January 30, 1997
SHARE PURCHASE AGREEMENT
THIS AGREEMENT is made on January 30, 1997, in Paris, France.
BETWEEN
1. Xxxxxxx Worldwide Associates Inc., a corporation organized and
existing under the laws of the State of Wisconsin, having is principal
office at 0000 Xxxxxx Xxxx, Xxxxxxxxxx, Xxxxxxxxx 00000, XXX (the
"Seller"), represented by Xx. Xxxx X. Xxxxxxx, its Senior Vice President
and Chief Financial Officer;
AND
1. Societe Figeacoise de Participations, a French societe anonyme with a
registered capital of FF 250,000 divided into 2,500 shares with a nominal
value of FF 100 each, having its registered office at 00 xxx Xxxxxxxxx
Xxxxxxxx, 00000 Xxxxxxx, Xxxxxx, and being registered at the Registry of
Commerce and Companies of Lorient under the number B 398 743 138
(hereinafter "SFP"), represented by Xx. Xxxxxxx Le Saffre; and
2. Plastimo, a French societe anonyme with a registered capital of
FF 41,250,000 divided into 412,500 shares with a nominal value of FF 100
each, having its registered office at 00 xxx Xxxxxxxxx Xxxxxxxx, 00000
Xxxxxxx, Xxxxxx, and being registered at the Registry of Commerce and
Companies of Lorient under the number B 863 500 237 ("Plastimo France".
SFP and Plastimo France shall collectively be referred to as the
"Purchasers".), represented by Xx. Xxxxxxx Le Saffre.
WITNESSETH
WHEREAS:
1. Seller will own immediately prior to the Closing (as such term is
defined in Section 1.03 hereof) all the shares (the "Plastimo France
Shares") of Plastimo France and all the issued shares (the "Plastimo UK
Shares") of Plastimo Manufacturing (UK) Limited, an English company with a
nominal share capital of (pound sterling) 1,000,000 divided into 1,000,000
shares of (pound sterling) 1 each of which 735,000 are issued, having its
registered office at School Lane, Chandlers Ford Industrial Estate,
Xxxxxxxxx, Xxxxxxxxx X000 0X0, Xxxxxxx ("Plastimo UK". Plastimo France
and Plastimo UK shall collectively be referred to as the "Companies" and
the Plastimo France Shares and the Plastimo UK Shares shall collectively
be referred to as the "Shares").
2. Seller desires to sell to SFP and SFP desires to purchase from Seller
the Plastimo France Shares, and Seller desires to concurrently sell to
Plastimo France and Plastimo France desires to Purchase from Seller the
Plastimo UK Shares, upon the terms and subject to the conditions set forth
herein.
NOW, THEREFORE, the Parties hereto agree as follows:
ARTICLE I
SALE AND PURCHASE OF THE SHARES
1.01 Purchase and Sale.
Upon the terms and subject to the conditions set forth in this
Agreement, at the Closing, the Seller shall sell to SFP and SFP shall
purchase from Seller the Plastimo France Shares, and (concurrently with
the sale of the Plastimo France Shares to SFP) Seller shall sell to
Plastimo France and Plastimo France shall purchase from Seller the
Plastimo UK Shares. It is hereby understood that SFP and Plastimo France
shall have no obligation to purchase the Plastimo France Shares and the
Plastimo U.K. Shares, respectively, unless the Seller tenders all of the
Plastimo France Shares to SFP and the Plastimo U.K. Shares to Plastimo
France at the Closing.
1.02 Purchase Price.
The aggregate consideration to be paid by SFP for the Plastimo France
Shares shall be FF 82,500,000 in cash, as may be adjusted pursuant to
Article V hereof (the "Plastimo France Purchase Price"). The aggregate
consideration to be paid by Plastimo France for the Plastimo UK Shares
shall be FF 11,680,207 in cash, as may be adjusted pursuant to Article V
hereof (the "Plastimo UK Purchase Price"). The Plastimo France Purchase
Price shall be paid by SFP, and the Plastimo UK Purchase Price shall be
paid by Plastimo France, in the manner and at the time set forth in
Section 1.03.
1.03 Closing.
(a) Subject to the terms and conditions of this Agreement, the sale
and purchase of the Shares contemplated hereby shall take place at a
closing (the "Closing") to be held at 9:00 a.m., local time, on January
30, 1997 at the offices of Salans Xxxxxxxxx & Heilbronn, 0 xxx Xxxxxx
x'Xxxxxx, 00000 Xxxxx, Xxxxxx, or at such other time or on such other date
or at such other place as the Seller and the Purchasers may mutually agree
upon in writing.
(b) At the Closing, the Seller shall deliver or cause to be
delivered to the Purchasers (i) a duly executed ordre de mouvement for all
of the Plastimo France Shares, sufficient to convey to SFP good title to
the Plastimo France Shares; (ii) a copy of the share transfer register of
Plastimo France showing the transfer of the Plastimo France Shares in
favor of SFP; (iii) duly endorsed stock certificates (or equivalent
documents) evidencing the Plastimo UK Shares, sufficient to convey to
Plastimo France good title to the Plastimo UK Shares; and (iv) the
certificates and other documents required to be delivered pursuant to
Section 4.01.
(c) At the Closing, SFP shall pay an amount equal to the Plastimo
France Purchase Price to the Seller by bank check (cheque de banque)
issued by a first rate French bank for immediately available funds.
(d) At the Closing, Plastimo France shall pay the Plastimo UK
Purchase Price to the Seller by bank check (cheque de banque) issued by a
first rate French bank for immediately available funds.
(e) The Seller shall not be deemed (i) to have transferred title to
the Plastimo France Shares to SFP or (ii) to have transferred title to the
Plastimo UK Shares to Plastimo France, unless each of the conditions
precedent to the obligations of the Seller set forth in Section 4.02
hereof are fulfilled.
ARTICLE II
REPRESENTATIONS AND WARRANTIES
GIVEN BY THE SELLER
To the exclusion of all other representations and warranties, whether
express, implied or statutory and except as set forth in the Exhibits
attached hereto, the Seller hereby makes the following representations and
warranties to SFP (and to Plastimo France with respect to the Plastimo UK
Shares) as to facts existing as of the date hereof and events which have
or have not occurred on or prior to the date hereof. The Seller hereby
acknowledges that SFP and Plastimo France have agreed to enter into this
Agreement on the basis of these representations and warranties, and are
relying on these representations and warranties regardless of the
participation of SFP's auditors in reviewing financial statements of the
Companies and any other investigation which SFP may have made. It is
expressly understood and agreed that any reference in this Article II to
the knowledge of the Seller shall refer to the actual knowledge of Xx.
Xxxx X. Xxxxxxx (who is a director of Plastimo France) and/or Xx. Xxxxxxxx
Xxxxx (who is a director of Plastimo France and Plastimo UK).
2.01 Corporate Matters
(a) Each Company and each Subsidiary (as such term is defined in
Section 2.01(d) hereof) has been duly organized in conformity with the
laws of its jurisdiction of incorporation. The Companies and the
Subsidiaries have obtained all material permits, licenses, authorizations
and approvals (governmental or otherwise) necessary to own and operate
their assets and to carry out their businesses as now being conducted,
except where failure to obtain a permit, license, authorization or
approval would not have a material adverse effect on the Companies and the
Subsidiaries taken as a whole (a "Material Adverse Effect"). The Companies
and the Subsidiaries have accurately and diligently accomplished, on or
prior to the applicable deadlines, all formalities that are required to
validly continue their existence.
(b) There has been no request for the annulment or the dissolution
of any Company or Subsidiary, nor any bankruptcy restructuring procedure
("redressement judiciaire") or judicial liquidation, nor any equivalent
procedure; neither Company nor any of the Subsidiaries is insolvent ("etat
de cessation de paiements"). There are no grounds upon which a third party
could require the dissolution or winding up of any Company or Subsidiary.
(c) A complete, up-to-date, certified copy of the by-laws (or
equivalent organizational documents) of the Companies and the
Subsidiaries, as well as an original excerpt ("Extrait K-bis") from the
Registry of Commerce and Companies (or equivalent certificate) for the
Companies and the Subsidiaries are attached hereto in Exhibit 2.01(c)(i).
