Document:

Exhibit 4.1

MGC DIAGNOSTICS CORPORATION

WARRANT TO PURCHASE SHARES OF COMMON STOCK

	
  

 	
  

 
	
 Warrant No. __ 

 	
 August 1, 2014 

 

          THIS CERTIFIES
THAT ____________ or its registered assigns (the “Holder”), is entitled
to subscribe for and purchase from MGC Diagnostics Corporation, a Minnesota
corporation (the “Company”), at any time on or before the Expiration
Date (as defined below), 168,342 fully paid and nonassessable shares (the “Warrant
Shares”) of the Company’s Common Stock, par value $0.01 (the “Common
Stock”), at the Exercise Price (as defined below) on the terms and
conditions specified herein. 

          This
Warrant to Purchase Shares of Common Stock (“Warrant”) is subject to the
following provisions, terms and conditions:

          1.          Expiration
of the Warrant. This Warrant may be exercised at any time or after the date
hereof and on or prior to August 1, 2017, (the “Expiration Date”).

          2.          Exercise
Price. Subject to the adjustments below, the exercise price of this Warrant
is $7.96 per share (the “Exercise Price”).

          3.          Exercise
of Warrant. The Holder may exercise its right to purchase the Warrant
Shares or any permitted portion thereof, by surrendering this Warrant with the
form of notice executed by Holder, to the Company at its principal office,
accompanied by payment, in cash, by wire transfer to an account designated by
the Company, or by certified or bank check payable to the order of the Company,
of the aggregate Exercise Price for the number of Warrant Shares being
purchased. If the number of the Warrant Shares purchased is less than the
remaining Warrant Shares, the Company will, upon the exercise, execute and
deliver to the Holder hereof a new Warrant (dated the date hereof) evidencing
the number of Warrant Shares remaining. As soon as practicable after the
exercise of this Warrant and payment of the requisite Exercise Price, but no
less than ten business days, the Company will cause to be issued in the name of
and delivered to the Holder, a certificate or certificates representing the
number of Warrant Shares purchased.

          4.          Legend.
The Company may require that any certificate or certificates representing
ownership in the Warrant Shares issued hereunder contain on the face thereof a
legend substantially as follows:

The securities represented by this
certificate have not been registered under either the Securities Act of 1933,
as amended (the “Act”), applicable state blue sky laws, or the laws of any
foreign jurisdiction and are subject to specific investment representations.
These securities may not be sold, offered for sale or transferred in the
absence of an effective registration under the Act and such applicable state
blue sky laws, or foreign jurisdiction laws, or an opinion of counsel satisfactory
to the company that this registration is not required.

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          5.        Stock
Fully Paid; Reservation of the Warrant Shares. The Company covenants and
agrees that this Warrant has been authorized by all necessary corporate action,
that all of the Warrant Shares issuable upon the exercise of this Warrant will,
upon issuance, be duly authorized, validly issued, fully paid and nonassessable
and free from all liens. The Company covenants and agrees that, during the
period within which the rights represented by this Warrant may be exercised, it
will reserve, for the purpose of the issuance upon exercise of the purchase
rights evidenced by this Warrant, at least the number of shares of the Common
Stock as are issuable, from time to time, upon exercise of this Warrant.

          6.        Negotiability
and Transfer. This Warrant is issued upon the following terms, to which the
Holder consents and agrees:

	
  

 	
  

 
	
  

 	
 (a)          Title
 to this Warrant may be transferred in whole or in part only by endorsement
 (by the Holder hereof executing the form of assignment attached hereto) and
 delivery in the same manner as in the case of a negotiable instrument
 transferable by endorsement and delivery;

 
	
  

 	
  

 
	
  

 	
 (b)          Until
 this Warrant is transferred on the books of the Company, the Company may
 treat the registered holder of this Warrant as the absolute owner hereof for
 all purposes without being affected by any notice to the contrary; and 

 
	
  

 	
  

 
	
  

 	
 (c)          Any
 transfer of this Warrant must comply with applicable federal, state and any
 foreign jurisdiction securities laws. 

 

          The
Company and Holder also agree that in case of death of the Holder or, as the
case may be, his registered assigns, the rights under this Warrant can be
executed by the then-Holder’s legal heir or heirs. The heir(s) will be required to prove his title by a “certificate of
notoriety delivered by a Belgian notary public or the competent registration
office” (“certificat de hérédité rédigé par un notaire belge ou émise par le
bureau d’enregistrement compétent”) or any other equivalent certificate.”

          7.        Adjustment
of the Exercise Price and Number of the Warrant Shares. The number and kind
of securities purchasable upon the exercise of this Warrant and payment of the
Exercise Price will be subject to adjustment from time to time upon the
occurrence of certain events as follows. 

	
  

 	
  

 
	
  

 	
 (a)          Reclassification
 or Merger. In case of any reclassification, change or conversion of the
 Common Stock issuable upon the exercise of this Warrant (other than a change
 in par value, or as a result of a subdivision or combination), or in the case
 of any merger or consolidation of the Company with or into another
 corporation (other than a merger with another corporation in which the Company
 is the surviving corporation and that does not result in any reclassification
 or change of outstanding securities issuable upon exercise of this Warrant),
 or in the case of any sale of all or substantially all of the assets of the
 Company, the Company, or such successor or purchasing corporation, as the
 case may be, will execute and deliver to the Holder a new Warrant (in form
 and substance reasonably satisfactory to the Holder) providing that the
 Holder will have the right to exercise such new 

 

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 Warrant and
 upon such exercise to receive, in lieu of the shares of the Common Stock
 theretofore issuable upon exercise of this Warrant, the kind and amount of
 shares of stock, other securities, money and property receivable upon such
 reclassification, change or merger had the Warrant been exercised immediately
 prior to such event. Such new Warrant will provide for adjustments as nearly
 equivalent as may be practicable to the adjustments in this Section 7 to
 pursue the economic benefit intended to be conferred upon the Holder by this
 Warrant. The provisions of this Section 7(a) will similarly apply to
 successive reclassifications, changes, mergers and transfers.

 
	
  

 	
  

 
	
  

 	
 (b)          Subdivisions
 or Combination of the Warrant Shares. If the Company, at any time while
 this Warrant remains outstanding and unexpired, subdivides or combines the
 Common Stock or in the event of any dividend payable on the Common Stock in
 shares of Common Stock, the number of shares of Common Stock issuable upon
 exercise hereof will be proportionately adjusted and the Exercise Price
 increased or decreased, as the case may be, so that the aggregate Exercise
 Price of this Warrant at all times remains unchanged.

 
	
  

 	
  

 
	
  

 	
 (c)          Notices
 of Record Date. In the event of any taking by the Company of a record of
 its shareholders for the purpose of determining shareholders who are entitled
 to receive payment of any dividend or other distribution, any right to
 subscribe for, purchase or otherwise acquire any share of any class or any
 other securities or property, or to receive any other right, or for the
 purpose of determining shareholders who are entitled to vote in connection
 with any proposed merger or consolidation of the Company with or into any
 other corporation, or any proposed sale, lease or conveyance of all or
 substantially all of the assets of the Company, or any proposed liquidation,
 dissolution or winding up of the Company, the Company will mail to the
 Holder, as the holder of this Warrant, at least 10 days prior to the date specified
 therein, a notice specifying the date on which the record will be taken for
 the purpose of the dividend, distribution or right, and the amount and
 character of the dividend, distribution or right.

 
	
  

 	
  

 
	
  

 	
 (d)          Notice
 of Adjustments. Whenever the Exercise Price or the number of shares
 issuable upon the exercise of this Warrant is adjusted pursuant to the
 provisions hereof, the Company will within 30 days of the adjustment deliver
 a certificate signed by its chief financial officer to the Holder as the
 registered holder hereof setting forth, in reasonable detail, the event
 requiring the adjustment, the amount of the adjustment, the method by which
 such adjustment was calculated, and the Exercise Price after giving effect to
 such adjustment.

 

          8.       No
Voting Rights. This Warrant does not entitle the Holder to any voting
rights or other rights as a shareholder of the Company.

          9.      Notices.
All notices and other communications from the Company to the Holder of this
Warrant must be mailed, by first class mail, to the address furnished to the
Company in writing by the Holder, or, until an address is so furnished, to and
at the address of the last holder of this Warrant who has so furnished an
address to the Company. All communications from the Holder of 

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this Warrant
to the Company will be mailed by first class mail to the Company’s principal
office, or such other address as may have been furnished to the Holder in
writing by the Company.

          10.      Loss,
Theft, Destruction or Mutilation of Warrant. Upon receipt by the Company of
evidence reasonably satisfactory to it of the loss, theft, destruction or
mutilation of this Warrant, and in case of loss, theft, or destruction, of
indemnity or security reasonably satisfactory to it, and upon reimbursement to
the Company of all reasonable expenses incidental thereto, and upon surrender
and cancellation of this Warrant, if mutilated, the Company will make and
delivery a new warrant of like tenor and dated as of such cancellation in lieu
of this Warrant.

          11.      Acknowledgment
of the Holder. The Holder hereby represents and warrants as follows:

	
  

 	
  

 
	
  

 	
 (a)          Holder
 has been furnished with the Company’s most recent Annual Report on Form 10-K,
 together with all subsequently quarterly and periodic reports and has
 received from the Company such other information concerning its operations,
 financial condition and other matters that Holder has requested and
 considered all factors he deems material in deciding on the advisability of
 investing in the Company;

 
	
  

 	
  

 
	
  

 	
 (b)         To
 the extent requested, Holder has provided the Company with complete and
 accurate information in all material respects concerning his knowledge,
 experience and financial condition;

 
	
  

 	
  

 
	
  

 	
 (c)          As
 a sophisticated investor, Holder has such knowledge and experience in
 financial business matters that he or she is capable of evaluating the merits
 and risks of the prospective investment in this Warrant;

 
	
  

 	
  

 
	
  

 	
 (d)          Holder
 recognizes that investment in the Warrant may involve a high degree of risk,
 that transferability and resale is restricted and that, in the event of
 disposition of the underlying common stock, he or she could sustain a loss;

 
	
  

 	
  

 
	
  

 	
 (e)          Holder
 intends to hold the Warrant for investment purposes and not with a view to or
 for resale or distribution, and agrees that he or she will not sell or assign
 this Warrant without registration under all applicable securities laws or an
 appropriate exemption. 

 
	
  

 	
  

 
	
  

 	
 (f)          Holder
 undersigned understands and acknowledges that the Warrant has not been
 registered under the Act, applicable state blue sky laws, or applicable
 foreign jurisdiction laws pursuant to exemptions that depend upon this
 investment intention. The undersigned also understands and acknowledges that
 the underlying common stock has not been, nor will be registered under
 applicable securities laws and therefore will not be freely transferable and
 that the shares of the common stock will be marked with an appropriate legend
 reciting these resale restrictions;

 
	
  

 	
  

 
	
  

 	
 (g)          Holder
 is (i) an “Accredited Investor” for purposes of Regulation D promulgated
 under the Act, or (ii) if Holder is not an accredited investor, that Holder
 together with his, her or its personal representative has the knowledge and 

 

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 experience
 in financial and business matters that Holder is capable of evaluating the
 merits and risks of an investment in the Warrant and upon exercise the
 Warrant Shares; and

 
	
  

 	
  

 
	
  

 	
 (h)          Holder
 agrees that the Company is not providing Holder with any tax advice with
 respect to the receipt of this Warrant, the exercise of the Warrant, or and
 resale of the underlying common stock, and that Holder will consult with and
 rely on Holder’s own tax adviser.

 

          12.     Miscellaneous.

	
  

 	
  

 
	
  

 	
 (a)          The
 representations, warranties and agreements herein contained will survive the
 exercise of this Warrant. References to the “Holder of” include the immediate
 holders of the Warrant Shares purchased on the exercise of this Warrant, and
 the word “Holder” will include the plural thereof.

 
	
  

 	
  

 
	
  

 	
 (b)          This
 Warrant and any term hereof may be changed, waived, discharged or terminated
 only by an instrument in writing signed by the party against which enforcement
 of the change, waiver, discharge or termination is sought. This Warrant will
 be construed and enforced in accordance with and governed by the laws of the
 State of Minnesota. The headings in this Warrant are for purposes of
 reference only, and do not limit or otherwise affect any of the terms hereof.
 The invalidity or unenforceability of any provision hereof does in no way
 affect the validity or enforceability of any other provision.

 
	
  

 	
  

 
	
  

 	
 (c)          The
 Company agrees that, in the event, any Holder exercises all or any portion of
 that Holder’s Warrant, the Company will, within 10 business days, after
 exercise, notify each other Holder. Notice may be given electronically to
 each Holder’s most recent email provided by Holder to the Company, with a confirmatory
 copy sent by registered or overnight mail.

 

 [signature
page follows]

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          IN
WITNESS WHEREOF, this Warrant has been duly executed by the undersigned, as of
this first day of August, 2014.

	
  

 	
  

 	
  

 	
  

 
	
  

 	
 MGC DIAGNOSTICS CORPORATION

 	
  

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
 By: 

 	
  

 	
  

 
	
  

 	
  

 	
 Todd Austin,
 Chief Executive Officer

 	
  

 

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SUBSCRIPTION FORM

To be signed only upon exercise of the
Warrant.

          The
undersigned, the Holder of the within Warrant, hereby irrevocably elects to
exercise the purchase price right represented by the Warrant for, and to
purchase thereunder, ________ shares of the Common Stock of MGC Diagnostics
Corporation (the “Company”) to which the Warrant relates and herewith
makes payment of $___________ therefor in cash or by certified check and
requests delivery of the shares to the undersigned, the address for which or
for whom is set forth below the signature of the undersigned.

	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 
	
 Dated:

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
  

 	
 Signature of
 Holder

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
  

 	
 By: 

 	
  

 
	
  

 	
  

 	
  

 	
 Its:

 	
  

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
  

 	
 ADDRESS FOR
 DELIVERY PURPOSES:

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
  

 	
  

 

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ASSIGNMENT FORM

          FOR
VALUE RECEIVED, the undersigned hereby sells, assigns and transfers unto the
assignee designated below (the “Assignee”) the undersigned’s entire
right, title and interest in and to the Warrant to purchase ________ shares of
the Common Stock of MGC Diagnostics Corporation (the “Company”), and
hereby irrevocably appoints ______________________________ as attorney-in-fact
to transfer such Warrant on the books of the Company.

	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 
	
 Dated:

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
  

 	
 Signature of
 Assignor

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
  

 	
 By: 

 	
  

 
	
  

 	
  

 	
  

 	
  

 	
 Its:

 	
  

 

          The
Assignee represents that this Warrant and the shares issuable upon exercise
hereof or conversion thereof are being acquired for investment and that the
Assignee will not offer, sell or otherwise dispose of this Warrant or any
shares issuable upon exercise hereof or conversion thereof except under
circumstances that will not result in a violation of the Securities Act of
1933, as amended, or any state securities laws. Further, the Assignee
acknowledges that upon exercise of this Warrant, the Assignee will, if
requested by the Company, confirm in writing, in a form satisfactory to the
Company, that the shares so purchased are being acquired for investment and not
with a view toward distribution or resale.

	
  

 	
  

 	
  

 	
  

 
	
 Dated:

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
 Signature of
 Assignee

 

8Exhibit
10.1

STOCK PURCHASE
AGREEMENT

          THIS
STOCK PURCHASE AGREEMENT (including all schedules, exhibits and
other agreements attached hereto or made a part hereof, and all amendments
hereto, this “Agreement”) is made
and entered into as of July 10, 2014, by and among MGC Diagnostics Belgium
S.P.R.L., a private limited liability company incorporated under Belgium law
and a subsidiary of MGC Diagnostics Corporation (“Purchaser”), Guy Martinot (“G. Martinot”)
and Jean-Benoît Martinot (“J. Martinot” and, together with G.
Martinot, the “Shareholders”). 

RECITALS

          WHEREAS,
the Shareholders collectively own 100% of the issued and outstanding shares of
capital stock (the “Shares”) of MediSoft SA, a limited
liability company (“société anonyme”) incorporated under Belgian law having its
registered office at 5503 Sorinnes – Dinant (Belgium), Route de la Voie Cuivrée
1, registered in the register of legal entities under number 429.958.042 (the “Company”);

          WHEREAS,
the Shareholders desire to sell the Shares to Purchaser, and Purchaser desires
to purchase the Shares from the Shareholders, on the terms and subject to the
conditions set forth in this Agreement; 

          WHEREAS,
capitalized terms that are used but not defined in the body of this Agreement
are defined in Exhibit A hereto (such meanings to be equally applicable
to the singular and the plural forms thereof); and

          WHEREAS,
Section 10.14 hereof provides a table of terms that are defined in the
body of this Agreement.

          NOW,
THEREFORE, for and in consideration of the premises and of the mutual
representations, warranties, covenants, agreements and conditions contained
herein, the parties hereto agree as follows:

ARTICLE 1.

PURCHASE AND SALE

          Section
1.1     Agreement to Sell. At the closing of
the transactions contemplated hereby (the “Closing”), the Shareholders will grant,
sell, convey, assign, transfer and deliver to Purchaser, upon and subject to
the terms and conditions of this Agreement, the Shares, free and clear of all
Encumbrances. 

          Section
1.2     Agreement to Purchase. At the Closing,
Purchaser will purchase all of the Shares from the Shareholders, upon and
subject to the terms and conditions of this Agreement and in reliance on the
representations, warranties, covenants and agreements of the Shareholders
contained herein, in exchange for the Purchase Price.

          Section
1.3     Purchase Price. The aggregate purchase
price to be paid by Purchaser to the Shareholders for the Shares (the “Purchase
Price”) is: (a) (i) Five Million Eight Hundred Thousand

Euro
(€5,800,000) minus (ii) the aggregate amount of Company Indebtedness as
of the Closing, but excluding for purposes of this Section 1.3 only the
amounts contemplated by subparagraph (j) of the definition of Company
Indebtedness, minus (iii) the Incremental Subsidiary Purchase Price (the
amount so determined pursuant to this clause (a), the “Closing Cash Consideration”);
plus (b) the issuance of the Warrants at the Closing. The Closing Cash
Consideration will be paid to the Shareholders at the Closing in accordance
with Section 2.2(b)(i). 

ARTICLE 2.

CLOSING

          Section
2.1     Closing. Subject to the terms and
conditions of this Agreement, the closing of the transactions contemplated
hereby (the “Closing”) will take place at the offices of Marx Van Ranst
Vermeersch & Partners in Brussels, Belgium at 10:00 a.m., local time, on
the later to occur of (a) August 1, 2014 or (b) the first Business Day of the
calendar month following the satisfaction or (to the extent permitted by
Applicable Law) waiver of all of the conditions precedent to the obligations of
the parties set forth in Article 7 (other than those conditions that by
their nature or terms are to be satisfied by the delivery of documents or the
payment of money at the Closing, but subject to the satisfaction or (to the
extent permitted by Applicable Law) waiver of those conditions). The date on
which the Closing occurs will be referred to in this Agreement as the “Closing
Date.” The Closing will be deemed effective as of 12:00:01 a.m.,
Minneapolis time, on the Closing Date. All documents delivered and actions
taken at the Closing will be deemed to have been delivered or taken
simultaneously. 

          Section
2.2      Deliveries at Closing. At the Closing
and subject to the terms and conditions herein contained: 

	
  

 	
  

 
	
  

 	
 (a)      The
 Shareholders will deliver to Purchaser the following:

 
	
  

 	
  

 
	
  

 	
           (i)          the
 register of shares of the Company; 

 
	
  

 	
  

 
	
  

 	
           (ii)         the
 minute books, stock ledgers, stock certificate books and seals of the Company
 and its Subsidiaries;

 
	
  

 	
  

 
	
  

 	
           (iii)        an
 irrevocable first demand bank guarantee, in the form and substance
 satisfactory to Purchaser, duly executed and issued by ING Belgium S.A.
 (guaranteeing an amount equal to ten percent (10%) of the Closing Cash
 Consideration to provide security for the Shareholders’ indemnification
 obligations under Article 9 of this Agreement); 

 
	
  

 	
  

 
	
  

 	
           (iv)         a
 release of claims, each in form attached hereto as Exhibit B, duly
 executed by each of the Shareholders;

 
	
  

 	
  

 
	
  

 	
           (v)          employment-related
 documentation, in form and substance reasonably satisfactory to Purchaser,
 duly executed by each of the individuals set forth on Schedule 2.2(a)(v);
 

 
	
  

 	
  

 
	
  

 	
           (vi)         such
 Encumbrance releases, payoff letters or termination statements, in form and
 substance reasonably satisfactory to Purchaser, as

 

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 Purchaser may reasonably
 request to evidence the release and discharge of any Encumbrances (other than
 Permitted Encumbrances) on the assets or properties of the Company or its
 Subsidiaries or the Shares;

 
	
  

 	
  

 
	
  

 	
           (vii)        a
 resignation, each in the form attached hereto as Exhibit C, duly
 executed by each director of the Company or any of its Subsidiaries;

 
	
  

 	
  

 
	
  

 	
           (viii)       evidence,
 in form and substance reasonably satisfactory to Purchaser, that each of the
 agreements set forth on Section 2.2(a)(viii) of the Disclosure
 Schedule (collectively, the “Terminated Agreements”) has been
 terminated; 

 
	
  

 	
  

 
	
  

 	
           (ix)         evidence,
 in form and substance reasonably satisfactory to Purchaser, of the repayment
 of all loans made by the Company or any of its Subsidiaries to any Person
 (including, without limitation, the repayment of the G. Martinot Debt
 Obligation);

 
	
  

 	
  

 
	
  

 	
           (x)          evidence,
 in form and substance reasonably satisfactory to Purchaser, that each of the
 Company’s Subsidiaries is wholly owned by the Company as of the Closing,
 which shall specifically include, without limitation: (1) the most recent
 share transfer agreements regarding Medisoft France Sarl; (2) the most recent
 notarial transfer of share interest deed regarding Medisoft Germany GmbH; and
 (3) an up to date certificate of ownership of the shares of Medisoft RAM
 Italia S.R.L issued by the Register of Enterprises; 

 
	
  

 	
  

 
	
  

 	
           (xi)         evidence,
 in form and substance satisfactory to Purchaser, that none of the Company,
 any of its Subsidiaries or any of their respective Affiliates have or will
 have any liability to the Walloon Region arising out of or relating to the
 Walloon Region Grant Agreement);

 
	
  

 	
  

 
	
  

 	
           (xii)        a
 service agreement, in form and substance satisfactory to Purchaser (the “Laurent
 Martinot Service Agreement”), duly executed by Laurent Martinot;

 
	
  

 	
  

 
	
  

 	
           (xiii)       an
 extract of the central criminal register (“extrait du casier judiciaire
 central”) of the Company, as of the most recent practicable date, and a
 certificate of good standing of each Subsidiary of the Company, as of the
 most recent practicable date, from the jurisdiction of incorporation or
 organization of each such Subsidiary; 

 
	
  

 	
  

 
	
  

 	
           (xiv)        the
 deed of incorporation of the Company and each of its Subsidiaries; 

 
	
  

 	
  

 
	
  

 	
           (xv)         the
 articles of association of the Company and each of its Subsidiaries as in
 effect as of the Closing Date; 

 

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           (xvi)        the
 certificates of the Shareholders required to be delivered pursuant to Section
 6.14 and Section 7.3(d), duly executed by each of the
 Shareholders; 

 
	
  

 	
  

 
	
  

 	
           (xvii)       a
 certificate of the Shareholders, certifying the aggregate amount the Company
 Indebtedness as of the Closing, duly executed by each of the Shareholders (it
 being understood that (i) such certificate shall itemize each separate
 component of the Company Indebtedness and (ii) the Shareholders shall provide
 Purchaser with documentation, in form and substance satisfactory to
 Purchaser, evidencing the aggregate amount of each separate component of the
 Company Indebtedness as of the Closing);

 
	
  

 	
  

 
	
  

 	
           (xviii)      a
 certificate of a duly authorized person of the Company and each of its
 Subsidiaries, dated the Closing Date, in form and substance reasonably
 satisfactory to Purchaser, as to no amendments to such entity’s deed of
 incorporation or articles of association since the date of the deed and
 articles specified in clauses (xiv) or (xv), respectively;

 
	
  

 	
  

 
	
  

 	
           (xix)        all
 consents, waivers or approvals required to be obtained by the Shareholders in
 connection with the consummation of the transactions contemplated hereby
 (whether from a Governmental Entity or other third party);

 
	
  

 	
  

 
	
  

 	
           (xx)         the
 Aerocrine License Agreement Amendment, duly executed by Aerocrine AB and the
 Company;

 
	
  

 	
  

 
	
  

 	
           (xxi)        the
 New Service Agreement, between the Company and BMG Medical SA, duly executed
 by the Company and BMG Medical SA; 

 
	
  

 	
  

 
	
  

 	
           (xxii)       certificates
 of tax good standing, lien waivers and other state tax certificates as
 reasonably requested by Purchaser; (“Bescheinigung in Steuersachen” for
 Medisoft Germany GmbH and “Certificato
 di vigenza con dicitura di non fallimento” for Medifoft Ram Italia
 S.r.l)”); 

 
	
  

 	
  

 
	
  

 	
           (xxiii)      the
 Funds Flow Agreement, duly executed by each of the Shareholders; 

 
	
  

 	
  

 
	
  

 	
           (xxiv)      the
 Right of First Offer Agreement, duly executed by J. Martinot; and 

 
	
  

 	
  

 
	
  

 	
           (xxv)       such
 other documents, certificates or instruments as Purchaser may reasonably
 request, in form and substance reasonably satisfactory to Purchaser. 

