On behalf of the Registrant, the undersigned hereby certifies that the
following exhibit provides fair and accurate English translations of certain
material contained therein the original and official language of which is
French.
DEPUY, INC.
By: /s/ Steven L. Artusi
--------------------------------------
Steven L. Artusi
Senior Vice President, General Counsel
and Secretary
By: /s/ Thomas J. Oberhausen
--------------------------------------
Thomas J. Oberhausen
Senior Vice President and Chief
Financial and Accounting Officer
SHARE PURCHASE AGREEMENT
DATED 28 FEBRUARY 1997
BETWEEN
DEPUY, INC.
AND
PATRICK LANDANGER
ERIC LANDANGER
MARYVONNE GUIBERT
MICHEL COLOMBIER
RENEE LANDANGER
LOUIS LANDANGER
MARTINE BONNAVENTURE
GUY BONNAVENTURE
COUDERT FRERES
52, AVENUE DES CHAMPS-ELYSEES
75008 PARIS
FRANCE
SHARE PURCHASE AGREEMENT
BETWEEN :
- - DePuy, Inc., a corporation incorporated and existing under the laws of
Delaware, United States of America, having its principal office at 700
Orthopaedic Drive, Warsaw, IN 46581-0988, United States of America,
represented by James Lent, duly authorized for the purposes hereof,
(hereinafter referred to as the "Purchaser"),
ON THE ONE HAND,
AND :
- - Mr. Patrick Landanger, a French citizen domiciled at 85, quai d'Orsay,
75007 Paris, France;
- - Mr. Eric Landanger, a French citizen domiciled at 15, rue des Acacias,
52000 Jonchery, France; and
- - Ms. Maryvonne Guibert, a French citizen domiciled at 9, boulevard Gambetta,
52000 Chaumont, France;
(hereinafter referred to individually as a "Majority Shareholder" and
collectively as the "Majority Shareholders"), and
- - Mr. Michel Colombier, a French citizen domiciled at 512, chemin
Viralamande, 69140 Rillieux La Pape, France;
- - Mrs. Renee Landanger, a French citizen domiciled at 10, rue de Dijon, 52000
Chaumont, France;
- - Mr. Louis Landanger, a French citizen domiciled at 10, rue de Dijon, 52000
Chaumont, France;
- - Mrs. Martine Bonnaventure, a French citizen domiciled at 260, avenue du
Stade, 45770 Saran, France; and
- - Mr. Guy Bonnaventure, a French citizen domiciled at 260, avenue du Stade,
45770 Saran, France
(hereinafter referred to individually as a "Minority Shareholder", and
collectively as the "Minority Shareholders"),
(the Majority Shareholders and the Minority Shareholders being hereinafter
referred to individually as a "Seller", and collectively as the "Sellers"),
ON THE OTHER HAND,
(hereinafter referred to individually as a "Party", and collectively as the
"Parties").
2
WITNESSETH
WHEREAS, the Majority Shareholders own two hundred and nine thousand six hundred
and sixty-seven (209,667) shares representing one hundred percent (100%) of the
shares and voting rights in 3L, a societe anonyme with a capital of 209,667,000
French Francs divided into 209,667 shares with a par value of 1,000 French
Francs each, having its registered office at Z.I. "La Vendue", rue du Val, 52000
Chaumont, France, and registered with the Registry of Commerce and Companies of
Chaumont under number B 393 985 411 (hereinafter referred to as "3L");
WHEREAS, the Sellers own eight hundred and five thousand nine hundred and
twenty-four (805,924) shares representing thirty-seven point two five percent
(37.25%) of the shares and voting rights in Landanger-Camus, a societe anonyme
with a capital of 21,636,700 French Francs divided into 2,163,670 shares with a
par value of 10 French Francs each, having its registered office at Z.I. "La
Vendue", rue du Val, 52000 Chaumont, France, and registered with the Registry of
Commerce and Companies of Chaumont under number B 347 558 371 (hereinafter
referred to as "Landanger-Camus");
WHEREAS, 3L owns one million one hundred and thirty-three thousand five hundred
and twenty-nine (1,133,529) shares representing fifty-two point thirty-nine
percent (52.39%) of the shares and voting rights in Landanger-Camus;
WHEREAS, the Sellers and 3L together own one million nine hundred and thirty-
nine thousand four hundred and fifty-three (1,939,453) shares representing
ninety percent (90%) of the shares and voting rights in Landanger-Camus;
WHEREAS, nine point three six percent (9.36%) of the Landanger-Camus shares are
publicly traded on the Second Market (Second Marche) of the Paris Stock
Exchange;
WHEREAS, the Sellers wish to sell their direct and indirect controlling stake in
Landanger-Camus via the sale of all of the shares and voting rights they hold in
3L and the shares and voting rights they hold in Landanger-Camus; and
WHEREAS, the Purchaser wishes to purchase all of the shares and voting rights in
3L and all of the shares and voting rights held by the Sellers in Landanger-
Camus;
NOW, THEREFORE, in consideration of the premises and the mutual agreements and
covenants hereinafter set forth, the Purchaser and the Sellers hereby agree as
follows :
3
SECTION 1
DEFINITIONS
The following terms will have the meanings as set forth in the following
Sections:
- - "Additional Price" Section 2.2.4
- - "Closing" Section 3.1
- - "Closing Date" Section 3.1
- - "Determination Date" Section 2.2.2(d)
- - "Escrow Agreement" Section 2.2.2(a)
- - "Group" Section 2.1.1
- - "Indemnification Agreement" Section 5.1.1
- - "Landanger-Camus" Recitals
- - "Landanger-Camus Group" Section 2.2.2
- - "Landanger-Camus Shares" Section 2.1.1
- - "Majority Shareholder / Majority Shareholders" Page 1
- - "Majority Shareholders' Group" Section 7.1
- - "Minority Shareholder / Minority Shareholders" Page 1
- - "Notional Price" Section 2.2.2(b)
- - "Party" / "Parties" Page 1
- - "Purchaser" Page 1
- - "Purchaser's Group" Section 2.1.1
- - "Seller" / "Sellers" Page 1
- - "Shares" Section 2.1.2
- - "Subsidiaries" Section 3.2(e)
- - "TIPS" Section 2.2.4
- - "3L" Recitals
- - "3L Shares" Section 2.1.1
- - "X%" Section 2.2
SECTION 2
PURCHASE AND SALE OF SHARES
SECTION 2.1 - PURCHASE AND SALE OF SHARES
- -----------------------------------------
2.1.1 Subject to satisfaction of the conditions precedent set forth in Section
4 below and in accordance with the terms hereof:
(i) the Majority Shareholders will sell to the Purchaser, or to any
company belonging to the Group (as such term is defined in the last
paragraph of this Section 2.1.1) of the Purchaser (hereinafter
referred to as the "Purchaser's Group"), on the Closing Date (as
such term is defined in Section 3.1 below), two hundred and nine
thousand six hundred and sixty-seven (209,667) shares representing
one hundred percent (100%) of the shares and voting rights in 3L
(hereinafter referred to as the "3L Shares"); and
(ii) the Sellers will sell to the Purchaser, or to any company belonging
to the Purchaser's Group, on the Closing Date, eight hundred and
five thousand nine hundred and twenty-four (805,924) shares
representing all of the shares
4
and voting rights held by the Sellers in Landanger-Camus
(hereinafter referred to as the "Landanger-Camus Shares").
For purposes hereof, a "Group" is composed of all companies and entities
which are directly or indirectly controlled by the Purchaser, or which
directly or indirectly control the Purchaser, or which are under the
direct or indirect control of the same ultimate company or entity as the
Purchaser.
2.1.2 Subject to satisfaction of the conditions precedent set forth in Section
4 below and in accordance with the terms hereof, the Purchaser will
purchase, or will cause any company belonging to the Purchaser's Group to
purchase, from the Majority Shareholders and the Sellers on the Closing
Date :
(i) the 3L Shares; and
(ii) the Landanger-Camus Shares.
The 3L Shares and the Landanger-Camus Shares are collectively referred to herein
as the "Shares".
SECTION 2.2 - PURCHASE PRICE
- ----------------------------
The price to be paid by the Purchaser to the Sellers for the Shares will be
determined as follows.
For purposes of the calculations contained in this Section, the percentage of
the total number of shares and voting rights in Landanger-Camus held by 3L and
the Sellers as of the Closing Date is hereinafter referred to as "X%".
2.2.1 The value of 100% of the shares and voting rights in Landanger-Camus has
been fixed at seven hundred and seventy-seven (777) million French
Francs.
2.2.2 By no later than thirty (30) days following signature of this Share
Purchase Agreement, the Sellers will provide the Purchaser with the
unaudited consolidated balance sheet (bilan) of the companies listed in
Exhibit 2.2.2(a) hereto (the "Landanger-Camus Group") as of 28 February
1997, drawn up in accordance with the same consistently applied
accounting principles, policies and methods as those used for the
financial statements as of 31 August 1996 (copies of such financial
statements as of 31 August 1996, including the consolidated balance
sheet, being attached hereto as Exhibit 2.2.2).
(a) Any negative difference - net of any tax deduction arising from the
items generating such difference, provided that such tax deduction
has not yet been recorded - in the consolidated net asset value of
the Landanger-Camus Group (such as same is defined in Exhibit
2.2.2(c) hereto) as of 28 February 1997 pursuant to the unaudited
consolidated balance sheet of the Landanger-Camus Group, as compared
to 31 August 1996, will be deducted from the 777 million French Franc
amount described in Section 2.2.1 above and shall be transferred to
an escrow account to be opened by the Closing Date.
The terms and conditions of functioning of this escrow account are as
set forth in Exhibit 2.2.2(b) hereto, and will be reiterated in a
contract
5
(hereinafter referred to as the "Escrow Agreement") to be executed at
the latest on the Closing Date. It will in particular be provided in
the Escrow Agreement that the costs of such escrow account will be
borne in equal parts among the Sellers on the one hand, and the
Purchaser on the other hand.
The amount resulting from the difference between 777 million French
Francs and the above negative difference, if any, will constitute the
notional price for 100% of the shares and voting rights in Landanger-
Camus (hereinafter referred to as the "Notional Price"). It is hereby
agreed that (i) the loss, if any, resulting from the transfer of the
Surgical Instruments Activity contemplated in Section 4.4 below will
not be taken into account for purposes of calculating such difference;
and (ii) that the dividend declared out of the profits achieved by
Landanger-Camus as of 31 August 1996 will be taken into account for
such purpose.
(b) By no later than thirty (30) days following receipt of the unaudited
consolidated balance sheet of the Landanger-Camus Group from the
Sellers, the Purchaser shall deliver to the Sellers the unaudited
consolidated balance sheet of the Landanger-Camus Group as of 28
February 1997, audited by the accountants appointed by the Purchaser,
the Purchaser to bear the cost of such audit.
(c) Within fifteen (15) days following receipt of the consolidated balance
sheet of the Landanger-Camus Group as of 28 February 1997, as audited
by the Purchaser's accountants, the Sellers shall notify in writing
either (i) their acceptance of the calculation made by the Purchaser's
accountants, or (ii) that they dispute such calculation. If they
dispute one or several items contained therein, then the Paris Office
of Ernst & Young shall be retained by the Purchaser and the Sellers to
conduct an additional review of the consolidated balance sheet of the
Landanger-Camus Group as of 28 February 1997.
No later than fifteen (15) days after the engagement of Ernst & Young
(as evidenced by its written acceptance), the Purchaser and the
Sellers shall submit briefs to Ernst & Young setting forth their
respective positions regarding the items in dispute, should they deem
it necessary.
Ernst & Young shall render its decision resolving the items in dispute
and determining the consolidated net asset value within thirty (30)
days after its engagement. The Purchaser and the Sellers shall be
bound by such determination which shall be final.
The fees and expenses of Ernst & Young shall be shared equally by the
Purchaser and the Sellers.
(d) The sums escrowed shall be released within fifteen (15) days from
either (i) the final determination by Ernst & Young referred to in
Section 2.2.2(c) above, or (ii) the Sellers' notification of their
acceptance of the calculation by the accountants appointed by the
Purchaser as referred to in Section 2.2.2(c) above, in accordance
with the following rules:
- Should either (i) accountants named by the Purchaser (in the event
the Sellers accept their calculation), or (ii) Ernst & Young (in
the
6
contrary event) confirm a negative difference in the consolidated
net asset value of the Landanger-Camus Group up to the amount
determined pursuant to the unaudited consolidated balance sheet of
the Landanger-Camus Group, the amount of such negative difference
shall be returned to the Purchaser, the balance of the sums
escrowed being paid to the Sellers.
- Should either (i) the accountants named by the Purchaser (in the
event the Sellers accept their calculation), or (ii) Ernst & Young
(in the contrary event) rebut the existence of a negative
difference in the consolidated net asset value of the Landanger-
Camus Group , the whole amount of the sums escrowed shall be paid
to the Sellers.
- Should either (i) the accountants named by the Purchaser (in the
event the Sellers accept their calculation), or (ii) Ernst &
Young (in the contrary event) find the existence of a negative
difference with the consolidated net asset value of the
Landanger-Camus Group in excess of that determined pursuant to
the unaudited consolidated balance sheet of the Landanger-Camus
Group, the whole amount of the sums escrowed shall be returned to
the Purchaser, and the Sellers shall refund to the Purchaser the
part of the Notional Price paid pursuant to Section 2.2.3 hereto
which corresponds to the balance of the negative difference not
covered by the sums escrowed, and which will be paid from the
escrow account mentioned in the first paragraph of Section 2.2.4.
In the event that the decrease in the TIPS is implemented before
(i) the date of final determination by Ernst & Young referred to
in Section 2.2(c) above, or (ii) the Sellers' acceptance of the
calculation by the accountants appointed by the Purchaser as
referred to in Section 2.2(c) above (the "Determination Date"),
then the portion of the Additional Price determined pursuant to
Section 2.2.4(b) below which should have been paid to the Sellers
will be escrowed until the Determination Date and the balance of
the negative difference which was not covered by the sum escrowed
pursuant to Section 2.2(a) above will be paid out of the sums
escrowed pursuant to this Section.
2.2.3 At the Closing, the Purchaser will pay to the Sellers X% of the Notional
Price.
2.2.4 If, at the Closing, the decrease in the Tarif Interministeriel des
Prestations Sanitaires (hereinafter referred to as the "TIPS") which will
regulate the prices of hip implants on the French market listed in
Exhibit 2.2.4 hereto is not implemented, the Purchaser will transfer to
the escrow account described in Section 3.3 below 48 million French
Francs (hereinafter referred to as the "Additional Price").
(a) The terms and conditions of such escrow account are set forth in
Exhibit 2.2.2(b) hereto.
(b) A portion of the Additional Price will be paid to the Sellers from the
escrow account following implementation of the decrease in the TIPS
after the
7
Closing, pursuant to the terms set forth in Section 2.2.4(c) below,
the amount of such portion to be calculated pursuant to the average
percentage decrease in the TIPS as set forth below :
AVERAGE PERCENTAGE OF DECREASE PORTION OF THE ADDITIONAL PRICE
IN THE TIPS TO BE PAID TO THE SELLERS
(IN MILLIONS OF FRENCH FRANCS)
- -----------------------------------------------------------------
From 0% to 5% 48 x X%
6% 40 x X%
7% 32 x X%
8% 24 x X%
9% 16 x X%
10% 8 x X%
11% and over 0 x X%
- -----------------------------------------------------------------
The average percentage decrease in the TIPS, if any, will be equal to
the percentage of reduction in (i) the hypothetical value of the
aggregate sales of Landanger-Camus for each of the hip implants listed
in Exhibit 2.2.4 hereto with respect to the three (3) month period
from 1 September to and including 30 November 1996 which would have
resulted had the TIPS decrease been in effect during such three-month
period, compared to (ii) the actual value of the aggregate sales for
each such hip implants listed in Exhibit 2.2.4 hereto with respect to
such three (3) month period.
Only one reduction in the TIPS, whether implemented before or after
the Closing, will be taken into account (and only if within the time
limit set forth in Section 2.2.4(c) below).
The portion of the Additional Price not paid to the Sellers pursuant
to the provisions hereinabove will be repaid to the Purchaser at the
same time as the portion of the Additional Price owed to the Sellers
is paid to them.
(c) Subject to the provision contained in the last paragraph of Section
2.2.2(d) above, the disbursement of the funds escrowed pursuant to
this Section 2.2.4 will take place by the tenth (10th) business day
following the implementation of the decrease in the TIPS; provided,
however, if such decrease is not implemented within nine (9) months of
the Closing Date, the escrow created by this Section 2.2.4 will be
terminated, and the amount escrowed will be paid to the Sellers within
the two (2) week period following expiry of such nine (9) month
period.
2.2.5 Subject to the provision contained in the last paragraph of Section
2.2.2(d) above, if the decrease in the TIPS is implemented before
Closing, a portion of the Additional Price determined pursuant to Section
2.2.4(b) above will be paid directly by the Purchaser to the Sellers at
the Closing at the same time and to the same bank account as the sum
determined pursuant to Section 2.2.3 above.
2.2.6 All sums to be paid pursuant to this Section 2 will be paid in cash (en
numeraire), in French Francs. All sums due to the Sellers and/or the
Purchaser from the escrow account will be paid inclusive of interest
earned thereon.
8
2.2.7 All sums to be paid pursuant to this Section 2 to the Sellers will be
paid to the accounts mentioned in Section 3.3(b). The Sellers will decide
amongst themselves how such sums will be allocated between them. The
Sellers hereby release the Purchaser from any liability or responsibility
of any nature whatsoever relating to such allocation or, when payment is
made by the Purchaser, the receipt by each of them of their respective
portion of the price.
SECTION 3
CLOSING
SECTION 3.1 - CLOSING - CLOSING DATE
- ------------------------------------
Subject to the terms and conditions of this Share Purchase Agreement, and
subject to satisfaction of all of the conditions precedent set forth in Section
4 below, the sale and purchase of the Shares contemplated hereby will take place
at a closing (hereinafter referred to as the "Closing") will take place on 1
April 1997 at the offices of Coudert Freres, 52, avenue des Champs-Elysees,
75008 Paris, France, or at such other place and/or date as the Parties may agree
(the day on which the Closing takes place being hereinafter referred to as the
"Closing Date").
MISSING MATERIAL
- ----------------
SECTION 3.2 - DOCUMENTS TO BE DELIVERED BY THE SELLERS AT CLOSING
- -----------------------------------------------------------------
At the Closing, the Sellers will deliver or will cause to be delivered to the
Purchaser:
(a) all clearances and authorizations required from the Sellers for the sale of
the Shares;
(b) duly signed share transfer forms (ordres de mouvement) for the Shares in
favor of the Purchaser or any company of the Purchaser's Group and, more
generally, all documents required to carry out such transfers.
(c) the share transfer register (registre des mouvements de titres) and the
individual shareholders' accounts (comptes d'actionnaires) of 3L on which
the transfer of the shares in 3L to the Purchaser will be recorded
immediately, as well as any other documentation evidencing due completion
of the transfer of the Landanger-Camus Shares;
(d) the registers containing the minutes of the meetings of the shareholders of
3L and Landanger-Camus, the Board of Directors (conseil d'administration)
of 3L, the Directorate (directoire) and Supervisory Board (conseil de
surveillance) of Landanger-Camus, and the corresponding corporate bodies of
the Subsidiaries (as such term is defined in Section 3.2(e) below) in which
3L and/or Landanger-Camus have a majority shareholding;
(e) resignation letters signed by the managers ("gerants") and members of the
Board of Directors, Directorate and Supervisory Board (as the case may be)
of 3L and Landanger-Camus, as well as by all of the members of similar
corporate bodies of the companies (hereinafter referred to as the
"Subsidiaries"), all of the above members and companies being listed in
Exhibit 3.2(e) hereto, such resignations to take effect upon appointment of
the resigning persons' successors, as well as
9
evidence of transfer of their shares in such companies to the majority
shareholders thereof;
(f) resignation letters, with effect as of the Closing Date at the latest,
signed by those shareholders (except for Michel Colombier and Maryvonne
Guibert, whose employment will continue) having employment contracts with
3L, Landanger-Camus or any of the Subsidiaries, including those listed in
Exhibit 3.2(f) hereto;
(g) resignation letters from the statutory auditors of 3L, Landanger-Camus and
the Subsidiaries, such resignations to take effect upon appointment of the
replacement statutory auditors;
(h) receipt in respect of the payment by the Purchaser of the portion of the
price for the Shares paid as of the Closing Date;
(i) an executed copy of the Escrow Agreement;
(j) all documents evidencing satisfactory completion of the operations
described in Sections 4.3, 4.4 and 4.6;
(k) execution copies of agreements implementing the principles set forth in
Section 6 below, and copies of the relevant registration certificates
issued by the Institut National de la Propriete Industrielle; and
(l) a lease for a two (2) year term as from Closing and terminable with a three
(3) month notice period from the lessee, for the premises located Z.A.E. de
Findrol, 74250 Fillinges and used by Landanger-Camus for its operation as
of the date hereof, the financial terms of such lease to be the same as
those of the current lease.