No resolution has been approved that results or will result in the
amendment of the attached by-laws or the dissolution or winding up of any
Company or Subsidiary. All of the corporate books and registries of the
Companies and the Subsidiaries have been properly maintained in all
material respects in accordance with applicable law. The corporate books
and registries of the Companies and the Subsidiaries accurately reflect,
in all material respects in accordance with applicable law, their
activities since their incorporation. A copy of the last board of
directors minutes of each Company and each Subsidiary, as well as the
minutes of the last shareholders' meeting, are attached hereto as Exhibit
2.01(c)(ii).
(d) Exhibit 2.01(d) sets forth the name of each subsidiary of the
Companies (the "Subsidiaries"), including each Subsidiary's jurisdiction
of organization, its registered share capital, the number and nominal
value of its issued shares, the current ownership by the Companies of such
shares and each Subsidiary's registered office. Other than the
Subsidiaries, the Companies do not have any subsidiaries and do not
directly or indirectly hold shares or other securities in any company,
French or foreign. Neither of the Companies is part of any group or
association with third parties nor of any organization to which it could
be obligated to contribute additional capital or the liabilities of which
it could be required to pay or guarantee. None of the Companies or
Subsidiaries acts as a member of the board of directors of any other
company. No contract exists whose stated purpose is to give to a third
party (i) influence over the control or the management of the Companies
or the Subsidiaries or their respective businesses or (ii) a right to
claim a part of the profits of the Companies or the Subsidiaries.
2.02 Capital Structure
(a) The Plastimo France Shares represent 100% of the capital of
Plastimo France, and the Plastimo UK Shares represent 100% of the capital
of Plastimo UK. The Shares are fully paid-in. Except as set forth in
Exhibit 2.01(d), Plastimo France is the direct owner of 100% of the shares
of the Subsidiaries (the "Subsidiary Shares"). The Companies have not
issued shares or rights of any kind whatsoever other than the Shares and
the Subsidiaries have not issued shares or rights of any kind whatsoever
other than the Subsidiary Shares which may give rise, directly or upon
conversion, exchange, reimbursement or exercise, to an increase of their
capital or an issuance of securities which entitle their owners to a share
of the profits or to voting rights of the Companies or the Subsidiaries.
(b) The Seller has full legal right, power and authority to sell the
Shares and has obtained all requisite permits and consents for such sale.
Except as set forth in Exhibit 2.02(b), the Shares are fully negotiable
and free from any option rights, claims, privileges, liens, security
interests, collateral, encumbrances, charges or restrictions of any kind
whatsoever. Immediately following the sale of the Plastimo France Shares
to SFP and the sale of the Plastimo UK Shares to Plastimo France (and
except in connection with any actions taken by SFP), SFP shall acquire
full ownership of the Plastimo France Shares and Plastimo France shall
acquire full ownership of the Plastimo UK Shares, free from any option
rights, claims, privileges, liens, security interests, collateral,
encumbrances, charges or restrictions of any kind whatsoever.
2.03 Effect of the Sale
Except as set forth in Exhibit 2.03 hereto and except for matters not
having a Material Adverse Effect, the sale of the Plastimo France Shares
to SFP and the sale of the Plastimo UK Shares to Plastimo France will not:
(a) conflict with or violate the by-laws or other organizational
documents of either Company or conflict with or violate any legal or
regulatory disposition, or any judgment or decision that has been notified
to either Company, whether judicial or regulatory; or
(b) result in the creation of any option rights, claims, privileges,
liens, security interests, collateral, encumbrances, charges or
restrictions of any kind whatsoever upon any material assets owned by the
Companies or the Subsidiaries; or
(c) give any person the right to revoke a guarantee, surety, comfort
letter or other similar document issued for the benefit of any Company or
Subsidiary; or
(d) give any person the right to modify, cancel or revoke any
material permit, authorization or license necessary for the legal exercise
of the activities of the Companies' or the Subsidiaries' businesses or of
any favorable tax regime or of subsidy or other public assistance; or
(e) give any person the right to require the early repayment of a
loan or a line of credit or any other financing granted to any Company or
Subsidiary or to modify their terms; or
(f) give any person the right to terminate a material contract or
agreement to which a Company or a Subsidiary is a party, or any other
material contract or agreement which is necessary for the Companies' or
the Subsidiary's businesses or to modify the effects of any such contracts
or agreements.
2.04 Potential Conflicts of Interest
Except as set forth in Exhibit 2.04 hereto, neither the Seller, nor
any entity that is controlled by the Seller:
(a) holds, or has the option to acquire, directly or indirectly, a
participation in a company or business which conducts business with the
Companies or the Subsidiaries as a supplier, purchaser, lessor, provider
of services or in any other manner; or
(b) holds, or has the option to acquire, directly or indirectly, in
whole or in part, any assets or rights used by any Company or Subsidiary
for purposes of conducting its activities or which are necessary for the
conduct of the business of any Company or Subsidiary; or
(c) receives any remuneration from persons outside the JWA group who
provide goods or services to any Company or any Subsidiary, or from
persons who purchase goods or services from any Company or Subsidiary; or
(d) has made, or intends to make, a claim against a Company or
Subsidiary whether by virtue of a contract or by operation of law; or
(e) is owed any amounts by the Companies and/or the Subsidiaries by
reason of a loan or for any other reason excluding ordinary course
intercompany transactions.
2.05 Financial Situation
(a) The Seller has delivered to SFP a copy of the consolidated
financial statements of the Companies and the Subsidiaries for the year
ended on September 27, 1996 stated in U.S. Dollars (hereinafter the
"Accounts"), attached hereto as Exhibit 2.05 (a).
(b) The Accounts have been prepared according to U.S. generally
accepted accounting principles (U.S. GAAP) applied on a consistent basis.
They fairly present in accordance with US GAAP on a consolidated basis in
all material respects the financial condition of the Companies at
September 27, 1996 and the results of the operations of the Companies and
the Subsidiaries for the financial period which they cover. To the best
knowledge of the Seller: (i) these Accounts have been prepared from the
individual statutory accounts of the Companies and Subsidiaries and (ii)
such statutory accounts were prepared according to generally accepted
accounting principles of the countries in which each Company or Subsidiary
operates, applied on a consistent basis. A copy of each of these
statutory accounts for the year ended September 30, 1996 is attached
hereto as Exhibit 2.05(b). The local currencies of such statutory
accounts were converted into U.S. Dollars for the purposes of the Accounts
at the rates set forth in Exhibit 2.05(b).
2.06 Current Operations
Each of the Companies and Subsidiaries has since September 27, 1996
been managed in the ordinary course of business and "en bon pere de
famille". Except as set forth in Exhibit 2.06 hereto, since September 27,
1996:
(a) To the exclusion of macro-economic type events or modifications,
no event, modification or transaction of any kind has taken place which
has a Material Adverse Effect on the financial condition and operations of
the Companies and Subsidiaries taken as a whole and the Seller knows of no
event or modification which will have such an effect;
(b) No dividend has been declared or paid by the Companies, no
amount has been improperly paid out by any Company or Subsidiary, and no
shares of the Companies have been repurchased or redeemed by the
Companies;
(c) None of the Companies or Subsidiaries has contracted a
commitment or obligation other than in the ordinary course of its
business, and in conformity with its previous practice and in amounts
comparable with those commitments contracted in the past;
(d) None of the Companies or Subsidiaries has acquired any material
fixed assets or sold any of their material fixed assets except at prices
conforming to their fair market value, nor (except for contested items or
for other reasonable commercial reasons) relinquished any debts or other
rights due to them without receiving full compensation therefor, nor
repaid any loan prior to its repayment date;
(e) None of the Companies or Subsidiaries has, except in the
ordinary course of business, raised salaries or has modified the terms of
the employment contracts to which it is a party, nor the benefits enjoyed
by its employees and managers. None of the Companies or Subsidiaries has
(except in the ordinary course of business or as required by applicable
laws, regulations and collective bargaining agreements) expressly
undertaken to increase the salaries or bonuses or other advantages of any
of their employees or managers; and
(f) None of the Companies or Subsidiaries has granted any material
option rights, mortgages or other security interests or encumbered the
property of the Companies and/or the Subsidiaries in any way.
