Document:

Exhibit
10.36

 

SCI CALYX

Real Estate Company (Société Civile Immobilière)

Capital stock 10,000 euros

Registered office: 161, rue
Lavoisier

38330 Montbonnot Saint Martin

France

 

 

 

BYLAWS

 

 

 

 

SCI CALYX

Real Estate Company (Société Civile Immobilière)

Capital stock 10,000 euros

Registered office: 161, rue Lavoisier

38330 Montbonnot Saint Martin

France

 

 

BYLAWS

 

The
undersigned:

 

·                                          Société
TORNIER, a société par actions simplifiée (a
simplified joint stock company) with authorized capital stock of 311,024 euros,
having its registered office in Saint-Ismier, (38330), France, rue Doyen Gosse,
recorded in the Grenoble Commercial Register under No. 070 501 275,
represented on this occasion by Douglas Kohrs, who has been issued due
authorization for the purpose,

 

·                                          Mr. Alain Tornier, born August 24, 1946, in Grenoble
(38000), residing at 299 Chemin du Buttit in Saint-Ismier (38330), France, a
French citizen, divorced,

 

HAVE
DRAFTED THE BYLAWS SET FORTH BELOW FOR THE SOCIETE CIVILE
THEY INTEND TO FORM BETWEEN THEM:

 

2

 

ARTICLE 1
— FORM OF THE COMPANY

 

A
société civile (non-trading company)
governed by the provisions of Title IX of Book III of the French Civil Code,
the regulations issued for their application and these Bylaws is formed among
the holders of the shares created below and those that may be created in the
future.

 

ARTICLE 2
— PURPOSE

 

The
purpose of the company is:

 

·                                          the acquisition,
administration, management by leasing or otherwise of all property and real
estate assets,

·                                          all financial transactions
involving real or movable property and in general all transactions that are
related directly or indirectly to that purpose, on condition that these
transactions do not modify the essential non-trading character of the company.

 

ARTICLE 3 — COMPANY NAME

 

The name of the company is:

 

SCI CALYX

 

This
name, which must appear on all transactions and documents issued by the company
and intended for third parties, must be preceded or followed by the words “Société Civile” and the amount of the authorized capital
stock.

 

ARTICLE 4
— REGISTERED OFFICE

 

The
registered office is at:

 

MONTBONNOT SAINT MARTIN
(38330), FRANCE

161 rue Lavoisier

 

The
registered office may be transferred to any other location in the same city or
in the same department by a simple decision of the management which, in that
case, is authorized to amend the bylaws accordingly, and to any other location
by an extraordinary collective decision of the shareholders.

 

ARTICLE 5
— DURATION

 

The
duration of the company is set at 99 years counting from its recording in the
Commercial Register, unless it is dissolved before the end of that period or
extended under the conditions set forth in these bylaws.

 

ARTICLE 6
— CONTRIBUTIONS

 

The
undersigned are contributing the amounts indicated below in cash to the
company, namely:

 

	
  ·

  	
  Société
  TORNIER SAS, the sum of:

  	
   

  	
  5,100 euros

  	
   

  
	
  ·

  	
  Alain
  Tornier, the sum of:

  	
   

  	
  4,900 euros

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  For a total sum of:

  	
   

  	
  10,000 euros

  	
   

  

 

3

 

All
of these contributions, in cash, i.e. the total sum of 10,000 euros, have been
deposited prior to this date with Banque BNP Paribas, Montbonnot (38330) Branch
Office, in an account opened in the name of the Company in formation. This
amount will be withdrawn by the Management upon presentation of the certificate
from the Registrar’s Office of the Court of Commerce (Greffe du
Tribunal de commerce) certifying the recording of the Company in the
Commercial Register.

 

ARTICLE 7
— CAPITAL STOCK

 

The
capital stock is set at the sum of ten thousand (10,000) euros. It is divided
into one thousand (1,000) shares having a par value of ten (10) euros
each, numbered from 1 to 1,000, and distributed to the shareholders in
representation of their respective capital contributions, namely:

 

·                                          Société
TORNIER, 510 shares numbered 1 through 510,

·                                          Alain Tornier,
490 shares, numbered 511 through 1,000,

 

the
total of which equals the number of shares making up the capital stock: 1,000
shares.

 

ARTICLE 8
— MODIFICATION OF THE CAPITAL STOCK

 

The
capital stock may be increased by a collective extraordinary decision, by the
creation of new shares or by increasing the par value of the existing shares
either by means of capital contributions in cash or in kind, offsetting with
liquid and due credits against the company or by the incorporation of profits
or reserves.

 

In
the event of a capital increase, the recipients of new shares, if they are not
already shareholders, must be approved under the conditions set forth in Article 12
below.

 

The
capital stock may also be reduced, by a collective extraordinary decision, by
means of the cancellation, reimbursement or repurchase of existing shares or an
exchange of shares for an identical or lower number of new shares that may or
may not have the same par value.

 

ARTICLE 9
— CURRENT ACCOUNTS

 

In
addition to their contributions, the shareholders may pay in or place at the
company’s disposal any sums the company may need. These amounts shall be
credited to a current account opened in the name of the shareholder.

 

The
maximum amount of these sums, the conditions for their repayment and the
setting of interest rates shall be determined by agreement between the
management and the shareholders.

 

ARTICLE 10
— REPRESENTATION OF THE SHARES

 

The
shares may not be represented by negotiable certificates. The rights of each
shareholder in the company are exclusively as set forth in these Bylaws, any
subsequent amendments to these Bylaws and transfers that are carried out in
accordance with due procedure.

 

4

 

ARTICLE 11
— RIGHTS LINKED TO THE SHARES

 

Each
share gives its owner an equal share in the company’s profits and in all the
company’s assets.

 

The
shares are indivisible from the point of view of the company. The co-owners of
a share that is held jointly shall be represented by a single representative
chosen from among the joint owners. In the event of disagreement, the
representative shall be appointed by the courts at the request of the more
diligent party.

 

If
a share is subject to a life interest, the voting right shall belong to the
bare owner, except for decisions relating to the allocation of profits, in
which case the voting right is reserved for the beneficial owner. In all cases,
however, the bare owner has the right to participate in the collective
decisions.

 

ARTICLE 12
— TRANSFER OF SHARES AMONG LIVING PERSONS

 

12.1                           Every transfer of shares
must be recorded by an officially recorded instrument or private agreement.

 

The
transfer shall be valid in the eyes of the company only after completion of the
formalities pursuant to Article 1690 of the French Civil Code. However,
these formalities may be replaced by a transfer in the Register of Transfers
maintained by the company. This Register is the collection, in the
chronological order of their creation, of identical pages that contain
writing on one side only. Each of these pages is reserved for an owner of
shares in the company on the basis of its ownership or for more than one owner
on the basis of their joint ownership, their bare ownership or beneficial
ownership of the shares in question.