 

	
  

 	
  

 
	
  

 	
           (b)     Purchaser
 will deliver to the Shareholders (or to such other third party as is
 specified below, as applicable) the following:

 

	
  

 	
  

 
	
  

 	
           (i)           each
 Shareholder’s Pro Rata Share of the Closing Cash Consideration, by wire
 transfer of immediately available funds to such bank accounts designated in
 writing by the Shareholders;

 

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           (ii)         the
 Warrants, duly executed by Parent; 

 
	
  

 	
  

 
	
  

 	
           (iii)        the
 Funds Flow Agreement, duly executed by Purchaser; 

 
	
  

 	
  

 
	
  

 	
           (iv)        the
 Laurent Martinot Service Agreement, duly executed by the Company;

 
	
  

 	
  

 
	
  

 	
           (v)         the
 Right of First Offer Agreement, duly executed by the Company; and

 
	
  

 	
  

 
	
  

 	
           (vi)        the
 certificate of Purchaser required to be delivered pursuant to Section
 7.2(c), duly executed by Purchaser.

 

	
  

 	
  

 
	
  

 	
           (c)       All
 deliveries, payments and other transactions and documents relating to the
 Closing will be interdependent and none will be effective unless and until
 all are effective (except to the extent that the party entitled to the
 benefit thereof has waived satisfaction or performance thereof as a condition
 precedent to Closing).

 

          Section
2.3      Other actions at Closing. 

	
  

 	
  

 
	
  

 	
           (a)       The
 parties to this Agreement will sign the transfer of the Shares in the
 register of shares of the Company.

 
	
  

 	
  

 
	
  

 	
           (b)       Purchaser
 shall hold a shareholders’ meeting of the Company in order to approve the
 following decisions:

 

	
  

 	
  

 
	
  

 	
             (i)        Acknowledgement
 of the resignation of the directors; and 

 
	
  

 	
  

 
	
  

 	
             (ii)       Appointment
 of new directors.

 

ARTICLE 3.

REPRESENTATIONS AND WARRANTIES REGARDING THE COMPANY
AND ITS SUBSIDIARIES

          To
induce Purchaser to enter into this Agreement, the Shareholders jointly and
severally represent and warrant to Purchaser, except as otherwise disclosed in
the Disclosure Schedule, as follows: 

5

          Section
3.1      Organization; Qualification. The
Company is a limited liability company (“société anonyme”) duly organized,
validly existing and in good standing under the laws of Belgium. The Company
has all requisite power and authority to own, lease and operate its properties
and to carry on its business as now conducted and is duly qualified to do
business as a foreign entity in each of the jurisdictions set forth on Section
3.1 of the Disclosure Schedule, which constitute all of the jurisdictions
where the character of the property owned or leased by it or the nature of its
activities makes such qualification necessary. True, complete and correct
copies of the deed of incorporation and of the coordinated articles of
association (“statuts”) of the Company as currently in effect, have been made
available to Purchaser.

          Section
3.2      Capitalization. The capital of the
Company is equal to One Hundred Ninety-Six Thousand Three Hundred Thirty-Six
Euros (€196,336) represented by Two Thousand Three Hundred Seventeen (2,317)
shares of common stock, without par value. The Shares (i) comprise all of the
issued and outstanding shares of capital stock of the Company, (ii) have been
duly authorized, are validly issued, fully paid and non-assessable, (iii) are
not subject to and were not issued in violation of any preemptive rights, and
(iv) are held of record by the Shareholders. There are no outstanding or
authorized options, warrants, purchase rights, subscription rights, conversion
rights, exchange rights or other contracts or commitments that would require
the Company to issue, sell or otherwise cause to become outstanding any of its
capital stock. There are no outstanding or authorized stock appreciation,
phantom stock, profit participation or similar rights with respect to the
Company. The Company is not subject to any obligation to repurchase or
otherwise acquire or retire any shares of capital stock and there are no
commitments of the Company to distribute to holders of any class of its capital
stock any evidence of indebtedness or assets, or to pay any dividend or make
any other distribution in respect thereof. 

          Section
3.3      Subsidiaries; Ownership of Other Securities.

	
  

 	
  

 
	
  

 	
           (a)       Set
 forth on Section 3.3(a) of the Disclosure Schedule is a list of all
 the Company’s Subsidiaries, together with the jurisdiction of incorporation
 for each such Subsidiary. The Company’s Subsidiaries are duly organized and
 validly existing under the laws of their respective jurisdiction of incorporation.
 The Company’s Subsidiaries have all requisite power and authority to own,
 lease and operate their properties and to carry on their business as now
 conducted and are duly qualified to do business as a foreign entity in each
 of the jurisdictions set forth on Section 3.3(a) of the Disclosure
 Schedule, which constitute all of the jurisdictions where the character of
 the property owned or leased by such Subsidiary or the nature of such
 Subsidiary’s activities makes such qualification necessary. True, complete
 and correct copies of the deed of incorporation and the coordinated articles
 of association or other similar governing documents of each of the Company’s
 Subsidiaries, each as currently in effect, have been made available to
 Purchaser.

 
	
  

 	
  

 
	
  

 	
           (b)       All
 of the issued and outstanding capital stock of each of the Company’s
 Subsidiaries have been duly authorized, are validly issued, fully paid and
 non-assessable and, other than any such capital stock presently owned by G.
 Martinot, are held of record by the Company. As of the Closing, all of the
 issued and outstanding capital stock of each of the Company’s Subsidiaries
 will be held of record by the Company. There are no outstanding or
 authorized: (i) options, warrants, purchase rights, subscription rights,
 conversion rights, exchange rights or other contracts or commitments that
 would require any of the Company’s

 

6

	
  

 	
  

 
	
  

 	
 Subsidiaries
 to issue, sell or otherwise cause to become outstanding any of the capital
 stock of any of the Company’s Subsidiaries; or (ii) bonds, debentures, notes
 or other indebtedness of any of the Company’s Subsidiaries having the right
 to vote (or convertible into or exercisable or exchangeable for securities
 having the right to vote) on any matters with the shareholder(s) of such
 Subsidiary. There are no outstanding or authorized stock appreciation,
 phantom stock, profit participation or similar rights with respect to any of
 the Company’s Subsidiaries. Neither the Company nor any of its Subsidiaries
 is subject to any obligation to repurchase or otherwise acquire or retire any
 shares of capital stock of any Subsidiary and there are no commitments of the
 Company or any of its Subsidiaries to distribute to holders of any class of
 the Subsidiary’s capital stock any evidence of indebtedness or assets, or to
 pay any dividend or make any other distribution in respect thereof.

 
	
  

 	
  

 
	
  

 	
           (c)       Aside
 from any shares of capital stock of any of the Company’s Subsidiaries
 presently owned by G. Martinot, the Company has good and marketable title to
 all of the issued and outstanding capital stock of each of its Subsidiaries,
 free and clear of any and all Encumbrances. As of the Closing, the Company
 will have good and marketable title to all of the issued and outstanding
 capital stock of each of its Subsidiaries, free and clear of any and all
 Encumbrances. Neither the Company nor G. Martinot is a party to any option,
 warrant, purchase right or other contract or commitment (other than this
 Agreement) that would require either the Company or G. Martinot to sell,
 transfer or otherwise dispose of any of its Subsidiaries’ capital stock or
 membership interests. Neither the Company nor G. Martinot is a party to any
 voting trust, proxy or other agreement or understanding with respect to the voting
 of any of its Subsidiaries’ capital stock or membership interests.

 
	
  

 	
  

 
	
  

 	
           (d)       Neither
 the Company nor any of its Subsidiaries owns or has any interest, direct or
 indirect, or any commitment to purchase or otherwise acquire, any capital
 stock or other equity interest, direct or indirect, in any other Person.

 

          Section
3.4      [INTENTIONALLY
OMITTED]

          Section
3.5      Governmental Approvals. No filing with,
and no permit, authorization, consent or approval of, any Governmental Entity
is required to be obtained by the Company or any of its Subsidiaries in
connection with the execution, delivery and performance by the Shareholders of
this Agreement or the consummation of the transactions contemplated hereby
other than as set forth on Section 3.5 of the Disclosure Schedule.

          Section
3.6      No Violations. Except as set forth on Section
3.6 of the Disclosure Schedule, the execution, delivery and performance by
the Shareholders of this Agreement and the consummation by the Shareholders of
their obligations hereunder do not and will not (a) conflict with,
constitute a violation or breach of or default under or give rise to (or give
rise after the giving of notice, the passage of time or both) a right of
termination, cancellation or acceleration of any obligation of the
Shareholders, the Company or any of the Company’s Subsidiaries or to a loss of
any benefits to which the Shareholders, the Company or any of the Company’s
Subsidiaries is entitled under any provision of: (i) the Company’s or any
of the Company’s Subsidiaries’ articles of association or other similar
governing documents; (ii) assuming the consents, actions and filings
listed on Section 3.5 of the Disclosure Schedule have been obtained,
taken and made, any law, regulation, judgment, injunction, order or decree
binding upon the Shareholders, the Company or any

7

of the Company’s
Subsidiaries, or any of their respective assets or properties; or
(iii) any Contract to which any Shareholder, the Company or any of the
Company’s Subsidiaries is a party or any license, franchise, permit or similar
authorization held by any Shareholder, the Company or any of the Company’s
Subsidiaries, including, without limitation, the Authorizations (as defined
below); or (b) result in the creation or imposition of any Encumbrance
(other than a Permitted Encumbrance) on any of the assets or properties of the
Company or any of the Company’s Subsidiaries or any Encumbrance on the Shares. 

          Section
3.7      Government Authorizations. The Company
and its Subsidiaries, as applicable, possess all material permits, licenses,
clearances, waivers, authorizations, approvals and certificates from
Governmental Entities which are necessary to conduct their business in
compliance with all federal, state, local or foreign laws, statutes,
regulations, guidance, orders and judgments ordered applicable to the Company
or any of its Subsidiaries (the “Authorizations”). Section 3.7 of
the Disclosure Schedule contains a true and complete list of all such
Authorizations. The Authorizations are valid, in good standing and in full
force and effect, and the Company and its Subsidiaries, as applicable, have at
all times complied and are currently complying in all respects with each such
Authorization. The execution, delivery or performance of this Agreement by the
parties will not have any effect on the continued validity or sufficiency of
the Authorizations, nor will any additional permits, licenses, waivers,
authorizations, approvals, clearances or certificates be required by virtue of
the execution, delivery or performance of this Agreement by the parties hereto
to enable the Company and its Subsidiaries to conduct their business.

          Section
3.8      Financial Statements; No Undisclosed
Liabilities; Company Indebtedness; Working Capital; Consolidated Net Assets.

	
  

 	
  

 
	
  

 	
           (a)       The
 Financial Statements are based upon the books and records of the Company and
 its Subsidiaries, have been prepared in accordance with GAAP consistently
 applied during the periods indicated and present fairly the financial
 position and results of operations of the Company and its Subsidiaries on a
 consolidated basis at the respective dates and for the respective periods
 indicated.

 
	
  

 	
  

 
	
  

 	
           (b)       The
 Company and its Subsidiaries have no liabilities or obligations, whether
 accrued, absolute, asserted or unasserted, contingent or otherwise (“Liabilities”),
 except as and to the extent reflected or reserved for in the Financial
 Statements and except for (a) Liabilities of the same nature as those set
 forth in the Financial Statements and incurred in the ordinary course of
 business since the Balance Sheet Date (none of which results from, arises out
 of, relates to, is in the nature of or was caused by any breach of contract,
 breach of warranty, tort, infringement or violation of law), (b) Liabilities
 arising after the date of this Agreement and permitted by the terms hereof,
 and (c) Liabilities identified on Section 3.8(b) of the Disclosure
 Schedule. 

 
	
  

 	
  

 
	
  

 	
           (c)       Except
 as set forth on Section 3.8(c) of the Disclosure Schedule, neither the
 Company nor any of its Subsidiaries has any Company Indebtedness.

 
	
  

 	
  

 
	
  

 	
           (d)       At
 the Closing, the Company and its Subsidiaries on a consolidated basis, will
 have at least the amount of Working Capital they otherwise would have in the
 ordinary course of business consistent with past practice (i.e.,
 in the absence of the transactions contemplated hereby). Without limiting the
 generality of the

 

8

	
  

 	
  

 
	
  

 	
 foregoing,
 the Shareholders acknowledge and agree that each of (i) accounts receivable,
 (ii) inventory, and (iii) accounts payable, will, at the Closing, be at
 levels the Company and its Subsidiaries would otherwise have maintained in
 the ordinary course of business consistent with past practice.

 
	
  

 	
  

 
	
  

 	
           (e)       As
 of the Closing, the net assets of the Company and its Subsidiaries on a
 consolidated basis (“Capitaux Propres” – case 10/15 of the annual accounts)
 will not be less than €93,336.78.

 
	
  

 	
  

 
	
  

 	
           (f)       Section
 3.8(f) of the Disclosure Schedule sets forth the aggregate liability that
 the Company and its Subsidiaries will incur in connection with the Specified
 Items. 

 
	
  

 	
  

 
	
  

 	
           (g)       Neither
 the Company nor any of its Subsidiaries has any Contract with the Walloon
 Region other than the Walloon Region Grant Agreement. 

 

          Section
3.9      Absence of Certain Changes. Except as
set forth on Section 3.9 of the Disclosure Schedule, since the Balance
Sheet Date the Company and its Subsidiaries have operated in the ordinary
course of business, consistent with past practice, and neither the Company nor
any of its Subsidiaries has: 

	
  

 	
  

 
	
  

 	
           (a)       incurred
 any Liabilities, other than Liabilities incurred in the ordinary course of business,
 or discharged or satisfied any Encumbrances, or paid any Liabilities, other
 than in the ordinary course of business, or failed to pay or discharge when
 due any accounts payable or other Liabilities;

 
	
  

 	
  

 
	
  

 	
           (b)       sold,
 encumbered, assigned or transferred any assets or properties of the Company
 or any of its Subsidiaries other than in the ordinary course of business
 consistent with past practice;

 
	
  

 	
  

 
	
  

 	
           (c)       created,
 incurred, assumed, modified, amended or guaranteed any indebtedness for money
 borrowed;

 
	
  

 	
  

 
	
  

 	
           (d)       made
 any material change in the business of the Company or any of its
 Subsidiaries, except for such changes as may be required to comply with
 Applicable Law;

 
	
  

 	
  

 
	
  

 	
           (e)       made
 any loans, advances or capital contributions to, or investments in, any
 Person;

 
	
  

 	
  

 
	
  

 	
           (f)       except
 as required by Applicable Law, (i) instituted or announced any increase in
 the compensation, bonuses or other benefits payable to any employee; (ii)
 entered into or amended any employment, consulting, severance or change of
 control agreement with any employee; (iii) entered into, adopted or amended
 any Plan or other commitment or arrangement relating to the employment of any
 employee; or (iv) made or committed to make any material increase in
 contributions or benefits under any Plan that would become effective on or
 after the Closing Date; 

 

9

	
  

 	
  

 
	
  

 	
           (g)       made
 any change in the accounting methods, principles or policies applied in the
 preparation of the Financial Statements, other than any change required by
 Applicable Law or a change in GAAP;

 
	
  

 	
  

 
	
  

 	
           (h)       made
 or changed any Tax election, changed an annual accounting period, adopted or
 changed any accounting method, filed any amended Tax Return, entered into any
 closing agreement, settled any Tax claim or assessment relating to the
 Company or its Subsidiaries, surrendered any right to claim a refund of
 Taxes, consented to any extension or waiver of the limitation period
 applicable to any Tax claim or assessment relating to the Company or its
 Subsidiaries, or taken any other similar action relating to the filing of any
 Tax Return or the payment of any Tax;

 
	
  

 	
  

 
	
  

 	
           (i)       failed
 to use commercially reasonable efforts to collect any accounts receivable
 when due; 

 
	
  

 	
  

 
	
  

 	
           (j)       made
 or suffered any amendment or termination of any Material Contract (as defined
 below); 

 
	
  

 	
  

 
	
  

 	
           (k)       canceled,
 modified or waived any debts or claims held by the Company or any of its
 Subsidiaries, other than with respect to immaterial amounts in the ordinary
 course of business consistent with past practice;

 
	
  

 	
  

 
	
  

 	
           (l)       suffered
 any material damage, destruction or casualty loss to any of its properties,
 not covered by insurance, or suffered any repeated, recurring or prolonged
 shortage, cessation or interruption of supplies or utilities or other
 services required to conduct its business and operations;

 
	
  

 	
  

 
	
  

 	
           (m)      made
 commitments or agreements for capital expenditures or capital additions or
 betterments exceeding in the aggregate Five Thousand Euro (€5,000) in excess
 of the Company’s currently existing capital expenditure budget, a true and
 correct copy of which has been made available to Purchaser; 

 
	
  

 	
  

 
	
  

 	
           (n)       (A)
 issued or committed to issue any capital stock of the Company or any of its
 Subsidiaries or securities (including options and warrants) convertible into
 or exchangeable (or exercisable) for capital stock of the Company or any of
 its Subsidiaries, (B) adjusted, split, combined, reclassified or redeemed any
 of the Shares or (C) declared, authorized, set aside or paid any dividend;

 
	
  

 	
  

 
	
  

 	
           (o)       acquired
 any interest in any other business entity;

 
	
  

 	
  

 
	
  

 	
           (p)       executed
 any Contract or incurred any Liability therefor (i) involving an annual
 payment or receipt in excess of Five Thousand Euro (€5,000) or requiring
 aggregate payments or receipts in excess of Five Thousand Euro (€5,000) or
 (ii) that cannot be terminated without penalty on less than 90 days’ notice; 

 
	
  

 	
  

 
	
  

 	
           (q)       entered
 into any transactions with any Affiliate, shareholder, director, officer or
 employee of the Company or any of its Subsidiaries;

 
	
  

 	
  

 
	
  

 	
           (r)       entered
 into any agreement, commitment or understanding (whether written or oral)
 with respect to any of the foregoing; or

 

10

	
  

 	
  

 
	
  

 	
             (s)       suffered
 any change, condition, event or occurrence that has had or would reasonably
 be expected to have, individually or in the aggregate, a Material Adverse
 Effect.

 

          Section
3.10      Real Estate.

	
  

 	
  

 
	
  

 	
             (a)       Except
 as set forth on Section 3.10(a) of the Disclosure Schedule under the
 heading “Owned Real Property”, neither the Company nor any of its
 Subsidiaries owns any real property or has any right of first refusal or
 option to purchase any real property. Section 3.10(a) of the
 Disclosure Schedule contains a complete and accurate list, under the heading
 “Leased Real Property,” of each parcel of Leased Real Property. The Real
 Property comprises all of the real property used in or otherwise related to
 the Company’s or any of its Subsidiaries’ business and is suitable for the
 purposes for which it is presently used. 

 
	
  

 	
  

 
	
  

 	
             (b)       Section
 3.10(b) of the Disclosure Schedule contains a complete and accurate
 description of all Encumbrances and other agreements, contracts or interests
 relating to or affecting the Real Property, whether recorded or not, except
 for the Existing Real Property Leases and those that may be canceled by the
 Company or any of its Subsidiaries at any time without Liability. None of the
 Company, any of its Subsidiaries or any of the Shareholders have entered into
 any agreement for the sale of the Owned Real Property. 

 
	
  

 	
  

 
	
  

 	
             (c)       The
 Owned Real Property is owned by the Company in full and exclusive ownership.
 Copies of all documents evidencing title of the Company to such real property
 have been delivered to Purchaser. 

 
	
  

 	
  

 
	
  

 	
             (d)       The
 Company or one of its Subsidiaries has a valid leasehold interest in the
 Leased Real Property. Each of the Existing Real Property Leases is a legal,
 valid and binding agreement of the Company or one of its Subsidiaries, on the
 one hand, and the landlord thereunder, on the other hand, subsisting in full
 force and effect, enforceable in accordance with its terms, and there is no,
 and neither the Company nor any of its Subsidiaries has received notice of
 any, default (or any condition or event which, after notice or lapse of time
 or both, would constitute a default) by any party thereunder. The Company and
 its Subsidiaries have performed all of their required obligations under, and
 are not in violation or breach of or default under, any of the Existing Real
 Property Leases, and the other party or parties to the Existing Real Property
 Leases are not in violation or breach of or default under any such lease.
 Neither the Company nor any of its Subsidiaries owes any brokerage
 commissions with respect to any of the Leased Real Property. There are no
 leases, subleases, licenses, concessions or other agreements, written or
 oral, affecting any part of the Leased Real Property other than the Existing
 Real Property Leases.

 
	
  

 	
  

 
	
  

 	
             (e)       The
 Company and its Subsidiaries have rights of ingress and egress to and from a
 public right-of-way and the Real Property and all buildings, structures,
 facilities, fixtures and other improvements thereon used in the operation of
 the Company’s or any of its Subsidiaries’ business. 

 

11

	
  

 	
  

 
	
  

 	
             (f)       All
 buildings, structures, facilities, fixtures and other improvements thereon
 used in the operation of the Company’s or any of its Subsidiaries’ business
 are located entirely within the boundaries of the Real Property. There are no
 encroachments of any buildings, structures, facilities, fixtures and other
 improvements owned or used by any other party within the boundaries of the
 Real Property.

 
	
  

 	
  

 
	
  

 	
             (g)       There
 are no pending or, to the Knowledge of the Shareholders, contemplated or
 threatened condemnation proceedings against all or any portion of the Real
 Property or any appurtenant easement.

 
	
  

 	
  

 
	
  

 	
             (h)       The
 Real Property, buildings, structures, facilities, fixtures and other
 improvements thereon, comply with all applicable governmental requirements in
 respect of the use, operation and construction thereof, including health,
 safety, fire, electrical or building codes, or environmental, zoning,
 platting and other land use requirements. There are no permits, licenses or
 consents required by any Governmental Entity in connection with the use and
 occupancy of the Real Property except those previously obtained by the
 Company or its Subsidiaries and listed on Section 3.7 of the
 Disclosure Schedule.

 
	
  

 	
  

 
	
  

 	
             (i)        To
 the Knowledge of the Shareholders, there are no (i) public improvements which
 have been commenced or completed and for which an assessment may be levied
 against the Real Property, or (ii) any planned improvements which may result
 in any assessment against the Real Property. None of the Company, the Company’s
 Subsidiaries, the Shareholders or any of their respective Affiliates has
 received notice of any reassessment of the Real Property’s current real
 estate tax valuation. 

 
	
  

 	
  

 
	
  

 	
             (j)        None
 of the Company, the Company’s Subsidiaries, the Shareholders or any of their
 respective Affiliates has received notice of any actual or threatened
 reduction or curtailment of any utility service now supplied or available to
 the Real Property. The Real Property is supplied with utilities and other
 services necessary for the Company’s and its Subsidiaries’ business
 operations at such locations. 

 
	
  

 	
  

 
	
  

 	
            (k)        All
 structural, mechanical, electrical, heating, air conditioning, drainage,
 sewer, water and plumbing systems serving the Real Property are in proper
 working order.

