<PAGE>
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
-----------------------------------
FORM 10-Q
/X/ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For quarterly period ended January 31, 1998
--------------------------------------
OR
/ / TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from to
---------------- --------
Commission file number 1-6357
---------------------------------------------------
ESTERLINE TECHNOLOGIES CORPORATION
------------------------------------------------------
(Exact name of registrant as specified in its charter)
Delaware 13-2595091
- ------------------------------------ ------------------------------------
(State or other jurisdiction (I.R.S. Employer
of incorporation or organization) Identification No.)
10800 NE 8th Street, Bellevue, Washington 98004
--------------------------------------------------
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code 425/453-9400
-------------
Indicate by check mark whether the registrant: (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days.
Yes X No
----- -----
As of March 9, 1998, 8,642,911 shares of the issuer's common stock were
outstanding.
1
<PAGE>
PART I - FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
- ------- --------------------
ESTERLINE TECHNOLOGIES CORPORATION
CONSOLIDATED BALANCE SHEET
As of January 31, 1998 and October 31, 1997
(In thousands, except share amounts)
<TABLE>
<CAPTION>
January 31, October 31,
1998 1997
----------- -----------
(unaudited)
<S> <C> <C>
ASSETS
- ------
Current Assets
Cash and equivalents $ 39,446 $ 56,045
Accounts receivable, net of allowances
of $2,840 and $2,860 for doubtful
accounts 59,339 67,520
Inventories
Raw materials and purchased parts 20,819 17,502
Work in process 31,263 26,191
Finished goods 9,300 9,693
----------- ----------
61,382 53,386
----------- ----------
Deferred income taxes 14,439 14,186
Prepaid expenses 3,598 3,290
----------- ----------
Total Current Assets 178,204 194,427
----------- ----------
Property, Plant and Equipment 180,673 175,615
Accumulated depreciation 118,718 117,239
----------- ----------
61,955 58,376
----------- ----------
Intangibles, net and Other Assets 51,227 37,044
----------- ----------
$ 291,386 $ 289,847
=========== ==========
LIABILITIES AND SHAREHOLDERS' EQUITY
- ------------------------------------
Current Liabilities
Accounts payable $ 20,261 $ 20,475
Accrued liabilities 60,404 66,111
Credit facilities 5,113 2,467
Current maturities of long-term debt 6,041 6,386
Federal and foreign income taxes 3,957 1,472
----------- ----------
Total Current Liabilities 95,776 96,911
----------- ----------
Long-Term Debt 26,283 27,218
Shareholders' Equity
Common stock, par value $.20 per share,
authorized 30,000,000 shares, issued
and outstanding 8,642,911 shares for
both periods 1,729 1,729
Capital in excess of par value 48,559 48,559
Retained earnings 123,843 119,007
Cumulative translation adjustment (4,804) (3,577)
----------- ----------
Total Shareholders' Equity 169,327 165,718
----------- ----------
$ 291,386 $ 289,847
=========== ==========
</TABLE>
2
<PAGE>
ESTERLINE TECHNOLOGIES CORPORATION
CONSOLIDATED STATEMENT OF OPERATIONS
For the Three Months Ended January 31, 1998 and 1997
(Unaudited)
(In thousands, except per share amounts)
<TABLE>
<CAPTION>
Three Months Ended
January 31,
------------------------
1998 1997
--------- ---------
<S> <C> <C>
Net Sales $ 95,730 $ 82,198
Costs and Expenses
Cost of sales 59,023 50,109
Selling, general and administrative 29,133 26,191
Interest income (600) (636)
Interest expense 824 957
--------- ---------
Earnings Before Income Taxes 7,350 5,577
Income Tax Expense 2,514 1,818
--------- ---------
Net Earnings $ 4,836 $ 3,759
=========== ==========
Net Earnings Per Share - Basic $ .56 $ .44
=========== ==========
Net Earnings Per Share - Diluted $ .55 $ .43
=========== ==========
</TABLE>
3
<PAGE>
ESTERLINE TECHNOLOGIES CORPORATION
CONSOLIDATED STATEMENT OF CASH FLOWS
For the Three Months Ended January 31, 1998 and 1997
(Unaudited)
(In thousands)
<TABLE>
<CAPTION>
Three Months Ended
January 31,
-----------------------
1998 1997
-------- --------
<S> <C> <C>
Cash Flows Provided (Used) by Operating Activities
Net earnings $ 4,836 $ 3,759
Depreciation and amortization 4,422 4,126
Deferred income taxes (1,591) 1,020
Working capital changes
Accounts receivable 7,867 9,497
Inventories (5,144) (4,047)
Prepaid expenses (348) 59
Accounts payable 97 1,128
Accrued liabilities (4,009) (10,318)
Federal and foreign income taxes 2,528 (2,567)
Other, net 384 791
--------- ---------
9,042 3,448
--------- ---------
Cash Flows Provided (Used) by Investing Activities
Capital expenditures (5,902) (3,361)
Capital dispositions 35 605
Acquisitions (20,130) --
--------- ---------
(25,997) (2,756)
--------- ---------
Cash Flows Provided (Used) by Financing Activities
Net change in credit facilities 2,784 1,549
Repayment of long-term debt (1,235) (227)
--------- ---------
1,549 1,322
--------- ---------
Effect of Exchange Rates (1,193) (744)
--------- ---------
Net Increase (Decrease) in Cash and Equivalents (16,599) 1,270
Cash and Equivalents - Beginning of Period 56,045 46,436
--------- ---------
Cash and Equivalents - End of Period $ 39,446 $ 47,706
========= =========
Supplemental Cash Flow Information
Cash paid during the period for
Interest expense $ 1,371 $ 1,651
Income taxes 1,260 2,887
</TABLE>
4
<PAGE>
ESTERLINE TECHNOLOGIES CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
For the Quarter Ended January 31, 1998 and 1997
1. The consolidated balance sheet as of January 31, 1998 and the
consolidated statements of operations and cash flows for the quarters
ended January 31, 1998 and 1997 are unaudited, but in the opinion of
management all adjustments necessary to present fairly the financial
statements referred to above have been made. The results of operations
and cash flows for the interim periods presented are not necessarily
indicative of results for the full year.
