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Exhibit 2.13
STOCK PURCHASE AGREEMENT
AMONG
▇▇▇▇▇▇ UK INC.,
AND
▇▇▇▇▇-▇▇▇▇▇▇ QUEILLE,
▇▇▇▇▇▇▇ QUEILLE,
▇▇▇▇▇▇ ▇▇▇▇▇,
▇▇▇▇▇▇ ▇▇▇▇▇,
▇▇▇▇ ▇▇▇▇▇,
▇▇▇▇▇▇ ▇▇▇▇▇▇,
▇▇▇▇-▇▇▇▇▇▇▇ ▇▇▇▇▇, AND
▇▇▇▇-▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
JUNE 4, 1999
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STOCK PURCHASE AGREEMENT
THIS STOCK PURCHASE AGREEMENT ("Agreement") is made and entered into
this fourth day of June,1999 by and between:
- ▇▇▇▇▇▇ U.K INC., an Ohio corporation ("▇▇▇▇▇▇"), having its
registered office located at 700 ▇▇▇▇▇ Tower, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇▇ duly represented by ▇▇. ▇▇▇▇▇▇
▇▇▇▇▇▇▇, who has all the powers of such representation,
On the One Hand,
And
- Mrs. ▇▇▇▇▇ ▇▇▇▇▇▇ Queille with an address at ▇ ▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇;
- ▇▇. ▇▇▇▇▇▇▇ Queille with an address at ▇ ▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇,
▇▇▇▇▇, ▇▇▇▇▇, ▇▇▇▇▇▇;
- ▇▇. ▇▇▇▇▇▇ ▇▇▇▇▇, with an address at 14 impasse de la Marniere,
▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇;
- ▇▇▇. ▇▇▇▇▇▇ ▇▇▇▇▇, with an address at Residence ▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇
▇▇▇ ▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇ ▇▇▇▇▇▇▇-▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇;
- ▇▇. ▇▇▇▇ ▇▇▇▇▇, with an address at ▇▇ ▇▇▇ ▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇
▇▇▇▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇;
- ▇▇. ▇▇▇▇▇▇ ▇▇▇▇▇▇, with an address at ▇▇ ▇▇▇▇▇ ▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇▇▇
▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇;
- ▇▇. ▇▇▇▇-▇▇▇▇▇▇▇ ▇▇▇▇▇, with an address at ▇▇ ▇▇▇ ▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇
▇▇▇▇▇▇▇▇ ▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇;
- ▇▇. ▇▇▇▇-▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, with an address at ▇▇/▇▇ ▇▇▇ ▇▇ ▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇;
On the Other Hand
(the "Sellers").
▇▇▇▇▇▇ and the Sellers are referred to herein collectively as the
"Parties".
RECITALS
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A. The Sellers, in the aggregate, own all of the issued and outstanding
capital stock of ESCLI S.A., a corporation (societe anonyme) organized and
existing under the laws of France, registered with the Registry of Commerce and
Companies of Nanterre under No. B 350 578 001, having its registered office at
▇▇-▇▇ ▇▇▇ ▇▇▇▇-▇▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇-▇▇▇-▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇ ("ESCLI").
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B. This Agreement contemplates a transaction in which ▇▇▇▇▇▇ will
purchase from the Sellers, and the Sellers will sell to ▇▇▇▇▇▇, all of the
issued and outstanding capital stock ofESCLI in return for cash.
NOW, THEREFORE, in consideration of the premises and the mutual
undertakings and agreements herein made, the Parties agree as follows:
1. Definitions
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"ESCLI" has the meaning set forth in the first recital above.
"ESCLI SHARE" means any share of the common stock, no par value, of
ESCLI.
"AFFILIATE" means, with respect to any entity or individual, any entity
or individual which directly or indirectly controls, is controlled by or is
under common control with such entity or individual.
"BASIS" means any known past or present fact, situation, circumstance,
status, condition, activity, practice, plan, occurrence, event, incident,
action, failure to act or transaction that forms or could form the basis for any
specified consequence.
"BENEFICIARY" has the meaning set forth in ss.6(b)(i) below.
"CASH CLOSING PAYMENT" has the meaning set forth in ss.2(b) below.
"CASH ESCROW AMOUNT" has the meaning set forth in ss.2(b) below.
"CLOSING" has the meaning set forth in ss.2(c) below.
"CLOSING DATE" has the meaning set forth in ss.2(c) below.
"CONSULTING AGREEMENT" has the meaning set forth in ss.2(d)(iii) below.
"CONTRIBUTIONS" means all permanent or exceptional deductions, charges
or other contributions required to be made or paid pursuant to any social
security regime, unemployment benefit or severance plan, welfare arrangement,
retirement or pension plan, health or other employee insurance plan, employee
training program, profit-sharing plan or other employee benefit or labor-related
plan pursuant to any applicable law and for which any Person or any of its
predecessors may be liable.
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"CONTROL" (including the terms "to control", "controlling", "controlled
by" and other variations of the term "control") means the ownership of 50% or
more of the outstanding shares (or the equivalent in a non-corporate entity) or
voting rights of any Person.
"DAMAGES" means any and all liabilities, obligations, losses, damages,
penalties, claims, actions, suits, judgments, settlements, out-of-pocket costs,
expenses and disbursements (including reasonable fees of advisers and expert
witnesses) of whatever kind and nature.
"DISCLOSURE SCHEDULE" means the disclosure schedule delivered by the
Guarantor hereto pursuant to ss.ss.3 and 4 below. Nothing contained in the
Disclosure Schedule shall be deemed adequate to disclose an exception to a
representation or warranty made in this Agreement unless the exception is
identified in the Disclosure Schedule with reasonable particularity, describing
the relevant facts in reasonable detail.
"EMPLOYMENT AGREEMENT" has the meaning set forth in ss.2(f) below.
"ENCUMBRANCE" means any Security Interest, warrant, option, purchase
right, preemptive right, or other right or claim of any character that restricts
the transfer of capital stock.
"ENVIRONMENTAL LAW" means any supra-national, national, state or local
statute, law, rule, regulation, ordinance, code, policy or guidelines in effect
and in each case as amended, and any judicial or administrative interpretation
thereof, including any judicial or administrative order, consent decree or
judgment, relating to the environment, health, safety or Hazardous Materials.
"ESCROW AGREEMENT" has the meaning set forth in ss.2(b) below.
"FINANCIAL STATEMENTS" has the meaning set forth in ss.4(g) below.
"GUARANTOR" means Mrs. ▇▇▇▇▇ ▇▇▇▇▇▇ Queille who shall be the only
guarantor with respect to ESCLI's representations and warranties among the
Sellers.
"HAZARDOUS MATERIALS" means (a) any petroleum or petroleum products,
radioactive materials, asbestos in any form that is or could become friable,
urea formaldehyde foam insulation, transformers or other equipment that contain
dielectric fluid containing polychlorinated biphenyls, and radon gas; (b) any
chemicals, materials or substances defined as or included in the definition of
"hazardous substances," "hazardous wastes," "hazardous materials," "extremely
hazardous wastes," "restricted hazardous wastes," "toxic substances," "toxic
pollutants," "contaminants" or "pollutants," or words of similar import, under
any applicable Environmental Law; and (c) any other chemical, material or
substance exposure to which is prohibited, limited or regulated by any
governmental authority.
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"INTELLECTUAL PROPERTY" means (a) all inventions (whether patentable or
unpatentable and whether or not reduced to practice), all improvements thereto
and all patents, patent applications, and patent disclosures, together with all
reissuances, continuations, continuations-in-part, revisions, extensions, and
reexaminations thereof, (b) all trademarks, service marks, trade dress, logos,
trade names, together with all translations, adaptations, derivations, and
combinations thereof and including all goodwill associated therewith, and all
applications, registrations, and renewals in connection therewith, (c) all
models and all applications, registrations, and renewals in connection
therewith, (d) all copyrightable works, all copyrights, and all applications,
registrations, and renewals in connection therewith, (e) all mask works and all
applications, registrations, and renewals in connection therewith, (f) all trade
secrets and confidential business information (including ideas, research and
development, know-how, formulas, compositions, manufacturing and production
processes and techniques, technical data, designs, drawings, specifications,
customer and supplier lists, pricing and cost information, and business and
marketing plans and proposals), (g) all computer software (including related
technical documentation), (h) all other proprietary rights, and (i) all copies
and tangible embodiments thereof (in whatever form or medium).
"▇▇▇▇▇▇" has the meaning set forth in the preface above.
"KNOWLEDGE" means knowledge after reasonable investigation.
"LIABILITY" means any liability (whether known or unknown, whether
asserted or unasserted, whether absolute or contingent, whether accrued or
unaccrued, whether liquidated or unliquidated, and whether due or to become
due), including (without limitation) any liability for Taxes and Contributions.