 

          Section
3.11      Personal Property Leases. Section
3.11 of the Disclosure Schedule contains a true, complete and correct list
of each Contract pursuant to which the Company or any of its Subsidiaries
leases any equipment, furniture or fixtures or other items of tangible personal
property (including, without limitation, all capital and operating leases) (the
“Personal
Property Leases”). True, complete and correct copies of the written
Personal Property Leases, including all amendments to such Personal Property
Leases, and written descriptions of the material terms of any oral Personal
Property Leases, including all amendments thereto, have been made available by
the Shareholders to Purchaser. The Company and its Subsidiaries are not and, to
the Knowledge of the Shareholders, no other party is in breach or violation of,
or in default under any Personal Property Lease, and the Company and its
Subsidiaries have not received any written (or, to the Knowledge of the Shareholders,
verbal) notice of any such breach, violation or default thereunder.

12

          Section
3.12     Title to Properties. The Company and
each of its Subsidiaries, as applicable, have good and marketable title to all
of their respective properties and assets, real, personal and mixed, which one
of them purports to own or which are used
by the Company or any of its Subsidiaries in the operation of their respective
businesses as conducted prior to Closing, including, without limitation,
all properties and assets reflected on the most recent consolidated balance
sheet included in the Financial Statements, other than immaterial assets or
properties disposed of in the ordinary course of business since the Balance
Sheet Date, free and clear of all Encumbrances, except for Permitted
Encumbrances. 

          Section
3.13     Condition of Personal Property;
Sufficiency of Assets. The Company’s and its Subsidiaries’ structures,
buildings, equipment, furniture and fixtures are, in the aggregate and taken as
a whole, in operating condition and repair, subject to normal wear and tear,
and are adequate for the uses to which they are currently being put. The
Company and its Subsidiaries own, or lease under valid leases, all property,
structures, buildings, equipment, furniture, fixtures and other tangible assets
and properties necessary for the conduct of their business as now conducted.

          Section
3.14     Compliance with Laws; 

	
  

 	
  

 
	
  

 	
                (a)          The
 Company and its Subsidiaries have complied in all material respects with all
 Applicable Laws. No action, suit, proceeding, hearing, investigation, charge,
 complaint, claim, demand or notice has been filed or commenced against the
 Company or any of its Subsidiaries alleging any failure to so comply. Neither
 the Company nor any of its Subsidiaries has received notice to the effect that
 the Company or any of its Subsidiaries is not in compliance with any
 Applicable Laws. 

 
	
  

 	
  

 
	
  

 	
                (b)          The
 Company and its Subsidiaries have complied with all applicable
 export-control, trade and economic sanctions laws, rules, and regulations
 (whether federal, state, foreign, or other), including the U.S. Commerce
 Department’s Export Administration Regulations and all sanctions laws, rules
 and regulations maintained by the U.S. Treasury Department’s Office of
 Foreign Assets Control, as well as all applicable export-control and
 sanctions laws, rules and regulations maintained by other jurisdictions, to
 the extent that no such laws, rules, regulations, or sanctions programs of
 any other jurisdiction are in contravention of any Belgian law, rule or
 regulation.

 
	
  

 	
  

 
	
  

 	
                (c)          Neither
 the Company nor any of its Subsidiaries, nor any of their directors or
 employees: (i) has engaged, directly or indirectly, in any violation of the
 FCPA, article 246 and following and article. 504bis and 504terof the Belgian
 Criminal Law code, the French law no93-122 of 29 January 1993 concerning the
 prevention of corruption and transparency in the economic field and public
 procedures, the Italian Legislative Decree 8th June 2001, no. 231, or any other
 applicable anti-bribery or anti-corruption laws or treaties (collectively,
 the “Anti-Corruption
 Laws”), or any anti-boycott, anti-terrorism, or arms-control laws,
 rules, or regulations or sanctions programs; (ii) has conducted business with
 any restricted party identified in writing by the U.S. government, Belgian
 government, the French government, the German government or the Italian
 government as a Person with whom or with which conducting business would
 constitute a violation of U.S., Belgian, French, German or Italian Applicable
 Law; or (iii) has been the subject of 

 

13

	
  

 	
  

 
	
  

 	
 any bribery, money
 laundering or anti-kick-back investigation by any Governmental Entity.
 Without limiting the foregoing, (1) none of the Company, any of its
 Subsidiaries, or any of their respective directors, officers, agents,
 distributors, employees or other Persons acting on their behalf has, directly
 or indirectly, taken any action, or failed to act, in a manner that would be
 a violation of any Anti-Corruption Laws; (2) the Company and its Subsidiaries
 maintain their books and records in a manner that, in reasonable detail,
 accurately and fairly reflects the transactions and disposition of their
 assets, and maintains a system of adequate internal accounting controls; (3) no
 portion of the Purchase Price will be used to fund payments in connection
 with securing improperly any approvals or any other improper advantages from
 any Governmental Entity; and (4) none of the officers, directors, employees
 or agents of the Company or any of its Subsidiaries are Government Officials.
 For purposes of this Agreement, “Government Official” means any (A)
 officer or employee of a Governmental Entity or instrumentality thereof
 (including any state-owned or state-controlled enterprise) or of a public
 international organization, (ii) candidate for political office or official
 of any political party, (iii) person acting for or on behalf of any
 Governmental Entity or instrumentality thereof, or (iv) a member of a royal
 family.

 

          Section
3.15     Conflict Minerals. The conduct of the
Company’s and its Subsidiaries’ business, as currently conducted or as proposed
to be conducted in the future, does not and will not require the Company or any
of its Affiliates to make any disclosure, filing or report or submit any filing
or report to the SEC pursuant to Section 13(p) of the Exchange Act or any of
the rules or regulations promulgated under or pursuant to Section 13(p) of the
Exchange Act. Without limiting the foregoing, no Conflict Minerals (as defined
below) are necessary to the functionality or production of or are used in the
production of any product of the Company or any of its Subsidiaries or any
product currently proposed to be manufactured by the Company or any of its
Subsidiaries or on its behalf in the future. For purposes of this Agreement, “Conflict
Minerals” means: (a) columbite–tantalite (coltan), cassiterite,
gold, wolframite, or their derivatives, which originate in the Democratic
Republic of the Congo or a country that shares an internationally recognized
border with the Democratic Republic of the Congo; and (b) any other mineral or
its derivatives, the exploitation and trade of which is determined by the
Secretary of State of the United States to be financing conflict in the Democratic
Republic of the Congo or a country that shares an internationally recognized
border with the Democratic Republic of the Congo.

          Section
3.16     Products/Regulation. 

	
  

 	
  

 
	
  

 	
                (a)          There
 have been no written notices, citations or decisions by any Governmental
 Entity that any Company Products (as hereinafter defined) are defective or
 fail to meet any applicable standards or other regulatory requirements
 promulgated by any such Governmental Entity. The Company and its Subsidiaries
 have complied in all material respects with their policies, procedures and
 specifications with respect to design, manufacture, labeling, testing,
 inspection and sale of Company Products. There have been no recalls, field
 notifications or seizures ordered or, to the Knowledge of the Shareholders,
 threatened by any such Governmental Entity with respect to any of the Company
 Products. 

 
	
  

 	
  

 
	
  

 	
                (b)          The
 Company Products have all necessary and current marketing approvals or
 clearances by all Governmental Entities requiring such approvals or 

 

14

	
  

 	
  

 
	
  

 	
 clearances in the
 jurisdictions where the Company Products are marketed or where such approvals
 or clearances are required. All necessary amendments, supplements and reports
 required to keep the approvals and clearances current with the versions of
 the Company Products being marketed have been filed in a timely manner and
 are complete and accurate. Any changes in product design and manufacturing
 and quality assurance procedures have been filed in a timely manner.

 
	
  

 	
  

 
	
  

 	
                (c)          The
 Company and each of its Subsidiaries have also obtained all necessary
 Authorizations from every country in which the Company Products are currently
 marketed. 

 
	
  

 	
  

 
	
           Section
 3.17     Taxes. Except as set forth on Section
 3.17 of the Disclosure Schedule:

 
	
  

 	
  

 
	
  

 	
                (a)          The
 Company and each of its Subsidiaries has filed in due time all tax
 declarations required by Applicable Law and have paid all Taxes within the
 required time period and there is no fact that could give rise to any
 Liability in addition to Taxes already paid or reserved for in the Financial
 Statements.

 
	
  

 	
  

 
	
  

 	
                (b)          All
 transactions in which the Company or any of its Subsidiaries is involved have
 been properly characterized by the Company or the applicable Subsidiary for
 Tax purposes and are not capable of re-characterization by the Tax
 authorities, and the Company and its Subsidiaries have reported and paid
 Taxes accordingly.

 
	
  

 	
  

 
	
  

 	
                (c)          The
 most recent Tax Return of the Company and of each of its Subsidiaries
 contains the exact amount of the tax losses carried forward which can be used
 to offset against future profits. 

 
	
  

 	
  

 
	
  

 	
                (d)          Neither
 the Company nor any of its Subsidiaries has (i) during the current tax year
 or the seven preceding tax years granted any abnormal benefits to any third
 party, and there are no commitments to do so in the future or (ii) during the
 current tax year or the five preceding tax years benefited from any abnormal
 benefit granted by any third party.

 
	
  

 	
  

 
	
  

 	
                (e)          The
 capital mentioned in the Financial Statements fully qualifies as paid up
 capital of the Company and each of its Subsidiaries for tax purposes. 

 
	
  

 	
  

 
	
  

 	
                (f)          Neither
 the Company nor any of its Subsidiaries has declared, granted or paid any
 commissions, fees salaries and other similar costs as described in article 57
 of the Code or similar legislation in France, Germany and Italy which could
 give rise to a taxation as “secret commissions” according to article 219 of
 the Code or similar legislation in France, Germany or Italy. 

 
	
  

 	
  

 
	
  

 	
                (g)          Neither
 the Company nor any of its Subsidiaries has realised any hidden profits that
 are not listed under the assets of the Company that could give raise to a
 taxation according to article 219 of the Code or similar legislation in
 France, Germany or Italy. 

 

15

	
  

 	
  

 
	
  

 	
                (h)          Neither
 the Company nor any of its Subsidiaries has paid any interest to its
 directors or shareholders that is to be re-qualified as dividends according
 to article 18.4 and 185 of the Code or similar legislation in France, Germany
 or Italy. 

 
	
  

 	
  

 
	
  

 	
                (i)           Neither
 the Company nor any of its Subsidiaries has made any profits which can be
 requalified as taxable profits according to article 185§2 of the Code or
 similar legislation in France, Germany or Italy. 

 
	
  

 	
  

 
	
  

 	
                (j)           Neither
 the Company nor any of its Subsidiaries has paid any interest that is not
 deductible for tax purposes according to article 198§1.11 of the Code or
 similar legislation in France, Germany or Italy. 

 
	
  

 	
  

 
	
  

 	
                (k)          Neither
 the Company nor any of its Subsidiaries has at any time entered into or been
 party to any transactions, schemes or arrangements, including but not limited
 to mergers, demergers, transfer of going concerns (or branches thereof),
 contributions in kind and transactions, schemes or arrangements, which
 violate the Applicable Law or may give rise to Tax not provided for in the
 Financial Statements.

 
	
  

 	
  

 
	
  

 	
                (l)           All
 self-employed directors of the Company, as well as all other partners or
 agents of the Company for whose Taxes the Company or any of its Subsidiaries
 is jointly and severally liable have duly complied with all the obligations
 in respect of Taxes, including the payment of social security contributions.

 
	
  

 	
  

 
	
  

 	
                (m)         Sufficient
 provisions have been made in the Financial Statements for all Taxes due and
 payable by the Company or any of its Subsidiaries in connection with the
 bookkeeping years to which the Financial Statements relate. 

 
	
  

 	
  

 
	
  

 	
                (n)          The
 Company and its Subsidiaries have paid all Taxes (including, without
 limitation, social security contributions) due prior to the date of this
 Agreement, and no such Taxes (including, without limitation, social security
 contributions) are past due or subject to an extension of any kind or nature.

 

          Section
3.18     Environmental Matters. Except as set
forth on Section 3.18 of the Disclosure Schedule:

	
  

 	
  

 
	
  

 	
                (a)          Materials
 that require special handling, treatment, storage or disposal are and have
 been properly dealt with by the Company and its Subsidiaries in compliance
 with Environmental Laws. 

 
	
  

 	
  

 
	
  

 	
                (b)          The
 land, buildings and plant presently or previously owned, leased or otherwise
 used by the Company or any of its Subsidiaries are not and have not been used
 for the manufacturing, generating, processing, storage, handling, use or
 disposal of any Hazardous Material or waste. No underground tanks or other
 underground storage receptacles for those substances are located on, in or
 under such land, buildings or plants.

 
	
  

 	
  

 
	
  

 	
                (c)          Neither
 the Company nor any of its Subsidiaries have any actual or contingent
 Liability in respect of any pollutants, chemicals, or industrial, toxic or
 Hazardous Material or waste that may have been released into the environment.

 

16

	
  

 	
  

 
	
  

 	
                (d)          There
 has been no violation by the Company or any of its Subsidiaries of any
 Environmental Laws. Each environmental permit, license or other authorization
 required for the operation of the business of the Company or any of its
 Subsidiaries is in full force and effect. There is no violation of any such
 permit, license or authorization; and no proceeding is pending or, to the
 Knowledge of the Shareholders, threatened seeking the revocation or
 limitation of any such permit, license or authorization.

 
	
  

 	
  

 
	
  

 	
                (e)          Neither
 the Company nor any of its Subsidiaries is under any obligation to carry out
 any clean-up work or other remedial work under any Environmental Laws. No
 proceedings are threatened by or against the Company or any of its
 Subsidiaries to oblige any of them to carry out any clean-up or other
 remedial work and there are no facts or circumstances that would give rise to
 any such proceedings. Neither the Company nor any of its Subsidiaries has (i)
 received any instruction or order of any Governmental Entity in connection
 with any environmental matters or (ii) been subject to any actions of, or
 received any complaints from, any third parties, including neighbours, Governmental
 Entities or associations. 

 
	
  

 	
  

 
	
  

 	
                (f)          There
 is no asbestos, PCB’s or any other harmful substances present on, in or under
 the Real Property.

 

          Section
3.19     Litigation. There is no action, order,
writ, injunction, judgment or decree outstanding or claim, suit, litigation,
proceeding or labor dispute (“Action”) pending or, to the Knowledge of
the Shareholders, threatened against the Company or any of its Subsidiaries.
Neither the Company nor any of the Company’s Subsidiaries is in default with
respect to any judgment, order, writ, injunction or decree of any court or
Governmental Entity, and there is no unsatisfied judgment against the Company
or any of the Company’s Subsidiaries.

          Section
3.20     Contracts. Section 3.20 of the
Disclosure Schedule contains a true and complete list of all Contracts
(including, if oral, summaries of the material terms thereof) to which the
Company or any of its Subsidiaries is party, other than the Existing Real
Property Leases and the Personal Property Leases, that constitute: 

	
  

 	
  

 
	
  

 	
                (a)          any
 lease or sublease of real property;

 
	
  

 	
  

 
	
  

 	
                (b)          any
 employment or consulting agreement not terminable at will and without penalty
 or payment of any kind and without the payment of any penalty by, or any
 other material consequence to, the Company or any of its Subsidiaries;

 
	
  

 	
  

 
	
  

 	
                (c)          any
 open purchase orders or sales orders; 

 
	
  

 	
  

 
	
  

 	
                (d)          any
 Contract that involves the performance of services or delivery of goods or
 materials by the Company or any of its Subsidiaries that may result in
 consideration paid or delivered to the Company in excess of Five Thousand
 Euro (€5,000);

 
	
  

 	
  

 
	
  

 	
                (e)          any
 agreement that involves the performance of services for, or delivery of goods
 or materials to the Company or any of its Subsidiaries that may 

 

17

	
  

 	
  

 
	
  

 	
 result in consideration
 paid or delivered by the Company in excess of Five Thousand Euro (€5,000);

 
	
  

 	
  

 
	
  

 	
                (f)          any
 agreement which provides for, or relates to, the incurrence of indebtedness
 for borrowed money (including any interest rate or non-U.S. currency swap,
 cap, collar, hedge or insurance agreements, or options or forwards on such
 agreements, or other similar agreements for the purpose of managing the
 interest rate or non-U.S. exchange risk associated with its financing); 

 
	
  

 	
  

 
	
  

 	
                (g)          any
 Contract granting any Person an Encumbrance on any of the assets or
 properties of the Company or any of its Subsidiaries;

 
	
  

 	
  

 
	
  

 	
                (h)          any
 Contract pursuant to which any deferred purchase price relating to property
 or services may be owing following the date hereof (including all obligations
 under any acquisition agreements pursuant to which the Company or any of its
 Subsidiaries is, or may be, responsible for any earn-out, note payable or
 other contingent payment); 

 
	
  

 	
  

 
	
  

 	
                (i)          any
 Contract that limits or restricts where the Company or any of its
 Subsidiaries may conduct their business or the type or line of business in
 which they may engage;

 
	
  

 	
  

 
	
  

 	
                (j)          any
 consignment, distributor, sales representative, dealer, manufacturers
 representative, sales agency, advertising representative or advertising or
 public relations contract;

 
	
  

 	
  

 
	
  

 	
                (k)          any
 Contract which restricts or limits (or purports to restrict or limit) in any
 way the Company’s or any of its Subsidiaries’ ability to freely operate;

 
	
  

 	
  

 
	
  

 	
                (l)          any
 guarantee of the obligations of customers, suppliers, officers, directors,
 employees, Affiliates or others;

 
	
  

 	
  

 
	
  

 	
                (m)         all
 partnership agreements, joint venture agreements or similar agreements;

 
	
  

 	
  

 
	
  

 	
                (n)          any
 Contract that is not terminable on not more than 90 days’ notice and without
 the payment of any penalty by, or any other material consequence to, the
 Company or any of its Subsidiaries;

 
	
  

 	
  

 
	
  

 	
                (o)          any
 Contract relating to capital expenditures or the acquisition or construction
 of fixed assets for or in respect of any real property, in each case
 requiring payments in excess of Five Thousand Euro (€5,000); 

 
	
  

 	
  

 
	
  

 	
                (p)          any
 Contract constituting a Company Intellectual Property Agreement; 

 
	
  

 	
  

 
	
  

 	
                (q)          any
 Contract with any Affiliate, director, officer or employee of the Company or
 any of its Subsidiaries; 

 

18

	
  

 	
  

 
	
  

 	
                (r)          any
 (i) Contract with any Governmental Entity, or any political or other
 subdivision, department or branch thereof or (2) subcontract relating to a
 prime contract with any Governmental Entity, or any political or other
 subdivision, department or branch thereof;

 
	
  

 	
  

 
	
  

 	
                (s)          any
 collective bargaining agreement or other Contract with a labor union or other
 labor organization;

 
	
  

 	
  

 
	
  

 	
                (t)          all
 other agreements to sell any asset or assets (i) valued at Five Thousand Euro
 (€5,000) or more individually or Five Thousand Euro (€5,000) in the aggregate
 or (ii) entered into outside the ordinary course of business; or

 
	
  

 	
  

 
	
  

 	
                (u)          any
 other Contract that is material to the Company or any of its Subsidiaries or
 the absence of which would have a Material Adverse Effect.

 

The Contracts listed on Section 3.20 of the
Disclosure Schedule are referred to herein as the “Material Contracts.” Each
Material Contract (i) is a legal, valid and binding obligation of the Company
and/or its Subsidiaries and, to the Knowledge of the Shareholders, the other
parties to such Material Contract, (ii) is in full force and effect in
accordance with its terms and (iii) will continue in full force and effect upon
consummation of the transactions contemplated hereby without penalty or other
adverse consequence, subject to obtaining the consents and approvals referred
to in Section 3.6 of the Disclosure Schedule. The Company and its
Subsidiaries, as the case may be, have performed each obligation under each of
the Material Contracts that was to be performed by it at or before the date
hereof. The Company and its Subsidiaries are not in breach or default in any
material respect under any Material Contract, and, to the Knowledge of the
Shareholders, no other party to any Material Contract is in breach or default
thereunder. To the Knowledge of the Shareholders, no party to any of the
Material Contracts intends to cancel, terminate or modify any of such Material
Contracts. A true, correct and complete copy of each written Material Contract,
and a written description of the material terms of each oral Material Contract,
has been made available to Purchaser.

          Section
3.21     Employee Benefits. The Company has
complied with all requirements and all formalities imposed on it by Tax Law
regarding Employee Benefits and has properly and timely paid and, in general,
has executed timely and properly any payment of Taxes in relation to Employee
Benefits. 

          Section
3.22     Employees. 

	
  

 	
  

 
	
  

 	
                (a)          Section
 3.22(a) of the Disclosure Schedule (i) lists each employee of the Company
 or any of its Subsidiaries as of the date of this Agreement, (ii) shows for
 each such employee annual salary or hourly rate, any other compensation
 payable (including compensation payable pursuant to bonus, incentive,
 deferred compensation or commission arrangements), date of employment and
 position, (iii) states the total number of employees, and (iv) indicates for
 each such employee, and in the aggregate, full-time, part-time and temporary
 status. No employees of the Company or any of its Subsidiaries are currently
 on a lay-off, short-term disability, long-term disability, vacation, family
 leave or other leave of absence. Each current and former employee of the
 Company, any Subsidiary of the Company or any Affiliate has been properly
 classified for all purposes, including, but not limited to, (i) taxation and
 tax 

 

19

	
  

 	
  

 
	
  

 	
 reporting, (ii)
 eligibility to participate in the Plans and (iii) legal requirements
 governing the payment of wages.

 
	
  

 	
  

 
	
  

 	
                (b)          To
 the Knowledge of the Shareholders, no executive employee of the Company or
 any of its Subsidiaries and no group of employees of the Company or any of
 its Subsidiaries has any plans to terminate his, her or their employment. The
 Company and each of its Subsidiaries have complied at all times with all
 Applicable Laws relating to employment and employment practices and those
 relating to the calculation and payment of wages (including overtime pay,
 maximum hours of work and child labor restrictions), equal employment
 opportunity (including laws prohibiting discrimination or harassment or
 requiring accommodation on the basis of race, color, national origin,
 religion, gender, disability, age, sexual orientation or otherwise),
 affirmative action and other hiring practices, occupational safety and
 health, workers’ compensation, unemployment compensation, the payment of
 social security and other Taxes, and unfair labor practices under Applicable
 Law. Neither the Company nor any of its Subsidiaries have any labor relations
 problem pending or, to the Knowledge of the Shareholders, threatened, and
 their labor relations are satisfactory. There are no workers’ compensation
 claims pending against the Company or any of its Subsidiaries or, to the
 Knowledge of the Shareholders, any facts that would give rise to such a
 claim. No employee of the Company or any of its Subsidiaries is subject to
 any secrecy or noncompetition agreement or any other agreement or restriction
 of any kind that would impede in any way the ability of such employee to
 carry out fully all activities of such employee in furtherance of the
 business of the Company and its Subsidiaries.

 
	
  

 	
  

 
	
  

 	
                (c)          Section
 3.22(c) of the Disclosure Schedule, lists each employee of the Company or
 any of its Subsidiaries as of the date of this Agreement who holds a
 temporary work authorization or residence permit (the “Work Permits”), and shows
 for each such employee the type of Work Permit and the length of time
 remaining on such Work Permit. With respect to each Work Permit, all of the
 information that the Company or its Subsidiaries provided to the competent
 authorities (each, a “Department”) in the application for such
 Work Permit was true and complete. The Company or one of its Subsidiaries has
 received the appropriate notice of approval from the applicable Department
 with respect to each such Work Permit. Neither the Company nor any of its
 Subsidiaries has received any notice from any Department that any Work Permit
 has been revoked. There is no action pending or, to the Knowledge of the
 Shareholders, threatened to revoke or adversely modify the terms of any Work
 Permit. No employee of the Company or any of its Subsidiaries is (a) a
 non-immigrant employee whose status would terminate or otherwise be affected
 by the transactions contemplated by this Agreement, or (b) an alien who
 is authorized to work in the European Union in non-immigrant status. 