SECTION 3.3 - DOCUMENTS DELIVERED BY THE PURCHASER AT CLOSING
- -------------------------------------------------------------
At Closing, the Purchaser will deliver or cause to be delivered to the Sellers:
(a) all clearances and authorizations required from the Purchaser for the
purchase of the Shares;
(b) evidence of a wire transfer to the order of the Sellers in the amount of
the portion of the price to be paid for the Shares as of the Closing Date,
pursuant to Section 2, to the following account opened with Banque Paribas;
(c) evidence of a wire transfer in the amount set forth in Section 2.2.4 above
to the following escrow account with Banque Paribas, if necessary; and
(d) executed copies of the agreements referred to in Sections 3.2(i) and (k)
above.
SECTION 3.4 - OTHER FORMALITIES AT CLOSING
- ------------------------------------------
All deliveries of documents to be made or actions to be taken at Closing will be
deemed to have taken place simultaneously on the Closing Date.
10
SECTION 4
CONDITIONS PRECEDENT
The sale and the purchase of the Shares are subject to the following conditions
precedent :
SECTION 4.1 - SHAREHOLDINGS IN 3L, LANDANGER-CAMUS AND THE SUBSIDIARIES
- -----------------------------------------------------------------------
4.1.1 The Majority Shareholders hold two hundred and nine thousand six hundred
and sixty-seven (209,667) shares in 3L, representing one hundred percent
(100%) of the shares and voting rights in such company, as well as seven
hundred and sixty-nine thousand two hundred and seventy-four (769,274)
shares in Landanger-Camus, representing thirty-five point fifty-five
percent (35.55%) of the shares and voting rights in such company.
4.1.2 3L holds at least one million one hundred and thirty-three thousand five
hundred and twenty-nine (1,133,529) shares in Landanger-Camus,
representing fifty-two point thirty-nine percent (52.39%) of the shares
and voting rights in such company.
4.1.3 3L and/or Landanger-Camus hold, directly and indirectly, the number of
shares and voting rights in the Subsidiaries representing the percentage
thereof set forth in Exhibit 4.1.3 hereto.
SECTION 4.2 - PRIOR ADMINISTRATIVE AUTHORIZATIONS AND CLEARANCES
- ----------------------------------------------------------------
All governmental, administrative and other approvals, authorizations and
clearances, whether national or supranational, required to complete the
transactions contemplated herein have been obtained. In particular :
(a) the Treasury Department (Tresor) of the Ministry of Finance and Economy has
not challenged the acquisition of the Shares; and
(b) in the event that prior to the Closing, the Purchaser has notified the
acquisition of the Shares to the Minister of Finance and Economy pursuant
to the Ordonnance of 1 December 1986 on French merger control, such
acquisition has not been referred by the Minister to the Competition
Council.
(c) Others, including any notification to, authorization by or clearance from,
any authorities in the United States of America or in any country in which
3L, Landanger-Camus or any of the Subsidiaries are active, as may be
required.
SECTION 4.3 - GEYSER S.A. AND AED SOFT
- --------------------------------------
4.3.1 All of the four thousand five hundred and sixty-four (4,564) shares held
by Landanger-Camus in Geyser S.A., and all of the seven hundred (700)
shares held by Landanger-Camus in AED Soft will have validly been
transferred, pursuant to applicable laws and regulations, to one or more
third parties in such manner that neither the Purchaser, 3L, Landanger-
Camus nor any of the Subsidiaries will incur any liability whatsoever,
including without limitation any present or contingent tax liabilities,
resulting from such transfer or relating to Geyser S.A. and AED Soft.
11
4.3.2 All outstanding repurchase obligations of Landanger-Camus with respect to
the outstanding shares of Geyser S.A. will have been assumed by a third
party in such manner that neither the Purchaser, 3L, Landanger-Camus nor
any of the Subsidiaries will incur any obligation or liability with
respect thereto, including without limitation any present or contingent
tax liabilities. This will apply (without limitation) to the put options
(promesses d'achat ) currently or formerly held by the following persons,
for the following number of shares in Geyser S.A. :
- Mr. Boileau 5 shares
- Ms. Rolland 5 shares
- Mr. Rolland 5 shares
- Mr. Roetynck 550 shares
- Ms. Brouard 550 shares
- Mr. Ognier 1,830 shares
4.3.3 Purchaser acknowledges that the rights (though an exclusive worldwide
(except France), free, irrevocable license) under a patent concerning the
use of the procedure for producing bone substitute materials
("SUPERCRIT") held by Boots, a Swiss company, are not included among the
rights of the Medinov Subsidiary (but only insofar as such rights apply
to applications for human bone).
SECTION 4.4 - SURGICAL INSTRUMENTS ACTIVITY
- -------------------------------------------
The general surgical instruments activity carried out by Landanger-Camus
(consisting in products used in general surgery and the corresponding
sterilization boxes, but excluding all trauma products and all orthopedic
ancillary instruments), together with, pursuant to Article L.122-12 of the
French Labor Code, the employees of Landanger-Camus assigned to such surgical
instruments activity (and all obligations and liabilities in respect of such
employees) as same are listed in Exhibit 4.4 hereto, will have been transferred,
pursuant to applicable laws and regulations, to a single third party company,
and the shares received by Landanger-Camus in consideration for such activity
will have been sold to any of the Sellers for a price equal to the value of the
activity as determined by the court-appointed auditor, in such way that neither
the Purchaser, 3L, Landanger-Camus nor any of the Subsidiaries will incur any
liability, including without limitation any present or contingent tax
liabilities, resulting from the transfer of such activity, the transfer or non-
transfer of the employees of Landanger-Camus within the framework of the
transfer of the activity, and more generally, connected with such activity prior
or subsequent to its transfer.
SECTION 4.5 - TRADENAMES - TRADEMARKS
- -------------------------------------
The agreements implementing the principles set forth in Section 6 below
will have been executed, and all steps connected therewith will have been
taken.
SECTION 4.6 - GUARANTY
- ----------------------
The Majority Shareholders and Michel Colombier will have put in place the
Guaranty referred to in Section 4.2.2 of the Indemnification Agreement, and
will have provided the Purchaser with a certified copy thereof.
SECTION 4.7 - INDEMNIFICATION AGREEMENT
- ---------------------------------------
12
An Indemnification Agreement, based substantially on the model attached
hereto as Exhibit 4.7 but subject to further negotiation, will have been
executed.
SECTION 4.8 - CONSEQUENCES OF NON-FULFILLMENT OF CONDITIONS PRECEDENT
- ---------------------------------------------------------------------
If any of the conditions precedent set forth in Sections 4.1 to 4.7 above
have not been satisfied by 1 April 1997 at the latest, the Purchaser may decide
(i) not to purchase the Shares, without incurring any liability of any nature
whatsoever, or (ii) to waive such condition(s) precedent.
SECTION 5
COVENANTS
SECTION 5.1 - SELLERS' COVENANTS
- --------------------------------
5.1.1 Disclosure
----------
The Sellers undertake that, without prejudice to any of the Purchaser's
rights hereunder, they will disclose forthwith in writing to the
Purchaser any matter or development which may arise or become known to
the Sellers after the date hereof which is inconsistent with any of the
representations and warranties set out in the Indemnification Agreement
(the "Indemnification Agreement") to be signed by the Closing Date, or
which might make any of them inaccurate or misleading, or which would be
likely to result in one of the obligations or conditions set forth herein
not being satisfied or fulfilled on time or which might delay or prevent
the Closing.
5.1.2 Free Access
-----------
As from the date hereof and subject to the giving of reasonable prior
notice, the Sellers will cause 3L, Landanger-Camus, the Subsidiaries,
their employees, officers, representatives and advisers to give the
Purchaser and its employees, officers, representatives and advisors free
access, under the best possible conditions during normal business hours,
to the premises, accounts, records, employees and advisors of 3L,
Landanger-Camus and the Subsidiaries. As from the date hereof, the
Sellers will provide all necessary assistance to ensure that the
transition period inherent to the transfer of ownership and control of
the Shares and the integration of 3L, Landanger-Camus and the
Subsidiaries into the Purchaser's group takes place in the best possible
conditions, and so that the Purchaser may monitor compliance by the
Sellers of all of their obligations, covenants, representations and
warranties referred to in this Share Purchase Agreement and in the
Indemnification Agreement.
In addition, the Sellers agree that the Purchaser and its employees,
officers, representatives and advisors will have the right, as from the
date hereof, to meet with executives ("cadres") of 3L, Landanger-Camus
and the Subsidiaries, and that the Sellers will co-operate, and will
cause all persons (including its employees, officers, representatives and
advisors) or entities belonging to or working for any company of the
Sellers group to co-operate, so as to assist and facilitate the contacts
by the Purchaser of such persons.
13
5.1.3 Cooperation
-----------
The Sellers undertake, and will cause their representatives and advisors,
as well as 3L, Landanger-Camus and the Subsidiaries and their employees,
officers, representatives and advisors, to fully cooperate with and
assist the Purchaser, its employees, officers, representatives and
advisors in order to prepare for and to realize the transfer of ownership
and control of 3L and Landanger-Camus as provided in this Share Purchase
Agreement.
In particular, they will fully cooperate with the Purchaser, its
employees, officers, representatives and advisors with respect to the
determination of the purchase price for the Shares pursuant to Section 2
above and to all obligations, procedures, public tender offers and as
well as any squeeze-out which would take place under the regulations of
the Paris Stock Exchange in connection with or as a result of the
purchase of the Shares by the Purchaser.
Moreover, as of the Closing, they will take all necessary steps to
adequately inform all customers and licensors of completion of the
transactions contemplated herein.
5.1.4 No Dividends
------------
The Sellers will cause 3L and Landanger-Camus not to pay any dividend or
interim dividend (acompte sur dividendes) to its shareholders as from the
date hereof.
SECTION 5.2 - PURCHASER'S COVENANTS
- -----------------------------------
5.2.1 Disclosure
----------
The Purchaser undertakes that, without prejudice to any of the Sellers'
rights hereunder, it will disclose forthwith in writing to the Sellers
any matter or development which may arise or become known to the
Purchaser after the date hereof which is inconsistent with any of the
representations and warranties of the Purchaser to be set out in the
Indemnification Agreement or which might make any of them inaccurate or
misleading, or which would be likely to result in one of the obligations
or conditions set forth herein not being satisfied or fulfilled on time
or which might delay or prevent the Closing.
5.2.2 The Purchaser will submit to the Sellers :
----------------------------------------
(a) the final draft declaration to the Treasury Department of the
Ministry of Finance (Tresor) pursuant to the regulations governing
foreign investments in France;
(b) should the Purchaser decide to notify the acquisition of the Shares
pursuant to the Ordonnance of 1 December 1986 on French merger
control, the final draft of the notification to the Minister of the
Economy; and
(c) any notification to, authorization by or clearance from, any
authorities in the United States of America or in any country in
which 3L, Landanger-Camus or any of the Subsidiaries are active.
14
SECTION 5.3 - CONDUCT OF BUSINESS PRIOR TO THE CLOSING
- ------------------------------------------------------
During the period from the date of execution hereof to the Closing, the Sellers
will cause 3L, Landanger-Camus and the Subsidiaries to conduct their businesses
with due care and only in the ordinary course of business, to maintain the
integrity of their assets and, in particular, their prospects and business
relationships, and to not increase their liabilities other than in the ordinary
course of business and in no event by more than one million (1,000,000) French
Francs. Without in any respect limiting the generality of the foregoing, prior
to the Closing, the Sellers will ensure, in particular, that 3L, Landanger-Camus
and the Subsidiaries will not, without the Purchaser's prior written consent :
(a) sell, transfer or otherwise dispose of any of their assets, except for :
(i) sales of inventory in the ordinary course of business;
(ii) the operations provided for in Sections 4.3 and 4.4 above; and
(iii) the transfer [to Landanger-Camus of the shares of the SCIs ORTHOTIM
and GAM owning the premises located in Villeurbanne;
(b) mortgage, pledge or encumber, or grant any privilege or guarantee,
affecting any of their assets;
(c) increase the remuneration or employment benefits of any of their employees,
officers, representatives or advisors;
(d) initiate any collective or individual termination of employment agreements,
other than for faute grave or faute lourde;
(e) conclude any new employment agreement, or terminate or modify, in any
manner whatsoever, any employment agreements in force as of the date
hereof, with the exception of those entered into between any shareholders
and Landanger-Camus, 3L or any of the Subsidiaries, which must be
terminated at the latest on the Closing Date, except for Michel Colombier's
contract and Maryvonne Guibert's contract;
(f) modify, terminate or cancel any contracts by which they are bound under
circumstances which would affect their business relations, prospects,
relationship with developers and licensors or the operations contemplated
in this Share Purchase Agreement;
(g) enter into or renew any material contract with respect to their assets or
business, except in the ordinary course of business or as contemplated
under this Share Purchase Agreement;
(h) maintain levels of inventory of their products inconsistent with their past
practices, subject to usual seasonal variations and customer demands;
(i) operate credit control, cash collection and payment inconsistent with
recent past practice;
(j) pay any obligation or liability relating to or in respect of their
business, other than current liabilities in the ordinary course of their
business, or waive, release or settle any rights or claims of 3L,
Landanger-Camus or the Subsidiaries relating to or in
15
respect of their businesses exceeding two hundred and fifty thousand (250,000)
French Francs in the aggregate;
(k) authorize or propose any of the foregoing, or enter into any agreement,
commitment or undertaking, written or oral, to do any of the foregoing; or
(l) incur any capital expenditure in excess of fifty thousand (50,000) French
Francs for a single investment, or one hundred thousand (100,000) French
Francs per company in the aggregate.
SECTION 5.4 - FURTHER ACTION
- ----------------------------
The Sellers and the Purchaser will make all reasonable efforts to take, or cause
to be taken, all appropriate action as may be required to carry out the
provisions hereof and consummate and make effective the transactions described
herein. In the event that at any time after the Closing any further action is
necessary or desirable to carry out the purposes of this Share Purchase
Agreement, each Party will take such further action at its own cost (including
the execution and delivery of such further instruments and documents) as the
other Party may reasonably request.
SECTION 6
TRADEMARKS - TRADENAMES - CORPORATE NAME
SECTION 6.1
- -----------
Landanger-Camus and the Subsidiaries, for their activities as of the Closing
Date :
(a) are hereby granted the exclusive right to use the names "Landanger" and
"Landanger-Camus";
(b) have been, or will be by the Closing Date at the latest, registered as the
exclusive owners of such names with the Institut National de la Propriete
Industrielle in France, and with similar organizations in other countries
where these companies carry out their respective activities as of the
Closing Date; and
(c) will retain the exclusive possibility to be registered as the owners of
such names for such activities in any other countries.
SECTION 6.2
- -----------
Only in respect of the activities indicated in Sections 4.3 and 4.4 above, the
Sellers, or the corporate entity created to carry out such activities :
(a) are hereby granted the exclusive right to use the name "Landanger";
(b) have been, or will be by the Closing Date at the latest, registered as the
exclusive owners of such names with the Institut National de la Propriete
Industrielle in France, and with similar organizations in any other
countries in which the activities described in Sections 4.3 and 4.4 above
are carried out as of the Closing Date; and
16
(c) will retain the exclusive possibility to be registered as the owners of
such names for the activities described in Sections 4.3 and 4.4 above in
any other countries.
SECTION 6.3
- -----------
Landanger-Camus is hereby definitively granted the exclusive right to use the
patronymic "Landanger-Camus" as its corporate name.
SECTION 6.4
- -----------
For any activities other than those carried out by 3L, Landanger-Camus and the
Subsidiaries as of the Closing Date and the activities described in Sections 4.3
and 4.4 above, neither Party will have the possibility to use the names
"Landanger" and "Landanger-Camus" and to be registered as the owner of same
without the prior written consent thereto of the other Party.
All necessary steps, and in particular contractual steps, will be taken at the
latest by the Closing in order to validly implement the above.
SECTION 7
NON COMPETITION
SECTION 7.1
- -----------
The Majority Shareholders and Michel Colombier hereby undertake, for each of
them and on behalf of each of the companies in which they will retain a direct
or indirect interest (hereinafter referred to as the "Majority Shareholders'
Group"), that neither the Majority Shareholders nor any company of the Majority
Shareholders' Group nor Michel Colombier will carry on with, or assist in the
carrying-on with, or be involved in, directly or indirectly, whether alone or
with any other individual or entity, whether for their own account or for that
of any other person, firm or company, the manufacture, sale, marketing, research
or development of orthopaedic devices or, more generally, compete in any manner
whatsoever with any activity carried out, or products manufactured and/or sold,
by 3L, Landanger-Camus or the Subsidiaries as of the Closing Date.
This non-compete obligation will not apply to (i) the activities described in
Sections 4.3 and 4.4 above, (ii) the acquisition, use and sale of Kirchner and
Steiman surgical pins, or to (iii) passive investments in public companies, a
minority part of activity thereof could compete with the activities carried out
by 3L, Landanger-Camus or the Subsidiaries.
This non-compete obligation will apply in France for a period of four (4) years
from the Closing Date, and for a period of one (1) year from the Closing Date in
Germany, Switzerland, Spain, Italy, The Netherlands, Belgium, the Scandinavian
countries, the United Kingdom, the United States of America, India, China and
Austria.
The restrictions contained in this Section 7 are considered to be reasonable by
the Parties. In the event any restriction is found to be void, but would be
valid if a part of it were deleted or the period or geographical area of
application reduced, such restriction will apply with such modification as may
be required to render such restriction valid and effective.
17
SECTION 7.2
- -----------
The Majority Shareholders and Michel Colombier undertake to not directly or
indirectly offer or effectively entrust to any individual in the employ of 3L,
Landanger-Camus or any of the Subsidiaries on the Closing Date, any job, task or
mission of any nature whatsoever, whether or not remunerated, nor to respond
positively to any request of such nature made by an individual in the employ of
3L, Landanger-Camus or any of the Subsidiaries on the Closing Date.
This undertaking will apply for two (2) years as from the Closing Date.
SECTION 8
TERMINATION OF THE SHARE PURCHASE AGREEMENT
SECTION 8.1 - TERMINATION BY MUTUAL AGREEMENT
- ---------------------------------------------
This Share Purchase Agreement may be terminated, and the transactions
contemplated herein abandoned, for any reason and at any time prior to the
Closing with the mutual written consent of the Purchaser and the Sellers. This
Share Purchase Agreement will be terminated automatically if the Closing has not
taken place by 30 April 1997, unless the Parties decide to extend in writing
such deadline.
SECTION 8.2 - TERMINATION BY THE PURCHASER
- ------------------------------------------
This Share Purchase Agreement may be terminated by the Purchaser, and the
transactions contemplated herein abandoned, in case of non-fulfillment of the
conditions set forth in Sections 4.1 to 4.7 by 30 April 1997 at the latest.
SECTION 8.3 - SURVIVAL UPON TERMINATION
- ---------------------------------------
Upon its termination pursuant to this Section 8, this Share Purchase Agreement
will become null and void, with no liability for any Party hereto, provided,
however, that in the event of the cause of such termination being a default on
the part of any Party, the Purchaser or the Sellers, as the case may be, will
retain all of their rights to claim damages and remedies arising as a result of
such default, and breach, and further provided, however, that upon any
termination pursuant to this Section 8, Sections 9.1 (Confidentiality), 9.2
(Expenses - Taxes), 9.4 (Public Announcements) and 9.12 (Governing Law -
Disputes) hereof will survive such termination.
18
SECTION 9
GENERAL PROVISIONS
SECTION 9.1 - CONFIDENTIALITY
- -----------------------------
(a) All information and documents provided to either Party within the framework
of the transaction contemplated herein is deemed to be confidential in
nature, irrespective of whether or not the transaction is consummated. Any
analyses, compilations, studies or other documents prepared by either
Party, its employees, officers, representatives or advisors within the
framework of said transaction will be kept confidential by such Party.
Neither Party will use or disclose, and represents that its employees,
officers, representatives and advisors will not use or disclose, such
information during a period of five (5) years from the date hereof, except
to the extent such information :
- was known to the receiving Party prior to receipt thereof from the other
Party, and was not subject to a confidentiality commitment; or
- is or becomes generally known to the public; or
- is received by the receiving Party from a source not subject to a
confidentiality commitment; or
- has been or is gathered or obtained by the receiving Party independently
from the confidential information disclosed by the other Party.
(b) In particular, the Parties undertake to keep the contents of this Share
Purchase Agreement and the Indemnification Agreement confidential, subject
to disclosure as may be required pursuant to (i) proceedings conforming
with the provisions of Section 9.12 hereof, (ii) any tax audit, (iii)
French or United States securities regulation requirements, (iv)
competition and labor law requirements in France or in any country in which
3L, Landanger-Camus or the Subsidiaries conduct their respective
activities, (v) any other requirement of a public authority, or (vi) a
press release issued pursuant to Section 9.4 below.