"MOST RECENT BALANCE SHEET" means the balance sheet contained within
the Most Recent Financial Statements.
"MOST RECENT FINANCIAL STATEMENTS" has the meaning set forth in ss.4(g)
below.
"MOST RECENT FISCAL MONTH END" has the meaning set forth in ss.4(g)
below.
"MOST RECENT FISCAL YEAR END" has the meaning set forth in ss.4(g)
below.
"ORDINARY COURSE OF BUSINESS" means the ordinary course of business
consistent with past custom and practice (including with respect to quantity and
frequency).
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"PLAN" means any employee benefits, bonuses, welfare arrangements,
unemployment or severance benefits, pensions, retirement plans, health or other
employee insurance plans, employee training programs, stock options, stock
purchase, deferred compensation, profit-sharing plans or other similar
arrangements.
"PARTY" has the meaning set forth in the preface above.
"PERSON" means an individual, a partnership, a corporation, a limited
liability company, an association, a joint stock company, a trust, a joint
venture, an unincorporated organization, or a governmental entity (or any
department, agency, or political subdivision thereof).
"PURCHASE PRICE" has the meaning set forth in ss.2(b) below.
"SECURITY INTEREST" means any mortgage, pledge, lien, privilege,
encumbrance, charge, or other security interest.
"SELLER" has the meaning set forth in the preface above.
"SUBSIDIARY" means any corporation with respect to which a specified
Person (or a Subsidiary thereof) owns, directly or indirectly, either the
outstanding voting stock or other ownership interest.
"TAX" means any French, state, local, or foreign income, gross
receipts, license, payroll, employment, severance, stamp, premium, windfall
profits, environmental, para-fiscal charges, customs duties, capital stock,
franchise, profits, withholding, social security (or similar), unemployment,
disability, real property, personal property, sales, use, transfer,
registration, value added, alternative or add-on minimum, estimated, or other
tax and duty of any kind whatsoever, including any interest, penalty, or
addition thereto, whether disputed or not.
"TAX RETURN" means any return, declaration, report, claim for refund,
or information return or statement relating to Taxes and Contributions,
including any schedule or attachment thereto, and including any amendment
thereof.
"THIRD PARTY CLAIM" has the meaning set forth in ss.6(d) below.
2. PURCHASE AND SALE OF ESCLI SHARES
(a) BASIC TRANSACTION. On and subject to the terms and
conditions of this Agreement, ▇▇▇▇▇▇ agrees to purchase from each of the
Sellers, and each of the Sellers agrees to sell to ▇▇▇▇▇▇, all of his or her
ESCLI Shares for the consideration specified below in this section. 2.
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(b) PURCHASE PRICE. At the Closing, ▇▇▇▇▇▇ shall pay the
Sellers a purchase price of Fifteen Million Two Hundred Fifty Thousand Three
Hundred and Ten French Francs (FF 15,250,310) (the "Purchase Price"), Eleven
Million Nine Hundred Seventy Thousand Five Hundred Twenty-Five French Francs (FF
11,970,525) of which shall be paid in cash at the Closing (the "Cash Closing
Payment"), Three Million Two Hundred Seventy-Nine Thousand Seven Hundred
Eighty-Five French Francs (FF 3,279,785) of which shall be paid in cash to Fifth
Third Bank, as escrow agent under the Escrow Agreement (attached as Exhibit
2(b)(i) hereto), the purpose of which is to secure and provide a source for the
payment of any amount payable by the Guarantor to ▇▇▇▇▇▇ pursuant to ss.6 hereof
(the "Cash Escrow Amount"). The Purchase Price paid to each Seller shall be as
set forth in Exhibit 2(b)(ii) hereto.
(c) THE CLOSING. The closing of the transactions contemplated
by this Agreement (the "CLOSING") shall take place at the offices of ▇▇▇▇ &
Associes, ▇ ▇▇▇ ▇▇▇▇▇▇▇ ▇▇ ▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇, commencing at 2.00
p.m., local time, on June 4, 1999 or at such other date as ▇▇▇▇▇▇ and the
Sellers may mutually determine (the "CLOSING DATE"). All actions to be taken at
the Closing shall be considered to take place simultaneously and no transaction
or delivery of any document shall be deemed complete until all transactions and
deliveries of documents are complete.
(d) DELIVERIES BY THE SELLERS AT THE CLOSING. At the Closing,
the Sellers shall deliver to ▇▇▇▇▇▇ the following:
(i) share transfer orders for the ESCLI Shares, duly
endorsed by each of the Sellers;
(ii) the certificate from a first rank insurance
company accepting to provide life insurance on the
life of ▇▇. ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ at standard rates for
One Million Five Hundred Thousand Euros (Euros
1,500,000);
(iii) the consulting agreement duly executed by Mrs.
▇▇▇▇▇ ▇▇▇▇▇▇ Queille, attached as Exhibit
2(d)(iii) hereto, pursuant to which Mrs.
▇▇▇▇▇-▇▇▇▇▇▇ Queille shall provide certain
services to ▇▇▇▇▇▇ following the Closing Date and
will be remunerated therefor in accordance with
the terms and conditions set forth in such
agreement (the "Consulting Agreement");
(iv) the Non-Competition Covenant duly executed by each
of the Sellers attached as Exhibit 2(d)(iv) hereto
(the "Covenant");
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(v) an opinion from counsel to the Sellers dated as of
the Closing Date attached as Exhibit 2(d)(v);
(vi) the resignations, effective as of the Closing, of
each director of ESCLI;
(vii) evidence that all notifications to the workers'
committee have been given in accordance with all
applicable laws and regulations;
(viii) evidence that the accounts for the fiscal year
ended on December 31, 1998 have been duly approved
by the shareholders of ESCLI; and
(ix) the Escrow Agreement duly executed by the
Guarantor.
(e) DELIVERIES BY ▇▇▇▇▇▇ AT THE CLOSING. At the Closing,
▇▇▇▇▇▇ shall deliver to the Sellers the following:
(i) the consideration specified in ss.2(b) above;
(ii) an opinion from counsel to ▇▇▇▇▇▇ dated as of the
Closing Date and attached as Exhibit 2(e)(ii); and
(iii) the Escrow Agreement duly executed by ▇▇▇▇▇▇ and
the escrow agent.
(f) OTHER DOCUMENTS TO BE DELIVERED AT THE CLOSING. Each of
the Parties shall cause to deliver an employment contract or any amendment
thereof duly executed by ▇▇. ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ (the "Employment Contract").
3. REPRESENTATIONS AND WARRANTIES CONCERNING THE TRANSACTION.
(a) REPRESENTATIONS AND WARRANTIES OF THE SELLERS. Each of the
Sellers represents and warrants to ▇▇▇▇▇▇ that the statements contained in this
ss.3(a) are correct and complete as of the Closing Date with respect to himself
or herself (but not with respect to any other Seller).
(i) AUTHORIZATION OF TRANSACTION. The Seller has full
power and authority to execute and deliver this Agreement and to
perform his or her obligations hereunder. This Agreement constitutes
the valid and legally binding obligation of the Seller, enforceable in
accordance with its terms and conditions. The Seller need not give
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any notice to, make any filing with, or obtain any authorization,
consent, or approval of any government or governmental agency in order
to consummate the transactions contemplated by this Agreement.
(ii) NONCONTRAVENTION. Neither the execution and the
delivery of this Agreement, nor the consummation of the transactions
contemplated hereby, will (A) violate any constitution, statute,
regulation, rule, injunction, judgment, order, decree, ruling, charge,
or other restriction of any government, governmental agency, or court
to which the Seller is subject or (B) conflict with, result in a breach
of, constitute a default under, result in the acceleration of, create
in any party the right to accelerate, terminate, modify, or cancel, or
require any notice under any agreement, contract, lease, license,
instrument, or other arrangement to which the Seller is a party or by
which he or she is bound or to which any of his or her assets is
subject. The Seller has not received any threatened or pending claim
that would prevent the consummation of any of the transactions
contemplated by this Agreement or affect adversely the right of ▇▇▇▇▇▇
to own ESCLI Shares and to control ESCLI.
(iii) BROKERS' FEES. The Seller has no Liability or
obligation to pay any fees or commissions to any broker, finder, or
agent with respect to the transactions contemplated by this Agreement
for which ▇▇▇▇▇▇ could become liable or obligated.
(iv) ESCLI SHARES. The Seller holds of record and
owns beneficially the number of ESCLI Shares set forth next to his or
her name in ss.4(b) of the Disclosure Schedule, free and clear of any
Encumbrances. The Seller is not a party to any voting trust, proxy, or
other agreement or understanding with respect to the voting of any
capital stock of ESCLI.