 
	
  

 	
  

 
	
  

 	
                (d)          No
 employee of the Company or any of its Subsidiaries is covered by any
 collective bargaining agreement entered in at Company level, and no
 collective bargaining agreement at Company level is being negotiated. There
 have not been any union or other collective organizing, election or other
 activities made or threatened at any time within the past three years by or
 on behalf of any union, employee representative or other labor organization
 or group of employees with respect to any employees of the Company or any of
 its Subsidiaries. Except as set 

 

20

	
  

 	
  

 
	
  

 	
 forth on Section
 3.22(d) of the Disclosure Schedule, there is no union, employee
 representative or other labor organization, which, pursuant to Applicable
 Law, must be notified, consulted or with which negotiations need to be conducted
 in connection with the transactions contemplated by this Agreement.

 
	
  

 	
  

 
	
  

 	
                (e)          The
 Company and its Subsidiaries have paid in full to all employees all wages,
 salaries, bonuses and commissions due and payable to such employees, and the
 Company has fully reserved in its books of account all amounts for wages,
 salaries, bonuses and commissions due but not yet payable to such employees.

 
	
  

 	
  

 
	
  

 	
                (f)          The
 remuneration payable to directors, employees, free-lance consultants and
 subcontractors has not been increased since 1 January 2014 other than for
 increases required by law and disclosed in Section 3.22(f) of the
 Disclosure Schedule and the Company and its Subsidiaries have not contracted
 any obligation to increase the remuneration payable other than for increases
 required by Applicable Law.

 
	
  

 	
  

 
	
  

 	
                (g)          Neither
 the Company nor any of its Subsidiaries is bound by any labour agreement
 which would entitle the employees to more than the normal notice period or
 compensation in lieu of notice prescribed by the law or the collective
 bargaining agreements concluded at the sector or national level.

 
	
  

 	
  

 
	
           Section
 3.23     Intellectual Property. 

 
	
  

 	
  

 
	
  

 	
                (a)          Section
 3.23(a) of the Disclosure Schedule contains a complete and accurate list
 of (i) all products and services currently manufactured, marketed, sold
 or distributed by the Company or any of its Subsidiaries or which have been
 manufactured, marketed, sold, or distributed by the Company or any of its
 Subsidiaries in the five years prior to the date hereof, (ii) all
 products and services that the Company or any of its Subsidiaries expects or
 intends to make available commercially within two years after the date
 hereof, and (iii) all products and service offerings that are in development
 as of the date hereof (such products and services described in clauses (i),
 (ii) and (iii), the “Company Products”).

 
	
  

 	
  

 
	
  

 	
                (b)          Section
 3.23(b) of the Disclosure Schedule contains a complete and accurate list
 of each item of Company Registered Intellectual Property Rights and for each
 such item, (i) the name of the applicant/registrant, inventor/author and
 current owner, (ii) the jurisdiction where the application/registration
 is located, (iii) the application or registration number, (iv) the
 filing date and the issuance/registration/grant date, (v) the
 prosecution status thereof (including all actions that must be taken by the
 Company or its Subsidiaries with respect thereto prior to sixty (60) days
 after the Closing), and (vi) in the case of Domain Name registrations
 the named registrant and the registrar or equivalent Person with whom that
 Domain Name is registered. Each item of Company Registered Intellectual
 Property Rights, to the extent that a registration or equivalent has been
 issued, is currently in compliance with all formal legal requirements
 (including payment of filing, examination and maintenance fees and proofs of
 use) and is valid and enforceable. 

 

21

	
  

 	
  

 
	
  

 	
                (c)          In
 each case in which the Company or any of its Subsidiaries have acquired
 ownership of any Registered Intellectual Property Rights from another Person,
 the Company or one of its Subsidiaries has obtained a valid and enforceable
 assignment sufficient to vest such ownership in the Company or its
 Subsidiaries and has recorded or had recorded each such acquisition with the
 Office for Harmonization in the Internal Market (Trade Marks and Designs)
 (OHIM), European Patent Office (EPO), the U.S. Patent and Trademark Office,
 the U.S. Copyright Office, the appropriate Domain Name registrar or their
 respective equivalents in the applicable jurisdiction, as the case may be, in
 each case in accordance with Applicable Laws. 

 
	
  

 	
  

 
	
  

 	
                (d)          Section
 3.23(d) of the Disclosure Schedule contains a complete and accurate list
 of all Contracts (i) under which the Company or any of its Subsidiaries
 uses, has the right to use or has been granted a license with respect to
 Intellectual Property Rights or technology of a third Person (“In-License”)
 (other than licenses and related services agreements for commercially
 available, off-the-shelf software in object code form for which neither the
 Company nor any of its Subsidiaries has paid more than Five Thousand Euro
 (€5,000) for a perpetual license for a single user, a single work station or
 a single server (or Ten Thousand Euro (€10,000) in the aggregate for an
 enterprise license for the Company or any of its Subsidiaries), that are used
 by the Company and its Subsidiaries but not incorporated into any Company
 Products, and that have not been customized for use by Company or any of its
 Subsidiaries) or (ii) under which the Company or any of its Subsidiaries
 has licensed to others the right to use or agreed to transfer to others any
 of the Company Intellectual Property Rights or rights with respect thereto (“Out-Licenses”),
 other than customer, dealer, reseller or distributor licenses entered into in
 the ordinary course of business. To the Knowledge of the Shareholders, no
 party to any Company Intellectual Property Agreement is in breach thereof.
 There are no pending disputes regarding the scope of such Company
 Intellectual Property Agreements, performance of the parties thereto or with
 respect to payments made or received or to be received thereunder. All
 Company Intellectual Property Agreements are valid, binding and in full force
 and effect.

 
	
  

 	
  

 
	
  

 	
                (e)          No
 government funding, facilities or resources of a Governmental Entity or university
 were used in the development of any Company Products or Company Intellectual
 Property Rights and, except as set forth on Section 3.23(e) of the
 Disclosure Schedule, no rights have been granted to any Governmental Entity
 or university with respect to any Company Products or under any Company
 Intellectual Property Rights other than under the same standard commercial
 rights as are granted by the Company and its Subsidiaries to commercial end
 users of the Company Products in the ordinary course of business. 

 
	
  

 	
  

 
	
  

 	
                (f)          The
 Company and its Subsidiaries own all right, title and interest in the Company
 Intellectual Property Rights, free and clear of all Encumbrances other than
 Permitted Encumbrances. To the Knowledge of the Shareholders, there are no
 facts or circumstances that would render any Company Intellectual Property
 Rights invalid or unenforceable. Neither the Company nor any of its
 Subsidiaries have allowed any of the Company Intellectual Property Rights to
 lapse or enter the public domain. The Company and its Subsidiaries own or
 have sufficient rights in all Intellectual Property Rights used by them in,
 and necessary to manufacture, have 

 

22

	
  

 	
  

 
	
  

 	
 manufactured, use,
 sell, have sold and import, Company Products in all jurisdictions in which
 such Company Products are manufactured, sold or used and to conduct the
 businesses of the Company and its Subsidiaries, or contemplated or planned to
 be manufactured, sold or used, and to conduct the businesses of the Company
 and its Subsidiaries, without violating any Intellectual Property Right of
 any third party.

 
	
  

 	
  

 
	
  

 	
                (g)          The
 Company and each of its Subsidiaries have taken reasonable and appropriate
 steps to protect and preserve the confidentiality of the Trade Secrets that
 comprise any part of the Company Intellectual Property Rights, and, to the
 Knowledge of the Shareholders, there are no unauthorized uses, disclosures or
 infringements of any such Trade Secrets by any Person. To the Knowledge of
 the Shareholders, all use and disclosure by the Company or any of its
 Subsidiaries of Trade Secrets owned by another Person was otherwise lawful
 and was not in breach of any Contract. Without limiting the foregoing, the
 Company and its Subsidiaries have and enforce a policy for identifying and
 safeguarding the confidentiality of Company Trade Secrets including, but not
 limited to, marking appropriate documents with restrictive legends,
 restricting access to proprietary information to persons having a
 need-to-know, and requiring employees and consultants and contractors to
 execute a confidentiality and assignment agreement substantially in the
 Company’s standard form previously provided to Purchaser. To the Knowledge of
 the Shareholders, there has been no material breach or suspected material
 breach of any such policy. Each such policy is listed and described in Section
 3.23(g) of the Disclosure Schedule. To the Knowledge of the Shareholders
 (i) neither the Company nor any of its Subsidiaries is in breach of any
 agreement with respect to any third party Trade Secret, and there are no
 threatened or pending disputes with respect to any alleged breach of such
 agreements, and (ii) no third party is in breach of any agreement with
 respect to the Trade Secrets that comprise any part of the Company
 Intellectual Property Rights, and there are no threatened or pending disputes
 with respect to any alleged breach of such agreements. 

 
	
  

 	
  

 
	
  

 	
                (h)          To
 the Knowledge of the Shareholders, no Person or any of such Person’s products
 or services or the operation of such Person’s business is infringing upon or
 otherwise violating any Company Intellectual Property Rights, and neither the
 Company nor any of its Subsidiaries have asserted or threatened any claim
 against any Person alleging the same.

 
	
  

 	
  

 
	
  

 	
                (i)          Neither
 the Company nor any of its Subsidiaries has received notice of any suit,
 claim, action, investigation or proceeding made, conducted or brought by a
 third Person against the Company or any of its Subsidiaries, and no such
 suit, claim, action, investigation or proceeding has been filed or threatened
 alleging that the Company or any of its Subsidiaries or any the Company
 Products or other operation of the Company’s or its Subsidiaries’ business
 infringes or violates the Intellectual Property Rights of any third Person.
 There is no pending or threatened claim challenging the validity or
 enforceability of, or contesting the Company’s or any of its Subsidiaries’
 rights with respect to, any of the Company Intellectual Property Rights. The
 Company and its Subsidiaries are not subject to any Action that restricts or
 impairs the use of any Company Intellectual Property Rights.

 

23

	
  

 	
  

 
	
  

 	
                (j)          Neither
 this Agreement nor the transactions contemplated by this Agreement, will
 result in (i) the Company or any of its Subsidiaries being obligated to grant
 to any third party any right to or with respect to any Company Intellectual
 Property Rights; (ii) the Company or any of its Subsidiaries becoming bound
 by, or subject to, any non compete or other restriction on the operation or
 scope of their respective businesses, (iii) the Company or any of its
 Subsidiaries becoming obligated to pay any royalties or other amounts to any
 third party, or (iv) any customer of the Company or any of its Subsidiaries
 obtaining the right to reduce its payments to the Company or any of its
 Subsidiaries relative to payments that otherwise would have been required to
 be made by them.

 
	
  

 	
  

 
	
  

 	
                (k)          All
 Company Products sold, licensed, leased, provided or delivered by the Company
 or any of its Subsidiaries to customers and users on or prior to the Closing
 conform (or will conform on the date provided or delivered) in all material
 respects to applicable contractual commitments, express and implied
 warranties, service level commitments, product specifications and product
 documentation and to any representations made to such customers or users.
 Neither the Company nor any of its Subsidiaries has any Liability (and, to
 the Knowledge of the Shareholders, there is no legitimate basis for any
 present or future action, suit, proceeding, hearing, investigation, charge,
 complaint, claim or demand against the Company or any of its Subsidiaries
 giving rise to any material Liability) for replacement, repair or redelivery
 of Company Products. Except with respect to defects in manufacturing that do
 not arise from manufacturing processes designed or determined before Closing
 or to defects in materials that do not arise from materials acquired from
 vendors selected prior to Closing, to the Knowledge of the Shareholders, each
 Company Product contemplated or planned to be sold, licensed, leased,
 provided or delivered by the Company or any of its Subsidiaries to customers
 and users after the Closing will conform in all material respects to
 applicable contractual commitments, express and implied warranties, service
 level commitments, product specifications and product documentation and to
 any representations that, consistent with past and contemplated future
 practice of the Company and its Subsidiaries, as applicable, would be made to
 such customers or users.

 

          Section
3.24     Insurance. Section 3.24 of the
Disclosure Schedule sets forth a list of all policies of fire, liability,
workmen’s compensation, life, property and casualty and other insurance owned
or held by the Company and its Subsidiaries (the “Insurance Policies”). All of
the Insurance Policies (a) are in full force and effect, (b) are
sufficient for compliance with all requirements of Applicable Law and of any
Material Contract to which the Company or any of its Subsidiaries is subject,
(c) are valid and enforceable, (d) insure against risks of the kind
customarily insured against and in amounts customarily carried by businesses
similarly situated and (e) provide adequate insurance coverage for the
activities of the Company and its Subsidiaries. Since the respective dates of
the Insurance Policies, no notice of cancellation or non-renewal with respect
to any such policy has been received by the Company or any of its Subsidiaries
and no party to any such policy has repudiated any provision thereof. Neither
the Company nor any of its Subsidiaries have received any written notice of
denial of coverage, reservation of rights or rejection of tender for any claim
with respect to any Insurance Policy. The Shareholders have provided to
Purchaser a true, correct and complete copy of the Insurance Policies. Section
3.24 of the Disclosure Schedule sets forth a list of all pending claims
with respect to the Insurance Policies. Section 3.24 of the Disclosure
Schedule 

24

identifies all of the Company’s and any of its
Subsidiaries’ self-insurance or co-insurance programs and sets forth the
applicable self-insurance or co-insurance amounts. 

          Section
3.25     No Brokers. No Person will be entitled
to receive any brokerage commission, finder’s fee, fee for financial advisory
services or similar compensation in connection with the transactions
contemplated by this Agreement based on any Contract made by or on behalf of
the Company or any of its Subsidiaries for which Purchaser or the Company is or
could become liable or obligated.

          Section
3.26     Transactions with Affiliates. Except
for (a) payment of compensation for employment or reimbursement of expenses to
employees in the ordinary course of business consistent with past practice and
(b) participation in the Plans by employees (i) Section 3.26 of the
Disclosure Schedule sets forth a list of each Contract, transaction or
arrangement under which, during the two years preceding the date of this
Agreement, the Company or any of its Subsidiaries purchased, acquired or leased
any property, goods or services from, or sold, transferred or leased any
property or services to, or loaned or advanced any money to, or borrowed any
money from, any officer, director, shareholder or member of the Company, the
Company’s Subsidiaries, any Shareholder or any of their respective Affiliates;
(ii) except as set forth on Section 3.26 of the Disclosure Schedule, no
officer, director of the Company, the Company’s Subsidiaries, any Shareholder
or any of their respective Affiliates is indebted to the Company or any of its
Subsidiaries for money borrowed or other loans or advances, and neither the
Company nor any of its Subsidiaries is indebted to any such Person, and (iii)
no officer or director of the Company, the Company’s Subsidiaries, any
Shareholder or any of their respective Affiliates has any interest in any
property (whether real, personal or mixed and whether tangible or intangible)
used in or pertaining to the Company’s or any of its Subsidiaries’ business.

          Section
3.27     Powers of Attorney; Bank Accounts. 

	
  

 	
  

 
	
  

 	
                (a)          Except
 for powers of attorney granted to attorneys, accountants or others in
 connection with matters relating to Taxes, the Plans or intellectual property
 matters, neither the Company nor any of its Subsidiaries has granted any
 written power of attorney to any Person for any purpose whatsoever, which
 power of attorney is currently in force.

 
	
  

 	
  

 
	
  

 	
                (b)          Section
 3.27(b) of the Disclosure Schedule sets forth a true and complete list of
 all bank accounts and safe deposit boxes of the Company and its Subsidiaries
 and all Persons authorized to sign or otherwise act with respect thereto as
 of the date hereof.

 

          Section
3.28     Major Customers and Vendors. Section
3.28 of the Disclosure Schedule sets forth a complete and accurate list of
the names of the Company’s and its Subsidiaries’ (a) 25 largest customers for
the 12-month period ended December 31, 2013 (and for the six months ended June
30, 2014), showing the approximate aggregate total GAAP revenues to the Company
and its Subsidiaries from each such customer during such period, and (b) 25
largest vendors (as measured by payments to third parties) for the 12-month
period ended December 31, 2013 (and for the six months ended June 30, 2014),
showing the approximate aggregate total payment in EUROS by the Company and its
Subsidiaries to each such vendor during each such period. Except as otherwise
contemplated by this Agreement or noted on Section 3.28 of the
Disclosure Schedule, no customer or vendor listed on Section 3.28 of the
Disclosure Schedule has given notice that it intends to cease doing business
with 

25

the Company or any of its Subsidiaries or decrease the
amount of business it does with the Company or any of its Subsidiaries in any
material respect.

          Section
3.29     Accounts Receivable. All notes and
accounts receivable of the Company and each of its Subsidiaries that are
reflected on the most recent balance sheet included in the Financial Statements
or on the accounting records of the Company and its Subsidiaries as of the
Closing Date (collectively, the “Accounts Receivable”) represent valid
obligations arising from sales actually made or services actually performed in
the ordinary course of business. There is no contest, claim or right of set-off
under any Contract with any obligor of an Accounts Receivable relating to the
amount or validity of such Accounts Receivable. 

          Section
3.30     Inventory. Subject to reserves and
write-downs reflected on the most recent balance sheet included in the
Financial Statements or on the accounting records of the Company and its
Subsidiaries as of the Closing Date: (a) the inventories of the Company and its
Subsidiaries consist of items that are current and of good and merchantable
quality and not subject to any write-down or write-off; (b) the portion of such
inventories consisting of finished products is saleable in the ordinary course
of the business of the Company and its Subsidiaries at normal prices; and (c)
the portion of such inventories consisting of raw materials and
work-in-progress is of a quality useable in the production of finished
products. Current levels of such inventories are substantially consistent with
the level of inventories that has been maintained in respect of the
manufacturing, production, marketing, sales and distribution by the Company and
its Subsidiaries prior to the date hereof in accordance with the ordinary
course of business of the Company and its Subsidiaries.

          Section
3.31     No Similar Agreements. None of the
Shareholders, the Company or any of the Company’s Subsidiaries has any legal
obligation to any other Person to enter into any transaction with respect to
the transfer of any of the Shares or all or any material portion of the assets
of the Company or any of its Subsidiaries. 

          Section
3.32     Directors 

	
  

 	
  

 
	
  

 	
                (a)          There
 are no amounts owing to any present or former director of the Companies or
 any of its Subsidiaries. 

 
	
  

 	
  

 
	
  

 	
                (b)          Neither
 the Company nor any of its Subsidiaries has made or agreed to make any
 payment or provided or agreed to provide any benefit to a present or former
 director in connection with the actual or a proposed termination or
 suspension of such director’s mandate. 

 
	
  

 	
  

 
	
  

 	
                (c)          There
 is no, and neither the Company nor any of its Subsidiaries has any obligation
 to enter into, any consultancy contract (written or otherwise) with any of
 the current or former directors of the Company or any of its Subsidiaries.

 
	
  

 	
  

 
	
  

 	
                (d)          There
 is no, and no proposal has been announced to enter into or establish, any
 agreement, arrangement, custom or practice (whether legally enforceable or
 not) for the payment of, or payment of a contribution towards, any
 extra-legal pensions, allowances, lump sums or other similar benefits on
 retirement, death, termination of employment (voluntary or not) or during
 periods of sickness or disablement, for the benefit of any current or former
 director of the Company or any of its Subsidiaries or for the benefit of the
 dependents of any such person.

 

26

          Section
3.33   Registers.

	
  

 	
  

 
	
  

 	
             (a)       All
 registers and other books required by law to be kept by the Company or any of
 its Subsidiaries are up to date and have been properly kept and are located
 at the registered office of the Company or the applicable Subsidiary, as the
 case may be, and such registers or other books are in compliance with the
 legislation in force and contain a true and complete record of the matters
 with which they should deal and the necessary signatures are affixed. No
 notice or allegation has been received that any of the registers or other
 books are incorrect or should be rectified. All deposit, registration and
 publication formalities required of the Company or any of its Subsidiaries by
 Applicable Law have been properly and timely executed.

 
	
  

 	
  

 
	
  

 	
             (b)       The
 corporate records and minute books of the Company and each of its
 Subsidiaries contain complete and accurate minutes of all board of directors’
 and shareholders’ meetings since its incorporation. All such meetings were
 duly called and held, all such resolutions were duly passed and the
 shareholder’s registers of the Company and each of its Subsidiaries are
 complete and accurate in all respects.

 

          Section
3.34   Representations and Warranties. The
representations and warranties contained in this Article 3 do not contain any
untrue statement of a material fact or omit to state any material fact
necessary to make the statements and information contained in this Article 3
not misleading in light of the circumstances in which they have been made.

ARTICLE 4.

REPRESENTATIONS AND WARRANTIES OF THE
SHAREHOLDERS

          Each
Shareholder, severally and not jointly, represents and warrants to Purchaser as
follows:

          Section
4.1     Power; Authority; Capacity. Such
Shareholder has full power and authority to sell, assign, transfer and deliver
to Purchaser pursuant to this Agreement the Shares that are owned by him, and
to perform all acts and things required to be performed by such Shareholder in
order to consummate the transactions contemplated by this Agreement. Such
Shareholder has the legal capacity to execute and deliver this Agreement and
all of the other documents contemplated herein to which he is a party, to
perform his obligations under this Agreement and each such other document and
to consummate the transactions contemplated by this Agreement and each such
other document. This Agreement and all of the other agreements contemplated
herein to which each Shareholder is a party have been duly executed and
delivered by such Shareholder and constitute valid and binding agreements of
such Shareholder, enforceable against such Shareholder in accordance with their
respective terms, except as such enforceability is subject to the effect of (a)
any applicable bankruptcy, insolvency, reorganization or similar laws relating
to or affecting creditors’ rights generally and (b) general principles of
equity (regardless of whether such enforceability is considered in a proceeding
in equity or at law).

          Section
4.2     Ownership of Shares; G. Martinot’s
Ownership of BMG Medical SA 

	
  

 	
  

 
	
  

 	
             (a)      Such
Shareholder has good and marketable title to the Shares in the amount set
forth opposite his name on Section 4.2 of the Disclosure Schedule, free and
clear of any and all Encumbrances, and the transfer and delivery of the
Shares to  

 

27

	
  

 	
  

 
	
  

 	
 Purchaser by such Shareholder will be sufficient to
transfer good and marketable record and beneficial ownership of the Shares
the Shares owned by such Shareholder to Purchaser, free and clear of any and
all Encumbrances. Such Shareholder is not a party to any option, warrant,
purchase right or other contract or commitment (other than this Agreement)
that would require such Shareholder to sell, transfer or otherwise dispose of
any capital stock of the Company. Except as set forth on Section 4.2 of the
Disclosure Schedule, neither Shareholder is a party to any voting trust,
proxy or other agreement or understanding with respect to the voting of any
capital stock of the Company. 

 
	
  

 	
  

 
	
  

 	
            
 (b)      G. Martinot is by power of attorney the
 chief operating officer of BMG Medical SA, of which the directors and
 shareholders are Mr. Pieter Bourgeois, domiciled at Avenue Hamoir 29, B1180
 Uccle (56%) and Mrs. Marie Blaise, domiciled at Rue des Sorbiers 16, B5101
 Erpent (44%). G. Martinot hereby personally stands for the acceptance by BMG
 Medical SA of any and all obligations subscribed by BMG Medical SA under this
 Agreement and the New Service Agreement. 

 

          Section
4.3       Litigation. There is no Action pending,
or to the actual knowledge of such Shareholder, threatened against such
Shareholder that would have a Material Adverse Effect on the ability of such
Shareholder to enter into or consummate the transactions contemplated by this
Agreement. 

          Section
4.4       Securities Laws Representations; No Tax
Advice. 

	
  

 	
  

 
	
  

 	
             (a)      Such
 Shareholder has been furnished with Parent’s most recent Annual Report on
 Form 10-K, together with all subsequent quarterly and periodic reports and
 has received from Parent such other information concerning its operations,
 financial condition and other matters that he has requested and considered
 all factors he deems material in deciding on the advisability of investing in
 Parent.

 
	
  

 	
  

 
	
  

 	
             (b)      To
 the extent requested, such Shareholder has provided Purchaser and Parent with
 complete and accurate information in all material respects concerning his
 knowledge, experience and financial condition.

 
	
  

 	
  

 
	
  

 	
             (c)      As
 a sophisticated investor, such Shareholder has such knowledge and experience
 in financial business matters that he believes he is capable of evaluating
 the merits and risks of the prospective investment in the Warrant to be
 issued to him at the Closing.

 
	
  

 	
  

 
	
  

 	
             (d)      Such
 Shareholder recognizes that investment in the Warrant to be issued to him may
 involve a high degree of risk, that transferability and resale is restricted
 and that, in the event of disposition of the underlying common stock, he
 could sustain a loss. 

