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EXHIBIT 2.2
GUARANTEE AGREEMENT
BETWEEN:
- THE COMPANIES AND INDIVIDUALS whose corporate names and names are
identified in EXHIBIT 1 hereto, and those which subsequently adhere to
this Agreement in accordance with Section 14 hereof,
(hereinafter referred to as the "Guarantors"),
ON THE ONE HAND,
AND:
REVOD CORPORATION, a company organized under the laws of the State of
Delaware, United States of America, with its principal office at 0000
Xxxxx Xxxx, Xxxxx 000, Xxxxxxxxxx, Xxxxxxxx 00000, Xxxxxx Xxxxxx of
America,
Represented for purposes hereof by its Vice-President, Xx. Xxxx X.
Xxxxxxx, who is duly authorized,
(hereinafter referred to as the "Beneficiary"),
ON THE OTHER HAND.
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2.
PREAMBLE:
A/ Various individuals and legal entities have sold to the Beneficiary on
the date of this Agreement and concurrently with the signature hereof,
either directly or indirectly; a certain number of shares of par value
one hundred francs (FF. 100), of the capital of Imaje S.A., a French
societe anonyme with a capital of FF. 139,851,100, having its
principal office at 0, xxx Xxxxxxx Xxxxx, 00000 Xxxxx xxx Xxxxxxx,
registered with the Registry of Commerce and Companies of Romans under
number B 353 282 106.
B/ The Beneficiary has purchased these shares on the date hereof and on
the basis of the representations made by the Guarantors in this
Agreement and its Exhibits and Appendices.
IN VIEW OF THE FOREGOING, THE PARTIES HERETO HAVE AGREED AS FOLLOWS:
ARTICLE 1: DEFINITIONS
The words and phrases listed below and used in this Agreement shall have the
following meanings:
"Share(s)" shall mean one or more shares of the
Company's capital, as the case may be;
"Accounts" shall mean the Company's consolidated
and uncertified accounts as of June 30,
1995, which are attached hereto as
EXHIBIT 5;
"Escrow Agreement" shall mean the escrow agreement of even
date herewith between the Guarantors'
Representative, acting in the name and
for the account of the Guarantors, the
Escrow Agent and the Beneficiary;
"To the Guarantors' shall mean the knowledge possessed by
best knowledge" the management staff of the Company
concerning the conduct of the
affairs of the Companies of the Group
after performance of the audits and due
diligence operations which they shall
deem necessary in connection with the
representations set forth in EXHIBIT 3
hereto. The management staff shall be
the following persons: Xx. Xxxxxx
Journo, Xx. Xxxxxx Xxxxx, and Xx.
Xxxxxx Xxxxxxx;
"Representations" shall mean those representations
appearing in EXHIBIT 3 hereto, and
"Representation", when used in the
singular,
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3.
shall mean any one of such
representations as described in the
corresponding appendices, it being
understood that the Representations
with respect to the Subsidiaries listed
in EXHIBIT 2(B) are made to the
Guarantors' best knowledge, with the
exception of those representations made
in Sections 1, 2, 3(a), 3(b), 3(c),
3(d), 3(f), 3(g), 3(h), 4(b), 4(h),
4(i), 5(a), 5(b), 5(c), 5(g), 5(k),
6(ba), 6(bc) paragraphs 1 and 3,
6(bd)(ii), 6(bdf), 7(a), 7(c), 7(d),
7(g), 7(h)(i), 7(h)(iii), 7(h)(v),
7(h)(vi), 7(h)(vii), 7(h)(viii),
7(h)(ix), 7(h)(x), 8 and 9 of EXHIBIT
3;
"Subsidiaries" shall mean those French and foreign
subsidiaries and sub-subsidiaries of
the Company of which more than forty
percent (40%) of the share capital is
owned, either directly or indirectly,
as listed in EXHIBIT 2(A) hereto;
"Sale Price" shall mean the price of seven hundred
and thirty-four francs (FF. 734.00)
per share;
"Claim" shall mean any claim made by the
Beneficiary against the Guarantors and
notified to the Guarantors'
Representative with respect to any
inaccuracy of any of the
Representations;
"Guarantors' Representative" shall mean the person identified in
Section 10 below, together with any
person(s) who may subsequently be
appointed in accordance with the terms
of such Section.
"Escrow Agent" shall mean the branch of Lyonnaise de
Banque located at 00, xxx Xxxxx, 00000
Xxxxx, Xxxxxx;
"Company" shall mean Imaje S.A.;
"Companies of the Group" shall mean the Company and all of its
Subsidiaries, and the expression "a
Company of the Group", when used in the
singular, shall mean any one of such
companies;
ARTICLE 2: GUARANTEE
Subject to the provisions of this Agreement or its Exhibits and Appendices, the
Guarantors hereby warrant, jointly but not severally, all of the
Representations made by the Guarantors in EXHIBIT 3 hereto.
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4.
ARTICLE 3: CLAIMS
3.1 Subject to the provisions contained hereinafter, all Claims
made against the Guarantors shall correspond, franc for franc,
to the negative impact of any inaccurate Representation
determined at the level of any of the Companies of the Group
which are covered by such Representation.
3.2 A Claim relating to a Subsidiary shall not give rise to a
second Claim relating to an additional liability or a
reduction of assets which is not recorded in the Accounts.
3.3 A Claim relating to a Subsidiary which is not wholly owned by
the Company shall be paid after deduction of the percentage
representing the portion of the capital which is not held,
either directly or indirectly, by the Company.
3.4 A Claim shall not be made against the Guarantors unless its
unitary impact exceeds one hundred thousand francs (FF.
100,000). However, in the event Claims are made in amounts of
less than one hundred thousand francs (FF. 100,000) which
arise as a result of the same fact, the aggregate amount of
such Claims shall be taken into account in evaluating the
extent to which the one hundred thousand-franc (FF. 100,000)
threshold is exceeded. It is also agreed that this unitary
threshold of one hundred thousand francs (FF. 100,000) shall
not apply to Claims in connection with the state of the
inventory and customer accounts as of the date of this
Agreement, for which special provision has been made in
Sections 9.1(i) and (ii) below.
3.5.1 The Guarantors shall pay to the Beneficiary, or to any Company
of the Group designated by it, the amount of any justified
Claim, subject to the provisions of this Agreement, and in
particular subject to the application of:
a. The franchise agreed in paragraph 3.6.1, and
b. The upper limits defined in paragraph 3.6.2;
The amount thus determined shall be multplied, for each
Guarantor, by a fraction whose numerator shall be the number
of Shares sold by such Guarantor, and whose denominator shall
be the total number of the Company's Shares, i.e. one million
three hundred and ninety-eight thousand five hundred and
eleven (1,398,511).
3.5.2 The amounts claimed shall be payable:
- if they are not contested by the Guarantors'
Representative within forty-five (45) days of
notification of the Claim;
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5.
- in the event they are contested by the Guarantors'
Representative within such deadline, immediately
following notification of a court decision ordering
their payment;
- in the event no payment is made within the deadline
or on the date referred to above, the amount due
shall bear interest at a rate equal to the legal
interest rate plus four percent (4%).
3.5.3 In the event of notification of contestation by the
Guarantors' Representative within forty-five (45) days,
interest payable as compensation for prejudice suffered as a
result of non-payment of the amount of the Claim shall be
calculated from the forty-fifth (45th) day following
notification of such Claim, and up to notification of a court
decision ordering payment of the amount of the Claim.