(b) REPRESENTATIONS AND WARRANTIES OF ▇▇▇▇▇▇. ▇▇▇▇▇▇
represents and warrants to the Sellers that the statements contained in this
ss.3(b) are correct and complete as of the Closing Date.
(i) ORGANIZATION OF ▇▇▇▇▇▇. ▇▇▇▇▇▇ is a corporation
organized, validly existing and in good standing under the laws of the
State of Ohio.
(ii) AUTHORIZATION OF TRANSACTION. ▇▇▇▇▇▇ has full
power and authority (including full corporate power and authority) to
execute and deliver this Agreement and to perform its obligations
hereunder. This Agreement constitutes the valid and legally binding
obligation of ▇▇▇▇▇▇, enforceable in accordance with its terms and
conditions.
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(iii) NONCONTRAVENTION. Neither the execution and the
delivery of this Agreement, nor the consummation of the transactions
contemplated hereby, will (A) violate any constitution, statute,
regulation, rule, injunction, judgment, order, decree, ruling, charge,
or other restriction of any government, governmental agency, or court
to which ▇▇▇▇▇▇ is subject or any provision of its charter or by-laws
or (B) conflict with, result in a breach of, constitute a default
under, result in the acceleration of, create in any party the right to
accelerate, terminate, modify, or cancel, or require any notice under
any material agreement, contract, lease, license, instrument, or other
arrangement to which ▇▇▇▇▇▇ is a party or by which it is bound or to
which any of its assets is subject.
(iv) BROKERS' FEES. Other than liabilities or
obligations to Technomark, ▇▇▇▇▇▇ has no Liability or obligation to pay
any fees or commissions to any broker, finder, or agent with respect to
the transactions contemplated by this Agreement for which any Seller
could become liable or obligated.
4. REPRESENTATIONS AND WARRANTIES CONCERNING ESCLI. The Guarantor
represents and warrants to ▇▇▇▇▇▇ that the statements contained in this
section.4 are correct and complete as of the Closing Date, except as set forth
in the Disclosure Schedule.
(a) ORGANIZATION, QUALIFICATION, AND CORPORATE POWER. ESCLI is
a corporation organized, validly existing and in good standing under the laws of
France. ESCLI is duly authorized to conduct business and has full corporate
power and authority and all licenses, permits, and authorizations necessary to
carry on the businesses in which it is engaged and in which it presently
proposes to engage and to own and use the properties owned and used by it.
ss.4(a) of the Disclosure Schedule lists the directors of ESCLI. The Guarantor
has delivered to ▇▇▇▇▇▇ correct and complete copies of the by-laws and corporate
records of ESCLI (as amended through the Closing Date). The minute books
(containing the records of meetings of the stockholders, the board of directors
and any committees of the board of directors and the attendance registers
thereof), the stock certificate books and the stock record books of ESCLI, all
of which have been made available to ▇▇▇▇▇▇, are correct, complete and executed
in compliance with all applicable requirements. ESCLI is not in default under or
in violation of any provision of applicable laws and regulations or its by-laws.
(b) SHARE CAPITAL. The share capital of ESCLI is in the amount
set forth in ss.4(b) of the Disclosure Schedule, and is divided into the number
of shares or other ownership interests set forth in ss.4(b) of the Disclosure
Schedule. All of the ESCLI Shares (i) are issued and outstanding; (ii) are duly
authorized, validly issued and fully paid and have been issued in compliance
with applicable laws and regulations. There are no outstanding or authorized
options, warrants, preemptive rights, purchase rights, subscription rights,
conversion rights, exchange rights, or other contracts or commitments that could
require ESCLI to issue, sell,
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or otherwise cause to become outstanding any of its capital stock. There are no
outstanding or authorized stock appreciation, profit participation, or similar
rights with respect to ESCLI. ESCLI is not a party to any voting trusts,
proxies, or other agreements or understandings with respect to the voting of the
capital stock of ESCLI. The ESCLI Shares represent, in the aggregate, direct or
indirect ownership of 100% of the share capital of ESCLI. Upon completion of the
account entries and other formalities required by applicable laws and
regulations, ▇▇▇▇▇▇ will receive valid and marketable title to the ESCLI Shares,
free and clear of any Encumbrances.
(c) NONCONTRAVENTION. Neither the execution and the delivery
of this Agreement, nor the consummation of the transactions contemplated hereby,
will (i) violate any constitution, statute, regulation, rule, injunction,
judgment, order, decree, ruling, charge, or other restriction of any government,
governmental agency, or court to which ESCLI is subject or any provision of the
by-laws of ESCLI or (ii) conflict with, result in a breach of, constitute a
default under, result in the acceleration of, create in any party the right to
accelerate, terminate, modify, or cancel, or require any notice under any
agreement, contract, lease, license instrument to which ESCLI is a party or by
which it is bound or to which any of its assets is subject; or (iii) result in
the imposition of any Security Interest upon any of its assets. ESCLI does not
need to give any notice to, make any filing with, or obtain any authorization,
consent, or approval of any government or governmental agency in order for the
Parties to consummate the transactions contemplated by this Agreement. ESCLI has
not received any threatened or pending claim that would prevent the consummation
of any of the transactions contemplated by this Agreement or affect adversely
the right of ▇▇▇▇▇▇ to own ESCLI Shares and to control ESCLI.
(d) BROKERS' FEES. ESCLI has no Liability or obligation to pay
any fees or commissions to any broker, finder, or agent with respect to the
transactions contemplated by this Agreement.
(e) TITLE TO ASSETS. ESCLI has good and marketable title to,
or a valid leasehold interest in, the properties and assets used by it, or shown
on the Most Recent Balance Sheet or acquired after the date thereof, free and
clear of all Security Interests.
(f) SUBSIDIARIES. ESCLI has no Subsidiary and no other
interest in any Person.
(g) FINANCIAL STATEMENTS. Attached hereto as Exhibit 4(g) are
the following financial statements (collectively the "FINANCIAL STATEMENTS"):
(i) audited balance sheets and statements of income and the notes thereto for
ESCLI as of and for the fiscal years ended December 31, 1995, March 31 1997 and
December 31, 1997; (ii) audited balance sheets and statements of income and the
notes thereto for ESCLI for the fiscal year ended December 31, 1998 (the "MOST
RECENT FISCAL YEAR END"); (iii) unaudited balance sheets and statements of
income (the "MOST RECENT FINANCIAL STATEMENTS") as of and for the three (3)
months ended March 31, 1999 (the "MOST RECENT FISCAL MONTH END") for ESCLI and
(iv) the management
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account as of April 30, 1999 for ESCLI. The Financial Statements and the Most
Recent Financial Statements (including the notes thereto) have been prepared in
accordance with French accepted accounting principles applied on a consistent
basis throughout the periods covered thereby, have been audited and certified
without reserve by ESCLI's statutory auditors, except for the Most Recent
Financial Statements, present fairly in all material respects the financial
condition of ESCLI as of such dates and the results of operations of ESCLI for
such periods and are consistent with the books and records of ESCLI.