2.07 Tax, Social Security and Customs
Except as set forth in Exhibit 2.07 hereto, at the date hereof, the
Companies and the Subsidiaries are not subject to any tax, social
security, or customs audit and no pending tax, social security or customs
adjustments have been notified to any of the Companies or Subsidiaries.
2.08 Compliance with the Law and Litigation
(a) The Companies and the Subsidiaries have acted in conformity with
the laws, decrees, regulations and binding decisions of competent
authorities that are applicable to them or that relate to their
activities, except where such non-conformity has no Material Adverse
Effect.
(b) Except for those items described in Exhibit 2.08(b) hereto and
for matters involving claims of less than FF 100,000 or its equivalent in
another currency, none of the Companies or Subsidiaries is a party to any
administrative, judicial or arbitration procedures. Except as set forth in
Exhibit 2.08(b), they are not the subject of any written claim and the
Seller has no knowledge of any circumstance which makes it reasonably
foreseeable that such a claim will be made against one of them. They have
not received any notification of a proceeding or administrative
investigation.
2.09 Contracts
(a) Exhibit 2.09(a) hereto enumerates all of the contracts to which
any Company or Subsidiary is a party:
(i) conferring exclusivity as a distributor, commercial agent
or traveling sales representative (VRP); or
(ii) requiring a payment of greater than FF 500,000; or
(iii) requiring, if terminated immediately after the date
hereof, the payment of an indemnity, penalty or other sum exceeding FF
500,000 , or, in the case of employment contracts, requiring indemnities
other than indemnities required by law or applicable collective bargaining
agreements.
Such contracts shall be referred to herein as the "Important Contracts".
(b) None of such Important Contracts violates any mandatory law or
regulation and the Companies and the Subsidiaries have full rights to
require their performance in accordance to their respective terms. No
party to these contracts is in breach of the obligations contained therein
thus giving a third party a right to terminate or to require payment of an
indemnity in excess of FF 500,000. No discussion is underway with the view
to modifying or terminating any of these contracts.
2.10 Real Property and Fixtures
(a) The Companies and the Subsidiaries have good title to or lease,
under written leases, all of the real property and fixtures to such real
property used in their industrial and commercial activity. Exhibit
2.10(a) contains copies of all such leases including any amendments. The
real property and said fixtures used in their industrial and commercial
activity are not subject to any contract that permits a third party to
occupy the premises used by the Companies or the Subsidiaries or that
could materially restrict or limit their present use by the Companies or
the Subsidiaries.
(b) To the best knowledge of the Seller and except as stated in
Exhibit 2.10(b), all of the real property and attached fixtures used by
the Companies and the Subsidiaries are in good working order and repair
(reasonable wear and tear excepted) in conformity in all material respects
with the laws and regulations applicable to them, in particular with
respect to zoning, environment, safety and labor law. To the best
knowledge of the Seller, the electrical, water and gas installations
conform in all material respects to existing legal requirements.
(c) No decision has been notified in writing to the Companies or the
Subsidiaries by a competent authority that has or will have the effect (i)
of restricting or modifying the use of the real property or installations
used by the Companies or the Subsidiaries or (ii) requiring material new
investments. No decision has been published by a competent authority that
has or will have the effect of (i) restricting or modifying the use of the
real property or installations used by the Companies or the Subsidiaries
or (ii) requiring material new investments before July 31, 1998.
2.11 Technical Installations and Equipment
(a) To the best knowledge of the Seller, the technical installations
and equipment held by the Companies and the Subsidiaries at the date
hereof are, reasonable wear and tear excepted, in good order and repair,
and conform in all material respects to the regulations that apply to
them, notably in environmental and security matters.
(b) There are adequate reserves in the Accounts in accordance with
U.S. GAAP for any obsolete installations and equipment and for any
installations and equipment relating to products that the Companies or the
Subsidiaries no longer sell.
(c) The Companies and the Subsidiaries have not incurred any
liability with respect to environmental, safety, hygiene or public health
matters which is, in accordance with the application of U.S. GAAP,
insufficiently provided for, in the Accounts.
2.12 Inventory and Goods Sold
(a) The inventory of products which are sold by the Companies and
the Subsidiaries as of September 27, 1996 is reflected in the Accounts and
registered in books of the Companies and the Subsidiaries on a consistent
basis and conforms to U.S. GAAP. If required, write-downs or reserves in
accordance with U.S. GAAP have been recorded in the Accounts with respect
to said inventory that is aging, obsolete or slow-moving or deteriorated.
(b) All products sold by the Companies and the Subsidiaries conform
in all material respects to the laws and regulations applicable to them
and to specifications contractually imposed by clients. With the exception
of the events described in Exhibit 2.12(b), the Seller has no knowledge of
any event or incident related to the products which may create a liability
for any Company or Subsidiary.
(c) Any warranties (other than warranties which apply by operation
of law) granted to the customers with respect to the products sold by the
Companies and the Subsidiaries are set forth in Exhibit 2.12(c)(1). Except
as set forth in Exhibit 2.12(c)(2), the Companies and the Subsidiaries
have not decided to recall or modify for any alleged material hazard or
alleged defect in design, manufacture or workmanship, the products which
it has sold or manufactured before the present date and no client has made
a written request that they recall or modify any such products for those
reasons.
2.13 Intangible Property Rights
(a) Businesses ("Fonds de Commerce"). The "fonds de commerce"
operated by Plastimo France is fully owned by it. It has been lawfully and
validly created, purchased or contributed and is free from any pledge,
security, privilege or any other similar third party rights of any kind.
Plastimo France has not leased any businesses pursuant to a "location
gerance".
(b) Intellectual Property Rights. All patents, patent applications,
trademarks, trademark applications and registered copyrights ("IP Rights")
which are owned by or licensed to the Companies or the Subsidiaries are
listed in Exhibit 2.13(b)(1). The IP Rights owned by the Companies and
the Subsidiaries are valid in the countries where registered and have been
duly registered with the offices as identified in Exhibit 2.13(b)(1) and
have been properly maintained and renewed in accordance with all
provisions of applicable law and regulations. Except as described in
Exhibit 2.13(b)(2), each Company or Subsidiary owns or has a valid license
(for the territory stated in the license) to use the IP Rights needed to
conduct their business as currently conducted and there are no claims or
demands which have been asserted in writing by any third party to the
Companies or the Subsidiaries with respect thereto. Except as described
in Exhibit 2.13(b)(3), the Companies and the Subsidiaries do not have any
obligation to pay royalties or other fees to third parties with respect to
such intellectual property rights.
2.14 Ownership and Security Interests
Except as set forth in Exhibit 2.14 hereto and except for security
interests on non-material assets and/or as otherwise reflected in the
Accounts and/or which are the subject of "credit-bail" or similar
arrangements, all of the inventory and assets of the Companies and the
Subsidiaries reflected in the Accounts are free from any security
interests, and the Companies and the Subsidiaries have full ownership
rights over them.
2.15 Customer Receivables; Loans
(a) All customer receivables as well as any other receivables of the
Companies or the Subsidiaries appearing in the Accounts are if required
covered by bad debt reserves established in the Accounts in accordance
with U.S. GAAP.
(b) Exhibit 2.15(b) contains a complete list of the outstanding
loans and lines of credit in excess of FF 1,000,000 (or its equivalent)
granted to the Companies and the Subsidiaries as well as the name and
address of all financial institutions with which the Companies or the
Subsidiaries have an account, indicating in each case the persons having
the authority to draw on these lines of credit or use the accounts. The
Companies and/or the Subsidiaries are not in default under such loans.
2.16 Suppliers and Customers
Exhibit 2.16 lists for the financial year ending September 27, 1996
the ten (10) main suppliers and ten (10) main customers of the Companies
and the Subsidiaries (taken on a consolidated basis), excluding entities
directly or indirectly owned by the Seller. None of these suppliers or
customers have broken off or interrupted, nor have threatened in writing
to break off or interrupt, relations with the Companies or the
Subsidiaries and none of these customers have reduced or threatened in
writing to reduce their orders significantly.
