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EXHIBIT 10(B)
On behalf of Xxxxx Industries, Inc., the undersigned hereby certifies that the
following Exhibit 10(b) is a fair and accurate English translation of the
Warranty Agreement between Xxxxx Industries, Inc. and Allibert Holding, SA,
SEDITEP, SA, Sauvagnat Allibert, SA, Allibert Transport und Lagertechnik GmbH
and Xxxxxx Allibert, SA.
XXXXX INDUSTRIES, INC.
Dated: December 17, 1998 By: /s/ Xxxxxxx X. Xxxxxxxx
----------------------------------
Xxxxxxx X. Xxxxxxxx,
Vice President - Finance
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WARRANTY AGREEMENT
CONCERNING THE FOLLOWING COMPANIES
Allibert Equipement, ATMP, SCI de la Plaine, Holdiplast,
Allibert Transport und Lagertechnik Verwaltungsgesellschaft mbH,
Allibert Transport und Lagertechnik GmbH & Co Kg,
Allibert Equipement US INC.
Allibert Contenitori SpA, Xxxxxxxx Xxxxxxxxxxx, Xxxxxx Xxxxxxxx (UK) Ltd,
Xxxxxxxx XxxxxxxxxXx S.A., Xxxxxxxx Equipement Sprl,
Xxxxxxxx Xxxxxx Xxxxx XXXX, Allibert Transport und Lagertechnik Ges. mbH
Hereinafter referred to collectively as the "Companies" and individually
designated by the term "Company."
BETWEEN THE UNDERSIGNED:
Allibert Holding, a societe anonyme with a capital of FRF 107,261,500, whose
registered office is at 0 xxx xx x'Xxxxxxx, 00000 Nanterre Cedex - SIREN - 722
055 571 - R.C.S. Nanterre, Represented by Xx. Xxxx Xxxx, Chairman of the Board
of Directors, specially delegated for the purposes hereof pursuant to a
resolution of the Board of Directors dated October 1, 1998.
SEDITEP, a societe anonyme with a capital of FRF 35,700,000, whose registered
office is at 0 xxx Xxxxxxxxxxx, 00000 Xxxxxxxx Xxxxx - XXXXX - 722 016 508 -
R.C.S. Nanterre, Represented by Mr. Xxxxxxxx Xxxxxxxx, Chairman of the Board of
Directors,
Sauvagnat Allibert, a societe anonyme with a capital of FRF 100,000,000, whose
registered office is at 0 xxx xx x'Xxxxxxx, 00000 Nanterre Cedex - SIREN - 352
849 210 - R.C.S. Nanterre, Represented by Xx. Xxxx Xxxx, Chairman of the Board
of Directors,
Allibert Transport und Lagertechnik GmbH (soon to be SAI Automotive
Grundstuckverwaltungsgesellschaft), a company organized under German law with a
capital of DEM 14,000,000, whose registered office is at Xxxxxxxxxxx 00-00000,
Xxxxxxxxx am Main, registered with the Frankfort am Main Trade Registry under
the number HRB 46.079, Represented by Mr. Ph. Xxxxxxxx, pursuant to powers
notarized on November 5, 1998, that were conferred upon him by Mr. X. Xxxxxx,
Managing Director,
hereinafter referred to as the "Guarantors", it being expressly provided that
they do not act jointly and severally for the purposes hereof
ON THE ONE HAND,
AND:
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Xxxxx Industries, Inc., a company organized under U.S. law (State of Ohio) whose
registered office is Xxxxx Industries, Inc. 0000 Xxxxx Xxxx Xxxxxx, Xxxxx, Xxxx
00000, X.X.X.,
Represented by Xx. Xxxxxxx X. Xxxxx, its Chief Executive Officer, or any other
company that it may substitute for itself on the Closing Date,
hereinafter referred to as the "Beneficiary,"
ON THE OTHER HAND,
IN THE PRESENCE OF
Xxxxxx Xxxxxxxx, a societe anonyme with a capital of FRF 107,624,250, whose
registered office is at 0 xxx xx x'Xxxxxxx, 00000 Nanterre Cedex - SIREN - 542
050 562 - R.C.S. Nanterre, represented by Xx. Xxxxxx Xxxxxx, Directeur General,
participating herein in order to act as joint and indefinite guarantor of the
Guarantors, their successors, assigns and beneficiaries, pursuant to the
obligations subscribed by the Guarantors pursuant hereof, in accordance with a
decision of the Supervisory Board dated September 25, 1998, pursuant to the
provisions of Article 128 paragraph 2 of the law of July 24, 1966 on commercial
companies.
WITNESSETH:
The Guarantors have irrevocably undertaken to transfer upon the Closing Date as
defined under Article 4 of the Protocol entered into this same day (the
"Protocol Agreement"), to the Beneficiary who has irrevocably undertaken to
purchase them, all of the shares and the interests composing the capital of the
companies listed below:
A1/ Allibert Equipement
A2/ ATMP
A3/ SCI de la Plaine
A4/ Allibert Transport und Lagertechnik Verwaltungsgesellschaft mbH,
A5/ Allibert Transport und Lagertechnik GmbH & Co KG,
A6/ Holdiplast,
the Beneficiary becoming on the Closing Date, directly or indirectly through the
other companies listed in points A1/ to A6/ above, the owner of:
- all of the shares of the Belgian company Allibert Equipement, the
Spanish company Xxxxxxxx Xxxxxxxxxxx S.A., the British company Xxxxxx
Allibert UK Ltd, the Austrian company Allibert Transport und
Lagertechnik Ges. mbH, the Italian company Xxxxxxxx Xxxxxxxxxxx and the
Portuguese company Allibert Contentores,
- 100% of the US company Allibert Equipement US Inc., itself still
holding 50% of the US company Allibert Contico LLC, the latter still
holding 100% of the Canadian company Allibert Industries Limitee,
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- 50.1% of the Chinese company Xxxxxxxx Xxxxxx Xxxxx XXXX.
The purchase of the shares and interest of the Companies listed from A1/ to A6/
will be made for a price, hereinafter referred to as the "Global Base Price," of
four hundred seventy six million French Francs (FF. 476,000,000) plus nineteen
million five hundred thousand US dollars (19,500,000 US dollars), this later
amount may be reduced to nineteen million US dollars (19,000,000 US dollars) if
the five hundred thousand US dollars (500,000 US dollars) price reduction
referred to in Article 4.7 of the Warranty Agreement concerning Allibert-Contico
LLC is applied.
Such Global Base Price may be subject to an Adjustment as defined and according
to the provisions in Article 5.2 of the Protocol Agreement signed on this same
day.
This Warranty Agreement is concluded pursuant to such Protocol and constitutes
an integral and undivided part hereof.
As an essential condition of the sale, the Beneficiary has requested:
(1) from the Guarantors, as former direct or indirect shareholders of these
Companies, which have accepted, to provide the Beneficiary with warranties as
defined below,
(2) from Xxxxxx Xxxxxxxx as a shareholder of the Guarantors, which has accepted,
to act as joint and indefinite guarantor of the Guarantors with respect to the
obligations and warranties of the latter pursuant to hereof.
WHEREAS
Pursuant to the Protocol Agreement as of this day, it has been expressly agreed
that the warranty granted in respect of the said Protocol Agreement must be in
the form of two warranties operating independently from one another:
A/ This Warranty concerns the Companies :
- ALLIBERT EQUIPEMENT
- ATMP
- SCI DE LA PLAINE
- HOLDIPLAST
- ALLIBERT EQUIPEMENT US INC. (USA)
- ALLIBERT CONTENITORI Spa (Italy)
- ALLIBERT CONTENTORES (Portugal)
- ALLIBERT HANDLING (UK, ex- XXXXXX ALLIBERT UK)
- XXXXXXXX XXXXXXXXXXX S.A. (Spain)
- ALLIBERT EQUIPEMENT Sprl (Belgium)
- XXXXXX XXXXXXXX XXXXX (China)
- ALLIBERT TRANSPORT UND LAGERTECHNIK Ges. mbH (Austria)
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- ALLIBERT TRANSPORT UND LAGERTECHNIK GmbH UND CO. KG (Germany)
- ALLIBERT TRANSPORT UND LAGERTECHNIK VERWALTUNGSGESELLSCHAFT
mbH (Germany)
and applying in particular to the corporate accounts as at August 31,1998, which
will be replaced by the corporate accounts as at December 31, 1998, when the
latter will have been drawn up and audited as indicated in Article 5 of such
Protocol Agreement, it being expressly agreed that such warranty is not
applicable to the companies: Allibert Contico LLC (USA) and Allibert Industries
Limitee (Canada).
B/ The other warranty concerning Allibert Contico LLC and Allibert Industries
Limited, and applying in particular on consolidated accounts of Xxxxxxxx Xxxxxxx
as at August 31, 1998.
Such last warranty, which is an integral and undivided part of the
aforementioned Protocol Agreement, is the subject of a separate agreement signed
this same day and named Warranty Agreement concerning Allibert Contico LLC.