(h) EVENTS SUBSEQUENT TO MOST RECENT FISCAL YEAR END. The
Guarantor represents and warrants that she did not cause or permit ESCLI to
engage in any practice, take any action, or enter into any transaction outside
the Ordinary Course of Business. Except as set forth in ss.4(h) of the
Disclosure Schedule, since December 31, 1998 and until the Closing Date, there
has not been any ESCLI Material Adverse Change. Without limiting the generality
of the foregoing, since that date, except as set forth in ss.4(h) of the
Disclosure Schedule:
(i) ESCLI has not sold, leased, transferred, or
assigned any of its assets, tangible or intangible, involving in the
aggregate more than One Hundred Twenty Thousand French Francs (FF
120,000);
(ii) ESCLI has not entered into any agreement,
contract, lease, or license (or series of related agreements,
contracts, leases, and licenses) including contracts with customers
involving more than Two Hundred Thousand French Francs (FF 200,000);
(iii) no party (including ESCLI) has accelerated,
terminated, modified, or canceled any agreement, contract, lease, or
license (or series of related agreements, contracts, leases, and
licenses) involving more than One Hundred Fifty Thousand French Francs
(FF 150,000) to which ESCLI is a party or by which it is bound;
(iv) ESCLI has not imposed or permitted to be imposed
any Security Interest upon any of its assets, tangible or intangible;
(v) ESCLI has not made any capital expenditure (or
series of related capital expenditures) either involving more than One
Hundred Fifty Thousand French Francs (FF 150,000) or outside the
Ordinary Course of Business;
(vi) ESCLI has not made any capital investment in,
any loan to, or any acquisition of the securities or assets of, any
other Person (or series of related capital investments, loans, and
acquisitions) either involving more than One Hundred Fifty Thousand
French Francs (FF 150,000) or outside the Ordinary Course of Business;
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(vii) ESCLI has not issued any Share, bond, or other
debt security or created, incurred, assumed, or guaranteed any
indebtedness for borrowed money or capitalized lease obligation;
(viii) ESCLI has not delayed or postponed the payment
of accounts payable and other Liabilities outside the Ordinary Course
of Business;
(ix) ESCLI has not canceled, compromised, waived, or
released any right or claim (or series of related rights and claims)
either involving more than Sixty Thousand French Francs (FF 60,000) or
outside the Ordinary Course of Business;
(x) ESCLI has not granted any license or sublicense
of any rights under or with respect to any Intellectual Property;
(xi) there has been no change made or authorized in
the by-laws of ESCLI;
(xii) ESCLI has not declared, set aside, or paid any
dividend or made any distribution with respect to its capital stock
(whether in cash or in kind) or redeemed, purchased, or otherwise
acquired any of its capital stock;
(xiii) ESCLI has not experienced any damage,
destruction, or loss (whether or not covered by insurance) to its
property;
(xiv) ESCLI has not made any loan (that will remain
outstanding on the Closing Date) to or with any of its directors and
employees;
(xv) ESCLI has not entered into any employment
contract or collective bargaining agreement, written or oral, or
changed or modified the terms of any existing such contract or
agreement;
(xvi) ESCLI has not granted any increase in the base
compensation of any of its directors and employees outside the Ordinary
Course of Business;
(xvii) ESCLI has not adopted, amended, modified, or
terminated any bonus, profit-sharing, incentive, severance, or other
contract, or commitment for the benefit of any of its directors and
employees or taken any such action with respect to any Plan;
(xviii) ESCLI has not made or pledged to make any
charitable or other capital contribution outside the Ordinary Course of
Business;
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(xix) there has not been any other material
occurrence, event or transaction outside the Ordinary Course of
Business; and,
(xx) ESCLI has not committed to any of the foregoing.
(i) UNDISCLOSED LIABILITIES. ESCLI has no Liability (and there
is no Basis for any present or future action, suit, proceeding, hearing,
investigation, charge, complaint, claim, or demand against any of them giving
rise to any Liability), that individually or in the aggregate is material to the
results of operations or the financial or other condition of ESCLI except for
(i) Liabilities reflected or reserved against on the Most Recent Balance Sheet
or described on ss.4(i) of the Disclosure Schedule or in the notes to the Most
Recent Financial Statements; or (ii) Liabilities which have arisen after the
Most Recent Fiscal Month End in the Ordinary Course of Business (none of which
results from, arises out of or was caused by any breach by ESCLI of any contract
or warranty, by any ESCLI tort or infringement or by any violation of law by
ESCLI).
(j) LEGAL COMPLIANCE. ESCLI has complied with all applicable
laws (including rules, regulations, codes, plans, injunctions, judgments,
orders, decrees, rulings, and charges thereunder) of French, state, local, and
foreign governments (and all agencies thereof), except where such failure to
comply would not, individually or in the aggregate, have an ESCLI Material
Adverse Effect; and to the Knowledge of the Sellers, no action, suit,
proceeding, hearing, investigation, charge, complaint, claim, demand, or notice
has been filed or commenced against any of them alleging any such failure to
comply.
(k) TAX AND CONTRIBUTION MATTERS.
(i) ESCLI has filed all Tax Returns that it was
required to file as of the Closing Date. All such Tax Returns were
correct and complete in all respects. All Taxes and Contributions owed
or which shall become due by ESCLI relating to all taxable periods of
ESCLI ending on or before the Closing Date (whether or not shown on any
Tax Return) have been paid or fully reserved in the Financial
Statements. ESCLI is not currently the beneficiary of any extension of
time within which to file any Tax Return. No claim has ever been made
by an authority in a jurisdiction where ESCLI does not file Tax Returns
that it is or may be subject to taxation by that jurisdiction. There
are no Security Interests on any of the assets of ESCLI that arose in
connection with any failure (or alleged failure) to pay any Tax or
Contribution.
(ii) ESCLI has withheld and paid all Taxes and
Contributions required to have been withheld and paid in connection
with amounts paid or owing to any employee, independent contractor,
creditor, stockholder, or other third party.
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(iii) The Guarantor does not expect any authority to
assess any additional Taxes or Contributions for any period for which
Tax Returns have been filed. There is no dispute or claim concerning
any Liability of ESCLI either (A) claimed or raised by any authority in
writing or (B) as to which any of the Sellers and the directors (and
employees responsible for Tax and Contributions matters) of ESCLI has
Knowledge based upon personal contact with any agent of such authority.
ss.4(k) of the Disclosure Schedule lists all French, state, local, and
foreign income Tax Returns filed with respect to ESCLI for taxable
periods as of January 1, 1995, indicates those Tax Returns that have
been audited, and indicates those Tax Returns that currently are the
subject of audit. The Guarantor has delivered to ▇▇▇▇▇▇ correct and
complete copies of all income Tax Returns, examination reports, and
statements of deficiencies assessed against or agreed to by ESCLI since
January 1, 1995.
(iv) ESCLI has not waived any statute of limitations
in respect of Taxes or agreed to any extension of time with respect to
a Tax assessment or deficiency.
(v) No tax authority in any jurisdiction in which
ESCLI does not file Tax Returns has made or asserted a claim that ESCLI
is subject to taxation in that jurisdiction based on the activities of
ESCLI.
(vi) ESCLI has not agreed to, and is not required to
include in its income, any adjustment by reason of a change in
accounting method or otherwise.
(vii) The unpaid Taxes of ESCLI (A) did not, as of
the Most Recent Fiscal Month End, exceed the reserve for tax Liability
(including any reserve for deferred Taxes established to reflect timing
differences between book and Tax income) set forth on the face of the
Most Recent Balance Sheet (including any notes thereto) and (B) do not
exceed that reserve as adjusted for the passage of time through the
Closing Date in accordance with the past custom and practice of ESCLI
in filing their Tax Returns.
(l) REAL PROPERTY.
(i) ESCLI owns no real property.
(ii) Section.4(l)(ii) of the Disclosure Schedule
lists all real property leased or subleased to ESCLI. The Sellers have
delivered to ▇▇▇▇▇▇ correct and complete copies of the leases and
subleases listed in section.4(l)(ii) of the Disclosure Schedule (as
amended through the Closing Date). With respect to each lease and
sublease listed in section.4(l)(ii) of the Disclosure Schedule:
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(A) to the Knowledge of the Guarantor, the
lease or sublease is in full force and effect and will
continue to be in full force and effect on identical terms
following the consummation of the transactions contemplated
hereby;
(B) no party to the lease or sublease is in
material breach or material default or has repudiated such
lease or sublease, and no event has occurred which, with
notice or lapse of time, would constitute a material breach or
material default or permit termination, modification, or
acceleration thereunder;
(C) ESCLI has not assigned, transferred,
conveyed, mortgaged or encumbered any interest in the
leasehold or sub-leasehold;
(D) all facilities leased or subleased
thereunder have all licenses and permits that are necessary
for the operation of ESCLI's business as presently conducted
thereat and as presently proposed to be conducted thereat; and
(E) to the Knowledge of the Guarantor, the
owner of each facility leased or subleased to ESCLI has good
and marketable title to the parcel of real property free and
clear of any Security Interest other than Security Interests
that do not materially impair ESCLI's use of such facility.
(m) INTELLECTUAL PROPERTY.
(i) ESCLI owns or has the right to use pursuant to
license, sublicense, agreement, or permission all Intellectual Property
that is material to the operation of the businesses of ESCLI as
presently conducted and as presently proposed to be conducted. Except
as set forth on ss.4(m)(i) of the Disclosure Schedule, each such
material item of Intellectual Property will be owned or available for
use by ESCLI on identical terms and conditions immediately subsequent
to the Closing hereunder.
(ii) The Guarantor represents that neither she nor
ESCLI has ever received any charge, complaint, claim, demand, or notice
alleging any such interference, infringement, misappropriation, or
violation (including any claim that any of ESCLI must license or
refrain from using any Intellectual Property rights of any third
party). To the Knowledge of the Guarantor, no third party has
interfered with, infringed upon, misappropriated, or otherwise come
into conflict with any Intellectual Property rights of any of ESCLI.
