<PAGE>
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
--------------------------
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(D) OF
THE SECURITIES EXCHANGE ACT OF 1934
DATE OF REPORT (DATE OF EARLIEST EVENT REPORTED): FEBRUARY 5, 1998
FRIEDE GOLDMAN INTERNATIONAL INC.
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
<TABLE>
<S> <C> <C>
DELAWARE 0-22595 72-1362492
(STATE OR OTHER JURISDICTION OF (COMMISSION FILE NUMBER) (I.R.S. EMPLOYER IDENTIFICATION NO.)
INCORPORATION OR ORGANIZATION)
</TABLE>
525 EAST CAPITOL STREET, SUITE 402
JACKSON, MISSISSIPPI 39201
(ADDRESS OF PRINCIPAL
EXECUTIVE OFFICES
AND ZIP CODE)
(601) 352-1107
(REGISTRANT'S TELEPHONE NUMBER,
INCLUDING AREA CODE)
-----------------------
<PAGE>
ITEM 5. OTHER EVENTS
The Acquisition
Friede Goldman International Inc., a Delaware corporation (the
"Company"), through its subsidiary, Friede Goldman France, S.A.S., a French par
actions simplifee (the "Purchaser"), acquired all of the issued and outstanding
shares of capital stock of Achere, S.A., a French societe anonyme (the
"Acquiree") from the following shareholders of the Acquiree: Mr. Jean-Francois
Queru, Mr. Arnaud Queru, Ms. Helene Queru, Mrs. Regine Queru, Mr. Jean-Michel
Gandreuil, Mrs. Dominique Gandreuil and MGLV, a French societe civile
(collectively, the "Vendors"). The acquisition was effected pursuant to a Sale
and Purchase Agreement, dated February 5, 1998 (the "Purchase Agreement"), by
and among the Purchaser and the Vendors. Pursuant to the Purchase Agreement, the
Purchaser also acquired all of the equity interests of the following direct and
indirect subsidiaries of the Acquiree: France Marine S.A. ("France Marine"),
Brissoneau & Lotz Marine S.A. ("BLM"), Brissoneau & Lotz Marine Offshore, S.A.
("BLM Offshore"), BOPP S.A. ("BOPP") and Kerdranvant S.A.R.L. ("Kerdranvant").
Under the terms of the Purchase Agreement, the Purchaser paid a purchase price
of FF147,760,200 (approximately US$25,311,000 at the exchange rate in effect at
the close of business on February 5, 1998) plus any applicable taxes and fees.
The parties to the Purchase Agreement also executed an amendment
thereto, dated the date of such agreement, whereby Mr. Gandreuil agreed to use a
portion of the sale proceeds received by him to purchase shares of the Company's
common stock. The shares purchased by Mr. Gandreuil have not been registered
with the United States Securities and Exchange Commission, and accordingly, are
subject to restrictions upon transfer.
The Financing
The Company financed the acquisition with net proceeds remaining from
the Company's initial public offering in July 1997.
Achere, S.A. and its Subsidiaries
The Acquiree is a French holding company whose holdings include 100% of
the outstanding shares of capital stock of France Marine.
France Marine is a French holding company whose holdings include 99.9%
of the outstanding shares of capital stock of each of BLM, BLM Offshore and BOPP
and 74% of the outstanding equity interests of Kerdranvant (the remaining 26% of
the outstanding equity interests are held by BOPP). In accordance with French
law, a director of each of BLM, BLM Offshore and BOPP holds the remaining 0.1%
of the outstanding shares of capital stock of each entity.
BLM operates a facility in Carquefou, France near Nantes that designs
and manufactures deck machinery, including mooring, anchoring and cargo handling
equipment.
BLM Offshore, also based in Carquefou, designs and manufactures rack-
and-pinion jacking systems used on offshore drilling platforms.
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<PAGE>
BOPP operates a facility in Lanveoc, France near Brest that
manufactures trawl and draw net winches for inshore and ocean going fishing
vessels and equipment for service vessels and hydrographical survey ships.
Kerdranvant, also based in Lanveoc, manufactures hydraulic power and
rack-and-pinion steering systems used in all types of vessels.
ITEM 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION AND EXHIBITS
(A-B) FINANCIAL STATEMENTS OF BUSINESSES ACQUIRED AND PRO FORMA
FINANCIAL INFORMATION
If the Company determines that the transaction described in Item 5
constituted an acquisition of a significant amount of assets, the required
financial statements and pro forma financial information will be filed by
amendment hereto within the time period required by Item 7 of Form 8-K.
(C) EXHIBITS
Exhibit 99.1 -- Press Release issued by Friede Goldman International
Inc. on February 9, 1998.
Exhibit 99.2 -- Sale and Purchase Agreement, dated February 5, 1998,
by and among Friede Goldman France S.A.S., Mr. Jean-
Francois Queru, Mr. Arnaud Queru, Ms. Helene Queru,
Mrs. Regine Queru, Mr. Jean-Michel Gandreuil, Mrs.
Dominique Gandreuil and MGLV.
Exhibit 99.3 -- Amendment No. 1 to Sale and Purchase Agreement, dated
February 5, 1998, by and among Friede Goldman France
S.A.S., Friede Goldman International Inc., Mr. Jean-
Francois Queru, Mr. Arnaud Queru, Ms. Helene Queru,
Mrs. Regine Queru, Mr. Jean-Michel Gandreuil, Mrs.
Dominique Gandreuil and MGLV.
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<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
FRIEDE GOLDMAN INTERNATIONAL INC.
Date: February 18, 1998
By: /s/ James A. Lowe, III
------------------------------
James A. Lowe, III
General Counsel and Secretary
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<PAGE>
EXHIBIT INDEX
Exhibit No. Page No.
----------- --------
Exhibit 99.1 -- Press Release issued by Friede Goldman International
Inc. on February 9, 1998.
Exhibit 99.2 -- Sale and Purchase Agreement, dated February 5, 1998, by
and among Friede Goldman France S.A.S., Mr. Jean-Francois
Queru, Mr. Arnaud Queru, Ms. Helene Queru, Mrs. Regine
Queru, Mr. Jean-Michel Gandreuil, Mrs. Dominique
Gandreuil and MGLV.
Exhibit 99.3 -- Amendment No. 1 to Sale and Purchase Agreement, dated
February 5, 1998, by and among Friede Goldman France
S.A.S., Friede Goldman International Inc., Mr. Jean-
Francois Queru, Mr. Arnaud Queru, Ms. Helene Queru, Mrs.
Regine Queru, Mr. Jean-Michel Gandreuil, Mrs. Dominique
Gandreuil and MGLV.
<PAGE>
EXHIBIT 99.1
NEWS RELEASE FOR MORE INFORMATION CONTACT:
NATALIE PHARR, DIR. OF COMMUNICATION
601-352-1107/FAX: 601-352-0588
FOR IMMEDIATE RELEASE
FRIEDE GOLDMAN PURCHASES INTERNATIONAL
OFFSHORE EQUIPMENT MANUFACTURER
ACQUISITION OF FRANCE MARINE COMPANIES PROMISES
EXPANDED PRODUCT LINES AND WORLDWIDE OPERATIONS BASE
JACKSON, MISS. (Feb. 9, 1998) -- Friede Goldman International Inc.
(NASDAQ:FGII) announced today the purchase of France Marine S.A., and its
subsidiaries Brissonneau & Lotz Marine (BLM), BLM Offshore, BOPP and Kerdranvat.
Headquartered in Nantes, France, the companies are global leaders in the design
and manufacture of marine and offshore equipment.
Says J.L. Holloway, chairman and CEO of FGII, "This acquisition is a key
ingredient in our long-term strategic plans, and it's a perfect combination of
strengths. It allows Friede Goldman to enter the rig equipment market and
manufacture critical components used in building offshore drilling units. At
the same time, the France Marine companies will gain North American outlets for
their top quality products, which we intend to market aggressively."