Consequently, it is expressly agreed that the person liable for the guarantees
which may be due hereunder as well as for those resulting from other commitments
shall not bear a double economic burden, particularly as regards any loss, any
liability, damage, or other burdens which may already have been compensated for,
indemnified or taken into account.
NOW THEREFORE IT HAS BEEN AGREED AS FOLLOWS:
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SECTION I - REPRESENTATIONS AND WARRANTIES
------------------------------
The Guarantors make the following representations and warranties on the
date hereof (with a reiteration upon the Closing Date each time that
such a reiteration will be mentioned), it being specified that the
information provided to the Beneficiary in the Exhibits hereto (except
for Exhibits 1, 2 and 18) shall not in any manner limit the scope and
extent of the representations and warranties set forth in Sub Section
II - REPRESENTATION AND WARRANTIES RELATING TO THE COMPANIES and the
related Guarantors' indemnification obligations hereunder, subject to
the provisions set for hereafter in respect of tax consolidation in
Subsection III - SPECIAL PROVISIONS - TAX CONSOLIDATION and it being
expressly agreed that the industrial sites of :
- Gaillon (France)
- Prunay (France)
- Gloucester (Great Britain)
- Palau de Plegamans (Spain)
- Santa Perpetua (Spain)
are expressly excluded from the scope of the present warranty as for
the environmental regulations. The agreements relating to these sites,
in respect to the environment, are referred to under article 14 of the
above mentioned Protocol Agreement.
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SUB-SECTION I - REPRESENTATION AND WARRANTIES OF THE SELLERS
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1. OWNERSHIP OF THE SHARES OF THE COMPANIES
----------------------------------------
1.1. On this day and upon the Closing Date, all the shares
and interest (hereinafter the "Shares") of the
Companies are and shall be freely negotiable and/or
transferable, they represent and shall represent,
directly or indirectly, 100% of the share capital of
the Companies, with the exception of Xxxxxxxx Xxxxxx
Xxxxx for which the Shares represent 50.1% of the
later's capital.
The Shares are and shall be free from any restrictions
or security interests.
The Shares are not and shall not be listed for trading
on a stock market.
The Companies have not and shall not have issued any
preferred shares, non-voting preferred shares, bonds
convertible into or exchangeable for shares or giving
a right to subscribe for shares, and in general, these
Companies have not and shall not have issued any
securities giving a right by means of conversion,
exchange, reimbursement, presentation of a warrant or,
in any event, to the allotment at any time or on a
fixed date, of shares which in this regard are or will
be issued to represent a fraction of the share capital
of the Companies.
Similarly there are no and there shall not exist any
Shares with double voting rights and no limitation has
been applied to the voting right pursuant to the
applicable regulations in France, Belgium, Italy,
Portugal, Great Britain, Spain, Austria, Germany, the
USA or China.
The Shares are not and shall not be the subject of any
agreement or claim of any kind whatsoever nor of any
litigation.
The share accounts, register of transfers and transfer
orders and/or all other necessary documents such as
share certificates are and shall be in compliance with
the applicable regulations and have been kept
up-to-date.
At the time of the transfer by the Guarantors to the
Beneficiary, the Shares shall be freely negotiable and
free from any option or preemption rights, claims,
liens, sureties, pledges, security interests, charges,
encumbrances or restrictions of any kind whatsoever.
Following the transfer of the Shares, in the manner
provided for in Articles 2 and 11 of the Protocol
Agreement to the Beneficiary, the latter will have
acquired full ownership of the Shares, free from any
option or preemption rights, claims, liens, sureties,
pledges, security interests, charges, encumbrances or
restrictions of any kind whatsoever.
The Companies have not decided any dividend
distribution since August 31, 1998, and shall not
carry out any distribution until the Closing Date.
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2. POWERS
------
The Guarantors (each of them individually) have been granted
all powers, rights, authorities and capabilities to sign the
Protocol Agreement, transfer the Shares of the Companies to
the Beneficiary and to agree to the present Warranty
Agreement.
3. EFFECTS OF THE SALE
-------------------
The transfer of all the Shares or the modification of the
boards of directors of the Companies shall not and may not,
with the exception of the effects mentioned in EXHIBIT 1,
result in:
(a) a violation of any legislative or regulatory
provision, agreement, undertaking, by-laws of a
company or any decision whatsoever, whether judicial
or otherwise, or
(b) an early termination or modification of an agreement
having an adverse effect on the Companies, or
(c) any registration or the constitution of a lien,
guarantee, pledge or other security interest on the
assets of the Companies, or
(d) the right for anyone to withdraw from a surety,
guarantee, comfort letter or similar document issued
in favor of any one of the Companies, or
(e) the right for anyone to modify, cancel or revoke one
of the permits, authorizations or licenses necessary
for the lawful exercise by any one of the Companies of
their activities or for any favorable tax regime or
subsidy or any other public aid, or
(f) the right for anyone to seek the early reimbursement
of a loan or credit facility or any other financing
granted to any one of the Companies or to modify the
terms thereof.
4. CONTRACTS IN PROGRESS
---------------------
The sale of the Shares shall not have any effect on the
contracts existing between the Companies and third parties and
there is no and shall not be upon the Closing Date any
contract to which the Companies are a party that provides for
early termination or a
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modification in the conditions in the event of a change of
majority in the general meetings of the shareholders or in the
event of a modification in the composition of the
administrative or management structures of the Companies, with
the exception of those in the exhibits (EXHIBIT 18).
5. MANAGEMENT OF THE COMPANIES
---------------------------
As of the date hereof and until the Closing Date:
(a) There shall not be any material changes having a
significant effect on the financial or commercial
situation, the assets or the operations of the
Companies and the Guarantors are not aware of any
event or modification likely to have such a
consequence.
(b) The Companies shall be managed in a careful and
prudent manner and in a manner consistent with the
previous management and according to the same methods
as during previous fiscal years and shall have
conducted only ordinary operations in the normal
course of business. In particular they shall not have
disposed of or acquired any tangible or intangible
fixed assets, with the exception of those in the
exhibits (EXHIBIT 2).
(c) No dividend has been or shall be declared or
distributed by the Companies and no profit of one of
the Companies has been distributed and no share of any
of the Companies has been redeemed or amortized
directly or indirectly by any of them.
(d) The Companies shall not make any commitment or
obligation exceeding the normal course of business in
accordance with past practice and for amounts and
periods comparable with those of the commitments they
made in the past.
(e) The Companies shall not acquire or sell assets, or
waive any receivable or right, or make any remission
of debt, except in the normal course of business, and
for sales of assets, in consideration for a price
consistent with their real value.
(f) The Companies shall not increase the salaries and
shall not modify the terms of the employment contracts
to which they are a party or the social benefits
received by their employees and managers (except for
the applicable general increases carried out pursuant
to collective bargaining agreements).
(g) The Companies shall not promise to increase the
salaries, premiums or other benefits of any one of
their employees or managers (except for the applicable
general increases carried out pursuant to collective
bargaining agreements).
SUB-SECTION II - REPRESENTATION AND WARRANTIES RELATING TO THE
----------------------------------------------------------------
COMPANIES
---------
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1. INCORPORATION AND EXISTENCE OF THE COMPANIES
--------------------------------------------
1.1 The Companies have been duly incorporated. The
Companies validly hold, currently and upon the Closing
Date their corporate names, subject to the provisions
of Article 3 of the Protocol Agreement.
1.2 The list of directors, chairman, general managers and
statutory auditors or other corporate managers,
established this present day, is in the exhibits
(EXHIBIT 3).
1.3 The registers of deliberations of the board of
directors and general meeting of the shareholders, the
attendance register of board of directors' meetings
and the attendance sheets of the general meetings, or
other necessary documents, are and shall be upon the
Closing Date in compliance with the applicable
regulations and all initials and signatures relating
to board meetings and general meetings that have been
held up until the Closing Date shall be added thereto.
The by-laws of the Companies are and shall be up to
date with all amendments and are attached in EXHIBIT
4.
All necessary publication formalities following
decisions taken by the Company's structures have been
and shall be carried out in accordance with the
applicable regulations.
1.4 The Companies operate and shall operate until the
Closing Date their businesses, property and assets in
accordance with the laws and regulations applicable to
them and with the provisions of their by-laws, and
they hold as of this day all the necessary permits,
approvals and authorizations for their activities,
subject to what is provided for in Article 14 of the
Protocol Agreement.
1.5 As of this day, there is no (and upon the day of the
Closing there shall not be) any procedure or action
seeking the dissolution or liquidation of the
Companies or declaring them to be in judicial
reorganization or liquidation, or involved in any
other bankruptcy proceeding.
1.6 Allibert Equipement, ATMP and Holdiplast are included
in the composition of a tax integration, the group
leader being Xxxxxx Xxxxxxxx, pursuant to a tax
integration agreement in the exhibits hereto (EXHIBIT
5). The above-mentioned transfer of the shares of
Allibert Equipement, ATMP and Holdiplast shall
immediately cause the withdrawal of these companies
from the above-mentioned composition retroactively to
the opening day of the fiscal year during which the
withdrawal occurs; accordingly Xxxxxxxx Equipement,
ATMP and Holdiplast will become taxable again, if they
are individually making a profit, on the result and
net long term capital gain realized at the close of
fiscal year 1999.