 

To
be legally binding on third parties, the transfer must also be registered with
the Registrar’s Office of the Court of Commerce as an entry in to the Commercial
Register.

 

When
two spouses are shareholders in the company simultaneously, valid transfers by
one to the other must be recorded in an officially recorded instrument or
private agreement with an authenticated date other than by the death of the
transferor.

 

The
shares may be transferred without restriction between shareholders, subject to
the preemption right stipulated in Article 13 below.

 

The
shares may be transferred to third parties only with approval given under the
conditions below, even if the transfers are being made to the transferor’s
spouse, ascendants or descendants.

 

The
approval of the shareholders shall be given in the form of an extraordinary
collective decision, whereby the transferring shareholder shall take part in
the vote.

 

The
company and each of the shareholders must be notified of the intended transfer,
accompanied by a request for approval, in the form of an extrajudicial notice,
a letter sent via ordinary mail or a letter sent via registered mail with
confirmation of delivery. The management shall make all the arrangements
necessary to consult the shareholders with regard to the intended transfer.

 

The
shareholders shall make a decision on the planned transfer within one month
following the notification of the company and the transferring shareholder
shall be notified of their decision by a letter sent via ordinary mail or a
letter sent via registered mail with confirmation of delivery within two months
following the notification.

 

5

 

If
the request is approved, the transfer must be completed within three months
following the notification of the approval. If the transfer is not completed
within this period, the transferor shall be deemed to have renounced the
transfer.

 

If
approval is withheld, each shareholder may offer to acquire the shares in
question.

 

When
more than one shareholder expresses a wish to purchase the shares, unless
agreed otherwise they shall be deemed to be offering to purchase the shares in
proportion to the number of shares they held prior to the notification of the
planned transfer.

 

If
none of the shareholders offers to purchase the shares or if there are shares
that have not been purchased because the requests received do not cover all of
the shares, the company may have the shares purchased by a third party who has
been duly approved by the shareholders other than the transferor.

 

The
company may also proceed to purchase the shares for purposes of their
cancellation.

 

The
management shall be responsible for collecting the individual purchase offers
from the shareholders and then, if necessary, requesting an offer from a third
party or from the company.

 

The
management shall notify the transferor, in a letter sent via ordinary mail or a
letter sent via registered mail with confirmation of delivery, of the name of
the proposed purchaser(s), shareholder(s) or third parties, or the offer
by the company to repurchase the shares, as well as the price offered. If an
agreement on the price cannot be reached, the price shall be set by a
designated expert or by the parties or, if the parties are unable to reach an
agreement on the appointment of the expert, by an order of the President of the
District Court (Président du Tribunal de Grande Instance)
acting in response to a request for an interim order and without appeal, all
without prejudice to the right of the transferor to keep its shares.

 

In
all cases where the shares are purchased either by shareholders or by third
parties designated by the shareholders or repurchased by the company, if the
transferor refuses to sign the transfer agreement after having been formally
notified to do so, the transfer shall be officially completed by the management
or the representative of the company specially authorized for the purpose, who
shall sign the transfer agreement on behalf of the company. This record, which
relates the procedure followed, shall be accompanied by all the pertinent
documentation.

 

If
the transferor receives no purchase offers within a period of six months
counting from the date of the last of the notifications it has made to the
company and to the shareholders, the transfer shall be deemed to have been
approved, unless the other shareholders have decided, in the same period, to
dissolve the company, a decision which the transfer may render null and void if
it notifies the company by extrajudicial notice or a letter sent via registered
mail with confirmation of delivery of its renunciation of the initial transfer
plan within one month, counting from the decision to dissolve the company.

 

These
provisions relating to the absence of a purchase offer within the period
allowed are applicable if the company has given notification of its refusal to
approve the transfer as well as if it has neglected to do so.

 

12.2                           Also subject to approval by
the company are all trades, capital contributions, allocations following
liquidation of community property by the surviving spouse or former spouse,
donations, the purpose or effect of which is to transfer any ownership rights
to one or more shares in the company between any individuals or entities.

 

6

 

The
preceding provisions are also applicable in the case of the merger or spin-off
of a shareholding entity.

 

12.3                           The shares may be pledged as
collateral, provided that the publication requirements pursuant to the
regulations in force that determine the rank of the secured creditors are
observed.

 

Any
shareholder may obtain consent from the shareholders for the intended pledging
of shares as security under the same conditions as those stipulated for the
shareholders’ approval of a transfer of shares. The company must give
notification of the decision of the shareholders to consent to the intended
pledging of the shares as security or refuse to approve it within a period of
six months counting from the last of the notifications containing the request.
The lack of a response in this period shall be deemed approval. Consent to the
intended pledging of shares as security also includes the approval of the
transferee in the event of the forced sale of the shares on condition that the
shareholders and the company are given notification of this sale at least one
month prior to the sale.

 

Each
shareholder may take the place of the purchaser within a period of five clear
days after the sale. If more than one shareholder exercises this option and
wishes to purchase a total number of shares that exceeds the number of shares
available for purchase, in the absence of an agreement among the interested
shareholders stipulating otherwise, their requests shall be reduced taking into
consideration the right of each shareholder to acquire the shares on offer in
proportion to the number of shares the shareholder previously held in relation
to the number of shares held by all of the shareholders. If, after this first
allocation, there remain unattributed shares, these shares shall be distributed
in the same proportion among the shareholders whose requests have not been
filled.

 

If
the shareholders do not take the place of the intended purchaser for all of the
shares that are the subject of the forced sale, the company may proceed to
purchase the shares for purposes of their cancellation.

 

Notification
of a forced sale that is not the result of a pledging of the shares as security
to which the other shareholders have given their consent must likewise be given
to the shareholders and to the company one month prior to the sale. During this
period, the shareholders may decide to purchase the shares, have the company
purchase them for cancellation or dissolve the company early, under the
conditions stipulated in Article 12.1 above.

 

If
the sale has already taken place, the shareholders or the company may exercise
the option of substitution available to them under Paragraph 3 of Article 12.3.
Failure to exercise this option shall be deemed approval of the purchaser.

 

ARTICLE 13
— PREEMPTION RIGHT

 

The
transfer of shares to a third party or to shareholders is subject to the
preemption right of the shareholders defined below.

 

The
transferor must notify the managing director of the company of its intended
transfer, indicating the identity of the transferee (name and address or
company name, registered office, amount of the capital stock, Commercial
Register information, makeup of the management and supervisory bodies, identity
of the shareholders), the number of shares involved in the planned transfer and
the price offered.