2. The notes to the consolidated financial statements in the Company's Annual
Report on Form 10-K for the fiscal year ended October 31, 1997 provide a
summary of significant accounting policies and additional financial
information that should be read in conjunction with this Form 10-Q.
3. Classifications have been changed for certain amounts in the preceding
period to conform with the current year's financial presentation.
5
<PAGE>
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF RESULTS OF OPERATIONS,
- ------- --------------------------------------------------------------
LIQUIDITY AND CAPITAL RESOURCES
-------------------------------
CERTAIN STATEMENTS IN THIS FORM 10-Q CONTAIN FORWARD-LOOKING STATEMENTS WITHIN
THE MEANINGS OF SECTION 27A OF THE SECURITIES ACT OF 1933, AS AMENDED, AND
SECTION 21E OF THE EXCHANGE ACT OF 1934, AS AMENDED. SUCH STATEMENTS INVOLVE
RISKS AND UNCERTAINTIES REGARDING MATTERS THAT COULD SIGNIFICANTLY AFFECT
EXPECTED RESULTS INCLUDING INFORMATION ABOUT INDUSTRY TRENDS, GROWTH, ORDERS,
CAPITAL EXPENDITURES AND BACKLOG. THUS, ACTUAL RESULTS MAY VARY MATERIALLY
FROM THESE FORWARD-LOOKING STATEMENTS DEPENDING ON A VARIETY OF FACTORS WHICH
INCLUDE BUT ARE NOT LIMITED TO CHANGES IN THE TELECOMMUNICATIONS, COMPUTER,
AEROSPACE AND DEFENSE MARKETS; FLUCTUATIONS IN FOREIGN CURRENCY RATES;
REDUCTIONS, TERMINATIONS OR CHANGES IN U.S. GOVERNMENT DEFENSE BUDGET
PRIORITIES; VARIABILITY OF CAPITAL EQUIPMENT MARKETS AND OTHER RISKS WHICH ARE
DETAILED IN OTHER COMPANY DOCUMENTS FILED WITH THE SECURITIES AND EXCHANGE
COMMISSION. THE COMPANY DOES NOT UNDERTAKE ANY OBLIGATION TO PUBLICLY RELEASE
THE RESULTS OF ANY REVISIONS THAT MAY BE MADE TO THESE FORWARD-LOOKING
STATEMENTS TO REFLECT ANY FUTURE EVENTS OR CIRCUMSTANCES.
RESULTS OF OPERATIONS
- ---------------------
QUARTER ENDED JANUARY 31, 1998 COMPARED TO QUARTER ENDED JANUARY 31, 1997
Net sales for the quarter ended January 31, by Group, were as follows:
(In thousands)
<TABLE>
<CAPTION>
Increase from
prior year 1998 1997
-------------- --------- ---------
<S> <C> <C> <C>
Automation 11% $ 34,475 $ 30,936
Aerospace and Defense 21% 34,957 28,793
Instrumentation 17% 26,298 22,469
--------- ---------
Total Net Sales $ 95,730 $ 82,198
========= =========
</TABLE>
Net sales for the first quarter of 1998 increased 16% overall compared to the
first quarter of 1997. The commercial aerospace markets continue to drive the
improvement in the Aerospace/Defense and Instrumentation Groups as they benefit
from increased demand for aerospace related products. Automation Group sales
growth for the quarter was primarily due to an increase in demand for metal
fabrication equipment as well as modest sales increases for printed circuit
board drilling machines.
During the first quarter the company completed four small acquisitions. These
acquisitions have been combined with existing operating units and represent
expansions of existing businesses. Three of the acquisitions were in the
Aerospace/Defense Group and included a Sagem aerospace pressure sensor product
line based in France and two small companies; Ohio-based Fluid Regulators
Corporation and California-based Kai R. Kuhl Co. In addition, Korry
Electronics Co., part of the Instrumentation Group, acquired the Boeing 777
cockpit switch product line from Illinois Tool Works. Acquisitions completed
during the first quarter contributed modestly to the sales increase.
6
<PAGE>
Total gross margin as a percentage of net sales declined by 1%, to 38%, in
comparison with the same period in 1997. Currently, the Automation Group is
encountering pricing pressures due to foreign competitors with weaker
currencies and this is particularly true in Asia. Group gross margins ranged
from 37% to 39% in the first quarter of 1998 compared with 36% to 41% during
the same period in 1997.