SECTION 9.2 - EXPENSES - TAXES
- ------------------------------
Except as otherwise specified in this Share Purchase Agreement, all costs and
expenses, including, without limitation, fees and disbursements of counsel,
financial advisors and accountants, incurred in connection herewith and the
transactions contemplated herein, will be borne by the Party incurring such
costs and expenses, irrespective of whether or not the Closing takes place. The
Purchaser will pay the registration taxes (droits d'enregistrement) and stamp
duties (droits de timbre) due in connection herewith.
All expenses and taxes resulting from the operations described in Sections 4.3,
4.4 and 4.6 will be borne exclusively by the Sellers, irrespective of whether or
not the Closing takes place.
19
SECTION 9.3 - NOTICES
- ---------------------
All notices, claims, demands and other communications hereunder will be made in
writing, given or made by delivery in person, by courier service, registered
mail (postage prepaid, return receipt requested), telecopy, telegram or telex,
to the respective Parties at the following addresses (or at such other addresses
as may be specified in a notice given in accordance with this Section 9.3) :
(a) If to the Purchaser :
DePuy, Inc.
P.O. Box 988
700 Orthopaedic Drive
Warsaw
Indiana 46581-0988
U.S.A.
Telecopy : (00-1) 219 269 5675
Attention : Legal Department
DePuy International Ltd.
St. Anthony's Road
Leeds
Yorkshire LS11 8DT
U.K.
Telecopy : (00-44) 113 272 4192
Attention : Legal Department
with a copy to :
Coudert Brothers
1114 Avenue of the Americas
New York, N.Y. 10036-7703
U.S.A.
Telecopy : (00-1) 626 4120
Attention : Jeffrey Cohen
and to :
Coudert Freres,
52, Avenue des Champs-Elysees
75008 Paris
France
Telecopy : (00-33) 1 53 83 60 60
Attention : Olivier de Precigout
(b) If to the Sellers :
Mr. Patrick Landanger
5, avenue Pol Antoine
52000 Chaumont
France
Telecopy : (00-33) _______________
20
Mr. Eric Landanger
15, rue des Acacias
52000 Jonchery
France
Telecopy : (00-33) _______________
Ms. Maryvonne Guibert
9, boulevard Gambetta
52000 Chaumont
France
Telecopy : (00-33) _______________
Mr. Michel Colombier
512, chemin Viralamande
69140 Rillieux La Pape
France
Telecopy : (00-33) _______________
Mrs. Renee Landanger
10, rue de Dijon
52000 Chaumont
France
Telecopy : (00-33) ___________________
Mr. Louis Landanger
10, rue de Dijon
52000 Chaumont
France
Telecopy : (00-33) ______________
Mrs. Martine Bonnaventure
260, avenue du Stade
45770 Saran
France
Telecopy : (00-33) ___________________
Mr. Guy Bonnaventure
260, avenue du Stade
45770 Saran
France
Telecopy : (00-33) __________________
with a copy to :
Desfilis, Juchs & Associes
49 bis, Avenue F.D. Roosevelt
75508 Paris
France
Telecopy : (00-33) 1 45 63 29 68
Attention : Maitre J.L. Desfilis
21
A notice will be deemed to have been duly made or given :
(a) in the case of personal delivery, by the giving of a receipt of delivery of
such notice from the addressee, or from any person working at its above-
mentioned address,
(b) in the case of a registered letter or a courier delivery, upon first
presentation of such notice at the address of the addressee; and
(c) in the case of a transmission by telecopy, telegram or telex, upon the
existence of proof of transmission, confirmed by registered letter with
return receipt requested sent at the latest on the first business day
following the date of such transmission.
SECTION 9.4 - PUBLIC ANNOUNCEMENTS
- ----------------------------------
Neither Party hereto will make, or cause to be made, any press releases or
public announcements in respect of this Share Purchase Agreement, the
Indemnification Agreement or the transactions contemplated hereby and thereby
without prior approval of the other Party, and the Parties will cooperate as to
the timing and contents of any such announcement. Nothing in this Section 9.4
will prevent a Party from supplying any information as may be required by any
public authority or as will be required by law, but such Party will furnish
notice thereof to the other Party as soon as practicable given the
circumstances.
SECTION 9.5 - SEVERABILITY
- --------------------------
If any term or other provision of this Share Purchase Agreement is invalid,
illegal or incapable of being enforced by any rule of law or public policy, all
other conditions and provisions of this Share Purchase Agreement will,
nevertheless, remain in full force and effect so long as the economic or legal
substance of the transactions contemplated hereby is not affected in any manner
materially adverse to any Party. Upon such determination that any term or other
provision is invalid, illegal or incapable of being enforced, the Parties will
negotiate in good faith to modify this Share Purchase Agreement so as to effect
the original intent of the Parties as closely as possible in an acceptable
manner in order that the transactions contemplated hereby are consummated as
originally contemplated to the greatest extent possible.
SECTION 9.6 - LANGUAGES
- -----------------------
This Share Purchase Agreement is entered into and executed in the French and
English languages. In the event of any disputes concerning the construction or
meaning of this Share Purchase Agreement, the French version will prevail.
SECTION 9.7 - ENTIRE AGREEMENT
- ------------------------------
Except as provided in the Indemnification Agreement, this Share Purchase
Agreement constitutes the entire agreement of the Parties hereto with respect to
the subject matter hereof, and supersedes all agreements and undertakings, both
written and oral, between the Sellers and the Purchaser, or any of the companies
of the group to which each Party belongs, prior to the date hereof with respect
to the subject matter herein.
22
SECTION 9.8 - WAIVERS, MODIFICATIONS OR AMENDMENTS
- --------------------------------------------------
No waiver, modification or amendment of any provision of this Share Purchase
Agreement will be valid, or of any force or effect, unless made in writing and
signed by each of the Parties hereto, and specifying with particularity the
nature and extent of such waiver, modification or amendment. Any such waiver,
modification or amendment will in no event be construed to be a general waiver,
abandonment, modification or amendment of any of the provisions of this Share
Purchase Agreement, but the same will be strictly limited and restricted to the
extent and occasion specified in such writing or writings signed by the Parties.
SECTION 9.9 - SECTION HEADINGS - EXHIBITS
- -----------------------------------------
The table of contents to this Share Purchase Agreement and the headings of
particular Sections herein are inserted only for convenience and are in no way
to be construed as part of this Share Purchase Agreement or as a limitation of
the scope of the particular Sections to which they refer.
Each Exhibit to this Share Purchase Agreement constitutes an integral part
hereof; and all references to this Share Purchase Agreement will include all
Exhibits hereto.
SECTION 9.10 - ASSIGNMENT - SUCCESSORS AND ASSIGNS
- --------------------------------------------------
Neither this Share Purchase Agreement nor any rights, liabilities or obligations
hereunder may be assigned without the express written consent of the other Party
hereto (which consent will be given or refused at the discretion of each of the
Parties), although the Purchaser will be entitled to assign all of its rights
and undertakings hereunder to any company belonging to the Purchaser's Group as
specified in Section 2.1 above, the Purchaser remaining liable for performance
of the obligations of assignee herein and in the Indemnification Agreement.
This Share Purchase Agreement will be binding upon and inure to the benefit of
successors and permitted assigns of the Parties hereto.
SECTION 9.11 - SPECIFIC PERFORMANCE
- -----------------------------------
The Parties hereto agree that they will be entitled to specific performance of
the terms hereof, insofar as permitted under French law.
SECTION 9.12 - GOVERNING LAW - DISPUTES
- ---------------------------------------
This Share Purchase Agreement will be governed by, and construed in accordance
with, French law.
23
All disputes arising in connection with this Share Purchase Agreement will be
settled by the competent Paris courts.
Executed in ten (10) original counterparts,
In Paris,
On 28 February 1997
FOR THE SELLERS : FOR THE PURCHASER :
/s/ Patrick Landanger /s/ James Lent
- --------------------- --------------
Patrick Landanger DePuy, Inc.
By : James Lent
Title : Chairman of the Board
and Chief Executive Officer
/s/ Eric Landanger
- ------------------
Eric Landanger
/s/ Maryvonne Guibert
- ---------------------
Maryvonne Guibert
/s/ Michel Columbier
- --------------------
Michel Colombier
/s/ Mrs. Renee Landanger
- ------------------------
Mrs. Renee Landanger
/s/ Mr. Louis Landanger
- -----------------------
Mr. Louis Landanger
/s/ Mrs. Martine Bonnaventure
- -----------------------------
Mrs. Martine Bonnaventure
/s/ Mr. Guy Bonnaventure
- ------------------------
Mr. Guy Bonnaventure
24
TABLE OF CONTENTS
SECTION 1 DEFINITIONS......................................................... 3
SECTION 2 PURCHASE AND SALE OF SHARES......................................... 3
Section 2.1 - Purchase and Sale of Shares................................ 3
Section 2.2 - Purchase Price............................................. 4
SECTION 3 CLOSING............................................................. 8
Section 3.1 - Closing - Closing Date..................................... 8
Section 3.2 - Documents to be Delivered by the Sellers at Closing........ 8
Section 3.3 - Documents Delivered by the Purchaser at Closing............ 9
Section 3.4 - Other Formalities at Closing............................... 9
SECTION 4 CONDITIONS PRECEDENT................................................ 10
Section 4.1 - Shareholdings in 3L, Landanger-Camus and the Subsidiaries.. 10
Section 4.2 - Prior Administrative Authorizations and Clearances......... 10
Section 4.3 - Geyser S.A. and AED Soft................................... 10
Section 4.4 - Surgical Instruments Activity.............................. 11
Section 4.5 - Tradenames - Trademarks.................................... 11
Section 4.6 - Guaranty................................................... 11
Section 4.7 - Indemnification Agreement.................................. 11
Section 4.8 - Consequences of Non-Fulfillment of Conditions Precedent.... 12
SECTION 5 COVENANTS........................................................... 12
Section 5.1 - Sellers' Covenants......................................... 12
5.1.1 Disclosure................................................. 12
5.1.2 Free Access................................................ 12
5.1.3 Cooperation................................................ 13
5.1.4 No Dividends............................................... 13
Section 5.2 - Purchaser's Covenants...................................... 13
5.2.1 Disclosure................................................. 13
5.2.2 The Purchaser will submit to the Sellers:.................. 13
Section 5.3 - Conduct of Business Prior to the Closing................... 14
Section 5.4 - Further Action............................................. 15
SECTION 6 TRADEMARKS - TRADENAMES - CORPORATE NAME............................ 15
Section 6.1.............................................................. 15
Section 6.2.............................................................. 15
Section 6.3.............................................................. 16
Section 6.4.............................................................. 16
SECTION 7 NON COMPETITION..................................................... 16
25
Section 7.1.......................................... 16
Section 7.2......................................... 17
SECTION 8TERMINATION OF THE SHARE PURCHASE AGREEMENT..... 17
Section 8.1 - Termination by Mutual Agreement....... 17
Section 8.2 - Termination by the Purchaser.......... 17
Section 8.3 - Survival Upon Termination............. 17
SECTION 9GENERAL PROVISIONS.............................. 17
Section 9.1 - Confidentiality....................... 18
Section 9.2 - Expenses - Taxes...................... 18
Section 9.3 - Notices 19
Section 9.4 - Public Announcements.................. 21
Section 9.6 - Languages 21
Section 9.7 - Entire Agreement...................... 21
Section 9.8 - Waivers, Modifications or Amendments.. 22
Section 9.9 - Section Headings - Exhibits........... 22
Section 9.10 - Assignment - Successors and Assigns.. 22
Section 9.11 - Specific Performance................. 22
Section 9.12 - Governing Law - Disputes............. 22
EXHIBIT 2.2.2.A
LIST OF COMPANIES INCLUDED IN THE SCOPE OF CONSOLIDATION
- - LANDANGER-CAMUS S.A.
- - LANDOS ORTHOPADIE GmbH
- - LANDOS ESPANA S.A.
- - LANDOS ITALIA Srl
- - LANDOS NEDERLAND BV
- - LANDANGER-LANDOS S.A.
- - BIOLAND S.A.
- - MEDINOV-A.M.P. S.A.
- - MIKROLAND S.A.
- - LANDOS BIOMECANIQUE S.A.
- - LANDOS INTERNATIONAL S.A.
- - LANDOS INC.
- - BIOLAND-PHARMA Sarl
- - GEYSER S.A.
- - TECHLAND Sarl
- - SUSHRUT PVT Ltd
- - ADLER MEDIEQUIP Ltd
- - BEIJING LANDOCHINE ARTIFICIAL JOINT CO Ltd
- - GESTION CONSEIL LANDANGER SNC
- - MEDINOV ITALIA Srl
- - MEMO IMPLANTS Sarl
- - A.M.P. DEVELOPPEMENT S.A.
- - A.M.P. INDUSTRIE (absorbed by Medinov-A.M.P.)
- - A.M.P. MEDICAL (absorbed by Medinov-A.M.P.)
- - PAMERLAND SCI
- - AM SCI
- - ORTHOTIM SCI
EXHIBIT 2.2.2
LANDANGER-CAMUS
CONSOLIDATED FINANCIAL
STATEMENTS
YEAR ENDED 31ST AUGUST 1996
CONSOLIDATED BALANCE SHEET AT 31ST AUGUST 1996
ASSETS
08/31/1996 08/31/1995
--------------------------------------- ------------ NOTES TO
YEAR ENDED 31 AUGUST DEPRECIATION FINANCIAL
(FF'000) GROSS & PROVISIONS NET NET STATEMENTS
- ----------------------------------------------------------------------------------------------------------
CALLED-UP SHARE CAPITAL NOT PAID - - - -
INTANGIBLE FIXED ASSETS
Preliminary expenses 1079 323 756 9
Research and development costs - - - -
Concession, patents, licences 14035 8175 5860 3943
Goodwill 12495 5184 7311 1605
Payments on account - - - 180
Other intangible assets - - - -
GOODWILL ON ACQUISITION 55191 13529 41662 27073 3
TANGIBLE FIXED ASSETS
Land 6019 642 5377 3723
Buildings 58918 21481 37437 37040 4
Machinery and equipment 69154 58031 11123 12241 4
Other tangible assets 98727 69867 28860 35780 4
Fixed assets in progress 7551 - 7551 1392
Payments on account 1943 - 1943 2562
FIXED ASSET INVESTMENTS
Other participating interests 884 450 434 584 2
Related loans and advances - - - -
Other shares 4811 2692 2119 2119 2
Loans 862 160 702 1016
Other investments 1169 7 1162 1253
SHARES IN AFFILIATED UNDERTAKINGS 1361 - 1361 1539
- -------------------------------------------------------------------------------------------
FIXED ASSETS 334199 180541 153658 132059 5
- -------------------------------------------------------------------------------------------
Inventory and work in progress
Raw materials and consumables 19964 3256 16708 17236
Work in progress - Goods 21920 684 21236 21094
Work in progress - Services - - - -
Semi-finished and finished goods 109448 21095 88353 94508
Goods for resale 22391 4892 17499 22382
Payments on account 735 - 735 801
Trade debtors 6
Trade debtors and related accounts 132871 10340 122531 129070
Miscellaneous debtors 22843 32 22811 15453
Other debtors 6836 4024 2812 5093
Called-up share capital not paid - - - -
Marketable securities 20346 - 20346 14873
Cash at bank and in hand 19096 - 19096 14555
Prepayments 4998 - 4998 5400
- -------------------------------------------------------------------------------------------
CURRENT ASSETS 381448 44323 337125 340465
- -------------------------------------------------------------------------------------------
Deferred charges - - - -
Deferred tax assets 12878 - 12878 14227 17
- -------------------------------------------------------------------------------------------
TOTAL 728525 224864 503661 486751
- ----------------------------------------------------------------------------------------------------
CONSOLIDATED BALANCE SHEET AT 31ST AUGUST 1996 (CONT.)
LIABILITIES
YEAR ENDED 31 AUGUST 08/31/1996 08/31/1995 NOTES TO
(FF'000) FINANCIAL
STATEMENTS
- --------------------------------------------------------------------------------------------
Called-up share capital 21637 21637
Share premium account 67696 77417
Revaluation reserve - -
Legal reserve 643 643
Other reserves 1651 1651
Profit and loss account - -
Regulated provisions - -
Investment grants - -
Consolidated reserves 104511 66424
Currency translation difference -9 525
Net profit for the year- Group share 40239 34740
- -------------------------------------------------------------------------------
CAPITAL AND RESERVES 236368 203037 7
- -------------------------------------------------------------------------------
Minority interests in reserves 316 4280
Minority interests in currency translation difference - -
Minority interests in net profit for the year 47 317
- -------------------------------------------------------------------------------
MINORITY INTERESTS 363 4597 7
- -------------------------------------------------------------------------------
Other equity 10763 7918 8
Provisions for liabilities and charges 11395 9691
Deferred tax 2495 2803
Goodwill 369 606
- -------------------------------------------------------------------------------
PROVISIONS 14259 13100 9
- -------------------------------------------------------------------------------
BORROWINGS 11
Debenture loans - -
Bank loans and overdrafts 96280 117383 4
Other loans and debts 27136 21988
Payments received on account - 6
TRADE CREDITORS 6
Trade creditors and related accounts 37417 38802
Tax and social security 42467 48406
Miscellaneous creditors 14655 16818
OTHER CREDITORS
Fixed-asset suppliers 8902 6766
Sundry creditors 14470 7690
DEFERRED INCOME 581 240
- -------------------------------------------------------------------------------
TOTAL LIABILITIES 241908 258099
- -------------------------------------------------------------------------------
TOTAL 503661 486751
- --------------------------------------------------------------------------------------------
CONSOLIDATED PROFIT AND LOSS ACCOUNT FOR THE YEAR ENDED 31ST AUGUST 1996
YEAR ENDED 31 AUGUST 08/31/1996 08/31/1995 NOTES TO
(FF'000) FINANCIAL
STATEMENTS
- ----------------------------------------------------------------------------------------
Goods purchased for resale 274476 147353
Manufactured goods 226395 293464
- ---------------------------------------------------------------------------
TURNOVER 500871 440817 12 18
- ---------------------------------------------------------------------------
Production inventories 11697 16750
Production capitalised 16001 15182
Operating subsidies 426 730
Provisions written back and charges transferred 28135 26026
Other operating income 1292 185 6
- ---------------------------------------------------------------------------
OPERATING INCOME 558422 499690
- ---------------------------------------------------------------------------
Purchases of goods for resale 46181 41076
Change in stocks of goods purchased for resale 21387 2847
Purchases of raw materials and consumables 36649 36969
Change in stocks of raw materials and consumables -503 3965
Other purchases and external charges 125427 125647 13
Taxes (other than corporation tax) 12585 10249
Wages and salaries 108372 98365 14
Social security costs 41615 37535
Depreciation 36954 36954
Provisions 33223 26991
Other operating charges 15965 12595 6
- ---------------------------------------------------------------------------
OPERATING CHARGES 477858 433193
- ---------------------------------------------------------------------------
OPERATING PROFIT 80567 66497
- ---------------------------------------------------------------------------
Income from securities 153 38
Interest receivable and similar income 346 1195
Provisions written back and charges transferred 268 89
Foreign exchange gains 1633 2372
Net income from the disposal of securities 388 486
- ---------------------------------------------------------------------------
FINANCIAL INCOME 2788 4180
- ---------------------------------------------------------------------------
Depreciation and provisions 570 3095
Interest payable and similar charges 10684 6320
Foreign exchange losses 1562 3821
Net charge on the disposal of securities - 3872
- ---------------------------------------------------------------------------
FINANCIAL CHARGES 12816 17108
- ---------------------------------------------------------------------------
NET FINANCIAL CHARGES -10028 -12928 15
- ---------------------------------------------------------------------------
PROFIT BEFORE TAXATION 70539 53569
- ----------------------------------------------------------------------------------------
(FF'000) 08/31/1996 08/31/1995 NOTES TO
FINANCIAL
STATEMENTS
- -------------------------------------------------------------------------------------
Exceptional income from revenue transactions 5107 2567
Exceptional income from capital transactions 4032 5053
Provision written back and charges transferred 2421 5880
- ------------------------------------------------------------------------
EXCEPTIONAL INCOME 11560 13500
- ------------------------------------------------------------------------
Exceptional charges on revenue transactions 3898 878
Exceptional charges on capital transactions 5733 2468
Depreciation and provisions 3770 6058
- ------------------------------------------------------------------------
EXCEPTIONAL CHARGES 13401 9404
- ------------------------------------------------------------------------
EXCEPTIONAL (CHARGES) INCOME -1841 4096 16
- ------------------------------------------------------------------------
Employee profit-sharing 4436 5040
Corporation tax 18775 14530 17
Share of losses in affiliated undertakings -70 -260
- ------------------------------------------------------------------------
CONSOLIDATED NET PROFIT BEFORE GOODWILL 45417 37835
AMORTISATION
- ------------------------------------------------------------------------
Goodwill amortisation 5132 2778
- ------------------------------------------------------------------------
CONSOLIDATED NET PROFIT 40285 35057 18
- ------------------------------------------------------------------------
Share accruing to minority interests 47 317
Share accruing to the Group 40238 34740
- -------------------------------------------------------------------------------------
NOTES TO THE CONSOLIDATED ACCOUNTS
1 - ACCOUNTING POLICIES
1. COMPANY ACCOUNTS
The financial statements of group companies are prepared in accordance with
accounting standards applicable in the country where they operate. Appropriate
adjustments are recorded in the consolidated accounts so to follow group
accounting policies. These policies, which are applied consistently from one
year to the next, comply with French accounting standards as well as
internationally accepted accounting principles as published by the International
Accounting Standard Committee.