 

7

 

The
managing director must notify the company’s shareholders of this plan within 15
days and the shareholders shall individually have a period of 15 days to offer
to purchase the shares to be transferred in proportion to their share of the
company stock.

 

If
the offers to purchase the shares are not proportional to the number of shares
in the company already held by the purchasers, the managing director may
proceed to allocate the shares to be purchased on the basis of the offers
received. If the offers have not absorbed all of the shares offered for sale,
the managing director may offer them to any shareholders of his choice or have
them purchased by the company, which must either sell them or cancel them
within a period of six months.

 

These
shares shall be purchased at a price which, if the parties are unable to come
to an agreement, shall be determined by an expert pursuant to the provisions of
Article 1843-4 of the French Civil Code.

 

The
above provisions are applicable to all sales and transfers, including by public
tender under the terms of a Court Order or otherwise.

 

If
the preemption right is not exercised, the planned transfer may be completed
subject to compliance with the provisions of Article 12 above.

 

In
the event of a capital increase that takes the form of an issue of shares in
cash, the transfer of the subscription rights is subject to the provisions of
this article.

 

The
transfer of the right to the awarding of free shares in the company in the
event of the incorporation into the capital of profits, reserves, provisions,
issue or merger premiums, shall be considered similar to the transfer of the
free shares themselves and must be the subject of a first-refusal procedure
under the conditions defined above.

 

Any
transfer carried out in violation of the above clauses shall be considered null
and void.

 

ARTICLE 14
— APPROVAL OF SPOUSAL COMMUNITY PROPERTY ARRANGEMENTS

 

The
position of shareholder is extended to a spouse under a community property
arrangement for one-half of the shares subscribed or acquired by means of
community property funds if the potential shareholder notifies the company of
his or her intention to be a shareholder personally.

 

If
the notification is given at the time of the capital contribution or
acquisition, the approval given by the shareholders shall be considered valid
for both spouses. If the spouse exercises his or her claim subsequent to the
completion of the subscription or the acquisition, such exercise shall be
subject to the approval of the shareholders in the forms and conditions
stipulated in Article 12 of these Bylaws. The shareholder spouse shall
then be barred from voting and his or her shares shall not be taken into
consideration for the calculation of the majority.

 

The
spouse must be notified of the shareholders’ decision within two months of the
request; in the absence of notification, approval shall be deemed given. In the
event of a properly notified refusal, the shareholder spouse shall remain a
shareholder for all of the community property shares. The above referenced
notifications shall be made by a letter sent via registered mail with
confirmation of delivery.

 

8

 

ARTICLE 15
— DEATH OF A SHAREHOLDER

 

The
company shall not be dissolved by the death of a shareholder, but shall be
continued among the surviving shareholders and the heirs or assigns of the
deceased shareholder and the shareholder’s surviving spouse, if any, duly
approved by the surviving shareholders under the conditions set forth in Article 12
above.

 

The
heirs, assigns or spouse who are not approved to become shareholders are
entitled only to the value of the company shares left to them.

 

The
heirs, assigns or spouse of the deceased shareholder must document their
entitlement within three months of the death by producing a copy of an
officially recorded document containing statements by a number of persons as to
their identity or entitlement or an extract of an inventory of the estate.
Within thirty days of the submission of these documents, the managing director
must bring about a decision by the surviving shareholders at on the request for
approval. The interested parties shall be notified by the management within a
period of six months counting from the death; in the absence of notification,
approval shall be deemed to have been given. If approval is refused, the
provisions of Articles 1862 and 1863 of the French Civil Code apply. The
purchase price of the shares shall be paid in cash at the time of the
completion of the transfers or the decision to reduce the capital stock, which
must take place within the month of the final determination of the price.

 

In
the absence of the completion of the purchase or the reduction of the capital
within a period of six months of the notification of the occurrence of the
death, the heirs, assigns or spouse shall be deemed to have been approved as
shareholders.

 

ARTICLE 16
— WITHDRAWAL

 

Without
prejudice to the rights of third parties, a shareholder may withdraw from the
company in whole or in part, after authorization has been given by the
collectivity of shareholders acting under the majority conditions defined for
extraordinary decisions.

 

The
collective decision must be made within a period of three months, counting from
the request for withdrawal, notification of which must be given by a letter
sent via registered mail with confirmation of delivery.

 

The
withdrawal of a shareholder for cause may also be decided by a court ruling.

 

Unless
Article 1844-9, paragraph 3, of the French Civil Code is applied, the
withdrawing shareholder shall be entitled to the reimbursement of the value of
his or her shareholder rights determined, in the absence of an amicable
agreement, pursuant to Article 1843-4 of the French Civil Code.

 

ARTICLE 17
— INSOLVENCY, PERSONAL BANKRUPTCY, REORGANIZATION OR JUDICIAL LIQUIDATION

 

In
the event of insolvency, personal bankruptcy, reorganization or judicial
liquidation proceedings involving one of the shareholders, and unless the other
shareholders decide unanimously to dissolve the company, the shareholder rights
of the interested party shall be reimbursed and the shareholder in question
shall then cease to be a shareholder.

 

9

 

ARTICLE 18
— SHAREHOLDER LIABILITY

 

With
regard to third parties, the shareholders shall be liable indefinitely for the
liabilities of the company in proportion to their share in the capital stock on
the date the liabilities are payable or on the date of the suspension of
payments.

 

A
shareholder who has contributed only his industry shall be considered liable to
the same extent as the shareholder with the lowest proportion of the capital
stock.

 

Creditors
may pursue a shareholder to collect payment of the company’s debts only after
having tried unsuccessfully to collect the debt from the company itself.

 

Legal
action against non-liquidating shareholders or their heirs and assigns is
prohibited for five years dating from the publication of the dissolution of the
company.

 

ARTICLE 19
— MANAGEMENT

 

The
company shall managed by one or more persons, who may or may not be
shareholders, individuals or entities who have been appointed, with or without
a limitation of term, by a collective decision of the shareholders representing
more than one-half of the shares of the company.

 

The
managing director may be dismissed by a decision of shareholders representing
more than two thirds of the shares in the company.

 

The
functions of the managing director cease with the death, insolvency, personal
bankruptcy, reorganization or judicial liquidation, dismissal or resignation of
the managing director or the expiration of the managing director’s term of
office, if a term has been set.

 

The
death, resignation or dismissal of a managing director, who is not required to
be a shareholder, shall not result in the dissolution of the company. If the
managing director is a shareholder, upon resignation or dismissal the managing
director is authorized to withdraw from the company under the conditions set
forth in Article 16 above.

 

If
the managing director is a legal entity, the legal entity’s own managing
directors are subject to the same conditions and obligations and the same civil
and criminal liabilities as if they were managing directors of the company in
their own name, without prejudice to the joint liability of the legal entity
they manage.

