On behalf of the Registrant, the undersigned hereby certifies that the
following exhibit provides a fair and accurate English translation of the
material contained in the original, the 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
Exhibit 2.2
===========================
INDEMNIFICATION AGREEMENT
===========================
DATED APRIL 1, 1997
BETWEEN
DEPUY ORTHOPEDIE S.A.
AND
PATRICK LANDANGER
ERIC LANDANGER
MARYVONNE GUIBERT
COUDERT FRERES
52, AVENUE DES CHAMPS-ELYSEES
75008 PARIS
FRANCE
INDEMNIFICATION AGREEMENT
BETWEEN :
- - DePuy Orthopedie S.A., a limited liability company with a capital of
FRF4,430,000, having its registered office at 2 rue du Bois Sauvage, 91000
Evry, represented by Bruce de Grange, "Director General", duly authorized
for the purposes hereof,
(hereinafter referred to as the "Beneficiary"),
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 "Guarantor", and collectively
as the "Guarantors"),
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 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, at the date of signature of the Share Purchase Agreement (as this term
is defined below), the Sellers owned eight hundred and five thousand nine
hundred and twenty-four (805,924) shares representing thirty-seven point twenty
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, at the date of signature of the Share Purchase Agreement, 3L owned 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, at the date of signature of the Share Purchase Agreement (as this term
is defined below), the Sellers and 3L together owned one million nine hundred
and thirty-nine thousand four hundred and fifty-three (1,939,453) shares
representing eighty-nine point sixty-four percent (89.64%) of the shares and
voting rights in Landanger-Camus;
WHEREAS, at the date of signature of the Share Purchase Agreement (as this term
is defined below), nine point thirty six percent (9.36%) of the Landanger-Camus
shares were 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
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, 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.
WHEREAS, pursuant to Section 9.10 of the Share Purchase Agreement, the Purchaser
assigned all its rights and obligations thereunder to the Beneficiary.
-3-
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.
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
"Landanger-Camus" 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
"Beneficiary" 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 Beneficiary. Unless specifically provided
otherwise, these representations and warranties are made as of the date hereof.
SECTION 2.1 - SHAREHOLDINGS
- ---------------------------
2.1.1 Shares in 3L
------------
(a) The share capital of 3L amounts to 209,667,000 French Francs, divided
into 209,667 3L Shares having a par value of 1,000 French Francs each,
validly issued, subscribed to and paid up in their entirety. Each 3L
share carries a voting right, and a right to share in the profits.
-4-
(b) The Majority Shareholders have full and valid title to all of the 3L
Shares, free of any encumbrances, pledges, liens, claims or rights of
any third party, and have full authority and capacity to sell all of
the 3L Shares to the Beneficiary.
(c) 3L has not issued any securities (valeurs mobilieres) other than those
referred to in sub-section 2.1.1(a) above. There is no option, right
or obligation to subscribe to, acquire, sell, pledge or grant any
right over the 3L Shares. No other voting rights have been granted.
(d) With the exception of the shares held in Landanger-Camus, 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, or any other assets other than the shares held in
Landanger-Camus and the cash necessary to face the liabilities of 3L
existing as of the Closing Date.
2.1.2 Shares in Landanger-Camus
-------------------------
(a) The share capital of Landanger-Camus amounts to 21,636,700 French
Francs, divided into 2,163,670 Landanger-Camus Shares having a par
value of 10 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.
201,670 of the above shares are identifiable bearer shares (actions au
porteur identifiable), and 1,961,992 are registered shares (actions
nominatives).
(b) The Sellers and 3L have full and valid title to one million nine
hundred and thirty-nine thousand four hundred and fifty-three
(1,939,453) Landanger-Camus Shares representing eighty-nine point
sixty-four percent (89.64%) of the shares and voting rights in
Landanger-Camus, free of any encumbrances, pledges, liens, claims or
rights of any third party. The Sellers have full authority to sell all
of the Landanger-Camus Shares to the Beneficiary.
(c) Landanger-Camus 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 Landanger-Camus Shares. No other voting
rights have been granted.