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In accordance with the provisions of the tax
integration regime (Articles 223 A et seq. of the
French Tax Code), Allibert Equipement, ATMP and
Holdiplast will lose any loss carry forwards they may
have realized during the integration period and the
possibility of distributing their reserves exempt from
the tax on dividend distribution corresponding to the
profits they realized during the integration period.
2. ACCOUNTS OF THE COMPANIES
-------------------------
2.1. Accounts of the Companies as at August 31, 1998
The guaranty contemplated herein relates in particular
to the Accounts as at August 31, 1998 of the following
companies:
- ALLIBERT EQUIPEMENT
- ATMP
- SCI DE LA PLAINE
- HOLDIPLAST
- ALLIBERT EQUIPEMENT US INC. (USA)
- ALLIBERT CONTENITORI Spa (Italy)
- ALLIBERT CONTENTORES (Portugal)
- XXXXXXXX HANDLING ( ex- XXXXXX ALLIBERT UK)
- ALLIBERT MANUTENCION S.A. (Spain)
- ALLIBERT EQUIPEMENT Sprl (Belgium)
- XXXXXXXX XXXXXX XXXXX (China)
- ALLIBERT TRANSPORT UND LAGERTECHNIK Ges.mbH
(Austria)
(the "Companies")
A copy of the Accounts of the Companies (balance
sheets, income statements and appendices) closed as at
August 31, 1998, as certified by the Statutory
Auditors and for Companies without Statutory Auditors,
attached with an opinion without reservations issued
by an auditor is in the exhibits hereto (EXHIBIT 6).
They are true and sincere and give a fair image of the
results of the operations from January 1, 1998 to
August 31, 1998, as well as of the financial situation
and assets and liabilities of these Companies as at
August 31, 1998.
The Companies are at the date hereof the valid
legitimate owners, without any dispute, restriction or
reservation, of all assets reflected in the Balance
Sheets as at August 31, 1998, whether movable or
immovable, tangible or intangible.
These assets and rights shall not be encumbered by any
security interest, lien, mortgage or pledge, with the
exception of those in the exhibits (EXHIBIT 8).
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UNDISCLOSED LIABILITIES
Except for liabilities and operations reflected in the
Accounts as at August 31, 1998 and for expenses and
other debts incurred in the ordinary course of
business to the Seller's knowledge, the Companies, as
at August 31, 1998, have no material obligation or
significant liability of the Companies, certain or
probable, of a type required to be set forth in the
Accounts as at August 31, 1998, prepared in accordance
with GAAP.
2.2. Corporate Accounts as at December 31, 1998
A copy of the Corporate Accounts (balance sheets,
income statement and appendices) as at December 31,
1998 certified by the Statutory Auditors and for
companies without Statutory Auditors, attached with an
opinion without reservations issued by an auditor,
having been prepared in accordance with applicable
accounting principles, as mentioned in Article 53.1 of
the Protocol Agreement of the companies hereinafter,
will be appended hereto in Exhibit 7 after their
drawing up:
- ALLIBERT EQUIPEMENT
- ATMP
- SCI DE LA PLAINE
- HOLDIPLAST
- ALLIBERT EQUIPEMENT US INC. (USA)
- ALLIBERT CONTENITORI Spa (Italy)
- ALLIBERT CONTENTORES (Portugal)
- ALLIBERT HANDLING (UK, ex- XXXXXX ALLIBERT
UK)
- XXXXXXXX XXXXXXXXXXX S.A. (Spain)
- ALLIBERT EQUIPEMENT Sprl (Belgium)
- XXXXXXXX XXXXXX XXXXX (China)
- ALLIBERT TRANSPORT UND LAGERTECHNIK Ges. mbH
(Austria)
- ALLIBERT TRANSPORT UND LAGERTECHNIK GmbH UND
CO. KG (Germany)
- ALLIBERT TRANSPORT UND LAGERTECHNIK
VERWALTUNGSGESELLSCHAFT mbH (Germany)
(the "Companies")
As soon as they are drawn up as specified above, the
said corporate accounts as at December 31, 1998 shall
replace the accounts as at August 31, 1998 referred to
in article 2.1 above for the implementation hereof.
They will be true and sincere and will give a fair
image of the results of the operations of fiscal year
1998 as well as of the financial situation and assets
and liabilities of the Company as at December 31,
1998.
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The Companies shall be upon the Closing Date the valid
legitimate owners, without any dispute, restriction or
reservation, of all the assets reflected in their
Balance Sheet as at December 31, 1998, whether movable
or immovable, tangible or intangible.
These assets and rights shall not be encumbered by any
security interest, lien, mortgage or pledge, with the
exception of those appearing in the exhibits (EXHIBIT
8).
UNDISCLOSED LIABILITIES
-----------------------
Except for liabilities and operations reflected in the
Corporate Accounts as at December 31, 1998 and for
expenses and other debts incurred in the ordinary
course of business, there shall not exist since
December 31, 1998 and until the Closing Date, to the
Seller's knowledge, any material obligation or
significant liability of the Companies, certain or
probable, of a type required to be set forth in the
Corporate Accounts as at December 31, 1998, prepared
in accordance with GAAP.
2.3. The accounting books and records required by the
applicable regulations have been and shall have been
properly kept, and they reflect and will reflect the
exact up-to-date situation of the Companies.
3. REAL ESTATE, LEASES AND FINANCED LEASES (CREDIT-BAIL)
-----------------------------------------------------
The Companies occupy at the date hereof and will occupy on the
Closing Date the real estate appearing in EXHIBIT 9 pursuant
to title deeds, commercial leases and construction leases,
rental contracts or all other occupancy agreements on any
grounds whatsoever, which have all been validly entered into.
Subject to what is mentioned hereafter in EXHIBIT 9 and to
what is agreed upon in Article 14 of the Protocol Agreement in
respect of the environment, the buildings referred to in
EXHIBIT 9 are and shall be on the Closing Date in a good
general condition and ordinarily maintained, their occupancy
and operation by the Companies complies and shall comply on
the Closing Date with the laws and regulations including
standards in matters of safety and hygiene and with the
contractual provisions applicable to them.
The Companies have not entered into any real property or
movable property financed leases, with the exception of those
listed hereto (EXHIBIT 10).
No party to any of these financed leases or agreements
previously mentioned in the first paragraph hereof contravenes
with any of its obligations and with the terms of any of such
financed leases or agreements, and such financed leases and
agreements are valid and binding.
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Their rent has been revised in accordance with legal
provisions, the applicable regulations and leases, and they
have not been the subject of any notice or exchange of
correspondence seeking their termination.
The Companies are and shall be on the Closing Date up to date
with the payment of all rents, charges, taxes, fees and other
sums payable for the real estate mentioned in EXHIBIT 9.
No decision has been notified by a competent authority that
may have the effect of restricting or modifying the use of the
real estate properties used by the Companies or of requiring
new investments (subject to what will be mentioned in the
Phase 1 and Phase 2 audits conducted by WCI and Xxxxx Xxxxx in
accordance with Article 14 of the Protocol Agreement) and no
such decision is likely to be taken due to the Beneficiary's
acquisition of the Shares.
4. MATERIALS, INSTALLATIONS AND EQUIPMENTS
---------------------------------------
Upon the date hereof, the Companies own the materials,
installations and equipments appearing in the balance sheets
as at August 31, 1998, and upon the Closing Date they will own
the materials, installations and equipments which will appear
in the Corporate Balance Sheets as at December 31, 1998
pursuant to valid title deeds. The said materials,
installations and equipments are at the date hereof and shall
be upon the Closing Date, in a normal condition of use,
maintenance and repair and in compliance with the legal or
regulatory requirements applicable to them.
5. INTELLECTUAL PROPERTY RIGHTS
----------------------------
5.1 Upon the date hereof the Companies hold, and on the
Closing Date the Companies shall have (subject to the
fact that the protection periods have not yet come to
their definite term), full title to the trademarks,
corporate names, trade names, trade signs, patents,
models, copyright and know-how listed in the exhibits
(EXHIBIT 11).
5.2 The Companies validly use, currently and on the
Closing Date, the trade sign, corporate name and
trademark Allibert; it is recalled that, as provided
for above, they must cease, unless the authorization
is renewed, using the name Xxxxxxxx as a trade sign,
trade name or otherwise, subject to what is indicated
above concerning the use of the corporate names
including the name Xxxxxxxx, in accordance with the
provisions of the Protocol Agreement.
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The use by the companies of an Allibert trademark
solely for professional products is the subject of a
license entered into on the Closing Date.
5.3 The rights indicated in the exhibits (EXHIBIT 11) are
and shall be on the Closing Date validly registered in
the name of the Companies and have been regularly
renewed. The rights to the trademarks, patents,
models, copyrights and know-how indicated in the
exhibit are not and shall not be subject to any use
limitation in favor of third parties, which might
result in particular from coexistence agreements.
The intellectual property rights indicated in the
exhibits (EXHIBIT 11) are and shall be on the Closing
Date free of any security interests or guarantees.