Selling, general and administrative expenses for the first quarter of 1998
totaled $29.1 million, an increase of $2.9 million over last year's first
quarter. As a percentage of net sales, selling, general and administrative
expenses decreased to 30% from 32% during the same period in 1997.
The Company employs a diversification strategy which has tended to balance
cycles that occur in our markets from time to time. Currently, the
Aerospace/Defense and Instrumentation Groups' earnings indicate an upward
trend while demand for printed circuit board drilling equipment is stable
despite negative headlines from Asia and industry pricing pressures.
The effective income tax rate for the first quarter of 1998 increased to 34%
from 33% during the same period in 1997, primarily as a result of nondeductible
goodwill related to acquisitions.
Orders for the first quarter of 1998 were $112.9 million, compared with
$85.2 million for the same period in 1997. Companywide backlog at
January 31, 1998 was $171.3 million, compared with $130.2 million at
January 31, 1997. The increase in backlog is primarily associated with
orders received from the aerospace markets and the acquisitions completed in
the first quarter. Approximately $30 million in backlog is scheduled to ship
after fiscal 1998. All orders in backlog are subject to cancellation until
delivery.
The Company is aware of the issues associated with the programming code in
existing computer systems as the millennium (year 2000) approaches. The
Company is utilizing both internal and external resources to address year 2000
compliance. It is anticipated that all related efforts will be complete by
December 31, 1998, allowing adequate time for implementation issues and
testing. To date, confirmations have been received from the Company's primary
suppliers that plans are being developed to address processing of transactions
in the year 2000. At this time, management believes that the costs associated
with compliance will not have a material effect on the Company's financial
position or results of operations.
7
<PAGE>
LIQUIDITY AND CAPITAL RESOURCES
- -------------------------------
Cash and equivalents on hand at January 31, 1998 totaled $39.4 million, a
decrease of $16.6 million from October 31, 1997. In addition, cash flow
provided by operating activities of $9 million and an increase in borrowings
of $1.5 million were used to fund capital expenditures of $5.9 million and
acquisitions of $20.1 million. The Company continues to generate strong
operating cash flow and has the resources available for reinvestment in
existing businesses and strategic acquisitions.
Net accounts receivable decreased $8.2 million to $59.3 million at
January 31, 1998 primarily due to a higher level of collections for the
quarter. Inventory at January 31, 1998 was $61.4 million, an increase of
$8 million and was related to acquisitions completed during the first quarter
as well as increased production rates in the Automation Group. Current
liabilities decreased $1.1 million during the first quarter to $95.8 million.
The decrease was primarily due to reductions in accrued liabilities of
$5.7 million offset by increases in credit facilities of $2.6 million related
to the occupancy of a new facility in Bourges, France and taxes of
$2.5 million related to the current year. Net working capital decreased
$15.1 million from $97.5 million at October 31, 1997 to $82.4 million at
January 31, 1998.
Capital expenditures, consisting of buildings, machinery, equipment and
computers, are anticipated to be approximately $28 million during fiscal
1998, compared with $21.6 million in fiscal 1997. Capital expenditures for
the first quarter ended January 31, 1998 totaled $5.9 million and were
concentrated in the Aerospace/Defense Group for the new facility in Bourges,
France, enhancements to information technology and machinery and equipment.
Total debt at January 31, 1998 was $37.4 million, an increase of $1.4 million
from October 31, 1997. Of the total debt outstanding at January 31, 1998,
$28.6 million was outstanding under the Company's Senior Notes, and
$8.8 million was outstanding under various foreign currency debt agreements,
including capital lease obligations for the Bourges facility. The annual
principal repayment of $5.7 million on the Senior Notes is scheduled to be
made on July 30, 1998. This repayment schedule will continue annually until
maturity on July 30, 2002.
8
<PAGE>
PART II - OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
- ------- -----------------
The Company is a party to various lawsuits and claims, none of which, in
the opinion of management, is expected to have a material effect on the
Company's financial position or results of operations.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
- ------- ---------------------------------------------------
At the Company's annual meeting of shareholders held on March 4, 1998,
shareholders approved the following proposals:
(a) The election of the following directors for three-year terms
expiring at the 2001 annual meeting:
<TABLE>
<CAPTION>
Votes Cast
------------------------
Name For Withheld
----- --------- --------
<S> <C> <C>
Richard R. Albrecht 7,750,710 26,310
John F. Clearman 7,757,035 19,985
Paul G. Schloemer 7,752,710 24,310
</TABLE>
Current directors whose terms will continue after the 1998
annual meeting are Gilbert W. Anderson, E. John Finn,
Robert F. Goldhammer, Wendell P. Hurlbut, Jerome J. Meyer
and Malcolm T. Stamper.
(b) The selection of Deloitte & Touche LLP as independent auditors
for the fiscal year ending October 31, 1998. (7,761,266 votes
for, 3,414 votes against and 12,340 votes abstained).
There were no broker non-votes on any of the above proposals.
The Company also announced a 2-for-1 stock split effective and payable on
April 20, 1998 to shareholders of record on March 31, 1998. The brokers'
cutoff date upon which they will be required to notify the Company of their
share requirements will be April 7, 1998.
9
<PAGE>
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
- ------- --------------------------------
(a) Exhibits.