(d) Except as provided in Sections 2.1.3 and 2.1.4 below, Landanger-Camus
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.
-5-
2.1.3 Shares in the Subsidiaries
--------------------------
(a) Landanger-Camus 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) Landanger-Camus 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 of such
shareholdings being lost, transferred, removed, pledged or blocked as
a result of the purchase of the Shares by the Beneficiary.
(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) Landanger-Camus and the Subsidiaries have minority shareholdings in
the companies listed in Exhibits 2.1.4(a) and 2.1.3(d)
hereto(hereinafter referred to as the "Minority Shareholdings").
(b) Landanger-Camus 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 Beneficiary.
(c) The companies in which Landanger-Camus and the Subsidiaries own
Minority Shareholdings have not issued any securities (valeurs
mobilieres) with the exception of those indicated in Exhibits 2.1.4(c)
and 2.1.3(d) 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 Minority Shareholdings.
(d) Except as shown in Exhibits 2.1.4(d) and 2.1.3(d) hereto, (i) the
companies in which Landanger-Camus and the Subsidiaries own a Minority
Shareholding of 33% or more 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, and (ii) to the best knowledge of the
Guarantors, the companies in which Landanger-Camus and the
Subsidiaries own a Minority Shareholding of less than 33% do not own
any shares or securities of, nor do they have any direct or
-6-
indirect interests or shareholdings in, any corporation, company,
partnership, business entity, joint venture or any other enterprise.
SECTION 2.2 - ORGANIZATION
- --------------------------
2.2.1 3L and Landanger-Camus are societes anonymes validly organized under
the laws of France. The Subsidiaries and the companies in which
Landanger-Camus and the Subsidiaries have Minority Shareholdings are
companies of the form described in Exhibits 2.2.1 and 2.1.3(d) hereto,
and are validly organized under the laws of the countries in which
they are incorporated.
2.2.2 None of 3L, Landanger-Camus, the Subsidiaries or the companies in
which Landanger-Camus 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, Landanger-Camus, the Subsidiaries and the companies in which
Landanger-Camus 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
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 Except as disclosed in Exhibit 2.2.5 hereto, 3L, Landanger-Camus, the
Subsidiaries and the companies in which Landanger-Camus 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.
SECTION 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, Landanger-Camus 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
-7-
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.
SECTION 2.4 - FINANCIAL STATEMENTS
- ----------------------------------
2.4.1 The consolidated financial statements of Landanger-Camus as of 31
August 1996 have been signed off by the statutory auditors of
Landanger-Camus 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,
Landanger-Camus 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, Landanger-Camus and the Subsidiaries'
respective statutory auditors are attached hereto as Exhibit 2.4.1.
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, Landanger-
Camus 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 2.4.3 hereto, none of such
assets are subject to any prior assignment, lien or security interest.
-8-
2.4.4 Accounts receivable owed by Geyser S.A. to 3L, Landanger-Camus and/or
the Subsidiaries will be paid by Geyser S.A. by 31, May 1997 at the
latest. Any such account receivable not paid by 15 July, 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. For any such accounts receivable owed by Geyser S.A. and not
paid by 31 May 1997, 3L, Landanger-Camus or the Subsidiaries will send
to Geyser S.A. a formal notice by registered mail with return receipt
requested. If such account receivable is not paid by Geyser S.A.
within eight (8) days from the sending of such formal notice, and even
if Geyser S.A. disputes the validity or amount of such account
receivable, the Guarantors will indemnify the Beneficiary for the full
amount of such account receivable and interest thereon, within thirty
(30) days from receipt by the Guarantors of a notice from the
Beneficiary stating that Geyser S.A. has not paid such account
receivable together with a copy of the formal notice initially sent by
3L, Landanger-Camus or the Subsidiaries to Geyser S.A.,
notwithstanding any provision to the contrary in this Indemnification
Agreement and particularly in Section 4.2.3(a) hereto or in other
agreements.
2.4.5 Except as disclosed in Exhibit 2.4.5 hereto, 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, (i) in an amount, individually or in the
aggregate, in excess of one (1) million French Francs and (ii) which
was not recorded in the Financial Statements, or which has been
revealed since such date not in the ordinary course of business and
consistent with recent past practice.