2. CONSOLIDATION METHOD
Companies are fully consolidated when they meet the materiality thresholds
defined below and when they are controlled exclusively, that is, when a majority
of voting rights is held directly or indirectly, or when effective control can
be exercised either legally or contractually over their financing and operating
policy, pursuant to a contract, statutory provisions or when the holding
company, in practice, appoints the majority of member of the management,
executive and supervisory bodies.
Companies are proportionally consolidated when they are controlled jointly with
another group such that effective management control and voting rights are
shared equally.
Companies over which Landanger-Camus exercises significant influence over
financing and operating policy are accounted for by the equity method. The Group
is considered to exercise significant influence when it controls at least 20% of
voting rights.
Participating interests meeting the above criteria, but where control is
intended to be temporary or which fail to meet the following materiality
thresholds, are not consolidated. These thresholds are turnover of FF1m and
total assets of FF1m.
All intra-group transactions are eliminated on consolidation, as well as intra-
group income and charges (profits on disposal, inventory profits, dividends,
etc.).
3. INTANGIBLE FIXED ASSETS
Intangible fixed assets are recorded at historical cost, excluding any financial
charges. Research and development costs as well as costs to file and maintain
patents are charged to the profit and loss account in the year when incurred.
Other intangible assets are amortised using the straight-line method over their
estimated useful life, not exceeding five years. Software is amortised over
three years, patents over five years.
4. GOODWILL ON ACQUISITION
Goodwill is the excess of purchase consideration over the fair value of net
assets acquired on the date when first included in the consolidation scope.
Fair-value adjustments are allocated to the asset line items concerned. Any
amount remaining is capitalised under the heading "Goodwill on acquisition" and
amortised using the straight-line method over a period determined on a case-by-
case basis according to the assumptions made and objectives set when the
acquisition was made. This period is set by default at five years but in any
event cannot exceed twenty years.
5. TANGIBLE FIXED ASSETS
The gross value at which tangible fixed assets are reported on the balance sheet
corresponds to acquisition cost, or net book value when recorded in connection
with an asset contribution, excluding all financial charges and all
reevaluation.
Assets with a value of over FF100,000 made available under a finance lease,
hire-purchase or similar agreement are capitalised at their original value, and
the corresponding lease obligation is recorded as a liability.
Tangible fixed assets are depreciated using the straight-line method over their
estimated useful life as indicated below:
Buildings: 20 years
-Industrial equipment: 4 to 5 years
-Tooling: 3 years
-Furniture and fittings: 8 years
-Computer equipment: 3 years
-Office equipment: 3 to 5 years
-Motor vehicles: 5 years
Demonstration equipment, mainly endoscopic equipment, is capitalised and
depreciated over three years.
Ancillary equipment made available to customers is capitalised and depreciated
over two years.
6. FIXED ASSET INVESTMENTS
The gross value at which investments are reported on the balance sheet
corresponds to acquisition cost. A provision for diminution of value is recorded
when the group's share of net assets is inferior to cost, in the case of non-
consolidated companies, or when the loan or advance is unlikely to be recovered.
7. INVENTORY
Goods for resale and raw materials are valued at purchase price plus incidental
costs using the method known as "first in, first out" (FIFO). Work in progress
and finished products are valued at production cost, which includes raw material
purchase cost as well as direct and indirect production costs based on a normal
level of activity. Ancillary equipment and equipment used to fit orthopaedic
implants will either be:
- - Sold to customers, notably abroad; or
- -Made available free of charge to customers, as is the practice in France.
Consequently, when this equipment is new it is entered into inventory. If the
equipment is subsequently sold, the transaction is recorded under turnover. If
it is made available free of charge to customers, it is transferred to tangible
fixed assets.
Implants on loan or deposit at customers are entered into inventory. They give
rise to a flat 30% provision for depreciation so as to make allowance for
losses and extreme sizes not fitted frequently.
Finished products and goods for resale give rise to provisions for depreciation
determined by reference to the inventory turnover rate for each line or when net
realisable value is inferior to book value.
8. PROVISIONS
a) Provision for retirement indemnities
This provision is intended to cover the present value of the employees' vested
rights in respect of contractual indemnities payable on retirement.
Retirement obligations are calculated using an actuarial method based on the
proportion of vested rights of employees on the payroll at the date the
calculation is done, taking into account the probability that those employees
will remain employed within the Group and applying a statistical mortality
table.
b) Provision for doubtful debts3
A provision for diminution of value is recorded when carrying value is inferior
to book value. Carrying value is determined taking into account circumstances
and applying the prudence concept.
c) Provision for liabilities and charges
This provision concerns liabilities and charges whose nature has been clearly
identified and which, given events that have occurred or are occurring, are
likely to materialise.
9. TAXATION
The tax charge includes current taxes payable by each company included in the
consolidation scope, adjusted for deferred taxes.
Deferred taxes result mainly from consolidation adjustments, the elimination of
intra-group profits and timing differences between accounting and taxable
income. Deferred tax is calculated in respect of all timing differences under
the liability method. Deferred tax assets are recognised by individual companies
only to the extent of deferred tax liabilities recognised by the same company,
unless the company is assured of obtaining relief for any losses by carrying
those losses back, or unless the company's earnings prospects make it probable
that losses can be relieved in future periods.
10. FOREIGN CURRENCIES
Foreign-currency transactions are translated at the exchange rate ruling on the
transaction date. Assets and liabilities in foreign currencies are translated at
the exchange rates ruling at the balance sheet date. Differences resulting from
the translation of foreign currency transactions are taken to the profit and
loss account.
The financial statements of foreign subsidiaries are translated into French
francs under the net investment method "methode du cours de cloture".
Accordingly:
- - Amounts in the balance sheet are translated at the year-end exchange rate;
- - Amounts in the profit and loss account are translated at the average exchange
rate;
- - The resulting translation difference is taken directly to reserves.
2 - CONSOLIDATION SCOPE
% OWNED CONSOLIDATION
08/31/1996 08/31/95 METHOD
------------------------------------------
Landanger-Camus 100 100 Full consolidation
Landos Orthopadie 100 100 Full consolidation
Landos Espana 100 100 Full consolidation
Landos Italia 100 34 Full consolidation
Landos Nederland 100 100 Full consolidation
Landanger Landos 100 100 Full consolidation
Bioland 98 89 Full consolidation
Medinov AMP 99.71 99.47 Full consolidation
Mikroland 99.95 99.95 Full consolidation
Landos Biomecanique 97 97 Full consolidation
Landos International 94 94 Full consolidation
Landos Inc. 100 100 Full consolidation
Bioland Pharma 99.8 99.8 Full consolidation
Geyser 37.43 33.33 Equity accounted
Techland 100 100 Full consolidation
Sushrut 40 40 Equity accounted
Adler 40 40 Equity accounted
Landexing 100 100 Full consolidation
Gestion Conseil Landanger 99.8 99.8 Full consolidation
Medinov Italia 30 30 Equity accounted
Memo implants 100 70 Full consolidation
A.M.P. Developpement 100 85.05 Full consolidation
AMP Industrie (absorbed by Medinov AMP) - 99.98 -
A.M.P. Medical (absorbed by Medinov AMP) - 99.85 -
SCI Pamerland 100 - Full consolidation
SCI AM 90 - Full consolidation
------------------------------------------
Major events:
- ------------
- - On 30th November 1995 the endoscopy business was transferred from Landanger
Landos, a fully consolidated subsidiary, to Geyser, a company accounted for by
the equity method. The endoscopy business carried on by Geyser generated a net
loss of FF537 thousand on turnover of FF6,408 thousand.
- - Landos Italia became a fully-owned subsidiary on 1st April 1996. Accordingly,
this company, previously accounted for by the equity method, has been fully
consolidated since that date. Landos Italia contributed a loss of FF1,143
thousand on turnover of FF5,750 thousand for the period from April to August
1996.
NON-CONSOLIDATED COMPANIES
% OWNED NET BOOK VALUE ON
BALANCE SHEET
31/08/96 31/08/95 31/08/96 31/08/95
- ------------------------------------------------------------------------------------
- - Companies not meeting the turnover and
total assets criteria:
Landos UK 100.00 100.00 - -
Medinov Distribution 100.00 100.00 115 115
Apophyse 30.00 30.00 - -
AED Soft 41.18 41.18 70 70
Kaenta 25.00 25.00 - 150
- - Companies less than 20% owned:
Surgical Innovation 9.5 9.5 - -
Sopagefi 8.05 8.05 2068 2055
Texinfine 14.25 14.25 250 250
Other n/a n/a 50 63
- - Companies for which accounting data was
not available in time:
Landor
-----------------
2553 2703
- ------------------------------------------------------------------------------------
3 - GOODWILL ON ACQUISITION
1. POSITIVE GOODWILL
COMPANIES ACQUIRED 31/08/95 INCREASE DECREASE 31/08/96
- ------------------------------------------------------------------------------------
Landos Orthopadie 5478 - - 5478
Landanger Landos 1035 - 1035 -
Walton Medical 2257 - 2257 -
Medinov - AMP 6726 - 1203 5523
Bioland Pharma 149 - - 149
Bioland 1600 1180 - 2780
Techland 1872 - - 1872
Sushrut 857 - - 857
Adler 162 - - 162
AMP Developpement 18200 15965 - 34165
Medinov AMP Medical 1392 - - 1392
Geyser - 76 - 76
Landos Italia - 2737 - 2737
- ------------------------------------------------------------------------------------
TOTAL 39728 19958 4495 55191
- ------------------------------------------------------------------------------------
Depreciation Period
Landos Orthopadie 5 years 3841 1096 - 4937
Landanger Landos 5 years 1035 - 1035 -
Walton Medical 5 years 2257 - 2257 -
Medinov - AMP 5 years 4071 1104 1203 3972
Bioland Pharma 5 years 90 30 - 120
Bioland 5 years 67 396 - 463
Techland 5 years 102 374 - 476
Sushrut 5 years 171 171 - 342
Adler 5 years 32 32 - 64
AMP Developpement 15 years 317 1656 - 1973
AMP Medical 5 years 672 274 - 946
Geyser 5 years - 8 - 8
Landos Italia 5 years - 228 - 228
- ------------------------------------------------------------------------------------
TOTAL 12655 5369 4495 13529
- ------------------------------------------------------------------------------------
2. NEGATIVE GOODWILL
COMPANIES ACQUIRED: 31/08/95 INCREASE DECREASE 31/08/96
- ------------------------------------------------------------------------------------
AMP Industrie 606 - 237 369
- ------------------------------------------------------------------------------------
TOTAL 606 - 237 369
- ------------------------------------------------------------------------------------
4 - FINANCE LEASES
GROSS VALUE
31/08/95 ADDITIONS DISPOSALS 31/08/96
- ---------------------------------------------------------------------------------------------
Land 413 - - 413
Buildings 42102 - - 42102
Machinery and equipment 25877 1216 - 27093
Other tangible fixed assets 7785 - 131 7654
-----------------------------------------------
76177 1216 131 77262
-----------------------------------------------
DEPRECIATION
-----------------------------------------------
31/08/95 CHARGE WRITE-BACK 31/08/96
-----------------------------------------------
Buildings 10680 2108 - 12788
Machinery and equipment 21253 2725 - 23978
Other tangible fixed assets 4523 1073 131 5465
-----------------------------------------------
36456 5906 131 42231
-----------------------------------------------
LESS THAN 1 TO 5 MORE THAN TOTAL
1 YEAR YEARS 5 YEARS
Lease obligations 5882 14234 15210 35326
- ---------------------------------------------------------------------------------------------
5 - MOVEMENTS IN FIXED ASSETS
Gross value INTANGIBLE TANGIBLE INVESTMENTS TOTAL
ASSETS ASSETS
- ---------------------------------------------------------------------------------------------
Opening balance (08/31/95) 15695 235616 7970 259281
Additions and increases 11663 31320 312 43295
Valuation difference - 2748 - -
Disposals and reductions -365 -34401 -556 -35322
Transfers - - - -
Change in consolidation scope 585 6994 - 7579
Currency translation difference 30 35 - 65
- ---------------------------------------------------------------------------------------------
CLOSING BALANCE (08/31/96) 27608 242312 7726 277646
- ---------------------------------------------------------------------------------------------
Depreciation INTANGIBLE TANGIBLE INVESTMENTS TOTAL
ASSETS ASSETS
- ---------------------------------------------------------------------------------------------
Opening balance (08/31/95) 9958 142878 2998 155834
Charge and increases 3789 35039 579 39407
Write-back and reductions -171 -30055 -268 -30494
Transfers 14 (14) - -
Change in consolidation scope 72 2153 - 2225
Currency translation difference 20 20 - 40
- ---------------------------------------------------------------------------------------------
CLOSING BALANCE (08/31/96) 13682 150021 3309 167012
- ---------------------------------------------------------------------------------------------
6 - OTHER OPERATING ITEMS
OTHER DEBTORS
- -Staff 765
- -Social security 269
- -VAT 12,566
- -Grants receivable 528
- -Advance corporation tax 6,710
- -Other taxes paid on account 1,702
- -Consigned containers 218
- -Other 22,842
OTHER CREDITORS
- -Commission, discounts and royalties payable 14,655
OTHER INCOME
- -Rental income - buildings 93
- -Royalties receivable from patents 1,199
1,292
OTHER CHARGES
- -Royalties payable on patents 15,616
- -Bad debts 349
15,965
7 - MOVEMENT IN CAPITAL AND RESERVES
Opening balance (08/31/95) 207,634
Change in share capital of parent company -
Net profit for the year ended 40,285
Dividend (7,271)
Currency translation difference (121)
Change in consolidation scope (3,796)
CLOSING BALANCE (08/31/96) 236,731
8 - OTHER EQUITY
OPENING INCREASE DECREASE CHANGE IN CLOSING
BALANCE CONSOLIDATION SCOPE BALANCE
(08/31/95) (08/31/96)
-------------------------------------------------------------------
Conditional advances from 7918 3220 1330 955 10763
ANVAR
-------------------------------------------------------------------
Less than 1 year 1955 1830
2 to 5 years 5963 8233
More than 5 years - 700
-------------------------------------------------------------------
7918 10763
-------------------------------------------------------------------
9 - PROVISIONS
OPENING INCREASE DECREASE CHANGE IN CLOSING
BALANCE CONSOLIDATION SCOPE BALANCE
(08/31/95) (08/31/96)
----------------------------------------------------------------------
1. For liabilities and charges
Customer disputes 550 607 472 - 685
Employee disputes 950 600 950 - 600
Restructuring 230 200 430 - -
Retirement indemnities 4938 1239 133 189 6233
Tax 2378 1223 354 - 3247
Indexation 639 94 103 - 630
Other provisions 6 - 6 - -
----------------------------------------------------------------------
9691 3963 2448 189 11395
----------------------------------------------------------------------
2. For deferred tax
Calculated under the liability
method 2803 562 893 23 2495
----------------------------------------------------------------------
10 - CURRENCY RISK
Foreign-currency liabilities to third parties FOREIGN CURRENCY FRENCH FRANC
AMOUNT AMOUNT
--------------------------------
US dollar 195 989
Dutch guilder 304 928
Deutsche mark 792 2709
Pound sterling 52 410
Japanese yen 550 25
Swiss franc 62 261
---------
5322
--------------------------------
Foreign-currency liabilities to group companies FOREIGN CURRENCY FRENCH FRANC
AMOUNT AMOUNT
--------------------------------
US dollar 798 4047
Dutch guilder 2346 7156
Deutsche mark 3015 10313
Swiss franc 5231 22074
Spanish peseta 477679 19346
Italian lira 1478957 4955
Indian rupee 1807 257
Chinese yuan 1894 1157
---------
69305
--------------------------------
11 - BORROWINGS
OPENING CHANGE IN INCREASE DECREASE CLOSING
BALANCE CONSOLIDATION BALANCE
(08/31/95) SCOPE (08/31/96)
------------------------------------------------------------
1. Analysis by nature
Bank loans 66989 3075 8838 26799 52103
Finance leases 40205 - 1216 6095 35326
Employee profit-sharing 9883 - 5694 3079 12498
Coface advances 4477 - 2220 451 6246
Life annuities 6809 - 94 967 5936
Deposits - 80 - - 80
Factoring 3204 2017 - 879 4342
Accrued interest on loans 819 - 129 - 948
Bank overdrafts 6824 - - 989 5835
Accrued interest on bank overdrafts 161 - - 59 102
------------------------------------------------------------
139371 5172 18191 39318 123416
------------------------------------------------------------
2. Analysis by maturity
Due in less than 1 year 47511 46447
Due in 1 to 5 years 71714 58942
Due in more than 5 years 20146 18027
------------------------------------------------------------
139371 123416
------------------------------------------------------------
Average interest rate 6.62%
Proportion of borrowings bearing a variable interest rate 25.00%
12 - TURNOVER
1. By business line 08/31/96 08/31/95
--------------------
Orthopaedics 408 440 342 547
Surgery 32 294 37 959
Endoscopy 10 975 18 131
Traumatology 20 541 17 567
Bio-materials 23 972 21 132
Other 4 649 3 481
--------------------
500 871 440 817
--------------------
2. By geographical region 08/31/96 08/31/95
--------------------
France 368 624 321 587
European Union 103 662 90 793
Rest of the world 28 585 28 437
--------------------
500 871 440 817
--------------------
13 - RESEARCH AND DEVELOPMENT COSTS
Research and development costs charged to the profit and loss accounts amounted
to FF23,817 thousand in the year ended 31st August 1996.
14 - STAFF
AVERAGE STAFF COSTS*
NUMBER
----------------------------------
Senior managers 15 12 558
Administrative managers 36 12 586
Sales managers 40 20 415
Technical managers 55 20 332
Clerical staff 220 35 692
Production staff 169 27 697
Sales staff 44 23 165
----------------------------------
579 152 445
----------------------------------
* including payroll taxes
15 - NET FINANCIAL ITEMS
08/31/96
INCOME
-Interest 499
-Provision for foreign exchange losses written back -
-Provision for indexation written back 123
-Provision against financial assets written back 145
-Foreign exchange gains 1 633
-Net income from the disposal of securities 388
CHARGES
-Interest on loans and bank overdrafts -7 128
-Interest on lease payments -3 556
-Provision for foreign exchange losses -
-Provision against financial assets -308
-Provision against securities -150
-Provision for indexation -112
-Foreign exchange losses -1 562
--------------
NET FINANCIAL INCOME/(CHARGES) -10 028
--------------
16 - EXCEPTIONAL ITEMS
ON REVENUE TRANSACTIONS CHARGES
-------------
-Adjustment to trade debtor balances 24
-Adjustment to trade creditor balances 263
-Penalties 216
-Adjustment to company accounts 59
-Adjustment to tax 125
-Customer disputes 421
-Employee disputes 1188
-Restructuring 88
-Other 1514
-------------
3898
-------------
GAINS
-------------
-Adjustment to trade debtor balances 338
-Adjustment to trade creditor balances 669
-Penalties -
-Cheques not honoured -
-Adjustment to company accounts 663
-Adjustment to tax 3164
-Adjustment to corporation tax (change to tax law) 180
-Customer disputes 93
-Guarantees extended to buyer -
-Difference in opening net book value -
-------------
5107
-------------
ON CAPITAL TRANSACTIONS NET INCOME
-Disposal of tangible fixed assets -1821
-Disposal of investments -
-Share of investment subsidies credited to income 120
-------------
-1701
-------------
PROVISIONS PROVISIONAL
EXPENSES
-------------
-Retirement indemnities 1226
-Employee disputes 600
-Customer disputes 607
-Restructuring 200
-Tax audit 1137
-Doubtful debts 3770
-------------
RECOVERY
ON
PROVISIONS
-------------
-Retirement indemnities 133
-Restructuring 430
-Tax 54
-Employee disputes 950
-Customer disputes 854
-------------
2421
-------------
NET EXCEPTIONAL CHARGE -1841
-------------
17 - TAXATION
Current tax 19 590
Tax credit - Research (2,236)
Tax credit - Training (54)
17 300
Deferred tax
- -Deferred tax charge 4 245
- -Deferred tax credit (2,769)
-------
18 776
Profit before tax and employee profit-sharing 68,698
Effective tax rate 27.33%
Movement in deferred tax OPENING CHANGE IN INCREASE DECREASE CLOSING
BALANCE CONSOLIDATION BALANCE
(08/31/95) SCOPE (08/31/95)
------------------------------------------------------------
-Deferred tax asset 14 227 457 1 923 3 729 12 878
-Deferred tax liability 2 803 23 562 893 2 495
------------------------------------------------------------
Net balance 11 424 434 1 361 2 836 10 383
------------------------------------------------------------
In accordance with the principle of prudence, ordinary tax losses carried
forward and deferred capital allowances do not give rise to the recognition of a
deferred tax asset in the consolidated accounts.