(iii) Section.4(m)(iii) of the Disclosure Schedule
identifies each patent or registration which has been issued to ESCLI
with respect to any of its Intellectual Property, identifies each
pending patent application or application for registration which
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ESCLI has made with respect to any of its Intellectual Property, and
identifies each license, agreement, or other permission which ESCLI has
granted to any third party with respect to any of its Intellectual
Property (together with any exceptions). The Guarantor has delivered to
▇▇▇▇▇▇ correct and complete copies of all such patents, registrations,
applications, licenses, agreements, and permissions (as amended to
date) and has made available to ▇▇▇▇▇▇ correct and complete copies of
all other written documentation evidencing ownership and prosecution
(if applicable) of each such item. ss.4(m)(iii) of the Disclosure
Schedule also identifies each trade name or unregistered trademark used
by ESCLI in connection with any of its businesses. With respect to each
item of Intellectual Property required to be identified in ss.4(m)(iii)
of the Disclosure Schedule:
(A) ESCLI has all right, title, and interest
in and to the item, free and clear of any Security Interest,
license, or other restriction;
(B) the item is not subject to any
outstanding injunction, judgment, order, decree, ruling, or
charge;
(C) no action, suit, proceeding, hearing,
investigation, charge, complaint, claim, or demand is pending
or, to the Knowledge of the Guarantor, is threatened which
challenges the legality, validity, enforceability, use, or
ownership of the item; and
(D) ESCLI has not agreed to indemnify any
Person for or against any interference, infringement,
misappropriation, or other conflict with respect to the item.
(iv) Section.4(m)(iv) of the Disclosure Schedule
identifies each item of Intellectual Property that any third party owns
and that ESCLI uses pursuant to license, sublicense, agreement, or
permission. The Guarantor has delivered to ▇▇▇▇▇▇ correct and complete
copies of all such licenses, sublicenses, agreements, and permissions
(as amended to date). With respect to each item of Intellectual
Property required to be identified in section.4(m)(iv) of the
Disclosure Schedule:
(A) to the Knowledge of the Guarantor, the
license, sublicense, agreement, or permission covering the
item is in full force and effect and will continue to be in
full force and effect on identical terms following the
consummation of the transactions contemplated hereby
(including the assignments and assumptions referred to in
section.2 above);
(B) to the Knowledge of the Guarantor, no
party to the license, sublicense, agreement, or permission is
in material breach or material default or has repudiated such
license, sublicense, agreement or permission, and no event has
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occurred which with notice or lapse of time would constitute a
material breach or material default or permit termination,
modification, or acceleration thereunder;
(C) the underlying item of Intellectual
Property is not subject to any outstanding injunction,
judgment, order, decree, ruling, or charge;
(D) no action, suit, proceeding, hearing,
investigation, charge, complaint, claim, or demand is pending
or, to the Knowledge of the Guarantor, is threatened which
challenges the legality, validity, or enforceability of the
underlying item of Intellectual Property; and
(E) ESCLI has not granted any sublicense or
similar right with respect to the license, sublicense,
agreement, or permission.
(v) To the Knowledge of the Guarantor, ESCLI will not
interfere with, infringe upon, misappropriate, or otherwise come into
conflict with, any Intellectual Property rights of third parties as a
result of the continued operation of its businesses as presently
conducted and as presently proposed to be conducted.
(vi) ESCLI has undertaken all the necessary measures
and taken all possible steps in order to ensure Year 2000 conformity of
any of its hardware, software, products and any other equipment
necessary for the conduct of its businesses. Year 2000 conformity shall
mean that neither performance nor functionality is significantly
adversely affected by dates prior to, during and after the Year 2000.
The Guarantor represents and acknowledges that she shall remain fully
liable for all guarantees given by ESCLI prior to the Closing to any
third party concerning Year 2000 conformity, whether or not such
guarantees have been disclosed in ss.4(m)(vi) of the Disclosure
Schedule.
(ii) ASSETS.
(i) ESCLI has, and after the Closing Date will
continue to have, full ownership rights to all of its assets necessary
for the conduct of its businesses as presently conducted and as
presently proposed to be conducted, free and clear of any Security
Interest. ss.4(n) of the Disclosure Schedule lists all of the fixed
tangible and intangible assets carried on the books of ESCLI. All such
assets have been properly valued in accordance with French accepted
accounting principles for at least the preceding three fiscal years.
(ii) Section.4(n) lists all the lease or lease-back
("credit bail") agreements under which ESCLI is the lessee of any
personal property necessary for the conduct of its businesses as
presently conducted and as presently proposed to be conducted, free
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and clear of any Security Interest. All rentals due under such lease
agreements have been paid and there exist no defaults under the terms
of any of such lease agreements.
(iii) ESCLI owns or leases all facilities, machinery,
equipment, and other tangible assets necessary for the conduct of its
businesses as presently conducted and as presently proposed to be
conducted. Each of the facilities, machinery, equipment, material and
any other asset owned or leased has been maintained in accordance with
normal industry practice, is in good operating condition and repair
(subject to normal wear and tear), and is suitable for the purposes for
which it presently is used and presently is proposed to be used.
(o) CONTRACTS. 4(o) of the Disclosure Schedule lists the
following contracts and other agreements to which ESCLI is a party:
(i) any agreement (or group of related agreements)
for the lease of personal property (other than lease-back obligations)
to or from any Person providing for lease payments in excess of One
Hundred Twenty Thousand French Francs (FF 120,000) per annum;
(ii) any agreements and contracts with customers and
any agreement (or group of related agreements) for the purchase or sale
of raw materials, commodities, supplies, products, or other personal
property, or for the furnishing or receipt of services, the performance
of which will extend over a period of more than one year, result in a
material loss to ESCLI, or involve consideration in excess of Two
Hundred Thousand French Francs (FF 200,000);
(iii) any agreement concerning a partnership or joint
venture;
(iv) any agreement (or group of related agreements)
under which it has created, incurred, assumed, or guaranteed any
indebtedness for borrowed money, or any capitalized lease obligation,
in excess of One Hundred Twenty Thousand French Francs (FF 120,000);
(v) any agreement concerning confidentiality or
non-competition provisions;
(vi) any agreement with any of the Sellers and their
Affiliates (other than ESCLI);
(vii) any profit sharing, stock option, stock
purchase, stock appreciation, deferred compensation, severance, or
other Plan or arrangement for the
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benefit of its current or former directors and employees;
(viii) any collective bargaining agreement;
(ix) any agreement for the employment of any
individual on a full-time, part-time, consulting, or other basis
providing annual compensation in excess of Seventy Thousand French
Francs (FF 70,000) or providing severance benefits in excess of One
Hundred Twenty Thousand French Francs (FF 120,000);
(x) any agreement under which it has advanced or
loaned any amount to any of its directors and employees;
(xi) any agreement under which the consequences of a
default or termination could have a material adverse effect on the
business, financial condition, operations, results of operations, or
future prospects of ESCLI; or
(xii) other than agreements or contracts with
customers, any other agreement (or group of related agreements) the
performance of which involves consideration in excess of One Hundred
Twenty Thousand French Francs (FF 120,000).
The Guarantor has delivered to ▇▇▇▇▇▇ a correct and complete copy of each
written agreement listed in section.4(o) of the Disclosure Schedule (as amended
to date) and a written summary setting forth the terms and conditions of each
oral agreement referred to in section.4(o) of the Disclosure Schedule. With
respect to each such agreement: (A) to the Knowledge of the Guarantor, the
agreement is in full force and effect; (B) to the Knowledge of the Guarantor and
unless the existence, if any, of change of control provisions provided for in
said agreements as set forth is section.4(o)(xi) of the Disclosure Schedule, the
agreement will continue to be in full force and effect on identical terms
following the consummation of the transactions contemplated hereby; (C) to the
Knowledge of the Guarantor, no party is in material breach or material default,
and no event has occurred which with notice or lapse of time would constitute a
material breach or material default, or permit termination, modification, or
acceleration, under the agreement; and (D) no party has repudiated any provision
of the agreement. Except as listed on section.4(o) of the Disclosure Schedule,
ESCLI is not a party to any contract or agreement, relating to provision by
ESCLI of services, with any French, state or local government, governmental
agency or other governmental authority.
(p) NOTES AND ACCOUNTS RECEIVABLE. All notes and all accounts
receivable of ESCLI are reflected properly on their books and records, are valid
receivables subject to no setoffs or counterclaims, are current and collectible,
and will be collected in accordance with their terms at their recorded amounts,
subject only to the reserve for bad debts set forth on the face of the Most
Recent Balance Sheet as adjusted for the passage of time through the Closing
Date in
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accordance with the past custom and practice of ESCLI.
(q) POWERS OF ATTORNEY. section.4(q) of the Disclosure
Schedule sets forth the outstanding powers of attorney executed on behalf of
ESCLI.