2.17 Managers and Key Employees
Exhibit 2.17 sets forth (i) the name and total remuneration
(including in-kind benefits) of the five (5) most highly remunerated
managers, employees and representatives ("VRP") of each Company and
Subsidiary and (ii) all the agreements and labor conventions with these
persons. None of these persons has threatened in writing to end his or her
position or relationship with one of the Companies or the Subsidiaries,
and the Seller has no knowledge of any reason that could warrant the
revocation of these managers for misconduct or termination of these
employees or representatives for "faute grave" or "faute lourde".
2.18 Employees
(a) The members of the personnel of the Companies and the
Subsidiaries are governed by the Collective Bargaining Agreements listed
in Exhibit 2.18(a). No collective dismissals of the personnel have been
notified to any of the employees of the Companies or the Subsidiaries. The
personnel of the Companies and the Subsidiaries are not on strike and have
not advised in writing that they intend to strike.
(b) Except as set forth in Exhibit 2.18(b), the employees and
managers of the Companies and the Subsidiaries are not entitled to receive
any indemnities (such as termination indemnities, retirement indemnities
or end of work indemnities) which exceed the indemnities required by the
laws, regulations and collective bargaining agreement ("convention
collective") which apply to the Companies and the Subsidiaries, and no
employees are entitled to participate in the Companies' or the
Subsidiaries' profits or to participate in retirement or life insurance
plans or funds which are not required by the laws, regulations or
collective bargaining agreement which apply to the Companies and the
Subsidiaries.
(c) Except as set forth in Exhibit 2.18(c) and as required by
applicable laws, regulations and collective bargaining agreements, the
Companies and the Subsidiaries have not contracted any obligation nor are
bound by any obligation towards members of their former personnel or their
heirs, in particular pursuant to a pension or complimentary retirement
scheme.
2.19 Subsidies and Governmental Assistance
To the best knowledge of the Seller, Exhibit 2.19 hereto enumerates
the governmental subsidies, be it national, regional, departmental or
other, as well as the leases and other contracts and preferential
conditions granted by a governmental authority be it national, regional,
departmental or other, to one of the Companies or Subsidiaries and from
which the Companies or the Subsidiaries currently benefit. To the best
knowledge of the Seller, the Companies and the Subsidiaries will in no
event be required to reimburse for any reason whatsoever the subsidies
already received, except as indicated in Exhibit 2.19.
2.20 Insurance
The insurance policies subscribed to by the Companies and the
Subsidiaries are currently in force and performance of such policies can
be demanded in accordance with their terms. The coverage which they
insure is normal and prudent in the industry relating to the specific
activities exercised by the Companies and the Subsidiaries.
2.21 Guarantees and Off-Balance Sheet Undertakings
With the exception of the items listed in Exhibit 2.21 hereto, the
Companies and the Subsidiaries are not bound by any third party
guarantees, "cautions" or other off-balance-sheet undertakings
("engagements hors bilan") (it being understood that the term guarantees
does not cover product warranties).
2.22 Brokers
All negotiations pertaining to the sale of the Shares and the
agreements relating to such sale have been carried on in such a manner
that no broker or other person acting on behalf of the Seller shall have a
valid claim against any of the Companies or the Subsidiaries or against
SFP and its shareholders for any broker's fee or finder's fee or similar
compensation. The Seller has employed the Societe Generale, whose fees
will be paid exclusively by the Seller.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF SFP
SFP hereby represents and warrants to the Seller as follows:
3.01 Organization
SFP is a societe anonyme, validly organized and existing under the
laws of France and has all requisite corporate power and authority to
enter into this Agreement and to perform its obligations hereunder.
3.02 Authorization and Validity
The execution and delivery of this Agreement by SFP and the
performance by SFP of the transactions contemplated herein have been duly
authorized by the conseil d'administration of SFP. This Agreement has
been duly executed and delivered by SFP and, assuming the due
authorization, execution and delivery of this Agreement by the Seller,
constitutes a valid and binding obligation of SFP, enforceable against it
in accordance with its terms. No consent of any third party (whether
governmental or otherwise) is required by SFP to consummate the
transactions contemplated by this Agreement.
3.03 No Conflict or Violation
Neither the execution of this Agreement not the performance of the
transactions contemplated herein will (i) violate or conflict with the
bylaws of SFP or (ii) violate or constitute a default under any material
contract to which SFP is a party or by which its assets or property are
bound or any law or any order, judgment or rule of any governmental
authority which is applicable to SFP or its assets or property.
3.04 Brokers
All negotiations pertaining to the sale of the Shares and the
agreements relating to such sale have been carried on in such a manner
that no broker or other person acting on behalf of SFP shall have a valid
claim against Seller and its shareholders for any broker's fee or finder's
fee or similar compensation.
ARTICLE IV
CONDITIONS PRECEDENT TO CLOSING
4.01 Conditions Precedent to Obligations of the Purchasers
The obligations of the Purchasers to purchase the Shares at the
Closing are subject to the satisfaction at or prior to the Closing of each
of the following conditions (unless satisfaction of any such condition is
expressly waived in writing by SFP):
(a) each of the representations and warranties of the Seller
contained in Article II shall be true and correct as of the Closing, and
SFP shall have received a certificate of the Seller to such effect;
(b) (i) the Seller shall have caused Plastimo Nordic AB to transfer
to an entity other than any Company or Subsidiary all of the shares held
by Plastimo Nordic AB in Scubapro AB for a price of SEK 1,300,000, (ii)
the Seller shall have assumed or guaranteed any liabilities of Plastimo
Nordic AB in respect of Scubapro AB (including, without limitation, any
taxes payable in respect of the transfer of the shares of Scubapro AB, all
inter-company loans and any guaranties of the debts of Scubapro AB) or, to
the extent it is impossible to substitute a third party as guarantor of
the obligations of Scubapro, Seller shall issue a counter-guarantee to
Plastimo Nordic AB, such counter-guarantee to be in a form reasonably
acceptable to SFP's counsel, and (iii) SFP shall have received a
certificate of the Seller as to the matters set forth in clauses (i) and
(ii);
(c) the Seller shall have delivered to SFP an irrevocable letter of
credit of a first class French bank substantially in the form attached in
Exhibit 5.02(b) hereto.
(d) the board of directors of Plastimo France shall have approved
(agree) (i) SFP as a new shareholder of Plastimo France and (ii) the
financial institutions listed in Exhibit 4.01(d) hereto as new
shareholders of Plastimo France in the event that they exercise their
pledges over the shares of Plastimo France pledged to them, and the Seller
shall have delivered to SFP a certified copy of the relevant board
resolutions;
(e) the board of directors of Plastimo UK shall have approved the
transfer of the Plastimo UK Shares to Plastimo France in accordance with
Article 15 of the Articles of Association of Plastimo UK and the Seller
shall have delivered to SFP a certified copy of the relevant board
resolution;
(f) the persons listed in Exhibit 4.01(f) hereto shall have tendered
their resignations from their respective offices as members of the boards
of directors of the Companies and the Subsidiaries effective as of the
date of the Closing;
(g) the Seller shall have delivered to Plastimo France or Plastimo
UK, as the case may be, duly executed distribution, supply and commercial
agency agreements substantially in the form of the agreements contained in
Exhibit 4.01(g) hereto.
4.02 Conditions Precedent to Obligations of the Seller
The obligations of the Seller to sell the Shares at the Closing are
subject to the satisfaction at or prior to the Closing of each of the
following conditions (unless satisfaction of any such condition is
expressly waived in writing by the Seller):
(a) each of the representations and warranties of SFP contained in
Article III shall be true and correct as of the Closing, and the Seller
shall have received a certificate of SFP to such effect; and
(b) SFP shall have tendered to the Seller a bank check (cheque de
banque) on a first class French bank for immediately available funds in
the full amount of the Plastimo France Purchase Price and Plastimo France
shall have tendered to the Seller a bank check for immediately available
funds in the full amount of the Plastimo UK Purchase Price, as set forth
in Section 1.03.
ARTICLE V
INDEMNIFICATION AGREEMENT
The Seller hereby undertakes to indemnify and hold harmless SFP or
(with respect to the acquisition of Plastimo UK) Plastimo France as set
forth below. It is agreed between the parties that any amounts payable
by the Seller pursuant to this Article V shall constitute a reduction in
the Plastimo France Purchase Price and/or the Plastimo UK Purchase Price,
as appropriate.