 
	
  

 	
  

 
	
  

 	
             (e)      Such
 Shareholder intends to hold the Warrant issued to him for investment purposes
 and not with a view to or for resale or distribution, and agrees that he will
 not sell or assign this Warrant without registration under all applicable
 securities laws or an appropriate exemption. 

 

28

	
  

 	
  

 
	
  

 	
              (f)      Such
Shareholder understands and acknowledges that the Warrant to be issued to him
has not been registered under the Securities Act of 1933 (the “Act”),
applicable state blue sky laws, or applicable foreign jurisdiction laws
pursuant to exemptions that depend upon this investment intention. The
undersigned also understands and acknowledges that the underlying common
stock has not been, nor will be registered under applicable securities laws
and therefore will not be freely transferable and that the shares of the
common stock will be marked with an appropriate legend reciting these resale
restrictions.  

 
	
  

 	
  

 
	
  

 	
              (g)      Such
 Shareholder qualifies (i) as an “Accredited Investor” for purposes of
 Regulation D promulgated under the Act, or (ii) if not an accredited
 investor, that he together with his personal representative has the knowledge
 and experience in financial and business matters to be capable of evaluating
 the merits and risks of an investment in the Warrant to be issued to him. 

 
	
  

 	
  

 
	
  

 	
              (h)      Such
 Shareholder agrees that none of the Company, Purchaser, Parent or any of their
 respective Affiliates is providing him with any tax advice with respect to
 his receipt of the Closing Cash Consideration or the Warrant to be issued to
 him, or subsequent exercise of the Warrant and resale of the underlying
 common stock, and that he will consult with and rely on his own tax adviser.

 

ARTICLE 5.

REPRESENTATIONS AND WARRANTIES OF
PURCHASER

          To
induce Shareholders to enter into this Agreement, Purchaser represents and
warrants to the Shareholders as follows:

          Section
5.1       Authority. 

	
  

 	
  

 
	
  

 	
            (a)     The
 execution, delivery and performance of this Agreement and the agreements
 attached hereto or made a part hereof by Purchaser and the consummation of
 the transactions contemplated by this Agreement have been duly authorized by
 all necessary action on the part of Purchaser and do not and will not
 conflict with, result in a default of, constitute a default under, or create
 in any party the right to accelerate, terminate, modify, or cancel, or
 require any notice under, (i) any provision of the articles of association or
 other organizational documents of Purchaser, (ii) any Applicable Law to which
 Purchaser or any of its assets may be subject, or (iii) any Contract to which
 Purchaser is a party or by which it is bound or to which any of its assets is
 subject.

 
	
  

 	
  

 
	
  

 	
            (b)     Purchaser
 has full power and authority to enter into this Agreement and all of the
 other documents contemplated herein and to carry out the transactions
 contemplated hereby and thereby.

 
	
  

 	
  

 
	
  

 	
            (c)     This
 Agreement has been duly and validly executed and delivered by Purchaser and
 is (and all of the other documents contemplated hereby to which Purchaser is
 a party, when executed and delivered by Purchaser will be) the legal, 

 

29

	
  

 	
  

 
	
  

 	
 valid and binding obligation of Purchaser,
 enforceable in accordance with its respective terms, except as such may be
 limited by bankruptcy, insolvency, reorganization or similar laws affecting
 creditors’ rights generally, and by general equitable principles.

 

          Section
5.2     Organization and Qualification.
Purchaser is a private limited liability company lawfully existing under the
laws of the Belgium with full power and authority to own or lease its
properties and to conduct its business in the manner and in the places where
such properties are owned or leased or such business is conducted. 

          Section
5.3     Consents and Approvals. No consent,
authorization, order, or approval of or filing with any Governmental Entity or
other entity or Person is required for the execution and delivery of this
Agreement by Purchaser and the consummation by Purchaser of the transactions
contemplated by this Agreement.

          Section
5.4     No
Brokers. No Person will be entitled to receive any brokerage commission,
finder’s fee, fee for financial advisory services or similar compensation in
connection with the transactions contemplated by this Agreement based on any
Contract made by or on behalf of Purchaser or any of its Affiliates for which
any of the Shareholders is or could become liable or obligated.

ARTICLE 6.

COVENANTS

          Section
6.1     Conduct of the Business.

	
  

 	
  

 
	
  

 	
          (a)        From
the date hereof until the earlier of the Closing Date or the date, if any, on
which this Agreement is terminated pursuant to Section 8.1 (the “Termination
Date”), the Company and each of its Subsidiaries will (and each of
the Shareholders will cause the Company and its Subsidiaries to) (i) conduct
their business only in the ordinary course of business consistent with past
practice and (ii) use reasonable best efforts to preserve intact the business
organization and goodwill of their business, to maintain the Company’s and
its Subsidiaries’ relationships with the customers, suppliers, distributors
and other third parties having business dealings with the Company or any of
its Subsidiaries and to keep available the services of the key employees and
independent contractors providing services to the Company or any of its
Subsidiaries. 

 
	
  

 	
  

 
	
  

 	
          (b)        In
furtherance of, and without limiting the generality of, Section 6.1(a),
except as expressly permitted by this Agreement, as set forth in Section
6.1(b) of the Disclosure Schedule or as approved in writing by Purchaser
(which approval will not be unreasonably withheld, conditioned or delayed),
from the date hereof until the earlier of the Closing Date or the Termination
Date, neither the Company nor any of its Subsidiaries will (and the
Shareholders will not permit the Company or any of its Subsidiaries to) do
any of the following:  

 
	
  

 	
  

 
	
  

 	
          (i)         take
 or omit to take any action that results or may reasonably be expected to
 result in any of the representations and warranties of the Shareholders set

 

30

	
  

 	
  

 
	
  

 	
 forth herein being or becoming untrue in any
material respect or in any of the conditions precedent set forth in Section
7.1 or Section 7.3 not being satisfied;  

 
	
  

 	
  

 
	
  

 	
           (ii)           amend
 or otherwise change its organizational documents; 

 
	
  

 	
  

 
	
  

 	
           (iii)          incur
 any Liabilities, other than Liabilities incurred in the ordinary course of
 business, or discharge or satisfy any Encumbrances, or pay any Liabilities,
 other than in the ordinary course of business consistent with past practice,
 or fail to pay or discharge when due any accounts payable or other
 Liabilities;

 
	
  

 	
  

 
	
  

 	
           (iv)          sell,
 encumber, assign or transfer any assets or properties of the Company or any
 of its Subsidiaries other than in the ordinary course of business consistent
 with past practice;

 
	
  

 	
  

 
	
  

 	
           (v)           create,
 incur, assume, modify, amend or guarantee any indebtedness for money
 borrowed;

 
	
  

 	
  

 
	
  

 	
           (vi)          make
 any material change in the business of the Company or any of its
 Subsidiaries, except for such changes as may be required to comply with
 Applicable Law;

 
	
  

 	
  

 
	
  

 	
           (vii)         make
 any loans, advances or capital contributions to, or investments in, any
 Person;

 
	
  

 	
  

 
	
  

 	
           (viii)        except
 as required by Applicable Law, (A) institute or announce any increase in the
 compensation, bonuses or other benefits payable to any employee; (B) enter
 into or amend any employment, consulting, severance or change of control
 agreement with any employee; (C) enter into, adopt or amend any Plan or other
 commitment or arrangement relating to the employment of any employee; or (D)
 make or commit to make any material increase in contributions or benefits
 under any Plan that would become effective on or after the Closing Date; 

 
	
  

 	
  

 
	
  

 	
           (ix)          make
 any change in the accounting methods, principles or policies applied in the
 preparation of the Financial Statements, other than any change required by
 Applicable Law or a change in GAAP;

 
	
  

 	
  

 
	
  

 	
           (x)           made
 or changed any Tax election, changed an annual accounting period, adopted or
 changed any accounting method, filed any amended Tax Return, entered into any
 closing agreement, settled any Tax claim or assessment relating to the
 Company or its Subsidiaries, surrendered any right to claim a refund of
 Taxes, consented to any extension or waiver of the limitation period
 applicable to any Tax claim or assessment relating to the Company or its
 Subsidiaries, or taken any other similar action relating to the filing of any
 Tax Return or the payment of any Tax;

 
	
  

 	
  

 
	
  

 	
           (xi)         fail
 to use commercially reasonable efforts to collect any accounts receivable
 when due; 

 
	
  

 	
  

 
	
  

 	
           (xii)        make
 or suffer any amendment or termination of any Material Contract; 

 

31

	
  

 	
  

 
	
  

 	
           (xiii)          cancel,
 modify or waive any debts or claims held by the Company or any of its
 Subsidiaries, other than with respect to immaterial amounts in the ordinary
 course of business consistent with past practice;

 
	
  

 	
  

 
	
  

 	
           (xiv)          suffer
 any material damage, destruction or casualty loss to any of its properties,
 not covered by insurance, or suffer any repeated, recurring or prolonged
 shortage, cessation or interruption of supplies or utilities or other
 services required to conduct its business and operations;

 
	
  

 	
  

 
	
  

 	
           (xv)           make
 commitments or agreements for capital expenditures or capital additions or
 betterments exceeding in the aggregate Five Thousand Euro (€5,000) in excess
 of the Company’s currently existing capital expenditure budget, a true and
 correct copy of which has been made available to Purchaser; 

 
	
  

 	
  

 
	
  

 	
           (xvi)          (A)
 issue or commit to issue any capital stock of the Company or any of
 its Subsidiaries or securities (including options and warrants) convertible
 into or exchangeable (or exercisable) for capital stock of the Company or any of
 its Subsidiaries, (B) adjust, split, combine, reclassify or redeem any of the
 Shares or (C) declare, authorize, set aside or pay any dividend;

 
	
  

 	
  

 
	
  

 	
           (xvii)         acquire
 any interest in any other business entity;

 
	
  

 	
  

 
	
  

 	
           (xviii)        execute
 any Contract or incur any Liability therefor (i) involving an annual payment
 or receipt in excess of Five Thousand Euro (€5,000) or requiring aggregate
 payments or receipts in excess of Five Thousand Euro (€5,000) or (ii) that
 cannot be terminated without penalty on less than 90 days’ notice; 

 
	
  

 	
  

 
	
  

 	
           (xix)          enter
 into any transactions with any Affiliate, shareholder, director, officer or
 employee of the Company or any of its Subsidiaries; or

 
	
  

 	
  

 
	
  

 	
           (xx)           enter
 into any agreement, commitment or understanding (whether written or oral)
 with respect to any of the foregoing.

 

          Section
6.2     Access to Information. Subject to the
terms of the Confidentiality Agreement, from the date hereof until the earlier
of the Closing Date or the Termination Date, the Company and its Subsidiaries
will (and the Shareholders will cause the Company and its Subsidiaries to)
furnish to Purchaser and its authorized representatives such additional
information relating to the Company and its Subsidiaries as Purchaser may
reasonably request. No investigation conducted by or on behalf of, or
information furnished to, Purchaser or its representatives will operate as a
waiver or otherwise affect any representation, warranty, covenant or agreement
given or made by the Shareholders hereunder.

          Section
6.3     Notice of Certain Events. From the date
hereof until the earlier of the Closing Date or the Termination Date, the
Company and its Subsidiaries will (and the Shareholders will cause the Company
and its Subsidiaries to) promptly notify Purchaser in writing of: (a) any
material adverse change in the Company’s or any of its Subsidiaries’ business;
(b) any material breach of or default under this Agreement or event that would
reasonably be expected to become such a breach or default on or prior to the
Closing; (c) any notice or other communication from any other Person (including
any Governmental Entity) alleging that the consent of such Person (or Governmental

32

Entity) is or may be required in
connection with the transactions contemplated hereby; and (d) any Actions
commenced or, to the Knowledge of the Shareholders, threatened against the
Company or any of its Subsidiaries that, if pending on the date hereof, would
have been required to have been disclosed as an exception to the
representations and warranties contained in Sections 3.19 or 4.3 or that relate
to the consummation of the transactions contemplated hereby.  

          Section
6.4     Reasonable Best Efforts. Subject to the
terms and conditions of this Agreement, each party will use its reasonable best
efforts to cause the Closing to occur and to take, or cause to be taken, all
actions, to file, or cause to be filed, all documents and to do, or cause to be
done, and to assist and cooperate with the other parties in doing, all things
necessary, proper or advisable to consummate and make effective, in the most
expeditious manner practicable, the transactions contemplated hereby; provided,
however, that Purchaser will not be required to give any guarantee or pay any
fees or other payments in order to obtain any consent, approval or waiver or to
consent to any change in the terms of any Material Contract that Purchaser may
reasonably deem adverse to the interests of Purchaser or the business of the
Company and its Subsidiaries; provided, further, that Purchaser will not be
required to: (a) sell or otherwise dispose of, hold separate or agree to sell
or dispose of, any assets, categories of assets or businesses of the Company or
any of its Subsidiaries, Purchaser or its subsidiaries; or (b) terminate
existing relationships, contractual rights or obligations to avoid, prevent or
terminate any action by any Governmental Entity that would restrain, enjoin or
otherwise prevent consummation of the transactions contemplated hereby.  

          Section
6.5     Exclusivity. From the date hereof until
the earlier of the Closing Date or the Termination Date, none of the
Shareholders will, and none of them will permit any of their respective
Affiliates or representatives acting on their behalf to, take any action to
solicit, initiate, encourage or accept any offer or proposal from, engage in
any discussions or negotiations with, or provide any information to, any Person
(other than Purchaser and its Affiliates and representatives) concerning any
merger, consolidation, sale or transfer of assets, sale or transfer of equity
interests or other business combination involving the Company or any of its
Subsidiaries (an “Alternative Transaction”). Each of the Shareholders will,
and each of them will cause their respective Affiliates and representatives to,
immediately cease and cause to be terminated all existing discussions,
negotiations or other communications with any Persons conducted previously with
respect to any Alternative Transaction. Each of the Shareholders will
immediately notify Purchaser in writing upon receipt by such Shareholder or any
of his respective representatives of any proposal, offer or inquiry regarding
an Alternative Transaction, which notice will indicate in reasonable detail the
identity of the Person making such proposal, offer or inquiry and the material
terms and conditions thereof.

          Section
6.6     Insurance Policies. The Shareholders
will cause the Company and its Subsidiaries to maintain all insurance policies
that provide coverage for the Company or any of its Subsidiaries in full force
and effect through at least the close of business on the Closing Date in an
amount and scope consistent with any such policies in effect as of the date
hereof, and will provide for the renewal of all such policies that by their
terms will expire prior to the Closing Date.

          Section
6.7     Confidentiality. All documents,
materials and other information furnished in connection with the transactions
contemplated hereby will be subject to, and will be kept confidential in
accordance with, the terms of the Confidentiality Agreement. Effective upon the
Closing: (a) the obligations of Purchaser and its Affiliates under the
Confidentiality Agreement will terminate; and 

33

(b) the obligations of the Shareholders with respect
to the confidentiality of the Confidential Information will be governed by Section
6.9(d).

          Section
6.8     Public Announcements. The initial press
release with respect to this Agreement and the transactions contemplated hereby
will be a release mutually acceptable to the parties. Thereafter, none of the
Shareholders or any of their respective Affiliates or representatives will, without
the prior written consent of Purchaser, issue any press release or make any
other public announcement concerning the existence or terms (including the
Purchase Price) of this Agreement except as and to the extent that public
disclosure of a matter without Purchaser’s consent is required by Applicable
Law or the rules or regulations of any applicable stock exchange or quotation
system, in which case Purchaser will be so advised and the parties will use
commercially reasonable efforts to cause a mutually agreeable release or
announcement to be issued prior to such disclosure.

          Section
6.9     Restrictive Covenants of the Shareholders.

	
  

 	
  

 
	
  

 	
          (a)          Non-Competition.
 During the Restricted Period, other than on behalf of Purchaser, the
 Shareholders will not, and each Shareholder will cause his Affiliates not to,
 directly or indirectly, own, control, manage, operate, conduct, engage in,
 participate in, consult with, perform services for, guarantee the debts or
 obligations of, permit his name to be used by or in connection with, or
 otherwise carry on, a business anywhere in the Territory that competes with
 the Business as conducted as of the Closing Date (it being understood and
 acknowledged by the Shareholders that the foregoing restricted activities are
 not limited to any particular region within the Territory because the
 Business has been and will continue to be conducted throughout the Territory
 and may be engaged in effectively from any location within or outside the
 Territory). For the avoidance of doubt, nothing set forth in this Section
 6.9(a) will prohibit the Shareholders or their Affiliates from (1) being
 an equity holder in a mutual fund or a diversified investment company, (2)
 being a passive owner of not more than two percent (2%) in the aggregate of
 an outstanding class of publicly traded securities or (3) in the case of J.
 Martinot only, continuing to perform the services identified on Schedule
 6.9(a) on behalf of the clients listed therein. 

 
	
  

 	
  

 
	
  

 	
          (b)          Non-Solicitation.
 During the Restricted Period, other than on behalf of Purchaser, the
 Shareholders will not, and each Shareholder will cause his Affiliates not to,
 directly or indirectly: (1) solicit any client, customer, supplier or agent
 with respect to any product or service competitive with the Business; or (2)
 otherwise interfere with or damage the business relationship between
 Purchaser or the Company or any of its Subsidiaries, on the one hand, and any
 client, customer, supplier or agent, on the other hand. 

 
	
  

 	
  

 
	
  

 	
          (c)          Non-Solicitation
 of Employees / Independent Contractors. During the Restricted Period,
 none of the Shareholders will, and each of them will cause their respective
 Affiliates not to, directly or indirectly: (i) solicit the employment of or
 hire (whether as an employee, independent contractor or otherwise) any
 employee or independent contractor providing services to the Company or any
 of its Subsidiaries (other than any employee or independent contractor who
 has not worked for, or provided services to, Purchaser, the Company or any of
 their respective Affiliates for a period of at least six (6) months); or (ii)
 otherwise interfere with or damage the 

 

34

	
  

 	
  

 
	
  

 	
 business relationship between Purchaser or the
 Company or any of its Subsidiaries, on the one hand, and any employee or
 independent contractor, on the other hand. 

 
	
  

 	
  

 
	
  

 	
           (d)          Confidentiality.
From and after the Closing Date, the Shareholders will, and each of them will
cause their respective Affiliates and their respective directors, officers,
employees and advisors to, keep confidential and not disclose or use any
Confidential Information, other than to disclose Confidential Information to
Purchaser. Notwithstanding the foregoing, if the Shareholders, any of their
respective Affiliates or any of their respective directors, officers,
employees and advisors (collectively, the “Disclosing Party”) is
requested or required by Applicable Law to disclose any Confidential
Information, the Disclosing Party will provide Purchaser with notice of such
request or requirement as promptly as practicable (unless not permitted by
Applicable Law) so that Purchaser may seek a protective order or other
appropriate remedy or waive compliance with the foregoing provisions of this
Section 6.9(d). The Disclosing Party will cooperate with Purchaser in
connection with Purchaser’s efforts to seek such an order or remedy. If
Purchaser does not obtain such an order or other remedy, or waives compliance
with the provisions of this Section 6.9(d), the Disclosing Party will furnish
only that portion of the applicable Confidential Information that is legally
required, and will exercise reasonable efforts to obtain assurance that
confidential treatment will be accorded such disclosed information.  

 
	
  

 	
  

 
	
  

 	
           (e)          
Equitable Remedies. Each of the Shareholders acknowledges and agrees
that (i) Purchaser and its Affiliates would suffer irreparable and ongoing
damages in the event that any provision of this Section 6.9 were not
performed in accordance with its terms or otherwise were breached and (ii)
monetary damages alone would be an inadequate remedy for any such
nonperformance or breach. Accordingly, each of the Shareholders agrees that,
in the event of any actual or threatened breach of this Section 6.9,
Purchaser will be entitled, in addition to all other rights and remedies that
it may have existing in its favor at law, in equity or otherwise, to obtain
injunctive or other equitable relief (including a temporary restraining
order, a preliminary injunction and a final injunction) to prevent any actual
or threatened breach of any of such provisions and to enforce such provisions
specifically, without the necessity of posting a bond or other security or of
proving actual damages. The prevailing party in any action commenced under
this Section 6.9(e) (whether through a monetary judgment, injunctive relief
or otherwise) also will be entitled to recover reasonable attorneys’ fees and
court costs incurred in connection with such action.  

 
	
  

 	
  

 
	
  

 	
           (f)           Acknowledgements.
Each of the Shareholders acknowledges and agrees that (i) the restrictive
covenants set forth in this Section 6.9 are an essential element of this
Agreement and an integral part of the transactions contemplated hereby; (ii)
but for these covenants, Purchaser would not have entered into this
Agreement; and (iii) in view of the nature of the Business, the business
objectives of Purchaser in acquiring the Shares, and the consideration paid
for the Shares, the restrictive covenants set forth in this Section 6.9
(including the geographic scope and duration of these covenants) are
reasonable and necessary in order to protect Purchaser’s legitimate business
interests.  

 

35

           (g)          Severability;
Reformation. Each of the covenants contained in this Section 6.9 is a severable
and independent covenant. If, at the time of enforcement of any provision of
this Section 6.9, a final judicial determination is made by a court of
competent jurisdiction that any such provision is unreasonable or otherwise
unenforceable under Applicable Law, the parties hereby authorize such court to
revise and reform the provisions of this Section 6.9 so as to produce the
maximum legally enforceable restrictions (not greater than those contained
herein) permitted by Applicable Law. If such court refuses to do so, the
parties agree that the provisions of this Section 6.9 will not be rendered null
and void, but rather will be deemed amended to provide for such maximum legally
enforceable restrictions.  

            Section
6.10    Tax Matters. 

	
  

 	
  

 
	
  

 	
            (a)          Transfer
 Taxes. The Shareholders will be liable for, and will timely pay, defend
 and hold harmless each Purchaser Indemnified Party from and against any and
 all Losses incurred by such Purchaser Indemnified Party resulting from, in
 connection with or arising out of, any Transfer Taxes imposed as a result of
 the transactions contemplated hereby. Purchaser agrees to timely sign and
 deliver such certificates or forms as may be reasonably necessary or
 appropriate to establish an exemption from (or otherwise reduce), or file Tax
 Returns with respect to, any Transfer Taxes.

 
	
  

 	
  

 
	
  

 	
            (b)         Assistance
 and Cooperation. After the Closing Date, the Shareholders will: (i)
 assist Purchaser, the Company and its Subsidiaries in preparing any Tax
 Returns that the Company or any of its Subsidiaries are responsible for
 preparing and filing in connection to the Pre-Closing Period; (ii) cooperate
 fully in preparing for or defending against any Tax Contests with taxing
 authorities regarding any Tax Returns of the Company or any of its
 Subsidiaries in connection to the Pre-Closing Period; and (iii) make
 available to Purchaser and to any taxing authority as reasonably requested
 all information, records and documents relating to Taxes of the Company or
 any of its Subsidiaries. The Shareholders and Purchaser will furnish each
 other with timely notice of, and copies of all correspondence received from
 any taxing authority in connection with, any Tax Contest relating to Taxes of
 the Company or any of its Subsidiaries for the Pre-Closing Period.

 

          Section
6.11     Expenses. Except as otherwise
expressly provided herein, each party will bear and pay all of its costs and
expenses (including the fees and expenses of its attorneys, accountants,
investment bankers and other advisors) incurred in connection with this
Agreement and the transactions contemplated hereby, whether or not the Closing
will have occurred. 

          Section
6.12     Further Assurances. At any time and
from time to time following the Closing, at the request of any party and
without further consideration, each party will execute and deliver, or cause to
be executed and delivered, such other documents and instruments and will take,
or cause to be taken, such further or other actions as the other party may
reasonably request or as otherwise may be necessary or desirable to evidence
and make effective the transactions contemplated hereby.

          Section
6.13     Environmental Investigation Matters.
Pursuant to Phase II work proposal prepared by ENVIRON International
Corporation (“ENVIRON”) dated June 20, 2014, the parties 

36

each acknowledge that Purchaser has performed certain
and is permitted to (but shall not be required to) conduct further
environmental investigations (collectively, the “Environmental Investigation”)
at the Owned Real Property. All expenses associated with the Environmental
Investigation, whether conducted before or after the Closing Date, shall be
paid by Purchaser. To the extent the Environmental Investigation identifies any
response actions (collectively, the “Response Actions”) required to be
conducted at the Owned Real Property in order to ensure such property is in
compliance with any Environmental Law, then (a) the parties agree to continue
to use ENVIRON to perform (or, if that is not possible, to monitor and verify
the completion of) such Response Actions and (b) the Shareholders shall be
solely responsible for all costs and expenses associated with any Response
Actions. 