<TABLE>
<CAPTION>
Exhibit
Number Exhibit
-------- --------
<S> <C>
10.25 Property lease between Slibail Immobilier and Norbail
Immobilier and Auxitrol S.A., dated April 29, 1997, relating
to the manufacturing facility of Auxitrol at 5, allee Charles
Pathe, 18941 Bourges Cedex 9, France, effective on the
construction completed date (December 5, 1997).
11. Schedule setting forth computation of basic and diluted
earnings per common share for the quarter ended
January 31, 1998 and 1997.
27.1 Financial Data Schedule, January 31, 1998 (EDGAR Only).
27.2 Financial Data Schedule, fiscal year 1997 including quarters
1, 2 and 3 (EDGAR Only).
27.3 Financial Data Schedule, fiscal year 1996 (EDGAR Only).
</TABLE>
(b) Reports on Form 8-K.
No reports on Form 8-K were filed during the quarter for which this report
is filed.
10
<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.
Esterline Technologies Corporation
(Registrant)
Date: March 17, 1998 By: /s/ Robert W. Stevenson
-------------------------------------
Robert W. Stevenson
Executive Vice President and
Chief Financial Officer and
Secretary
(Principal Financial Officer)
By: /s/ Robert D. George
-------------------------------------
Robert D. George
Treasurer and Controller
(Principal Accounting Officer)
11
<PAGE>
29 April 1997
-------------
Property lease
granted
by
SLIBAIL IMMOBILIER and
NORBAIL IMMOBILIER to
AUXITROL SA
-----------
JEAN-LOUIS REGNIER, JEAN-LUC REGNIER
GERARD HERVET, CHARLES BRICARD
LUC BOUVET ET FRANCOIS THESSIEUX
NOTARIES
holders of a notarial office at
20, RUE DES PYRAMIDES, PARIS
<PAGE>
At the head office of Societe Civile Professionnelle "Jean BERGERAULT, Francis
BERGERAULT, Bruno BERGERAULT, Notaires associes, holder of a notarial office at
3 rue Emile Zola, Bourges (Cher),
Maitre Francois THESSIEUX, notary in partnership of a company holding a
notarial office at 20, rue des Pyramides, 75001 Paris, received this deed in
authentic form.
INFORMATION ABOUT THE PARTIES
1. LESSORS
1.1 SLIBAIL IMMOBILIER
A public limited company,
governed by existing laws, notably Article 2 of Act No 66-455 of 2 July 1966,
modified by government order No 67-837 of 28 September 1967, with respect to
enterprises carrying on a leasing business, and by its bylaws,
with a capital of two hundred twenty million French francs (FRF 220,000,000),
having its registered office at 19 boulevard des Italiens, 75002 Paris,
entered in the Register of Companies of Paris under No B 682 039 086 (68B03908),
approved for the benefit of the tax rules applicable to SICOMIs (French
tax-exempt commercial property companies) by an order from the Ministry of
Finance dated 3 October 1968, whose decision to preserve the benefit of this tax
regime on the conditions stipulated in Article 96.I, second paragraph, of Act
90.1168 (Budget Act for 1991) was recorded on 4 July 1991 by the Ministry of the
Economy, Finance and the Budget,
originally incorporated under the name "SOCIETE LYONNAISE IMMOBILIERE POUR LES
COMMERCE ET L'INDUSTRIE - SLICOMI" and having:
- - changed its name to "SLIBAILSICOMI" by virtue of a resolution adopted by
the Extraordinary General Meeting of partners of the said company on 9 November
1992, a duly certified copy of whose minutes was appended, after mention, to an
office copy of a deed recording their registration, received by Maitre
Jean-Louis REGNIER, notary in partnership in Paris, on 21 December 1992,
<PAGE>
- - adopted its current name by virtue of a resolution adopted by the
Extraordinary General Meeting of partners of the said company on 29 January
1996, a duly certified copy of whose minutes was appended, after mention, to an
office copy of a deed recording their registration, received by Maitre
Jean-Louis REGNIER, notary in partnership in Paris, on 4 March 1996,
represented by:
Mr Jean-Pierre HIEBEL, attorney in fact, domiciled at 106 rue des Trois
Fontanot, Nanterre, Hauts de Seine,
acting on behalf of Mr Claude VIVIEN, General Manager of the said company, by
virtue of a power of attorney granted privately on 28 April 1997 in Nanterre,
appended hereto after mention,
the said Mr VIVIEN being at the time domiciled at 34 rue Laffitte, 75009 Paris
and currently domiciled at 106 rue des Trois Fontanot, Nanterre, Hauts de Seine,
duly empowered to act herein by virtue of his functions, confirmed for an
indefinite time, with the right of substitution and with the broadest possible
powers to act under all circumstances on behalf of the said company, including
the power to act before the courts, by virtue of a resolution adopted by the
Board of Directors of the said company on 16 February 1995, a duly certified
copy of whose minutes was appended, after mention, to an office copy of a deed
recording their registration, received by Maitre Jean-Louis REGNIER, the
aforesaid notary, on 22 May 1995.
1.2 NORBAIL IMMOBILIER
A public limited company,
with a capital of FRF 50,000,000,
having its registered office at 16 rue Le Peletier, 75009 Paris,
entered in the Register of Companies of Paris under No B 352 109 656 (89B14721),
represented by:
Mrs Elisabeth MORIN-GAILLARD, domiciled at 16 rue Le Peletier, 75009 Paris,
<PAGE>
acting in her capacity as corporate secretary of the said company and by virtue
of the powers delegated to her by Mr DESMADRYL under a private deed executed in
Paris on 28 May 1996, filed on 12 June 1996 at the notarial office at 83
boulevard Haussmann, 75008 Paris.