(r) INSURANCE. Section.4(r) of the Disclosure Schedule sets
forth the following information with respect to each insurance policy
(including, without limitation, policies providing property, casualty,
liability, and workers' compensation coverage) to which ESCLI has been a party,
a named insured, or otherwise the beneficiary of coverage at any time within the
past five (5) years:
(i) the name, address, and telephone number of the
agent;
(ii) the name of the insurer, the name of the
policyholder, and the name of each covered insured;
(iii) the policy number and the period of coverage;
(iv) the scope (including an indication of whether
the coverage was on a claims made, occurrence, or other basis) and
amount (including a description of how deductibles and ceilings are
calculated and operate) of coverage; and
(v) a description of any retroactive premium
adjustments or other loss-sharing arrangements.
With respect to each such insurance policy: (A) to the Knowledge of the
Guarantor, the policy is in full force and effect; (B) to the Knowledge of the
Guarantor, the policy will continue to be in full force and effect on identical
terms following the consummation of the transactions contemplated hereby; (C) to
the Knowledge of the Guarantor, neither ESCLI nor any other party to the policy
is in material breach or material default (including with respect to the payment
of premiums or the giving of notices), and no event has occurred which, with
notice or the lapse of time, would constitute such a material breach or material
default, or permit termination, modification, or acceleration, under the policy;
and (D) no party to the policy has repudiated any provision thereof. ESCLI has
been covered during the past five (5) years by insurance in scope and amount
customary and reasonable for the businesses in which it has engaged during the
aforementioned period.
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(s) LITIGATION. Section.4(s) of the Disclosure Schedule sets
forth each instance in which ESCLI (i) is subject to any outstanding injunction,
judgment, order, decree, ruling, or charge or (ii) is a party or, to the
Knowledge of the Guarantor, is threatened to be made a party to any action,
suit, proceeding, hearing, or investigation of, in, or before any court or
administrative agency of any French, state, local, or foreign jurisdiction or
before any arbitrator. None of the actions, suits, proceedings, hearings, and
investigations set forth in ss.4(s) of the Disclosure Schedule is likely, if
adversely determined, to result in any ESCLI Material Adverse Change. The
Guarantor has no reason to believe that any such action, suit, proceeding,
hearing, or investigation may be brought or threatened against ESCLI.
(t) EMPLOYEES.
(i) Section.4(t) of the Disclosure Schedule lists (A)
the employees of ESCLI; (B) setting forth the name, age, title, job
description and years of service of each employee, as well as the term
of each employment, consulting, management services or similar
agreement with and the total remuneration and other benefits provided
or agreed to be provided (whether now or in the future) to each
employee; (C) indicating all employees whom the Guarantor knows they
will leave ESCLI, voluntarily or otherwise, at any time prior to the
Closing Date; and (D) naming all employees, past or present, with
respect to whom a proceeding arising out of their employment with ESCLI
is pending before any authority or threatened in writing. Except as
specifically disclosed in ss.4(t) of the Disclosure Schedule, since
December 31, 1998, (1) no change has been made or promised in the rate
of remuneration, pension or other benefits of all or any group of
employees of ESCLI; (2) no change has been made or promised in the
terms of engagement of any employee; (3) no additional employee has
been hired; and (4) no employee has received or given notice
terminating employment or indicated an intent to do so. Neither the
Sellers nor ESCLI is a party to any contract with any employee which is
not terminable by such Seller or ESCLI, as the case may be, without
compensation (other than, any compensation payable as a matter of
statute) upon three month's notice given at any time, and there is no
outstanding claim against ESCLI by any former or present employee, or
any actual or threatened dispute between ESCLI and a material number or
class of employees.
(ii) Section.4(t) of the Disclosure Schedule lists
each Plan that ESCLI maintains or to which ESCLI contributes or has any
obligation to contribute in favor of any of its employees.
(A) Each such Plan complies in form and in
operation in all respects with applicable laws and
regulations.
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(B) ESCLI has paid, or specifically reserved
for in the Financial Statements, all Contributions (including
all employer contributions and employee salary contributions),
dismissal indemnities, paid vacation allowances or other
benefits accrued or payable as of the Closing Date to any
employee or former employee.
(C) There are no actions, suits or claims
which have been instituted or asserted, or which could
reasonably be expected by the Guarantor to be instituted or
asserted, against or relating to any of the Plans, by or on
behalf of any such employee or former employee.
(D) ESCLI has no Liability under any Plan
which is not fully-funded or fully and specifically reserved
in the Financial Statements.
(iii) There are no labor disputes pending or
threatened in writing between ESCLI and any of its employees. ESCLI has
complied with all laws relating to the employment of labor, whether
permanent, temporary, seasonal or fixed-term, including without
limitation all provisions relating to wages, hours, employee
profit-sharing, collective bargaining, severance, workers' committee
representation, employee voting or consultation rights and the payment
of social security and similar taxes. ESCLI is not liable for any
arrears of wages, or for any Taxes or penalties for failure to comply
with any of the foregoing.
(iv) No employee is a party with the Sellers or ESCLI
to any contract, lease, license or commitment other than his/her
employment contract. To the Knowledge of the Guarantor, no employee has
any participation in any business enterprise which is a competitor,
customer, distributor or supplier of ESCLI, or which has an existing
business relationship with ESCLI.
(u) GUARANTIES. ESCLI is not a guarantor or otherwise is not
liable for any Liability or obligation (including indebtedness) of any Person.
(v) ENVIRONMENTAL, HEALTH, AND SAFETY MATTERS.
Except as disclosed in section.4(v) of the Disclosure Schedule:
(i) Hazardous Materials have not at any time been
generated, used, treated or stored by ESCLI in violation in any
material respect of any applicable Environmental Law, or in any way
which will hereafter require material remedial action under any
applicable Environmental Law, and ESCLI has not received any notice of
any such violation with respect to Hazardous Materials;
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(ii) to the Knowledge of the Guarantor, there has
been no spill, discharge, leak, emission, injection, escape, dumping or
release of any kind onto any property owned or leased by ESCLI, or into
the environment surrounding any such property, of Hazardous materials,
other than releases permissible under applicable Environmental Law or
allowable under applicable permits;
(iii) ESCLI, its operations and any property owned by
it are in compliance in all material respects with (i) all applicable
Environmental Laws, and (ii) the requirements of any permits issued
under such laws; and
(iv) there are no pending or threatened claims
against ESCLI or any property owned or leased by it relating to
Hazardous Materials or environmental matters.
None of the circumstances, conditions or occurrences disclosed in ss.4(v) of the
Disclosure Schedule or reflected in the Financial Statements involves or will
result in any material liability on the part of ESCLI.
(w) CERTAIN BUSINESS RELATIONSHIPS WITH ESCLI. Except as
contemplated or permitted by this Agreement, disclosed in ss.4(w) of the
Disclosure Schedule or reflected in the Financial Statements, none of the
Sellers is involved in any business arrangement or relationship with ESCLI and
none of the Sellers owns any material asset, tangible or intangible, which is
used in the business of ESCLI.
(x) DISCLOSURE. The representations and warranties contained
in this ss.4 do not contain any untrue statement of a material fact or omit to
state any material fact necessary in order to make the statements and
information contained in this ss.4, in light of the circumstances under which
they were made, not misleading.
5. POST-CLOSING COVENANTS. The Parties agree as follows with respect to
the period following the Closing:
(a) GENERAL. In case at any time after the Closing any further
action is necessary or desirable to carry out the purposes of this Agreement,
each of the Parties will take such further action (including the execution and
delivery of such further instruments and documents) as any other Party
reasonably may request, all at the sole cost and expense of the requesting Party
(unless the requesting Party is entitled to indemnification therefor under ss.6
below). The Sellers acknowledge and agree that, from and after the Closing,
▇▇▇▇▇▇ will be entitled to possession of all documents, books, records
(including Tax records), agreements, and
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financial data of any sort within the possession of, or under the control of,
any Seller or ESCLI, relating to ESCLI.
(b) LITIGATION SUPPORT. In the event and for so long as any
Party actively is contesting or defending against any action, suit, proceeding,
hearing, investigation, charge, complaint, claim, or demand in connection with
(i) any transaction contemplated under this Agreement or (ii) any fact,
situation, circumstance, status, condition, activity, practice, plan,
occurrence, event, incident, action, failure to act, or transaction on or prior
to the Closing Date involving ESCLI, each of the other Parties will cooperate
with him, her or it and his, her or its counsel in the contest or defense, make
available their personnel, and provide such testimony and access to their books
and records as shall be reasonably necessary in connection with the contest or
defense, all at the sole cost and expense of the contesting or defending Party
(unless the contesting or defending Party is entitled to indemnification
therefor under ss.6 below).