2.4.6 The excess of debt over cash of Landanger-Camus (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 Exhibit 2.4.6)
subject to differences only due to seasonal fluctuations, i.e. to
facts, operations or transactions that occur regularly every year at
the same time period of the year and provided they have occurred in
the ordinary course of business and are consistent with recent
practice.
SECTION 2.5 - GEYSER S.A. - AED SOFT - 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 Beneficiary, 3L, Landanger-Camus or any of the
Subsidiaries will incur any liabilities whatsoever, including without
limitation any tax liabilities, resulting therefrom.
-9-
2.5.2 All amounts owed as of the Closing Date, or which might fall due
thereafter, for whatever reason to 3L, Landanger-Camus or any of the
Subsidiaries, by Geyser S.A., or AED Soft or regarding the surgical
instruments activity (as such term is described in Section 4.4 of the
Share Purchase Agreement) are listed in Exhibit 2.5.2 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,
subject to section 2.4.4 regarding the amounts owed by Geyser S.A. to
3L, Landanger-Camus or the Subsidiaries.
SECTION 2.6 - CONDUCT OF BUSINESS PRIOR TO THE CLOSING
- ------------------------------------------------------
During the period from the date of execution of the Share Purchase Agreement to
the Closing, 3L, Landanger-Camus and the Subsidiaries have carried out their
respective businesses with due care and only in the ordinary course of business,
have maintained the integrity of their assets and, in particular, their
prospects and business relationships, and have not increased 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, 3L, Landanger-Camus and the
Subsidiaries have not, without the Beneficiary'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 to Landanger-Camus of the shares of the SCIs
ORTHOTIM and GAM respectively Lessee under a financing lease
(preneur a credit bail) and owning the premises located in
Villeurbanne;
(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 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, in
accordance with Section 2.13.5 below);
(f) modified, terminated or canceled any contracts by which they are bound
under circumstances which would affect their business relations,
prospects,
-10-
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; a contract is deemed
"Material" when it has a direct or indirect impact of thirty thousand
(30,000) French Francs or more;
(h) maintained levels of inventory of their products inconsistent with
their past practices, subject to usual seasonal variations and
customer demands;
(i) operated credit control, cash collection and payment inconsistent with
recent past practice;
(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 of
3L, Landanger-Camus or the Subsidiaries relating to or in respect of
their businesses exceeding two hundred and fifty thousand (250,000)
French Francs in the aggregate per company;
(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; or
(l) incurred any capital expenditure in excess of fifty thousand (50,000)
French Francs for a single investment, or one hundred thousand
(100,000) French Francs in the aggregate per company;
SECTION 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, Landanger-Camus or any of the Subsidiaries.
2.7.2 3L, Landanger-Camus 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); non compliance is deemed "Material" when it has a direct
or indirect impact of thirty thousand (30,000) French Francs or more.
2.7.3 Except as otherwise disclosed in Exhibit 2.7.3 hereto, none of 3L,
Landanger-Camus 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
-11-
a product which is Material to the activities of 3L, Landanger-Camus
and the Subsidiaries; a product is deemed "Material" to the activities
of 3L, Landanger-Camus and the Subsidiaries when sales of such product
are above thirty thousand (30,000) French Francs per year.
2.7.5 Notwithstanding the generality of the above provisions, there is no
action against any of 3L, Landanger-Camus or the Subsidiaries, or any
of their employees, corporate officers (mandataires sociaux) or
shareholders, nor to the best knowledge of the Guarantors any risk of
same, nor any potential liability for any of 3L, Landanger-Camus or
the Subsidiaries, relating to: (i) a violation of Article L.365-1 of
the French Public Health Code, 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 Public
Health Code (Huriet Law) and/or (iii) any criminal offense.
2.7.6 Notwithstanding the generality of the above provisions, there is no
action against any of 3L, Landanger-Camus or the Subsidiaries, nor any
risk of same, nor any potential liability for any of 3L, Landanger-
Camus or the Subsidiaries resulting from any breach of the stock
exchange regulations.