Under the said deed, Mr DESMADRYL himself acted as Chairman of the Board of
Directors of the said company, a function to which he was elected and which he
accepted by virtue of a resolution adopted by the Board of Directors on 29 March
1996, of which the minutes were filed on 12 June 1996 at the notarial office at
83 boulevard Haussmann, 75008 Paris.
SLIBAIL IMMOBILIER and NORBAIL IMMOBILIER as well as their representatives are
herein referred to as the "LESSOR", acting jointly and respectively up to 50%
for SLIBAIL IMMOBILIER, the lead manager, and up to 50% for NORBAIL IMMOBILIER,
PARTY OF THE FIRST PART
<PAGE>
2. LESSEE
AUXITROL SA
A public limited company,
with a capital of FRF 25,000,000,
having its registered office at 78, 80 avenue de la Prospective, Bourges, Cher,
entered in the Register of Companies of Bourges under No B 602 023 251 (63B64),
represented by:
Mr Henri VERGES, Chairman of the Board of Directors of the said company,
domiciled at 78, 80 avenue de la Prospective, Bourges,
duly empowered to act herein by virtue of a resolution adopted by the Board of
Directors of the said company in Saint Cloud on 3 April 1997, of which a duly
certified copy is appended hereto after mention.
AUXITROL SA and its representative are herein referred to as the "LESSEE",
PARTY OF THE SECOND PART
<PAGE>
PREAMBLE
WITNESSETH
1. The LESSEE wishes to have industrial premises, to be constructed on the
site described hereinafter, located in BOURGES (Cher) and currently owned
by SEMARB, hereinafter referred to as the OWNER OF THE SITE.
2. Without intervention by the LESSOR, the LESSEE has taken the initiative to
negotiate its acquisition terms directly with the OWNER OF THE SITE.
3. The LESSEE arranged to have established, according to its needs, the
construction program for the premises to be erected at the site.
4. On 10 February 1997, the LESSEE filed a building permit application.
On 7 March 1997, the LESSEE obtained a building permit bearing No 018033 97
P0025, delivered by the Commune of BOURGES.
This permit was displayed at the townhall of BOURGES, as witness an
affidavit issued by the said townhall on 14 April 1997, and was displayed
at the site, as witness a report drawn up on 11 March 1997 by Maitre Jean
CHASTEL, bailiff in partnership in BOURGES.
5. The LESSEE has asked the LESSOR for the following property financing
transaction in its favor, including:
- - acquisition of the said site by the LESSOR,
- - construction by the LESSOR of the premises needed by the LESSEE,
- - and lease by the LESSEE of the building, under a lease tied to a sales
undertaking.
6. The LESSOR has agreed to carry out this financing transaction in the light
of the LESSEE's person and the guarantees which the LESSEE has agreed to
provide.
<PAGE>
7. Under a deed received this day by Maitre Francis BERGERAULT, notary in
partnership in BOURGES, the LESSOR accordingly acquired the said site at a
price of FIVE MILLION FRANCS excluding VAT (FRF 5,000,000 ex-VAT),
incremented by ONE MILLION THIRTY THOUSAND FRENCH FRANCS (FRF 1,030,000) by
way of VAT, paid cash.
The LESSOR has further paid the notary the sum of SEVENTY-FIVE THOUSAND
FRANCS (FRF 75,000) by way of provision for the duties, taxes, costs and
emoluments due in connection with said acquisition.
8. The LESSEE has intervened in this sales deed to declare that all clauses
and terms of this deed correspond to those which the LESSEE itself had
negotiated with the seller.
DESCRIPTION OF PROPERTY
LAND TO BE ACQUIRED
In BOURGES (Cher).
A building site survey section ZM number 139 at the site known as "Le Noir a
Beurat", with a content of five hectares thirty-seven areas and ninety-one
centiares (5ha 37a 91ca).
The said site is part of a development program governed by the ZONE
D'AMENAGEMENT CONCERTE DE L'ECHANGEUR (cloverleaf concerted development zone)
procedure adopted by resolution of the town council of the city of BOURGES on 26
October 1989, approved by the Prefect of the Cher district on 26 October 1989,
of which the documents are filed with Maitre BOUTET, notary in partnership in
BOURGES, referred to more extensively hereinafter.
CONSTRUCTIONS TO BE ERECTED
An industrial building with a gross leasing area of 10,183 sq.m. and 251 parking
places at the surface.
- --------------------------------------------------------------------------------
In the remainder of the text, the term "property" shall be used to refer to all
property elements and rights covered by the lease.
<PAGE>
AGREEMENTS
NOW THEREFORE IT HAS BEEN AGREED AS FOLLOWS
The parties agree to carry out, within the framework of Act No 66-455 of 2 July
1966 and Article 57 of Act No 95-115 of 4 February 1995, the property financing
transaction described in the foregoing preamble and forming an indivisible whole
by agreement between the parties.
Accordingly,
- - the parties have laid down and agreed to their reciprocal obligations
during the construction period ;
- - the LESSOR leases to the LESSEE, which agrees to let, the property
described above;
- - the LESSOR undertakes to sell said property to the LESSEE, which accepts
this undertaking as an undertaking only, and reserves the right to acquire
or not to acquire said property at its discretion;
on the General Terms (part one) and the Special Terms (part two) laid out below.