18 - OFF-BALANCE-SHEET COMMITMENTS
COMMITMENTS GIVEN
Emco shares pledged as collateral for the loan repayable in 1997 1,563
Guarantees given in respect of loans to subsidiaries 14,670
COMMITMENTS RECEIVED
Guarantees received from an executive officer 3,922
19 - FINANCING
CASH FLOW STATEMENT
SOURCES
Cash flow from operations 88 520
Disposals and reductions in fixed assets 4 459
Increase in capital subscribed by minority shareholders -
New loans and credit facilities 21 543
---------
114 522
---------
APPLICATIONS
Dividends paid 6 491
Fixed asset acquisitions
-Intangible assets 11 663
-Tangible assets 31 320
-Participating interests 26 374
-Other fixed assets 403
Repayment of loans and bank overdrafts 39 861
Change in working capital requirements -1 590
---------
114 522
---------
CASH FLOW FROM OPERATIONS
Net profit for the year 40 285
Share in earnings of companies accounted for by the equity method 184
Depreciation 42 112
Exceptional and financial provisions 5 096
Exceptional provisions written back -2 654
Proceeds from asset disposals -3 912
Net book value of assets sold 5 732
Change in consolidation scope 202
Deferred tax 1 475
----------
88 520
----------
% of turnover 17.67%
CHANGE IN WORKING CAPITAL REQUIREMENTS
Stocks (net) -12 524
Trade debtors and operating debtors 4 533
Trade creditors and operating creditors 5 911
Other debtors -9 227
Other creditors 4 204
Cash at bank and in hand 5 513
----------
-1 590
----------
EXHIBIT 2.2.2(b)
----------------
CONDITIONS OF OPENING AND OPERATION
-----------------------------------
OF THE ESCROW ACCOUNTS
----------------------
1. In conformity with the Share Purchase Agreement, the following
funds will be put into escrow by the Purchaser:
- the negative difference between (i) the amount of the consolidated
net asset value of the Landanger-Camus Group as of 28 February 1997 as shown on
the consolidated balance sheet, not audited by the Purchaser's accountants, and
(ii) the amount of the net asset value of such Group as of 31 August 1996; and
- if applicable, 48 million Francs in anticipation of a possible
decrease in the Tarif Interministerial of the Prestations Sanitaires, if same
has not occurred by the Closing Date.
2. The conditions of opening and operation of the escrow accounts
will be mutually agreed upon between the Parties likely to benefit from such
funds (the "Parties Involved") and the bank appointed as escrow agent, in
accordance with the following principles:
2.1 The escrow accounts will be opened at the head office, or at one
of the Paris or Luxembourg branches, of the Banque Paribas (hereinafter referred
to as the "Banque Paribas").
2.2 The Banque Paribas will invest the funds in escrow in one (or
several) financial products giving optimum remuneration on such funds,
considering (i) the probable and, in any case, the maximum period of time during
which such funds will be kept in escrow, and (ii) the tax regime applicable to
each of the Parties Involved. The "optimum" nature of the investment selected
will be fixed based on the hypothesis that upon release of the funds in escrow,
same will be divided in equal parts between the Parties Involved.
2.3 The interest earned on the funds in escrow will be allotted to
the Parties Involved in pro rata to the amounts in capital distributed amongst
them at the time of release of the funds.
2.4 The Banque Paribas may be reasonably remunerated for carrying-out
its mission as escrow agent.
2.5 The funds in escrow and the interest earned thereon will only be
released upon receipt by the Banque Paribas of a letter signed jointly by (i)
the law firm of Coudert Freres, 52, avenue des Champs-Elysees, 75008 Paris, and
(ii) the law firm of Desfilis, Juchs & Associes, 49 bis, avenue F.D. Roosevelt,
75508 Paris, and attesting to satisfaction of the conditions required to be met
for such funds to be released, as same are set forth in the Share Purchase
Agreement.
2.
2.6 The costs and expenses incurred in connection with the putting
into escrow of the above-mentioned funds and operation of the escrow accounts
(in particular, any remuneration of the Banque Paribas) will be split equally
between the Parties Involved. To the extent possible, such costs and expenses
will be deducted by the Banque Paribas from the funds in escrow prior to the
distribution of such funds among the Parties Involved, it being understood that
the Parties will not be held jointly and severally liable vis-a-vis the Banque
Paribas for payment of such costs and expenses.
2.7 The Banque Paribas will not become involved in any agreement or
dispute between the Parties Involved, and will not be required to watch over
execution of such agreements or follow developments in such disputes.
2.8 Any dispute arising as a result of the execution or
interpretation of the escrow agreements will be submitted to the jurisdiction of
the competent Paris courts.
* *
*
Privileged & confidential February 26, 1997
DRAFT
EXHIBIT 2.2.2(c)
DEFINITION OF NET ASSET VALUE
NET ASSET VALUE of the Champagne Group is defined as THE GROUP STOCKHOLDERS'
EQUITY (TOTAL DES CAPITAUX PROPRES), as shown on the face of the consolidated
balance sheet at August 31, 1996.
It excludes Minority Interests and Autres Fonds Propres.
The NET ASSET VALUE of the Champagne Group at August 31, 1996 amounted to:
FF 236 368 000, calculated as follows:
- - Total Assets: FF 503 661 000
- - Less:
- Total of debt
(TOTAL DETTES): 241 908 000
- - Total Provisions
(TOTAL PROVISIONS): 14 259 000
- - Autres fonds propres: 10 763 000
- - Minority Interests
(TOTAL MINORITAIRES): 363 000
--------------
NET ASSET VALUE: FF 236 368 000
==============
EXHIBIT 2.2.4
COMPARATIVE STUDY OF HIP
IMPLANTS SALES MADE BY
LANDANGER-LANDOS S.A. AND
MEDINOV-A.M.P. S.A. TOWARDS
PRIVATE CLINICS ONLY AND DURING
THE PERIOD FROM SEPTEMBER 1ST, 1996
TO NOVEMBER 30, 1996.
- - Sales comparison made during the period from September 1st, 1996 to November
30, 1996 and sales forecast done by application of the projected "nomenclature
T.I.P.S" as of February 17, 1997.
- - This study relied only on sales made to private clinics (and not sales made to
hospitals and distributors)
NEW TIPS SIMULATION
APPLICATION OF THE GRID OF FEB. 17, 1997
LANDANGER MEDINOV TRIM YEAR
C.A. PRIVE (Rea 09-11/96) 25347.0 14172.9 39519.9 133644.4
Sales Private sector
Ecart C.A. (gain + perte) -951.1 -901.2 -1852.3 -6075.7
Difference in sales (profit
and loss)
Ecart en % -3.8 % -6.4 % -4.7 % -4.5 %
Difference in %
LANDANGER-LANDOS : NEW TIPS SIMULATION (PRIVATE SECTOR: CLINICS)
----------------------------------------------------------------
SEPTEMBER TO NOVEMBER 1996
- ---------------------------------------------------------------------------------------------------------------------
PRIVE 9 A 11.96 C. A.
PRIVATE SECTOR FROM 9 TO 11, 1996 Sales
----------------------------------------------------------------------------------
Au 17.2
Volume C. A. Moyen TOTAL Actuel As of C ECART
Volume Sales Average TOTAL Current Feb. 17 C Difference
- ---------------------------------------------------------------------------------------------------------------------
autoblocante 5 275 5 143
titan 231 1 150.6 4.981 1 150.60 5 275 5 143 1 126.1 -24.5
TITAN: L96236-L96238 8 50.0 6.250 50.00 6 594 6 429 48.8 -1.2
corail 1 099 6 566.5 5.975 6 566.50 6 330 6 172 6 429.4 -137.1
CORAIL :L92508-L92506 9 63.2 7.002 63.20 7 406 7 221 61.6 -1.6
Euroform ciment 115 741.8 6.450 741.80 6 805 6 250 681.3 -60.55
Euroform Hac 146 1 123.4 7.695 1 123.40 8 118 7 300 1 010.2 -113.2
Kronos cim 172 864.0 5.023 864.00 5 275 5 143 838.5 -25.5
KRONOS :L36480-490-500 11 68.6 6.236 68.60 6 594 5 143 53.6 -15.0
Kronos cim L36080-90-100 8 49.9 6.238 49.90 5 275 6 429 48.8 -1.1
Kronos s/cim L36560a580 6 36.0 6.000 36.00 6 330 7 221 41.1 5.1
Egoform 3 83.5 27.833 83.50 25 000 17 000 48.3 -35.2
Kar 148 1 032.9 6.979 1 032.90 7406 7 221 1 013.0 -19.9
Fjord 2 10.0 5.000 10.00 5275 5 143 9.7 -0.3
Phaland 55 423.2 7.695 423.20 8 118 7 300 380.6 -42.6
Reconstitution 3 57.0 19.000 57.00 8 000 22.7 -34.3
Reef 15 284.5 18.957 284.50 9 000 128.0 -156.5
TD ciment 23 139.6 6.070 139.60 6 594 6 429 140.2 0.6
TD Hac 33 227.0 6.879 227.00 7 406 7 221 225.9 -1.1
Dysplasique cim 1 6.4 6.400 6.40 6 805 5 143 4.9 -1.5
Dysplasique hac 8 118 6 172
Reconstruc. cim 3 19.3 6.433 19.30 6 805 8 000 22.7 3.4
Reconstruc. hac 4 30.8 7.700 30.80 8 118 9 000 34.1 3.3
PVL 106 528.7 4.988 528.70 5275 5 143 516.7 -12.0
Divers/speciales
TIGE (Stem) 2,201 139 6 159 13 556.90 12 886.2 -6707
Moore-Thomps. 73 115.7 1 585 115.70 1994 1 400 96.9 -18.8
Ecart -670.7
Ancillaire & avoir
alumine 1 644 4 088.5 2.487 4 088.50 2 637 2 556 3 983.0 -105.5
inox 455 585.8 1.287 585.80 1 371 1 477 637.0 51.2
Inox S:facture 11 33.0 3.000 33.00 3 000 1 477 15.4 -17.6
Cocr 97 144.8 1.493 144.80 1 583 1 477 135.8 -9.0
Zircom 64 159.9 2.498 159.90 2 637 2 556 155.1 -4.8
speciales - (cephaliques 7 33.7 4.814 33.70 5 943 2 556 17.0 -16.7
type Moore 1 371 1 477
TETE (head) 2 278 5 045.7 2.215 5 045.70 4 943.2 -102.5
tropic 394 1 693.7 4.299 1 693.70 4 537 4 431 1 654.8 -38.9
atoll 299 1 287.9 4.307 1 287.90 4 537 4 431 1 255.8 -32.1
vis 1,488 343.4 0.231 343.40 250 244 344.1 0.7
insert trop/atoll 1,063 713.7 0.671 713.70 700 683 688.2 -25.5
calypso 11 47.7 4.336 47.70 4 537 4 431 46.2 -1.5
corol 77 333.9 4.336 333.90 4 537 4 431 323.4 -10.5
Cbs 179 719.9 4022 719.90 4 537 4 431 751.8 31.9
- ---------------------------------------------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------------------------------------------
PRIVE 9 A 11.96 C. A.
PRIVATE SECTOR FROM 9 TO 11, 1996 Sales
----------------------------------------------------------------------------------
Au 17.2
Volume C. A. Moyen TOTAL Actuel As of C ECART
Volume Sales Average TOTAL Current Feb. 17 C Difference
- ---------------------------------------------------------------------------------------------------------------------
Pe sdt 179 125.0 0.698 125.00 738 738 125.2 0.2
Pe Kronos 212 147.6 0.696 147.60 738 738 148.3 0.7
Kronos dysplasique 2 16.1 8.050 16.10 738 8 000 15.2 -0.9
Octopus module 31 134.4 4.335 134.40 5 275 7 500 220.4 86.0
Octopus implant 16 55.8 3.488 55.80 1 899 1 852 28.1 -27.7
Octopus insert 24 24.5 1.021 24.50 700 683 15.5 -9.0
cupule mobile 213 627.3 2.945 627.30 3 165 2 500 504.7 -122.6
Galaxy 75 325.2 4.336 325.20 4 537 4 431 315.0 -10.2
divers/speciaux
PVL 47 32.6 0.694 32.60 738 738 32.9 0.3
Charnley
COTYLE 4,310 6,628.7 1.538 6 628.70 6 469.6 -159.1
Ancillaire + Access.
TOTAL HIPS
Without MOORE 8,789 25,253.3 2.87 25 231.30 24 299.0 -932.3
With MOORE 8,862 25,347.0 2.86 25 347.00 24 395.9 -951.1
Difference for 3 months -932.3
-951.1
Value for one year (1 tri/3*11) -3 418.4
-3.8%
- ---------------------------------------------------------------------------------------------------------------------
MEDINOV: NEW TIPS SIMULATION (ONLY PRIVATE SECTOR - CLINICS)
------------------------------------------------------------
SEPTEMBER TO NOVEMBER 1996
--------------------------
- -------------------------------------------------------------------------------------------------------------------
PRIVE 9 A 11.96 TOTAL
----------------------------------------------------------------------------------------
Au 17.2
Volume C. A. Moyen 3 mois Actuel As of C T ECART
Volume Sales Average 3 months Current Feb. 17 Difference
- -------------------------------------------------------------------------------------------------------------------
Modulcor cim 330 1 674.5 5.074 1 674.5 5 275 5 143 1 608.7 1 608.7 -65.8
Alliance cim 23 115.0 5.000 115.0 5 275 5 143 112.1 112.1 -2.9
Alliance s/cim 189 1 142.2 6.043 1 142.2 6 330 6 172 1 105.7 1 105.7 -36.5
Geomodular s/cim 6 330 6 172
Geomodular II S/cim 6 330 6 172
Morphometric I cim 130 839.8 6.460 839.8 6 805 6 250 770.1 770.1 -69.7
Morphometric I s/cim 343 2 639.3 7.695 2 639.3 8 118 7 300 2 373.4 2 373.4 -265.9
Morphometric II s/cim 83 638.7 7.695 638.7 8 118 7 300 574.3 574.3 -64.4
Morphometric V s/cim 22 161.6 7.345 161.6 8 118 9 000 187.7 187.7 26.1
Kerboul Cochin cim 3 781 3 394
Adapt 1 47.5 47.500 47.5 17 000 16.1 16.1 -31.4
Morpho 5 (diaphyse) 16 7.7 0.481 7.7 -7.7
Autoblocante
Morpho adapt
TIGE 1 137 7 266.3 6.391 7 266.3 6 748.1 6 748.1 -518.2
Moore-Thomps. 1 994 1 400
Ecart (Difference) -518.2 -518.2
2 637 2 556
Tete inox 251 326.1 1.299 326.1 1 371 1 477 351.4 351.4 25.3
Tete chrome cobalte 42 63.0 1.500 63.0 3 000 1 477 58.8 58.8 -4.2
Tete zircone 849 2115.9 2.492 2 115.9 2 637 2 571 2 069.0 2 069.0 -46.9
TETE 1 142 2 505.0 2.194 2 505.0 2 479.2 2 479.2 -25.8
-25.8
Cotyle omega 467 2 025.1 4.336 2 025.1 4537 4 431 1 961.4 1 961.4 -63.7
Cotyle spring 8 34.7 4.336 34.7 4537 4 431 33.6 33.6 -1.1
Cotyle Sophia II 5 25.0 5.000 25.0 4537 4 431 21.0 21.0 -4.0
Cotyle Alliance 200 867.3 4.337 867.3 4537 4 431 840.0 840.0 -27.3
Insert 780 519.6 0.666 519.6 700 683 505.0 505.0 -14.6
cupule mobile 41 121.5 2.963 121.5 3165 2 500 97.2 97.2 -24.3
butee 131 256.3 1.956 256.3 1583 350 43.5 43.5 -212.8
fond de cotyle 1899 1 852
vis cotyle 1 362 321.4 0.236 321.4 250 244 315.0 315.0 -6.4
cotyle PE 147 102.8 0.699 102.8 738 738 102.8 102.8 0.0
Obturateur 321 120.4 0.375 120.4 396 386 117.4 117.4 -2.9
col amovible morpho 80 7.5 0.094 7.5 1 000 7.5 7.5
COTYLE 3 542 4 401.6 1.243 4 401.6 4 044.4 4 044.4 -357.2
Ancillaire + Access -357.2
TOTAL HIPS
Without MOORE 5 821 14 172.9 2.43 14 172.9 1 400.0 13 271.7 13 271.7 -901.2
With MOORE 5 821 14 172.9 2.43 14 172.9 2 800.0 13 271.7 13 271.7 -901.2
Difference for 3 months -901.2 -901.2
-901.2 -901.2
-3 451.6
Coef pour an 3.83 -6.4%
- --------------------------------------------------------------------------------------------------------------------
CONCLUSIONS OF CNAMTS MEETING - FEBRUARY 17, 1997
- -----------------------------------------------------------------------------------------------------------------------------------
301E01.4 HIP ARTICULATED IMPLANTS Total TARIFS Counter 2,50 % SAVING %
Volume TIPS proposal TARIF CNAM decrease
Private SNITEM established or
17-fev-97 CNAM 0,9750 increase
- ------------------------------------------------------------------------------------------------------------------------------------
301E01.41 Standard Stems (neck 36 586
included)
301E01.411 Right stem, monoblock, 3 781 3 481 F 3 481 F 3 394 F 329 042 2.5%
cemented
301E01.413 Right stem, modular, cemented 23 498 5 275 F 5 275 F 5 143 F 3 098 799 2.5%
301E01.414 Right stem, modular, 9 307 6 330 F 6 330 F 6 172 F 1 472 833 2.5%
non-cemented
- ------------------------------------------------------------------------------------------------------------------------------------
301E01.42 Anatomic Stems 16 939
301E01.421 Cemented anatomic stems 5 190 6 805 F 6 250 F 6 250 F 2 880 450 8.2%
301E01.422 Non-cemented anatomic stems 11 749 8 118 F 7 300 F 7 300 F 9 610 682 10.1%
- ------------------------------------------------------------------------------------------------------------------------------------
301E01.43 Revision stem (neck included) 8 611
Right stem monoblock 567 4 748 F 4 748 F 4 629 F 67 303 2.5%
301E01.441 Modular stem, cemented 5 265 6 594 F 6 594 F 6 429 F 867 935 2.5%
301E01.442 Modular stem, non-cemented 2 779 7 406 F 7 406 F 7 221 F 514 532 2.5%
301E01.44 Stem for reconstruction (neck 1 283
included)
301E01.431 Modular stem, cemented 274 15 000 F 8 000 F 8 000 F 1 918 000 46.7%
301E01.432 Modular stem, non-cemented 1 009 15 000 F 9 000 F 9 000 F 6 054 000 40.0%
301E01.45 Head and lunar head 78 291
301E01.451 metallic (metal or metallic 40 462 1 583 F 1 477 F 1 477 F 4 288 972 6.7%
alloy)
301E01.452 Ceramic 36 906 2 637 F 2 637 F 2 556 F 2 989 386 3.1%
301E01.453 Mixed (association of 923 1 583 F 2 637 F 2 571 F -911 993 -62.4%
different materials)
- ------------------------------------------------------------------------------------------------------------------------------------
301E01.46 Cotyles standard 46 124
301E01.461 Cotyle monoblock, massive 18 006 738 F 738 F 738 F 0 0.0%
polymer
301E01.46 Cotyle monoblock, massive 687 4 431 F 4 000 F 4 000 F 296 097 9.7%
ceramic
301E01.463 Cotyle monoblock, mixed 1 018 3 165 F 3 165 F 3 086 F 80 549 2.5%
(association of different
materials)
301E01.464 Modular cotyle, cemented, 308 2 465 F 2 465 F 2 403 F 18 981 2.5%
metal-back without
301E01.465 Modular cotyle, 26 105 4 575 F 4 575 F 4 431 F 3 759 120 3.1%
non-cemented, metal-back
without insert
- ------------------------------------------------------------------------------------------------------------------------------------
301E01.47 Cotyles for reconstruction 240
301E01.471 Modular cotyle, metal-back 15 2 465 F 6 500 F 6 500 F -60 525 -163.7%
without insert
301E01.472 Modular cotyle, 225 4 575 F 7 500 F 7 500 F - 658 125 - 63.9%
non-cemented, metal-back
without insert
301E01.48 Insert only 33 703
301E01.481 in massive polymer 32 625 700 F 700 F 683 F 570 938 2.5%
301E01.482 in ceramic 154 700 F 2 637 F 2 571 F -288 146 -267.3%
301E01.483 mixed (association of 924 700 F 2 637 F 2 571 F - 1 728 873 -267.3%
different materials)
301E01.49 Mobile bipolar Cupula 7 115 3 165 F 2 500 F 2 500 F 4 731 475 21.0%
("Cupule") or monopolar
femoral upula
301E01.50 Abutment anti-dislocation 1 928 NR 350 F 350 F -674 800
301E01.51 Special Implants
301E01.511 Special stem 564 19 000 F 17 000 F 17 000 F 1 128 000 10.5%
301E01.512 Special Cotyle 200 4 575 F 8 000 F 8 000 F -685 000 -74.9%
301E01.4101 Supporting ring or cotyle 4 959 1 899 F 1 899 F 1 852 F 235 429 2.5%
back
301E01.4102 Fixed cupula for necrosis of 137 1 567 F 1 567 F 1 528 F 5 367 2.5%
the femoral head
301E01.4103 Femoral prosthesis monopolar 1 112 1 994 F 1 400 F 1 400 F 660 528 29.8%
monoblock (type Modular cephalic
prosthesis
301E01.4104 Removable neck with double 1 234 1 161 F 1 000 F 1 000 F 198 674 13.9%
cone morse
- ----------------------------------------------------------------------------------------------------------------------------------
Saving CHAM if non-linear 40 769 628
discount of 2.5%
Grey areas were subject to
additional discount of 2.50%
Screw with cotyle 250 244
Obturator 396 386
- ----------------------------------------------------------------------------------------------------------------------------------
EXHIBIT 3.2.E
3 L S.A.
- --------
Members of the Board of Directors
- ---------------------------------
Patrick LANDANGER
Maryvonne GUIBERT born LANDANGER
Eric LANDANGER
Renee LANDANGER
LANDANGER-CAMUS S.A.