5.01 General Indemnification
The Seller undertakes to indemnify SFP or (with respect to the
acquisition of Plastimo UK) Plastimo France, from and against (i) all
damages, losses and liabilities suffered or incurred by SFP and/or the
Companies and/or the Subsidiaries as well as (ii) all reasonable out of
pocket costs and expenses relating thereto and/or relating to any third
party claims (such costs and expenses to include reasonable attorney and
accountants fees), arising from any breach or violation by the Seller of
any representations and warranties set forth in Article II of this
Agreement.
5.02 Taxes
(a) The Seller shall, as the sole and exclusive remedy with respect
to any Assessments (as such term is defined below) other than the Specific
Tax Audit, indemnify SFP for any such Assessment (including interest and
penalties) plus the cost of reasonable attorneys' fees, arising from any
tax, social security or customs audit relating to the activities of the
Companies and/or the Subsidiaries before the date of the Closing excluding
the Specific Tax Audit. This indemnity shall be owed by the Seller as soon
as an assessment is made and payment is required (or bond or another form
of security must be given) even if the Companies or the Subsidiaries have
the right to contest such assessment. If a Company or Subsidiary
successfully contests all or part of such assessments and recovers all or
part of the payment made, the Seller shall be entitled, in the manner set
forth in paragraph 5.02(b)(ix), to total or partial reimbursement of the
temporary indemnification amount paid. In the event that any such
assessment arises in France, the parties agree that the procedures and
reimbursements set forth in Section 5.02(b) with respect to the Specific
Tax Audit shall also apply to such assessment (except for the requirement
of the Seller procuring a bank letter of credit). In the event that any
such assessment arises in a country other than France, the parties agree
to apply in good faith procedures and reimbursements substantially
comparable to those set forth in Section 5.02(b). In all cases, the
provisions of Section 5.02(b) relating to control and direction of
proceedings and settlements as well as to cooperation shall apply mutatis
mutandis.
For the purposes hereof, the term "Assessments" shall mean
assessments ("redressements"), including any interest and penalties, which
are payable to the relevant tax, social security or customs authorities
and either agreed by the relevant Company or Subsidiary (with the Seller's
prior written approval) or are finally determined by litigation with such
tax, social security or customs authorities.
(b) In the case of the "inspection fiscale" currently underway and
disclosed in Exhibit 2.07(b) (the "Specific Tax Audit") as the sole and
exclusive remedy with respect to the Specific Tax Audit, the Seller hereby
undertakes, notwithstanding this disclosure, to indemnify SFP in the
manner set forth below.
(i) By way of application of Section 5.04(e), with respect to
any Assessments relating to the ''provision pour hausse des prix" or the
"provision pour depreciation des stocks" in the Specific Tax Audit, the
Seller will have no indemnification obligation except to indemnify SFP for
all interest and penalties arising in connection with such Assessments.
(ii) Any other Assessments on account of the Specific Tax
Audit shall give rise to indemnification by the Seller to SFP for both the
additional tax and the interest and penalties arising in connection
therewith.
(iii) At such time as Plastimo France may receive an "xxxx
xx xxxx en recouvrement" (an "Avis") in relation to the Specific Tax Audit
(other than with respect to the items set forth in Section 5.02(b)(i)
above) and, unless otherwise instructed in writing by the Seller, Plastimo
France shall, and SFP shall cause Plastimo France to, promptly deliver to
the tax authorities (a) a ''lettre de reclamation" (in the form prepared
by counsel for the Seller) concerning the Avis and (b) a request for a
"sursis" in payment of amount(s) indicated on the "Avis" (and being
contested pursuant to the Seller's instructions) together with an offer of
security from Seller (but not including security with respect to those
items set forth in Section 5.02(b)(i) above) to the tax authorities in
such form as indicated by the Seller. Plastimo France shall separately
offer security for the items set forth in Section 5.02 (b)(i) on terms
which are similar to those offered by Seller. If the tax authorities do
not accept the security as so offered, Plastimo France shall, and SFP
shall cause Plastimo France to, promptly deliver to the tax authorities
such offer of substitute or modified security as is further indicated by
the Seller.
(iv) In the event that the tax authorities accept the offer
of security (as modified if applicable) pursuant to subsection (iii)
above, the Seller shall be responsible for assuring that such security is
put into place at no cost to Plastimo France (with the exception of the
security which is being offered separately by Plastimo France for the
Section 5.02(b)(i) items). Upon the instructions of the Seller, Plastimo
France shall, and SFP shall cause Plastimo France to, promptly take all
measures which may be necessary or desirable (including the signature of
all documents) for such security to be put into place.
(v) In the event that payment by Plastimo France of the
assessments set forth on the Avis becomes required either because the tax
authorities do not accept the offer of security (as modified if
applicable) pursuant to subsection (iii) above or if, after the tax
authorities have accepted such offer of security, Seller fails to put
such security into place as required, then Seller shall pay to SFP a
temporary indemnification amount (the "TIA") equal to the amount of the
indemnity which would have been owed hereunder by the Seller to SFP had
the assessment of taxes, interest and penalties in the Avis been a final
Assessment.
(vi) The Seller's obligation to provide the agreed security to
the tax authorities or to pay the TIA if the tax authorities do not accept
the offer of security (as modified if applicable) shall be secured by an
irrevocable letter of credit in the maximum amount of FF 6,000,000 issued
by a first class French bank substantially in the form set forth in
Exhibit 5.02(b). Such letter of credit shall remain in effect until (a)
the French tax authorities have finally abandoned all claims with respect
to the Specific Tax Audit, or (b) the Seller has paid the TIA or provided
security satisfactory to the French tax authorities with respect to each
of the Avis issued by the French tax authorities with respect to the
Specific Tax Audit, or (c) Plastimo France and the tax authorities have
settled any existing claims arising with respect the Specific Tax Audit
and the indemnification owed by the Seller with respect thereto has been
paid. Plastimo France shall, and SFP shall cause Plastimo France to,
promptly notify (in writing with a copy to the Seller) the bank following
receipt of an Avis (1) whether such Avis covers all or only part of the
remaining claims of the tax authorities under the Specific Tax Audit and
(2) of any other matters as set forth in (a), (b) or (c) above which would
cause the letter of credit to no longer remain in effect. The charges (as
set forth in the letter of credit itself) of the bank which is issuing
such letter of credit shall, as a condition to such letter of credit
remaining in effect, be paid by SFP promptly upon the request(s) of the
issuing bank. Any payment by the bank pursuant to the letter of credit
shall be automatically deemed to be a payment of TIA by the Seller. In
addition, if prior to Plastimo France S.A. receiving the Avis, the French
tax authorities release some of their current claims, then the parties
shall in good faith agree on a corresponding reduction in the maximum
amount of the letter of credit and SFP will so promptly notify in writing
the issuing bank.
(vii) Notwithstanding any provisions to the contrary in this
Agreement, it is agreed that the entire direction and control of the
Specific Tax Audit shall rest with the Seller at all times and at all
stages of the procedure, whether before the tax administration or in the
courts (including appeals). SFP hereby agrees to cause the management of
Plastimo France to cooperate promptly and fully with the Seller and its
representatives in connection with the Specific Tax Audit and it is agreed
that such cooperation undertaking was a critical inducement for the Seller
to agree to provide the irrevocable letter of credit provided for in
subsection (v) above, without which the Seller would not have so agreed.
The Seller hereby initially (with a right to change at any time by sending
written notice to Plastimo France and SFP) designates Xx. Xxxxxxxx Xxxxx
as its representative vis-a-vis Plastimo France and SFP in connection with
the Specific Tax Audit who (together with such advisors as he may choose)
shall have the right to attend and conduct all proceedings in front of the
tax authorities and, if relevant, the courts and shall promptly be given
by Plastimo France, as part of the aforesaid undertaking to cooperate, a
copy of all documents and correspondence received from the tax
administration and in the context of any court proceedings with regard to
the Specific Tax Audit and shall be promptly informed of all oral
(including telephone) contacts with the administration in such regard.