3.5.4 In the event of notification of contestation by the
Guarantors' Representative within forty-five (45) days as set
forth above, and the amount of the Claim is not paid within
such deadline, but the contestation is unilaterally waived by
the Guarantors' Representative before any court decision on
the merits of the case is rendered, then in addition to the
amount of the Claim, an amount equal to the legal interest
rate plus three percent (3%) shall be applied to the amount of
such Claim and shall be payable immediately; such interest
shall be calculated from the forty-fifth (45th) day following
notification of the Claim, and up to the date of its payment.
3.6.1 No payments shall be made by the Guarantors under the terms of
this Agreement until the total amount of the sums due by them
in connection with one or more Claims exceeds ten million
francs (FF. 10,000,000), in which case only the amount in
excess of that limit shall be payable.
3.6.2 The total amount of payments made by the Guarantors on any
grounds under the terms of this Agreement shall not under any
circumstances exceed a total upper limit of 22.4060% of the
Sale Price multiplied by the number of Shares sold by the
Guarantors.
In addition, and subject to such overall upper limit, the
payments made by the Guarantors with respect to Claims made
between the first and second anniversaries of the date of
signature of this Agreement shall not in any event exceed
8.7670% of the Sale Price multiplied by the number of Shares
sold by the Guarantors.
Finally, and subject to the upper limit defined above, the
payments made by the Guarantors with respect to Claims made
after the second anniversary of the date of signature of this
Agreement and before December 31, 1998, shall not exceed
5.8447% of the Sale Price multiplied by the number of Shares
sold by the Guarantors.
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6.
3.7 The Beneficiary is not entitled to demand payment by the
Guarantors of the amount of any Claim relating, in particular,
to tax, tax-related or social security liabilities, or to any
additional liabilities resulting from a claim made against any
of the Companies of the Group by a third party, unless such
claim results from a reassessment or award made against one of
the Companies of the Group and which has been fully and
finally paid by it after all appeals have been exhausted, or
which results from a settlement agreement which has been duly
approved by the Guarantors' Representative, such approval not
to be withheld without just cause.
3.8 Any amount payable with respect to any Claim shall be reduced
by the amount of any tax saving which may result for the
Companies of the Group from the occurrence of the costs,
prejudice, losses or increased expense which gave rise to such
Claim.
With respect to any tax reassessments made, these shall only
be taken into consideration to the extent of the net amount of
any additional liabilities. In this connection, any tax
reassessment which merely results in a temporary burden on the
Companies of the Group shall not be taken into account, with
the exception, however, of any surcharges, penalties or
interest for late payment. This shall also apply, for
example, to reserves deemed on a provisional basis to be
non-deductible, as well as to any charge whose deductibility
is deferred.
3.9 The Guarantors shall not be liable for payment to the
Beneficiary of any Claim in the following cases:
a) where the Claim is or will be offset by any increase in assets
or a reduction of liabilities affecting any of the Companies
of the Group compared with the Accounts; As an exception to
the foregoing, no offset shall be deemed to exist with respect
to:
(i) Increased assets and reduced liabilities involving
the tangible fixed assets of the Companies of the
Group, except within the same heading on the balance
sheet (demonstration printers are not considered to
be fixed assets for purposes of this Section), and
(ii) The activation of tax loss carryovers whch are not
recorded in the Accounts;
b) where the Claim results from or is attributable to negligence
on the part of the Beneficiary or of any of the Companies of
the Group after the date hereof; or
c) where the Claim results from any legislation or regulation
which is not in force on the date of signature of this
Agreement, or from any change in taxation or compulsory
contribution rates.
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7.
ARTICLE 4: ESCROW
4.1 Each of the Guarantors hereby undertakes, as a guarantee of
payment of the amounts of any Claims which may be made by the
Beneficiary under the terms of Section 3 hereof, to deposit in
an account opened by the Escrow Agent the sum of one hundred
and sixty-four francs and forty-six centimes (FF. 164.46) per
Share sold, corresponding to twenty-two point four zero six
zero percent (22.4060%) of the Sale Price per Share paid to
such Guarantor.
4.2 Each of the Guarantors shall have the option, within thirty
(30) days of the date of sale of the Shares, of substituting
for the cash deposit in escrow referred to under Section 4.1
above a bank guarantee upon first demand issued by a
first-rate French bank and prepared in accordance with the
model set forth in EXHIBIT 4 hereto.
4.3 The amount of the sums placed in escrow in cash or in the form
of bank guarantees issued to the benefit of the Escrow Agent
for the account of each Guarantor and for each Share shall be:
- reduced to eight point seven six seven zero percent
(8.7670%) of the Sale Price paid to each Guarantor on
the first anniversary of the date of signature of
this Agreement; and
- to five point eight four four seven (5.8447%) of the
Sale Price paid to each Guarantor on the second
anniversary of the date of signature of this
Agreement;
plus, in both cases, the aggregate amount claimed by the
Beneficiary under those Claims which were made prior to either
of such dates but which remain unpaid by the Guarantors on
either of such dates.
4.4 The escrow arrangement shall be organized in accordance with
the terms of the Escrow Agreement of even date herewith
concluded between certain of the Guarantors, the Beneficiary
and the Escrow Agent.
ARTICLE 5: EFFECT OF A CLAIM
All amounts paid by the Guarantors to the Beneficiary in respect of a Claim
shall be deemed to constitute a reduction of the purchase price of the Shares.
ARTICLE 6: MANAGEMENT OF DISPUTES
The Guarantors' Representative may, at the Guarantors' expense, organize the
defense in the name of any of the Companies of the Group against any claims by
third parties in excess of one million francs (FF. 1,000,000) which constitute,
or which may become the subject of, a Claim. The Guarantors' Representative
shall be authorized to participate in all negotiations or
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proceedings, whether before the lower courts or the courts of appeals, in
connection with such third-party claims.
In the event of such a third-party claim, the Beneficiary also hereby
undertakes, and undertakes that each of the Companies of the Group will
undertake, to do the following:
a) to take all reasonable measures requested by the Guarantors'
Representative in order to minimize, avoid, resist, or reach a
compromise in, such third-party claim, and for that purpose, to
undertake all proceedings in the name of the Company or Companies of
the Group concerned, at the request of the Guarantors' Representative
and at the Guarantors' expense;
b) to authorize the Guarantors' Representative and his attorneys to have
access to, examine and make copies of all files and registers of the
Companies of the Group, provided, however that the Guarantors shall
keep such information confidential with the exception of any
disclosure which may be necessary in connection with such actions;
c) to request production of any affidavits or evidence by the staff of
the Companies of the Group, and to participate in all proceedings or
hearings intended to obtain production of such affidavits or evidence;
to provide all reasonable assistance to enable the Guarantors'
Representative to avoid, defend or reach a compromise in, any
proceedings, at no cost to the Guarantors except for duly evidenced
external expenses; and
d) to take, or to ensure that the Company or Companies of the Group
concerned shall take, all reasonable measures to reduce the amount of
any losses incurred in connection with such claims, demands or
proceedings.