As of this day, the Companies have not granted to
third parties any right of use or exploitation,
option, license or right whatsoever, for no
consideration or for valuable consideration, to the
intellectual property rights indicated in (EXHIBIT
11), other than those referred to in (EXHIBIT 12).
In general, the Companies currently hold and shall
hold on the Closing Date full title to all the
intellectual property rights concerning the objects
manufactured and/or sold in the context of the
transferred activity and/or that are necessary to
conduct the sold activity, except with regard to:
- the elements (and particularly the third
party software packages) indicated in the
exhibits (EXHIBIT 13) for which the Companies
only hold license,
- the Allibert trademark, the use of which by
the Companies must be in compliance with the
above-mentioned license agreement,
- the logo of the Xxxxxx Allibert group, of
which a facsimile is attached in the exhibits
(EXHIBIT 14), which may however be duly used
by the Companies for no consideration for one
(1) year as from the Closing Date.
The Guarantors are not aware of any action brought by
third parties against the Companies for invalidity,
forfeiture because of failure to exploit or
insufficient exploitation, violation or infringement
of intellectual property rights (EXHIBIT 11), other
than those referred to in the exhibits (EXHIBIT 15).
The Companies' conduct of their activities does not, in the
countries where the products of these companies are currently
marketed, infringe any patent, trademark, model, copyright or
other industrial or intellectual property or possession right
not held by the Companies, and does not require for the
above-mentioned countries that a license be obtained for any
of these rights from a third party, except for what is
specified in EXHIBIT NO. 18. In particular, none of these
rights is held by an employee or corporate manager
-13-
15
of one of the Companies, by one of the Guarantors, a direct or
indirect shareholder of the Guarantors or an Affiliate of the
Guarantors.
6. BANK ACCOUNTS
-------------
On the date hereof and on Closing Date, the Companies hold and
shall hold the bank and postal accounts appearing in their
balance sheets.
The Companies can freely dispose of all the sums credited to
such bank and postal accounts, after cross-checking the
accounts.
The details of these bank accounts appear in the exhibits
(EXHIBIT 16).
7. SECURITY INTERESTS
------------------
On the date hereof and on the Closing Date, the movable assets
are not and shall not be subject to any surety or pledge and
the fixed assets are not subject to any mortgage, charge or
right in favor of a third party, with the exception of those
appearing in the exhibits (Exhibit 8).
The Companies have not given any warranty, guaranty, or
permission for the performance of the undertakings contracted
either by third parties or by the Companies.
8. OFF BALANCE SHEET COMMITMENTS
-----------------------------
There are no off balance sheet commitments and in particular
no financed leases (credit- bail), with the exception of those
that are mentioned in EXHIBIT 17 which corresponds to the
commitments as at August 31, 1998. Off balance sheets as at
December 31, 1998 shall be mentioned in the Corporate Accounts
of the different companies on the same date. They shall only
include elements resulting from a normal and common
management.
9. PROVISIONS
----------
All provisions needing to be established pursuant to
accounting principles and consistent with a good accounting
and financial management have been written up in the accounts
as at August 31, 1998, and shall be written up in the accounts
as at December 31, 1998, in particular all necessary
provisions shall have been made for any direct or indirect
taxation applying or that may be applied to the Companies for
the period ending on December 31, 1998.
Taking into account undertakings by the Sellers in respect of
the environment (Article 14 of the Protocol Agreement), no
provisions for environmental risks shall be implemented in the
Accounts of the Companies as at December 31, 1998.
-14-
16
10. CONTRACTS IN PROGRESS
---------------------
EXHIBIT 18 herein lists also all the contracts to which one of
the Companies is a party at the date hereof:
(i) granting an exclusivity;
(ii) with a term of more than one year or requiring a
consideration exceeding FRF 1,000,000 (one million);
or
(iii) requiring in case of termination, the payment of an
indemnity, fine or other amount exceeding FRF
1,000,000 (one million) or in the case of an
employment contract the payment of an indemnity
exceeding the indemnity provided for by law or under
collective agreements.
None of the contracts breaches a mandatory provision of a law
or of a by-law and the Companies may require that the said
contracts be performed according to their terms. None of the
parties to these contracts have breached the obligations which
would result in the termination of the contract and in the
payment of an indemnity. No discussions are in progress
seeking to modify or terminate one of these contracts, with
the exception of those contained in EXHIBIT 18.
Between the date hereof and the Closing date, no contract
within one of the above categories shall be concluded without
the prior and written consent of the Beneficiary.
11. INVENTORY
---------
The inventory, goods in process and finished products of the
Companies are correctly inventoried and valued in the accounts
as at August 31, 1998 and shall be inventoried and valued in
the Corporate Accounts as at December 31, 1998 correctly and
in accordance with the accounting principles and the inventory
that is unable to be sold or is out of date have been, for the
accounts as at August 31, 1998, and shall be for the corporate
accounts as at December 31, 1998, the subject of a due
provision, in continuation of the methods used by the
Companies.
12. CUSTOMERS
---------
All accounts receivable appear in the accounts as at August
31, 1998 and shall appear in the Corporate Accounts as at
December 31, 1998.
The net amount of provisions for each account receivable
appearing in the Balance Sheets as at August 31, 1998 and
which will appear in the Corporate Balance Sheets as at
December 31, 1998 will actually be collected by the Companies
on the proper date.
-15-
17
As far as the Guarantors are aware, on the date hereof, none
of the major customers of the Companies (representing 3% of
the turn over as it will result from the combined accounts
defined in article 5.3.2. of the Protocol Agreement) has ended
or interrupted nor threatened to end or interrupt its
relationship with the Companies, except for those referred to
in EXHIBIT 19. Between the date hereof and the Closing Date,
as soon as the management of the Companies will have informed
the Guarantors, the Guarantors will inform the beneficiary of
any termination of relations or menace to terminate relations
with the Companies from the part of the said important
clients.
13. INSURANCE POLICIES
------------------
The Companies are and shall be until the Closing Date properly
and sufficiently insured in view of the specific activities
carried on by each of the Companies and the custom in the
profession and are up-to-date with their premiums. It is
however pointed out that the insurance coverage of these
Companies will cease on the Closing Date and consequently the
Purchaser shall enter into the necessary insurance policies
for the Closing Date.
None of the Companies has and shall have breached until the
Closing Date any one of its obligations under these policies
or has and shall have neglected to notify in a timely, precise
and accurate manner all required facts and information.
Major accidents and claims that have occurred and been
declared since January 1, 1997 are indicated in the exhibits
(EXHIBIT 20).
There have not been any accidents or claims for more than one
million (1,000,000) francs that have occurred and not been
declared.
14. EMPLOYMENT CONTRACTS - PARTICULAR BENEFITS
------------------------------------------
A) No employment contract or particular benefit has been
on the date hereof nor shall be until the Closing
Date granted by the Companies to any of their
directors or general managers and there are no and
there shall not be any employment contracts granted
by such Companies to an employee containing
provisions that are more favorable, particularly in
the matter of severance payments, that those set
forth in the applicable collective bargaining
agreement, with the exception of those appearing in
the exhibits (Exhibit 21).
B) The retirement and risk insurance regimes available
to the personnel and executives of Allibert
Equipement, ATMP, Holdiplast are a result of both
obligatory legal provisions and the agreements
indicated below:
- executive risk insurance contract "UAP"
No. 708 347-AXA Courtage
- medical expenses contract "UAP/Uni
Prevoyance" No. 5 304 0003
- medical expenses contract "UAP" 708 351-AXA
Courtage
-16-
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C) The Companies are and shall be on the Closing Date
up-to-date in the payment of salaries, commissions
and other direct and indirect compensation (including
in particular the overtime hours) and the
reimbursement of expenses due to the employees.
D) The Companies have complied and shall comply until
the Closing Date with all of the provisions of the
employment contracts and/or collective bargaining
agreement. There are no and on the Closing Date there
shall not be any other company agreements (accord
d'entreprise) in the Companies or collective
bargaining agreement applicable to the Companies
other than the plastic transformation collective
bargaining agreement and the plastics industry
collective bargaining agreement and the company
agreements appearing in the exhibits (Exhibit 21).
15. LITIGATION
----------
On the date hereof, the Companies are not parties as applicant
or defendant in any contentious suit, litigation or any
arbitration (the "Litigation"), with the exception of those
appearing herein (EXHIBIT 22). This Exhibit shall be updated
on the Closing Date. This exhibit shall be up dated on the
Closing Date in case of new litigation occurring within the
Closing Date.
As far as the Guarantors are aware, it being understood that
any failure to be aware does not exempt them from the warranty
provided for hereunder, no procedure, action or claim of any
kind whatsoever is on the point of being brought either by or
against the Companies or against any person whose improper
actions might be likely to incur the Companies' liability.
16. SOCIAL REGULATIONS
------------------
On the date hereof the Companies have, and on the Closing Date
they shall have always complied with the social legislation
(including in particular in matters of hygiene and safety in
the work place) and are, on the date hereof, and shall be on
the Closing Date up-to-date with the payment of all their
contributions to the Social Security, family allowance and
various retirement, unemployment and various social benefits
organizations. The Companies have also paid all the amounts
owed to various collecting entities because of tax adjustment.