SECTION 2.8 - INTELLECTUAL PROPERTY
- -----------------------------------
2.8.1 3L, Landanger-Camus 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.A hereto, except for: (i) those which are in
the public domain, and (ii) the intellectual property right owned and
licensed by third parties, as same is specifically identified in said
Exhibit 2.8.1.B hereto.
2.8.2 Exhibit 2.8.1.A lists the respective commercial names pertaining to
said Intellectual Property when applicable.
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, and/or renewed when applicable, 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 Except as otherwise disclosed in Exhibit 2.8.4 hereto and 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.
-12-
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, and in any country.
SECTION 2.9 - ENVIRONMENTAL CONDITIONS
- --------------------------------------
2.9.1 None of 3L, Landanger-Camus 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, Landanger-Camus nor any of the Subsidiaries is subject to
any liabilities (including liabilities for cleaning up and/or
remediation, and/or costs for personal injury or property damage) as a
result of any Material breach of any Environmental Law; a breach is
deemed "Material" when it has a direct or indirect impact of thirty
thousand (30,000) French Francs or more.
2.9.3 No expenditures are required in connection with the activities of any
of 3L, Landanger-Camus or any of the Subsidiaries, as same are
presently conducted, in order to comply with any Environmental Law.
SECTION 2.10 - REAL PROPERTY
- ----------------------------
2.10.1 Exhibit 2.10.1.A hereto lists (together with a map) each parcel of
real property owned by 3L, Landanger-Camus and the Subsidiaries
(hereinafter referred to as the "Real Property"). 3L, Landanger-Camus
and the Subsidiaries have full and valid title to all Real Property,
free from any mortgages, liens, pledges or other encumbrances.
Exhibit 2.10.1.B hereto lists each parcel of real property leased by
3L, Landanger-Camus and the Subsidiaries (hereinafter referred to as
the "Leased Real Property") stating for each parcel: (i) the address
of the parcel, (ii) the name and address of the owner, (iii) the type
of lease, (iv) date of entry into force and the term of the lease and
(v) the amount of the rent.
3L, Landanger-Camus and the Subsidiaries have full and valid deeds to
lease all the Leased Real Property, free from any encumbrances.
2.10.2 All documents necessary to prove the title of 3L, Landanger-Camus and
the Subsidiaries to the Real Property and the existence of valid
leases to the benefit of 3L, Landanger-Camus and the Subsidiaries for
the Leased Real Property are in the possession of the relevant
company.
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2.10.3 To the best knowledge of the Guarantors, the Real Property and the
Leased 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, Landanger-Camus and
the Subsidiaries.
2.10.4 With the exception of the real property located at Fillinge 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, Landanger-Camus and the Subsidiaries. The commercial
lease currently in effect for the real property located at Fillinge
will be terminated as from the Closing Date at no cost to 3L,
Landanger-Camus or the Subsidiaries and a short-term lease with a term
of two years as from the Closing Date and terminable at any time with
a three (3) month notice period from the lessee will be entered into
by the Closing Date.
SECTION 2.11 - PERSONAL PROPERTY
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2.11.1 As of the date of close of the Financial Statements, 3L, Landanger-
Camus and the Subsidiaries had full and valid title to, free and clear
from any charges, 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, 3L, Landanger-Camus and the Subsidiaries will
have full and valid title to, free and clear from any charges, 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 (the resulting personal property on the
Closing Date is hereinafter referred to collectively as the "Personal
Property").
2.11.3 The Personal Property is free and clear from any charges, 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, Landanger-
Camus and the Subsidiaries, except as disclosed in Exhibit 2.11.3
hereto.
2.11.4 No third party owns any other personal property, whether tangible or
intangible, required for the conduct of the respective activities of
3L, Landanger-Camus or the Subsidiaries except as disclosed in Exhibit
2.11.4 hereto.
SECTION 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, agreements regarding subsidies
granted to 3L, Landanger-Camus or the Subsidiaries, mortgages and
other undertakings of any kind, whether written or oral, to which 3L,
Landanger-Camus or any of the
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Subsidiaries is a party, or to which 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; contracts, purchase orders,
licenses and sub-licenses, leases, loan agreements, agreements
regarding subsidies are deemed "Material" when they have a direct or
indirect impact of thirty thousand (30,000) French Francs or more.