Insofar as the Guarantors' Representative shall take over the management of any
negotiations or proceedings, he shall keep the Beneficiary informed of the
management and outcome of such matters, and shall submit any proposed
settlement agreements to the Beneficiary for its approval insofar as the
ultimate burden of payment, in whole or in part, shall be for a Company of the
Group in accordance with this guarantee.
Any failure by the Beneficiary to comply with the provisions of this Section 6
or Section 7 or Sections 8.3 or 9.2 with respect to any Claim shall not deprive
it of its rights in connection with any unrelated Claim.
ARTICLE 7: ACTIONS AGAINST THIRD PARTIES
Any Claims made with respect to any inaccurate Representation shall be reduced
by the amount of any sums which have been or which may be received or obtained
by the Beneficiary or any of the Companies of the Group from any third party
which may be liable, in whole or in part, for the events or circumstances which
have given rise to a Claim; the Beneficiary hereby undertakes to take all
reasonable actions against such third party or to ensure that the concerned
Company of the Group takes such actions.
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9.
In the event that any amount is recovered in this connection after
indemnification of the Beneficiary by the Guarantors, the Beneficiary shall
repay the smaller of the two following amounts to the Guarantors, or shall
ensure that such amount is repaid:
a) the amount already paid by the Guarantors under the terms of this
Agreement;
b) the net amount recovered after tax and reasonable procedural and legal
fees, adjusted, if applicable, to take account of the percentage of
the Company's shareholding in the Subsidiary concerned by such Claim,
or the percentage of such Claim borne either directly or indirectly by
the Beneficiary.
The Guarantors shall lose their right to claim restitution as described in the
preceding paragraph one (1) year after dissolution of the escrow account in
accordance with the terms of the Escrow Agreement.
ARTICLE 8: REPRESENTATIONS AND UNDERTAKINGS BY THE BENEFICIARY
8.1 The Beneficiary acknowledges that prior to the date hereof, it
has had free access to the personnel, locations, contracts,
documents and attorneys of the Companies of the Group.
8.2 No Claims may be made with respect to any of the
Representations set forth in EXHIBIT 3 hereto, insofar as the
fact or event on which the Claim is based is already the
subject of a Claim which has been satisfied in connection with
one of the other Representations.
8.3 In the event a Claim is made, the Beneficiary shall authorize
the Guarantors' Representative and his attorneys to consult
the accounts, registers and documents, as well as the staff of
the Companies of the Group, in order that the Guarantors'
Representative may accept and, if applicable, contest such
Claim with the benefit of all of the relevant facts. It is
understood, however, that such consultations shall not extend
the payment deadline set forth in Section 3.5.2 hereof. It is
also understood that the Guarantors' Representative shall
ensure that information thus obtained is kept confidential,
any disclosures which may be necessary under the terms of
Sections 6 and 7 hereof notwithstanding.
ARTICLE 9: TERM
9.1 The Guarantors' obligations as defined herein shall apply to
all Claims sent to the Guarantors' Representative by the
Beneficiary as follows:
- for all Claims in connection with fiscal or social
security matters, not later than December 31, 1998;
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10.
- for all other Claims, not later than the second
anniversary of the date of this Agreement, subject to
the special provisions defined hereafter which are
applicable to the inventory and customer receivables.
The parties hereto thus agree that the Beneficiary may make no
further Claims:
(i) after May 15, 1996 for those claims relating to
unrecovered customer receivables corresponding to
invoices issued up to and including September 30,
1995; and
(ii) after May 15, 1996 for those claims relating to the
existing inventory on September 30, 1995.
Each Claim shall include sufficient information to enable the
Guarantors to evaluate their nature and their financial and
fiscal impact, it being understood that such Claim may, if
applicable, be clarified subsequently insofar as such
information is not available at the time the Claim is made.
9.2 The Beneficiary shall communicate to the Guarantors'
Representative all third-party claims as described under
Section 6 hereof within thirty (30) business days of the date
on which the relevant Company or Companies of the Group shall
have been served with a summons or received notice of such
third-party claim, failing which any Claim on the basis of
such third-party claim shall no longer be admissible.
With respect to any other Claims, the Beneficiary shall inform
the Guarantors' Representative thereof within a reasonable
time after the Company shall have at its disposal sufficient
information to enable it to make a Claim. The Guarantors may
not, however, invoke late notice of a Claim, except insofar as
the lateness of the notice has given rise to an aggravation of
the prejudice suffered or that the deadline provided for under
Section 9.1 hereof has expired.
ARTICLE 10: GUARANTORS' REPRESENTATIVE
For purposes hereof, the Guarantors shall be finally bound by all actions by
Xx. Xxxx-Xxxxxx Xxxxxx, resident at 0, xxx Xxxxxx Xxxxxx, 00000
Xxxxx-Xxx-Xxxxxxx; the Guarantors hereby irrevocably appoint Xx. Xxxx-Xxxxxx
Xxxxxx as their representative in order that he may act in the Guarantors' name
and on their behalf, and make all decisions which are either directly or
indirectly connected with the subject matter of this Agreement, and in order
that he may receive all notices under Section 16 hereof. In the event of any
incapacity to act on the part of Xx. Xxxx-Xxxxxx Xxxxxx, Xx. Xxxxx Xxxxxx,
resident at Xxxxxxxxxxxxxx 0, 00000 XX Naarden, the Netherlands, shall act in
his place. In the event both Xx. Xxxx-Xxxxxx Xxxxxx and Xx. Xxxxx Xxxxxx are
unable to act, the Guarantors shall notify the Beneficiary of the name of their
replacement, who shall thereafter act as the Guarantors' Representative.
Absent such notification within thirty (30) days after acknowledgement of
Messrs. Xxxx-Xxxxxx Xxxxxx'x and Xxxxx Xxxxxx'x incapacity to act by the
Beneficiary or any of the Guarantors, and once such
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acknowledgement has been notified to all of the Guarantors, a new Guarantors'
Representative shall be appointed by the President of the Commercial Court of
Paris, at the request of any of the parties.
During any period of incapacity, all notices to the Guarantors' Representative
shall be deemed to have been validly given if notified to the last address of
the Guarantors' Representative who is incapacitated.
ARTICLE 11: FEES AND DISBURSEMENTS
Each of the parties shall bear the fees, expenses and disbursements incurred by
it or which may be payable by it in connection with this Agreement
ARTICLE 12: GOVERNING LAW
This Agreement shall be governed by the laws of France.
ARTICLE 13: DISPUTES
All disputes concerning the validity, interpretation or performance of this
Agreement shall be submitted to the sole jurisdiction of the courts of France.
ARTICLE 14: ADHESION TO THIS AGREEMENT
Those shareholders of the Company who are not signatories of this Agreement and
who sell their shares in the Company to the Beneficiary concurrently with or
subsequent to the signature hereof may adhere to the terms of this Agreement
and the Escrow Agreement by signing an adhesion letter in accordance with the
model given in EXHIBIT 6 hereto. Such adhesion shall be possible until 12.00
p.m. on November 9, 1995, which deadline may be extended at the Beneficiary's
discretion. Whatever the date of their adhesion, they shall be treated as
though they had signed this Agreement on its original date. The parties hereby
undertake to accept such adhesion without condition, provided, however, that
adhesion is by signature ne variatur of the model attached hereto as EXHIBIT 6.