- --------------------
Members of the Board of Trustees
- --------------------------------
Eric LANDANGER (President)
Maryvonne GUIBERT born LANDANGER
Louis LANDANGER
Renee LANDANGER
Charles BERNEY
Members of the Directorate
- --------------------------
Patrick LANDANGER
Pierre GUIBERT
Michel COLOMBIER
Gerard FURET
A.M.P. DEVELOPPEMENT S.A.
- -------------------------
Members of the Board of Directors
- ---------------------------------
Patrick LANDANGER
Renee LANDANGER
LANDANGER-CAMUS (permanent representative: Pierre GUIBERT)
MEDINOV-A.M.P. S.A.
- -------------------
Members of the Board of Directors
- ---------------------------------
Patrick LANDANGER
Pierre BRISSOT
Renee LANDANGER
LANDANGER-CAMUS (permanent representative: Pierre GUIBERT)
Michel COLOMBIER
LANDANGER-LANDOS S.A.
- ---------------------
Members of the Board of Directors
- ---------------------------------
Patrick LANDANGER
Renee LANDANGER
Louis LANDANGER
Eric LANDANGER
Maryvonne GUIBERT born LANDANGER
BIOLAND S.A.
- ------------
Members of the Board of Directors
- ---------------------------------
Nicole ROUQUET
Patrick LANDANGER
Renee LANDANGER
LANDANGER-CAMUS (permanent representative: Pierre GUIBERT)
MIKROLAND S.A.
- --------------
Members of the Board of Directors
- ---------------------------------
Patrick LANDANGER
LANDANGER-CAMUS (permanent representative: Pierre GUIBERT)
Michel COLOMBIER
TECHLAND Sarl
- -------------
Bertrand BERGUE (manager)
LANDOS NEDERLAND BV
- -------------------
Patrick LANDANGER
SUSHRUT SURGICAL PVT Ltd
- ------------------------
2 administrative positions
- --------------------------
Patrick LANDANGER
Jean-Claude ZIEGLER
ADLER MEDIEQUIP Ltd
- -------------------
2 administrative positions
- --------------------------
Patrick LANDANGER
Jean-Claude ZIEGLER
BEIJING LANDOCHINE ARTIFICIAL JOINT CO Ltd
- ------------------------------------------
Patrick LANDANGER (President)
LANDOS UK Ltd
- -------------
Patrick LANDANGER
PAMERLAND SCI
- -------------
Patrick LANDANGER (manager)
MEMO IMPLANTS Sarl
- ------------------
Frederic CAUBIT (manager)
MEDINOV DISTRIBUTION S.A.
- -------------------------
Michel COLOMBIER
Charles BERNEY
Rene MONFERINI
MEDINOV ITALIA
- --------------
Michel COLOMBIER
BIOLAND-PHARMA Sarl
- -------------------
Nicole ROUQUET (manager)
LANDOS BIOMECANIQUE S.A.
- ------------------------
Patrick LANDANGER
LANDOS ESPANA S.A.
- ------------------
Sole Administrator
- ------------------
Patrick LANDANGER
LANDOS INC.
- -----------
Patrick LANDANGER
Office
- ------
Jean-Paul BURTIN (vice-president)
Pierre GUIBERT (secretary-treasurer)
Peter T. Tucci (assistant secretary)
LANDOS INTERNATIONAL S.A.
- -------------------------
Patrick LANDANGER
Charles BERNEY
Rene MONFERINI
LANDOS ITALIA Srl
- -----------------
Patrick LANDANGER
Pierre GUIBERT
Gerard FURET
Raffaelo BARMETTLER
LANDOS ORTHOPADIE GmbH
- ----------------------
Patrick LANDANGER (manager)
AM SCI
- ------
Patrick LANDANGER (manager)
GAM SCI
- -------
Patrick LANDANGER (manager)
ORTHOTIM SCI
- ------------
Patrick LANDANGER (manager)
EXHIBIT 3.2.F
LIST OF SELLERS BENEFICIARY OF
AN EMPLOYMENT AGREEMENT
WITH 3L, LANDANGER-CAMUS OR
ONE OF ITS SUBSIDIARIES
- - Patrick LANDANGER
- - Maryvonne LANDANGER spouse Guibert
- - Eric LANDANGER
- - Michel COLOMBIER
EXHIBIT 4.1.3
DIRECT OR INDIRECT INTERESTS
HELD BY 3L AND/OR
LANDANGER-CAMUS
Number of %
company stocks
or
shares held by
Landanger-Camus
or 3L
- - A.M.P. DEVELOPPEMENT S.A. 568.618 100%
* Meeo Implants Sarl (100%)
* Texinfine S.A. (14.23%)
* Apophyse Sarl (30%)
* Kaenta S.A. (25%)
* AED Soft Sarl (41.18%)
- - MEDINOV-A.M.P. S.A. 145.580 99,7%
* Medinov Distribution S.A. (97%)
* Medinov Italia Srl (30%)
* Orthotim SCI (100%)
* GAM SCI (100%)
* SOPAGEFI S.A. (8.1%)
- - LANDANGER-LANDOS S.A. 616.640 100%
- - BIOLAND S.A. 27.440 98%
* Bioland-Pharma Sarl (99.8%)
- - MIKROLAND S.A. 10.000 100%
- - TECHLAND S.A. 5.000 100%
- - LANDOS NEDERLAND BV
* Landos Italia Srl (100%)
* Landos Espana S.A. (100%)
* Landos Biomecanique S.A. (97%)
* Landos International S.A. (94%)
* Landos Orthopadie GmbH (100%)
* Landos Inc. (100%)
* Tissue Processing Netherlands BV (50%)
- - BEIJING LANDOCHINE ARTIFICIAL 100%
JOINT CO Ltd
- - LANDOS UK Ltd 200 100%
- - GESTION CONSEIL LANDANGER SNC 500 100%
- - PAMERLAND SCI 7.950 100%
* AM S.C.I. (90%)
- - SUSHRUT PVT Ltd 8.005 40%
- - ADLER MEDIEQUIP Ltd 16.340 40%
- - SURGICAL INNOVATIONS Ltd 100 10%
EXHIBIT 4.4
LIST OF SALARIED EMPLOYEES
TRANSFERRED TO THE
COMPANY LANDANGER SARL
(IN THE COURSE OF FORMATION)
C. ARDOIN Receptionist
T. BERNARD Workman Working From His Home
C. BONNENFANT Assembler
I. CARDOSO Customer Service Employee
J. DAUNY Surgical Representative
J. DEBRICON Workman Working From His Home
P. DEBRICON Workman Working From His Home
M. DENIS Surgical Representative
S. DIOT Laborer Working From His Home
D. DROUOT Assembler
G. FIEVET Surgical Representative
D. FOUREL Fitter
J-N FRANCOIS Surgical Representative
D. GAIDE Customer Service Technician
P. GRANGE Surgical Representative
P. GROSLEVIN Customer Service Technician
A. GUILLAUMOT Inventory Control
V. HERBULOT Customer Service Secretary
C. KUSA Store Salesperson
E. LANDANGER Surgical Representative
M. LARVOR Surgical Representative
M. MAINO Customer Service Secretary
D. MARIVET Instrument Operator
M-L MELINAT Customer Service Technician
E. MILESI Workman Working From His Home
S. PERRET Customer Service Secretary
J. PETRYSZYN Surgical Representative
P. PRAT Secretary
J. PRIQUELER Repairer
P. ROUGEOT Surgical Representative
M. SANCHEZ Manager of Customer Service Surgical Department
J-P SEPTFONS Surgery Master
C. SIMON Laborer Working From His Home
C. SOUS Surgical Representative
S. VALLEE Customer Service Technician
INDEMNIFICATION AGREEMENT
DATED _________________ 1997
BETWEEN
DEPUY, INC.
AND
PATRICK LANDANGER
ERIC LANDANGER
MARYVONNE GUIBERT
MICHEL COLOMBIER
COUDERT FRERES
52, AVENUE DES CHAMPS-ELYSEES
75008 PARIS
FRANCE
PRIVILEDGED & CONFIDENTIAL DRAFT OF 28 FEBRUARY 1997
INDEMNIFICATION AGREEMENT
BETWEEN :
- - DePuy, Inc., a ______________________ incorporated and existing under the
laws of _____________________________, having its [_______] principal
place of business at _____________________ and registered with the
______________________ of ____________________ under number
____________________, represented by ______________________, duly
authorized for the purposes hereof,
(hereinafter referred to as the "Purchaser"),
ON THE ONE HAND,
AND :
- - Mr. Patrick Landanger, a French citizen domiciled at 85, quai d'Orsay,
75007 Paris, France;
- - Mr. Eric Landanger, a French citizen domiciled at 15, rue des Acacias,
52000 Jonchery, France; and
- - Ms. Maryvonne Guibert, a French citizen domiciled at 9, boulevard
Gambetta, 52000 Chaumont, France;
- - Mr. Michel Colombier, a French citizen domiciled at 512, chemin
Viralamande, 69140 Rillieux La Pape, France;
(hereinafter referred to individually as a "Guarantor", and collectively
as the "Guarantors"),
ON THE OTHER HAND,
hereinafter referred to individually as a "Party", and collectively as the
"Parties".
PRIVILEDGED & CONFIDENTIAL 2 DRAFT OF 28 FEBRUARY 1997
WITNESSETH
WHEREAS, the Majority Shareholders own two hundred thousand six hundred and
sixty seven (209,667) shares representing one hundred percent (100%) of the
shares and voting rights in 3L, a societe anonyme with a capital of 209,667,000
French Francs divided into 209,667 shares with a par value of 1,000 French
Francs each, having its registered office at Z.I. "La Vendue", rue du Val, 52000
Chaumont, France, and registered with the Registry of Commerce and Companies of
Chaumont under number B 393 985 411 (hereinafter referred to as "3L");
WHEREAS, the Sellers own ________________ (_____) shares representing
_____________________ percent (_____%) of the shares and voting rights in
Champagne, a societe anonyme with a capital of ____________________ French
Francs divided into _________________ shares with a par value of _____ French
Francs each [TO BE CONFIRMED], having its registered office at
_____________________________, France, and registered with the Registry of
Commerce and Companies of _______________ under number B _____________________
(hereinafter referred to as "Champagne");
WHEREAS, 3L owns _______________ (___) shares representing
________________________ percent (______%) of the shares and voting rights in
Champagne;
WHEREAS, ______________ of the Champagne shares are publicly traded on the
Second Market (Second Marche) of the Paris Stock Exchange;
WHEREAS, under a share purchase agreement signed on 28 February 1997
(hereinafter referred to as the "Share Purchase Agreement"), the Sellers have
agreed to sell to the Purchaser their direct and indirect controlling stake in
Champagne via the sale of all of the shares and voting rights they hold in 3L,
and the shares and voting rights they hold in Champagne, subject to satisfaction
of several conditions precedent contained therein;
WHEREAS, the Share Purchase Agreement was executed, and the transactions
contemplated therein will be completed subject to conditions precedent, and in
consideration of the mutual representations and warranties of the Parties.
NOW, THEREFORE, the Parties have agreed on the terms contained herein, and that
this Indemnification Agreement will be interpreted and construed in light of the
terms of the Share Purchase Agreement.
PRIVILEDGED & CONFIDENTIAL 3 DRAFT OF 28 FEBRUARY 1997
SECTION 1
DEFINITIONS
The following terms will have the meanings as set forth in the following
Sections. All terms contained herein beginning with a capital letter and not
contained in the list set forth below are defined in the Share Purchase
Agreement, and will have the meanings set forth therein.
"Contracts" Section 2.12.1
"Environmental Law" Section 2.9.1
"Financial Statements" Section 2.4.1
"Guarantor" / "Guarantors" Page 1
"Guaranty" Section 4.2.2
"Indemnified Claims" Section 4.4.1
"Indemnitee" Section 4.4.1
"Indemnitor" Section 4.4.1
"Intellectual Property" Section 2.8.1
"Champagne" Recitals
"Loss" / "Losses" Section 4.2.1
"Minority Shareholdings" Section 2.1.4(a)
"Party" / "Parties" Page 1
"Parties' Losses" Section 4.4.1
"Permits" Section 2.2.3
"Personal Property" Section 2.11.2
"Plans" Section 2.14.1
"Purchaser" Page 1
"Real Property" Section 2.10.1
"Share Purchase Agreement" Recitals
"Subsidiaries" Section 2.1.3(a)
"Taxes" Section 2.15.1
"3L" Recitals
SECTION 2
REPRESENTATIONS AND WARRANTIES OF THE GUARANTORS
The Guarantors hereby jointly and severally (solidairement) make the following
representations and warranties to the Purchaser. Unless specifically provided
otherwise, these representations and warranties are made as of the date hereof.
2.1SHAREHOLDINGS
- ----------------
2.1.1 Shares in 3L
------------
(a) The share capital of 3L amounts to 209,667,000 French Francs, divided into
209,667 shares having a par value of 1,000 French Francs each, validly
issued, subscribed to and paid up in their entirety. Each share in 3L
carries a voting right, and a right to share in the profits.
PRIVILEDGED & CONFIDENTIAL 4 DRAFT OF 28 FEBRUARY 1997
(b) The Majority Shareholders have full and valid title to all of the shares
in 3L, free of any encumbrances, pledges, liens, claims or rights of any
third party, and have full authority and capacity to sell all of the
shares in 3L to the Purchaser.
(c) 3L has not issued any securities (valeurs mobilieres) other than those
referred to in sub-section 2.1.2(a) above. There is no option, right or
obligation to subscribe to, acquire, sell, pledge or grant any right over
the shares in 3L. No other voting rights have been granted.
(d) With the exception of the shares held in Champagne, 3L does not own any
shares or securities of, nor does it have any direct or indirect interests
or shareholdings in, any corporation, company, partnership, business
entity, joint venture or any other enterprise, or any commitment or
obligation to purchase any such interests or shareholdings.
2.1.2 Shares in Champagne
-------------------
(a) The share capital of Champagne amounts to ________________ French Francs,
divided into ____________________ shares having a par value of ____ French
Francs each, validly issued, subscribed to and paid up in their entirety.
Each of the above shares carries a voting right, and a right to share in
the profits.
The above shares are traded on the Second Market (second marche) of the
Paris Stock Exchange.
__________________ of the above shares are bearer shares (actions au
porteur), and _________________ are registered shares (actions
nominatives).
(b) The Sellers and 3L have full and valid title to ____________ of the shares
in Champagne, free of any encumbrances, pledges, liens, claims or rights
of any third party. The Sellers have full authority to sell all of the
Champagne Shares to the Purchaser.
(c) Champagne has not issued any securities (valeurs mobilieres) other than
those referred to in sub-section 2.1.2(a) above. There is no option,
right or obligation to subscribe to, acquire, sell, pledge or grant any
right over any shares in Champagne. No other voting rights have been
granted.
(d) Except as provided in Sections 2.1.3 and 2.1.4 below, Champagne does not
own any shares or securities of, nor does it have any direct or indirect
interests or shareholdings in, any corporation, company, partnership,
business entity, joint venture or any other enterprise.
2.1.3 Shares in the Subsidiaries
--------------------------
(a) Champagne has a direct or indirect majority shareholding in, or effective
control over, the companies listed in Exhibit 2.1.3(a) hereto (hereinafter
referred to as the "Subsidiaries"). The shareholdings of third-party
shareholders in the Subsidiaries are also described in such Exhibit.
(b) Champagne has full and valid title to its shareholdings in the
Subsidiaries, free of any encumbrances, pledges, liens, claims or right of
any third party, and there is no agreement, law, regulation or any other
factor which would result in all or part
PRIVILEDGED & CONFIDENTIAL 5 DRAFT OF 28 FEBRUARY 1997
of such shareholdings being lost, transferred, removed, pledged or blocked
as a result of the purchase of the Shares by the Purchaser.
(c) The Subsidiaries have not issued any securities (valeurs mobilieres) with
the exception of those indicated in Exhibit 2.1.3(c) hereto. There is no
option, right or obligation to subscribe to, acquire, sell, pledge or
grant any right over, the Sellers' shareholdings in the Subsidiaries.
(d) Except as shown in Exhibit 2.1.3(d) hereto, the Subsidiaries do not own
any shares or securities of, nor do they have any direct or indirect
interests or shareholdings in, any corporation, company, partnership,
business entity, joint venture or any other enterprise.
2.1.4 Minority Shareholdings
----------------------
(a) Champagne has minority shareholdings in the companies listed in Exhibit
2.1.4(a) hereto (hereinafter referred to as the "Minority Shareholdings").
(b) Champagne has full and valid title to the Minority Shareholdings, free
from any encumbrances, pledges, liens, claims or right of any third party,
and there is no agreement, law, regulation or any other factor which would
result in all or part of such Minority Shareholdings being lost,
transferred, removed, pledged or blocked as a result of the purchase of
the Shares by the Purchaser.
(c) The companies in which Champagne owns Minority Shareholdings have not
issued any securities (valeurs mobilieres) with the exception of those
indicated in Exhibit 2.1.4(c) hereto. To the best knowledge of the
Guarantors, there is no option, right or obligation to subscribe to,
acquire, sell, pledge or grant any right over, the Sellers' shareholdings
in the Subsidiaries.
(d) Except as shown in Exhibit 2.1.4(d) hereto, the companies in which
Champagne owns a Minority Shareholding do not own any shares or securities
of, nor do they have any direct or indirect interests or shareholdings in,
any corporation, company, partnership, business entity, joint venture or
any other enterprise.
2.2 ORGANIZATION
- ----------------
2.2.1 3L and Champagne are societes anonymes validly organized under the laws of
France. The Subsidiaries and the companies in which Champagne has
Minority Shareholdings are companies of the form described in Exhibit
2.2.1 hereto, and are validly organized under the laws of the countries in
which they are incorporated.
2.2.2 None of 3L, Champagne, the Subsidiaries or the companies in which
Champagne holds Minority Shareholdings are, nor never have been,
insolvent. Nor have they ever suspended their payments or been subject to
any judicial recovery or liquidation proceedings.
2.2.3 3L, Champagne, the Subsidiaries and the companies in which Champagne holds
Minority Shareholdings are duly qualified to carry out their respective
activities, and do so in accordance with applicable laws and regulations,
as well as with their respective corporate purposes. In particular, they
have obtained from all
PRIVILEDGED & CONFIDENTIAL 6 DRAFT OF 28 FEBRUARY 1997
relevant public authorities all authorizations, permits, approvals for,
and made all notifications required in connection with, the conduct,
ownership and operation of their respective activities and assets
(hereinafter referred to as the "Permits"). They are in full compliance
with all of the Permits, each of which is valid.
2.2.4 No legal or administrative proceeding to revoke, cancel or not renew any
Permit is pending or threatened and, except as disclosed in Exhibit 2.2.4
hereto, no Permit is scheduled to expire within the three (3) year period
following the Closing Date.
2.2.5 3L, Champagne, the Subsidiaries and the companies in which Champagne holds
Minority Shareholdings have good and valid title to all of their
respective assets, free and clear of any encumbrances, pledges, liens,
claims or rights of any third party. The sale of the Shares by the
Sellers will not adversely affect such title.
2.3 AUTHORITY - NO CONFLICTS - NO APPROVALS
- -------------------------------------------
2.3.1 The Sellers have full authority and capacity to execute the Share Purchase
Agreement and the Indemnification Agreement, and to perform same.
2.3.2 All prior authorizations, clearances or approvals of any kind whatsoever
from any corporate body of 3L, Champagne or the Subsidiaries, or from any
third party, including public or administrative authorities, whether
national or supranational, including those mentioned in Section 4 of the
Share Purchase Agreement, required for execution of the Share Purchase
Agreement and of this Indemnification Agreement, and the performance by
the Sellers and the Guarantors of their respective obligations under such
agreements, have been validly obtained.
