 if the Damage is covered in whole or in part by a specific provision
set forth in the Financial Statements or in the Closing Accounts, the
amount thereof shall be calculated, with the amount of such provision
to be deducted.
3.8 The Warrantors agree to indemnify the Beneficiaries for any French taxes
paid by the Beneficiaries or the Companies on the amounts received from the
Warrantors.
3.9 It is understood and agreed that:
3.9.1 a Damage claim may be indemnified only once, even if the fact or
circumstance giving rise thereto is covered by several Representations
and Warranties;
3.9.2 a fact or circumstance giving rise to a Price Reduction or Price
Differential as set forth in Article 6 of the Share Purchase
Agreement, or for which responsibility is assumed by the Sellers under
Article 5(g) of the Share Purchase Agreement, may not give rise to
indemnification under this Article 3;
3.9.3 more generally, a fact or occurrence giving rise to a payment by the
Sellers, under Articles 5(g) and 6 of the Share Purchase Agreement,
shall not be the basis for indemnification under this Article 3.
3.9.4 if, after payment by the Warrantors, an amount which constitutes
additional indemnification for a claim of Damage is, or could be,
recovered from a third party by the Beneficiary or one of the
Companies, they shall take all necessary steps to undertake such
recovery. The amounts recovered from such third party shall be
refunded promptly to the Warrantors up to the amounts already paid by
them under this Article 3.
3.9.5 Payments by the Warrantors of any Damage shall be converted into U.S.
dollars on the basis of the five-day average of the mid-range rate for
the five days preceding the
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payment date as published in the "US Currency Trading Dollar Exchange
Rates" table of the European edition of The Wall Street Journal.
3.10 The Beneficiary hereby waives any right to make a Claim which it might have
for indemnification of any Damage relating to occurrences, facts, or risks
disclosed in this Agreement, the Share Purchase Agreement, or the Schedules
thereto (hereinafter called the "Exceptions"), subject to the Exceptions
set forth in Schedule 3.10, for which the Beneficiary reserves any and all
rights to make a Claim on the terms and conditions set forth in Article
3.10 hereof. Simply mentioning an agreement, contract, or other fact in
this Agreement or the Share Purchase Agreement, or the Schedules thereto,
or the fact that the Beneficiary could have had knowledge thereof, because
of the reviews conducted prior to the Closing Date does not constitute
disclosure of an Exception.
4. Security for Payment
As security for the performance of their obligations under this Agreement,
a portion of the Price, i.e., forty five million U.S. dollars ($
45,000,000), shall be paid into escrow on the Closing Date with OBC, Odier
Bungener Courvoisier, bank, which will act as escrow agent for the benefit
of the Beneficiary, as provided in the Escrow Agreement.
5. Assignment - Substitution
5.1 This Agreement is personal to the parties and cannot be assigned by any of
them save that the Beneficiary may assign its rights hereunder to an
Associated Company or a third party to which the Shares are simultaneously
sold, provided that (i) such sale involve the entirety of the Agreement and
that (ii) the Beneficiary remain jointly liable for the performance, by the
Associated Company or the third party of the obligations incumbent thereon
under the Agreement.
5.2 In the event of the death or permanent mental incapacity of one or more of
the Warrantors, this Agreement shall be binding on his/her heirs and
successors or, as the case may be, legal guardian or trustee.
5.3 Any substitution made by the Purchaser under Article 7(c) of the Share
Purchase Agreement shall automatically substitute the Associated Company as
a co-contracting party under the terms and conditions of the
Representations and Warranties Agreement and the Escrow Agreement.
6. Expenses
Except as expressly provided in this Agreement and/or the Share Purchase
Agreement, each of the parties shall bear all the costs and expenses
incurred by it in connection with this Agreement and its negotiation,
signature and performance including, but not limited to, the fees and
disbursements of any professional advisor, attorney, accountant or any
other person whose services may have been used by the said Party.
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7. Confidentiality
7.1 The Warrantors and the Beneficiary undertake to hold in confidence and not
to disclose to third parties (except to their professional advisors and, in
the case of the Beneficiary, to any of its Associated Companies and, in the
case of the Warrantors, the persons whose names are set forth in Schedule
1.23) without the prior written consent of the other the terms and
conditions of the transactions contemplated by this Agreement.