This acquisition now will allow the Friede Goldman companies to offer
services in all phases of offshore rig construction -- from design and
engineering, to manufacturing, to equipment sales. It will mean lower lead time
in outfitting rigs for existing Friede Goldman customers, providing faster
response to market demands. The FGII companies will also be able to supply
other offshore manufacturers with rig kits, consisting of legs, jacking systems,
anchoring winches, and cranes. Says Holloway, "This move carefully positions us
for profitable growth in the world-wide offshore oil and gas markets. It
compliments our existing operations, and brings to Friede Goldman the quality
and service of one of Europe's most respected companies."
-- MORE--
<PAGE>
FRANCE MARINE -- PAGE 2
France Marine, through its subsidiaries, operates two manufacturing
facilities on the Atlantic coast of France, additional marketing and technical
offices in East Asia, and has relationships with a network of affiliated service
companies in 45 countries. Brissonneau & Lotz Marine is a leader in the design
and manufacture of deck machinery, including mooring, anchoring, and cargo
handling equipment. The subsidiaries also manufacture gears, rack and pinion
jacking systems, and a full range of electric and hydraulic products.
Subsidiary BLM, best known in the U.S. for innovative design and quality
manufacturing, has devoted its expertise to marine activity since its founding
in 1841. Today the company employs the latest in CAD technology and owns
numerous patents.
The purchase of France Marine and its subsidiaries has been in negotiation
over the last few months. Details of the cash transaction sale were
undisclosed. Jean-Michel Grandreuil, Managing Director of France Marine S.A.,
will continue to manage the French operations, and the company plans expansion
in North America.
Friede Goldman International is a leading provider of offshore drilling
services, including design and engineering, new construction, financing, repair,
retrofit, and modification. FGII operates engineering and design firm Friede &
Goldman, Ltd. and four shipyards in the U.S. and Canada through subsidiaries HAM
Marine, Friede Goldman Offshore, and Friede Goldman Newfoundland. The company's
Common Stock is quoted on the NASDAQ National Market.
* Note: This press release includes certain statements that may be deemed to be
"forward-looking statements" within the meaning of Section 27A of the Securities
Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934,
as amended. All statements, other than statements of historical facts, included
in this press release that address activities, events or developments that
Friede Goldman International Inc. expects, believes or anticipates will or may
occur in the future, are forward-looking statements. These statements are based
on certain assumptions and analyses made by Friede Goldman International Inc. in
light of its experience and its perception of historical trends, current
conditions, expected future developments and other factors it believes are
appropriate in the circumstances. Such statements are subject to a number of
assumptions, risks and uncertainties, many of which are beyond the control of
Friede Goldman International Inc. and which are discussed in Friede Goldman
International Inc.'s Registration Statement on Form S-1. Investors are
cautioned that any such statements are not guarantees of future performance and
that actual results or developments may differ materially from those projected
in the forward-looking statements.
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<PAGE>
Exhibit 99.2
SALE AND PURCHASE AGREEMENT
DATED FEBRUARY 5, 1998
BETWEEN THE UNDERSIGNED:
1. Mr. Jean-Francois Queru, a French citizen residing at 10, rue des
Primeveres, 43390 Petit Mars;
2. Mr. Arnaud Queru a French citizen residing at 10, rue des Primeveres, 43390
Petit Mars;
3. Ms. Helene Queru, a French citizen residing at 10, rue des Primeveres,
43390 Petit Mars;
4. Mrs. Regine Queru, a French citizen residing at 10, rue des Primeveres,
43390 Petit Mars;
5. Mr. Jean-Michel Gandreuil, a French citizen residing at 18, rue Auguste
Renoir, 44980 Sainte Luce sur Loire,
6. Mrs. Dominique Gandreuil, a French citizen residing at 18, rue Auguste
Renoir, 44980 Sainte Luce sur Loire;
7. MGLV, a French societe civile with a capital of FRF 200,000, registered
with the Commercial and Corporate Register of Nantes under the number D 409
418 548 having its registered office at 10, rue des Primeveres, 43390 Petit
Mars, represented for the purposes hereof by its gerant, W. Jean-Francois
Queru;
hereinafter referred to individually by name
and collectively as the "Vendors"
ON THE ONE HAND,
<PAGE>
AND
Friede Goldman France, S.A.S. a French par actions simplifiees having a share
capital of FRF 250,000 in the process of being registered with the Commercial
and Corporate Register of Nantes whose registered office is at 15 rue de la
Metallurgie, 44470 Carquefou, represented by Mt. J.L. Holloway, duly authorized
by virtue of a power of attorney from the President, Mr. Jean-Michel Gandreuil,
dated February 5,1998,
hereinafter called "the Purchaser"
ON THE OTHER HAND.
WHEREAS:
A. Achere (hereinafter called "the Company") is a French societe anonyme whose
registered office (siege) is at Carquefou (44,470) 5, rue de l'Hotellerie
and which is registered under the number 409 439 403 at the Commercial and
Companies Registry of Nantes.
B. Societe civile Arnaud and Societe civile Helene, and D.J.C.M. are French
societe civile, Societe civile Arnaud and Societe civile Helene having
their registered offices at 10, rue des Primeveres, 44390 Petit Mars and
being registered under number 409 418 704 and number 409 418 845,
respectively, D.J.C.M. having its registered office at 18, rue Auguste
Renoir, 44980 Sainte Luce sur Loire and being registered under number 409
418 126.
C. The capital of the Company is FRF 10,000,000 divided into 100,000 shares of
FRF 100 each (hereinafter called "the Shares"). The Vendors are between
themselves the owners of all of the Shares in the following proportions:
CLASS "A" SHAREHOLDERS
----------------------
- Mr. Jean Francois Queru 66,997 Class A Shares
- Societe civile Helene 12,000 Class A Shares
- Societe civile Arnaud 12,000 Class A Shares
---------------------
SUB-TOTAL 90,997 Class A Shares
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<PAGE>
CLASS "B" SHAREHOLDERS
----------------------
- MGLV SCI 4,499 Class B Shares
- D.J.C.M. 4,499 Class B Shares
- Mrs. Regine Queru 1 Class B Share
- Mr. Jean Francois Queru 1 Class B Share
- Mr. Jean-Michel Gandreuil 1 Class B Share
- Mr. Arnaud Queru 1 Class B Share
- Ms. Helene Queru 1 Class B Share
---------------
SUB-TOTAL 9,003 Class B Shares
====================
TOTAL 100,000 Shares
D. The principal activity of the Company is the ownership of shareholdings and
participations in other companies.
E. The Company holds, directly or indirectly, interests in the following
subsidiary companies (hereinafter called "the Subsidiaries") in the
following proportions:
(i) The Company holds 100% of the shares in France Marine S.A. ("France
Marine");
(ii) France Marine holds the following interests;
-- of the equity interests in SCI Les Venez;
-- 99.90% of the shares in Brissonneau & Lotz Marine S.A. ("BLM"),
Brissonneau & Lotz Marine Offshore S.A. ("BLMO"), BOPP S.A.
("BOPP");
-- 90% of the equity interests in SCI du Croissant;
-- 74% of the equity interests in SARL Kerdranvat; and,
-- 10% of the equity interests in SCI Port de Lorient.
(iii) Mr. Jean Francois Queru holds the following interests:
-- 1 equity interest of the 12,000 equity interests of Societe
civile Arnaud;
-- 1 equity interest of the 12,000 equity interests of Societe
civile Helene;
-3-
<PAGE>
(iv) Ms. Regine Queru holds the following interest:
-- 1 Share in the Company;
(v) Mr. Arnaud Queru holds the following interests:
-- 11,999 equity interest of the 12,000 equity interests of Societe
civile Arnaud;
-- 1 Share in the Company;
(vi) Ms. Helene Queru holds the following interests:
-- 11,999 equity interest of the 12,000 equity interests of Societe
civile Helene;
-- 1 Share in the Company;
(vii) Mr. Jean-Michel Gandreuil holds the following interests:
-- 1,999 equity interest of the 2,000 equity interests of D.J.C.M.;
-- 1 Share in the Company.