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 Except as otherwise disclosed in Exhibit 2.12.3 hereto, none of 3L,
Landanger-Camus 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 Beneficiary have been validly
obtained.
2.12.5 The transfer to the Beneficiary 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 and agreements regarding subsidies granted to
3L, Landanger-Camus or the Subsidiaries) or give to the other
contracting third party a right to terminate or amend same.
2.12.6 None of 3L, Landanger-Camus 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,
Landanger-Camus or the Subsidiaries is a party to any Contract which
is unrelated to their respective activities.
SECTION 2.13 - LABOR MATTERS
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2.13.1 Exhibit 2.13.1 hereto sets forth the number of employees, categorized
by activity or country, working as of the Closing Date at the sites of
3L, Landanger-Camus and the Subsidiaries.
2.13.2 3L, Landanger-Camus and the Subsidiaries comply in all Material
respects with applicable labor and social security laws and
regulations; non-compliance is deemed "Material" when it has a direct
or indirect impact of thirty thousand (30,000) French Francs or more.
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2.13.3 Except as otherwise disclosed in Exhibit 2.13.3 hereto, no corporate
officer (mandataire social), employee or agent of 3L, Landanger-Camus
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,
Landanger- Camus or the Subsidiaries are pending or, to the best
knowledge of the Guarantors, threatened, except as disclosed in
Exhibit 2.13.4 hereto.
2.13.5 Except as disclosed in Exhibit 2.13.5 hereto, none of the Sellers will
have an employment agreement with 3L, Landanger-Camus or any of the
Subsidiaries as of the Closing Date. If any of the Sellers had
employment agreements prior to the Closing, same will be terminated
(except as disclosed in Exhibit 2.13.5 hereto) at no cost to 3L,
Landanger-Camus or the Subsidiaries.
SECTION 2.14 - EMPLOYEE BENEFIT MATTERS
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2.14.1 Exhibit 2.14.1 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,
Landanger-Camus and the Subsidiaries (hereinafter collectively
referred to as the "Plans"). Each of the Plans complies in all
Material respects with all applicable laws; non-compliance is deemed
"Material" when it has a direct or indirect impact of thirty thousand
(30,000) French Francs or more.
2.14.2 Adequate reserves have been recorded in the accounts of 3L, Landanger-
Camus 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.
SECTION 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.
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2.15.2 Until the Closing Date :
(a) all of the Tax returns required to be filed with respect to 3L,
Landanger-Camus and the Subsidiaries have been timely filed;
(b) all such returns are or will be correct and complete in all Material
respects; non-compliance is deemed "Material" when it has a direct or
indirect impact of thirty thousand (30,000) French Francs or more.
(c) no adjustment relating to such returns has been proposed or imposed by
any tax or social security authority;
(d) there have not been actions or proceedings for the assessment or
collection of Taxes pending or, to the best knowledge of the
Guarantors, threatened against 3L, Landanger-Camus or any of the
Subsidiaries, except as otherwise disclosed in Exhibit 2.15.2(d)
hereto;
(e) all Taxes shown on such returns or otherwise due have been timely and
properly paid, or adequate reserves have been provided on the
Financial Statements to pay same;
(f) any Taxes falling due by the Closing Date have been timely and
properly paid by 3L, Landanger-Camus and the Subsidiaries; and
(g) all reserves and liabilities for Tax have been adequately and
correctly accounted for in the accounts of 3L, Landanger-Camus and the
Subsidiaries;
(h) there have not been nor will be disallowed transfer prices for
intragroup services and assets and no disguised profit distributions
and similar operations.
SECTION 2.16 - UNDISCLOSED LIABILITIES
- ---------------------------------------
With the exception of the liabilities shown in the Financial Statements or which
have been incurred by 3L, Landanger-Camus 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, Landanger-Camus or any of the Subsidiaries
have any liabilities of whatever nature, whether certain, contingent, future or
otherwise.