The shareholders of Sevres Valence Investissements and Pineal shall be parties
to this Agreement in proportion to the number of Shares which they are deemed
to have sold, in accordance with EXHIBIT 7 hereto, on the dates set forth in
such Exhibit, with retroactive effect to the date of this Agreement, if
applicable
ARTICLE 15: WAIVER
Each of the Guarantors hereby irrevocably waives any pre-emptive rights or
other rights it may have with respect to the Shares, if applicable, as of the
date hereof, including those arising from the shareholder agreements concluded
between the shareholders of Imaje and from any other agreement by which such
Guarantor may be bound or of which it may be a beneficiary.
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12.
Each of the Guarantors hereby warrants that it has sold to the Beneficiary all
of the shares owned by it, and undertakes to sell to the Beneficiary all
securities which it may hold in the capital of the Subsidiaries, for a price
established according to the formula set forth in EXHIBIT 8 hereto.
ARTICLE 16: NOTICES
All notices sent in connection with this Agreement shall be valid if sent by
hand delivery against a receipt, or by registered mail with return receipt
requested, to the addresses set forth below, or to any other address notified
by the Beneficiary or the Guarantors' Representative:
- If to the Guarantors, to: Xx. Xxxx-Xxxxxx Xxxxxx
0, xxx Xxxxxx Xxxxxx
00000 Xxxxx-les-Valence
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with a copy to: Xxxxxxxxx xx Xxxxxx
00, xxx Xxxxx
00000 Xxxx
Attention: Messrsr. Alain de la Chapelle
and Pierre Pissaloux
and to: Xxxxxxxx & Associes
00, xxx xx Xxxxxxxxxx
00000 Xxxxx
Attention: Messrs. Xxxxxxxxx Xxxxxxxx
and Xxxxxxxx Xxxxx
- If to the Beneficiary, to: Revod Corportion, c/o
Dover Technologies International, Inc.
Attention: Xxxx X. Xxxxxxx, Esq.
One Marine Xxxxxxx Xxxxx
Xxxxx Xxxxx
Xxxx Xxxxx
Xxxxxxxxxx, XX 00000-0000
XXX
Done at Paris
On September 29, 1995
In three (3) original counterparts
[signed] [signed]
-------------------------- -------------------------------
FOR THE BENEFICIARY
Revod Corporation
[signed]
-------------------------- -------------------------------
[signed] [signed]
-------------------------- -------------------------------
[signed] [signed]
-------------------------- -------------------------------
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14.
[signed] [signed]
-------------------------- -------------------------------
[signed] [signed]
-------------------------- -------------------------------
[signed] [signed]
-------------------------- -------------------------------
[signed] [signed]
-------------------------- -------------------------------
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EXHIBIT 3
EXHIBIT 3
REPRESENTATIONS
1. REPRESENTATIONS WITH RESPECT TO THE SHARES AND THE GUARANTORS'
CAPACITY TO ACT
a) Each of the Guarantors is fully empowered to execute and
perform this Agreement.
None of the Guarantors is currently the subject of any
proceedings with a view to the prevention or resolution of
business difficulties or of a judgment of dissolution.
b) Each of the Guarantors is the owner of the Shares sold by it
to the Beneficiary (and SVI and Pineal are the owners of the
Shares deemed to be sold by those persons referred to in
Exhibit 10, in accordance with Section 14 hereof). Each of
the Guarantors has full power and authority to transfer full
ownership of such Shares.
c) The transferred Shares are free and clear of all liens,
pledges, sureties, encumbrances or restrictions whatsoever.
In particular, they are not split into bare ownership and
usufruct rights.
d) The Shares shall not then be the subject of any promises to
sell or purchase options granted to other shareholders or
third parties. The Shares were not split into investment
certificates and voting rights certificates.
e) Each of the Shares represents an equal percentage of the
Company's capital to that represented by each of the other
Shares, and gives a right to exercise identical voting rights.
a) The sale of the Shares to the Beneficiary shall not in itself
result in:
i) any violation of any legal, regulatory or statutory
provisions, contractual obligations, or any decisions
by legal or administrative authorities;
ii) any loss of subsidies, bonuses, rebates, discounted
loans or exemptions, except as set forth in Appendix
1 (f) hereto;
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2.
iii) any early termination of or significant modification
to any contracts, including any leases or credit-
leasing (credit-bail), supply or distribution
agreements, except as set forth in Appendix 1 (fa)
hereto;
iv) any calls for early repayment of any loans or credits
granted to any of the Companies of the Group, except
as set forth in Appendix 1 (fb) hereto;
v) any obligation to pay a bonus or indemnity to any of
the employees or managers of any of the Companies of
the Group;
vi) any modification, suspension or withdrawal of any
permits or authorizations granted to any of the
Companies of the Group, or of any favorable fiscal or
corporate regime in place as a result of an agreement
or otherwise;
vii) payment of any taxes, fees or duties other than the
1% registration tax which may be due as a result of
the sale of the Shares, subject to a limit of twenty
thousand francs (FF. 20,000) per transfer;
viii) any entitlement for any party to be released from its
obligations under the terms of any warranty,
guarantee, comfort letter or other similar document
issued as a security or in support of any
undertakings on the part of any of the Companies of
the Group;
ix) any registration or constitution of a pledge or other
security on the assets of any of the Companies of the
Group.
2. INFORMATION
The information concerning the Companies of the Group set forth in Appendix 2
hereto is true and correct as of the date hereof.
3. REPRESENTATIONS CONCERNING THE COMPANIES OF THE GROUP
a) The Companies of the Group listed in Appendix 2 hereto as
shareholders of the Subsidiaries and the sub-Subsidiaries are
the owners of their shareholdings free and clear of all liens,
pledges, sureties, encumbrances or restrictions whatsoever
arising prior to the date hereof.
b) The Companies of the Group are incorporated in accordance with
the legislation of the place where their principal offices are
located, and are registered with the Registry of Commerce and
Companies or local equivalent. They are not subject to
annulment and are acting in conformity with their by-laws,
up-to-date copies of which have been made available to the
Beneficiary and to the Guarantors' Representative on the date
hereof as listed in Appendix 3(b) hereto.
All approvals, authorizations, consents and permits required
for the performance of each of the Companies of the Group's
activities have been
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obtained and are in full force and effect, and the activities
of each of the Companies of the Group are carried out in
accordance with such approvals, authorizations and permits.
None of the Companies of the Group have been notified of
proceedings which may result in the withdrawal, suspension or
modification of any of the approvals, authorizations and
permits referred to above, and no such proceedings are
anticipated, to the Guarantors' best knowledge.
c) No capital increase or reduction is pending as of the date
hereof, nor are any transferable securities outstanding or
being issued which would give rise to a right to subscribe the
Company's shares, nor any bonds which may be converted into
shares or other transferable securities, except as set forth
in Appendix 3(c) hereto.
d) The corporate capital of each of the Companies of the Group is
that stated in Appendix 2 hereto, which also states the number
of shares or securities issued by each of them. Such shares
or securities are validly issued and paid up in full in
proportion to the portion of capital issued.
The own funds of the Companies of the Group which are
registered in France are not less than half of their
respective amounts of registered capital, except as set forth
in Appendix 3(d) hereto.
The Shares of the Company are of a single class, and no other
securities of any nature whatsoever have been issued,
including founders' shares, subscription rights, warrants,
investment certificates or subscription vouchers, except as
set forth in Appendix 3(c) hereto.