(viii) Mrs. Dominique Gandreuil holds the following interest:
-- 1 of the 2,000 equity interests of D.J.C.M.;
(ix) BOPP holds the following interests:
-- 96% of the equity interests in SCI Ty Gwen;
-- 50% of the equity interests in TSA;
-- 14% of the shares/equity interests in Hydro Armor,
-- a 10% interest in each of two vessels, the "Villon" and the
"Rabelais";
F. The Vendors wish to sell and the Purchaser wishes to purchase the whole,
but not part only, of the Shares and the whole, but not part only, all of
the equity interests presently held in Societe civile Arnaud and Societe
civile Helene and D.J.C.M. (the "Equity Interests").
-4-
<PAGE>
NOW IT IS HEREBY AGREED AS FOLLOWS:
1. Sale and Purchase.
-----------------
1.1 The Vendors hereby sell and the Purchaser hereby purchases the whole except
for one, but not pan only, of the Shares in accordance with the terms and
conditions of this Agreement together with all rights now or hereafter
attaching thereto.
1.2 The Vendors hereby sell and the Purchaser hereby purchases the whole, but
not part only, of the Equity Interests in accordance with the terms and
conditions of this Agreement together with all rights now or hereafter
attaching thereto as reiterated by the acts of transfer provided for in
Article 4.2.2 and annexed hereto.
1.3 The obligation of the Purchaser being to purchase the whole, but not part
only, of the Shares and Equity Interests, the obligation of the Vendors is
joint and several, each Vendor undertaking to sell these of the Shams
and/or Equity Interests owned by him/her/it and to procure the sale by the
other Vendors of those of the Shares and/or Equity Interests owned by them
respectively.
2. Price.
-----
The price for the whole of the Shares and Equity Interests (hereinafter
called "the Price") shall be the sum of one hundred and forty seven million
seven hundred sixty thousand, two hundred French francs (FRF 147,760,200),
which amount shall be paid by the Purchaser to each Vendor according to the
table hereafter.
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<PAGE>
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------------------------
NUMBER OF
ARCHERE SHARES
HELD DIRECTLY
OR INDIRECTLY AMOUNT OF PAYMENT
VENDORS BY VENDORS PER SHARE PRICE TO EACH VENDOR
- ---------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
- ---------------------------------------------------------------------------------------------------------
Jean-Francois QUERU 66,998 1,500 FRF 100,497,000.00
- ---------------------------------------------------------------------------------------------------------
Societe Civile M.G.L.V. 4,499 1,500 FRF 6,748,500.00
- ---------------------------------------------------------------------------------------------------------
Regine QUERU 1 1,500 FRF 1,500.00
- ---------------------------------------------------------------------------------------------------------
Helene QUERU 1 1,500 FRF 1,500.00
- ---------------------------------------------------------------------------------------------------------
Arnaud QUERU 1 1,500 FRF 1,500.00
- ---------------------------------------------------------------------------------------------------------
Sub-Total 71,500 FRF 107,250,000.00
- ---------------------------------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------------------------------
Jean-Francois QUERU 12,000
acting as "Gerant" of the
Societe Civile Helene
which holds in ACHERE:
- ---------------------------------------------------------------------------------------------------------
Helene QUERU 11,999 1,429.30 FRF 17,150,170.70
- ---------------------------------------------------------------------------------------------------------
Jean-Francois QUERU 1 1,429.30 FRF 1,429.30
- ---------------------------------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------------------------------
Jean-Francois QUERU 12,000
acting as "Gerant" of the
Societe Civile ARNAUD
which holds in ACHERE:
- ---------------------------------------------------------------------------------------------------------
Arnaud QUERU 11,999 1,429.30 FRF 17,150,170.70
- ---------------------------------------------------------------------------------------------------------
Jean-Francois QUERU 1 1,429.30 FRF 1,429.30
- ---------------------------------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------------------------------
Jean-Michel GANDREUIL 4,499
acting as "Gerant" of the
Societe Civile D.J.C.M.
which holds in ACHERE:
- ---------------------------------------------------------------------------------------------------------
Jean-Michel GANDREUIL 1,999 3,103.50 FRF 6,203,896.50
- ---------------------------------------------------------------------------------------------------------
Dominique GANDREUIL 1,999 3,103.50 FRF 40,510,200.00
- ---------------------------------------------------------------------------------------------------------
Sub-Total 28,499 FRF 40,510,200.00
- ---------------------------------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------------------------------
TOTAL NUMBER OF 99,999 TOTAL PRICE FRF 147,760,200.00
SHARES
- ---------------------------------------------------------------------------------------------------------
</TABLE>
At closing. the Purchaser shall deliver a bank check to each of the Vendors
certified by a first class French bank.
3. Conditions Precedent.
--------------------
The Parties hereby agree that the conditions precedent contained in the
letter of intent signed on December 30, 1997 (and attached hereto as
Schedule 3) between Friede Goldman International, Inc. on behalf of the
Purchaser and by Mr. Jean-Francois Queru on behalf of the Vendors, have
been fulfilled in their entirety as of the date hereof.
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<PAGE>
4. Closing.
-------
4.1 Closing shall take place on the date hereof at 5 rue de lHotellerie, 44470
Carquefou, France (hereinafter called "Closing" or the "Closing Date", as
the case may be).
4.2 At Closing, the Vendors shall. deliver to the Purchaser:
4.2.1 duty executed share transfer forms (ordes de mouvement) in respect
of the whole of the Shares in favor of such person or persons as the
Purchaser may specify;
4.2.2 duty executed acts for the transfer of the Equity Interests in
Societe civile Arnaud, Societe civile Helene and D.J.C.M., which
hold a total of 28,499 Shares in the Company. Copies of the acts for
the transfers of Equity Interests appear as Schedule 4.2.2 hereto.
4.2.3 a certified copy of the resolution of the board of directors of the
Company approving the Purchaser and such other persons or
corporations as the Purchaser may specify as shareholders of the
Company;
4.2.4 a certified copy of the decision of the gerants of Societe civile
Arnaud, Societe civile Helene and D.J.C.M. approving the Purchaser
and such other persons or corporations as the Purchaser may specify
as Equity Interest holders.
4.2.5 evidence of the Vendors' acceptance to unconditionally and
irrevocably waive the terms of the shareholders' agreement signed
between themselves on November 16, 1996;
4.2.6 the shareholder accounts of the Company together with the Register
of Transfers of the Company in both cases up to date to record the
transfers made pursuant to the share transfer forms referred to in
Article 4.2.1 hereof;
4.2.7 the minute books of board and shareholders' meetings of the Company
in both cases up to date together with the attendance book in
respect of board meetings and the relevant attendance sheets and
proxies in respect of shareholders' meetings;
4.2.8 the minutes of the equity holders' meetings of Societe civile
Arnaud, Societe civile Helene and D.J.C.M. up to date together with
the attendance book in respect of such meetings and the relevant
attendance sheets and proxies in respect of equity holders'
meetings;
4.2.9 if, and to the extent, requested by the Purchaser, the unconditional
resignations of the directors (administrateurs) of the Company and
of the Subsidiaries and of the
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<PAGE>
President-Directeur General, Directeur General, and gerant of the
Company and all Subsidiaries;
4.3 At the Closing Date, the Vendors shall procure the holding of such board
and/or shareholders' meetings of the Company as the Purchaser may request
to effect the appointment of such persons as the Purchaser may require as
directors (administrateurs) of the Company and as President-Directeur
General and, if appropriate, Directeur General, of the Company.
5. Representations and Warranties of the Guarantors.
------------------------------------------------
5.1 Mr. Jean Francois Queru and Mr. Jean-Michel Gandreuil in their capacities
as, respectively, the outgoing President-Directeur General of the Company
and outgoing Directeur General of BLM (hereinafter called the
"Guarantors"), pro rata. to the percentage of each such Vendor's direct or
indirect interest in the Company (i.e., for Mr. Jean Francois Queru 95% and
for Mr. Jean-Michel Gandreuil 5%), make the representations and grant the
warranties to the Purchaser as set forth in Articles 5 and 6 hereof.
For the avoidance of doubt, the term "pro rata" as used in this Article 5
shall mean that, in the event of a Valid Claim (as such term is defined at
Article 6) the percentage of each Guarantor's individual liability for such
Valid Claim shall be divided between the Guarantors as a function of the
percentage referred to hereabove.