2.3.3 The Share Purchase Agreement and this Indemnification Agreement have been
duly executed by the Sellers and the Guarantors, and constitute the legal,
valid and binding obligation of the Sellers and the Guarantors,
enforceable against them in accordance with the terms of such agreements.
2.4 FINANCIAL STATEMENTS
- ------------------------
2.4.1 The consolidated financial statements of Champagne as of 31 August 1996
have been signed off by the statutory auditors of Champagne without
qualification, and the financial statements of 3L and the Subsidiaries as
of the close of their respective last financial year have been signed off
by the statutory auditors of each of these companies. The above-mentioned
financial statements of 3L, Champagne and the Subsidiaries have been
approved by the shareholders of these companies within the time period
required therefor by applicable laws.
True and complete copies of the above-mentioned financial statements
(hereinafter referred to as the "Financial Statements") and of the
legally-required reports of 3L, Champagne and the Subsidiaries respective
statutory auditors are attached hereto as Exhibit 2.4.1.
PRIVILEDGED & CONFIDENTIAL 7 DRAFT OF 28 FEBRUARY 1997
2.4.2 The Financial Statements :
(i) are correct and give in all respects a true and fair view of the
assets, liabilities and financial situation of the relevant company
as of their respective dates or in respect of the periods covered
thereby;
(ii) give a true and fair view of the results of the operations and
shareholders' equity of the relevant company; and
(iii) have been prepared in a careful, diligent and professional manner,
and in accordance with applicable rules and Generally Accepted
Accounting Principles.
2.4.3 Without limiting the generality of the foregoing, the accounts receivable,
loans, advances, and any other sums owed to 3L, Champagne or the
Subsidiaries as recorded in the Financial Statements and not paid or
settled as of the Closing Date, or incurred since the close of the
Financial Statements and not paid or settled as of the Closing Date:
(i) are valid;
(ii) are not subject to any dispute, set-off or counterclaim; and
(iii) are collectible.
Except as otherwise disclosed in Exhibit 4.4.3 hereto, none of such assets
are subject to any prior assignment, lien or security interest.
2.4.4 Accounts receivable owed by Geyser to 3L, Champagne and/or the
Subsidiaries will be paid by Geyser within twelve (12) months from 28
February 1997 at the latest. Any such accounts receivable not paid within
six (6) months from 28 February 1997 will bear interests at a rate equal
to the French legal interest rate (published in the French Official
Journal) plus three (3) points per year.
2.4.5 There is no potential liability or liabilities which could result from any
court judgment, out-of-court settlement, administrative decision, binding
order, event or factor of whatever nature, in an amount, individually or
in the aggregate, in excess of one (1) million French Francs which was
not recorded in the Financial Statements, or which has been revealed since
such date in the ordinary course of business consistent with recent past
practice.
2.4.6 [The excess of debt over cash of Champagne (to be calculated pursuant to
Exhibit 2.4.6 hereto) on a consolidated basis is not greater than as of 31
August 1996 (as set forth in the same Exhibit). TO BE NEGOTIATED]
2.5 GEYSER S.A. - SURGICAL INSTRUMENTS ACTIVITY
- ----------------------------------------------
2.5.1 The operations described in Sections 4.3 and 4.4 of the Share Purchase
Agreement have been completed in their entirety, in accordance with
all applicable laws and regulations, without any infringement of
any obligations or commitments, whether legal, contractual or
other, and none of the Purchaser, 3L,
PRIVILEDGED & CONFIDENTIAL 8 DRAFT OF 28 FEBRUARY 1997
Champagne or any of the Subsidiaries will incur any liabilities
whatsoever, including without limitation any tax liabilities, resulting
therefrom.
2.5.2 All amounts owed as of the Closing Date, or which might fall due
thereafter, for whatever reason by Geyser S.A. and the Surgical
Instruments Activity (as such term is described in Section 4.4 of the
Share Purchase Agreement) to 3L, Champagne or any of the Subsidiaries are
listed in Exhibit ___ hereto. Such sums will be entirely, timely and
validly paid by such companies, or by the entity which will carry out the
Surgical Instrument Activity.
2.6 CONDUCT OF ACTIVITIES PRIOR TO THE CLOSING
- ---------------------------------------------
During the period between the date of closing of the Financial Statements and
the Closing, 3L, Champagne and the Subsidiaries have carried out, and will
continue to carry out, their respective businesses with due care and only in the
ordinary course of business, have maintained, and will maintain, the integrity
of their assets and, in particular, their prospects and business relationships,
and have not increased, and will not increase, their liabilities. Without in
any respect limiting the generality of the foregoing, prior to the Closing, 3L,
Champagne and the Subsidiaries have not, without the Purchaser's prior written
consent :
(a) sold, transferred or otherwise disposed of any of their assets, except
for:
(i) sales of inventory in the ordinary course of business;
(ii) the operations provided for in Sections 4.3 and 4.4 of the Share
Purchase Agreement; and
(iii) the transfer of the lease for the premises located in Lyon;
(b) mortgaged, pledged or encumbered, or granted any privilege or guarantee
affecting, any of their assets;
(c) increased the remuneration or employment benefits of any of their
employees, officers, representatives or advisors;
(d) initiated any collective or individual termination of employment
agreements, other than for faute grave or faute lourde;
(e) concluded any new employment agreement, or terminated or modified, in any
manner whatsoever, any employment agreements in force as of the date
hereof, with the exception of those entered into between any shareholders
and Champagne, 3L or any of the Subsidiaries, which must be terminated at
the latest on the Closing Date;
(f) modified, terminated or cancelled any contracts by which they are bound
under circumstances which would affect their business relations,
prospects, relationship with developers and licensors or the operations
contemplated in the Share Purchase Agreement;
(g) entered into or renewed any material contract with respect to their
assets or business, except in the ordinary course of business or as
contemplated under the Share Purchase Agreement;
PRIVILEDGED & CONFIDENTIAL 9 DRAFT OF 28 FEBRUARY 1997
(h) maintained levels of inventory of their products inconsistent with their
recent past practices, subject to usual seasonal variations and customer
demands;
(i) operated credit control, cash collection and payment activities
inconsistent with their past practices;
(j) paid any obligation or liability relating to or in respect of their
business, other than current liabilities in the ordinary course of their
business, or waived, released or settled any rights or claims relating to
or in respect of their businesses;
(k) authorized or proposed any of the foregoing, or entered into any
agreement, commitment or undertaking, written or oral, to do any of the
foregoing;
(l) incurred any capital expenditure in excess of ________________ (____)
French Francs for a single investment, or _____________ (_________) French
Francs in the aggregate; or
(m) [OTHERS?].
2.7 LITIGATION AND COMPLIANCE
- ----------------------------
2.7.1 Except as otherwise disclosed in Exhibit 2.7.1 hereto, there is no pending
or threatened action, claim, suit, arbitration or proceeding against 3L,
Champagne or any of the Subsidiaries.
2.7.2 3L, Champagne and the Subsidiaries have conducted, and continue to conduct
their respective businesses in all [MATERIAL?] respects in compliance with
applicable laws and regulations (including, without limitation, all
applicable tax, social security, criminal, customs, labor, consumer
protection, competition, zoning and product regulations).
2.7.3 None of 3L, Champagne or any of the Subsidiaries have received (i) any
notification from any public authority of any violation of any such laws
or regulations, or (ii) any notification or correspondence relating to any
inquiry implying any such violation.
2.7.4 There is no court judgment, out-of-court settlement, administrative
decision, binding order, event or factor of whatever nature, nor any risk
of same, which could result in a prohibition to manufacture, sell or
otherwise deal with a product which is material to the activities of 3L,
Champagne and the Subsidiaries.
2.7.5 There is no action against any of 3L, Champagne or the Subsidiaries, or
any of their employees or officers, nor any risk of same, relating to (i)
a violation of Article L.365-1 of the French Code de la Sante Publique,
with the exception of the action currently pending against an officer of
Medinov AMP and/or (ii) a violation of Articles L. 209-1 and following of
the French Code de la Sante Publique (Loi Huriet).
PRIVILEDGED & CONFIDENTIAL 10 DRAFT OF 28 FEBRUARY 1997
2.8 INTELLECTUAL PROPERTY
- -------------------------
2.8.1 3L, Champagne and the Subsidiaries own all French and foreign intellectual
property rights (including droits d'auteurs), copyrights, drawings, logos,
patents and patent applications, manufacturing and trade secrets,
manufacturing marks, trademarks or service marks, inventions, know-how,
and licenses or sublicenses relating thereto which they use in the conduct
of their respective activities (hereinafter referred to as the
"Intellectual Property") as same is listed in Exhibit 2.8.1 hereto, except
for (i) those which are in the public domain, and (ii) the intellectual
property owned and licensed by third parties, as same is specifically
identified in said Exhibit 2.8.1 hereto.
2.8.2 All patents, trademarks used and owned by 3L, Champagne and the
Subsidiaries and their respective applications pertaining to said
Intellectual Property are listed in Exhibit ___ hereto.
2.8.3 In respect of all Intellectual Property which is registered as of the date
hereof, all the applications submitted have been duly filed and/or
registered and/or issued, are valid and in full force and effect, and in
compliance with all applicable laws and regulations, and all annual
renewal fees relating thereto have been paid.
2.8.4 To the best knowledge of the Guarantors, none of the Intellectual Property
infringes or otherwise violates any right of any third party in any
country, and more generally, there are no known or threatened claims of
infringement of any intellectual property rights of any third party. No
claims or demands by any other person pertaining to any of the
Intellectual Property have been made or are threatened.
2.8.5 To the best knowledge of the Guarantors, none of the Intellectual Property
is subject to any infringement or other violation by a third party, under
any form, or in any country.
2.9 ENVIRONMENTAL CONDITIONS
- ----------------------------
2.9.1 None of 3L, Champagne nor any of the Subsidiaries has been or is in breach
of any environmental laws, regulations or injunctions (hereinafter
referred to as the "Environmental Law"). In particular, there are no
substances present on or under the premises used by any of them, or in
connection with the conduct and operation of their respective activities
which constitute a breach of any Environmental Law.
2.9.2 None of 3L, Champagne nor any of the Subsidiaries is subject to any
liabilities (including liabilities for cleaning up, remediation, or costs
for personal injury or property damage) as a result of any [MATERIAL?]
breach of any Environmental Law.
2.9.3 No expenditures are required in connection with the activities of any of
3L, Champagne or any of the Subsidiaries, as same are presently conducted,
in order to comply with any Environmental Law.
2.10 REAL PROPERTY
- ------------------
PRIVILEDGED & CONFIDENTIAL 11 DRAFT OF 28 FEBRUARY 1997
2.10.1 Exhibit 2.10.1 hereto lists (together with a map) each parcel of real
property owned or leased by 3L, Champagne and the Subsidiaries
(hereinafter referred to as the "Real Property"). 3L, Champagne and the
Subsidiaries have valid title to all Real Property, free from any
mortgages, liens, pledges or other encumbrances.
2.10.2 All documents necessary to prove the title of 3L, Champagne and the
Subsidiaries to the Real Property are in the possession of the relevant
company.
2.10.3 To the best knowledge of the Guarantors, the Real Property is free from
defects, in a good state of repair, and in good working order, and is
capable of being properly used in connection with the respective
activities of 3L, Champagne and the Subsidiaries.
2.10.4 With the exception of the real property located at Filling and described
in Exhibit 2.10.4 hereto, no third party owns any real property required
in connection with the conduct of the respective activities of 3L,
Champagne and the Subsidiaries. A short-term lease with a term of two
years as from the Closing Date and terminable with a three (3) month
notice period from the lessor will be entered into by the Closing Date.
2.11 PERSONAL PROPERTY
- ----------------------
2.11.1 As of the date of close of the Financial Statements, 3L, Champagne and
the Subsidiaries had valid title to, free and clear from any mortgages,
liens, pledges or other encumbrances, all of the personal tangible and
intangible property as reflected in the Financial Statements.
2.11.2 On the Closing Date, such companies will have valid title to, free and
clear from any mortgages, liens, pledges or other encumbrances, such
personal property, as well as to all personal tangible and intangible
property acquired in the ordinary course of business as defined in
Section 2.6 hereof, with the exception of personal tangible and
intangible property which have been disposed of since the date of close
of the Financial Statements in the ordinary course of business and are
described in Exhibit 2.11.2 hereto (hereinafter referred to collectively
as the "Personal Property").
2.11.3 The Personal Property is free and clear from any mortgages, liens,
pledges or other encumbrances, from defects, is in a good state of
repair and in good working order, and is capable of being properly used
in connection with the respective activities of 3L, Champagne and the
Subsidiaries.
2.11.4 No third party company owns any other personal property, whether
tangible or intangible, or other assets required for the conduct of the
respective activities of 3L, Champagne or the Subsidiaries.
2.12 MATERIAL CONTRACTS
- -----------------------
2.12.1 All material outstanding contracts, purchase orders, licenses and sub-
licenses (both domestic and foreign), leases (whether for real or
personal property), loan agreements, mortgages and other undertakings of
any kind, whether written or oral, to which 3L, Champagne or any of the
Subsidiaries is a party, or to which
PRIVILEDGED & CONFIDENTIAL 12 DRAFT OF 28 FEBRUARY 1997
any of the assets, liabilities or activities of any of these companies
is subject (hereinafter referred to as the "Contracts"), are valid,
binding and in full force and effect, comply with all applicable laws
and regulations, have been concluded on an arm's length basis.
2.12.2 All Contracts with a duration of more than one year or involving the
payment or receipt of sums in excess of 300,000 French Francs per year
are listed in Exhibit 2.12.2 hereto.
2.12.3 None of 3L, Champagne or any of the Subsidiaries are in default under
any of the Contracts, or is aware of any default committed by any
contracting party thereto.
2.12.4 All consents or approvals from any contracting party to any of the
Contracts required for the sale of the Shares by the Sellers and/or the
Purchase of the Shares by the Purchaser have been validly obtained.
2.12.5 The transfer to the Purchaser of title to the Shares will not, directly
or indirectly, conflict in any way with the provisions, or result in a
breach, suspension, amendment or termination, of any of the Contracts
(including without limitation product licence agreements with product
developers, agreements regarding Intellectual Property rights, loan
agreements) or give to the other contracting third party a right to
terminate or amend same.
2.12.6 None of 3L, Champagne or any of the Subsidiaries have received a
notification of the intent of any contracting third party to terminate
or to not renew any of the Contracts.
2.12.7 Without limiting the generality of the foregoing, none of 3L, Champagne
or the Subsidiaries is a party to any Contract which is unrelated to
their respective activities.
2.13 LABOR MATTERS
- ------------------
2.13.1 Exhibit _____ hereto sets forth the number of employees, categorized by
department, working as of the date hereof at the sites of 3L, Champagne
and the Subsidiaries.
2.13.2 3L, Champagne and the Subsidiaries comply in all material respects with
applicable labor and social security laws and regulations.
2.13.3 No shareholder, corporate officer (mandataire social), employee or agent
of 3L, Champagne or the Subsidiaries has any rights exceeding the
statutory requirements (including those existing in collective
bargaining agreements which apply to the company concerned), including
in case of termination of their functions.
2.13.4 No trade union or labor disputes or work stoppages involving 3L,
Champagne or the Subsidiaries are pending or, to the best knowledge of
the Guarantors, threatened.
2.13.5 Except as disclosed in Exhibit 2.13.5 hereto, none of the Sellers will
have an employment agreement with 3L, Champagne or any of the
Subsidiaries as of the
PRIVILEDGED & CONFIDENTIAL 13 DRAFT OF 28 FEBRUARY 1997
Closing Date. If any of the Sellers had employment agreements prior to
the Closing, same will be terminated at no cost to 3L, Champagne or the
Subsidiaries.
2.14 EMPLOYEE BENEFIT MATTERS
- -----------------------------
2.14.1 Exhibit ____ hereto lists all benefit plans, profit-sharing plans
(whether mandatory or voluntary), company savings plans, stock option
plans, retiree, medical or life insurance plans, and retirement and
severance agreements for the benefit of any officer or employee of 3L,
Champagne and the Subsidiaries (hereinafter collectively referred to as
the "Plans"). A true, complete and correct copy of each Plan and all
related documents have been furnished by the Guarantors to the
Purchaser. Each of the Plans complies in all material respects with all
applicable laws.
2.14.2 Adequate reserves have been recorded in the accounts of 3L, Champagne
and the Subsidiaries in order to cover all the benefits and advantages
provided for in the Plans.
2.14.3 Entitlements to paid vacation accrued as of the respective dates of the
Financial Statements but unused are adequately provided for in the
Financial Statements.
2.15 TAXES AND SOCIAL SECURITY CHARGES
- --------------------------------------
2.15.1 For purposes of this Indemnification Agreement, the term "Taxes" will
include all forms of taxation and other public duties, whether in France
or elsewhere, including but not limited to income tax (impot sur le
revenu), corporation income tax (impot sur les societes), capital gains
tax (impot sur les plus-values), value added tax (taxe sur la valeur
ajoutee), business tax (taxe professionnelle), other local taxes (autres
impots locaux), registration duties (droits d'enregistrement), customs
and excise duties (droits de douanes), stamp duties (droit de timbre),
social security and pension institutions (URSSAF), payments into
voluntary or mandatory private health care schemes, unemployment
contributions (ASSEDIC), any other governmental past or present local
taxes, duties or social charges, any other contributions to public,
semi-public or private bodies organisms, as well as any interest or
penalties incurred in connection with any of the foregoing.
2.15.2 Until the Closing Date:
(a) all of the Tax returns required to be filed with respect to 3L,
Champagne and the Subsidiaries have been or will be timely filed;
(b) all such returns are or will be correct and complete in all material
respects;
(c) there have not been nor will be disallowed transfer prices for
intragroup services and assets and no disguised profit distributions and
similar operations;
(d) no adjustment relating to such returns has been or will be proposed or
imposed by any tax or social security authority;
PRIVILEDGED & CONFIDENTIAL 14 DRAFT OF 28 FEBRUARY 1997
(e) there have not been nor will be actions or proceedings for the assessment
or collection of Taxes pending or, to the best knowledge of the
Guarantors, threatened against 3L, Champagne or any of the Subsidiaries;
(f) all Taxes shown on such returns or otherwise due have been or will be
timely and properly paid, or adequate reserves have been or will be
provided on the Financial Statements to pay same;
(g) any Taxes falling due by the Closing Date have been or will be timely and
properly paid by 3L, Champagne and the Subsidiaries; and
(h) all reserves and liabilities for Tax have been or will be adequately and
correctly accounted for.
2.16 UNDISCLOSED LIABILITIES
- ----------------------------
With the exception of the liabilities shown in the Financial Statements or which
have been incurred by 3L, Champagne or the Subsidiaries in the ordinary course
of business as described in Section 2.6 hereof since the date of close of the
Financial Statements, none of 3L, Champagne or any of the Subsidiaries have any
liabilities of whatever nature, whether certain, contingent, future or
otherwise.
None of 3L, Champagne or any of the Subsidiaries have granted any warranty to,
or stands surety for, any third party for any reason whatsoever.
2.17 DIVIDENDS - RECAPITALIZATION AND PURCHASE OF SHARES
- --------------------------------------------------------
2.17.1 The dividend declared out of the profits of Champagne for the financial
year ended on 31 August 1996 has not exceeded seven million five hundred
thousand (7,500,000) French Francs. No precompte tax is due in
connection with this dividend. No dividend has been paid out of the
profits of 3L and the Subsidiaries for their respective last financial
year.
2.17.2 Since the close of the financial year covered by the Financial
Statements, none of 3L, Champagne or the Subsidiaries have:
(a) authorized the issue or have issued any securities other than those
reflected in the Financial Statements; or
(b) directly or indirectly redeemed or purchased any of their shares or
securities, or agreed to take any such action.
2.18 INSURANCE
- --------------
2.18.1 3L, Champagne and the Subsidiaries maintain insurance of the type and
covering amounts appropriate for the ownership and operation of their
assets, and the conduct of their respective activities.
2.18.2 Exhibit ___ hereto lists all pending events, claims, disputes and
litigations involving insurance policies relating to 3L, Champagne
or the Subsidiaries, as well
PRIVILEDGED & CONFIDENTIAL 15 DRAFT OF 28 FEBRUARY 1997
as all insurance policies from which any of such companies currently
benefit. There are no other pending claims under such insurance
policies.
2.18.3 None of 3L, Champagne or the Subsidiaries are in material breach or
default of, and no event has occurred which will constitute such a
breach or default or permit termination or modification of, any such
insurance policy. To the best knowledge of the Guarantors, all insurance
premiums due on or before the Closing Date have been paid in full by 3L,
Champagne and the Subsidiaries.