          Section
6.14     Certain Pre-Closing Actions. The
Shareholders will take all necessary action to: (a) cause each of the Company’s
Subsidiaries to be wholly owned by the Company as of the Closing for a purchase
price, in each case, equal to the greater of (i) one (1) Euro or (ii) the
minimum purchase price required by Applicable Law (collectively, the “Subsidiary
Transfers”); and (b) cause the Company to pay to the appropriate
Governmental Entity the €25,692 of social security charges that is due on July
20, 2014 (such payment, the “Specified Social Security Contribution”).
At the Closing, the Shareholders will deliver to Purchaser a certificate dated
the Closing Date, signed by each of the Shareholders, certifying that the
Specified Social Security Contribution has been paid as contemplated by this
Section 6.14.  

          Section
6.15     Payment by G. Martinot on the Closing Date.
On the Closing Date, G. Martinot will repay to the Company, by wire transfer of
immediately available funds to a bank account specified in writing by
Purchaser, the aggregate amount owing by G. Martinot to the Company, which
aggregate amount is specified under clause (ii) on Section 3.26 of the
Disclosure Schedule (such amount, the “G. Martinot Debt Obligation”).  

ARTICLE 7.

CONDITIONS PRECEDENT

          Section
7.1      Conditions to the Obligations of the Parties.
The obligations of the parties to consummate the transactions contemplated
hereby are subject to the satisfaction or (to the extent permitted by
Applicable Law) waiver by the parties, on or prior to the Closing Date, of each
of the following conditions: 

	
  

 	
  

 
	
  

 	
              (a)         Governmental
Approvals. All consents, approvals and actions of or by, and all filings with
and notifications to, any Governmental Entity required to consummate the
transactions contemplated hereby will have been obtained, taken or made, as
applicable, and will remain in full force and effect. 

 
	
  

 	
  

 
	
  

 	
              (b)          No
Prohibitions. No Applicable Law will prohibit or otherwise challenge the
legality or validity of the transactions contemplated hereby. 

 

          Section
7.2      Conditions to the Obligations of the
Shareholders. The obligations of the Shareholders to consummate the
transactions contemplated hereby are subject to the satisfaction or (to the
extent permitted by Applicable Law) waiver by the Shareholders, on or prior to
the Closing Date, of each of the following further conditions: 

37

	
  

 	
  

 
	
  

 	
              (a)          Accuracy
 of Representations and Warranties. Each of the representations and
 warranties of Purchaser set forth in this Agreement (i) that is qualified by
 materiality will be true and correct in all respects and (ii) that is not so
 qualified will be true and correct in all material respects, in each case at
 and as of the Closing Date as if made on and as of the Closing Date (except
 to the extent that any such representations and warranties speak expressly as
 of an earlier date, in which case they will be true and correct, or true and
 correct in all material respects, as the case may be, as of such earlier
 date).

 
	
  

 	
  

 
	
  

 	
              (b)          Performance
 of Covenants. Purchaser will have performed or complied in all material
 respects with all covenants, agreements and obligations required by this
 Agreement to be performed or complied with by Purchaser on or prior to the
 Closing Date.

 
	
  

 	
  

 
	
  

 	
              (c)          Certificate
 of Compliance. Purchaser will have delivered to the Shareholders a certificate
 dated the Closing Date, signed by an authorized officer of Purchaser,
 certifying as to the satisfaction of the conditions set forth in Section
 7.2(a) and Section 7.2(b).

 
	
  

 	
  

 
	
  

 	
              (d)          Receipt
 of Closing Deliveries. Purchaser will have executed and delivered, or
 caused to be executed and delivered, all of the agreements, certificates and
 other documents specified in Section 2.2(b), all in form and substance
 reasonably satisfactory to the Shareholders.

 

          Section
7.3     Conditions to the Obligations of Purchaser.
The obligations of Purchaser to consummate the transactions contemplated hereby
are subject to the satisfaction or (to the extent permitted by Applicable Law)
waiver by Purchaser, on or prior to the Closing Date, of each of the following
further conditions:

	
  

 	
  

 
	
  

 	
              (a)          Accuracy
 of Representations and Warranties. Each of the representations and
 warranties of the Shareholders set forth in this Agreement (i) that is
 qualified by materiality or Material Adverse Effect will be true and correct
 in all respects and (ii) that is not so qualified will be true and correct in
 all material respects, in each case at and as of the Closing Date as if made
 on and as of the Closing Date (except to the extent that any such representations
 and warranties speak expressly as of an earlier date, in which case they will
 be true and correct, or true and correct in all material respects, as the
 case may be, as of such earlier date).

 
	
  

 	
  

 
	
  

 	
              (b)          Performance
 of Covenants. The Shareholders will have performed or complied in all
 material respects with all covenants, agreements and obligations required by
 this Agreement to be performed or complied with by the Shareholders on or
 prior to the Closing Date.

 
	
  

 	
  

 
	
  

 	
              (c)          No
 Material Adverse Effect. Between the date hereof and the Closing Date,
 there will have been no Material Adverse Effect.

 
	
  

 	
  

 
	
  

 	
              (d)          Certificate
 of Compliance. The Shareholders will have delivered to Purchaser a
 certificate dated the Closing Date, signed by each of the Shareholders,

 

38

	
  

 	
  

 
	
  

 	
 certifying as to the
 satisfaction of the conditions set forth in Section 7.3(a), Section
 7.3(b) and Section 7.3(c).

 
	
  

 	
  

 
	
  

 	
              (e)          Third
 Party Consents. The Shareholders will have obtained the written consents
 of, or given notifications (to the extent only notification is required) to,
 each of the third parties set forth in Section 3.5 or Section 3.6
 of the Disclosure Schedule, in each case in form and substance reasonably
 satisfactory to Purchaser, and all such consents will remain in full force
 and effect.

 
	
  

 	
  

 
	
  

 	
              (f)          Receipt
 of Closing Deliveries. The Shareholders will have executed and delivered,
 or caused to be executed and delivered, all of the agreements, certificates
 and other documents specified in Section 2.2(a), all in form and
 substance reasonably satisfactory to Purchaser.

 

ARTICLE 8.

TERMINATION

          Section
8.1     Grounds for Termination.
Notwithstanding anything contained in this Agreement to the contrary, this
Agreement may be terminated and the transactions contemplated hereby may be
abandoned at any time prior to the Closing:

	
  

 	
  

 
	
  

 	
              (a)          by
 the mutual written agreement of Purchaser and the Shareholders’
 Representative;

 
	
  

 	
  

 
	
  

 	
              (b)          by
 Purchaser in the event of a material breach of any representation, warranty,
 covenant or agreement of the Shareholders contained herein and the failure of
 the Shareholders to cure such breach within ten (10) days after receipt of
 written notice from Purchaser requesting such breach to be cured; provided,
 however, that there will be no right to terminate if such breach was caused,
 in whole or in part, by a material breach by Purchaser;

 
	
  

 	
  

 
	
  

 	
              (c)          by
 the Shareholders’ Representative in the event of a material breach of any
 representation, warranty, covenant or agreement of Purchaser contained herein
 and the failure of Purchaser to cure such breach within ten (10) days after
 receipt of written notice from the Shareholders’ Representative requesting
 such breach to be cured; provided, however, that there will be no right to
 terminate if such breach was caused, in whole or in part, by a material
 breach by any Shareholder;

 
	
  

 	
  

 
	
  

 	
              (d)          by
 either Purchaser or the Shareholders’ Representative if any Governmental
 Entity will have issued a final and non-appealable order, decree or judgment
 permanently restraining, enjoining or otherwise prohibiting the consummation
 of the transactions contemplated hereby; or

 
	
  

 	
  

 
	
  

 	
              (e)          by
 either Purchaser or the Shareholders’ Representative if the Closing will not
 have occurred on or before November 1, 2014 (or such later date as may be
 agreed to in writing by Purchaser and the Shareholders’ Representative); provided,
 however, that the right to terminate this Agreement under this Section
 8.1(e) will not be available to any party whose failure to fulfill any
 obligation under, or breach of 

 

39

	
  

 	
  

 
	
  

 	
 any provision of, this
 Agreement will have been the cause of, or will have resulted in, the failure
 of the Closing to occur on or before the applicable date.

 

          Section
8.2     Notice of Termination. The party
desiring to terminate this Agreement pursuant to Section 8.1 will give
written notice of such termination to the other parties to this Agreement in
accordance with Section 10.4, specifying the provision(s) pursuant to
which such termination is effective.

          Section
8.3     Effect of Termination. If this
Agreement is terminated pursuant to this Article 8, this Agreement will
forthwith become void and of no further force and effect and all rights and
obligations of the parties hereunder will be terminated without further
liability of any party to any other party; provided, however, that (a) the
provisions of the Confidentiality Agreement, Section 6.7
(Confidentiality), Section 6.11 (Expenses), Section 6.13
(Environmental Investigation Matters), this Section 8.3 (Effect of
Termination) and Article 10 (Miscellaneous), and the rights and
obligations of the parties thereunder, will survive any such termination; and
(b) nothing herein will relieve any party from liability for any intentional
misrepresentation under, or any breach of, this Agreement prior to the date of
termination.

ARTICLE 9.

SURVIVAL AND INDEMNIFICATION

          Section
9.1     Survival.

	
  

 	
  

 
	
  

 	
              (a)          The
 representations and warranties of the parties contained in or made pursuant
 to this Agreement or in any certificate or other instrument delivered
 pursuant hereto or in connection herewith will survive the Closing and
 continue in full force and effect until the twenty-four (24) month
 anniversary of the Closing Date; provided, however, that: (i)
 the Regulatory Representations will survive the Closing and continue in full
 force and effect until ninety (90) days after the expiration of the statute
 of limitations period applicable to the matters covered thereby (giving
 effect to any tolling, waiver, mitigation or extension thereof); and (ii) the
 Fundamental Representations will survive the Closing and continue in full
 force and effect indefinitely. 

 
	
  

 	
  

 
	
  

 	
              (b)          The
 covenants and agreements of the parties contained in or made pursuant to this
 Agreement or in any certificate or other instrument delivered pursuant hereto
 or in connection herewith (including the Shareholders’ obligation to
 indemnify, defend and hold harmless the Purchaser Indemnified Parties from
 and against all Indemnified Liabilities) will survive the Closing and
 continue in full force and effect indefinitely or for the shorter period of time
 explicitly specified therein.

 
	
  

 	
  

 
	
  

 	
              (c)          Notwithstanding
 the preceding paragraphs (a) and (b), if written notice of a claim for
 indemnification is given in accordance with this Agreement on or prior to the
 expiration of the applicable survival period, the representations,
 warranties, covenants and agreements that are the subject of such claim will
 survive until such time as such claim has been fully and finally resolved. 

 

40

          Section
9.2     Indemnification by the Shareholders – Joint
and Several. Subject to the terms and conditions of this Article 9,
the Shareholders will, jointly and severally, indemnify and hold harmless
Purchaser and its Subsidiaries and Affiliates (including Parent), the Company
and its Subsidiaries and Persons who are officers, directors, employees, agents
and representatives of any of the foregoing after the Closing Date (“Purchaser
Indemnified Parties”) from and against any and all demands, claims,
losses, Liabilities, actions or causes of action, assessments, damages, fines,
Taxes, penalties, costs and expenses (including reasonable fees and
disbursements of counsel and amounts paid in settlement) (collectively “Losses”)
incurred or suffered by any Purchaser Indemnified Parties (whether involving a
Third Party Claim or a claim solely among the parties) arising out of,
resulting from or relating to:

	
  

 	
  

 
	
  

 	
              (a)          any
 breach of any of the representations or warranties made by the Shareholders
 in Article 3 of this Agreement or in any of the other agreements or
 certificates delivered by the Shareholders at the Closing in accordance with
 the terms hereof; 

 
	
  

 	
  

 
	
  

 	
              (b)          any
 failure by any of the Shareholders to perform any of their covenants or
 agreements contained in this Agreement (other than Section 6.9) or in
 any of the other agreements or certificates delivered by the Shareholders at
 the Closing in accordance with the terms hereof;

 
	
  

 	
  

 
	
  

 	
              (c)          any
 Transaction Expenses (excluding, however, any Transaction Expenses relating
 to the Specified Items); 

 
	
  

 	
  

 
	
  

 	
              (d)          any
 of the Terminated Agreements; 

 
	
  

 	
  

 
	
  

 	
              (e)          any
 Indemnified Liability; 

 
	
  

 	
  

 
	
  

 	
              (f)          (i)
 all Taxes (or the non-payment thereof) of the Company or any of its
 Subsidiaries (or any predecessors thereof) for all periods ending on or
 before the date of the latest Financial Statements which were not provided
 for in the Financial Statements; (ii) all Taxes of any member of an
 affiliated, consolidated, combined or unitary group of which the Company or
 any of its Subsidiaries (or any predecessor) is or was a member on or prior
 to the Closing Date for all periods ending on or before the date of the
 latest Financial Statements that were not provided for in the Financial
 Statements; (iii) all Taxes of any Person imposed on the Company or any
 Subsidiary as a transferee or successor, by contract or pursuant to any legal
 requirement, which Taxes relate to an event or transaction occurring on or
 prior to the Closing Date; and (iv) any and all Taxes imposed on the
 Shareholders. The Shareholders will reimburse Purchaser for any Taxes which
 are the responsibility of the Shareholders under this Section within 30 days
 after payment of such Taxes by Purchaser, the Company or any of its
 Subsidiaries; or 

 
	
  

 	
  

 
	
  

 	
              (g)          any
 Losses arising out of or relating to: (i) the Response Actions; or (ii) any
 violations of Environmental Law, regardless of whether or not any matter
 relating thereto is disclosed on Section 3.18 of the Disclosure
 Schedule. 

 

          Section
9.3     Indemnification by Shareholders – Several
and Not Joint With Respect to Specified Matters. Subject to the terms and
conditions of this Article 9, each Shareholder will, 

41

severally and not jointly, indemnify and hold harmless
the Purchaser Indemnified Parties from and against any and all Losses incurred
or suffered by any Purchaser Indemnified Parties (whether involving a Third
Party Claim or a claim solely among the parties) arising out of, resulting from
or relating to: 

	
  

 	
  

 
	
  

 	
              (a)         any
 breach of any of the representations or warranties made by such Shareholder
 in Article 4 of this Agreement; or

 
	
  

 	
  

 
	
  

 	
              (b)         any
 breach of, or failure to perform, any covenant or agreement of such
 Shareholder contained in Section 6.9 of this Agreement. 

 

          Section
9.4         Indemnification by Purchaser. Subject
to the terms and conditions set forth herein, Purchaser will indemnify and hold
harmless the Shareholders, their Affiliates and their respective officers,
directors, employees, agents and representatives (“Shareholder Indemnified Parties”)
from and against any and all Losses incurred or suffered by any Shareholder
Indemnified Parties (whether involving a Third Party Claim or a claim solely
among the parties) arising out of, resulting from or relating to:

	
  

 	
  

 
	
  

 	
              (a)          any
 breach of any of the representations or warranties made by Purchaser in Article
 5 of this Agreement or in any of the other agreements or certificates
 delivered by Purchaser at the Closing in accordance with the terms hereof; or

 
	
  

 	
  

 
	
  

 	
              (b)         any
 failure by Purchaser to perform any of its covenants or agreements contained
 in this Agreement or in any other agreement or certificate delivered by
 Purchaser at the Closing in accordance with the terms hereof.

 

          Section
9.5         Limitations on Indemnification. The
rights of the Indemnified Parties to indemnification pursuant to the provisions
of this Article 9 are subject to the following limitations:

	
  

 	
  

 	
  

 	
  

 
	
  

 	
              (a)         Deductible
 and Cap.

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
  

 	
 (i)          The Shareholders
 will not be required to indemnify, defend or hold harmless the Purchaser
 Indemnified Parties against, or reimburse the Purchaser Indemnified Parties
 for, any Losses pursuant to Section 9.2(a) or Section 9.3(a)
 unless and until the aggregate amount of Losses with respect to the matters
 contemplated thereby exceeds Fifty Thousand Euro (€50,000) (the “Threshold
 Amount”) in the aggregate, at which point the Purchaser
 Indemnified Parties will be entitled to recover all Losses from the first
 EURO up to a maximum aggregate amount of Losses equal to Two Million Two
 Hundred Thousand Euro (€2,200,000) (the “Cap”); provided, however,
 that the Threshold Amount and the Cap will not apply with respect to any
 indemnification claims arising out of, resulting from or in connection with
 (A) any breach of or inaccuracy in any of the Shareholders’ Fundamental
 Representations, (B) any breach of or inaccuracy in any of the Regulatory
 Representations or (C) any fraud, willful misconduct or intentional
 misrepresentation by any of the Shareholders. For the avoidance of doubt, the
 parties acknowledge and agree that the limitations on indemnification set
 forth in this 

 

42

	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
  

 	
 Section 9.5(a)(i) will not apply
 to any indemnification claims pursuant to Section 9.2(b), Section
 9.2(c), Section 9.2(d), Section 9.2(e), Section 9.2(f),
 Section 9.2(g) or Section 9.3(b).

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
  

 	
 (ii)          Purchaser will not
 be required to indemnify, defend or hold harmless the Shareholder Indemnified
 Parties against, or reimburse the Shareholder Indemnified Parties for, any
 Losses pursuant to Section 9.4(a) unless and until the aggregate
 amount of Losses with respect to the matters contemplated thereby exceeds the
 Threshold Amount in the aggregate, at which point the Shareholder Indemnified
 Parties will be entitled to recover all Losses from the first Euro up to a
 maximum aggregate amount of Losses equal to the Cap; provided; however,
 that the Threshold Amount and the Cap will not apply with respect to any
 indemnification claims arising out of, resulting from or in connection with
 (A) any breach of or inaccuracy in any of the Purchaser’s Fundamental
 Representations or (B) any fraud, willful misconduct or intentional
 misrepresentation by Purchaser. For the avoidance of doubt, the limitations
 on indemnification set forth in this Section 9.5(a)(ii) will not apply
 to any indemnification claims pursuant to Section 9.4(b).

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
              (b)         Calculation of Losses. For purposes of this Article 9, the amount
 of Losses incurred or suffered by any Indemnified Party will be calculated
 net of any insurance proceeds or other amounts actually recovered by such
 Indemnified Party for such Losses under any third party insurance policy
 (excluding self-insurance arrangements) or from any third party, less the
 costs and expenses incurred by such Indemnified Party to collect any such
 insurance proceeds or other amounts (including reasonable attorneys’ fees
 and, in the case of insurance proceeds, any deductibles or self-insured
 retentions, any increases in premium or any retroactive premium adjustments
 directly related to obtaining such insurance proceeds).

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
              (c)         Materiality Qualifiers. For purposes of calculating the amount of any
 Losses resulting from the breach of any representation or warranty contained
 in this Agreement (but not for purposes of determining whether any such
 breach has occurred), all limitations and qualifications relating to
 “materiality” or “Material Adverse Effect” contained in any representation or
 warranty of this Agreement or in any certificate or other instrument delivered
 pursuant hereto or in connection herewith will be disregarded.

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
              (d)         Mitigation. Each Indemnified Party agrees to use commercially reasonable
 efforts to mitigate any Losses that such Indemnified Party asserts under this
 Article 9 to the extent required by Applicable Law; provided, however,
 that an Indemnified Party’s obligation to mitigate any Losses will not
 require such Indemnified Party to (i) initiate any Action, (ii) assume or
 incur any material liability or (iii) take any other action that would
 reasonably be expected to materially disrupt or otherwise materially affect
 such Indemnified Party’s business or operations. Any reasonable costs and
 expenses incurred by an Indemnified Party in connection with such mitigation
 will constitute Losses that may be recovered hereunder.

 

43

          Section
9.6         Third Party Claim Procedures.

	
  

 	
  

 
	
  

 	
              (a)         Notice.
 If any Indemnified Party receives notice of the assertion of any claim or the
 commencement of any Action by a third party (including a Governmental Entity)
 in respect of which indemnification will be sought hereunder (a “Third
 Party Claim”), the Indemnified Party will give the Indemnifying
 Party prompt written notice (a “Claim Notice”) thereof describing in
 reasonable detail (based on the information then available to the Indemnified
 Party) the basis for the Third Party Claim. Notwithstanding the foregoing,
 the failure or delay of the Indemnified Party to give a Claim Notice will not
 relieve the Indemnifying Party of its indemnification obligations hereunder
 except to the extent (and only to the extent) that the Indemnifying Party
 will have been materially and adversely prejudiced by such failure.

 
	
  

 	
  

 
	
  

 	
              (b)         Defense.
 Subject to the limitations set forth in this Section 9.6, the
 Indemnifying Party will have the right to elect to conduct and control the
 defense, compromise or settlement of any Third Party Claim, at its sole cost
 and expense and with counsel of its choice reasonably acceptable to the
 Indemnified Party, if the Indemnifying Party (i) has acknowledged in writing
 its indemnification obligations hereunder without qualification or
 reservation of rights and (ii) if requested by the Indemnified Party, has
 provided evidence reasonably satisfactory to the Indemnified Party of the
 Indemnifying Party’s financial ability to pay any Losses resulting from the
 Third Party Claim; provided, however, that the Indemnified
 Party may participate therein through separate counsel chosen by it and at
 its sole cost and expense. Notwithstanding the foregoing, the Indemnified
 Party will have the right to conduct and control the defense, compromise or
 settlement of any Third Party Claim with counsel of its choice and at the
 Indemnifying Party’s sole cost and expense if: (A) the Indemnifying Party
 will not have acknowledged in writing its indemnification obligations
 hereunder and given notice of its election to conduct and control the defense
 of the Third Party Claim within fifteen (15) days after the Indemnifying
 Party’s receipt of a Claim Notice; (B) the Indemnifying Party fails to
 conduct such defense diligently and in good faith; (C) the Indemnified Party
 reasonably determines that use of counsel selected by the Indemnifying Party
 to represent the Indemnified Party would present such counsel with an actual
 or potential conflict of interest; (D) the Third Party Claim seeks
 injunctive, equitable or other non-monetary relief against the Indemnified
 Party or monetary damages in excess of 125% of the Cap; or (E) the Third
 Party Claim relates to or otherwise arises in connection with any criminal or
 regulatory proceeding.

 
	
  

 	
  

 
	
  

 	
              (c)         Cooperation.
 From and after delivery of a Claim Notice of a Third Party Claim, the
 Indemnifying Party and the Indemnified Party will, and will cause their
 respective Affiliates and representatives to, cooperate with the defense or
 prosecution of such Third Party Claim, including furnishing such records,
 information and testimony and attending such conferences, discovery
 proceedings, hearings, trials and appeals as may be reasonably requested by
 the Indemnifying Party or the Indemnified Party in connection therewith. In
 connection with any Third Party Claim, the Indemnifying Party and the
 Indemnified Party will use commercially reasonable efforts to avoid
 production of confidential information to the extent permitted by Applicable
 Law and to cause all communications among employees, counsel and other third
 parties representing any party to a Third Party Claim to be made so as to
 preserve any applicable attorney-client or work-product privileges. The party
 controlling the defense of any Third Party Claim will keep the
 non-controlling party advised of the status 

 

44

	
  

 	
  

 
	
  

 	
 thereof and will consider in good faith any
 recommendations made by the non-controlling party with respect thereto.