<PAGE>
PART ONE
GENERAL TERMS
<PAGE>
GENERAL TERMS
CONTENTS
PRELIMINARY DECLARATION: TRANSFER OF RISKS TO THE LESSEE
TITLE 1
100 AGREEMENT REGARDING PERIOD PRIOR TO EFFECTIVE DATE OF LEASE
101 Purchase of site (*)
102 Erection of constructions (*)
103 Financing of works (*)
104 Pre-rent (*)
105 Resolution during the period prior to the effective date of the lease
TITLE 2
200 LEASE
201 Effective date - Term (*)
202 Defects in leased property
203 Enjoyment and purpose of property (*)
204 Transfer of contract
205 Sublet - Pledge of business
206 Works
207 Rent (*)
207bis Temporary complementary rent (*)
208 Charges
209 Termination
210 Termination at LESSEE's request
211 Expropriation
212 Insurance
213 Insurance losses
TITLE 3
300 UNILATERAL UNDERTAKING TO SELL THE LEASED PROPERTY
301 Purpose
302 Request to consummate sale
303 Terms and conditions of sale (*)
(1) Note: The paragraphs followed by the (*) sign must be filled out with
the data in the corresponding paragraph in the Special Terms.
The other paragraphs may also be modified in the Special Terms.
<PAGE>
TITLE 4
400 GUARANTEES OFFERED BY THE LESSEE
401 Personal guarantee (*)
402 Death and disability insurance (*)
403 Other guarantees (*)
TITLE 5
NOT APPLICABLE
TITLE 6
600 CONDITION PRECEDENT
TITLE 7
700 MISCELLANEOUS PROVISIONS AND REPRESENTATIONS
701 Terms of payment governing sums owed by the LESSEE (*)
702 Late-payment interest
703 Vacation of premises
704 LESSOR's privilege
705 VAT option
706 Repayment of VAT to the Treasury by way of regularization
707 Land registration (*)
708 General Meetings of Co-owners Association
709 Miscellaneous costs
710 Management powers (*)
711 Other provisions (*)
712 LESSEE's representation
713 Election of domicile - jurisdiction
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PRELIMINARY DECLARATION: TRANSFER OF RISKS TO THE LESSEE
The parties represent that it is their common intention to consider all phases
and aspects of this operation - notably its legal and financial aspects - an
indivisible whole.
Moreover, the parties wish to stress the LESSOR's essentially financial
intervention in this operation.
The LESSEE, which has taken the initiative to make this investment, chosen the
site and ordered construction drawings according to its needs, and will be the
user of the property and may become its owner if it so desires, intends to
remain entirely in control of the operation, both during the construction period
and during the term in which the property is leased, even though the property
will be owned by the LESSOR for the financing term.
The LESSOR acknowledges that, even though it is the legal owner of the property,
its role, within the limits agreed between the parties and provided the LESSEE
fully performs its contractual obligations, is to finance a site chosen by the
LESSEE and the constructions defined in descriptive specifications.
Accordingly, it not only seems legitimate for the LESSEE to assume the risks
generated by its legal situation but also to assume the transfer of any and all
obligations and any and all risks, even those resulting from force majeure,
which would be incumbent on the builder and the property owner under general law
provisions.
This agreement is drafted subject to this preliminary declaration, which shall
be the constant reference to determine the division of charges, obligations and
risks between the parties and as necessary to determine the common intention of
the parties.
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TITLE 1 OF THE GENERAL TERMS
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100 AGREEMENT REGARDING PERIOD PRIOR TO EFFECTIVE DATE OF LEASE
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*101 PURCHASE OF SITE
Acquisition shall be by notarized deed.
The notarized deed can be signed only if the building permit and any
administrative authorizations necessary for construction and use of the property
by the LESSEE have been duly issued and have not been or can no longer be
subject to recourse.
The LESSEE shall intervene in the acquisition deed in order to certify that all
clauses and terms of this deed correspond to those which the LESSEE itself had
negotiated with the seller.
If said acquisition deed is not signed this day at the same time as this
contract (as specified in the Special Terms), it shall at all events be signed
before the deadline stipulated in paragraph 101 of the Special Terms, in
accordance with paragraph 600 "CONDITION PRECEDENT" below.
The parties undertake to provide the notary in time with all necessary
information and documents.
102 ERECTION OF CONSTRUCTIONS
102.1 The constructions to be erected are defined by the drawings and
descriptive specifications established at the initiative of the LESSEE
and approved by the LESSOR.
102.2 In accordance with the principles laid out in the PRELIMINARY
DECLARATION above, the LESSEE alone shall be charged with construction
of the constructed works, of which it shall deemed to be the builder and
for which it alone shall have full responsibility.
Accordingly, the LESSEE undertakes to assume any and all consequences
vis-a-vis the LESSEE itself as well as vis-a-vis third parties and the
government for all insurance losses to the property during construction,
all bad workmanship or defects in the constructions, whether during or
after construction, as well as all damage or harm to third parties due
to the site and the constructed works, and to reimburse the LESSOR
promptly all sums which the latter may have incurred in this respect.