17. TAX REGULATIONS
---------------
On the date hereof the Companies have, and on the Closing Date
they shall have always complied with the tax regulations and
are on the date hereof and shall be on the Closing Date up to
date with the payment of their direct or indirect taxes; as of
today, there are no claims, requests for information or
disagreements on the part of the tax authorities, with the
exception of those appearing in the exhibits (EXHIBIT 23).
-17-
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18. CRIMINAL LIABILITY ECONOMIC REGULATIONS
---------------------------------------
On the date hereof the Companies have and on the
Closing Date the Companies shall have complied with
both French and European economic regulations,
particularly in the area of competition, and they are
not subject to any action, procedure or complaint on
the part of the competent administrations or
authorities.
On the date hereof the Companies have, and on the
Closing Date they shall have complied with criminal
law and are not the subject of any criminal
proceedings and their corporate managers are not the
subject of any actions for criminal infringements
committed during the course of their duties.
19. REGULATIONS GOVERNING FINANCIAL RELATIONS WITH FOREIGN
------------------------------------------------------
COUNTRIES - CUSTOMS
-------------------
On the date hereof the Companies have, and on the Closing Date
they shall have complied with the regulations on financial
relations with foreign countries and with the applicable texts
in customs matters. They are not the subject of any action,
procedure or complaint whatsoever in this regard on the part
of the competent authorities.
20. INTERESTS HELD IN OTHER COMPANIES
---------------------------------
On the date hereof the Companies do not hold and shall not
hold on the Closing Date any interest in a company likely to
incur their joint and indefinite liability and, more
generally, do not hold on the date hereof, and shall not hold
on the Closing Date any interest in a company, grouping or
firm other than those mentioned in the Preamble.
21. REPRESENTATIONS AND UNDERTAKING CONCERNING THE HYGIENE AND
----------------------------------------------------------
SAFETY OF THE INSTALLATIONS
---------------------------
The Guarantors represent that the industrial facilities at
Gaillon, Prunay, Gloucester and Barcelona have obtained all
the administrative permits, licenses and authorizations
required by the applicable published laws and regulations
concerning hygiene and safety that are necessary to operate
and conduct the activity carried on at the sites in the
context of the peaceful enjoyment due to the Beneficiary.
The Guarantors represent that, as far as they are aware, until
the Closing Date, the industrial activity has been carried on
and will be carried on by the operating Companies in
compliance with applicable regulations and the Companies have
not received any injunction, formal notice or letter from an
administrative, judicial or other authority indicating to them
that their fixed assets and activities did not comply with
safety or hygiene standards, with the exception of those
appearing in EXHIBIT 24.
More generally, as far as the Guarantors are aware, the
Companies are in compliance with the regulations concerning
safety and hygiene.
-18-
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22. PROHIBITION
-----------
On the date hereof, there is no administrative, judicial or
other prohibition likely to block, wholly or partially, the
activities of the Companies and no fact is known that would be
likely to interrupt the continuation of the operations,
subject to the application of article 14 of the Protocol
Agreement. As far as the Guarantors are aware, there is no
element likely to lead, on the Closing Date, to an
administrative, judiciary or another kind of interdiction ,
likely to paralyze, in full or in part, the activities of the
Companies or to lead to the suspension of the operations,
subject to the implementation of Article 14 of the Protocol
Agreement.
23. PRODUCTS
--------
On the date hereof and on the Closing Date, as far as the
Guarantors are aware, it being understood that any failure to
be aware does not exempt them from the warranty provided for
hereunder, the products manufactured and/or sold up to this
day by the Companies have no manufacturing faults or defects
of any kind that might justify a request for cancellation of
the sale and/or damages on the part of any buyer, consumer or
third party, with the exception of those appearing in the
exhibits (EXHIBIT 25).
All the products sold by the Companies are in compliance with
the laws and regulations applicable to them and to the
specifications imposed by customers, particularly in matters
of safety. The Companies are not aware of any accident
concerning the products likely to incur its liability.
The products sold by the Companies are the subject of a
warranty in a form similar to the contract attached in EXHIBIT
25. The sales and inventory have been the subject of a
provision for warranty mentioned above.
With the exception of the abovementioned warranties, the
companies have no obligation to take back, modify or repair
for any reason whatsoever the products it has sold before the
date hereof and no customer has made a request that it takes
back, modify or repair its products sold, with the exception
of those mentioned in EXHIBIT 25.
24. SUBSIDIES
---------
On the date hereof, The Companies have not benefitted during
the last five (5) years from any government, regional,
departmental or other subsidy or aid, including in the form of
leases, credits or other contracts with preferential
conditions (the "Subsidies"), with the exception of those
appearing in the exhibits (EXHIBIT 26) the said Exhibit will
be up dated on the Closing Date in the event that Subsidies
would be allocated within the Closing Date.
None of the Companies will in any manner be required to
reimburse such aids already received for any reason
whatsoever.
-19-
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25. YEAR 2000 COMPLIANCE
--------------------
(a) Software programs developed in the Xxxxxx Allibert
Group for the companies.
Common provisions
-----------------
All the files of the software programs developed by the Xxxxxx
Allibert Group and used by the Companies have the century zone
and it will therefore be unnecessary to modify the layout of
the files in question.
Computer assisted production control software program (GPAO)
------------------------------------------------------------
The computer assisted production control software program has
been the subject of a "Year 2000 Validation" procedure
consisting of:
- Itemizing all the files including a date.
- Itemizing all the programs accessing files including
a date.
- Verifying by application each program using any file
including a date, and making the correction, if
necessary.
- Testing all applications in the situation of the
arrival of the Year 2000.
At the end of this procedure, which has occurred as of this
day and for which certain applications specific to the
"Equipment" division, such as "Workshop Follow-up" and
"Manufacturing Orders" should be accepted by the user, this
software program's adaptation to the Year 2000 will not create
any computer disturbance.
Accordingly, the Guarantors declare that the GPAO software
programs developed within the Xxxxxx Allibert Group will be
Year 2000 compliant, with the exception of the menu options
attached hereto (EXHIBIT 27). It being specified that certain
peripheral software provided by external suppliers, are not
available on the date hereof under there Year 2000 compliant
version.
For purposes hereof, the term " Year 2000 compliant" means
that:
- the computer functions, calculations and processes
operate consistently and continuously, whatever the
date on which the processing is really carried out
and whatever the input or output of the data, whether
before, at the time of, during or after January 1,
2000, and whether or not the data is affected by leap
years;
-20-
22
- the date-related data are accepted, calculated,
compared, sorted, extracted, sequenced or otherwise
processed, and restored and displayed, in a
consistent manner, whatever the dates used in these
data, whether before, at the time of, during or after
January 1, 2000.
(b) External software packages installed on computers
belonging to the Companies
The Companies using these programs will benefit from
any contractual stipulations concerning the arrival
of the Year 2000 that may appear in the license
agreements they have entered into with the companies
supplying these programs.
26. EURO COMPLIANCE
---------------
As of the date hereof and on the Closing Date
(a) Software programs developed in the Xxxxxx Allibert
Group for the Companies.
The software programs concerning:
- production management (purchasing software
programs)
- commercial management (AdV software program),
have been adapted to process the Euro so that it is
now possible to make purchases and/or sales in this
new currency, the currency for internal management
memorized in all the files (outstanding amounts,
continuity schedules, etc.) shall continue to be the
franc in 1999.
(b) External software packages installed on computers
belonging to the Companies
The Companies using these programs will benefit from
any contractual stipulations concerning the Euro that
may appear in the license agreements they have entered
into with the companies supplying these programs.
27. ENVIRONMENT
-----------
The Guarantors' representations and warranties relating to
environmental matters are the subject of an agreement between
the parties separate and distinct from this Warranty, in
accordance with the terms of Article 14 of the Protocol
Agreement signed on the date hereof, it being expressly
specified that the warranties given by the Guarantors under
paragraphs 14.15.3 and 14.15.4 at the Protocol Agreement are
governed by the present agreement.
-21-
23
SUB-SECTION III - SPECIAL PROVISION - TAX CONSOLIDATION
Allibert Equipement, ATMP and Holdiplast shall provide until December
31, 1998, their tax results to the tax integration group, of which
Xxxxxx Xxxxxxxx is the group leader and which they belonged to.
Therefore the consequences of their belonging and/or withdrawing are
hereafter set forth:
- suspended taxation of capital gains on sale of fixed assets
(Article 223 F of the French Tax Code),
- recovery of the neutralized subsidies and forgiveness of
debts,
- penalties resulting from the taxation of the regularization of
reserves, following the subsidiaries' withdrawal from the
group, neutralized in the course of the tax consolidation
pursuant to Article 223 B of the French Tax Code,
- implementation of the recovery subject to past regulation
(exemption pursuant to Article 223 L6B of the French Tax Code
applicable in 1991),
shall exclusively be borne by the Guarantors and/or their shareholders.
However, the following consequences in respect to the above-mentioned
companies' belonging to the above-mentioned tax integration group:
- loss of the benefit of carrying forward the losses incurred
during the consolidation,
- loss of the possibility to distribute exempt from the tax on
dividend distribution their reserves corresponding to the
benefits made in the course of the consolidation period,
are expressly excluded from the warranties given.