Except as set forth in Appendix 3(c) hereto, no rights or
obligation to create new shares or other transferable
securities of any nature whatsoever in any of the Companies of
the Group have been granted to any party whatsoever for any
reason whatsoever.
There are no shares of the Companies of the Group giving rise
to double voting rights or privileged or priority shares, or
preferential subscription rights reserved for any shareholder
or any third parties.
None of the securities issued by the Companies of the Group
are listed on any stock exchange or unlisted market.
e) The registers of minutes of the meetings of shareholders and
the board of directors (or local equivalent thereof) for each
of the Companies of the Group have been regularly maintained.
Those corporate decisions which may remain in effect were
taken in accordance with those legislative and regulatory
provisions applicable to each of the Companies of the Group.
18
4.
The share transfer registers and shareholders' accounts of
those Companies of the Group which are registered in France
have been regularly maintained and have been consulted by the
Beneficiary on the date hereof.
f) Except as stated in Appendix 2 and Appendix 3(f) hereto, none
of the Companies of the Group holds any direct or indirect
shareholding in any company or other legal entity existing in
law or in fact whatsoever.
None of the Companies of the Group is a member of a groupement
d'interet economique (economic interest group) or societe en
participation (a type of partnership).
None of the Companies of the Group serves as a corporate
officer of one or more companies outside the Group.
g) The minutes of the meetings of the boards of directors and
shareholders of the Companies of the Group, together with the
special reports of the Statutory Auditors which have been made
available to the Beneficiary prior to the Closing Date,
mention any special agreements concluded between the Companies
of the Group and their directors which are currently in force.
None of the Companies of the Group leases or uses movable or
fixed assets which belong, in whole or in part, to any of the
Guarantors, except as set forth in Appendix 3(g) hereto.
h) The Company's consolidated accounts as of December 31, 1994,
as certified by its Statutory Auditors (hereinafter the
"Certified Accounts") and the Company's consolidated accounts
as of June 30, 1995 (hereinafter the "Accounts") (the
Certified Accounts and the Accounts comprising the balance
sheet and the profit and loss statement) are set forth in
Appendix 7 hereto. The Certified Accounts and the Accounts
are hereinafter collectively referred to as the "Statements".
The Statements give a true, accurate and sincere account of
the financial position of the Imaje Group as of December 31,
1994 and June 30, 1995 respectively, and have been prepared in
accordance with the international accounting standards of the
International Accounting Standards Committee (I.A.S.C.) as
applied by the Company and set forth in the notes on the said
accounts.
The layout of the Statements and the accounting methods used
to evaluate the assets and liabilities are in conformity with
the Company's accounting procedures handbook and have not been
modified during the past three fiscal years, except as set
forth in Appendix 3(h) hereto. A copy of said handbook has
been provided to the Beneficiary prior to the date of this
Agreement.
19
5.
4. REPRESENTATIONS WITH RESPECT TO THE ASSETS OF THE COMPANIES OF THE
GROUP AS OF THE DATE HEREOF
a) The Companies of the Group are the owners of their corporate
names and of the logos, models, designs, patents, trade marks
and service marks listed in Appendix 4(a) hereto, together
with a list of the Xxxxxx envelopes filed by the Company at
the French Institut National de la Propriete Industrielle
(INPI). Their industrial and intellectual property rights are
protected as listed in Appendix 4(a) hereto, and all fees
payable in connection therewith have been paid.
With respect to those patents, trademarks and other industrial
and intellectual property rights which are currently
undergoing registration by any of the Companies of the Group,
the Beneficiary accepts such rights in their present state
without any warranty as to their registrability.
To the Guarantors' best knowledge, the know-how used by the
Companies of the Group does not violate any third-party
rights.
The Companies of the Group have concluded confidentiality
undertakings with certain of their correspondents, a list of
which is attached hereto as Appendix 4(aa).
Except as set forth in Appendix 4(ab), the Companies of the
Group have the sole right to use the industrial and
intellectual property rights referred to in Appendix 4(a),
which are not the subject of any surety or third-party rights
(and in particular of any license rights) or restrictions,
claims or disputes by third parties whatsoever.
Except as set forth in Appendix 4(ac), the Companies of the
Group are not bound to pay any royalties or other fees to
third parties with respect to the use of industrial or
intellectual property rights.
Except as set forth in Appendix 4(ad), none of the Companies
of the Group is a party to any proceedings or potential
disputes concerning industrial and intellectual property which
has been the subject of an exchange of registered mail, and no
such proceedings are imminent, to the Guarantors' best
knowledge.
In particular, none of the Companies of the Group are
counterfeiting or violating any patent, trademark or other
industrial or intellectual property right belonging to a third
party, nor are any of them responsible for any acts of unfair
competition in connection with such rights.
To the Guarantors' best knowledge, no third parties are
counterfeiting or violating, or have counterfeited or
violated, any patents, trademarks or other industrial or
intellectual property rights belonging to one of the Companies
of
20
6.
the Group, nor have they committed any acts of unfair
competition in connection with such rights.
b) Except as set forth in Appendix 4(b), no judicial or arbitral
proceedings relating to any actual or supposed violation of
intellectual property rights belonging to third parties are
pending or have been begun against any of the Companies of the
Group.
c) All buildings and premises used as of this date by the
Companies of the Group are owned by the Companies of the Group
and are substantially identical to those listed in the
Accounts with a correctly amortized value, or are the subject
of a lease or credit-leasing (credit-bail) agreement with
whose terms the Companies of the Group are in full compliance,
in particular with respect to the activities carried out in
the leased premises.
A list of buildings owned by the Companies of the Group is
set forth in Appendix 4(c).
A list of buildings in which the Companies of the Group are
tenants under the terms of credit-bail agreements is set
forth in Appendix 4(ca) hereto.
A list of buildings in which the Companies of the Group are
tenants is set forth in Appendix 4(cb) hereto.
A list of mortgages and registrations relating to those
buildings owned by the Company is set forth in Appendix 4(cc)
hereto.
Those buildings which are owned by the Company or in which it
is a tenant under the terms of credit-bail agreements are not
the subject of any expropriation or total or partial
requisition measures, or of any other administrative measures
which may significantly adversely affect their value, nor are
they the subject of any encumbrances which may seriously
affect their operation which have been notified to the
Companies of the Group.
d) All buildings and premises used by the Companies of the Group
are in a normal state of wear and have been maintained, except
for normal wear and tear as reflected in the Accounts under
the appropriate headings, where the Companies of the Group are
the owners of such buildings and premises.
To the Guarantors' best knowledge, all regulatory or
legislative requirements applicable to those buildings owned
by the Companies of the Group have been complied with, except
as set forth in Appendix 4(d) hereto.
None of the buildings owned by the Companies of the Group or
in which they are tenants under the terms of credit- bail
agreements are the subject of any actions for hidden defects,
failure to conform with regulations or actions invoking the
builders' liability.
21
7.
Except as stated in Appendix 4(da) hereto, none of the
buildings already constructed and owned by the Companies of
the Group has been built on land not owned by the Companies.