5.1.1 Ownership of the Subsidiaries and of Societe civile Arnaud, Societe
civile Helene, and D.J.C.M.
5.1.1.1 the Company holds 100% of the shares of France Marine, a
societe anomyme duly organized, validly existing under the
laws of France whose registered office is at Carquefou (44
470) Le Bel Air 5, rue de lHotellerie, registered at the
Commercial and Companies Registry of Nantes under number
390 859 452 and whose registered capital is FRF 8,500,000
divided into 85,000 shares (actions) of FRF 100 each;
5.1.1.2 France Marine holds 99,9% of the shares of BLM, a societe
anomyme duly organized, validly existing under the laws of
France whose registered office is at Nantes (44 470) 15,
rue de la Metallurgie, registered at the Commercial and
Companies Registry of Nantes under number 712 008 580 and
whose registered capital is FRF 20,800,000 divided into
208,000 shares (actions) of FRF 100 each;
5.1.1.3 France Marine holds 99,9% of the shares of BLMO, a societe
anomyme duly organized, validly existing under the laws of
France whose registered
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<PAGE>
office is at Carquefou (44 470) Le Bel Air 5, rue de
lHotellerie, registered at the Commercial and Companies
Registry of Nantes under number 402 861 991 and whose
registered capital is FRF 1,000,000 divided into 10,000
shares (actions) of FRF 100 each;
5.1.1.4 France Marine holds 100% of the shares of BOPP, a societe
anomyme duly organized, validly existing under the laws of
France whose registered office is at Crozon (29160) La
Maison Blanche, Lanveoc, registered at the Commercial and
Companies Registry of Quimper under number 377 280 466 and
whose registered capital is FRF 3,500,000 divided into
35,000 shares (actions) of FRF 100 each;
5.1.1.5 France Marine holds 90% of the equity interests of SCI du
Croissant, the other 10% being hold by BOPP, SCI du
Croissant being a societe civile duly organized, validly
existing under the laws of France whose registered office
is at La Maison Blanche, Lanveoc, 29160 Crozon, registered
at the Commercial and Companies Registry of Quimper under
number 377 924 519 and whose registered capital is FRF
10,000 divided into 100 equity interests (parts sociales)
of FRF 100 each;
5.1.1.6 France Marine holds 74% of the equity interests of
Kerdranvat, the other 26% being held by BOPP, Kerdranvat
being a societe a responsabilite limitee duly organized,
validly existing under the laws of France whose registered
office is at Crozon (29160) La Maison Blanche, Lanveoc,
registered at the Commercial and Companies Registry of
Quimper under number 353 009 822 and whose registered
capital is FRF 50,000 divided into 500 equity shares (parts
sociales) of FRF 100 each;
5.1.1.7 France Marine holds 10% of the equity interests of SCI
Port de Lorient, the other 90% being held by BOPP, SCI
Port de Lorient being a societe civile duly organized,
validly existing under the laws of France whose registered
office is at 81-83, avenue de La Perriere, 56100 Lorient,
registered at the Commercial and Companies Registry of
Lorient under number 377 522 776 and whose registered
capital is FRF 10,000 divided into 100 equity interests
(parts sociales) of FRF 100 each;
5.1.1.8 BOPP holds 96% of the equity interests of SCI Ty Gwen, the
other 4% being equally divided between Ms. Marie-Josee
Quilfen and Mr JeanJacques Quilfen, SCI Tygwen being a
societe civile duly organized, validly existing under the
laws of France whose registered office is at La Maison
Blanche, Lanveoc, 29160 Crozon, registered at the
Commercial and Companies Registry of Quimper under number
320 610 611 and whose
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<PAGE>
registered capital is FRF 10,000 divided into 100 equity
interests (parts sociales) of FRF 100 each;
5.1.1.9 BOPP holds 50% of the equity interests of TSA. the, other
50% being held by Mrs. Marie-Josee George, TSA being a
societe a responsabilite limitee duly organized, validly
existing under the laws of France whose registered office
is at Z.I. de Parc C'hastel, Fouesnant, registered at the
Commercial and Companies Registry of Quimper under number
B 333 760 452 and whose registered capital is FRF 50,000
divided into 500 equity interests of FRF 100 each;
5.1.1.10 France Marine holds 100% of the equity interests of SCI
Lesvenez, the latter being a societe civile duly
organized, validly existing under the laws of France whose
registered office is at ZAC de Lesvenez, 29780 Plouhinec,
registered at the Commercial and Companies Registry of
Quimper under number 352 993 117 and whose registered
capital is FRF 10,000 divided into 100 equity interests of
FRF 100 each,
5.1.1.11 Mr. Arnaud Queru holds 11,999 of the 12,000 equity
interests of Societe civile Arnaud, the remaining one
equity interest being held by Mr. Jean-Francois Queru,
Societe civile Arnaud being a societe civile duly
organized, validly existing under the laws of France whose
registered office is at 10, rue des Primeveres, 43390
Petit Mars, registered at the Commercial and Companies
Registry of Nantes under number 409 418 704 and whose
registered capital is FRF 1,200,000 divided into 12,000
equity interests of FRF 100 each;
5.1.1.12 Ms. Helene Queru holds 11,999 of the 12,000 equity
interests of Societe civile Helene, the remaining one
equity interest being held by Mr. Jean-Francois Queru,
Societe civile Helene being a societe civile duly
organized, validly existing under the laws of France whose
registered office is at 10, rue des Primeveres, 43390
Petit Mars, registered at the Commercial and Companies
Registry of Nantes under number 409 418 845 and whose
registered capital is FRF 1,200,000 divided into 12,000
equity interests of FRF 100 each;
5.1.1.13 Mr. Jean-Michel Gandreuil holds 1,999 of the 2,000 equity
interests of D.J.C.M., the remaining one equity interest
being held by Mrs. Dominique Gandreuil, D.J.C.M. being a
societe civile duly organized, validly existing under the
laws of France whose registered office is at 18, rue
Auguste Renoir, 44980 Sainte Luce s/s/ Loire, registered
at the Commercial and Companies Registry of Nantes under
number 409 418 126 and whose
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registered capital is FRF 200,000 divided into 2,000
equity interests of FRF 100 each;
5.1.1.14 BOPP holds 14% of the shares of Hydro-Armor, the other 86%
being held substantially by the Quere family, Hydro-Armor
being a societe civile duly organized, validly existing
under the laws of France whose registered office is at
Carrefour du Rohou, Plouezoc'h, 29252 Plouezoc'h
registered at the Commercial and Companies Registry of
Morlaix under number B 927 350 173;
5.1.1.15 BOPP holds 10% of the 35,400 equity interests in each of
two vessels, the "Villon" (copropriete du Chalutier
"Rabelais", 9, rue du Professeur Legendre, 29900
Concarneau) whose ship registration number is CC 683 453;
5.1.2 The Shares and Equity Interests
-------------------------------
5.1.2.1 the Shares represent the whole of the Share capital of the
Company, are fully paid in and are freely transferable. The
shares and equity interests held by the Company in each of
the Subsidiaries listed in Recital D hereto are also fully
paid in and freely transferable, except that 37,155 shares
of France Marine representing 43,72% of the capital
currently held by the Company are pledged in favor of
Credit Industriel de l'Ouest, BCME and Credit Maritime
Mutuel du Finistere;
5.1.2.2 the holders of Equity Interests in Societe civile Arnaud,
Societe civile Helene, and D.J.C.M. state that all such
Equity Interests are fully paid in and freely transferable,
that the activity of such companies is limited to the
management holdings in the Company, and that they own no
other assets.
5.1.2.3 each of the Vendors and Societe civile Arnaud, Societe
civile Helene, and D.J.C.M. have full and valid title to
those of the Shares set out against his/her/its name in the
Recitals hereto, free from any lien, charge or encumbrance
or any other third part rights and at Closing, such title
shall be validly transferred to the Purchaser or to such
person or persons as the Purchaser may specify. All the
authorizations, which must be, obtained prior to the
transfer of the Shares, in application of the Company's
statuts and French law, have been obtained by the Vendors,
except for the declaration of foreign investment in France
to be made by Purchaser to the French Treasury no later
than the Closing Date.