 

The
managing director may receive compensation which is defined by the decision by
which he or she was appointed. The managing director is also entitled to
reimbursement, upon presentation of supporting documentation, for the costs of
business entertainment and travel.

 

In
relationships with third parties, the managing director may bind the company by
legal transactions that are within the purpose of the company.

 

The
opposition by one managing director to the actions of another managing director
shall have no effect with regard to third parties, unless it is established
that the third party was aware of the opposition.

 

In
relationships between shareholders, the managing director may carry out all
actions that are within the purpose of the company and serve the interests of
the company.

 

10

 

However,
as an internal operating regulation and without this limitation being valid
vis-à-vis third parties, the managing director may not, without authorization
in the form of a collective decision of shareholders representing more than
one-half of the shares, conduct the following transactions alone:

 

·                  enter into,
amend or cancel any lease agreement or any other document concerning occupation
of the company’s commercial premises;

 

·                  purchase, sell
or trade real estate or other property or a leasehold;

 

·                  order any
construction work to be done on the premises, whether the work in question
relates to the structure of the building, its decoration, the interior design
or the layout of the building or property,

 

·                  take a mortgage
on the company property or impose any other charges on company assets,

 

·                  acquire or
transfer an equity position in any company; carry out a partial contribution of
company assets to any company already formed or to be formed;

 

·                  make
investments of any type or sign any contract or any legal transaction
committing the company for an amount greater than 10,000 euros;

 

·                  contract a loan
in any form whatever,

 

·                  grant loans in
any form whatever.

 

If
there is more than one managing director, the managing directors may exercise
this authority together or separately, although each managing director has the
right to oppose any transaction before it is completed.

 

The
managing director may, on his or her own responsibility, delegate his or her
authority for one or more determined actions.

 

Each
managing director is individually liable with respect to the company and to
third parties for violations of laws and regulations, violations of the Bylaws
and errors in management.

 

If
more than one managing director participated in the same action, they are
jointly liable with respect to third parties and the shareholders. However, in
the relationships of the managing directors to one another, the court shall
determine the contribution that each of them must make to paying compensation
for the damage.

 

ARTICLE 20
— COLLECTIVE DECISIONS

 

20.1                           The collective decisions
shall be made, at the option of the management, either in a meeting of
shareholders or in the form of a written consultation. Collective decisions may
also be reflected by the consent of all the shareholders expressed in an
authenticated document.

 

20.2                           The collective decisions
shall be made at the initiative of the management.

 

If
there is more than one managing director, each managing director may proceed to
convene the meeting or consultation and any such meeting notice or consultation
may not be challenged.

 

In
addition, any non-managing shareholder may, at any time, via registered letter,
request the management to propose a decision to the shareholders on a
determined issue.

 

11

 

Unless
the issue raised relates to a delay on the part of the managing director in the
performance of one of his obligations, the request shall be considered
satisfied when the managing director agrees to place the issue on the agenda of
the next meeting or written consultation. If the managing director opposes the
request or does not respond, the requesting shareholder may, upon the
expiration of the period of one month after the request was made, himself
proceed with the meeting notice or consultation.

 

20.3                           The meeting shall be held in
the location of the registered office or in any other location indicated in the
meeting notice.

 

The
meeting notice must be sent at least fifteen days in advance via registered
letter. The meeting notice must clearly indicate the agenda. The meeting may
also be convened orally and the meeting may be held immediately if all the
shareholders are present or represented.

 

Once
the meeting has been convened, the text of the proposed decisions and any
documents necessary for the information of the shareholder must be kept
available to them in the registered office, where they may examine or make
copies of the documents in question. The shareholders may request that these
documents be sent to them via ordinary mail or, at the shareholder’s expense,
via registered mail.

 

20.4                           In the event of a written
consultation, the text of the proposed decisions as well as the documents
necessary to provide the shareholders with the required information must be
sent to each of them via registered mail with confirmation of delivery. Each
shareholder shall have a period of fifteen days counting from the receipt of
these documents to cast a “yes” or “no” vote on each decision. The response
must be sent via registered mail. A shareholder who has not responded within the
period stipulated above shall be deemed to have abstained from voting.

 

20.5                           The meeting shall be chaired
by the managing director or, if the manager is not a shareholder, by the
shareholder who is present and accepts the position who owns or represents the
greatest number of shares. The functions of the ballot-counters shall be
performed by the two shareholders who accept the position and who represent,
either themselves or as proxies, the greatest number of shares. However, the
appointment of ballot-counters is not mandatory.

 

The
meeting may designate a person of its choice to act as secretary.

 

An
attendance sheet shall be prepared indicating the last names, first names and
addresses of the shareholders who are present or represented, the number of shares
held by each of them and the identity of the proxies. This attendance sheet
must be signed by the shareholders as they enter the meeting and must be
certified correct by the officers of the meeting, or if no officers have been
designated by the chairman of the meeting, and the proxies of the shareholders
represented must be attached. The attendance list must be kept in the
registered office.

 

20.6                           Every shareholder, including
the holder of shares granted in exchange for work (parts d’industrie),
has the right to attend the meetings and has a number of votes equal to the
number of shares owned.

 

Every
shareholder may also be represented by his or her spouse or by another
shareholder to whom a power of attorney has been given.

 

The
right to vote by mail must be exercised personally.

 

The
legal representatives of disabled shareholders may participate in the vote,
even if they are not themselves shareholders.

 

12

 

20.7                           When they are not recorded
in a document signed by all the shareholders or their proxies, the collective
decisions shall be recorded in minutes of the meeting drafted and retained in
accordance with the procedures set forth in Articles 44 ff. of Decree No. 78-704
dated July 3, 1978.

 

ARTICLE 21
— ORDINARY COLLECTIVE DECISIONS

 

All
decisions other than those that relate to the withdrawal of a shareholder, the
approval of new shareholders, the dismissal of the managing director or the
amendment of the Bylaws shall be considered ordinary decisions.

 

These
decisions, to be valid, must be approved by one or more shareholders
representing more than one-half of the shares.

 

ARTICLE 22
— EXTRAORDINARY COLLECTIVE DECISIONS

 

Decisions
considered extraordinary are those that relate to the withdrawal of a shareholder,
the approval of new shareholders, the dismissal of the managing director or the
amendment of the Bylaws. These decisions, to be valid, must be approved by one
or more shareholders representing at least two-thirds of the shares. However,
any change of nationality or increase in the shareholders’ liabilities must be
approved unanimously by all the shareholders.

 

ARTICLE 23
— FISCAL YEAR

 

The
fiscal year begins January 1 and ends December 31 of each year.