None of 3L, Landanger-Camus or any of the Subsidiaries have granted any warranty
to, or stands surety for, any third party for any reason whatsoever.
No shareholder of 3L, Landanger-Camus or any of the Subsidiaries has any right
against 3L, Landanger-Camus or any of the Subsidiaries.
SECTION 2.17 - DIVIDENDS - RECAPITALIZATION AND PURCHASE OF SHARES
- ------------------------------------------------------------------
2.17.1 The dividend declared out of the profits of Landanger-Camus for the
financial year ended on 31 August 1996 has not exceeded seven million
five hundred
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and seventy two thousand eight hundred and forty five (7,572,845)
French Francs. No precompte tax (tax for previous deduction) 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, Landanger-Camus 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.
SECTION 2.18 - INSURANCE
- ------------------------
2.18.1 3L, Landanger-Camus 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 2.18.2 hereto lists all pending events, claims, disputes and
litigations involving insurance policies relating to 3L, Landanger-
Camus or the Subsidiaries as well as all the insurance policies
relating to 3L, Landanger-Camus or the subsidiaries. There are no
other pending claims under the insurance policies from which 3L,
Landanger-Camus and the Subsidiaries currently benefit.
2.18.3 None of 3L, Landanger-Camus 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; a breach is deemed "Material" when it has a direct
or indirect impact of thirty thousand (30,000) French Francs or more.
To the best knowledge of the Guarantors, all insurance premiums due on
or before the Closing Date have been paid in full by 3L, Landanger-
Camus and the Subsidiaries.
SECTION 2.19 - INTERESTED PARTIES
- ---------------------------------
2.19.1 None of the Sellers, or any shareholder, corporate officer (mandataire
social) or employee of 3L, Landanger-Camus 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, Landanger-Camus 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, except as otherwise disclosed in Exhibit
2.19.1(i) hereto; 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 Leased Real
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Property, the Personal Property, or the Intellectual Property used by
3L, Landanger-Camus and the Subsidiaries, except as otherwise
disclosed in Exhibit 2.19.1(ii) hereto.
2.19.2 Any outstanding shareholders' loans and current accounts (comptes
courants d'actionnaire) of 3L, Landanger-Camus or the Subsidiaries
will have been paid or reimbursed prior to the Closing Date.
SECTION 2.20 - PRODUCT LIABILITY
- --------------------------------
All products manufactured and/or sold by 3L, Landanger-Camus and the
Subsidiaries comply in all Material respects with all applicable rules,
regulations, purchase orders and standards; non-compliance is deemed "Material"
when it has a direct or indirect impact of thirty thousand (30,000) French
Francs or more. There have not been any recalls or required adaptation or
modification of such products prior to the Closing Date, except as disclosed in
Exhibit 2.20 hereto.
SECTION 3 - REPRESENTATIONS AND WARRANTIES OF THE BENEFICIARY
The Beneficiary hereby represents and warrants as follows :
SECTION 3.1 - ORGANIZATION
- --------------------------
The Purchaser is a corporation validly organized under the laws of the State of
Delaware, United States of America. The Beneficiary, to whom the Purchaser has
assigned its rights and obligations under the Share Purchase Agreement, is a
corporation validly organized under the laws of France.
SECTION 3.2 - AUTHORITY - NO CONFLICTS - NO APPROVALS
- -----------------------------------------------------
The Beneficiary 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 Beneficiary of its obligations under such agreements
have been authorized by the Beneficiary's Board of Directors and do not require
any prior authorization, clearance or approval of any kind whatsoever 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 the Beneficiary, and constitute the
Beneficiary'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 Beneficiary from performing its obligations under the Share
Purchase Agreement and the Indemnification Agreement.
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SECTION 4 - INDEMNIFICATION
SECTION 4.1 - SURVIVAL OF REPRESENTATIONS AND WARRANTIES
- --------------------------------------------------------
4.1.1 The representations and warranties of the Guarantors and the
Beneficiary 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 sixty (60) 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-section
4.1.1 above.