Except as set forth in Appendix 4(db) hereto, no decisions
have been notified by any competent authority which may
restrict or modify the permitted use of any of the buildings
owned by any of the Companies of the Group, and no such
decisions are anticipated, to the Guarantors' best knowledge.
e) Each of the Companies of the Group has insured all of its
insurable goods with insurance companies which are known to be
solvent. The main insurance policies subscribed by the
Companies of the Group are set forth in Appendix 4(e) hereto,
including COFACE insurance (export credit and guarantee of
investment in China) and have been made available to the
Beneficiary prior to the date hereof. The Companies of the
Group have paid all premiums and complied with the terms of
such policies, none of which has been terminated. Appendix
4(e) gives a description of significant insurance claims filed
by the Companies of the Group with their insurers since
January 1, 1994. For purposes of this Representation, a
"significant insurance claim" is deemed to be one which
involves damage in an amount exceeding two hundred and fifty
thousand French francs (FF. 250,000).
f) The Companies of the Group have not granted any mortgages,
pledges, sureties or warranties to the benefit of third
parties with respect to any of their assets, except as stated
in the statements of filings or equivalent documents which may
be obtained from the mortgages office (conservation des
hypotheques) or the Clerk of the Commercial Court or local
equivalent of the place where each of the Companies of the
Group has its principal office, as set forth in Appendix 4(f)
hereto. In addition, the fixed assets of the Companies of the
Group are not subject to any judicial mortgages, their
businesses (fonds de commerce) are not subject to any judicial
pledges, and their movable assets are not subject to any
judicial security.
g) The amount of investment securities and shareholdings
reflected in the Accounts is a true and correct account of the
value of such securities as of June 30, 1995. The other
financial fixed assets appearing in the Accounts consist
essentially of security deposits and guarantees in connection
with leases, and factoring operations.
None of the Companies has granted loans to any individual or
to any legal entity, with the exception of customary loans to
employees or bodies responsible for the collection of
employers' construction fund contributions, or loans granted
to other Companies of the Group and any loans granted in the
past and repaid in full.
h) The volume and valuation of the inventories (raw materials,
work in progress and finished products) of the Companies of
the Group as stated in the Accounts give a faithful account of
the state of such inventories as of June 30, 1995.
22
8.
Inventories of raw materials and supplies are evaluated
according to the "first-in/first-out" method.
Inventories of work in progress and finished products are
evaluated at cost.
A reserve for depreciation of inventory is made where the
probable realization value is less than the inventory value.
In addition, a provision for depreciation is made on obsolete
or slow-moving inventories.
The inventories of products have not undergone any
substantial variation between July 1, 1995 and September 30,
1995 other than those arising from the normal course of
business.
The impact of the change in the method used between 1993 and
1994 is described in Appendix 3(h) hereto.
i) For each of the Companies of the Groups' receivables existing
as of the date hereof [September 30, 1995], at least
ninety-three percent (93%) of the nominal amount of such
receivable shall be paid no later than one hundred and eighty
(180) days after the Closing Date.
j) All movable property, including equipment, materials and
installations used by the Companies of the Group are in a
normal state of maintenance and repair.
5. REPRESENTATIONS WITH RESPECT TO THE LIABILITIES OF THE COMPANIES OF
THE GROUP ON THE DATE HEREOF
a) Allocations to the reserves which appear in the accounts of
the Companies of the Group, including the legal reserve, have
been properly made.
b) The Companies of the Group are not involved in any judicial,
arbitral or administrative proceedings or actions, with the
exception of recovery of receivables arising in the normal
course of business and litigation as described to the
Beneficiary, and which are listed in Appendix 5(b) hereto.
No administrative, judicial or arbitral decisions have been
notified to any of the Companies of the Group which may
significantly affect their operations or financial situation.
No such proceedings which may have such an influence on any of
the Companies of the Group are threatened, to the Guarantors'
best knowledge.
c) Except as set forth in Appendix 5(c), the Companies of the
Group are not currently the subject of any official inquiry,
assessment or verification by any French administration.
d) In carrying out their activities, the Companies of the Group
have complied with applicable regulations governing
urbanisation and classified installations, except as set forth
in Appendix 5(d) hereto.
23
9.
The Companies of the Group located in France have not been the
subject of any injunctions from the DRIRE which have not come
into effect.
In 1993, the Company was approved by the DRIRE as a transit
site for industrial waste generated by the Company's
activities.
The activities of the Companies of the Group and the
installations used by them and buildings owned by them are not
the source of any pollution or damage to the environment of
any nature whatsoever, in excess of applicable norms.
The environmental audit report prepared at the Beneficiary's
request by Xxxx Associates in France and in the United States
is attached hereto as Appendix 5(d).
To the Guarantors' best knowledge, none of the land, premises
or installations owned by any of the Companies of the Group or
in which they are tenants are contaminated.
Except as indicated in Appendix 5(da) hereto, none of the
Companies of the Group stores or treats dangerous or toxic
wastes or substances (as defined by applicable regulations) on
land used by them, and to the Guarantors' best knowledge, no
storage or treatment of dangerous or toxic wastes or
substances is carried out on such land. None of the Companies
of the Group has ordered the transportation of any dangerous
or toxic wastes or substances in contravention of applicable
regulations. None of the Companies of the Group or, to the
Guarantors' best knowledge, any third parties acting for any
of the Companies of the Group, have disposed of wastes from
any product or ink cartridges whatsoever, except at sites
which are approved for the storage, treatment, evacuation or
destruction thereof and which are the subject of valid
authorizations from competent authorities for such operations.
No prohibitions, injunctions, restrictions or limitations of
any nature whatsoever on the free use or disposal of the
movable or immovable assets of the Companies of the Group
arising from their environmental situation have been notified
to any of the Companies of the Group, subject to the
representations made in this Exhibit and its Appendices, and
no such notifications are anticipated, to the Guarantors' best
knowledge.
e) In general, the Companies of the Group are in full compliance
with applicable rules and regulations governing safety and
hygiene.
f) None of the Companies of the Group has received any
injunctions from any administrative or judicial authority, or
any requests from any professional or consumer body whatsoever
to recall any of its products, or to inform its customers of a
defect or any danger caused by a defect in any of its products
or linked to their use. None of the Companies of the Group
anticipates proceeding with a spontaneous recall campaign for
any of its products.
24
10.
A statement of requests for modifications pursuant to any
technical incidents relating to the products marketed by the
Companies of the Group during the 1994 and 1995 fiscal years
has been provided to the Beneficiary and accepted by the
latter as reflecting a normal and usual level of incidents for
the type of activity carried out by the Companies of the
Group. This statement is attached hereto as Appendix 5(f).
In addition, a set of technical letters covering the period
from January 1, 1994 to August 31, 1995 which include
instructions relating to modifications made or to be made to
the products of the Companies of the Group has been provided
to the Beneficiary, and are listed in Appendix 5(fa) hereto.
Appendix 5(fb) describes the general policy applied by the
Companies of the Group with respect to product warranties and
describes warranties given for terms in excess of two (2)
years.
Costs incurred as a result of technical problems as
described above subsequent to the date hereof for products
delivered prior to such date shall not exceed the amount of
the warranty costs borne during the 1994 fiscal year, i.e. 2%
of the Company's consolidated turnover as of December 31,
1994, calculated as set forth in Appendix 5(fc).
g) All installments that are due for long- and medium-term loans
contracted with financial institutions have been paid.
h) The Companies of the Group have fulfilled all their
obligations in connection with the leases of the premises used
by them for their activities. Notice has not been given by
the lessors of the Companies of the Group, and the latter have
not given notice to any of their lessors.
i) The Companies of the Group have made all tax, social security
and tax-related declarations to be filed or made in a timely
manner, and have paid by their due dates all taxes, duties,
levies and contributions payable by them on the date of
signature hereof.