 

By
exception, the first fiscal year shall begin on the day the company is recorded
in the Commercial Register and shall end December 31, 2008.

 

ARTICLE 24
— ACCOUNTS — SHAREHOLDERS’ RIGHT TO INFORMATION

 

At
the close of each fiscal year, the management shall prepare a statement of the
company’s assets and liabilities, a balance sheet, an income statement and
notes that contain all the additional information necessary to obtain a true
and fair picture of the company’s financial condition.

 

At
least once a year, the managing director must report on his management to the
shareholders and present them with a written report on the activity of the
company during the past fiscal year, including an indication of the profits
earned or projected and the losses incurred or projected.

 

This
report and, if necessary, the auditor’s report, the text of the proposed
decisions and all other documents necessary for the shareholders’ information
must be sent to each of the shareholders via regular mail at least fifteen days
before the meeting, or must be attached to the consultation letter.

 

During
the same period, these documents must also be kept available to the
shareholders at the registered office, where they can examine or copy them.

 

The
accounts must be submitted for the approval of the shareholders within six
months after the close of each fiscal year.

 

13

 

ARTICLE 25
— ALLOCATION OF THE RESULTS

 

The
net profit for the fiscal year shall be determined, for each fiscal year, after
deduction of the company’s overhead and other expenses, including all
amortization, depreciation and necessary provisions.

 

The
distributable profit consists of the net profit for the fiscal year minus any
deficits carried forward and plus any profits carried forward.

 

This
profit shall be distributed among the shareholders in proportion to the number
of shares belonging to each of them. The profit shall be credited to their
accounts on the company’s books or effectively paid on the date set either by
the shareholders or, if no such date is set, by the management.

 

However,
the shareholders may decide that some or all of the profit shall be carried
forward or allocated to any general or special reserves that have been created.

 

If
losses exist and are not offset with all or some of the reserves and the
profits carried forward from prior fiscal years, the losses must be allocated
to a balance-sheet item labeled “prior losses” and must then be charged against
the profits from subsequent fiscal years. The shareholders, in the form of an
appropriate collective decision, may also decide to discharge these losses in
accordance by any procedure they deem appropriate, in which case the losses
must be borne by each of them in proportion to their share of the capital
stock.

 

ARTICLE 26
— LIQUIDATION

 

The
company is in liquidation as soon as it is dissolved for any reason whatever.

 

The
liquidation shall be conducted by one or more liquidators who shall be
appointed and dismissed by a collective decision of shareholders representing
more than one-half of the shares of the company or, if no such decision can be
adopted, by a court order. The document that appoints the liquidator shall
define his authority and compensation.

 

After
payment of the debts and reimbursement of the capital stock, the assets shall
be divided among the shareholders in the same proportions as their share of the
profits. The rules concerning the division of estates, including
preferential allocation, shall be applied.

 

Any
asset contributed in kind to the assets to be divided shall be allocated, on
request and in the form of compensation if necessary, to the shareholder who
originally contributed it, whereby this option shall be exercised before any
other right to a preferential allocation.

 

The
deficits, if any, shall be divided among the shareholders in the same
proportions as the profits.

 

If
all of the shares in the company are held by a sole shareholder, the expiration
of the company or its dissolution for any reason whatever shall result in the
universal transmission of all of the company’s assets and liabilities to the
sole shareholder, if it is a legal entity, without the necessity for
liquidation, subject to the right of opposition of creditors pursuant to Article 1844-5
of the French Civil Code.

 

14

 

ARTICLE 27
— DISPUTES

 

All
disputes that may arise relating to the business of the company during the life
of the company or its liquidation, between shareholders or between the
shareholders and the company shall be submitted to the District Courts (tribunal de grande instance) having jurisdiction.

 

ARTICLE 28
— PUBLICITY — AUTHORITY

 

The
company shall acquire a legal personality only on the date it is recorded in
the Commercial Register.

 

However,
prior to the signature of these Bylaws, the legal transactions listed in an
attachment to these Bylaws have been carried out on behalf of and for the
account of the company being forced, whereby the attached list indicates for
each of these transactions the resulting obligation for the company.

 

This
list has been submitted to the shareholders before the signature of these
Bylaws. This list must remain attached to these Bylaws.

 

The
signature of these Bylaws signals the assumption by the company of the
obligations which are deemed to have been subscribed by it from the beginning,
as soon as the company has been recorded in the Commercial Register.

 

All
these transactions and the resulting obligations shall be deemed to have been
made and undertaken from the beginning by the Company, which shall assume them
on its own account by the simple fact of its recording in the Commercial
Register.

 

ARTICLE 29
— COSTS

 

The
costs, taxes and fees incurred by these Bylaws shall be borne by the company.

 

TRANSITIONAL CLAUSES

 

ARTICLE 30
— APPOINTMENT OF THE FIRST MANAGING DIRECTOR

 

Alain
Tornier, residing at 299 Chemin du Buttit, Saint-Ismier (38330), France, is
appointed the company’s first managing director for an indefinite term of
office.

 

ARTICLE 31
— ASSUMPTION BY THE COMPANY OF THE TRANSACTIONS AND OBLIGATIONS CONTRACTED IN
ITS NAME

 

The
undersigned acknowledge that they are aware of the legal transactions and
obligations undertaken before the signature of the Bylaws. Attached to these
Bylaws is a list describing these legal transactions and obligations undertaken
for the account of the company being formed.

 

15

 

Full
authority is given to the managing directors, with the option of acting
together or separately, to sign and have published the notice of formation in a
journal of legal announcements in the department where the registered office is
located.

 

The
signing of these Bylaws signifies, for the company, the assumption of all these
legal transactions and obligations, which shall be deemed to have been
subscribed by the company on the date of their origination, once the company
has been recorded in the Commercial Register.

 

Signed
in Montbonnot-Saint-Martin

On
June 30, 2008

In
seven originals

 

 

	
  /s/
  Douglas Kohrs

  	
   

  	
  /s/
  Alain Tornier

  
	
  For
  Société TORNIER SAS

  	
   

  	
  Mr. Alain
  Tornier

  
	
  Douglas
  Kohrs

  	
   

  	
   

  

 

	
   

  	
  Recorded
  in: SIE DE GREBOBLE - GRESIVAUDAN

  	
   

  
	
   

  	
  July 8,
  2008 - Receive No. 2008/663 Case No. 13     Ext.
  2441

  
	
   

  	
  Recording:

  	
  Fee
  waived

  	
  Penalties:

  
	
   

  	
  Total
  paid:

  	
  Zero
  euros

  	
   

  
	
   

  	
  Amount
  received:

  	
  Zero
  euros

  	
   

  
	
   

  	
  Agent

  	
   

  	
   

  

 

16

 

SCI CALYX

Real Estate Company (Société Civile Immobilière)