 
	
  

 	
  

 
	
  

 	
              (d)          Settlement
 Limitations. Except as set forth below, no Third Party Claim may be
 settled or compromised (i) by the Indemnified Party without the prior written
 consent of the Indemnifying Party or (ii) by the Indemnifying Party without
 the prior written consent of the Indemnified Party, in each case which
 consent will not be unreasonably withheld, conditioned or delayed.
 Notwithstanding the foregoing: (A) the Indemnified Party will have the right
 to pay, settle or compromise any Third Party Claim, provided that in such
 event the Indemnified Party will waive all rights against the Indemnifying
 Party to indemnification under this Article 9 with respect to such
 Third Party Claim unless the Indemnified Party will have sought the consent
 of the Indemnifying Party to such payment, settlement or compromise and such
 consent will have been unreasonably withheld, conditioned or delayed; and (B)
 the Indemnifying Party will have the right to consent to the entry of a
 judgment or enter into a settlement with respect to any Third Party Claim
 without the prior written consent of the Indemnified Party if the judgment or
 settlement (1) involves only the payment of money damages (all of which will
 be paid in full by the Indemnifying Party concurrently with the effectiveness
 thereof), (2) does not encumber any of the assets of the Indemnified Party
 and does not contain any restriction or condition that would reasonably be
 expected to have a future adverse effect on the Indemnified Party or the
 conduct of its business, (3) does not include any admission of wrong doing,
 and (4) includes, as a condition to any settlement or other resolution, a
 complete and irrevocable release of the Indemnified Party from all liability
 in respect of such Third Party Claim.

 
	
  

 	
  

 
	
  

 	
              (e)          Payments.
 The Indemnifying Party(ies) will pay to the applicable Indemnified Party, by
 wire transfer of immediately available funds to an account designated in
 writing by such Indemnified Party, all amounts payable pursuant to this Section
 9.6 promptly (and in no event later than fifteen (15) days) following
 receipt from such Indemnified Party of a bill or invoice, together with
 reasonable supporting documentation, for a Loss that is the subject of
 indemnification hereunder, unless the Indemnifying Party in good faith
 disputes the Loss, in which event it will so notify the Indemnified Party. In
 any event, the Indemnifying Party will pay to the applicable Indemnified
 Party, by wire transfer of immediately available funds to an account
 designated in writing by such Indemnified Party, the amount of any Loss for
 which it is liable hereunder no later than three days following any final
 determination of such Loss and the Indemnifying Party’s liability therefor. A
 “final determination” with respect to a dispute will exist when (i) the
 parties to such dispute have reached an agreement in writing resolving such
 dispute, (ii) a court of competent jurisdiction will have entered a final and
 non-appealable order or judgment resolving such dispute or (iii) an
 arbitration or like panel to which the parties have submitted such dispute
 will have rendered a final and non-appealable determination with respect to
 such dispute. Any amounts due hereunder that are not paid when due will bear
 interest from such due date until the payment date at the prime rate as
 published in The Wall Street Journal, Eastern Edition, on the due date.

 
	
  

 	
  

 
	
  

 	
              (f)          Tax
 Contest. Notwithstanding anything to the contrary in this Section 9.6,
 the Shareholders will have the right to represent the Company’s interests in
 any Tax Contest relating to Tax liabilities for which the Shareholders would
 be required to indemnify the Purchaser Indemnified Parties pursuant to this Article
 9 and which relate to the Pre-Closing Period; provided, however,
 that the Shareholders will have no right to represent the 

 

45

	
  

 	
  

 
	
  

 	
 Company’s interests in any Tax Contest unless the
 Shareholders’ Representative will have first notified the Purchaser in
 writing of the Shareholders’ intention to do so within thirty (30) days after
 the Shareholders’ Representative’s receipt of notice of the Third Party Claim
 for Taxes and will have agreed with the Purchaser in writing that, as between
 the Purchaser and the Shareholders, the Shareholders will be liable for any
 Taxes that result from such Tax Contest. Notwithstanding the foregoing, if
 (i) the Shareholders will not have given notice of their election to
 represent the Company’s interests in the Tax Contest within such 30-day
 period, (ii) the Shareholders fail to conduct such defense diligently and in
 good faith or (iii) Purchaser reasonably determines that use of counsel
 selected by the Shareholders to represent Purchaser would present such
 counsel with an actual or potential conflict of interest, then in each such
 case Purchaser will have the right to control the defense, compromise or
 settlement of the Tax Contest with counsel of its choice at the Shareholders’
 sole cost and expense. Notwithstanding the foregoing, the Shareholders will
 not be entitled to settle, either administratively or after the commencement
 of litigation, any Tax Contest without the prior written consent of
 Purchaser, which consent may be withheld in the sole discretion of Purchaser,
 unless the Shareholders will have indemnified Purchaser in a manner
 reasonably acceptable to Purchaser against the effects of any such
 settlement.

 

          Section
9.7     Direct Claim Procedures. If the
Indemnified Party has a claim for indemnification hereunder that does not
involve a Third Party Claim, the Indemnified Party will give the Indemnifying
Party written notice thereof describing in reasonable detail (based on the
information then available to the Indemnified Party) the basis for such claim
and the amount of the Losses claimed by the Indemnified Party (the “Claimed
Amount”) in respect thereof. Notwithstanding the foregoing, the
failure or delay of the Indemnified Party to give such notice will not relieve
the Indemnifying Party of its indemnification obligations hereunder except to
the extent (and only to the extent) that the Indemnifying Party will have been
materially and adversely prejudiced by such failure. Within thirty (30) days
after delivery of such notice, the Indemnifying Party will deliver to the
Indemnified Party a written response in which the Indemnifying Party will (i)
agree that the Indemnified Party is entitled to receive all of the Claimed
Amount (in which case such response will be accompanied by a payment by the
Indemnifying Party of the Claimed Amount), (ii) agree that the Indemnified
Party is entitled to receive part, but not all, of the Claimed Amount (the “Agreed
Amount”) (in which case such response will be accompanied by payment
by the Indemnifying Party of the Agreed Amount), or (iii) in good faith dispute
that the Indemnified Party is entitled to receive any of the Claimed Amount. If
the Indemnifying Party timely disputes the payment of all or part of the
Claimed Amount, the Indemnifying Party and the Indemnified Party will negotiate
in good faith to resolve such dispute as promptly as practicable. If such
dispute is not resolved within thirty (30) days following the delivery by the
Indemnifying Party of such response, the Indemnified Party and the Indemnifying
Party will each have the right to submit such dispute for resolution to a court
of competent jurisdiction pursuant to Section 10.2.

          Section
9.8     Tax Treatment of Indemnification Payments.
To the extent permitted by Applicable Law, all indemnification payments made
under this Agreement will be treated by the parties as an adjustment to the
Purchase Price for Tax purposes. In the event that any Governmental Entity
successfully asserts that such indemnification payments constitute taxable
income, then such indemnification payments will be made on an after-Tax basis.

          Section
9.9     Effect of Investigation. The right to
indemnification and payment of Losses under this Article 9 based on a
breach of any of the representations, warranties, covenants or agreements set
forth in this Agreement or any ancillary agreement relating hereto will not be
affected

46

by any investigation conducted at any time, or any
knowledge acquired (or capable of being acquired) at any time, whether before
or after the execution and delivery of this Agreement or the Closing Date, by
or on behalf of any of the parties with respect to the accuracy or inaccuracy
of or compliance with any such representations, warranties, covenants or
agreements. The waiver of any condition based on the accuracy of any such
representation or warranty, or on the performance of or compliance with any such
covenant or agreement, will not affect any party’s right to indemnification,
payment of Losses or any other remedy based on a breach of any such
representation, warranty, covenant or agreement.

          Section
9.10     No Contribution. Each of the Shareholders
acknowledges and agrees that its obligation to indemnify, defend and hold
harmless the Purchaser Indemnified Parties pursuant to this Article 9 is
an obligation solely of the Shareholders and that from and after the Closing,
none of the Shareholders will be entitled to contribution from, subrogation to
or recovery against Purchaser, the Company or their Affiliates (including,
without limitation, Parent) with respect to any Losses imposed on or incurred
by any of the Shareholders in connection with this Agreement or the
transactions contemplated hereby arising out of the Closing, relating to or in
respect of any period prior to the Closing or any breach by the Company or any
of the Shareholders of any of their representations, warranties, covenants or
agreements set forth in this Agreement. Nothing herein will affect any right of
contribution of the Shareholders among themselves.

ARTICLE 10.

MISCELLANEOUS

          Section
10.1     Entire Agreement. This Agreement,
including the Disclosure Schedule and exhibits, the ancillary agreements
relating hereto and the Confidentiality Agreement constitutes the entire
agreement between the parties and supersedes all prior discussions,
negotiations and understandings relating to the subject matter hereof, whether written
or oral (including any letter of intent or term sheet). 

          Section
10.2     Governing Law; Venue. This Agreement
will be construed under and governed by the laws of Belgium without regard to the
conflicts of law principles of any jurisdiction. Any action brought to enforce
any provision of this Agreement will be brought in a French-speaking court of
competent jurisdiction sitting in Brussels, Belgium, and the parties hereto
hereby consent to the jurisdiction of such courts. 

          Section
10.3     Headings; Interpretation; Absence of
Presumption.

	
  

 	
  

 
	
  

 	
                (a)          The
 table of contents, table of defined terms and headings in this Agreement are
 included for convenience of reference only and will not affect in any way the
 meaning or interpretation of this Agreement.

 
	
  

 	
  

 
	
  

 	
                (b)          In
 this Agreement, except to the extent otherwise provided herein or the context
 otherwise requires: (i) the definition of terms herein will apply equally to
 the singular and the plural; (ii) any pronoun will include the corresponding
 masculine, feminine and neuter forms; (iii) the words “include,” “includes”
 or “including” will be deemed to be followed by the words “without
 limitation”; (iv) the words “herein,” “hereof,” “hereto,” “hereunder” and
 words of similar import will be deemed references to this Agreement as a
 whole and not to any particular Section or 

 

47

	
  

 	
  

 
	
  

 	
 other provision of this
 Agreement; (v) the use of the word “or” is not intended to be exclusive
 unless expressly indicated otherwise; (vi) the words “will” and “shall” have
 equal force and effect; (vii) reference to any Article, Section, Exhibit,
 Annex or Schedule will mean such Article or Section of, or such Exhibit,
 Annex or Schedule to, this Agreement, as the case may be, and references in
 any Section or definition to any clause means such clause of such Section or
 definition; (viii) reference to any Applicable Law will mean such Applicable
 Law (including all rules and regulations promulgated thereunder) as amended, modified,
 codified or reenacted, in whole or in part, and in effect at the time of
 determining compliance or applicability; and (ix) reference to “€” or “Euros”
 will mean, and all payments hereunder will be made in, the lawful currency of
 the Euro zone of the European Union.

 
	
  

 	
  

 
	
  

 	
                (c)          Each party acknowledges
 and agrees that the parties have participated jointly in the negotiation and
 drafting of this Agreement. In the event that an ambiguity or a question of
 intent or interpretation arises, this Agreement will be construed as if
 drafted jointly by the parties, and no presumption or burden of proof will
 arise favoring or disfavoring any party by virtue of the authorship of any
 provision of this Agreement. 

 

          Section
10.4     Notices. All notices required or
permitted to be given under this Agreement will be in writing and will be
deemed given (a) when delivered in person, (b) three business days after being
deposited in the United States mail, postage prepaid, registered or certified
mail addressed as set forth below, (c) on the next business day after being
deposited with a nationally recognized overnight courier service addressed as
set forth below or (d) upon dispatch if sent by facsimile with telephonic
confirmation of receipt from the intended recipient to the facsimile number set
forth below (or to such other respective addresses as may be designated by
notice given in accordance with the provisions of this Section, except that any
notice of change of address will not be deemed given until actually received by
the party to whom directed):

	
  

 	
  

 	
  

 
	
  

 	
 If to the Shareholders: 

 
	
  

 	
  

 	
  

 
	
  

 	
  

 	
 Guy Martinot

 
	
  

 	
  

 	
 Rue Grande Duchesse Joséphine Charlotte 71

 
	
  

 	
  

 	
 L-9515

 
	
  

 	
  

 	
 Wiltz, Luxembourg

 
	
  

 	
  

 	
 Tel. No.: 32/474/88;30;20 

 
	
  

 	
  

 	
  

 
	
  

 	
  

 	
 with a copy to:

 
	
  

 	
  

 	
  

 
	
  

 	
  

 	
 Van Dievoet & Vandebeek

 
	
  

 	
  

 	
 Avenue Franklin D. Rooseveltlaan 89 B7 

 
	
  

 	
  

 	
 1050 Brussels - Belgium 

 
	
  

 	
  

 	
 Attention: Victor Vandebeek

 
	
  

 	
  

 	
 Tel No: 32-2-640.30.10

 
	
  

 	
  

 	
 Fax No.: 32-2-640.62.88

 
	
  

 	
  

 	
  

 
	
  

 	
 If to Purchaser:

 
	
  

 	
  

 	
  

 
	
  

 	
  

 	
 c/o MGC Diagnostics Corporation

 

48

	
  

 	
  

 	
  

 
	
  

 	
  

 	
 350 Oak Grove Parkway

 
	
  

 	
  

 	
 Saint Paul, Minnesota 55127-8599

 
	
  

 	
  

 	
 Attention: Wesley W. Winnekins

 
	
  

 	
  

 	
 Tel. No.: (651) 766-3497

 
	
  

 	
  

 	
 Fax No.: (651) 484-8941

 
	
  

 	
  

 	
  

 
	
  

 	
  

 	
 with a copy to:

 
	
  

 	
  

 	
  

 
	
  

 	
  

 	
 Lindquist & Vennum LLP

 
	
  

 	
  

 	
 4200 IDS Center

 
	
  

 	
  

 	
 80 South Eighth Street

 
	
  

 	
  

 	
 Minneapolis, Minnesota 55402

 
	
  

 	
  

 	
 Attention: Thomas G. Lovett, IV

 
	
  

 	
  

 	
 Tel. No.: (612) 371-3270

 
	
  

 	
  

 	
 Fax No.: (612) 371-3207

 

          Section
10.5     Counterparts. This Agreement may be
executed and delivered (including by facsimile, “pdf” or other electronic
transmission) in any number of counterparts, each of which will be deemed an
original and all of which will constitute one agreement.

          Section
10.6     Amendments and Waivers. This Agreement
may not be amended or waived except by an instrument in writing signed, in the
case of an amendment, by an authorized representative of each party to this
Agreement or, in the case of a waiver, by the party against whom such waiver is
to be effective. No course of conduct or failure or delay by any party in
exercising any right, power or privilege hereunder will operate as a waiver
thereof, nor will any single or partial exercise thereof preclude any other or
further exercise thereof or the exercise of any other right, power or
privilege. The rights and remedies provided herein will be cumulative and not
exclusive of any rights or remedies provided by law.

          Section
10.7     Severability of Invalid Provision.
Wherever possible, each provision hereof will be interpreted in such manner as
to be effective and valid under Applicable Law, but if any one or more of the
provisions contained herein will, for any reason, be held to be invalid,
illegal or unenforceable in any respect by a court of competent jurisdiction or
other authority, such provision will be ineffective to the extent, but only to the
extent, of such invalidity, illegality or unenforceability without invalidating
the remainder of such invalid, illegal or unenforceable provision or provisions
or any other provisions hereof. Upon such a determination, the parties will
negotiate in good faith to modify this Agreement so as to effect the original
intent of the parties as closely as possible to the fullest extent permitted by
Applicable Law in a mutually acceptable manner in order that the transactions
contemplated hereby be consummated as originally contemplated to the fullest
extent possible.

          Section
10.8     Benefit; Assignability. This Agreement
is enforceable by, and inures to the benefit of, the parties to this Agreement
and their respective successors and assigns. Neither this Agreement nor any
right, interest or obligation under this Agreement may be assigned by any party
to this Agreement without the prior written consent of the other parties hereto
and any attempt to do so will be void; provided, however, that
Purchaser may assign any or all of its rights and interests hereunder (i) to
one or more of its Affiliates, (ii) to any lender(s) (including any agent for
any lender(s)) as collateral security for any indebtedness of Purchaser and its
Affiliates (including, without limitation, Parent), and (iii) to any subsequent
purchaser of Purchaser or any material portion 

49

of its assets or business (whether such sale is
structured as a sale of equity, a sale of assets, a merger or otherwise).

          Section
10.9     Specific Performance. The parties
agree that irreparable and ongoing damages, for which monetary damages (even if
available) would not be an adequate remedy, would occur in the event that any
provision of this Agreement were not performed in accordance with its specific
terms or otherwise were breached. Accordingly, each party agrees that in the
event of any actual or threatened breach of this Agreement by the other party,
the non-breaching party will be entitled, in addition to all other rights and
remedies that it may have, to obtain injunctive or other equitable relief
(including a temporary restraining order, a preliminary injunction and a final
injunction) to prevent any actual or threatened breach of any of such
provisions and to enforce such provisions specifically, without the necessity
of posting a bond or other security or of proving actual damages. 

          Section
10.10    Disclosure Schedule. The Shareholders have
included references in the Disclosure Schedule to the particular Section of the
Agreement that relates to each disclosure. An item disclosed in one section or
subsection of this Disclosure Schedule will be deemed disclosed in another part
of this Disclosure Schedule as an exception to another representation,
warranty, covenant or agreement only to the extent that it is reasonably
apparent from the nature of the disclosure that such disclosure is also an
exception to such other representation, warranty, covenant or agreement. In the
event of any inconsistency between the statements in the body of this Agreement
and those in the Disclosure Schedule (other than an exception expressly set
forth as such in the Disclosure Schedule with respect to a specifically
identified representation or warranty), the statements in the body of this
Agreement will control. 

          Section
10.11    Attorneys’ Fees. In the event of any
litigation or other action at law or suit in equity to enforce this Agreement
or the rights of any party hereunder, the prevailing party in such litigation,
action or suit will be entitled to receive from the other party its reasonable
attorneys’ fees and other reasonable costs and expenses incurred therein.

          Section
10.12    No Third Party Beneficiaries. Except for Section
6.9 and Article 9, which are intended to benefit and to be
enforceable by the parties specified therein, nothing in this Agreement,
express or implied, is intended or will be construed to confer upon any third
party other than the parties hereto and their respective successors and
permitted assigns any right, remedy or claim under or by reason of this
Agreement.

          Section
10.13    Shareholders’ Representative. 

	
  

 	
  

 
	
  

 	
                 (a)          Each
 of the Shareholders hereby appoints and constitutes Guy Martinot (the “Shareholders’
 Representative”) as its true and lawful agent and
 attorney-in-fact, with full power of substitution and resubstitution, to act
 for and on behalf of such Shareholder for the purpose of taking any and all
 actions by such Selling Party specified in or contemplated by this Agreement,
 including as agent and attorney-in-fact for such Shareholder (i) in
 connection with any amendment or waiver of any provision of this Agreement
 pursuant to Section 10.6; (ii) in connection with the receipt of all
 agreements, certificates and other documents to be delivered by Purchaser at
 the Closing pursuant to Section 2.2(b); (iii) for the purpose of
 giving and receiving notices on behalf of such Shareholder under this
 Agreement; and (iv) for the purpose of defending, compromising or settling
 all indemnity claims pursuant to 

 

50

	
  

 	
  

 
	
  

 	
 Article 9,
 and conducting negotiations with Purchaser under this Agreement. The
 Shareholders’ Representative hereby accepts his appointment as the
 Shareholders’ Representative hereunder and agrees that he will not be entitled
 to any fee or other compensation for the performance of the Shareholders’
 Representative’s services hereunder.

 
	
  

 	
  

 
	
  

 	
                (b)          Any
 decision, act, consent or instruction of the Shareholders’ Representative
 under this Agreement will constitute a decision of each Shareholder and will
 be final, binding and conclusive upon each Shareholder, and Purchaser will be
 entitled to rely upon any such decision, act, consent or instruction of the
 Shareholders’ Representative as being the decision, act, consent or
 instruction of each Shareholder.

 
	
  

 	
  

 
	
  

 	
                (c)          The
 limited power of attorney granted hereby is coupled with an interest and will
 (i) survive and not be affected by the subsequent death, incapacity,
 disability, dissolution, termination or bankruptcy, as applicable, of any
 Shareholder, and (ii) extend to the successors, assigns, heirs, executors,
 administrators, legal representatives and beneficiaries, as applicable, of
 each Shareholder.

 
	
  

 	
  

 
	
  

 	
                (d)          Each
 Shareholder hereby agrees to indemnify, defend and hold harmless the
 Shareholders’ Representative from and against any and all loss, liability or
 expense (including the reasonable fees and expenses of the Shareholders’
 Representative’s attorneys) arising out of or in connection with any act or
 failure to act of the Shareholders’ Representative hereunder, except to the
 extent that such loss, liability or expense is finally adjudicated to have
 been primarily caused by the gross negligence or willful misconduct of the
 Shareholders’ Representative. 

 

51

          Section
10.14    Other Defined Terms. The following terms
will have the meanings defined for such terms in the Sections set forth below:

	
  

 	
  

 	
  

 	
  

 
	
 Term

 	
  

 	
  

 	
 Location

 
	
  

 	
  

 
	
 Accounts Receivable

 	
 Section 3.29

 
	
 Action

 	
 Section 3.19

 
	
 Agreed Amount

 	
 Section 9.7

 
	
 Agreement

 	
 Preamble

 
	
 Alternative Transaction

 	
 Section 6.5

 
	
 Anti-Corruption Laws

 	
 Section 3.14(c)

 
	
 Authorizations

 	
 Section 3.7

 
	
 Claim Notice

 	
 Section 9.6(a)

 
	
 Claimed Amount

 	
 Section 9.7

 
	
 Closing

 	
 Section 2.1

 
	
 Closing Cash Consideration

 	
 Section 1.3

 
	
 Closing Date

 	
 Section 2.1

 
	
 Company

 	
 Recitals

 
	
 Company Products

 	
 Section 3.23(a)

 
	
 Conflict Minerals

 	
 Section 3.15

 
	
 Department

 	
 Section 3.22(c)

 
	
 Disclosing Party

 	
 Section 6.9(d)

 
	
 ENVIRON

 	
 Section 6.13

 
	
 Environmental Investigation

 	
 Section 6.13

 
	
 G. Martinot Debt Obligation

 	
 Section 6.15

 
	
 Governmental Official

 	
 Section 3.14(c)

 
	
 In-License

 	
 Section 3.23(d)

 
	
 Insurance Policies

 	
 Section 3.24

 
	
 Laurent Martinot Service Agreement

 	
 Section 2.2(a)(xii)

 
	
 Liabilities

 	
 Section 3.8(b)

 
	
 Losses

 	
 Section 9.2

 
	
 Material Contracts

 	
 Section 3.20

 
	
 Out-Licenses

 	
 Section 3.23(d)

 
	
 Personal Property Leases

 	
 Section 3.11

 
	
 Purchase Price

 	
 Section 1.3

 
	
 Purchaser

 	
 Preamble

 
	
 Purchaser Indemnified Parties

 	
 Section 9.2

 
	
 Response Actions

 	
 Section 6.13

 
	
 Shareholder Indemnified Parties

 	
 Section 9.4

 
	
 Shareholders

 	
 Preamble

 
	
 Shareholders’ Representative

 	
 Section 10.13(a)

 
	
 Shares

 	
 Recitals

 
	
 Specified Social Security Contribution

 	
 Section 6.14

 
	
 Subsidiary Transfers

 	
 Secton 6.14

 
	
 Terminated Agreements

 	
 Section 2.2(a)(viii)

 
	
 Termination Date

 	
 Section 6.1(a)

 
	
 Third Party Claim

 	
 Section 9.6(a)

 
	
 Threshold Amount

 	
 Section 9.5(a)(i)

 
	
 Work Permits

 	
 Section 3.22(c)

 

 [signatures on following page]

52

          IN
WITNESS WHEREOF, the parties hereto have caused this Stock Purchase Agreement
to be executed by their duly authorized representatives as of the day and year
first above written.

	
  

 	
  

 	
  

 
	
  

 	
 PURCHASER:

 
	
  

 	
  

 	
  

 
	
  

 	
 MGC DIAGNOSTICS BELGIUM S.P.R.L.

 
	
  

 	
  

 	
  

 
	
  

 	
 By:

 	
 /s/ Todd M. Austin

 
	
  

 	
  

 	
 Name: Todd M. Austin

 
	
  

 	
  

 	
 Its: Gérant

 
	
  

 	
  

 	
  

 
	
  

 	
  

 	
  

 
	
  

 	
 SHAREHOLDERS:

 
	
  

 	
  

 	
  

 
	
  

 	
 /s/ Guy Martinot

 
	
  

 	
 Name: Guy Martinot

 
	
  

 	
  

 	
  

 
	
  

 	
 /s/ Jean-Benoît Martinot

 
	
  

 	
 Name: Jean-Benoît Martinot

 

Exhibit
A

Defined Terms

          “Aerocrine
License Agreement” means that certain Patent License and Settlement
Agreement, dated March 21, 2013, by and between Aerocrine AB and the Company.