2.19 INTERESTED PARTIES
- -----------------------
2.19.1 None of the Sellers, or any shareholder, corporate officer or employee
of 3L, Champagne or the Subsidiaries, or any individual related to any
such persons, or any affiliate or other legal entity or enterprise
directly or indirectly affiliated or associated with any of such
persons:
(i) has directly or indirectly entered into any oral or written
agreement with 3L, Champagne or any of the Subsidiaries, with the
exception of the employment agreements for employees of such
companies, including but not limited to those involving the payment
of any fee, commission, pension, life annuity or any other sum
whatsoever; or
(ii) has any right, or has claims in respect thereof, directly or
indirectly, in whole or in part, over any of the Real Property, the
Personal Property, or the Intellectual Property used by 3L,
Champagne and the Subsidiaries.
2.19.2 Any outstanding shareholders' loans and current accounts (comptes
courants d'actionnaire) of 3L, Champagne or the Subsidiaries will have
been paid or reimbursed prior to the Closing Date.
2.20 PRODUCT LIABILITY
- ----------------------
All products manufactured and/or sold by 3L, Champagne and the Subsidiaries
comply in all material respects with all applicable rules, regulations, purchase
orders and standards. There have not been any recalls or required adaptation or
modification of such products prior to the Closing Date.
3
REPRESENTATIONS AND WARRANTIES OF THE PURCHASER
The Purchaser hereby represents and warrants as follows :
3.1 ORGANIZATION
- ----------------
The Purchaser is a corporation validly organized under the laws of the State of
Delaware, United States of America. If the Purchaser assigns its rights and
obligations under the
PRIVILEDGED & CONFIDENTIAL 16 DRAFT OF 28 FEBRUARY 1997
Share Purchase Agreement and the Indemnification Agreement, the assignee will be
validly organized under the laws of its State of incorporation.
3.2 AUTHORITY - NO CONFLICTS - NO APPROVALS
- -------------------------------------------
The Purchaser has full authority and capacity to execute the Share Purchase
Agreement and the Indemnification Agreement, and to perform same.
The execution of the Share Purchase Agreement and the Indemnification Agreement
and the performance by the Purchaser of its obligations under such agreements do
not require any prior authorization, clearance or approval of any kind
whatsoever from any corporate body of the Purchaser [TO BE CONFIRMED], or from
any third party, including public or administrative authorities, whether
national or supranational, other than those set forth in Section 4.2 of the
Share Purchase Agreement. The Share Purchase Agreement and the Indemnification
Agreement have been duly executed by the Purchaser, and constitute the
Purchaser's legal, valid and binding obligation enforceable against them in
accordance with the terms of such Agreements. There is no litigation which
would prevent the Purchaser from performing its obligations under the Share
Purchase Agreement and the Indemnification Agreement.
If the Purchaser assigns its rights and obligations under the Share Purchase
Agreement and the Indemnification Agreement, the above representations will be
deemed to be made by such assignee.
4
INDEMNIFICATION
4.1 SURVIVAL OF REPRESENTATIONS AND WARRANTIES
- ----------------------------------------------
4.1.1 The representations and warranties of the Guarantors and the Purchaser
contained in this Indemnification Agreement and the Exhibits hereto are
valid as of the date of signature of the Share Purchase Agreement and will
remain in force from the date of signature of the Share Purchase Agreement
until the Closing Date, and for a further period of three (3) years
following the Closing Date.
Notwithstanding the foregoing, the representations and warranties
pertaining to tax and social security matters will remain in force until
expiry of a ninety (90) day period following expiry of the applicable
statute of limitations.
Any claim to be made pursuant hereto will therefore have to be made within
the above-mentioned period.
4.1.2 No claim may be made pursuant hereto on the basis of any representation or
warranty which has expired pursuant to sub-clause (a) above.
PRIVILEDGED & CONFIDENTIAL 17 DRAFT OF 28 FEBRUARY 1997
4.2 REFUND OF PART OF THE PRICE BY THE GUARANTORS
- -------------------------------------------------
4.2.1 Except as otherwise limited, the Guarantors will jointly and severally
(solidairement) refund a part of the price paid by the Purchaser for the
shares, such refunded sums being equal to any and all losses, liabilities,
damages, costs and expenses, including, without limitation, interest,
penalties and reasonable attorneys' fees and expenses (hereinafter
referred to as a "Loss" or "Losses") suffered directly or indirectly by
the Purchaser, 3L, Champagne and/or the Subsidiaries arising out of or
resulting from any inaccuracy in or breach of any representation or
warranty made by the Guarantors in this Indemnification Agreement, it
being understood, however, that no Loss shall be deemed to have occurred
if it has been sufficiently and adequately reserved in the consolidated
balance sheet of the Champagne Group as of 28 February 1997. Moreover,
the following is expressly specified :
(a) any sum paid by the Guarantors to the Purchaser pursuant to this Section
is deemed to be a refund (remboursement) of part of the purchase price
paid by the Purchaser for the Shares pursuant to the Share Purchase
Agreement.
(b) any Loss caused by a third party claim, and for which a final decision is
made in accordance with the stipulations of this Indemnification Agreement
that the Purchaser must be refunded by the Guarantors in respect of such
Loss, will include interest at a rate equal to the Taux de Base Bancaire
[TO BE CONFIRMED] plus 1.5 points on the amount of any payment made by 3L,
Champagne or the Subsidiaries as a result of a third party claim, as from
the date on which a payment was made, or a Loss was suffered, by 3L,
Champagne or the Subsidiaries as a result of such third party claim, until
the date on which such Loss is refunded by the Guarantors; and
(c) in the event of a claim by the Purchaser pursuant to its right to be
refunded, the Guarantors may in no way claim that they are relieved in
whole or in part (including by way of a reduction of the amount
recoverable and/or another concept of mitigation of damages) of any or all
of their obligation to refund based on the fact that the Purchaser was or
should have been aware of the situation, whether by virtue of : (x)
investigations conducted by or on behalf of the Purchaser, (y) information
provided to the Purchaser prior to the date hereof other than as expressly
provided otherwise in this Indemnification Agreement, or (z) any other
information which the Purchaser may have received at any time relating to
the subject claim.
4.2.2 At Closing, the Guarantors will provide the Purchasers with a first demand
bank guaranty (garantie bancaire a premiere demande) (hereinafter referred
to as the "Guaranty") given by ____________________ [NAME OF BANK], the
purpose of which is to guarantee the payment(s) to be made by the
Guarantors to the Purchaser pursuant to this Indemnification Agreement.
The amount of the Guaranty will be sufficient to cover:
(a) during the year from the Closing Date to the date of the first anniversary
thereof : ten percent (10%) of the price for the Shares paid to the
Guarantors pursuant to Section 2.2 of the Share Purchase Agreement;
PRIVILEDGED & CONFIDENTIAL 18 DRAFT OF 28 FEBRUARY 1997
(b) during the year from the first anniversary of the Closing Date to the date
of the second anniversary thereof : six percent (6%) of the price for the
Shares paid to the Guarantors pursuant to Section 2.2 of the Share
Purchase Agreement;
(c) during the year from the second anniversary of the Closing Date to the
date of the third anniversary thereof : three percent (3%) of the price
for the Shares paid to the Guarantors pursuant to Section 2.2 of the Share
Purchase Agreement.
4.2.3 The Guarantors' obligation to refund the Purchaser in accordance with this
Indemnification Agreement will be subject to the following limitations:
(a) The Guarantors will not be obligated to refund to the Purchaser a portion
of the price in accordance with the provisions of this Section 4 :
(i) in respect of any single Loss in an amount not exceeding ___________
(_________) French Francs, it being understood that if there is more
than one single Loss of the same nature or having the same cause, the
amounts of each of such single Losses will be added together to form
one and the same single Loss, this for purposes of calculating
whether or not the threshold of _______________ (_______) French
Francs is reached and assessing whether or not a reduction in the
price is due; or
(ii) if the aggregate amount of all single Losses is under seven million
(7,000,000) French Francs;
(b) The aggregate amount of the refund paid by the Guarantors to the Purchaser
pursuant to the terms of this Indemnification Agreement will not exceed
the purchase price paid by the Purchaser for the Shares, as stipulated in
Section 2.2 of the Share Purchase Agreement;
(c) Any proceeds actually recovered by 3L, Champagne or any of the
Subsidiaries, as the case may be, in respect of any Loss, in particular
under any insurance policy or indemnification agreement or guarantee, as
well as the net amount of any tax impact favorable to 3L, Champagne or any
of the Subsidiaries as a result of a Loss, will reduce the amount of such
Loss.
Notwithstanding the foregoing, the Guarantors will in any case first pay
the Purchaser the full amount of the Loss within thirty (30) days [AS FROM
FINAL DETERMINATION OF THE AMOUNT OF SUCH LOSS?]; and
(d) Any amount recovered by the Purchaser or 3L, Champagne or the Subsidiaries
from third parties with respect to a Loss which has given rise to a refund
by the Guarantors will be promptly repaid to the Guarantors.
4.3 INDEMNIFICATION BY THE PURCHASER
- ------------------------------------
Except as otherwise limited herein, the Purchaser will indemnify the Guarantors
in respect of any and all liabilities, damages, costs and expenses (including
reasonable attorneys' fees and expenses) suffered by them arising out of or
resulting from any inaccuracy in, or breach of, any representation or warranty
made by the Purchaser contained in this Indemnification Agreement.
PRIVILEDGED & CONFIDENTIAL 19 DRAFT OF 28 FEBRUARY 1997
4.4 GENERAL INDEMNIFICATION PROVISIONS
- --------------------------------------
4.4.1 For the purposes of this Section 4.4, (i) the term "Indemnitee" will refer
to the person or persons refunded in respect of part of the purchase price
or indemnified, or entitled to be refunded or indemnified, or claiming to
be entitled to be refunded or indemnified, pursuant to the provisions of
Sections 4.2 or 4.3, as the case may be, (ii) the term "Indemnitor" will
refer to the person having the obligation to refund or indemnify pursuant
to such provisions, and (iii) the term "Parties' Losses" will refer to the
Losses of either Party hereto, 3L, Champagne or the Subsidiaries, as the
case may be. The obligations and liabilities of an Indemnitor under this
Section 4 with respect to Losses subject to the refund or indemnification
provided for in this Article (hereinafter referred to as the "Indemnified
Claims") will be governed by and contingent upon the following additional
terms and conditions, it being understood that the refund or
indemnification will only be available hereunder if the following terms
and conditions are followed.
4.4.2 An Indemnitee will give the Indemnitor notice of any matter that may give
rise to a right to a refund or indemnification under this Indemnification
Agreement within thirty (30) days after being made aware thereof and,
together with such notice, the Indemnitee will provide to the Indemnitor
all information in its possession with respect to the claim and will
provide such further information and assistance as may be reasonably
requested by the Indemnitor.
The Indemnitor will be entitled to assume and control the defense of such
Indemnified Claim at its expenses and through counsel of its choice by
notifying the Indemnitee of its intention to do so within fifteen (15)
days of receipt of such notice from the Indemnitee.
The Indemnitee will cooperate with the Indemnitor in such defense, and
make available to it all such witnesses, records, materials and
information in its possession or under its control relating thereto as is
reasonably required by the Indemnitor, and will transmit without delay to
the Indemnitor any information, notification, court or arbitration
decision or proposal to settle relating thereto which it receives.
Similarly, in the event the Indemnitee is conducting the defense against
any Indemnified Claim, the Indemnitor will cooperate with the Indemnitee
in such defense and make available to it at Indemnitor's expense all such
witnesses, records, materials and information in its possession or under
its control relating thereto as is reasonably required by the Indemnitee.
In any event, the Party conducting the defense against any Indemnified
Claim will keep the other party reasonably informed of the development of
such Indemnified Claim.
4.4.3 No Indemnified Claim may be settled by the Indemnitor or the Indemnitee
without the written consent of the Indemnitee or, as the case may be, the
Indemnitor, which consent will not be unreasonably withheld or delayed.
4.4.4 Subject to the previous sections, in no event will the Purchaser be
prevented from settling any claim by a third party on the grounds that a
pending dispute exists between the Purchaser and the Sellers on any other
claim.
PRIVILEDGED & CONFIDENTIAL 20 DRAFT OF 28 FEBRUARY 1997
4.4.5 For purposes of this Section 4, a final decision shall be made with the
consequence that the Indemnitee will be entitled to be refunded or
indemnified by the Indemnitor upon a decision, judgment, decree or other
order by any court of competent jurisdiction, which decision, judgment,
decree or other order has become final with respect to the Indemnitee
(i.e., all allowable appeals have been exhausted by either party to the
-----
action or the time period within which such appeal may be filed has
expired).
5
GENERAL PROVISIONS
5.1 CONFIDENTIALITY
- -------------------
5.1.1 All information and documents provided to either Party within the
framework of the transaction contemplated herein is deemed to be
confidential in nature, irrespective of whether or not the transaction is
consummated. Any analyses, compilations, studies or other documents
prepared by either Party, its employees, officers, representatives or
advisors within the framework of said transaction will be kept
confidential by such Party. Neither Party will use or disclose, and
represents that its employees, officers, representatives and advisors will
not use or disclose, such information during a period of five (5) years
from the date hereof, except to the extent such information :
(i) was known to the receiving Party prior to receipt thereof from the
other Party, and was not subject to a confidentiality commitment;
or
(ii) is or becomes generally known to the public; or
(iii) is received by the receiving Party from a source not subject to a
confidentiality commitment; or
(iv) has been or is gathered or obtained by the receiving Party
independently from the confidential information disclosed by the
other Party.
5.1.2 In particular, the Parties undertake to keep the contents of this
Indemnification Agreement and the Share Purchase Agreement] confidential,
subject to disclosure as may be required pursuant to (i) an any judicial
proceeding conforming with the provisions of Section 5.12 hereof, (ii) any
tax audit, (iii) French or United States securities regulation
requirements, (iv) competition and labor law requirements in France or in
any country in which 3L, Champagne or the Subsidiaries conduct their
respective activities, or (v) any other requirement of a public authority.
5.2 EXPENSES - TAXES
- --------------------
Except as otherwise specified in this Indemnification Agreement, all costs and
expenses, including, without limitation, fees and disbursements of counsel,
financial advisors and accountants, incurred in connection herewith, will be
borne by the Party incurring such costs and expenses, irrespective of whether or
not the Closing takes place.
PRIVILEDGED & CONFIDENTIAL 21 DRAFT OF 28 FEBRUARY 1997
5.3 NOTICES
- -----------
All notices, claims, demands and other communications hereunder will be made in
writing, given or made by delivery in person, by courier service, registered
mail (postage prepared, return receipt requested), telecopy, telegram or telex,
to the respective Parties at the following addresses (or at such other addresses
as may be specified in a notice given in accordance with this Section 5.3) :
(a) If to the Purchaser:
DePuy, Inc.
P.O. Box 988
700 Orthopaedic Drive
Warsaw
Indiana 46581-0988
U.S.A.
Telecopy: (00-1) 219 269 5675
Attention: Legal Department
DePuy International Ltd.
St. Anthony's Road
Leeds
Yorkshire LS11 8DT
U.K.
Telecopy: (00-44) 113 272 4192
Attention: Legal Department
with a copy to:
Coudert Brothers
1114 Avenue of the Americas
New York, N.Y. 10036-7703
U.S.A.
Telecopy: (00-1) 626 4120
Attention: Jeffrey Cohen
and to:
Coudert Freres,
52, Avenue des Champs-Elysees
75008 Paris
France
Telecopy: (00-33) 1 53 83 60 60
Attention: Olivier de Precigout
(b) If to the Sellers:
Mr. Patrick Landanger
85, quai d'Orsay
75007 Paris
France
Telecopy: (00-33) _______________
PRIVILEDGED & CONFIDENTIAL 22 DRAFT OF 28 FEBRUARY 1997
Mr. Eric Landanger
15, rue des Acacias
52000 Jonchery
France
Telecopy: (00-33) _______________
Ms. Maryvonne Guibert
9, boulevard Gambetta
52000 Chaumont
France
Telecopy: (00-33) _______________
with a copy to:
Desfilis, Juchs & Associes
49 bis, Avenue F.D. Roosevelt
75508 Paris
France
Telecopy: (00-33) 1 45 63 29 68
Attention: Maitre J.L. Desfilis
A notice will be deemed to have been duly made or given:
(a) in the case of personal delivery, by the giving of a receipt of delivery
of such notice from the addressee, or to any person working at its above-
mentioned address,
(b) in the case of a registered letter or a courier delivery, upon first
presentation of such notice at the address of the addressee; and
(c) in the case of a transmission by telecopy, telegram or telex, upon the
existence of proof of transmission, confirmed by registered letter with
return receipt requested sent at the latest on the first business day
following the date of such transmission.
5.4 PUBLIC ANNOUNCEMENTS
- ------------------------
Neither Party hereto will make, or cause to be made, any press releases or
public announcements in respect of this Indemnification Agreement, the Share
Purchase Agreement or the transactions contemplated hereby and thereby without
prior approval of the other Party, and the Parties will cooperate as to the
timing and contents of any such announcement. Nothing in this Section 5.4 will
prevent a Party from supplying any information as may be required by any public
authority or as will be required by law, but such Party will furnish notice
thereof to the other Party as soon as practicable given the circumstances.
5.5 SEVERABILITY
- ----------------
If any term or other provision of this Indemnification Agreement is invalid,
illegal or incapable of being enforced by any rule of law or public policy, all
other conditions and provisions of this Indemnification Agreement will,
nevertheless, remain in full force and
PRIVILEDGED & CONFIDENTIAL 23 DRAFT OF 28 FEBRUARY 1997
effect so long as the economic or legal substance of the transactions
contemplated hereby is not affected in any manner materially adverse to any
Party. Upon such determination that any term or other provision is invalid,
illegal or incapable of being enforced, the Parties will negotiate in good faith
to modify this Indemnification Agreement so as to effect the original intent of
the Parties as closely as possible in an acceptable manner in order that the
transactions contemplated hereby are consummated as originally contemplated to
the greatest extent possible.
5.6 LANGUAGES
- -------------
This Indemnification Agreement is entered into and executed in the French and
English languages. In the event of any disputes concerning the construction or
meaning of this Indemnification Agreement, the French version will prevail.
5.7 ENTIRE AGREEMENT
- --------------------
Except as provided in the Share Purchase Agreement, this Indemnification
Agreement constitutes the entire agreement of the Parties hereto with respect to
the subject matter hereof, and supersedes all agreements and undertakings, both
written and oral, between the Sellers and the Purchaser, or any of the companies
of the group to which each Party belongs, prior to the date hereof with respect
to the subject matter herein.
5.8 WAIVERS, MODIFICATIONS OR AMENDMENTS
- ----------------------------------------
No waiver, modification or amendment of any provision of this Indemnification
Agreement will be valid, or of any force or effect, unless made in writing and
signed by each of the Parties hereto, and specifying with particularity the
nature and extent of such waiver, modification or amendment. Any such waiver,
modification or amendment will in no event be construed to be a general waiver,
abandonment, modification or amendment of any of the provisions of this
Indemnification Agreement, but the same will be strictly limited and restricted
to the extent and occasion specified in such writing or writings signed by the
Parties.
5.9 SECTION HEADINGS - EXHIBITS
- -------------------------------
The table of contents to this Indemnification Agreement and the headings of
particular sections herein are inserted only for convenience and are in no way
to be construed as part of this Indemnification Agreement or as a limitation of
the scope of the particular sections to which they refer.
Each Exhibit to this Indemnification Agreement constitutes an integral part
hereof; and all references to this Indemnification Agreement will include all
Exhibits hereto.
5.10 ASSIGNMENT - SUCCESSORS AND ASSIGNS
- ----------------------------------------
Neither this Indemnification Agreement nor any rights, liabilities or
obligations hereunder may be assigned without the express written consent of the
other Party hereto (which consent will be given or refused at the discretion of
each of the Parties), although the
PRIVILEDGED & CONFIDENTIAL 24 DRAFT OF 28 FEBRUARY 1997
Purchaser will be entitled to assign all of its rights and obligations hereunder
to any company belonging to the Purchaser's Group, as specified in Section 2.1
of the Share Purchase Agreement. This Indemnification Agreement will be binding
upon and inure to the benefit of successors and permitted assigns of the
Purchaser.
If the Purchaser assigns its rights and obligations under the Share Purchase
Agreement and the Indemnification Agreement, it will remain liable for the
performance of its obligations by such assignee.
5.11 SPECIFIC PERFORMANCE
- -------------------------
The Parties hereto agree that they will be entitled to specific performance of
the terms hereof, insofar as permitted under French law.
SECTION 5.12 - GOVERNING LAW - DISPUTES
- ----------------------------------------
This Indemnification Agreement will be governed by, and construed in accordance
with, French law.
All disputes arising in connection with this Indemnification Agreement will be
settled by the competent Paris courts.
Executed in five (5) original counterparts,
In Paris,
On ______________ 1997
FOR THE SELLERS: FOR THE PURCHASER:
_________________________ _____________________________
Patrick Landanger DePuy, Inc.
By:
Title:
_________________________
Eric Landanger
_________________________
Maryvonne Guibert
_________________________
Michel Colombier