Capital stock 10,000 euros

Registered office: 161, rue Lavoisier

38330 Montbonnot-Saint-Martin

France

 

 

 

 

EXHIBIT

 

LIST OF LEGAL TRANSACTIONS FOR THE ACCOUNT OF THE COMPANY

IN FORMATION PRIOR TO THE SIGNING OF THE BYLAWS

 

·                                          Opening of a
bank account

·                                          Signature of a
Domicile Agreement

 

Signed
in Montbonnot-Saint-Martin

On
June 30, 2008

In
seven originals

 

	
  /s/
  Douglas Kohrs

  	
   

  	
  /s/
  Alain Tornier

  
	
  For
  Société TORNIER SAS

  	
   

  	
  Mr. Alain
  Tornier

  
	
  Douglas
  Kohrs

  	
   

  	
   

  

 

17Exhibit 10.38

 

SUBSCRIPTION AGREEMENT

 

EUR 29,600,000

AGGREGATE NOMINAL AMOUNT

OF

ZERO COUPON BONDS

MANDATORILY CONVERTIBLE INTO

COMMON SHARES

OF THE ISSUER

 

between

 

TMG B.V.

as issuer

 

and

 

KCH Stockholm AB

as purchaser

 

July 18, 2006

 

 

THE
UNDERSIGNED

 

1.             TMG
B.V., a private company with limited liability (besloten vennootschap met beperkte aansprakelijkheid),
incorporated under the laws of The Netherlands, with statutory seat in
Amsterdam and its address at:  Fred.
Roeskestraat 123 HG, 1076 EE Amsterdam, The Netherlands, hereinafter referred
to as:  the “Issuer”;

 

2.             KCH
Stockholm AB, a company organized under the laws of Sweden,
having its registered office at: 
Hamilton Advokatbyra, Kungsgatan 2A, Box 606, SE — 651 13 Karlstad,
Sweden, hereinafter referred to as:  the “Purchaser”.

 

WHEREAS:

 

(A)          TMG Holdings Coöperatief U.A., TMG Partners U.S.,
LLC, Vertical Fund I L.P., Vertical Fund II L.P. and Mr. Douglas W. Kohrs
hold all of the issued shares of the Issuer.

 

(B)           The Issuer intends to purchase, on the date hereof,
through its wholly owned subsidiary, TMG France SNC, the totality of the share
capital and voting rights of (i) Tornier Holding SAS, a French société par actions simplifiée, having its registered office
at Chemin Doyen Gosse, 38330 Saint Ismier, France and (ii) Donovan Medical
Equipment Ltd., a company incorporated in the Republic of Ireland, having its
registered office at 90 South Mall, Cork, Ireland (together, the “Acquisitions”).

 

(C)           The Issuer has authorised the creation and issue of EUR
29,600,000 aggregate nominal amount of zero coupon bonds due July 2009
convertible into common shares in the share capital of the Issuer at a nominal
value of EUR 0.01 each (the “Bonds”).

 

(D)          The Bonds will be in registered form in
denominations of EUR 50,000.

 

(E)           The Bonds will be issued pursuant to the Deed of
Issue.

 

AGREE
AS FOLLOWS:

 

Clause 1 —
Definitions

 

1.1         In this Agreement the following expressions
have the following meanings:

 

“Closing Date” means the date of completion of the
Acquisitions.

 

“Deed of Issue” means the deed of issue for the issuance of
the Bonds, substantially in the form of the draft attached hereto as Annex I.

 

“Issue Price” means the aggregate par value of the Bonds,
being EUR 29,600,000.

 

“Register” means a register maintained by the Issuer in which
the ownership of the Bonds shall be registered.

 

1.2         Capitalised terms not defined herein have the
meaning given to them in the Deed of Issue.

 

 

Clause 2 —
Issue of the Bonds

 

2.1         Subject to completion of the Acquisitions, the
Issuer undertakes to the Purchaser to promptly (but in any event not more than
five (5) business days) after the Closing Date issue the Bonds subject to
and in accordance with this Agreement and the Deed of Issue.

 

2.2         Subject to completion of the Acquisitions, the
Purchaser undertakes to the Issuer that, subject to and in accordance with this
Agreement, it will subscribe for and purchase the Bonds at the Issue Price
promptly (but in any event not more than five (5) business days) after the
Closing Date.

 

Clause 3 —
Fees and expenses

 

Any
expenses in connection with this Agreement and the Deed of Issue shall be borne
by the party incurring them.  The Issuer
shall pay any stamp, registration and other taxes and duties (including any
interest and penalties thereon or in connection therewith) which may be payable
upon or in connection with the creation and issue of the Bonds and the
execution of this Agreement and the Deed of Issue, and the Issuer shall
indemnify the Purchaser against any claim, demand, action, liability, damages,
cost, loss or expense (including, without limitation, reasonable legal fees)
which it may incur as a result or arising out of or in relation to any failure
to pay or delay in paying any of the same.

 

Clause 4 —
Closing

 

4.1         The closing of the issue of the Bonds shall
take place subject to completion of the Acquisitions and promptly (but in any
event not more than five (5) business days) after the Closing Date,
whereupon:

 

(a)           Deed of Issue.  The parties hereto shall execute the Deed of
Issue;

 

(b)           Registration and Delivery of Certificate.  Against receipt of the payment
referenced in clause 4,1(c), the Issuer shall enter the Purchaser in the
Register as registered holder of the Bonds and deliver to the Purchaser a
certificate confirming such entry in the form of the document attached hereto
as Annex II; and

 

(c)           Payment of Issue Price.  Against delivery of the
certificate referred to under clause 4.1(b), the Purchaser shall procure and
deliver the payment of the Issue Price to the Issuer by credit transfer in
Euros for same day value to the following (euro) bank account:  66.40.77.560 (EUR IBAN:  NL42 INGB 0664 0775 60) at ING Bank N.V.,
Amsterdam, the Netherlands (BIC/SWIFT INGBNL2A).

 

4.2         The actions referenced in clause 4.1 shall be
deemed to take place at the same time.

 

Clause 5 —
Governing law and enforcement

 

5.1         This Agreement is governed by and construed in
accordance with Dutch law.

 

2

 

5.2         The courts of the statutory seat of the Issuer
shall have exclusive jurisdiction to settle any dispute arising out of or in
connection with the present agreement (including a dispute regarding the
existence, validity or termination of this Agreement).

 

[REMAINDER OF THIS PAGE INTENTIONALLY LEFT BLANK]

 

3

 

This
Agreement was signed in duplicate in the manner set out below.

 

 

	
  /s/
  Sean D. Carney

  	
   

  
	
  TMG
  B.V.