          “Aerocrine
License Agreement Amendment” means that certain Amendment 1 to
Patent License and Settlement Agreement, in form and substance satisfactory to
Purchaser, to be entered into between Aerocrine AB and the Company.

          “Affiliate”
means, with respect to any Person, any other Person that, directly or
indirectly through one or more intermediaries, Controls, is Controlled by, or
is under common Control with, such Person. 

          “Applicable
Law” means all laws, statutes, treaties, rules, codes, ordinances,
regulations, rulings, orders, judgments, decrees, permits, certificates and
licenses of any Governmental Entity, including all interpretations of any of
the foregoing by a Governmental Entity having jurisdiction or any arbitrator or
other judicial or quasi-judicial tribunal (including without limitation those
pertaining to health, safety and the environment).

          “Balance
Sheet Date” means December 31, 2013.

          “Business”
means the business conducted by the Company and its Subsidiaries, including (a)
the development, manufacture, sale, lease, distribution and maintenance of
cardio-respiratory health products and (b) the exploration or consideration of
various inventions, improvements, technologies, products, methods, processes or
ideas, whether or not actually commercialized, arising out of or relating to
the Walloon Region Grant Agreement. 

          “Business Day”
means any day of the week other than (i) Saturday and Sunday and (ii) any day
which banks located in Brussels, Belgium are generally closed for business.

          “Cash”
means the cash and cash equivalents of the Company and its Subsidiaries
(including marketable securities and short-term investments) calculated in
accordance with GAAP, applied on a basis consistent with the preparation of the
Financial Statements (it being understood that such cash and cash equivalents
will be reduced by the aggregate amount of all checks that remain outstanding
as of the Closing).

          “Code”
means the Belgian Code on Income Tax 1992.

          “Company
Indebtedness” means, with respect to the Company and its
Subsidiaries, all (i) indebtedness for borrowed money, (ii) amounts past due
(or those that are subject to an extension) relating to social security
contributions and (iii) amounts that may be subject to reimbursement arising
out of or relating to the Walloon Region Grant Agreement, including the
following:

	
  

 	
  

 
	
  

 	
           (a)
 all obligations evidenced by bonds, debentures, notes, lines of credit or
 other similar instruments or debt securities; 

 
	
  

 	
  

 
	
  

 	
           (b)
 all indebtedness created or arising under any conditional sale or other title
 retention agreement with respect to property acquired by the Company or any
 of its

 

Exhibit A-1

	
  

 	
  

 
	
  

 	
 Subsidiaries (even though the rights and remedies of
 the seller or lender under such agreement in the event of default are limited
 to repossession or sale of such property); 

 
	
  

 	
  

 
	
  

 	
           (c)
 all indebtedness secured by a purchase money mortgage or other Encumbrance to
 secure all or part of the purchase price of the property subject to such
 Encumbrance; 

 
	
  

 	
  

 
	
  

 	
           (d)
 all obligations under leases which have been or must be, in accordance with
 GAAP, recorded as capital leases in respect of which the Company or any of
 its Subsidiaries is liable as lessee; 

 
	
  

 	
  

 
	
  

 	
           (e)
 any Liability in respect of banker’s acceptances or letters of credit; 

 
	
  

 	
  

 
	
  

 	
           (f)
 all indebtedness referred to above which is directly or indirectly guaranteed
 by the Company or any of its Subsidiaries or which they have agreed
 (contingently or otherwise) to purchase or otherwise acquire or in respect of
 which it has otherwise assured a creditor against loss; 

 
	
  

 	
  

 
	
  

 	
           (g)
 all interest, fees, penalties, prepayment premiums and other expenses owed
 with respect to the indebtedness referred to above or owing as a result of
 the transactions contemplated hereby; 

 
	
  

 	
  

 
	
  

 	
           (h)
 all obligations issued or assumed as the deferred purchase price of property
 or services (including all obligations under any acquisition agreements
 pursuant to which the Company or any of its Subsidiaries is, or may be,
 responsible for any earn-out, note payable or other contingent payments); 

 
	
  

 	
  

 
	
  

 	
           (i)
 all (i) past due social security contributions or (ii) social security
 contributions that are subject to an extension; 

 
	
  

 	
  

 
	
  

 	
           (j)
 all amounts subject to reimbursement at any time to the Walloon Region that
 arise out of or relate to the Walloon Region Grant Agreement; and 

 
	
  

 	
  

 
	
  

 	
           (k)
 all management fees, board fees or other fees payable to the Shareholders or
 any Affiliate of the Shareholders.

 

          “Company
Intellectual Property Agreements” means the In-Licenses and the
Out-Licenses, collectively.

          “Company
Intellectual Property Rights” means the Company Registered
Intellectual Property Rights and all unregistered Intellectual Property Rights
of the Company and its Subsidiaries.

          “Company
Registered Intellectual Property Rights” means all Registered
Intellectual Property Rights owned by, or filed in the name of, the Company or
any of its Subsidiaries.

          “Confidentiality
Agreement” means the Mutual Confidentiality and Non-Disclosure
Agreement, effective as of August 14, 2013, between Parent and the Company.

          “Confidential
Information” means all trade secrets, know-how and other
confidential or proprietary information and data of or relating to the Company,
its Subsidiaries or the Business. Notwithstanding the foregoing, Confidential
Information will not include information that (1) is or

Exhibit A-2

has become known to the public, other than by a breach
of this Agreement by any of the Shareholders or (2) is or has been lawfully
obtained by any of the Shareholders from an independent party under no
obligation of confidentiality to Purchaser, the Company or any of its
Subsidiaries and without a breach of this Agreement.

          “Contracts”
means all contracts, agreements, leases, indentures, purchase orders, sales
orders, mortgages, notes, bonds or other binding commitments, whether written
or oral.

          “Control”
means the power, directly or indirectly, to direct or cause the direction of
the management and policies of another Person, whether through the ownership of
voting securities, by contract or otherwise.

          “Copyrights”
means copyrights, copyright registrations and applications therefor, and all
other rights corresponding thereto, including moral and economic rights of
authors and inventors, however denominated.

          “Disclosure
Schedule” means the disclosure schedules attached to and made part
of this Agreement.

          “Domain Name”
means any or all of the following: domain names, uniform resource locators (“URLs”)
and other names and locators associated with the Internet.

          “Encumbrance”
means any mortgage, lien, claim, pledge, option, charge, security interest,
deed of trust, deed to secure debt, restriction on use, usufructs (“usufruit”),
long term lease rights (“droits emphytéose)”, easements (“servitude”) or
transfer or other encumbrance.

          “Environmental
Laws” means any Applicable Law or other legal requirement pertaining
to pollution, the environment or the health or safety of the public or
employees.

          “Existing
Real Property Leases” means: (a) the domiciliation agreement for a
registered office located at, 8 rue du Maréchal de Lattre de Tassigny, 59000
Lille (France); (b) the commercial lease agreement for a property located at
Centre Routier de Transports, Rue du Pic au vent, 59810 Lesquin (France); (c)
the commercial lease agreement for a property located at 2 avenue Elsa Triolet,
Buropôl, 13008 Marseille (France); (d) the lease of office space in
BioMedizinZentrum, 1st floor, 37 square meters, located at e
Universitätsstrasse 136, 44799 Bochum; and (e) the lease of a property located
at Via Germania 14, cap 35127, Padova (PD) (Italy). 

          “FCPA”
means the U.S. Foreign Corrupt Practices Act of 1977, 15 U.S.C. §§ 78m and
78dd-1, et seq.

          “Financial
Statements” means the annual consolidated accounts of the Company
and its Subsidiaries as of December 31, 2012 and December 31, 2013, and the
annual consolidated statements of income for the fiscal year periods ended
December 31, 2012 and December 31, 2013, as prepared by Grant Thornton. Copies
of the Financial Statements are attached hereto as Exhibit D.

          “Fundamental
Representations” means (1) with respect to the Shareholders, the
representations and warranties of the Shareholders contained in Section 3.1
(Organization; Qualification), Section 3.2 (Capitalization), Section
3.3 (Subsidiaries; Ownership of Other Securities), Section 3.8(c)
(Indebtedness), Section 3.8(d) (Working Capital), Section 3.8(e) (Net

Exhibit A-3

Assets), Section 3.8(f) (Aggregate Liability
for Specified Items), Section 3.8(g) (Walloon Region Contracts), Section
3.12 (Title to Properties), Section 3.23 (Intellectual Property), Section
3.25 (No Brokers), Section 3.32 (Directors), Section 4.1
(Power; Authority; Capacity) and Section 4.2 (Ownership of Shares;
Ownership of BMG Medical S.A.) and (2) with respect to Purchaser, the
representations and warranties of the Purchaser contained in Section 5.1
(Authority), Section 5.2 (Organization and Qualification) and Section 5.4
(No Brokers).

          “Funds Flow
Agreement” means the Funds Flow Agreement to be entered into at the
Closing, by and among Purchaser and the Shareholders, substantially in the form
attached hereto as Exhibit E to be entered into among Purchaser and the
Shareholders at the Closing.

          “GAAP”
means generally accepted accounting principles of Belgium, consistently
applied. 

          “Governmental
Entity” means any supranational, foreign, national, federal, state,
departmental, county, municipal, regional or other Governmental Entity, agency,
board, body, instrumentality or court.

          “Hazardous
Material” means any substance or material that is prohibited,
controlled or regulated by any Governmental Entity pursuant to Environmental
Laws including pollutants, contaminants, dangerous goods or substances, toxic
or hazardous substances or materials, wastes (including solid non-hazardous
wastes and subject wastes), all as defined in or pursuant to any Environmental
Law. Hazardous Materials will include, without limitation, petroleum products,
agricultural chemicals, asbestos, urea formaldehyde and polychlorinated
biphenyls, regardless of whether specifically listed or designated as a
hazardous material under any Environmental Law

          “Identified
Claim” means the claim identified on Schedule A to this
Agreement.

          “Incremental
Subsidiary Purchase Price” means the amount by which the aggregate
purchase price paid by the Company to consummate the Subsidiary Transfers
exceeds three (3) Euros. 

          “Indemnified
Liabilities” means: 

	
  

 	
  

 
	
  

 	
           (a)
 all Liabilities arising out of or relating to any Pre-Closing Period Actions;
 

 
	
  

 	
  

 
	
  

 	
           (b)
 all Company Indebtedness existing as of the Closing Date (including, without
 limitation, for the avoidance of doubt, (i) any Company Indebtedness that,
 for whatever reason, is not taken into account in the calculation of the
 Closing Cash Consideration and (ii) any amounts that become owing to the
 Walloon Region arising out of or relating to the Walloon Region Grant
 Agreement); 

 
	
  

 	
  

 
	
  

 	
           (c)
 all Liabilities arising out of or relating to the Plans (including the
 termination or winding up of any such Plans) or any other benefit or
 compensation plan, program, agreement or arrangement sponsored, maintained,
 administered or contributed to by the Company or any prior to or on the
 Closing Date; 

 
	
  

 	
  

 
	
  

 	
           (d)
 all Liabilities arising out of or relating to the employment, potential
 employment or termination of employment of any Person prior to or on the
 Closing Date, including (i) all Liabilities for salaries, wages, commissions,
 bonuses, deferred compensation, vacation pay,

 

Exhibit A-4

	
  

 	
  

 
	
  

 	
 sick pay, paid time off and other employee benefits
 of any nature (including any retiree benefits) that are payable or owed to
 any current or former employee or independent contractor in respect of
 services rendered, or welfare benefit claims incurred, prior to or on the
 Closing Date, (ii) all Liabilities arising out of or relating to claims by
 any current or former employee or independent contractor for workers’
 compensation or disability benefits payable on account of any injury, illness
 or other condition arising prior to or on the Closing Date, (iii) all
 Liabilities (including severance and related obligations) arising out of or
 relating to the termination of any employee or independent contractor prior to
 or on the Closing Date, and (iv) all Liabilities arising out or relating to
 any misclassification of any Person, as white collar (employee), blue collar
 employee (ouvrier) or independent contractor;

 
	
  

 	
  

 
	
  

 	
           (e)
 all Liabilities arising out of or relating to a breach or default by the
 Company or any of its Subsidiaries prior to or on the Closing Date of any
 Contract to which the Company or any of its Subsidiaries is a party; 

 
	
  

 	
  

 
	
  

 	
           (f)
 all Liabilities arising out of or relating to any failure of the Company to
 comply prior to or on the Closing Date with any Applicable Law (including,
 without limitation, any Environmental Law); 

 
	
  

 	
  

 
	
  

 	
           (g)
 all Liabilities arising out of or relating to any failure of the Company to
 pay any amounts (including any interest, penalties, fees and additions
 imposed by any Governmental Entity with respect to such amounts) to any state
 abandoned property administrator or other public official pursuant to any
 abandoned property, escheat or similar law that is attributable to abandoned
 or unclaimed property the liability for which accrued on or prior to the
 Closing Date; 

 
	
  

 	
  

 
	
  

 	
           (h)
 any accounts payable or other accrued expenses arising prior to or at the
 Closing that the Company or any of its Subsidiaries fail to pay in the
 ordinary course of business consistent with past practice (i.e.,
 in the absence of the transactions contemplated hereby); 

 
	
  

 	
  

 
	
  

 	
           (i)
 all Liabilities arising prior to the Closing to indemnify, reimburse or
 advance amounts to any director, officer, employee or agent of the Company or
 any of its Subsidiaries; and

 
	
  

 	
  

 
	
  

 	
           (j)
 all Liabilities arising out of or relating to any product liability or
 product warranty claims that arise out of or related to the Pre-Closing
 Period. 

 

          “Indemnified
Party” means a party entitled to indemnification pursuant to Article
9.

          “Indemnifying
Party” means a party required to provide indemnification pursuant to
Article 9.

          “Intellectual
Property Rights” means all of the following in any jurisdiction
throughout the world: 

	
  

 	
  

 
	
  

 	
           (a)
 all inventions (whether patentable or unpatentable and whether or not reduced
 to practice), all improvements thereto, and all Patents; 

 

Exhibit A-5

	
  

 	
  

 
	
  

 	
           (b)
 all trademarks, service marks, trade dress, logos, slogans, trade names,
 corporate names, Domain Names and rights in telephone numbers, together with
 all translations, adaptations, derivations, and combinations thereof and
 including all goodwill associated therewith, and all applications,
 registrations, and renewals in connection therewith; 

 
	
  

 	
  

 
	
  

 	
           (c)
 all copyrightable works, all Copyrights, and all applications, registrations,
 and renewals in connection therewith; 

 
	
  

 	
  

 
	
  

 	
           (d)
 all mask works and all applications, registrations, and renewals in
 connection therewith; 

 
	
  

 	
  

 
	
  

 	
           (e)
 all trade secrets and confidential business information (including ideas,
 research and development, know-how, formulas, compositions, manufacturing and
 production processes and techniques, technical data, designs, drawings,
 specifications, customer and supplier lists, pricing and cost information,
 and business and marketing plans and proposals); 

 
	
  

 	
  

 
	
  

 	
           (f)
 all computer software (including source code, executable code, data,
 databases and related documentation); 

 
	
  

 	
  

 
	
  

 	
           (g)
 all advertising and promotional materials; 

 
	
  

 	
  

 
	
  

 	
           (h)
 all other proprietary rights; and 

 
	
  

 	
  

 
	
  

 	
           (i)
 all copies and tangible embodiments thereof (in whatever form or medium).

 

          “Knowledge of
the Shareholders” means the actual knowledge of: (a) any of the
Shareholders; (b) any of the directors (“administrateurs”, “gérants”,
“Geschäftsführer”) or (c) any employee of the Company or any of its
Subsidiaries being part of the management team; provided, however,
that such persons will be charged with such knowledge as they would have
received had they made reasonable inquiry of such employees and other personnel
of the Company or its Subsidiaries, as applicable, having responsibility over
the matters represented. 

          “Leased Real
Property” means each parcel of real property leased by the Company
or any of its Subsidiaries (as lessee or lessor), as indicated on Section
3.10(a) of the Disclosure Schedule.

          “Liability”
means any liability or obligation of any kind or nature (whether known or
unknown, whether asserted or unasserted, whether absolute or contingent,
whether accrued or unaccrued, whether liquidated or unliquidated, and whether
due or to become due), including any liability for Taxes.

          “made
available” means when used with respect to any material or item
that, on or before 5:00 p.m. Brussels time on the second (2nd)
Business Day immediately preceding the date of this Agreement, the Shareholders
have posted (or caused to be posted) a true, complete and correct copy of such
material or item to the online data room entitled “Jewell 2014” hosted by
Merrill Datasite in connection with the transactions contemplated hereby.

          “Material
Adverse Effect” means, with respect to any Person, any effect, or
series of effects that, individually or in the aggregate, materially adversely
affects (a) the business, properties, financial condition, operations or
prospects of such Person, or (b) the ability of such Person to

Exhibit A-6

perform its obligations under this Agreement or any
agreements attached hereto or made a part hereof.

          “New Service
Agreement” means a Service Agreement, in the form attached hereto as
Exhibit F, to be entered into at the Closing by and between the Company
and BMG Medical SA.

          “Owned Real
Property” means each parcel of real property owned by the Company or
any of its Subsidiaries (as lessee or lessor), as indicated on Section
3.10(a) of the Disclosure Schedule.

          “Parent”
means MGC Diagnostics Corporation, a Minnesota corporation and the ultimate
parent of Purchaser.

          “Patents”
means patents and applications therefor and all reissues, revisions, divisions,
renewals, extensions, provisionals, continuations, continuations-in-part
thereof and all patent disclosures and reexaminations relating thereto.

          “Payoff
Letters” means the payoff letters delivered pursuant to Section
2.2(a)(vi).

          “Permitted
Encumbrances” means (a) statutory liens for Taxes not yet due,
(b) non-monetary imperfections of title that do not materially and
adversely affect the use, value or operation of the asset(s) subject thereto,
and (c) reservations, restrictions, easements, limitations, conditions and
other non-monetary Encumbrances of public record that do not materially and
adversely affect the use, value or operation of the Company’s or any of its
Subsidiary’s assets.

          “Person”
means any individual, corporation (including any non-profit corporation), general
or limited partnership, limited liability company, joint venture, estate,
trust, association, organization, labor union, joint-stock company, or
Governmental Entity.

          “Plans”
means all employee benefit plans, programs, agreements, policies, commitments
or arrangements (whether or not in writing), including but not limited to all
retirement, pension, profit sharing, deferred compensation, change-in-control,
severance pay, paid leave, education, welfare benefit, healthcare, dental,
disability, life insurance, retiree, cash bonus, incentive, commission, stock
bonus, deferred stock, stock purchase, stock option, stock appreciation,
restricted stock or stock units, phantom stock, phantom stock appreciation,
flexible spending accounts and fringe benefits

          “Post-Closing
Period” means any taxable period or portion thereof beginning after
the Closing Date. If a taxable period begins on or prior to the Closing Date
and ends after the Closing Date, then the portion of the taxable period that begins
the day following the Closing Date will constitute a Post-Closing Period. 

          “Pre-Closing
Period” means any taxable period or portion thereof ending on or
before the Closing Date. If a taxable period begins on or prior to the Closing
Date and ends after the Closing Date, then the portion of the taxable period
that ends on the Closing Date will constitute a Pre-Closing Period. 

          “Pre-Closing
Period Actions” means (a) all Actions pending on the Closing Date
and (b) all Actions initiated after the Closing Date that arise out of or
relate to any action, inaction, error, omission, event or condition existing or
occurring prior to or on the Closing Date.

Exhibit A-7

          “Pro Rata
Share” with respect to the Shareholders, means (a) eighty percent
(80%) for G. Martinot and (b) twenty percent (20%) for J. Martinot. 

          “Real
Property” means, collectively, the Owned Real Property and the
Leased Real Property.

          “Registered
Intellectual Property Rights” means Intellectual Property Rights
that are the subject of a pending application or an issued Patent, trademark,
Copyright, design right or other similar registration.

          “Regulatory
Representations” means the representations and warranties of the
Shareholders contained in Section 3.17 (Taxes), Section 3.18
(Environmental Matters) and Section 3.21 (Employee Benefits).

          “Restricted
Period” means the period commencing on the Closing Date and ending
on (a) in the case of G. Martinot the later of (i) the fifth (5th) anniversary
of the Closing Date or (ii) the second (2nd) anniversary of the date on which
G. Martinot ceases to provide services to the Company, whether directly or
indirectly, or (ii) in the case of J. Martinot, the third (3rd)
anniversary of the Closing Date.

          “Right of
First Offer Agreement” means the Right of First Offer Agreement, in
the form attached hereto as Exhibit G, to be entered into by and between
the Company and J. Martinot at the Closing.

          “Specified
Items” means the following: (a) the Subsidiary Transfers; (b) Taxes
owing by the Company or any of its Subsidiaries relating to their consolidated
income for the period January 1, 2014 through the Closing Date (but
specifically excluding, for the avoidance of doubt, any (i) past due social
security contributions or (ii) social security contributions that are the
subject of an extension of any kind or nature); (c) business valuation services
provided by Deloitte Consulting; (d) the environmental compliance issues
identified by ENVIRON in its draft Phase I Environmental Site Assessment and
Limited Environmental Compliance Review dated May 2014, as delivered to Parent;
(e) the Identified Claim; and (f) the dividends owing to J. Martinot that have
not been paid as of the Closing, as specified under clause (ii) on Section 3.26
of the Disclosure Schedule.

          “Subsidiary”
means, when used with reference to a specified Person, any Person that is
directly or indirectly Controlled by the specified Person.

          “Taxes”
means any federal, state, provincial, municipal, local or foreign income, gross
receipts, license, payroll, employment, excise, severance, stamp, occupation,
premium, windfall profits, environmental, customs duties, capital stock,
franchise, profits, withholding, social security (or similar), unemployment,
disability, real property, personal property, sales, use, transfer,
registration, value added, alternative or add-on minimum, estimated, or other
tax of any kind, including any interest, increment, penalty or addition
thereto, whether disputed or not and including any obligations to indemnify or
otherwise assume or succeed to the Tax liability of any other Person

          “Tax Contest”
means any audit, investigation, claim, litigation, assessment, reassessment,
dispute or controversy relating to Taxes.

Exhibit A-8

          “Tax Law”
means any and all laws, statutes, ordinances, rules, regulations, Collective
Bargaining Agreements, orders or determinations of any Governmental Entity
currently in effect and pertaining to any Taxes. 

          “Tax Return”
means any return, report, statement or other similar filing required to be
supplied to a taxing authority with respect to Taxes, including any schedule or
attachment thereto, and including any amendment thereof. 

          “Territory”
means all countries in which the Company or any of its Subsidiaries has
installed products, including, without limitation, the countries set forth on Exhibit
H. 

          “Trade
Secrets” means all trade secrets (including, those trade secrets
defined in the Uniform Trade Secrets Act and under corresponding foreign
statutory and common law), business, technical and know-how information,
non-public information, and confidential information and rights to limit the
use or disclosure thereof by any Person; including databases and data
collections and all rights therein.

          “Transaction
Expenses” means any and all expenses of the Company or any of its
Subsidiaries or the Shareholders incurred or to be incurred in connection with
the execution and delivery of this Agreement and the consummation of the
transactions contemplated hereby, including fees and disbursements of
attorneys, investment bankers, accountants and other advisors and service
providers.

          “Walloon
Region Grant Agreement” means that certain Agreement between the
Walloon Region and the Company concerning a recoverable advance of a maximum of
Two Hundred Sixty-Four Thousand Euro (€264,000) for research and development of
a measurement device for the pulmonary valve dated November 10, 2011.

          “Warrants”
means three-year warrants to purchase an aggregate of One Million Euro
(€1,000,000) worth of MGC common stock, in the form attached hereto as Exhibit
I, to be issued to the Shareholders at the Closing in accordance with their
Pro Rata Shares. 

          “Working
Capital” means the sum of the book values of all assets of the
Company and its Subsidiaries that constitute current assets under GAAP,
including Cash, less the sum of the book values of all Liabilities of the
Company and its Subsidiaries that constitute current liabilities under GAAP,
excluding any and all Liabilities that the Shareholders have paid or discharged
prior to Closing or have expressly agreed to pay after the Closing Date under
the terms of this Agreement. 

Exhibit A-9

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