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5.1.3 Effects of the Completion of the Sale of the Shares and Equity
Interests
to the best knowledge of the Guarantors, the completion of the sale
of the Shares and Equity Interests to or in accordance with the
instructions of the Purchaser will not result in the modification,
cancellation or revocation of any contract, agreement arrangement to
the Company or any of its Subsidiaries.
No clause in the commercial contracts would allow a customer to
cancel such contract due to a change in control of the Company or
any of its Subsidiaries but any customer is free to do so if he
believes that the Purchaser will compete with him.
5.1.4 Consolidated Balances of the Company and of the Subsidiaries as at
December 31, 1997 and at Closing
5.1.4.1 the balances appearing in the provisional consolidated
financial statements of the Company and the Subsidiaries as
at December 31, 1997, (the "Consolidated Balances") show a
true and fair view of the position of the Company and the
Subsidiaries as at December 31, 1997, in particular, with
respect to the items listed in the Ernst & Young report
attached hereto as Schedule 5.1.4.1;
5.1.4.2 the consolidated balances of the Company and of the
Subsidiaries at the date hereof are or will be, except for
transactions occurring in the ordinary course of business,
materially similar in all respects to the balances
appearing in the Consolidated Balances in particular with
respect to the list of items attached hereto as Schedule
5.1.4.1.
5.1.4.3 the accounts of Societe civile Helene, show a true and fair
view of their position as at December 31, 1997 and January
29, 1998. The accounts of DJCM show a true and fair view of
its position as at December 31, 1997.
5.1.5 Ownership of Assets
5.1.5.1 the Company and each of the Subsidiaries have full and
unencumbered title to all its assets including its ongoing
businesses (fonds de commerce), except for:
5.1.5.1.1 SCI du Croissant for which a mortgage has been
granted as security for a loan which outstanding
balance is FRF 640,000;
5.1.5.1.2 SCI Port de Lorient which only owns the building
located on land which belongs to the Port de
Lorient and occupied by
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SCI Port de Lorient pursuant to a contract for
long-term occupation which is to expire on
December 31, 2009;
5.1.5.1.3 the vessels Rabelais and Villon which are
mortgaged as Security for loans.
5.1.5.2 To the best knowledge of the Guarantors, all taxable assets
(both real estate and otherwise) are properly constructed
and in good condition, subject only to normal wear and
tear, and have been consistently and properly maintained.
None of such tangible assets is out of order or has any
apparent defect, which prevents or could prevent its use in
the future in accordance with the purpose for which it was
intended, except for SCI Ty Gwen, SCI Lesvenez and SCI Port
de Lorient. a description of the state of the of real
property is contained in an insurance report enclosed
hereto as Schedule 5.1.5.2.
5.1.5.3 to the best knowledge of the Guarantors, the carrying on of
business and the use by the Company and each of the
Subsidiaries of its respective assets is in accordance with
all legal or regulatory requirements, particularly with
regard to health and safety.
5.1.6 Real Property, Leases, Mortgages and Restrictions
5.1.6.1 Except for SCI du Croissant for which a mortgage has been
granted as security for a loan and SCI Port de Lorient
which only owns the building located on land which belongs
to the Port de Lorient as explained in Articles 5.1.5.1.1
and 5.1.5.1.2, the Company and the Subsidiaries have
unencumbered title (meaning that all real property owned by
them are free and clear of all liens, mortgages and
restrictions) to the following real property:
France Marine: apartment at Residence Le Continental,
2 rue du Chabut, 44150 Pornic;
BLM: 15 rue de La Metallurgie, 44470
Carquefou, for a total surface of
89,370 m2, registered with the Land
Registry of Carquefou at Section AV
under numbers 25, 26, 32, 34, and 46,
and 8 buildings of a surface of 19,747
m2;
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BOPP: La Maison Blanche, Lanveoc, 29160
Crozon, with a piece of land of a
surface of 1 hectare, 11 ares, and 6
centiares, registered with the Land
Registry of Crozon at Section I, under
number 11, and a building of a surface
of 6,169 m2;
SCI du Croissant: La Maison Blanche, Lanveoc, 29160
Crozon, for a total surface of 7,646
m2 registered with the Land Registry
of Lorient at Section K, under numbers
238 and 241, and a building of 1,400
m2;
SCI Port de Lorient: 81-83 avenue de La Perriere, 56100
Lorient, for a total surface of 812
m2, registered with the Land Registry
of Lorient at Section DW, under number
84;
SCI Lesvenez: Lieu dit Lambabu, ZAC de Lesvenez,
Plouhinec (Finistere), for a total
surface of 6,000 m2 (including a 900
m2 building designed for industrial
use) registered with the Land Registry
of Plouhinec at Section ZM, under
number 147;
SCI Ty Gwen: Lieu dit Parc-ar-C'hastel, Fouesnant,
for a total surface of 3080 m2
registered with the Land Registry of
Fouesnant at Section M, under number
776;
such properties constitute all of the real property
interests of the Company and the Subsidiaries.
The Company and the Subsidiaries have not entered into any
undertaking, to transfer the whole or any part of the real
property owned by it for valuable consideration or
otherwise or to encumber the whole or any part of such real
property with any such right, including commercial leases,
in favor of third parties to the exception of the lease
entered into by SCI Port de Lorient and Fournier and Ship.
To the best knowledge of the Guarantors, the Company and
the Subsidiaries have always conformed with all norms in
respect of the construction, occupation and use of the said
buildings and, in particular,
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with all orders, regulation of allotments, specifications
co-ownership regulations and internal regulations. There
are no town planning provisions or other restrictions which
restrict the use or reduce the value of the said buildings.
5.1.6.2 each of the leases of real or personal property, or any
domiciliation agreement to which the Company or any
Subsidiary is a party is valid and enforceable in
accordance with its terms. Should the lease of France
Marine terminate, then the leases. of Achere and BLM
Offshore shall terminate.
5.1.7 Intellectual Property
5.1.7.1 Schedule 5.1.7 contains a ha of the patents, trademarks,
trade names, copyright, logos, designs, software and other
intellectual property rights (hereinafter called "the
Rights") used by the Company and the Subsidiaries. Subject
to the Disclosure Letter, the Rights are owned by the
Company and the relevant Subsidiaries as indicated in
Schedule 5.1.7, and are, to the best knowledge of the
Guarantors, free from any charge or encumbrance or are used
pursuant to valid licenses from third parties of which
details are given in the said Schedule 5.1.7;
5.1.7.2 to the best knowledge of the Guarantors, neither the
Company nor any Subsidiary has infringed, and nor does it
infringe, any right belonging to any third party relating
to any patent, trademark trade name, copyright, logo,
design or software or any other intellectual property
rights belonging to third parties; and
5.1.7.3 except as disclosed in Schedule 5.1.7 and to the best
knowledge of the Guarantors, the Company has the unfettered
right to use its corporate name of which it has full title
and enjoyment, without paying any royalty to a third party.
The same applies to each of the Subsidiaries.
5.1.8 Material Contracts
set forth in Schedule 5.1.8 hereto is a list of all the contracts,
commitments, agreements and guarantees or other undertakings to
which the Company and any Subsidiary is a party which (i) account
for more than 3 per cent of the consolidated turnover of the Company
and the Subsidiaries for the financial period ended on the December
31, 1997 or (ii) are for a period of more than 12 months; or (iii)
provide for capital expenditure or the disposal of capital assets
for an aggregate amount in excess of FRF 1,500,000; or (iv) contain
any exclusivity commitment by, or for the benefit of, the Company or
any Subsidiary; or (v) contain any commitment by any
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party not to compete with any other; or (vi) are otherwise material
to the management, development and marketing of the Company and the
Subsidiaries (hereinafter called "Material Contracts");
5.1.9 Personnel
to the best knowledge of the Guarantors, the Company and the
Subsidiaries have satisfied, and continue to satisfy all their
obligations pursuant to applicable labor law.
5.1.10 to the best knowledge of the Guarantors, the activities of the
Company and of the Subsidiaries and all the assets, owned, leased or
used by them are validly insured in the case of assets with
reputable companies and the terms of the policies are such as would
be acceptable to a prudent entrepreneur carrying on a similar
business with similar assets.