The Seller agrees to keep Plastimo France fully informed of the progress
of such Specific Tax Audit and to promptly send to Plastimo France copies
of all memoranda, advice and other documents prepared by Seller or
Seller's counsel in connection with the Specific Tax Audit.
(viii) Plastimo France shall, and SFP shall cause it to,
enter into such settlement with the tax authorities regarding the Specific
Tax Audit as the Seller shall direct in writing and in addition Plastimo
France shall not enter into any settlement of the Specific Tax Audit
without the Seller's prior written approval. Notwithstanding the preceding
sentence, any settlements regarding the "provision pour hausse des prix"
or the "provision pour depreciation des stocks" shall be agreed jointly by
the Seller and Plastimo France
(ix) By way of application of Section 5.04(g), if the
"reclamations administratives ou judiciaires" of the assessment made by
Plastimo France at the request of the Seller, after Plastimo France has
received an Avis, reduce on any one or more occasions the amount assessed
by the French tax administration in its Avis and Plastimo France obtains a
refund from the French tax administration, SFP and the Seller shall
promptly recompute the indemnity owed by the Seller and SFP shall
reimburse to the Seller the difference (the "Difference") between the TIA
and the indemnity actually owed by the Seller with respect the final
Assessment (if interest is paid by the tax authorities SFP shall also pay
interest on such Difference at the rate paid by the tax authorities). In
the event that prior to a Final Assessment occurring (but after payment of
the TIA) there comes into being a partial settlement of the claims of the
tax authorities on which the TIA payment was calculated, and Plastimo
France obtains a refund from the French tax administration, SFP shall
promptly in good faith reimburse to Seller an appropriate amount to
reflect such partial refund. No set-off of any claims or rights may be
made by SFP or Plastimo France against the amount of the TIA to be
reimbursed hereunder.
(x) The Seller will bear all of its own expenses in connection
with the Specific Tax Audit and will, in addition to the other
indemnification due to SFP pursuant to this Section 5.02(b), indemnify
SFP, for all reasonable out-of-pocket costs (including attorney's fees)
incurred by Plastimo France in connection with the Specific Tax Audit
after the date of the Closing.
5.03 Specific Recall / Repair Indemnity
(a) In the case of the recall and repair programs on Plastimo rafts
currently underway and disclosed in Exhibit 2.12(c)(2) (the "Recall and
Repair Program") and as the sole and exclusive remedy with respect to such
Recall and Repair Program, the Seller hereby undertakes notwithstanding
this disclosure, to indemnify SFP for any costs (net of any related tax
benefit) incurred by Plastimo France with respect to such Recall and
Repair Program which exceed the FF 3,144,000 reserve set forth in the
Accounts (the "Recall Reserve") to the extent that such costs are incurred
by Plastimo France prior to August 31, 2003 (the "Excess Costs"). With
respect to the first FF 500,000 in Excess Costs, the indemnity shall be
equal to 50% of such Excess Costs and with respect to Excess Costs
exceeding FF 500,000, the indemnity shall be equal to 100% of such Excess
Costs. For the purposes of determining the Excess Costs, the parties
agree that the per unit costs and the total number of rafts recalled
and/or repaired shall equal those set forth in Exhibit 2.12(c)(2).
(b) Plastimo France undertakes to, and SFP shall cause Plastimo
France to, provide to the Seller on September 15 of each calendar year,
beginning on September 15, 1997, a report indicating (i) the number of
rafts which have been recalled and/or repaired during the preceding twelve
months for each category of repair covered by Exhibit 2.12(c)(2) and (ii)
the costs accrued to date with respect to the Recall and Repair Program
and the remaining amount of the Recall Reserve.
5.04 General Provisions Applicable to Indemnification
The following dispositions and provisions shall be applicable to the
determination and calculation of any indemnity which may arise in
connection with Sections 5.01 to 5.03 above:
(a) Except in the case of fraud (dol), the Seller shall not have any
liability for any representations and warranties other than those
representations and warranties set forth in Article II of this Agreement
and the specific indemnities provided for in Sections 5.02 and 5.03. In
addition, it is understood and agreed (i) that the indemnity arising under
Section 5.01 shall be owed only to the extent that the event which created
the damage, loss or liability was not disclosed herein or in the Exhibits
hereto but (ii) that the obligation of the Seller to indemnify SFP under
Sections 5.02 and 5.03 hereof shall not in any way be eliminated or
reduced by any disclosure of the "fait ou evenement generateur" to SFP.
(b) In the event that the same "fait ou evenement generateur" could
give rise to an obligation of indemnification by the Seller under both
Section 5.01, on the one hand, and Section 5.02 and/or 5.03, on the other
hand, only the indemnification provisions set forth in Sections 5.02 or
5.03, as the case may be, shall be applicable and in such case no claim
may be asserted pursuant to Section 5.01. In addition, the same "faits ou
evenements generateurs" cannot be used to obtain more than one
indemnification for the same loss, damage or liability.
(c) No indemnity shall become due on account of purely indirect
damages or losses and, in particular, no "multiple" of profits or other
items shall be applied in calculating any indemnity which may become due
hereunder by the Seller.
(d) If any expense or loss which gives rise to an indemnity
hereunder is deductible for income tax purposes by a Company or a
Subsidiary, the indemnity payable hereunder shall be reduced by the amount
of the deductible loss or expense multiplied by the applicable tax rate in
effect at the time the expense or loss is incurred; provided, however,
that if SFP is advised in writing by KPMG, in a form satisfactory to
Seller, that it is required on its tax return to report the indemnity
received as taxable income and it does in fact report on its tax return
such indemnity as taxable income, there shall be no reduction of the
indemnity hereunder.
(e) Any Assessments (as such term is defined in Section 5.02(a)),
including VAT Assessments, resulting in a simple transfer of income or
expenses (including depreciation and amortization) from one tax year to
another (or for VAT from one tax month to another) will not give rise to
an indemnity hereunder, except for any interest and penalties arising in
connection with such Assessments.
(f) Any indemnification computed with respect to an expense or
receipt which is subject to VAT shall be computed on a "hors taxe" basis
provided that the relevant Company or Subsidiary is able to recover the
VAT previously paid or deduct the newly incurred VAT.
(g) If the Seller pays any indemnity hereunder and one of the
Companies or Subsidiaries, or SFP, subsequently recovers or has a right to
recover before December 31, 2000 from a third party (including insurance
companies and tax authorities) an amount relating to the same facts,
matters and/or events which gave rise to such indemnity, SFP shall, and
shall cause the Companies and Subsidiaries to, take all appropriate
measures to obtain such recovery as soon as possible and shall, upon such
recovery promptly, up to the amount of such indemnity paid by the Seller,
pay the amount of such recovery over to the Seller. If such recovery is
received prior to the payment of the indemnity by the Seller, the Seller
shall reduce the amount of its payment by an amount equal to the amount of
the recovery.
(h) SFP undertakes to assure that any insurance policy currently
held by any one or more of the Companies and/or Subsidiaries and which
covers any risks which would permit the Companies and/or the Subsidiaries
to be reimbursed, wholly or partially, with respect to any "faits ou
evenements generateurs" which could give rise to an indemnification
obligation hereunder on the part of Seller, shall be maintained in effect
until the expiration of such indemnification obligation, provided that SFP
shall nonetheless have the right to cause the Companies and/or
Subsidiaries to subscribe to new policies in the place and stead thereof
which cover the same risks, so long as such substituted policies include a
"reprise du passe". If such new policies have higher deductibles or lower
ceilings than the previous policies and such higher deductibles or lower
ceiling cause a Company or Subsidiaries to receive for any "fait ou
evenement generateur" insurance proceeds which are less than the insurance
proceeds which would have been received under the older (lower) deductible
or (higher) ceiling, the reduction in the proceeds so computed shall be
deducted from the indemnity to be paid.
(i) The Seller's accountants shall be entitled to inspect or audit
the books and records of the Companies and/or Subsidiaries (with the right
to take copies of documents) in order to verify the application of the
provisions of this Agreement related to Seller's indemnification
obligations and the determination and calculation of any indemnity and SFP
shall cause the Companies and Subsidiaries to so authorize the Seller.