Except as set forth in Appendix 5(ia) hereto, none of the
Companies of the Group has benefited from any fiscal advantage
or favorable tax regime in exchange for existing undertakings
or obligations by which it is still bound. None of the
Companies of the Group is bound by any obligation or shall
incur any additional tax burden as a result of the obtention
of any fiscal advantages, carry-forward or postponement of
taxation, or of any favorable tax regime.
j) Significant off-balance sheet undertakings as of June 30, 1995
are listed in Appendix 5(k) hereto, and no new significant
off-balance sheet undertakings have been made since the date
of the Accounts.
k) To the Guarantors' best knowledge, there are no significant
contingent liabilities in addition to the off-balance sheet
undertakings and the facts and circumstances described in the
Appendices hereto resulting from any event or circumstance
25
11.
which is known on the date hereof and which may give rise to
an increase in liabilities or a reduction in assets, in an
amount which cannot be determined on the date hereof (e.g.
disclosure of the possible impact of a pollution source
currently under investigation, or a third-party claim for
which no provision has been made in the Accounts).
l) Authorizations of short-term bank credit lines (overdraft,
upper limits on discounts, etc.) for each of the Companies of
the Group have been provided to the Beneficiary in the "Bank
Profiles" prior to the date hereof, and are listed in Appendix
5(m) hereto.
The above-mentioned Bank Profiles detail the bank accounts
opened in the names of the Companies of the Group, with the
names of those persons authorized to operate such accounts.
Appendix 5(ma) gives a list of all written delegations of
powers granted by the Companies of the Group which are
currently in force for purposes other than the operation of
bank accounts, with details of powers thus granted and the
names of the holders, with the exception, however, of powers
whose scope is limited.
To the Guarantors' best knowledge and except as set forth in
Appendix 5(mb), there are no events or other circumstances
other than those resulting from the general economic or
political situation which will affect the supplies or outlets
of the Companies of the Group or the conditions applicable
thereto after the date hereof.
6. REPRESENTATIONS WITH RESPECT TO THE STAFF OF THE COMPANIES OF THE
GROUP
a) A list of management executives (cadres dirigeants) in the
service of the Companies of the Group has been made available
to the Beneficiary prior to the Closing Date, together with
the Company's labor reports for 1992, 1993 and 1994, which are
set forth in Appendix 6(a) hereto.
b) Model employment contracts as concluded by the Company are
attached hereto as Appendix 6(b). Appendix 6(b) also includes
a copy of those contracts under which certain management staff
(cadres dirigeants) enjoy advantages in excess of those
arising from the collective status referred to below or the
model agreements (including, but not limited to, increased
severance pay, extended notice periods, advantages in kind,
pensions); such Appendix sets forth the names of the
beneficiaries, their annual remuneration, the nature of the
exceptional advantages granted and an evaluation of the burden
represented by each of these advantages for the relevant
Companies of the Group.
Appendix 6(ba) hereto contains an exhaustive list of all the
corporate officers (mandataires sociaux) of the Companies of
the Group.
26
12.
There are no undertakings vis-a-vis former employees or
corporate officers which remain in force.
Appendix 6(bc) describes current labor litigation, including
electoral and union-related disputes, and states the parties
thereto, the subject of the dispute, the amount claimed from
the relevant Companies of the Group and the provisions made
in the Accounts in connection with such litigation.
Except as set forth in Appendix 6(bc1), none of the Companies
of the Group has been notified of any particular proceedings
by the Labor Inspectorate (Inspection du Travail) or local
equivalent for failure to comply with labor legislation, and
no such proceedings are anticipated, to the Guarantors' best
knowledge.
Neither the Guarantors nor any of the Companies of the Group
have undertaken to grant any benefits to any employees or
corporate officers of the Companies of the Group as a result
of the completion of the sale of the Shares as provided for
herein.
The Guarantors have ensured that the workers' committee of the
Company shall be informed of and consulted in connection with
the change of control of the Company.
The collective status of the staff of each of the Companies of
the Group registered in France is defined in Appendix 6(bd)
hereto. This Appendix sets forth, for each Company and, where
applicable, for each separate establishment:
i) the applicable collective bargaining and company
agreements;
ii) any exceptional agreements concluded with staff
representatives;
iii) remuneration systems, including premiums, bonuses,
commissions, advantages in kind, awarded to all of
the staff or to certain categories thereof;
iv) profit-sharing, incentive and company savings schemes;
v) undertakings in connection with retirement or health
insurance schemes, insofar as the staff concerned are
entitled to receive advantages in addition to those
provided for by law or the applicable collective
bargaining agreements as a result of such
undertakings.
c) The Companies of the Group are up to date with payment of all
social security, unemployment and retirement fund
contributions and all other contributions and payments linked
to employment.
27
13.
d) The registers which each of the Companies of the Group which
are registered in France are required to maintain in
accordance with labor legislation are up to date.
e) None of the employees of the Companies of the Group has
suffered any work-related accidents leading to death.
Appendix 6(e) lists cases of permanent or temporary disability
arising from work-related accidents since January 1, 1993, as
well as the insurance premium rate relating to work-related
accidents for the those Companies of the Group registered in
France as of January 1, 1995.
f) A list of benefits in kind granted to the staff of the
Companies of the Group (with the exception of company cars)
together with the amounts of employers' contributions to
social projects has been made available to the Beneficiary
prior to the date hereof and is set forth in Appendix 6(f)
hereto.
g) Except as set forth in Appendix 6(g) hereto, none of the
Companies of the Group has made any undertakings or is bound
by any obligations whatsoever which remain in force (including
any undertaking to rehire, grant priority in hiring or
maintain in employment) in connection with any plans for sale
or continuation, or any staffing plans or collective
dismissals.
7. REPRESENTATIONS WITH RESPECT TO MANAGEMENT OF THE COMPANIES OF THE
GROUP UP TO THE DATE OF THIS AGREEMENT
a) None of the Companies of the Group has been dissolved or is
undergoing dissolution, nor is any of the Companies of the
Group the subject of judicial reorganization or liquidation
proceedings, or amicable settlement proceedings.
b) Except as disclosed in the various Appendices to this Exhibit
3, the Companies of the Group are in compliance with all laws,
regulations or prescriptions issued by any administrative body
or authority which may be applicable to them. In the case of
the Subsidiaries listed in Appendix 7(b) hereto, this
representation is made to the Guarantors' best knowledge.
It is hereby specified a Claim under the terms of this
Guarantee Agreement may only be made if the Beneficiary or any
of the Companies of the Group has suffered a significant
prejudice which has given rise to actual expenses.
c) None of the Companies of the Group is a party to or is subject
to the provisions of any contracts or agreements other than
those concluded under normal conditions. An up-to-date list
of the main distribution and commercial agency agreements
concluded among the Companies of the Group, or between the
Companies of the Group and third parties is set forth in
Appendix 7(c) hereto.
With the exception of those contracts listed in Appendix 7(c)
or any other Appendices hereto, none of the Companies of the
Group is a party to any contract which may fall within one of
the following categories:
28
14.