5.1.11 Product Liability
to the best knowledge of the Guarantors, no individual claim (or
event which could give rise to a claim) has been made on the Company
or on any of the Subsidiaries in respect of damage suffered
resulting from a defect in any product manufactured, assembled or
sold.
5.1.12 Environment
to the best knowledge of the Guarantors, the activities of the
Company and of the Subsidiaries have always been and are being
operated in compliance with the applicable laws and regulations in
force concerning the protection of the environment, and no product
manufactured, assembled or sold or any service supplied by the
Company or any of the Subsidiaries is in violation of such laws and
regulations.
5.1.13. Litigation
to the best knowledge of the Guarantors and save for the cases
already disclosed, there is no current, threatened or pending
litigation, arbitration, claim, administrative proceeding,
administrative or tax investigation or any other action or
proceeding pending or contemplated whether as plaintiff or defendant
in relation to the Company or any of the Subsidiaries and the
Vendors are unaware of any facts which might give rise to any such
action or proceeding.
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<PAGE>
5.1.14 Absence of Changes
to the best knowledge of the Guarantors, since December 30, 1997 and
up to the date hereof, the Company and (where the context so
permits) all of the Subsidiaries, Societe civile Arnaud, Societe
civile Helene, and D.J.C.M.:
i) have conducted their operations according to their ordinary
and usual course of business consistent with past practice;
ii) refrained from paying or distributing any cash or assets,
whether by way of dividend distribution or otherwise, of
the Company and/or of any Subsidiary to any shareholder or
their affiliates or relatives or to any other person which
payment is not in the ordinary course of business, except
as concerns the distributions made to directors who are
requested to resign pursuant to this agreement, Mr. Jean
Bosser and Mr. Yves Tromeur for it total amount not
exceeding FRF 100,000;
iii) have not increased the compensation or few (including
fringe benefits) payable or to become payable to the
Vendors, their affiliates or relatives except the payments
made in the ordinary course of business (including salary
increase);
iv) have not amended or modified the organizational documents,
v) have not suffered any damage, destruction or other casualty
or loss (whether or not covered by insurance) materially
affecting the business or financial position, or
vi) have not suffered any social disturbance, conflict, strike,
lock-out, sit-in or similar event.
5.1.15 Taxes, Customs Duties
to the best knowledge of the Guarantors, the Company, the
Subsidiaries and Societe civile Arnaud, Societe civile Helene, and
D.J.C.M. have correctly filed all national, departmental and local
tax and social declarations at the required time and have kept
copies of the originals as filed. All national, departmental and
local taxes, and duties, (including, but not limited to, corporation
tax, value added tax, business tax, land tax and customs duties) and
all social and parafiscal charges due and owing by the Company
and/or the Subsidiaries, and/or Societe civile Arnaud, Societe
civile Helene, and D.J.C.M. at the date hereof have paid within the
legal time limits.
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5.1.16 General
5.1.16.1 to the best knowledge of the Guarantors, all the
information contained in this Agreement including the
recitals and the Schedules hereto is complete and accurate
in all respects;
5.1.16.2 to the best knowledge of the Guarantors, there is no
existing fact or event known to the Guarantors which is
likely to have a negative effect on the assets, business
or activities of the Company or any of the Subsidiaries or
any of the Societe civile Arnaud, Societe civile Helene,
or D.J.C.M. or which could reasonably be expected
adversely to affect the willingness of the Purchaser to
purchase the Shares and Equity Interests upon the terms of
this Agreement which has not been disclosed to the
Purchaser by or on behalf of the Guarantors in writing;
5.1.16.3 no written or oral statement certificate, instrument or
other document furnished to the Purchaser in the course of
the negotiations leading up to the signature of this
Agreement, or any other document, agreement or instrument
referred to herein contains or shall contain any untrue
statement of material fact or omits or shall omit to state
a material fact necessary to make the statements contained
therein not misleading;
5.1.16.4 all schedules attached hereto are true, correct and
complete as of the date hereof. Matters disclosed on each
schedule shall be deemed to be disclosed only for purposes
of the matters to be disclosed for any other purpose
unless expressly provided therein . For the avoidance of
doubt, information shall not be deemed to have been
disclosed unless such information is expressly identified
in writing or referred to for the express purposes of
disclosure.
5.1.16.5 For the avoidance of doubt and for the purposes hereof the
term "knowledge" shall be deemed to include information of
which the Guarantors had knowledge.
6. Indemnification by the Guarantors
---------------------------------
6.1 General Provisions
6.1.1 The Guarantors acknowledge and accept that the Purchaser has entered
into this Agreement in reliance on the Representations and
Warranties contained herein. The liability of the Guarantors in
relation to these Representations and Warranties shall in no way be
valid should it be established that the Purchaser was aware of the
inaccuracy of one or more of the Representations and Warranties at
the due hereof.
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6.1.2 Notwithstanding the Act that the legal status of the Purchaser or
the Company may be modified following the completion of the sale
contemplated hereby, and in particular, by way of merger,
transformation or otherwise, the Representations and Warranties
shall remain in full effect and binding force until July 31, 1999.
6.2 Indemnification
Subject to the provisions of this Article, Guarantors hereby undertake to
indemnify the Purchaser, or, if the Purchaser in its absolute discretion so
wishes, the Company or any relevant Subsidiary for the full amount of any
damage, loss, liability or expense of any kind, including legal ad court
fees which results from any inaccuracy, error, omission or third party
claim relating to the Representations and Warranties contained herein.
6.2.1 It is agreed that the Guarantors shall in no event be liable for
claims based on information specifically disclosed to the
Purchaser pursuant to the Disclosure Letter as signed by the
parties hereto on the Closing Date or for matters of which neither
of the Guarantors had knowledge prior to Closing; provided,
however, that, in the event of a Valid Claim which is contested by
the Vendors, the information contained within the audit reports
described on page 6 of the Disclosure Letter may be referred to
(including page number references) by the Guarantors solely for
the purposes of responding to such Valid Claim and in particular,
establishing that material information directly relating to such
Valid Claim has already been disclosed to the Purchaser.
6.2.2 In the event of a claim related to a matter of which one of the
Guarantors had knowledge and not disclosed prior to Closing
specifically, then the following shall apply:
6.2.2.1 Only an individual claim which is notified by the Purchaser to the
Guarantors pursuant to Article 6.3 for an amount in excess of FRF
150,000 shall be deemed a valid claim ("Valid Claim") for the
purpose of calculating the indemnity amounts described below;
provided, however, that any claim amounting to less than FRF
150,000 shall not be applied to the respective indemnity or
franchise thresholds, described below.
6.2.2.2 The Guarantors shall in no event be liable for any Valid Claim(s)
which, individually, or in the aggregate, according to the
provision of Article 6.2.2.1, would not exceed a total amount of
FRF 6,000,000, which amount shall be applied throughout the three
periods stated in Article 6.2.13 (hereafter called the "Franchise
Amount"), nor for any Valid Claim(s), in the aggregate, which
exceed(s) the Franchise Amount by more than ten million French
francs (FRF 10,000,000).
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6.2.2.3 The Guarantors' liability is limited to the following maximum
amounts:
-- From Closing Date until July 31, 1998 (hereafter called the
"First Period"): FRF 10,000,000.
-- From August 1, 1998 until January 31, 1999 (hereafter called
the "Second Period"): FRF 7,000,000.
-- From February 1, 1999 until July 31, 1999 (hereafter called
the "Third Period"): FRF 4,000,000.
6.2.2.4 In any event the maximum accumulated amount paid by the Guarantors
for the three periods is limited to a maximum of FRF 10,000,000.
Example A:
- ---------
6 Valid Claims for an aggregate amount of FRF 9,000,000 brought in the First
Period.
The first FRF 6,000,000 shall be for the Purchaser's own account.
The next FRF 3,000,000 shall be charged to the Guarantor.
As a consequence, the remaining guarantee shall, be:
- -- For the First Period, FRF 10,000,000 - FRF 3,000,000 = FRF 7,000,000;
- -- For the Second Period: FRF 7,000,000;
- -- For the, Third Period: FRF 4,000,000.