  	
   

  
	
   

  	
   

  
	
  By:

  	
  Sean
  D. Carney

  	
   

  
	
  Title:

  	
  Authorized
  Representative

  	
   

  
	
  Date:

  	
  July 18,
  2006

  	
   

  

 

 

This
Agreement was signed in duplicate in the manner set out below.

 

 

	
  /s/
  Hans Peter Jörin

  	
   

  
	
  KCH
  Stockholm AB

  	
   

  
	
   

  	
   

  	
   

  
	
  By:

  	
  Hans
  Peter Jörin

  	
   

  
	
  Title:

  	
  Holder
  of Procuration

  	
   

  
	
  Date:

  	
  July 18,
  2006

  	
   

  

 

 

ANNEX I

 

DEED OF ISSUE

 

EUR 29,600,000

AGGREGATE NOMINAL AMOUNT

OF

ZERO COUPON BONDS DUE 2009

MANDATORILY CONVERTIBLE INTO

COMMON SHARES

OF THE ISSUER

 

between

 

TMG B.V.

as issuer

 

and

 

KCH Stockholm AB

as holder

 

July 27, 2006

 

 

THE
UNDERSIGNED:

 

1.             TMG
B.V., a private company with limited liability (besloten vennootschap met beperkte  aansprakelijkheid),
incorporated under the laws of The Netherlands, with statutory seat in
Amsterdam and its address at:  Fred.
Roeskestraat 123 HG, 1076 EE Amsterdam, The Netherlands, hereinafter referred
to as:  the “Issuer”;

 

2.             KCH
Stockholm AB, a company organized under the laws of Sweden,
having its registered office at: 
Hamilton Advokatbyra, Kungsgatan 2A, Box 606, SE — 651 13 Karlstad,
Sweden, hereinafter referred to as:  the “Holder”.

 

WHEREAS:

 

(A)          TMG Holdings Coöperatief U.A., TMG Partners U.S.,
LLC, Vertical Fund I L.P., Vertical Fund II L.P. and Mr. Douglas W. Kohrs
hold all of the issued shares of the Issuer.

 

(B)           On July 18, 2006 the Issuer completed, through
its wholly owned subsidiary, TMG France SNC, the acquisition of the totality of
the share capital and voting rights of (i) Tornier Holding SAS, a French société par actions simplifiée, having its registered office
at Chemin Doyen Gosse, 38330 Saint Ismier, France and (ii) Donovan Medical
Equipment Ltd., a company incorporated in the Republic of Ireland, having its
registered office at 90 South Mall, Cork, Ireland.

 

(C)           On July 18, 2006 the Issuer and the Holder
entered into a subscription agreement (the “Subscription
Agreement”) pursuant to which the Issuer has undertaken to issue the
Bonds (as defined below under D) to the Holder and pursuant to which the Holder
has undertaken to subscribe for and purchase the Bonds at the Issue Price (as
defined the Subscription Agreement).

 

(D)          The Issuer has authorised the creation and issue of
EUR 29,600,000 aggregate nominal amount of zero coupon bonds due July 2009
convertible into common shares in the share capital of the Issuer with a
nominal value of EUR 0.01 per common share (the “Bonds”),
it being specified that the proceeds of the Bonds shall be used to entirely
repay the convertible bonds issued to Warburg Pincus (Bermuda) Private Equity
IX, L.P. (“Warburg Pincus”) pursuant to a
deed of issue dated July 18, 2006 between the Issuer and Warburg Pincus.

 

(E)           The Bonds will be in registered form in
denominations of EUR 50,000.

 

AGREE
AS FOLLOWS:

 

Clause 1 —
Definitions

 

In
this deed of issue the following expressions have the following meanings:

 

“Conversion Date” means the date on which the requirements of
clause 7.1 have been satisfied.

 

 

“Conversion Price” has the meaning given to it in clause 7.1
of this deed.

 

“Holder” means KCH Stockholm AB and any other holder of a
Bond as evidenced by the Register.

 

“IPO” means an initial public offering of the Issuer’s common
shares or securities of a corporate entity that, after a restructuring of the
legal status and capital structure of the Issuer, owns, directly or indirectly,
100% of the shares in the share capital of the Issuer or the Issuer’s property
and business as described in Section 7 of the Securityholders’ Agreement.

 

“Register” means the register for the Bonds as defined in
clause 8.2 of this deed.

 

“Securityholders’ Agreement” means that certain
Securityholders’ Agreement, dated as of July 18, 2006, by and among the
Issuer, the Holder, Warburg Pincus (Bermuda) Private Equity IX, L.P., Mr. Alain
Tornier and the Institutional Investors (as defined therein).

 

Clause 2 —
Issuance

 

The
Issuer hereby issues the Bonds to the Holder at the Issue Price (as defined in
the Subscription Agreement).

 

Clause 3 —
Form, Denomination and Title

 

The
Bonds are serially numbered from 1 through 592 and in registered form in
denominations of EUR 50,000.  The
registered holder of any Bond shall (except as otherwise required by law) be
treated as its absolute owner for all purposes (whether or not it is overdue
and regardless of any notice of ownership, trust or any other interest in such
Bond or any notice of any previous loss or theft thereof) and no person shall
be liable for so treating such holder.

 

Clause 4 —
Status of the Bonds

 

The
Bonds constitute direct, general and unconditional obligations of the Issuer
which will at all times rank pari passu
among themselves and at least pari passu with
all other present and future unsecured obligations of the Issuer, save for such
obligations as may be preferred by provisions of law that are both mandatory
and of general application.

 

Clause 5 —
No Pledge

 

The
Holder hereby agrees not to pledge, encumber or otherwise create any lien on
the Bonds for any reason without the Issuer’s prior written consent.

 

Clause 6 —
Interest

 

The
Bonds shall bear no interest.

 

 

Clause 7 —
Conversion

 

7.1         Each Bond Is mandatory convertible into common
shares in the share capital of the Issuer at a conversion price of EUR 3.3543
per common share, to be applied towards the nominal value of each Bond (the “Conversion Price”) on the earliest of:

 

(a)           the fifth business day following the delivery by the Majority
Institutional Investors (as defined in the Securityholders’ Agreement) of a
written notice related to the exercise of the Drag-Along Right in accordance
with Section 1.4 of the Securityholders’ Agreement;

 

(b)           the date immediately prior to the public filing of a registration
statement in connection with an IPO; or

 

(c)           the third anniversary of the date hereof.

 

7.2         In order to effect conversion pursuant to
clause 7.1, the Issuer shall complete and sign the conversion notice attached
hereto as Annex I and deliver the
notice to the Holder.