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102.3 The LESSOR vests full powers in the LESSEE, which shall not be entitled
to substitute a third party for the performance of this mandate, in
order to accomplish all formalities and steps, sign all documents,
agreements and contracts and do whatever else is necessary to build the
constructed works to completion, from the building permit application
(or, if already delivered, from application to transfer it to the
LESSOR's name) until acceptance report and completion declaration, in
order to obtain the certificate of conformity for the property as soon
as possible.
102.3.1 Safety and health prevention and coordination
The LESSEE shall comply with the special provisions applicable to
building and civil engineering operations under Act No 93.1148 of
31 December 1993 and decree no 94.1159 of 26 December 1994.
Accordingly, if necessitated by the duration or volume of the
works, the LESSEE shall notably file the prior declaration with the
authorities in charge of job-related health and safety.
At its own expense, the LESSEE shall also appoint a safety and
health protection coordinator with the qualifications stipulated in
the applicable regulations, which the LESSEE shall be able to
prove.
Moreover, if required because of the size of the works, the LESSEE
shall see to the organization of a college of contractors before
the start of the works and to compliance with disclosure
obligations vis-a-vis this college.
The LESSEE undertakes to reimburse the LESSOR all sums which the
latter may have to pay if forced to substitute itself for the
LESSEE because of the latter's non-performance, notably in order to
comply with a request from the authorities.
In the event that the LESSEE does not perform its commitments, this
contract may be terminated in accordance with paragraph 209 below.
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102.4 Insurance - construction
102.4.1 In order to be able to cover the risk transfer referred to above,
and to comply with the provisions of the law of 4 January 1978, the
LESSEE shall take out the following before groundbreaking day, in
its own name as well as on behalf of the LESSOR:
- a policy covering "Decennial owner and prime contractor's
(constructed works damage) liability"
designed to cover, apart from assignment of liability, payment of
the works necessary to repair all damage, even resulting from soil
deficiencies, which:
* jeopardizes the strength or solidity of the constructed works
forming the construction operation;
* affects one or more integral parts of the said constructed
works or one or more of their fixtures or facilities in such a
way as to make them unfit for their design purpose;
* affect the strength or solidity of one of the fixtures or
facilities which forms an integral part of the development,
foundation, framework, roof or wall works in the meaning of
Article 1792-2 of the Civil Code.
as well as any necessary demolition, earth, removal or disassembly
works.
- A policy covering "Decennial liability of the building owner"
designed to cover the decennial liability of the LESSOR and the
LESSEE as the LESSOR's agent against tangible damage to the
building entailing the insured's liability, tangible damage
entailing exercise of the cover for proper operation and intangible
damage (excluding bodily injuries) suffered by the LESSOR, the
LESSEE or any other occupant of the building, resulting from an
insured tangible risk.
- A policy covering "All construction site risks"
designed to cover tangible damage to the constructed works during
construction, damage to existing property, any financial losses and
various costs and fees, and to cover the property at new value, the
fees of experts and the liability of the LESSOR or the LESSEE for
risks linked to fire or explosions as well as CIVIL LIABILITY to
cover claims which may be made by damaged third parties against the
LESSOR and the LESSEE further to accidental damage caused by the
building works,
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the cover to be in an amount compatible with the nature of the
executed works and at least for the term of the works.
102.4.2 Subscription
The insurance policies listed in paragraph 102.4.1 shall be taken
out by the LESSEE as part of the "group" insurance policies under
the asset protection plan which the LESSOR, with the assistance of
its insurance broker, has implemented. The purpose of this plan is
to ensure that the LESSEE is covered by a policy which meets the
exact requirements stipulated in paragraph 102.4.1 above.
Should the LESSEE exceptionally, on its sole responsibility, decide
not to subscribe to the LESSOR's "group" insurance contracts but to
cover the risks which it is obliged to insure (as stipulated in
paragraph 102.4.1) by means of "other insurance policies", it shall
provide evidence of subscription of such "other policies" by
supplying the LESSOR's insurance broker with copies thereof,
failing which the LESSOR shall be entitled to cover the foregoing
risks at the LESSEE's expense.
The LESSEE shall also reply to every request for information or
additional documents received from the LESSOR's insurance broker.
Said "other policies" shall stipulate that the insurance company
concerned may not suspend their covers for any reason, nor refuse
to indemnify the LESSOR in case of loss on the ground that the
LESSEE has not complied with the obligations of the insurance
contract, without notifying the LESSOR at least one month in
advance by registered letter, in which event the LESSOR, at its own
discretion, shall be entitled to pay the premiums in the LESSEE's
place.
The "other policies" shall specify that all indemnities payable
under the damage covers shall be paid directly to the LESSOR and
shall necessarily provide for reciprocal waiver of recourse between
the LESSOR and the LESSEE.
Moreover, the LESSEE may or shall take out all complementary
policies it considers useful or necessary.
The LESSOR reserves the right to require subscription of all
complementary policies which turn out to be necessary. Inspection
or lack of inspection of said policies by the LESSOR or its
insurance broker shall not entail any liability on its part for
lack of insurance or inadequate insurance.
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102.4.3 Premiums:
As part of the LESSOR's asset protection plan and in application of
the preliminary declaration, the LESSEE shall be solely responsible
for negotiating with the LESSOR's broker both the face amount to be
insured and the premium rate of the subscribed insurance.