Such audits may not occur more than once per calendar year and Seller
shall give SFP at least 20 days prior written notice thereof. Seller shall
keep confidential all information and documents which it obtains or of
which it learns in conducting such audits and shall cause its agents to do
likewise.
(j) To the extent that any breach of a representation or warranty of
the Seller contained in Article II hereof is capable of remedy, SFP shall
afford the Seller a reasonable opportunity to remedy the breach prior to
making a claim for indemnification under Section 5.01 hereof. SFP agrees
that in the event of any breach giving rise to an indemnity obligation of
the Seller, SFP shall take and shall cause the Companies and the
Subsidiaries to take, or to cooperate with the Seller, if so requested by
the Seller, in order to take, all reasonable measures to mitigate the
consequences of the related breach.
(k) The Seller shall have no liability for indemnification which
arises as a result of (i) the passing of, or any change in, after the date
of the Closing, any law, rule, regulation or administration practice or
standard, of any government, governmental department, agency, regulatory
body or any increase in tax rates in effect on the date of the Closing,
even if such change in law, rule, regulation or administrative practice or
standard has retroactive effect or requires action at some future date; or
(ii) any loss by a Company or a Subsidiary of any tax loss carry forwards
or tax loss carry backs.
5.05 Threshold
(a) The different indemnities arising under Sections 5.01 and
5.02(a) (other than a claim for indemnification under Section 5.02(a)
arising out of the sale of Scubapro Sweden AB by Plastimo Nordic AB)
hereof will not give rise to payment unless the total amount of any
indemnities attributed under such sections (including interest, penalties
and reasonable attorney's fees), whether by agreement of the parties or
pursuant to arbitration under Section 6.06 and whether such indemnities
are finally determined before or after July 31, 1998, (the "Initial
Indemnification Amount") exceeds two million five hundred thousand (FF
2,500,000) French Francs (the "Initial Threshold"), in which case if such
amount is reached, the Seller shall pay the full amount of indemnities
owed under this Agreement pursuant to such sections.
(b) The different indemnities arising under Section 5.02(a)
attributable to one or more claims made after July 31, 1998 but prior to
the deadline set forth in Section 5.09(c) (the "Subsequent Tax
Indemnification") will not give rise to payment unless the total amount of
any indemnities attributable under such Section 5.02(a) (including
interest, penalties and reasonable attorney's fees) exceeds a new
threshold (the "Continuing Tax Threshold") which shall be equal to FF
2,500,000 minus the amount of the Initial Indemnification Amount, and
Seller shall only be required to pay the Subsequent Tax Indemnification if
it exceeds the Continuing Tax Threshold but, if this level is reached, the
Seller shall pay the full amount of the Subsequent Tax Indemnification.
(c) It is understood that the thresholds set forth in clauses (a)
and (b) of this Section 5.05 will not apply (i) to any claim for
indemnification under Sections 5.02(b) or 5.03 or (ii) to any claim for
indemnification under Section 5.02(a) arising out of the sale of Scubapro
Sweden AB by Plastimo Nordic AB.
5.06 Ceiling
Excluding indemnities for proven fraud (dol) and the indemnities
arising under Sections 5.02(b) and 5.03 above, the various indemnities set
forth in this Article V shall not give rise to any requirement of payment
by the Seller of more than forty-five million (FF 45,000,000) French
Francs in total.
5.07 Claim Procedure
(a) No later that 60 days (or earlier if the circumstances so
require) after having been informed of any facts or events giving rise to
a claim for indemnification hereunder, SFP shall in good faith give to the
Seller a written notice (a "Claim Notice") specifying in reasonable detail
any facts which may give rise to an indemnity under this Agreement. If
for any reason SFP fails to comply with the aforesaid time limit, SFP
shall not be precluded from asserting any claims hereunder, but the Seller
shall be entitled to a reduction in the indemnity payable if the failure
to notify within the aforesaid period caused the indemnity to be larger
than it would have been had the Seller been notified within the aforesaid
period. In such case, the Seller would be required to pay only the
indemnity which would have been owed had the Seller been notified within
the aforesaid period.
(b) In the event any proceedings shall be instituted or any claim or
demand shall be asserted by any third party (including a governmental
entity or agency) (a "Third Party Claim") in respect of which SFP may have
a right of indemnification from the Seller, SFP shall promptly notify the
Seller in the time period set forth in clause (a) above. The Seller
shall have the right, at its option and at its own expense (except that
the relevant Company or Subsidiary shall pay its own expenses), to be
represented by counsel of its own choice and to participate in, or at
Seller's written election within 30 days of receiving the relevant Claim
Notice, to take exclusive control of, the defense, negotiation and/or
settlement of the relevant proceeding or claim or demand; provided that if
Seller so elects to take control, SFP may participate in any such
proceeding with counsel of its choice and at its own expense. To the
extent that the Seller elects not to take control of any Third Party Claim
(or does not, which shall be the equivalent of having made such negative
election, notify SFP in writing of its election to take control within the
aforesaid 30 day period), SFP agrees not to settle or permit any Company
or Subsidiary to settle any Third Party Claims without the prior written
consent of the Seller. All such proposed settlements shall be notified by
SFP to the Seller in writing at least 30 days in advance and shall not be
entered into if in such 30 day period the Seller notifies SFP in writing
of its objection, in which case SFP shall continue to contest, and cause
the Companies and Subsidiaries to contest, the Third Party Claim and all
reasonable out of pocket expenses incurred by the Companies or the
Subsidiaries in defending against any such Third Party Claims, including
reasonable attorney fees, will be borne by the Seller. In all cases, the
Seller shall have the right, by sending written notice to SFP to request
the Companies and Subsidiaries to enter into a settlement of any Third
Party Claim, provided that, if SFP does not wish such a settlement to be
entered into, it shall have the right to so notify the Seller in writing
within 30 days of the Seller's notice to SFP, in which case the Seller
shall continue to be required to indemnify SFP with respect to the Third
Party Claim, but the indemnity owed shall not exceed the amount of the
indemnity which would have been owed had the proposed settlement been
accepted. The Seller and SFP agree to cooperate fully with each other in
connection with the defense, negotiation and/or settlement of any Third
Party Claim and SFP undertakes to cause the relevant Companies and/or
Subsidiaries and their counsel to so fully cooperate with Seller.
5.08 Indemnity Payment
Any indemnity set forth in this Article V will (subject to the next
paragraph) be due by the Seller within thirty days after SFP has sent a
Claim Notice, provided that, in the event of a Third Party Claim, the
indemnity will be due as soon as the Companies or the Subsidiaries are
obligated to pay under the terms of the contract, applicable legislation
or of a judgment.
In the case of disagreement between the parties, the indemnity will
be due by the Seller as soon as the liability has (i) been agreed in
writing by the parties or (ii) has been determined by an arbitral tribunal
in accordance with Section 6.06 hereof and the judgment provides for
immediate execution.
Any late payment of an indemnity hereunder shall give rise to an
interest charge computed at a rate of one month PIBOR plus 5% as from the
later of (i) 30 days after the date the Claim Notice was received by the
Seller or (ii) the date on which the loss giving rise to the indemnity was
incurred, or, for claims which are in dispute, as from the date of the
arbitral award. In any case where SFP is required to reimburse an
indemnity previously received, interest shall accrue at the same rate
beginning 30 days after a Company or Subsidiary has received the recovery
which gives rise to the Sellers' right to reimbursement.
5.09 Termination
(a) Any Claim Notice concerning indemnification arising under
Section 5.01 hereof must be sent to the Seller as provided in Section 6.02
no later than July 31, 1998. Any such Claim Notice sent after such date
shall not be valid.
(b) Any Claim Notice concerning indemnification arising under
Section 5.03 hereof must be sent to the Seller as provided in Section 6.02
no later than August 31, 2003. Any such Claim Notice sent after such date
shall not be valid.
(c) Any Claim Notice concerning indemnification arising under
Section 5.02 hereof may be sent for as long as the relevant governmental
administration is not barred by a statute of limitations, except that
Claim Notices relating to "droits d'enregistrement" and other matters
arising under Section 5.02 whose statute of limitations are longer than
four years must be sent as provided in Section 6.02 before December 31,
2000, after which date any such Claim Notices sent shall not be valid.