7.2 All announcements or communications with governmental or administrative
bodies, employee representatives or others, by or on behalf of the parties
hereto or the Companies relating to the transactions contemplated by this
Agreement, shall be in terms agreed by the Parties, provided, however, that
(i) the Beneficiary shall be entitled to make such announcements as it
thinks fit to comply with the regulations of any securities exchange on
which securities of Cephalon or any Associated Company may be traded and
(ii) the Sellers may make statements and announcements required to employee
representation bodies after taking into consideration comments of the other
Party.
7.3 If for any reason the transactions contemplated by this Agreement are not
completed, the obligations of the parties pursuant to this Article 7 will
remain in force for a period of five (5) years from the date of this
Agreement.
7.4 It is understood and agreed, for the sake of good order, that this
confidentiality undertaking shall not limit the right of the Parties to
disclose or use the contents of this Agreement to defend or establish their
rights in connection with a legal proceeding, including, but not limited
to, before any governmental agency or arbitration panel.
8. Notices
8.1 Any notice required to be given under this Agreement shall be validly given
if sent by registered letter (with return receipt requested) or by express
delivery service with acknowledgment of receipt, or by hand delivery
against written acknowledgement of receipt to the following addresses or to
such other address as may have been communicated by either of the Parties
to the other in accordance herewith at least five (5) days prior to the
notice:
for notices to the Warrantors:
Mr. Francois Lafon
c/o Me. Joel Chevreau
Bureau d'Etudes Juridiques Peyre
174, rue de l'Universite
75007 Paris
25
for notices to the Beneficiaries:
Cephalon, Inc.
145 Brandywine Parkway
West Chester, Pennsylvania 19380
United States
To the attention of its General Counsel
With a copy to:
Dechert
55, avenue Kleber
75116 Paris
To the attention of: Jonathan Schur, Esq.
Notices shall be effective as of the date of receipt, provided, however,
that they shall be deemed received by the Party involved (i) three (3) days
from the first attempt to deliver the registered letter with return receipt
requested, or express delivery service, and (ii) the day of the handwritten
acknowledgement of receipt in the event of hand delivery.
8.2 The Warrantors irrevocably confer on Mr. Francois Lafon, who accepts, the
authority to accept notices and take any action with respect to this
Agreement on behalf of all of them. Any notice given to Mr. Lafon as
provided in Article 8.1 hereinabove shall be deemed to be notice to all the
Warrantors.
9. Governing Law and Jurisdiction
9.1 This Agreement shall be governed by and construed in accordance with French
law.
9.2 Any dispute arising in relation to this Agreement, its interpretation or
execution (including, without limitation, its validity, performance or
interpretation) shall be submitted to the Commercial Court (Tribunal de
Commerce) of Paris, including any demands for provisional or emergency
remedies.
10. Waivers
The failure by any party hereto promptly to avail itself in whole or in
part of any right, power or privilege to which such party is entitled
pursuant to the terms of this Agreement shall not constitute a waiver of
such right, power or privilege which may be exercised at any time. To be
valid, waiver by any party hereto of any such right, power or privilege
must be in writing and notified to the other parties as provided in this
Agreement.
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11. Interpretation - Miscellaneous
11.1 The descriptive words or phrases at the head of the Articles are inserted
only as a convenience and for reference purposes and are not intended in
any way to define, limit or describe the scope or intent of the Articles
which they precede.
11.2 Each of the Schedules is an integral part of this Agreement.
11.3 This Agreement constitutes the entirety of the agreement between the
parties with regard to the subject matter hereof and supersedes any
previous agreement or agreements whether verbal or written with regard to
this Agreement.
SIGNED in Paris by the parties on the day and year first above written.
Mr. Francois Lafon Ms. Andree Carpentier, widow
(veuve) of Mr. Louis Lafon
/s/ Francois Lafon /s/ Andree Carpentier
- --------------------- -----------------------
CEPHALON, INC.
/s/ Frank Baldino, Jr.
- -----------------------------------
By: Frank Baldino, Jr.
Title: Chairman & Chief Executive Officer
27