(i) contracts whose remaining term is less than one (1)
year and which bind any of the Companies of the Group
for an amount in excess of one million French francs
(FF. 1,000,000);
(ii) contracts whose term exceeds one (1) year or is
unlimited (with the exception of labor agreements),
for an annual amount in excess of five hundred
thousand French francs (FF. 500,000) and which may
not be terminated by the Company of the Group which
is a party thereto without more than three (3)
months' notice and/or payment of an indemnity;
(iii) contracts giving rise to the payment by any of the
Companies of the Group of fees or the granting of a
counterpart in another form to the other party (or to
any entity or individual connected therewith) in
return for business brought to the relevant Company
of the Group by such party;
(iv) contracts relating to profit-sharing or the payment
of commissions, or which provide for a remuneration
on the basis of profits or turnover;
(v) contracts or undertakings under whose terms one or
more of the Companies of the Group is bound to
refrain from carrying out or to restrict certain
activities, or to refrain from competing;
(vi) contracts granting exclusive rights to a third party;
(vii) contracts which do not fall within the scope of the
normal day-to-day business of the relevant Company of
the Group, or which are concluded under conditions
other than those usually granted to independent
parties, or which do not reflect market conditions;
(viii) contracts relating to the holding and/or sale of
transferable securities of any of the Companies of
the Group.
To the Guarantors' best knowledge, none of the Companies of
the Group has been informed of any intent on the part of its
suppliers or customers to terminate or reduce their business
relationship, where such termination or reduction would
significantly affect the relevant Company's ability to supply,
its commercial outlets or its financial position.
d) None of the authorizations, licenses and, more generally,
rights necessary to the activities of the Companies of the
Group provide for a possible withdrawal, expiration or
termination solely as a result of the sale of the Shares.
e) To the Guarantors' best knowledge, none of the contracts l
isted under Section 7(c) hereof which have been concluded by
the Companies of the Group are the subject of any breach by
the Company of the Group concerned or the other party thereto,
subject to the information given in Appendix 7(e).
29
15.
f) To the Guarantors' best knowledge, none of the Companies of
the Group which has a relationship of economic dependency with
one of its suppliers has intervened in the management of such
supplier's affairs in such a way as for its liability to be
incurred in connection with an action seeking to cover
liabilities. This representation shall cease to be effective
six (6) months after the date of this Agreement, it being
understood that if the relevant Company of the Group pursues
its contractual relationship with such supplier after the date
hereof, the Guarantors shall not be liable for the
consequences of any action seeking to cover liabilities in the
event the supplier becomes insolvent more than six (6) months
after the date hereof.
g) Each of the Companies of the Group has been managed in the
ordinary course of business since July 1, 1995, and no
particular event has had a significant adverse impact on their
situation.
h) Except as set forth in Appendix 7(h) hereto, none of the
following has occurred or has been observed since July 1,
1995:
i) no liens, mortgages, pledges or oppositions, claims,
seizures or encumbrances of any nature whatsoever,
whether by contract or by judicial action, have been
granted with respect to the assets of the Companies
of the Group, except as reflected in the statements
of filings obtainable from the mortgages office
(conservation des hypotheques) or the Clerk of the
Commercial Court or local equivalent of the place
where each of the Companies of the Group has its
principal office;
ii) any damage, destruction or losses (which are not
covered by insurance policies) having a significant
adverse impact on any of the assets of the Companies
of the Group;
iii) any decisions by any of the Companies of the Group to
distribute or pay dividends or reserves, it being
specified that a dividend in an amount of four
million seven hundred and thirty-nine thousand francs
(FF. 4,739,000) was distributed to the Company's
shareholders during the second quarter of 1995;
iv) any significant increases in the debts or obligations
with respect to third parties of any of the Companies
of the Group other than those arising in the normal
course of business; in particular, there has been no
increase in bank debts (other than those arising from
the factoring contract concluded with SLIFAC) or of
overdrafts on credit lines;
v) any modification or termination of any contracts,
agreements or licenses other than those arising
within the normal course of business of the Companies
of the Group;
vi) any terminations of any of the insurance policies of
the Companies of the Group;
30
16.
vii) no increases in the remuneration due by any of the
Companies of the Group to any of their corporate
officers or employees (engineers, executives,
employees or laborers), or other supplementary
individual advantages, with the exception of those
increases arising in the normal course of business;
No modification of the collective status of the
staff except as set forth in Appendix 6(bd) hereto;
No resignations or dismissals of management
executives (cadres dirigeants);
No labor disputes;
No substantial modifications to the employment
contracts of any of the management executives (cadres
dirigeants) of the Companies of the Group.
viii) no new investments or undertakings to invest, or any
investment in movable or fixed assets (including
credit-bail undertakings) in a unit amount in excess
of five hundred thousand francs (FF. 500,000).
ix) none of the Companies is a party to any merger,
divestiture or contribution, and none of them has
made any modification or amortization of its capital
(with the exception, for the Company, of the
conversion of convertible bonds), or any issuance of
transferable securities or of subscription vouchers,
or any purchase of transferable securities.
x) no modifications have been made to the by-laws or
equivalent act of incorporation of any of the
Companies of the Group.
8. REPRESENTATIONS WITH RESPECT TO RELATIONS BETWEEN THE COMPANIES OF THE
GROUP AND THE GUARANTORS
Except as stated in Xxxxxxxx 0 xxxxxx, xxxx of the Guarantors:
(a) Holds, either together or separately, in whole or in part, any
property, assets or rights whatsoever, which the Companies of
the Group are to use or of which they are a beneficiary for
purposes of carrying out all or part of their activities, with
the exception of banking securities;
(b) Is a creditor or debtor of the Companies of the Group as a
result of any undertaking whatsoever, or has any present or
future rights in general against the Companies of the Group,
with the exception of those rights or payments due to the
employees of any of the Companies of the Group in connection
with their employment and of banking operations;
31
17.
(c) Has granted any guarantees or securities for any of the
undertakings of the Companies of the Group, or is the
beneficiary of any guarantee granted by one of the Companies
of the Group as security for any of their obligations, with
the exception of those banks who are Sellers.
9. INTERMEDIARIES
None of the Parties or Companies of the Group has concluded any
agreements with any intermediaries or advisors whatsoever which would
bind one of the Companies of the Group to pay, either directly or
indirectly, any remunerations, commissions or fees as a result of the
negotiation or signature of this Agreement, or the performance of the
operations contemplated herein.
10. EXCEPTIONS TO THE REPRESENTATIONS
Any exceptions to any one of the Representations appearing in this
Exhibit to the Guarantee Agreement or in any of the Appendices which
are an integral part hereof, shall be deemed to be enforceable against
the Beneficary with respect to another Representation where the
exception raised necessarily applies to such other Representation by
reason of its context.
11. DATE OF THE REPRESENTATIONS
The Representations made by the Guarantors pursuant to this Exhibit 3
are true and correct as of September 29, 1995. As an exception to the
foregoing, the Representations with respect to the Shares and the
Guarantors' Capacity to Act set forth in Section 1 of this Exhibit are
deemed to be true and correct insofar as they relate to any Guarantor
and the Shares sold by such Guarantor, on the date of sale of such
Shares, it being understood that such Representations shall
nevertheless be deemed to have been made with respect to all of the
Guarantors.