ARTICLE VI
GENERAL PROVISIONS
6.01 Agreement Integration
The present Agreement constitutes the entire agreement between the
parties concerning the subject matter hereof and replaces any previous
undertakings or representations of any kind whatsoever, whether verbal or
written. The present Agreement may not be modified except by written
agreement which carries a date subsequent to the date of the present
Agreement and is duly signed by the parties hereto.
6.02 Notices
All notices to a party under this Agreement must be sent in writing
and shall be considered duly dispatched only if sent by registered letter
with return receipt requested with confirmation by facsimile sent the same
day or next French and US business day, to the address of the party
concerned indicated at the beginning of this Agreement, or to such other
address as either party may notify to the other party as set forth in this
paragraph. Any notice sent in accordance with this Section 6.02 shall be
deemed to have been received five French and US business days following
the day it was sent. Copies of all notices shall also be sent by the
notifying party as follows:
If to the Seller, to: Xxxxxxx Worldwide Associates, Inc
0000 Xxxxxx Xxxx
Xxxxxxxxxx, Xxxxxxxxx 00000, XXX
Attention: Chief Financial Officer
Fax: 0 (000) 000-0000
Xxxxx & Xxxxxxx
Firstar Center
000 Xxxx Xxxxxxxxx Xxxxxx
Xxxxxxxxx, Xxxxxxxxx 00000-0000, XXX
Attention: Xxxxxxxx Xxxxxx, III, Esq.
Fax: 0 (000) 000 0000
Xxxxxx Prat
000, xxx xx Xxxxxxxx Xxxxx-Xxxxxx
00000 Xxxxx, Xxxxxx
Attention: Xxxxxxx Xxxxxxxx, Esq.
Xxxxxxx Xxxxx, Esq.
Fax: (00) 0.00.00.00.00
If to the Purchasers: Societe Figeacoise de Participations
00 xxx Xxxxxxxxx Xxxxxxxx
00000 Xxxxxxx, Xxxxxx
Attention: Xx. Xxxxxxx Le Saffre
Fax: (00) 0.00.00.00.00
Salans Xxxxxxxxx & Heilbronn
0, xxx Xxxxxx x'Xxxxxx
00000 Xxxxx, Xxxxxx
Attention: Xxxxxx X. Xxxxxxx, Esq.
Fax: (00) 0.00.00.00.00
6.03 Outside Date
If for any reason, any of the conditions precedent to the obligations of
the Seller set forth in Section 4.02 has not been satisfied by February 5,
1997, then, without prejudice to the Seller's rights to recover damages
for breach of this Agreement, the Seller shall not be required to proceed
with the Closing and its obligation to sell the Shares shall automatically
terminate. If for any reason any of the conditions precedent to the
obligations of the Purchasers set forth in Section 4.01 has not been
satisfied by February 5, 1997, then, without prejudice to the Purchasers'
rights to recover damages for breach of this Agreement, the Purchasers
shall not be required to proceed with the Closing and their obligations to
purchase the Shares shall automatically terminate.
6.04 Assignment
In the event that SFP transfers all or part of the Plastimo France
Shares to another company, SFP will be entitled to assign to that company
the benefit, including the right to make further claims here under, of
this Agreement with respect to the Shares which have been transferred by a
simple notification sent to the Seller as set forth in Section 6.02 of
this Agreement; provided, however, that SFP (without prejudice to its
rights to enforce the relevant claims) shall not have the right to assign
its rights in respect of any Claim Notices notified to the Seller prior to
July 31, 1998 (the "Claim Notice Rights") to any third party other than
the beneficiaries of the pledges of the shares of Plastimo France
mentioned in Section 4.01(d) in connection with the realization of such
pledges; provided, further, that SFP will continue to be bound by its
obligations under this Agreement. Notwithstanding the foregoing, it is
expressly agreed that (i) any assignee or transferee of any rights
pursuant to this Section 6.04 (including Claim Notice Rights as authorized
above) shall be bound by all of the provisions of Sections 6.05 and 6.06
of this Agreement and shall so agree in a writing delivered to the Seller
in a form reasonably acceptable to its counsel prior to any such
assignment or transfer of rights to such assignee or transferee having any
legal effect vis-a-vis the Seller (the "Assignment Acceptance Document"),
(ii) the Assignment Acceptance Document shall further confirm in a manner
reasonably acceptable to counsel to the Seller that with respect to any
matter in dispute (including matters which have already given rise to
arbitration proceedings under Section 6.06) between the Seller, on one
hand, and SFP, Plastimo France and/or any assignee, on the other hand, SFP
and the assignee shall use their best efforts, to have the matter settled
by the same arbitrators, in the same arbitration proceeding provided only
that the relevant arbitrators agree to group any claims made in one
arbitration proceeding, and (iii) the Assignment Acceptance Document shall
also confirm in a manner reasonably acceptable to counsel to the Seller
that any defenses which are available to the Seller against SFP and/or
Plastimo France shall also be available vis-a-vis any assignees pursuant
to this Section 6.04.
6.05 Mediation
For all disagreements on accounting matters that may arise between
the parties relating to the interpretation and execution of the present
agreement, the undersigned agree to submit their differences, prior to any
court or arbitration proceeding, to non-binding mediation, the Seller, on
one hand, and SFP and Plastimo France, on the other hand, each designating
one mediator, unless they agree on the choice of a single mediator. The
mediator or mediators will attempt to resolve the difficulties submitted
to them and have the parties accept an amicable resolution within a
maximum period of two months as from their nomination. The Seller and SFP
shall share equally the fees and expenses of such mediator or mediators.
6.06 Governing Law: Litigation
This Warranty Agreement shall be governed by French law, without
application of its conflict of law principles.
All disagreement or difficulties arising between the parties relative
to the validity, interpretation or execution of the Agreement shall be
submitted to arbitration under the dispositions of articles 1492 et seq.
of the New Code of Civil Procedure. If the parties agree to the naming of
a single arbitrator, the arbitration will proceed with the arbitrator that
they have chosen. In the contrary case, the tribunal shall be constituted
by three arbitrators. The Seller, on one hand, and SFP and Plastimo
France, on the other hand, shall each designate an arbitrator and the
designated arbitrators will choose a president of the arbitral tribunal.
In case one of the parties has not chosen an arbitrator in the thirty days
following the first notification of the party that has initiated the
arbitration or if the arbitrators cannot agree on the choice of the
president of the arbitral tribunal in the thirty (30) calendar days
following their nomination, the President of the Commercial Tribunal of
Paris, notified of the request by the most diligent party, will designate
the arbitrator or arbitrators necessary to complete the arbitral tribunal.
The arbitration will take place in Paris and in English. The arbitrator
will apply the procedural rules contained in articles 1442 to 1491 of the
New Code of Civil Procedure. They will not have the power of "amiable
composition". The decision of the arbitral tribunal will be final and the
parties hereby waive all rights to appeal. The arbitrators shall use their
best efforts to render their decision within a maximum delay of 6 months
following the date of the constitution of the arbitral tribunal.
If either party receives an award with respect to a claim, it shall
be entitled to interest computed at a rate equal to PIBOR at three months
on the amount of the award as from the later of (i) the date the claim was
received by the other party or (ii) the date the loss giving rise to the
indemnity was incurred. The arbitrators' fees will be borne by the party
and paid in the manner set forth in the arbitral decision.
6.07 Signature by Plastimo France
SFP acknowledges that Plastimo France is acquiring the Plastimo UK
Shares hereunder and hereby approves such acquisition together with the
rights and obligations of Plastimo France hereunder.
IN WITNESS WHEREOF the Seller, SFP and Plastimo France have entered into
the present Agreement as of the date first mentioned above.
Made in three (3) originals
/s/ Xxxx X. Xxxxxxx /s/ Xxxxxxx Le Saffre
The Seller SFP
By: Xxxx X. Xxxxxxx By: Xxxxxxx Le Saffre
Senior VP and CFO Pdt in Directories
/s/ Xxxxxxx Le Saffre
Plastimo France
By: Xxxxxxx Le Saffre
PDG