The Beneficiary is informed that the Companies Allibert Equipement,
ATMP and Holdiplast will have, prior to December 31, 1998, agreed with
Xxxxxx Xxxxxxxx that there would not be indemnification for a damage
resulting from their withdrawal of the scope of the above-mentioned tax
consolidation, and that consequently there could be no claims from
their part in respect of an indemnification submitted to Xxxxxx
Allibert resulting from this withdrawal, which the Beneficiary accepts
expressly.
SECTION 2 - SUBJECT OF THE WARRANTY
-----------------------------------
The Guarantors warrant in proportion to the fraction of the capital
sold, i.e., 100%, with the exception of Xxxxxxxx Xxxxxx Xxxxx, where in
this case the fraction of capital sold is 50.1%,
- all of the assets and liabilities appearing in the accounts as
at August 31, 1998 referred to under article 2.1. hereof which
will be replaced by the corporate accounts as at December 31,
1998 referred to in article 2.2 hereof
- as well as all representations and warranties made and given
by the Guarantors herein and specifically in Section 1 above.
-22-
24
SECTION 3 - REPAYMENT AND INDEMNIFICATION OBLIGATION
----------------------------------------------------
3.1 PRINCIPLES
----------
The Guarantors undertake to indemnify the Beneficiary for:
(i) any damage resulting from an inaccuracy or breach of
any representations found in Sub- section I
-Representations and Warranties of the Sellers.
(ii) any liability not accounted for or not supported by
any reserves or sufficient reserves (the "New
Liability"), as for any reduction of assets (the
"Assets Reduction") compared to the balance sheets of
the Companies for the business year ending on August
31, 1998, which shall be replaced by the balance
sheets as at December 31, 1998, whether the New
Liability or the Assets Reduction may have been
caused by or originate from facts dating before
December 31, 1998, or whether the New Liability or
the Assets Reduction result from commercial facts or
civil liability, or whether they should originate
from tax issues, para-tax issues, social issues or
others, particularly concerning:
- contributions owed to the Social Security
administration, and to all unemployment and
retirement schemes,
- taxes and various duties applied to the
turnover,
- adjustments made by the tax and social
authorities, not reserved for, resulting
from an event which might have occurred
prior to December 31, 1998.
or whether the New Liability or the Assets reduction
would be attributable to the inaccuracy or to the
incomplete declarations or to the non compliance with
the warranty obligations provided above, in Sub
Section II -Representations and Warranties Relating
to the Companies.
(iii) any additional liability resulting from a fact known
by the Guarantors or from a commitment occurring
between December 31, 1998 and the Closing Date, which
would not fall within the usual management of the
Companies and which would not have been disclosed to
the Beneficiary in accordance to the terms hereof,
(hereinafter referred to as the "Damage").
It is understood that the Guarantors shall not be
obliged to indemnify the Beneficiary for the Damage
which might already have been taken into
consideration in the adjustment of the Purchase Price
of Allibert Equipement Europe as defined in Articles
5.2.1 and 5.2.3 of the Protocol Agreement.
-23-
25
Likewise, the warranty applying to the Corporate
Accounts and not on the combined accounts the
Guarantors shall only have the responsibility of
indemnifying the company having suffered the damage
but it will not be taken into account, and the
Guarantors will not have to indemnify the
repercussions which this damage might have on the
accounts of another company, in particular the ones
of its parent company (for example: reserves on the
shares of the company having suffered the damage,
debt on the same company, or any other intercompany
account).
In order to estimate the amount of the damage, only
this damage will be taken into consideration and the
Guarantors shall not in any manner be held liable for
any unforeseeable or indirect damages, particularly
any loss of profits or benefits in connection with
the damage.
The parties agree upon a "De Minimis" of 12,000
(twelve thousand) French Francs. Consequently any
liability or claim in an individual amount equal or
less than this sum or its equivalent in a foreign
currency shall not be taken into account in the
assessment of the Damage.
3.2 EXEMPTION - CEILING
-------------------
It is specified that the total accrual of the sums that will
be due pursuant to the warranties may not exceed a maximum
amount equal to thirty percent (30%) of the Purchase Price of
Allibert Equipement Europe as defined in Article 5.2.1 of the
Protocol Agreement.
The payment obligation arising out of the application of this
warranty shall become effective only if the total amount of
the sums due by the Guarantors exceeds, in one or more times,
a total of ten million francs (FRF 10,000,000) and shall only
concern the sum of those amounts that is higher than an
exemption of five million francs (FRF 5,000,000), it being
understood that the Guarantors shall only pay the Beneficiary
the fraction of the sums due hereunder that exceeds five
million francs.
It is understood that in any event, the exemption of FRF
5,000,000 shall only be deductible a single time and, once the
exemption has been deducted, the Beneficiary shall be
indemnified on a franc for franc basis for any other sum
subsequently due under the warranty.
3.3 DETERMINATION OF THE INDEMNITY
------------------------------
The Guarantors shall indemnify the Beneficiary by paying
directly to the Company or the Companies which suffered the
Damage defined in Article 3.1 a sum equal to the entire damage
(hereafter "the Indemnity"), subject to the provisions of
article 3.2 above.
-24-
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Furthermore, the parties agree expressly that all sums which
will be paid in respect of an event covered by an insurance
contract, indemnities actually received from insurance
companies will be deducted from the sums due by the
Guarantors, subject to effective payment, it being understood
that in all cases, the Guarantors may not base their claim on
the provisions of the present article in order to delay or
refuse any payment due by him hereunder.
In the process of evaluating the amount of the Indemnity, only
the Damage shall be taken into account and the Guarantors
shall, in no event, be liable for enforceable or indirect
damages, particularly for any loss of profit or of benefits
related to the Damage.
In the case of implementation of the Warranty, the Guarantors
shall indemnify the Beneficiary by directly paying the Company
or Companies which have suffered the Damage. The Beneficiary
may, however, choose to be compensated directly.
In the event of a payment to the Company or Companies that
suffered the damage, the amount of the indemnity will be equal
to the amount of the damage.
In the event of a payment to the Beneficiary, this payment
will be characterized as a price reimbursement and will be
equal to the amount of the damage suffered by the company or
companies in question, less any immediate or potential tax
savings that might result for such company or companies. The
tax saving will be considered in each case as equal to the
amount of the damage incurred by the Company, multiplied by
the applicable Company profit tax at the time that the damage
was covered by the Company, even if the Company is not subject
to taxation pursuant to the business year in question (i.e. in
the event that the Company has a loss carry forward).
In the event of a verification carried out by the tax or
social authorities, the possible adjustments shall have the
following consequences:
a) if the claim by the tax or social administrations
results in a sum being due and deductible from the
profit subject to the corporate tax (imput sur les
societes), for a fiscal year prior to the transfer,
this additional liability shall be taken into account
only after a possible adjustment of the corporate tax
savings it would have caused if the Companies had
made profits;
b) if the adjustments which has been carried out makes
the Companies accountable for a liability which is
not legally deductible (non deductible expenses as
defined in the tax regulations), this liability shall
entirely trigger the guarantee for its total amount,
to the extent it has given rise to tax disbursement;
c) the adjustments corresponding to a mere delay in
making a payment in respect of a tax shall not be
taken into account, except for the effect of the
related interest for late payment and penalties, as
well as the effect resulting from a modification of
the tax regulations from one fiscal year to the
other;
-25-
27
d) the adjustments resulting from a decrease of loss
carry forwards or from an amortization which is
deemed deferred, if they do not give rise to an
immediate payment of the tax, shall give rise to a
payment only on the day on which the effective
payment of the related tax is made;
e) to the extent the VAT may be recoverable, the amount
of the adjustments in respect of VAT would only be
withheld for the payment of interest for late
payment, fines and penalties as well as for the
possible related financial costs.
3.4 TERM OF THE GUARANTEE
---------------------
Any claim for payment by the Beneficiary pursuant to these
provisions shall be notified by the Beneficiary to the
Representative of the Guarantors hereinafter designated in
Article 11 no later than the last day of the 18th month
following the Closing Date.
Any claim for payment made after such date shall not be
admissible and guaranties that have not been validly
implemented by no later than the last day of the 18th month
following the closing date will be extinguished on such date.
Notwithstanding the foregoing, any claim for payment resulting
from a tax, social (URSSAF, ASSEDIC or assimilated
institutions and accident insurance) or customs liability
shall be notified by the Beneficiary to the Representative of
the Guarantors no more than 30 days after the statute of
limitations for the recourse concerned for the warranty of
tax, para-fiscal, customs and social liabilities (URSSAF,
ASSEDIC or assimilated institutions and accident insurance).
This warranty will end 30 days after the final amicable,
litigious or court solution arising from the administration's
verifications.