Example B
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10 Valid Claims for an aggregate amount of FRF 15,000,000 brought in the First
Period.
The first FRF 6,000,000 shall be to the Purchaser's own account.
The next FRF 9,000,000 shall be charged to the Guarantor.
As a consequence, the remaining guarantee shall be:
- -- For the First Period: FRF 10,000,000 - FRF 9,000,000 =FRF 1,000,000;
- -- For the Second Period and for the Third Period FRF 1,000,0000.
Example C
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6 Valid Claims for an aggregate amount of FRF 9,000,000 brought in the Second
Period.
The first FRF 6,000,000 shall be to the Purchaser's own account.
The next FRF 3,000,000 shall be charged to the Guarantor.
As a consequence, the remaining guarantee shall be:
- -- For the Second Period: FRF 7,000,000 - FRF 3,000,000 = FRF 4,000,000;
- -- For the Third Period: FRF 4,000,000.
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6.2.3 Notwithstanding the terms of Article 5.1.11 hereto, it is expressly
agreed that the provisions of this Article 6 shall not apply to
Valid Claims from product defects.
6.2.4 Notwithstanding any other provisions in this Agreement, and without
prejudice to any of the Guarantors' other obligations under this
Agreement, it is hereby agreed, that in the event Mr. J.L. Holloway
ceases, for any reason whatsoever, to serve as Chief Executive
Officer of Friede Goldman International (whose functions shall be
deemed to end as of the date of the Board of Directors' meeting at
which Mr. J.L. Holloway's departure is confirmed - the "Departure
Date"), then the indemnification obligations of the Guarantors
shall also cease to exist as of the date on which Mr. J.L. Holloway
ceases to save in such capacity, without my formality being
necessary; provided, however, that any Valid Claims made prior to
the Departure Date shall remain valid and enforceable against the
Guarantors.
6.3 Notice of Claim(s)
------------------
The Purchaser shall notify the Guarantors of all Valid Claims by notice in
writing in accordance with Article 11 hereof within a reasonable time of
the basis for such Valid Claim arising; provided that no Valid Claim(s) may
be notified by the Purchaser against the Guarantors after July 31, 1999.
6.4 Payment of Claims
-----------------
Subject to the restrictions of this Article 6, all Valid Claim to which the
Guarantors have not responded to the Purchaser within one month from the
date on which notice of the Valid Claim is made by the Purchaser to the
Guarantors pursuant to Article 6.3 or which are accepted in whole or in
part by the Guarantors shall be paid to the Purchaser within thirty (30)
days of such notice; provided, however, that any contested Claims shall be
subject to the dispute resolution mechanism provided for at Article 12
hereof
7. Non-competition
---------------
During a period of twenty-four (24) months following the Closing Date, the
Vendors hereby jointly and severally undertake and agree, not to, except as
is required by law, within Metropolitan France (the "Territory"):
7.1 undertake, either directly or indirectly, any activity which competes with
those activities of the Company or any of the Subsidiaries within the
Territory as carried out at the date hereof (the "Activities"). In the
event that any Vendor, acting individually or together with another Vendor
or third party acquires directly or indirectly a controlling interest in an
entity whose activity competes with the Activities, the Vendor(s) shall
dispose of such interest within six (6) months of receiving notice of that
fact by the Purchaser; or
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7.2 reveal to any third party, or make use of in any way, of any trade secret,
know how, process, technique, list of customers or other confidential
information of the Company and/or the Subsidiaries not already in the
public domain, except in respect of information required to be disclosed by
law or the rules of any Stock Exchange; or
7.3 solicit any current employees, or customers of the Company and/or the
Subsidiaries, with the exception of one secretary.
8. Right to Offer Before Sale
--------------------------
To the extent permitted by law, Mr. Jean-Francois Queru must be notified of
any proposed transfer of all of the Shares of the Company and the
Subsidiaries by the Purchaser, such notification, including the nature of
the securities or rights involved, the price or the value proposed for the
transaction, the overall terms and conditions of payment of the price;
provided, however, the Mr. Jean-Francois Queru shall have no right to offer
before sale in the event of a merger of the Company or the Subsidiaries
with any third party and that the specific terms of the notifications are
subject to any confidentiality undertaking imposed on the Purchaser by the
potential transferee(s).
Within fifteen (15) days of the aforementioned notification, Mr. Jean-
Francois Queru shall have the right to make an offer to the Purchaser, such
offer to the Purchaser, such offer stating its terms and conditions,
including the nature of the securities or rights involved, the price or the
value proposed for the transaction, the terms and conditions of payment of
the price.
Within fifteen (15) days of Purchaser's receipt of Mr. Jean-Francois
Queru's proposal, the Purchaser shall deliver in writing to Mr. Jean-
Francois Queru a conditional or otherwise acceptance, rejection, or
counter-offer of the offer received from Mr. Jean-Francois Queru; provided
that in no event shall the Purchaser have the obligation to sell to Mr.
Jean-Francois Queru at any time any or all of the Share of the Company and
the Subsidiaries.
Pursuant to Article 9.1, the right to offer held by Mr. Queru is personal
to him and is not assignable.
All information directly or indirectly related to the matters triggering
the exercise of the right to offer before sale shall be strictly
confidential.
The provisions of the present article shall remain in force for seven (7)
years of the Closing Date.
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9. Assignment
----------
9.1 This Agreement is personal to the parties and cannot be assigned by any of
them save that (i) the Purchaser may assign its rights hereunder to an
Associated Company for which purpose the term "Associated Company" shall
mean any company which, directly or indirectly, controls or is controlled
by or is under the same control as the Purchaser and the term "control"
shall mean the ability to exercise or to procure the exercise, directly or
indirectly, of at least 50 per cent of the voting share of a company; and
(ii) the Purchaser (or such Associated Company) may freely assign its
rights to any person(s) or corporation(s) to whom the Shares may be
transferred following the Closing Date.
9.2 In the event of the death or permanent mental incapacity of one or more of
the Vendors this Agreement shall be binding on his/her heirs and
successors or, as the case may be, legal guardian or trustee.
10. Expenses
--------
Each of the parties shall bear all the costs and expenses incurred by it
in connection with this Agreement and its execution including, but not
limited to, the fees and disbursements of any counsel, independent
accountant or any other person whose services may have been used by the
said party in relation hereto.
11. Confidentiality
---------------
11.1 All announcements by or on behalf of the parties hereto relating to the
transaction contemplated hereby shall be in terms agreed by the parties
save that the Purchaser shall be entitled to make such announcement as it
thinks fit to comply with the regulations of any Stock Exchange on which
the Purchaser or any Associated Company of the Purchaser may be quoted.
11.2 Copy of all announcements shall be given to the Vendors.
11.3 No announcement shall be made in France, in particular as concerns the
purchase price, except for purposes, of filing the declaration of foreign
investment with the French Treasury.
11.4 The provisions of this Agreement and, in particular, the indemnification
clause of Article 6 hereto shall not be disclosed to any third party
except as may be required from the Purchaser for the purposes of filings
to be made with the U.S. Securities Exchange Commission.
12. Notices
-------
12.1 Any notice required to be given hereunder shall be validly given if sent
by registered letter (with return receipt requested) or by fax, confirmed
by such registered letter, or by hand
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<PAGE>
delivery against written acknowledgment of receipt to the following
address or to such other address as may have been communicated by either
of the parties to the other in accordance herewith:
For notices to the Vendors:
Mr. Jean-Francois Queru
10 rue des des Primeveres
44390 Petit Mars
Mr. Jean-Michel Gandreuil
18, rue Auguste Renoir
44980 Sainte Luce sur Loire
for notices to the Purchaser:
James A. Lowe, III, Esq.
General Counsel
Friede Goldman International, Inc.
525 East Capitol Street - Suite 402
Jackson, Mississippi 39201
U.S.A.
Facsimile Number: 601-352-0588
Telephone Number: 601-352-1107
12.2 The Vendors irrevocably confer on Mr. Jean-Francois Queru and Mr. Jean-
Michel Gandreuil, who accept, the authority to accept notices on behalf of
all of them and notice given to Mr. Jean-Francois Queru and Mr. Jean-
Michel Gandreuil shall be deemed to be notice to all of them.