 

7.3         If the Issuer shall at any time prior to the
conversion of the Bonds subdivide its common shares, by split-up or otherwise,
or combine its common shares, the number of common shares issuable on the
conversion of the Bonds shall forthwith be proportionately increased in the
case of a subdivision, or proportionately decreased in the case of a
combination.  Any adjustment under this
clause 7.3 shall become effective at the close of business on the date the
subdivision or combination becomes effective.

 

7.4         Upon conversion of a Bond, the Issuer will
arrange for the number of whole common shares deliverable upon conversion of
such Bond to be delivered to its Holder by means of execution of a notarial
deed of issue of shares within 14 business days after the Conversion Date.  The Holder will, to the extent required,
cooperate so that such conversion and delivery can be effectuated.  Fractional shares will not be delivered.  For any fractional shares the Issuer will pay
to the Holder an amount in cash equivalent to the fraction times the Conversion
Price.

 

7.5         Upon conversion of a Bond, other than cash
paid for fractional shares, the Holder will not receive any additional cash
payment.  The delivery to the Holder of
the fixed number of common shares into which the Bond is convertible together
with any cash payment for fractional shares satisfies any and all obligations
of the Issuer with respect to the converted Bond, including, without
limitation, the obligation to pay the principal amount at maturity of the Bond.

 

7.6         All Bonds converted shall be cancelled.  Cancelled or converted Bonds may not be
reissued or resold.

 

Clause 8 —
Transfer; Register

 

8.1         Transfer restriction.  Anything
in this deed of issue to the contrary notwithstanding, the Holder may not sell,
assign or transfer the Bonds, or any interest therein or the common

 

 

shares issuable or issued upon conversion of the Bonds, other than in
compliance with Section 1 (Transfers of
Securities) and Section 6.3 (Agreement
To Be Bound) of the Securityholders’ Agreement.  Such transfer can only be effectuated upon
written confirmation from the transferee to the Issuer to the effect that the
transferee accepts the terms and conditions of the Bonds set forth in this deed
of issue.

 

8.2                            Register.  The
ownership of the Bonds shall be registered on a record of ownership maintained
by the Issuer (the “Register”) on
which it shall enter the name and address of the Holder, and the principal
amount represented by the Bonds owing to the Holder from time to time.  The Issuer shall have no liability for
treating the registered Holder of the Bonds as the owner thereof for all
purposes.  Upon reasonable request from
time to time, the Issuer shall make available to the Holder the information
contained in the Register as to all Bonds.

 

Clause 9 —
Governing Law and Jurisdiction

 

9.1                            This deed of issue including the terms and
conditions of the Bonds are governed by and construed in accordance with Dutch
law.

 

9.2                            The courts of the statutory seat of the Issuer
have exclusive jurisdiction to settle any dispute arising out of or in
connection with the present agreement (including a dispute regarding the
existence, validity or termination of this Agreement).

 

[REMAINDER OF THIS PAGE INTENTIONALLY LEFT BLANK]

 

 

This
deed of issue was signed in duplicate in the manner set out below.

 

 

	
  /s/
  Sean D. Carney

  	
   

  
	
  TMG
  B.V.

  	
   

  
	
   

  	
   

  	
   

  
	
  By:

  	
  Sean
  D. Carney

  	
   

  
	
  Title:

  	
  Authorized
  Representative

  	
   

  
	
  Date:

  	
  July 27,
  2006

  	
   

  

 

 

This
deed of issue was signed in duplicate in the manner set out below.

 

 

	
  /s/
  Hans Peter Jörin

  	
   

  
	
  KCH
  Stockholm AB

  	
   

  
	
   

  	
   

  	
   

  
	
  By:

  	
  Hans
  Peter Jörin

  	
   

  
	
  Title:

  	
  Holder
  of Procuration

  	
   

  
	
  Date:

  	
  July 18,
  2006

  	
   

  

 

 

ANNEX I

 

Form of Conversion Notice

 

TMG B.V.

Fred. Roeskestraat 123 HG

1076 EE Amsterdam

The Netherlands

 

To:

KCH Stockholm AB

Hamilton Advokatbyra

Kungsgatan 2A

Box 606

SE – 651 13 Karlstad

 

July 18, 2006

 

Dear
Sirs,

 

TMG B.V.

€29,600,000 aggregate nominal amount

of

zero coupon bonds

convertible into

common shares of the issuer

(“the Bonds”)

 

CONVERSION NOTICE

 

Reference
is made to (i) the subscription agreement dated July 18, 2006 between
TMG B.V. as issuer and KCH Stockholm AB as purchaser, and (ii) the deed of
issue dated July     , 2006 between the aforesaid
parties (the “Deed of Issue”), both relating to
the Bonds.

 

Being
the issuer of the Bonds, we hereby irrevocably convert the total principal
amount of such Bonds specified below into common shares in accordance with
clause 7.2 of the Deed of Issue.

 

Total
principal amount of Bonds to be converted:______________________________

Total
number of common shares to be issued:_________________________________

Cash
equivalent for fraction of shares (if any): ________________________________

(conversion
price:  EUR 3.3543 per common share)

 

 

The
common shares required to be delivered within 14 business days after the date
hereof, will be delivered by the execution of a notarial deed of issue and by
registering KCH Stockholm AB in the shareholders register as the holder of the
common shares issued in respect of this conversion.

 

Yours
faithfully,

for
and on behalf of

TMG
B.V.

 

	
   

  	
   

  
	
  By:

  	
   

  
	
  Title:

  	
   

  

 

2

 

ANNEX II

 

Certificate in respect of Purchaser’s registration

 

TMG B.V.

Fred. Roeskestraat 123 HG

1076 EE Amsterdam

The Netherlands

 

To:  KCH Stockholm AB

Hamilton Advokatbyra

Kungsgatan 2A

Box 606

SE – 651 13 Karlstad

 

July      ,
2006

 

Dear
Sirs,

 

TMG B.V.

€29,600,000 aggregate nominal amount

of

zero coupon bonds

convertible into

common shares of TMG B.V.

(the “Bonds”)

 

Reference
is made to (i) the subscription agreement dated July 18, 2006 between
TMG B.V. as issuer and KCH Stockholm AB as purchaser (the “Subscription
Agreement”), and (ii) the deed of issue dated July     ,
2006 between the aforesaid parties (the “Deed of Issue”),
both relating to the Bonds.  In
accordance with clause 4.1(b) of the Subscription Agreement, we, the
undersigned, being duly authorised representatives of TMG B.V., hereby confirm
that on the date hereof TMG B.V. has entered KCH Stockholm AB in the Register
(as defined in clause 8.2 of the Deed of Issue) as the registered holder of the
Bonds.

 

	
  Yours
  faithfully,

  	
   

  
	
  for
  and on behalf of

  	
   

  
	
  TMG
  B.V.

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  By:

  	
   

  
	
  Title:

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