3.5 IMPLEMENTATION
--------------
The Guarantors shall not have to indemnify the Damage (defined
in article 3.1 hereof) if the claims addressed by the
Beneficiary, pursuant to the said Damage, will not have been
executed in accordance with the procedure and the process
defined in article 3.5 hereof:
3.5.1 In the event that (A) any claim, demand or procedure
is asserted or instituted by any party other than the
parties hereto (or their respective Affiliates) which
could give rise to a Damage as defined in article 3.1
hereof, (any such claim, demand or procedure,
hereinafter referred to as a "Third Party Claim"), or
(B) the Beneficiary shall have a claim to be
indemnified for a Damage which does not involve a
Third Party Claim (any such claim, hereinafter
referred to as a "Beneficiary Direct Claim"), the
Beneficiary shall:
(i) in the case of a Third Party Claim,
addressed to the Guarantors as promptly as
possible and no later than 20 days of
receipt, by the
-26-
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Company in question, of notice of such Third
Party Claim (and imperatively in all shorter
delays in order to avoid any preclusion,
other cancellation of rights or shift of the
burden of proof, which may be damaging for
the concerned Company) a written notice
specifying the nature of such claim and the
amount of the Third Party Claim, providing
Guarantors with a copy of the said Third
Party Claim as well as all documents
received by the Third Party in support of
its claim (hereinafter the "Claim Notice");
or
(ii) In the event of a Direct Claim by the
Beneficiary, addressed to the Guarantors as
soon as the Beneficiary will have knowledge
of a Damage, a written notice specifying the
nature of such claim and the amount or
estimated amount of the Damage (the said
estimate will not be decisive on the final
amount of the Damage (hereinafter the "Claim
Notice").
3.5.2 In the event of a Beneficiary Direct Claim, the
Guarantors shall have ninety (90) days following
receipt of the relevant Claim Notice (the "Review
Period") to make such investigation of the underlying
claim and gather from the Beneficiary and from the
Company in question all explanations and
justifications that the Guarantors will considers
necessary in order to make a decision on the validity
of the Beneficiary's Claim. If the Guarantors and the
Beneficiary agree, during the Review Period, upon the
validity and amount of the Beneficiary Direct Claim,
the Guarantors shall pay to the Beneficiary, within
thirty (30) days following the date of such
agreement, the full agreed amount claimed to the
Company in question or to the Beneficiary in
accordance with article 3.3 above. If the Beneficiary
and the Guarantors are unable to reach an agreement
prior to the expiration of the Review Period, the
matter shall than be settled pursuant to the
provisions of Article 6 hereof.
3.5.3 In the event of a Third Party Claim
(A) The Guarantors shall have the right to
conduct any defense of the claim against the
Third Party Claim and to retain counsel of
their choice, to represent the Beneficiary
and any other person the Guarantors may
designate in connection with such Third
Party Claim and shall pay the fees and
disbursements of such counsel and persons
designated by the Guarantors. If requested
by the Guarantors, the Beneficiary agrees to
cooperate and to have the staff of the
Company concerned by the Third Party Claim
cooperate with the Guarantors and their
counsel in contesting any such Third Party
Claim; the Beneficiary shall refrain from
taking any action likely to jeopardize or
interfere with the defense of such claim by
the Guarantors. If so requested by the
Guarantors, the Beneficiary shall make and
have prepared by the Company concerned by
the Third Party Claim any written document
(i.e. counterclaim) necessary to counter any
assertions in respect to the validity of the
Third Party Claim.
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(B) In the event that the Guarantors should
choose not to assure themselves the defense
against the Third Party Claim, the
Beneficiary undertakes and/or to have the
company concerned by the Third Party Claim
to institute proceedings or to assure the
legal defense, in all judicial or
administrative proceedings, and to pursue
these proceedings until their ultimate point
if the Guarantors require so and in case of
emergency, without any specific request, and
in order to avoid any foreclosure or
extinctive prescription, in order to reserve
the Guarantors' rights and to limit the
Guarantors' liability. The Guarantors shall
have the right, at their own expenses, to be
represented by an agent appointed to follow
the discussion with the proceedings with the
Third Party concurrently with the
representative of the Beneficiary and/or of
the companies and may reasonably inform
itself and take copies of all useful
documents related to the Claims, subject to
the Third Party Claim.
(C) No Third Party Claim may be settled without
the prior written consent of the Guarantors;
in particular, the Beneficiary shall obtain
the Guarantors' prior written approval for
any acceptance of claim, any acknowledgment
or settlement with Third Parties, it being
understood that the Guarantors may oppose to
the acceptance the acknowledgment or to the
Settlement only if they give prior notice to
the Beneficiary for their irrevocable and
unconditional acceptance to bear all costs
for the fees incurred by the Beneficiary in
the context of the Third Party claim before
and after the Guarantors refusal.
3.5.4 Common rules for "Beneficiary Direct Claims" and to
---------------------------------------------------
"Third Party Claims."
---------------------
(A) Upon formal notice, and upon the request of
the Guarantors, the Beneficiary shall grant
the Guarantors and their representatives
reasonable access to books, record and
assets of the Companies to the extent that
they are related to the Beneficiary Direct
Claim or to the Third Party Claim, subject
of the Claim Notice. The Guarantors will
not, and shall require as well from its
representatives not to use (except in
connection with the Beneficiary's Direct
Claim or the Third Party Claim) any
information disclosed pursuant to the
paragraph hereof which is defined as
confidential by the Beneficiary. Access to
these documents shall be granted during
normal business hours and shall not cause
unusual disturbance s to the operations of
the Beneficiary.
(B) The Beneficiary, undertakes not to come to
terms, settle, go to arbitration, in respect
of issues likely to incur the Guarantors'
liability under this Warranty without first
having obtained the Guarantors' agreement,
which must express their answer, whether
positive or negative, within eight (8) days
of a request for acceptance.
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3.6 NOUGHT
------
3.7 PAYMENT
-------
Any claim for payment made by the Beneficiary, resulting from
a Third Party Claim, shall be payable by the Guarantors within
thirty (30) days following its notification, provided that the
Company concerned is obliged, pursuant to the regulations in
effect or to a writ of execution, to meet the requirements
expressed in such claim, without having any recourse
whatsoever. In the event of a recourse, the indemnity shall be
payed to the Company within 5 bankable days upon the payment
date by the Company to a third party, should no disagreement
remain between the Guarantors and the Beneficiary concerning
the said Third Party Claim.
Without prejudice to the right of the Beneficiary to avail
itself, if necessary, of its rights arising out of the last
paragraph of article 1153 of the French Civil Code, if
payments have not been made at the agreed upon date, the sum
due shall immediately and without prior notice bear interest
at a rate equal to three (3) month PIBOR increased by two (2)
points. This provision may not be considered as allowing the
Parties to make late payments.
Any other request for payment from the Beneficiary will only
be due by the Guarantors within thirty (30) days of either the
acceptance by the Guarantors or the definitive establishment
of its validity pursuant to Article 6 hereof.
SECTION 4 - COLLATERAL SECURITY
-------------------------------
In the normal course of business of the Companies, the Guarantors have
given collateral securities to the banks which are appended in Exhibit
28 hereto.
The Beneficiary shall take the necessary measures to obtain the release
of these security interests within two months of the Closing Date.
SECTION 5 - TRANSFER OF THE BENEFIT OF THIS AGREEMENT AND THE COMMITMENTS
-------------------------------------------------------------------------
HEREUNDER
---------
The warranties granted by the Guarantors are non-assignable and
non-transferable, but in the event of the subsequent transfer (or
allotment) of all or part of the Shares to a company of the
Beneficiary's group, the Beneficiary may transfer to this company of
its group all or part of the benefit of these warranties, on condition
however that this transfer is notified to the Guarantors within thirty
days, respecting the provisions of Article 1690 of the Civil Code, and
on condition also that such company of its group has expressly taken
over the commitments made in the Protocol Agreement, in this Warranty
and, as the case may be, in any subsequent agreements.
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It is expressly agreed between the parties that the Guarantors shall
not have the option of transferring to any person whatsoever their
obligation hereunder. In the event the Guarantors cease to exist, their
successors shall be indivisible and jointly liable for the performance
of the obligations of this Warranty.
The Warranty will still be valid notwithstanding the termination of one
of the Companies or of the Beneficiary following a merger or an
absorption by another company.
Consequently, the Guarantors may not argue the termination of any of
the Companies or of the Beneficiary in order not to perform their
obligations under the Warranty.
SECTION 6 - DISPUTES
--------------------
Any disputes arising out of the validity, interpretation, performance
of this agreement, between the Guarantors and the Beneficiary shall be
submitted to the jurisdiction of the Commercial Court of Paris.
SECTION 7 - ELECTION OF DOMICILE
--------------------------------
The parties elect domicile at their respective registered offices, the
addresses of which are indicated at the beginning of this Agreement.
SECTION 8 - ASSIGNMENT BY THE GUARANTORS
----------------------------------------
Neither Guarantors, nor Xxxxxx Xxxxxxxx may substitute a third party
for themselves in any manner whatsoever for the performance of the
obligations under this Warranty.
SECTION 9 - THE GUARANTORS' AND BENEFICIARY'S ASSIGNS
-----------------------------------------------------
The obligations provided for herein shall be binding on the heirs,
successors, assigns and beneficiaries of the Guarantors, Xxxxxx
Xxxxxxxx, and of the Beneficiary, who shall remain jointly and
severally responsible between them for the performance of any
obligations arising herefrom.