SECTION 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 Beneficiary 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 Beneficiary, 3L, Landanger-Camus 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 unaudited consolidated balance sheet of the
Landanger-Camus Group as of 28 February 1997 to be delivered to the
Purchaser or Beneficiary pursuant to Section 2.2.2 of the Share
Purchase Agreement. Moreover, the following is expressly specified:
(a) any sum paid by the Guarantors to the Beneficiary pursuant to this
Section is deemed to be a refund (remboursement) of part of the
purchase price paid by the Beneficiary 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 Beneficiary must be refunded by the Guarantors in
respect of such Loss, will include interest at a rate equal to the
Paris Interbank Offered Rate-one year plus 1.5 point on the amount of
any payment made by 3L, Landanger-Camus 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, Landanger-
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Camus 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 Beneficiary 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
Beneficiary was or should have been aware of the situation, whether by
virtue of : (x) investigations conducted by or on behalf of the
Beneficiary, (y) information provided to the Beneficiary prior to the
date hereof other than as expressly provided otherwise in this
Indemnification Agreement, or (z) any other information which the
Beneficiary may have received at any time relating to the subject
claim.
4.2.2 At Closing, the Guarantors will provide the Beneficiary with a first
demand bank guaranty (garantie bancaire a premiere demande)
(hereinafter referred to as the "Guaranty") given by Paribas
Luxembourg, the purpose of which is to guarantee the payment(s) to be
made by the Guarantors to the Beneficiary 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, provided that if after the Closing, the Beneficiary pays a
portion or the total of the Additional Price pursuant to Section 2.2.4
of the Share Purchase Agreement, the amount of the Guaranty will be
increased to cover 10% of the Additional Price paid to the Guarantors;
(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 and the Additional Price 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 and the Additional Price paid to the Guarantors
pursuant to Section 2.2 of the Share Purchase Agreement.
The functioning of the Guaranty and the related escrow account is
described in the "Irrevocable first demand guarantees n 97/03/0014
and 97/03/0015" and the related Escrow Agreement signed this day
between the Beneficiary, the Guarantors and the Banque Paribas
Luxembourg S.A.
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4.2.3 The Guarantors' obligation to refund the Beneficiary in accordance
with this Indemnification Agreement will be subject to the following
limitations:
(a) The Guarantors will not be obligated to refund to the Beneficiary 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 fifty
thousand (50,000) 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 fifty
thousand (50,000) 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. The provisions under Section
2.4.4 hereto will not be taken into account for calculating this
amount.
(b) The aggregate amount of the refund paid by the Guarantors to the
Beneficiary pursuant to the terms of this Indemnification Agreement
will not exceed the purchase price paid by the Beneficiary for the
Shares, as stipulated in Section 2.2 of the Share Purchase Agreement;
(c) Any proceeds actually recovered by 3L, Landanger-Camus 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, Landanger-Camus or any of the Subsidiaries as a result of a Loss,
will reduce the amount of such Loss; and
INSERT "INSERT 1"
(d) Any amount recovered by the Beneficiary or 3L, Landanger-Camus 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.
SECTION 4.3 - INDEMNIFICATION BY THE BENEFICIARY
- ------------------------------------------------
Except as otherwise limited herein, the Beneficiary 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 Beneficiary contained in this Indemnification Agreement.
SECTION 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
INSERT 1
The amount of the Loss will be reduced by any reserve which no longer appears in
the accounts ("the surplus reserve"), and further provided that the surplus
reserve and the Loss belong to the same category of accounts being defined as
the same accounts with three figures as the same appear in the Plan comptable
general.
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4.2 or 4.3, as the case may be, (ii) the term "Indemnitor" will refer
to the person or persons 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, Landanger-Camus 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.
When the Beneficiary is the Indemnitee within the meaning given to
such term in this Section, the Beneficiary must also notify the Banque
Paribas Luxembourg S.A. in conformity with the irrevocable first
demand guarantees mentioned in Section 4.2.2 of this Agreement, such
obligation remaining valid until expiry of said guarantees.
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.
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4.4.4 Subject to the previous sections, in no event will the Beneficiary be
prevented from settling any claim by a third party on the grounds that
a pending dispute exists between the Beneficiary and the Guarantors on
any other claim.