(c) TRANSITION. None of the Sellers will take any action that
is designed or intended to have the effect of discouraging any lessor, licensor,
customer, supplier, or other business associate of ESCLI from maintaining the
same business relationships with ESCLI after the Closing as it maintained with
ESCLI prior to the Closing. Each of the Sellers will refer all customer
inquiries relating to the businesses of ESCLI to ▇▇▇▇▇▇ from and after the
Closing.
(d) CONFIDENTIALITY. Each Party covenants that it shall hold
confidential all information received from the other Party, its employees,
counsel or representatives in connection with this Agreement, unless the other
Party authorizes the disclosure or use of such information in writing, and with
the exception of information (a) already known by such Party prior to the
disclosure thereof by the other Party, its employees, counsel or representatives
and not held under a covenant of secrecy; (b) supplied to third party by the
other Party without restriction as to disclosure; (c) in the public domain; (d)
independently constituted by such Party; or (e) required by law to be disclosed
by such Party.
6. SURVIVAL AND INDEMNIFICATION.
(a) SURVIVAL. All representations and warranties contained in
this Agreement shall survive for three (3) years after the Closing Date with the
exception of the representations and warranties concerning tax and labor matters
which will survive for the applicable statutes of limitations. All
representations and warranties shall further survive beyond such three-year
period (or period of the applicable statutes of limitation) for so long as any
claim made during such three-year period (or period of the applicable statutes
of limitation) under this ss.6 are not definitively settled. In addition, it is
specified that the periods thus defined apply to the notification of the event
giving rise to indemnification and not to its judicial or amicable settlement.
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(b) INDEMNIFICATION.
(i) Subject to the provisions of this ss.6, the Guarantor
agrees to indemnify ▇▇▇▇▇▇ and or ESCLI against any Damages that are
incurred by ▇▇▇▇▇▇ and or ESCLI (collectively, "the Beneficiaries")
after the Closing Date as a consequence of or in connection with any
breach by the Guarantor of any of her representations and warranties,
on the express condition that ▇▇▇▇▇▇ shall have fully complied with its
obligations pursuant to section.6(d).
(ii) ▇▇▇▇▇▇ undertakes, without prejudice to any other duties
and obligations regarding the operation and management of ESCLI after
the Closing Date, to use its best efforts to minimize the risks of
claims under this section.6(b) and to mitigate Damages arising
therefrom.
(iii) It is specified that:
(A) any increase in liabilities or decrease in assets
resulting from a change in generally accepted accounting
principles in France or from retroactive laws or regulations
or from a change in interpretation by the courts or
administrative authorities related to the implementation of a
practice generally accepted until that time, shall be excluded
from the calculation of the amount of any Damages
indemnifiable by the Guarantor to the Beneficiaries pursuant
to this Agreement;
(B) the consequences of tax or social arrears or any
other Damage, which would result in a simple deferral of tax
or charges or which would lead to a mere transfer of profit or
earnings from one financial year to another or which would
result in a correlative right to deduction or allocation shall
not give rise to any claim for indemnification pursuant to
this Agreement, except for any resulting penalties and late
payment interest imposed upon or assessed against ESCLI;
(C) with respect to bad debts ("creances douteuses"),
the unsufficiency or lack of provision of such in ESCLI's
accounts shall be sufficiently evidenced by a default of
payment of such bad debt; provided however, that an account
receivable shall be deemed to be a bad debt either upon a
judicial bankruptcy order ("jugement d'ouverture d'une
procedure collective") rendered against the debtor or three
months further to a formal request of payment which shall
remain unsettled; in this event the Guarantor shall be
entitled to request that this bad debt be assigned to her for
a consideration of 1 French franc. ▇▇▇▇▇▇ agrees to make all
its reasonable efforts, in agreement with the Guarantor, to
ensure payment of account receivables;
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(D) the amount of any increase in assets or decrease
in liabilities resulting from the facts giving rise to any
Damages, or the amount of any total or partial recovery of a
provision or reserve in ESCLI's accounts, shall be applied to
reduce the amount of any Damages indemnifiable by the
Guarantor to the Beneficiaries pursuant to this Agreement;
(E) the amount of any Damages indemnifiable by the
Guarantor to the Beneficiaries pursuant to this Agreement
shall be calculated after taking into account (x) any
reduction resulting from tax savings and (y) any increase
resulting from the taxes, if any, paid by the Beneficiaries
solely as a result of the payment by the Guarantor of
indemnification pursuant hereto.
(c) CLAIMS: THRESHOLDS; LIMITATIONS
(i) Any claim by any of the Beneficiaries for indemnity under
this Agreement (each, a "Claim") shall specify the matter giving rise
to such Claim and the estimated amount of Damages that would be
incurred by such Beneficiary solely as a result of such matter.
(ii) The Guarantor shall not be obligated to indemnify the
Beneficiaries against Damages which may be incurred by the
Beneficiaries as a consequence of or in connection with matters
specified in ss.6(b), unless and until the aggregate amount of Damages
arising from matters specified in the Claims exceed an aggregate
threshold of French francs 300,000, at which point the Guarantor shall
be obligated to indemnify the Beneficiaries against all such Damages as
of the first French franc.
(d) PROCEDURE FOR INDEMNIFICATION
(i) ▇▇▇▇▇▇ shall give prompt written notice (within 30 days or
sooner if the claim or event so requires) to the Guarantor, pursuant to
ss.7(g) below, of any claim or event known to it which gives rise to a
Claim for indemnification hereunder by ▇▇▇▇▇▇ against the Guarantor;
provided that the failure of ▇▇▇▇▇▇ to give notice as provided in this
Agreement shall not relieve the Guarantor of her obligations under this
ss.6 to the extent that such failure has not prejudiced the Guarantor
and or ESCLI.
(ii) In the case of any Claim for indemnification hereunder
arising out of a claim, action, suit or proceeding brought against
ESCLI by any Person who is not a party to this Agreement (a "Third
Party Claim"), ▇▇▇▇▇▇ shall also give to the Guarantor copies of any
written claims, process or legal pleadings with respect to such Third
Party Claim promptly after such documents are received by ▇▇▇▇▇▇, it
being understood that any
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delay in remitting such documentation by ▇▇▇▇▇▇ shall not relieve the
Guarantor of her obligations under this ss.6 except to the extent that
such failure has prejudiced the Guarantor and or ESCLI.
(iii) The Guarantor may elect to compromise or defend at her
own expense and with her own counsel any Third Party Claim. If the
Guarantor elects to compromise or defend a Third Party Claim, she
shall, within 30 days (or sooner, if the nature of such Third Party
Claim so requires), notify ▇▇▇▇▇▇ of her intent to do so, and ▇▇▇▇▇▇
shall reasonably cooperate in the compromise of, or defense against,
such Third Party Claim.
(iv) The Guarantor shall pay ▇▇▇▇▇▇'▇ actual out-of-pocket
expenses incurred in connection with such cooperation including
▇▇▇▇▇▇'▇ reasonable legal expenses. After notice from the Guarantor to
▇▇▇▇▇▇ of her election to assume the defense of a Third Party Claim,
the Guarantor shall not be liable to ▇▇▇▇▇▇ under this ss.6 for any
legal expenses subsequently incurred by ▇▇▇▇▇▇ in connection with the
defense thereof; provided that ▇▇▇▇▇▇ shall have the right to employ
one counsel of its choice in each applicable jurisdiction (if more than
one jurisdiction is involved) to represent ▇▇▇▇▇▇ if, in ▇▇▇▇▇▇'▇
reasonable judgment, a conflict of interest between ▇▇▇▇▇▇ and the
Guarantor exists in respect of such Claim. If the Guarantor elects not
to compromise or defend against a Third Party Claim, or fails to notify
▇▇▇▇▇▇ of her election as provided in this ss.6(d), ▇▇▇▇▇▇ may pay,
compromise or defend such Third Party Claim at the expense of the
Guarantor, including ▇▇▇▇▇▇'▇ reasonable legal expenses. The Guarantor
shall not consent to entry of any judgment or enter into any settlement
without the written consent of ▇▇▇▇▇▇ (which consent shall not be
unreasonably withheld).
(v) If there is a reasonable likelihood that a Third Party
Claim may adversely affect ▇▇▇▇▇▇, ▇▇▇▇▇▇ will have the right, after
consultation with the Guarantor, to have sole control of the defense
and settlement of such Third Party Claim notwithstanding the provisions
of ss.6(d).
(e) PAYMENT OF INDEMNIFICATION: ▇▇▇▇▇▇ may satisfy Guarantor's
indemnification obligations by recourse to the escrow fund held by Fifth Third
Bank, as escrow agent, pursuant to the Escrow Agreement but recourse to that
escrow fund shall not constitute ▇▇▇▇▇▇'▇ sole remedy or source for satisfaction
of indemnification claims under this Agreement. The escrow agent shall hold the
Cash Escrow Amount for a period up to two years from the Closing Date pursuant
to the terms and conditions of the Escrow Agreement or for a longer period only
as permitted under the Escrow Agreement.