SECTION 10 - NOTICES
--------------------
10.1 All notices or communications hereunder shall be effective
only if they are made in writing and sent by registered letter
with return receipt requested, or by telex or telefax (telex
and telefax shall be confirmed the same day by registered
letter with return receipt requested) to the address and for
the attention of the recipient as indicated in Article 10.2.
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Such notices shall be deemed to have been received, in the
case of telefaxes or telexes, on the business day following
the day on which they are sent, in the case of registered
letters with return receipt requested, on the third business
day following the day on which they are sent, and in the case
of notices delivered by hand, on the day on which they are
handed over.
For the purposes of Article 3 above, the Guarantors expressly
agree that Allibert Holding, which accepts, is designated as
the "Representative of the Guarantors", and that consequently,
a copy of all notices or communications must be addressed to
it in accordance with the present article.
10.2 The addresses of the parties for the purposes of Article 10.1
are the following:
Representative of the Guarantors:
Company: Allibert Holding
Address: 0 xxx xx x'Xxxxxxx
00000 Xxxxxxxx - Xxxxxx
Telefax: 01 41 20 47 03
For the attention of: Legal Department
The Guarantors:
Company: Allibert Holding
Address: 0 xxx xx x'Xxxxxxx
00000 Xxxxxxxx - Xxxxxx
Telefax: 01 41 20 47 03
For the attention of: Legal Department
Company: Seditep
Address: 0 xxx Xxxxxxxxxxx
00000 Xxxxxxxx - Xxxxxx
Telefax: 01 41 20 47 03
For the attention of: Legal Department
Company: Xxxxxxxxx Xxxxxxxx
Address: 0 xxx xx x'Xxxxxxx
00000 Xxxxxxxx - Xxxxxx
Telefax: 01 41 20 47 03
For the attention of: Legal Department
Company: Allibert Transport und
Lagertechnik GmbH
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Address: Xxxxxxxxxxx 00-00000,
Xxxxxxxxx xx Xxxx
Telefax: 01 41 20 47 03
For the attention of: Legal Department
The Beneficiary:
Company: Xxxxx Industries, Inc.
Address: 0000 Xxxxx Xxxx Xxxxxx
Xxxxx, Xxxx 00000
X.X.X.
Telefax: (0) 000 000 0000
For the attention of: Mr. Xxxxxxx Xxxxx
10.3 A copy of the notice to the Beneficiary shall be addressed by
telefax, for information purposes to:
Xxxxxx & XxXxxxxx, L.P.A.
500 First National Tower
Akron, Ohio 44308
For the attention of: Xxxxx X'Xxxx
Xxxxxxx: 330/253-8601
and
Cabinet Salans, Xxxxxxxxx & Heilbronn
0, xxx Xxxxxx x'Xxxxxx
00000 Xxxxx
For the attention of: Me Xxxxxxx Xxxxxxx-Xxxxxx
and Me Xxxxxxxx Xxxxxx
Telefax: 01 42 68 15 45
10.4 In the event of a change of address or recipient, the party
concerned shall inform the other party as provided for above.
SECTION 11 - WAIVER
-------------------
The Beneficiary's failure to exercise a right provided for herein may
not in any event be interpreted as a waiver of any such right and shall
not in any manner affect the Beneficiary's right to exercise such
right.
No waiver of any contractual or legal representation or warranty shall
be effective unless the Beneficiary notifies such waiver to the
Guarantors by means of a written and signed declaration.
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SECTION 12 - SEVERABILITY
-------------------------
If any one of the provisions hereof were held to be invalid,
unenforceable, lapsed, illegal or inapplicable, it shall not affect the
validity, legality or applicability of the other provisions of the
warranty and shall not exempt the Guarantors from the performance of
the warranty. In such a case the parties shall negotiate in good faith
and shall substitute if possible another provision that is lawful
corresponding to the spirit and purpose of the unlawful provision.
SECTION 13 - ENTIRE AGREEMENT
-----------------------------
This Warranty constitutes the sole and entire agreement between the
parties as to the provisions that are the subject matter hereof.
Accordingly, it cancels and replaces all contracts, covenants,
exchanges of letters or oral agreements that may have existed between
the parties prior to the date hereof and concerning the same subject
matter, except for the provisions in the above mentioned Agreement
which shall prevail over the provisions hereof in case of discrepancy.
The Sellers make no other representations and grant no other warranties
to the Purchaser apart from those expressly and specifically made and
granted herein. Without limiting the general nature of the foregoing,
the Seller does not make any representations or warranties as to:
- the accuracy or completeness of any forecast, business plan,
budget or other prospective information supplied by the
Seller, the Xxxxxx Allibert company or their advisors, to the
Purchaser or its advisors;
- with respect to the future relations of the Companies with any
public authority, customers, suppliers, employees, with the
exception of what is expressly mentioned herein.
SECTION 14 - EXHIBITS
---------------------
14.1 The following exhibits form an integral part of this Warranty
Agreement:
1 Effect of the Sale
2 Deed of disposal or acquisition of tangible or
intangible fixed assets
3 List of directors, Chairman, general managers and
statutory auditors or other corporate managers
4 By-laws of the Companies
5 Tax integration agreements
6 Corporate Accounts drawn up as at August 31, 1998
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7 Corporate accounts of the Companies closed as at
December 31, 1998
8 Security, pledge, mortgage, warranties, guarantees,
charge
9 Real estate occupied by the Companies
10 Real estate financed leases
11 Intellectual property rights
12 Licenses or other rights granted on the intellectual
Property Rights
13 Intellectual Property Rights for which the Companies
only hold a license
14 Facsimile of the logo of the Xxxxxx Allibert Group
15 Actions brought by third parties in the matter of
Intellectual Property
16 Details of the bank accounts
17 Off balance sheet commitment
18 Contracts on which the sale of shares would have an
effect
19 Accounts receivable for which recovery appears
doubtful - Substantial customers having threatened to
cease all relations
20 Important accidents having occurred and having been
declared since January 1, 1997
21 Employment contracts containing provisions more
favorable than those provided for in the applicable
collective bargaining agreements. Company agreements
(accord d'entreprise)
22 Disputes, litigation or arbitration
23 Claims, requests for information from the tax
authorities
24 Injunctions and formal notices concerning compliance,
safety or hygiene standards
25 Products with manufacturing faults or defects -
Warranty Agreement
26 Governmental, regional or departmental subsidies
received during the last five (5) years
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27 Menu options for GPAO software remaining to be tested
for Year 2000 conformity.
28 Collateral securities granted
14.2 The following is expressly agreed :
a) the accounts of the Companies described in
Sub-section II - paragraph 2.2 Corporate Accounts as
at December 31, 1998 will be, on the Closing Date,
appended hereto as EXHIBIT 7.
b) If necessary, exhibits referred to in 14.1 above will
be up dated on the Closing Date with the
Beneficiary's agreement.
SECTION 15 - EFFECTIVE DATE
---------------------------
The present Warranty Agreement bounds the parties upon the signature
hereof and shall be null and void in the event of the non-occurrence of
the Protocol Agreement Share transfer, subject to the
[The rest of the page was left blank intentionally]
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Executed in Nanterre, On December 3, 1998 in 3 originals
For the Guarantors For the Beneficiary
ALLIBERT HOLDING XXXXX INDUSTRIES, INC.
/s/ Xxxxxx Xxxxxx /s/ Xxxxxxx X. Xxxxx
--------------------------------- -----------------------------------
Xxxxxx Xxxxxx Xxxxxxx X. Xxxxx
SEDITEP
/s/ Xxxxxxxx Xxxxxxxx
---------------------------------
Xxxxxxxx Xxxxxxxx
SAUVAGNAT ALLIBERT
/s/ Xxxxxx Xxxxxx
---------------------------------
Xxxxxx Xxxxxx
ALLIBERT TRANSPORT UND LAGERTECHNIK GmbH
/s/ Xxxxxxxx Xxxxxxxx
---------------------------------
Xxxxxxxx Xxxxxxxx
The undersigned, Allibert Holding, represented by Xx. Xxxxxx Xxxxxx, empowered
by Xx. Xxxx Xxxx, Chairman of the Board of Directors, hereby declares that it
gives the Beneficiary its joint collateral security for all sums that may be
owed to it by SEDITEP, SAUVAGNAT ALLIBERT, ALLIBERT TRANSPORT UND LAGERTECHNIK
under this warranty agreement, in accordance with the authorization of its Board
of Directors, a certified true copy of which is remitted to the Beneficiary.
For ALLIBERT HOLDING
/s/ Xxxxxx Xxxxxx
---------------------------------
Xxxxxx Xxxxxx
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IN THE PRESENCE OF
/s/ Xxxxxx Xxxxxx
---------------------------------
For XXXXXX ALLIBERT*
By Xxxxxx Xxxxxx
* Add written in your own hand "Good for acting as joint and indefinite
guarantor for all the obligations subscribed by the Guarantors, their
successors, assigns and beneficiaries pursuant to this Agreement".
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