13. Proper Law, Dispute Resolution
------------------------------
13.1 This Agreement shall be governed by and construed in accordance with
French law.
13.2 Dispute Resolution:
(a) All disputes arising in connection with this Agreement shall, before any
recourse is made to the Court of Arbitration of the International Chamber of
Commerce ("ICC"), be submitted to negotiations with a view to reaching an
amicable solution.
(b) The parties hereto shall each appoint one mediator. The two mediators
appointed by the parties shall then appoint a third mediator. In the event of
failure of the two parties to appoint their mediator or of the two mediators
appointed by the parties hereto to reach an agreement on the identity of the
third mediator within 15 days as from the notification of the request to mediate
or legal action by one of he parties to the other, the third mediator shall then
be designated by the
-24-
<PAGE>
General Secretariat of the international Chamber of Commerce ("ICC") if called
upon t do so by the most diligent party.
(c) The mediators shall hear the parties hereto and their counsel and shall
lay down the procedural rules hat he considers appropriate. Should the
mediation be successful, the mediators will draw up a daft settlement agreement
that will be submitted to the parties hereto for signature in the English and
the French languages. Neither the English language version nor the French
language version shall be deemed to have greater authority. Once signed, the
settlement agreement shall be binding upon the parties hereto.
(d) In the event that the mediation is broken off (i) within 45 days from
the appointing of the mediators or (ii) in the event of one party's refusal to
proceed with the mediation procedure, or (iii) in the event that the difference
is not resolved within 45 days from the start of the proceedings, the difference
shall be submitted to the ICC under the ICC Rules of Conciliation and
Arbitration with a panel of three arbitrators. Each party hereto shall have
appointed one arbitrator within thirty (30) days of the ICC having received the
Request for Arbitration from the most diligent party. The third arbitrator shall
be appointed by the two arbitrators so appointed. If the two arbitrators fail to
agree on the appointment of the third arbitrator within thirty (30) days from
the date of the appointment of the second arbitrator, the ICC shall appoint the
third arbitrator no later than forty-five (45) days from the date on which the
last of the two arbitrators is appointed. Regardless of the appointment
mechanism, the third arbitrator shall not be a national or resident of either
France or the USA (preferably a Swiss national).
(e) The arbitration shall be held in Nantes, France in the English and
French languages. As a condition to being appointed as an arbitration, the ICC
must certify to the parties hereto that each arbitrator is bilingual in the
English and French languages.
(f) The parties hereto expressly agree that arbitration shall be the final
and binding dispute resolution mechanism and in no event shall any of the
parties hereto cause a dispute to be submitted to judicial consideration. In
this regard, the parties hereto expressly agree to waive the application of
Articles 14 and 15 of the French Civil Code.
(g) The costs and expenses associated with the negotiation procedure shall
be borne by the parties hereto as determined by the negotiator.
14. Language
--------
This Agreement shall be signed in the English language only. a short-form
French language, version may be prepared for the sole purpose of
registration with the French tax authorities. It is hereby expressly
agreed that, although a full French translation certified by an accredited
translator shall be completed, the terms of the English language original
shall prevail.
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<PAGE>
15. Waivers
-------
The failure by any party hereto promptly to avail itself in whole or in
part of any right, power or privilege to which such party is entitled
pursuant to the terms of this Agreement shall not constitute a waiver of
such right, power or privilege which maybe exercised at any time. To be
valid, waiver by any party hereto of nay such right, power or privilege
must be in writing and notified to the other parties as provided herein.
16. Headings
--------
The descriptive words or phrases at the head of the Articles are inserted
only as a convenience and for reference purposes and are not intended to in
any way define, limit or describe the scope or intent of the Articles which
they precede.
17. Whole Agreement
---------------
This Agreement, including the Schedules and footnotes hereto, constitutes
the entirety of the agreement between the parties with regard to the
subject matter hereof and supersedes any previous agreement or agreements
whether verbal or written with regard thereto.
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<PAGE>
Done in Carquefou, France on February 5, 1998 in eight originals.
THE VENDORS FRIEDE GOLDMAN FRANCE
/s/ Jean-Francois Queru By: /s/ J.L. Holloway
- ------------------------------ ------------------------------
Jean-Francois Queru J. L. Holloway
(Guarantor)
/s/ Jean-Francois Queru
- ------------------------------
Regine Queru
By: Jean-Francois Queru
/s/ Jean-Francois Queru
- ------------------------------
Mr. Arnaud Queru
By: Jean-Francois Queru
/s/ Jean-Francois Queru
- ------------------------------
Ms. Helene Queru
By: Jean-Francois Queru
/s/ Jean-Francois Queru
- ------------------------------
SC MGLV
By: Jean-Francois Queru
Gerant
/s/ Jean-Michel Gandreuil
- ------------------------------
Jean-Michel Gandreuil
(Guarantor)
/s/ Jean-Michel Gandreuil
- ------------------------------
Mrs. Dominique Gandreuil
By: Mr. Jean-Michel Gandreuil
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<PAGE>
Exhibit 99.3
AMENDMENT NO. 1 TO THE AGREEMENT
February 5, 1998
The parties hereto agree, by way of amendment to the Sale and Purchase
Agreement signed today, that one third of the purchase price for the shares of
Achere, attributable to the undersigned, Jean-Michel Gandreuil, acting both in
his own capacity and in his capacity as gerant of the societe civile D.J.C.M.
(i.e., an amount equivalent to FRF 2,067,965.50, to be considered as a partial
set off against the total purchase price received by Jean-Michel Gandreuil on
the date hereof pursuant to the Sale and Purchase Agreement) will be paid by
Jean-Michel Gandreuil or a nominee no later than the close of business on
February 6, 1998, to purchase the monetary value equivalent in Friede Goldman
International, Inc. common stock (the "Stock"); it being specified that the
value of the Stock shall be the quoted value for the Stock as at the close of
trading on February 4, 1998.
To the extent permitted by law, it is further agreed that the
undersigned Jean-Michel Gandreuil, shall not sell, transfer or otherwise dispose
of the Stock so purchased for a period of one year as from the date on which
such purchase is perfected; provided, however, that as from the expiry of such
one-year period, Jean-Michel Gandreuil shall only dispose of the Stock,
including any additional Friede Goldman International stock which he may acquire
subsequent to the purchase of the Stock, in accordance with all internal and
other applicable regulatory terms and conditions relating to Stock held by
employees and relatives of Friede Goldman International, Inc. Jean-Michel
Gandreuil also understands and agrees that the Stock has not been registered
with the United States Securities and Exchange Commission and, therefore, may
not be sold or transferred except in a transaction exempt from registration
(e.g., pursuant to Rule 144) and that the certificates representing the Stock
will bear a legend to such effect. For purposes of this Agreement, the term
"Friede Goldman International, Inc." shall include all of its affiliated
entities
<PAGE>
and all other direct and indirect minority interests held by Friede Goldman
International Inc.
Done in Carquefou, France on February 5, 1998 in eight originals.
THE VENDORS FRIEDE GOLDMAN FRANCE
/s/ Jean-Francois Queru By: /s/ J.L. Holloway
- ------------------------------ ------------------------------
Jean-Francois Queru J. L. Holloway
(Guarantor)
/s/ Jean-Francois Queru FRIEDE GOLDMAN INTERNATIONAL
- ------------------------------ INC.
Regine Queru
By: Jean-Francois Queru By: /s/ J.L. Holloway
------------------------------
J. L. Holloway
/s/ Jean-Francois Queru
- ------------------------------
Mr. Arnaud Queru
By: Jean-Francois Queru
/s/ Jean-Francois Queru
- ------------------------------
Ms. Helene Queru
By: Jean-Francois Queru
/s/ Jean-Francois Queru
- ------------------------------
SC MGLV
By: Jean-Francois Queru
Gerant
/s/ Jean-Michel Gandreuil
- ------------------------------
Jean-Michel Gandreuil
(Guarantor)
/s/ Jean-Michel Gandreuil
- ------------------------------
Mrs. Dominique Gandreuil
By: Mr. Jean-Michel Gandreuil