(f) ADJUSTMENT TO THE PURCHASE PRICE - INTEREST. All
indemnification payments under this ss.6 shall be deemed adjustments to the
Purchase Price. Any final amount due by the Guarantor in connection with any
claim for indemnification made by ▇▇▇▇▇▇, as provided in ss.6 and duly notified
pursuant ss.7(h) shall bear interest at the French legal interest rate plus 4
points
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from the sending of such notification. Interest shall be paid only if a sum in
principal is itself due by the Guarantor to the Beneficiaries.
7. MISCELLANEOUS.
(a) PRESS RELEASES AND PUBLIC ANNOUNCEMENTS. No Party shall
issue any press release or make any public announcement relating to the
existence and subject matter of this Agreement prior to the Closing without the
prior written approval of ▇▇▇▇▇▇ and the Sellers (which approval shall not be
unreasonably withheld or delayed); PROVIDED, HOWEVER, that any Party may make
any public disclosure it believes in good faith is required by applicable law or
to obtain any consent hereby (in which case the disclosing Party will use its
reasonable best efforts to advise the other Parties prior to making the
disclosure).
(b) NO THIRD-PARTY BENEFICIARIES. This Agreement shall not
confer any rights or remedies upon any Person other than the Parties and their
respective successors and permitted assigns.
(c) ENTIRE AGREEMENT. This Agreement (including the documents
referred to herein) constitutes the entire agreement among the Parties and
supersedes all prior understandings, agreements, or representations by or among
the Parties, both written and oral, to the extent they related in any way to the
subject matter hereof.
(d) SUCCESSION AND ASSIGNMENT. This Agreement shall be binding
upon and inure to the benefit of the Parties named herein and their respective
successors and permitted assigns. No Party may assign either this Agreement or
any of his, her or its rights, interests, or obligations hereunder without the
prior written approval of ▇▇▇▇▇▇ and the Sellers; provided, however, that ▇▇▇▇▇▇
may (i) assign any or all of its rights and interests hereunder to one or more
of its Affiliates and (ii) designate one or more of its Affiliates to perform
its obligations hereunder (in any or all of which cases ▇▇▇▇▇▇ nonetheless shall
remain responsible for the performance of all of its obligations hereunder).
(e) COUNTERPARTS. This Agreement may be executed in one or
more counterparts, each of which shall be deemed an original but all of which
together will constitute one and the same instrument.
(f) HEADINGS. The section headings contained in this Agreement
are inserted for convenience only and shall not affect in any way the meaning or
interpretation of this Agreement.
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(g) NOTICES. All notices, requests, demands, claims, and other
communications required to be given hereunder shall be in writing and shall be
deemed duly given on the date delivered personally or by telecopy to the Parties
or on the date of receipt of a registered letter or certified mail, return
receipt requested, at the addresses set forth below, or on the date of receipt
of a telecopier transmission at the numbers set forth below:
If to the Sellers: Mrs. ▇▇▇▇▇-▇▇▇▇▇▇ Queille
------------------ ▇ ▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇
with a copy to counsel: THESIS
----------------------- ▇▇▇ ▇▇▇ ▇▇ ▇▇ ▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇
Fax No.: (▇▇ ▇) ▇▇ ▇▇ ▇▇ ▇▇
Attention: ▇▇▇▇-▇▇▇▇▇ ▇▇▇▇▇▇▇▇, Esq.
If to ▇▇▇▇▇▇: ▇▇▇▇▇▇ UK INC.
------------- ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
Fax No.: (▇) ▇▇▇ ▇▇▇ ▇▇▇▇
Attention: ▇▇▇▇ ▇. ▇▇▇▇▇▇, Esq.
General Counsel
Copy to: ▇▇▇▇ & ASSOCIES
-------- ▇ ▇▇▇ ▇▇▇▇▇▇▇ ▇▇ ▇▇ ▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇
Fax No.: (▇▇ ▇) ▇▇ ▇▇ ▇▇ ▇▇
Attention: ▇▇▇▇▇ ▇▇▇▇▇▇, Esq.
Any Party may send any notice, request, demand, claim, or other communication
hereunder to the intended recipient at the address set forth above using any
other means (including, expedited courier, messenger service, telex, ordinary
mail, or electronic mail), but no such notice, request, demand, claim, or other
communication shall be deemed to have been duly given unless and until it
actually is received by the intended recipient. Any Party may change its address
by giving the other Parties notice in the manner herein set forth.
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(h) GOVERNING LAW - JURISDICTION. Except as specifically
provided in the Escrow Agreement, this Agreement shall be governed by and
construed in accordance with the laws of France. Any dispute, controversy or
claim arising out of or relating to this Agreement or the breach, termination or
invalidity hereof shall be submitted only to the Commercial Court of Nanterre,
France. This Agreement has been executed in English.
(i) AMENDMENTS AND WAIVERS. No amendment of any provision of
this Agreement shall be valid unless the same shall be in writing and signed by
▇▇▇▇▇▇ and the Sellers. No waiver by any Party of any default,
misrepresentation, or breach of warranty or covenant hereunder, whether
intentional or not, shall be deemed to extend to any prior or subsequent
default, misrepresentation, or breach of warranty or covenant hereunder or
affect in any way any rights arising by virtue of any prior or subsequent such
occurrence.
(j) SEVERABILITY. If any term or provision of this Agreement
is held to be invalid or unenforceable, thatshall not affect the validity or
enforceability of the remaining terms and provisions of this Agreement.
(k) PAYMENT OF TAXES, FEES AND EXPENSES. Each of the Parties
shall bear its respective costs and expenses (including legal fees and expenses)
incurred in connection with this Agreement and the transactions contemplated
hereby. The Sellers agree that any of the ESCLI and Sellers' costs and expenses
(including any of their legal fees and expenses or any brokerage fees) in
connection with this Agreement or any of the transactions contemplated hereby
shall be borne directly by the Sellers; provided, however, that ▇▇▇▇▇▇ shall pay
the stamp and registration taxes with respect to the transfer of ESCLI Shares
and that the Sellers shall remain responsible and shall pay any other taxes
(including income Taxes) payable in respect of the transfer of the ESCLI Shares.
(l) CONSTRUCTION. The Parties have participated jointly in the
negotiation and drafting of this Agreement. In the event an ambiguity or
question of intent or interpretation arises, this Agreement shall be construed
as if drafted jointly by the Parties and no presumption or burden of proof shall
arise favoring or disfavoring any Party by virtue of the authorship of any of
the provisions of this Agreement. Any reference to any federal, state, local, or
foreign statute or law shall be deemed also to refer to all rules and
regulations promulgated thereunder, unless the context requires otherwise. The
word "including" shall mean including without limitation. The Parties intend
that each representation, warranty and covenant contained herein shall have
independent significance. If any Party has breached any representation, warranty
or covenant contained herein in any respect, the fact that there exists another
representation, warranty or covenant relating to the same subject matter
(regardless of relative levels of specificity) which the Party has not breached
shall not detract from or mitigate the fact that the Party is in breach of the
first representation, warranty or covenant.
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(m) INCORPORATION OF EXHIBITS AND DISCLOSURE SCHEDULES. The
Exhibits and Disclosure Schedules identified in this Agreement are incorporated
herein by reference and made a part hereof.
IN WITNESS WHEREOF, the Parties hereto have executed this Agreement as of the
date first above written.
▇▇▇▇▇▇ UK INC.,
By: /s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
-------------------------------------------
Name: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Title: Director, Mergers and Acquisitions
THE SELLERS:
/s/ ▇▇▇▇▇-▇▇▇▇▇▇ Queille /s/ ▇▇▇▇▇▇ ▇▇▇▇▇
----------------------------------- -----------------------------------
▇▇▇▇▇-▇▇▇▇▇▇ Queille ▇▇▇▇▇▇ ▇▇▇▇▇
/s/ ▇▇▇▇ ▇▇▇▇▇ /s/ ▇▇▇▇▇▇ ▇▇▇▇▇
----------------------------------- -----------------------------------
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
/s/ ▇▇▇▇▇▇▇ Queille /s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇
----------------------------------- -----------------------------------
▇▇▇▇▇▇▇ Queille ▇▇▇▇▇▇ ▇▇▇▇▇▇
/s/ ▇▇▇▇-▇▇▇▇▇▇▇ ▇▇▇▇▇ /s/ ▇▇▇▇-▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
----------------------------------- -----------------------------------
▇▇▇▇-▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇-▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
32