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).
SECTION 5 - GENERAL PROVISIONS
SECTION 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 of the Share Purchase Agreement
confidential, subject to disclosure as may be required pursuant to:
(i) proceedings 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, 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 5.4 below.
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SECTION 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 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
Beneficiary 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 of the Share Purchase Agreement will be borne by the Sellers,
irrespective of whether or not the Closing takes place.
SECTION 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 Beneficiary:
DePuy Orthopedie S.A.
2 rue du Bois Sauvage
91000 Evry
Telecopy: 01 60 78 17 73
Attention: Bruce de la Grange
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
-25-
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 Guarantors:
Mr. Patrick Landanger
85, quai d'Orsay
75007 Paris
France
Mr. Eric Landanger
15, rue des Acacias
52000 Jonchery
France
Ms. Maryvonne Guibert
9, boulevard Gambetta
52000 Chaumont
France
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 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
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(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 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.
SECTION 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 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.
SECTION 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.
SECTION 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 Guarantors and the Beneficiary, 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.
SECTION 5.8 - WAIVERS, MODIFICATIONS OR AMENDMENTS
- --------------------------------------------------
-27-
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.
SECTION 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.
SECTION 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 Beneficiary will be entitled to assign all of
its rights and undertakings hereunder to any company belonging to the
Beneficiary's Group, as specified in Section 2.1 of the Share Purchase
Agreement, the Beneficiary remaining liable for performance of the obligations
of assignee herein and in the Share Purchase Agreement. This Indemnification
Agreement will be binding upon and inure to the benefit of successors and
permitted assigns of the Parties hereto.
SECTION 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.
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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 April 1, 1997
FOR THE GUARANTORS: FOR THE BENEFICIARY:
Patrick Landanger Bruce de la Grange
- ----------------- ------------------
Patrick Landanger DePuy Orthopedie S.A.
By : Bruce de la Grange
Title : Directeur General
Eric Landanger
- --------------
Eric Landanger
Maryvonne Guibert
- -----------------
Maryvonne Guibert
LIST OF EXCLUDED SCHEDULES
Exhibit 2.1.3(a) List of direct or indirect majority-owned subsidiaries
Exhibit 2.1.3(c) Share issuances by subsidiaries
Exhibit 2.1.3(d) Subsidiary holdings
Exhibit 2.1.4(a) List of minority shareholdings
Exhibit 2.1.4(c) Shares issuances by minority shareholdings
Exhibit 2.1.4(d) Holdings by minority shareholdings
Exhibit 2.2.1 Organization of subsidiaries and minority shareholdings
Exhibit 2.2.4 Permits
Exhibit 2.2.5 Title to assets
Exhibit 2.4.1 Financial statements
Exhibit 2.4.3 Liens
Exhibit 2.4.5 Contingent liabilities
Exhibit 2.4.6 Calculation of debt over cash
Exhibit 2.5.2 Debts due by Geyser S.A. to Landanger-Camus and its
subsidiaries
Exhibit 2.7.1 Litigation
Exhibit 2.7.3 Compliance with governmental regulations
Exhibit 2.8.1.A Patents and trademarks
Exhibit 2.8.1.B Patent and trademark licenses
Exhibit 2.8.4 Infringement
Exhibit 2.10.1.A Real property
Exhibit 2.10.1.B Leased real property
Exhibit 2.10.4 Fillinge real property
Exhibit 2.11.3 Personal property liens
Exhibit 2.11.4 Third party personal property interests
Exhibit 2.12.2 Contracts
Exhibit 2.12.3 Administrative Proceedings
Exhibit 2.12.5 Patents
Exhibit 2.13.1 Employees
Exhibit 2.13.3 Employee compensation
Exhibit 2.13.4 Labor relations
Exhibit 2.13.5 Employment agreements
Exhibit 2.14.1 Employee benefit plans
Exhibit 2.15.2(d) Tax assessments
Exhibit 2.18.2 Insurance claims
Exhibit 2.19.1(i) Related party transactions
Exhibit 2.19.1(ii) Related party rights in assets
Exhibit 2.20 Product liability