The LESSOR's broker shall send the invoices for the premiums on the
insurance taken out within the framework of this plan to the LESSEE
for the latter's approval. The insurance premiums referred to in
paragraph 102.4.1 above shall be paid by the LESSOR on the terms
and within the limits provided for in paragraph 103.2 and 103.4 of
this contract.
102.4.4 Insurance broker
The LESSOR has appointed the following insurance broker:
SGAP
SOCIETE GENERALE D'ASSURANCES ET de PREVOYANCE
having its registered office at
50 rue de Chateaudun
75009 PARIS
The LESSOR expressly reserves the right to appoint any other
insurance broker in place of the above broker, which the LESSEE
herewith accepts.
102.4.5 Miscellaneous
At its own expense, the LESSEE shall resort to the services of an
officially approved technical inspection firm to carry out the
assignments stipulated in title II of Act No 78-12 of 4 January
1978. Its services shall cover all construction lots.
The LESSEE shall comply with its obligations in this respect and
shall disclose the inspector's recommendations, comments and
reservations simultaneously to the insurer and the contractor
concerned and shall not prevent the insurers, at their own expense,
from asking the technical inspector, in his official capacity, for
any additional information they believe they may need to judge the
insured risks.
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The LESSEE shall also verify that the chosen contractors are
adequately insured.
102.5 Acceptance of works
The LESSEE shall notify the LESSOR at least fifteen days in
advance, by registered letter with notice of receipt, of the date
and time of the works acceptance procedure, which the LESSOR shall
be entitled to attend at its own discretion.
*102.6 Works completion date
The works shall be completed and accepted at the latest by the date
stipulated in the Special Terms, failing which the LESSOR shall be
entitled to apply the resolution condition stipulated in paragraph
105.1.a.
102.7 Documents and information to be disclosed by the LESSEE to the LESSOR
. Copy of the building permit application (and appended
drawings) and the original of the acknowledgment of receipt
issued by the authorities.
. Building permit and builder and user authorizations (if these
government authorizations are necessary).
. Name and address of main contractor (architect or design
firm).
. Detailed drawings and complete descriptive specifications of
the contemplated constructions, including all works drawings.
. Contracts signed by the LESSEE and stamped by the main
contractor.
. Works and payment schedules.
. Copy of insurance certificates, insurance policies and premium
receipts from the insurance companies for the construction
insurance policies.
. Name and address of officially approved technical inspector.
. Copy of declaration opening the construction site.
. Copy of construction site reports.
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. Contractors' payment requests bearing the LESSEE's "good for
payment" and the main contractor's stamp.
. Copies of various documents delivered by the authorities,
notably as regards safety and hygiene.
. Reports on any significant incident or suspension of works.
. Works acceptance reports and as applicable reservation
withdrawal reports.
. Copy of works completion declaration.
. Original of certificate of conformity.
. Copy of prior declaration provided for by Article L.235-2 of
the French Labor Code.
. Contract signed with the safety and health protection
coordinator.
. Affidavit as to the coordinator's qualifications.
. Insurance certificate regarding the coordinator's decennial
liability.
. General safety and health protection coordination plan.
. Rules of college of contractors.
. File on subsequent intervention on the constructed works, as
delivered by the coordinator on acceptance of the works.
These documents and information must be sent to the LESSOR as soon
as they are established or are served on or known to the LESSEE.
Within forty-five days from completion of the property, the LESSEE,
after having duly performed its obligations, shall send the LESSOR,
for the latter's signature, the new construction declaration
designed for the Survey Department. In the event that the LESSEE
fails to send this document, it shall bear all consequences
thereof, especially any resulting loss of partial temporary
exemption from land tax.
103 FINANCING OF WORKS
103.1 The LESSOR shall not be obliged to make payments to finance the
constructions as long as:
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1. It has not been able to become, on the conditions provided for
under paragraph 101 above and by authenticated deed, owner of
the site or holder of a real property right to the said site.
2. The LESSEE has not provided it with evidence that the
insurance policies stipulated under paragraph 102.4 have been
implemented.
3. The LESSOR is not in possession of the contract or agreement
corresponding to the expense.
*103.2 The LESSOR agrees to finance the investment (land and constructions
provided for in the descriptive specifications) up to the ceiling
specified in the Special Terms.
The LESSEE undertakes to bear all additional costs. It is agreed that
the fraction of the construction financed by it shall become the
LESSOR's property by accretion, without indemnity, whether on early
termination of the lease, irrespective of the reason, or at its normal
expiration, if the LESSEE does not exercise the sales undertaking
granted in its favor.
103.3 The LESSOR shall in no event be obliged to finance works not provided
for in the descriptive specifications.
103.4 Requests for payment (invoices, accounts, bills for fees) established in
the LESSOR's name shall bear the LESSEE's notice "good for payment" and
the stamp of the architect or the design firm, in accordance with the
directives given by the LESSOR.
Payments shall be made cash by check, which shall be the sole payment
method. The LESSOR shall have at least fifteen days from the date of
receipt of such payment requests to make these payments.
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104. PRE-RENT
*104.1 Commitment fee
The LESSEE shall pay a commitment fee whose calculation method and terms
of payment are stipulated in the Special Terms.
*104.2 Interim interest
During the period between the date on which this contract is signed and
the effective date of the lease, the LESSEE shall pay the LESSOR
quarterly interest, payable in arrears, prorated to the annual rate
stipulated in the Special Terms, on all sums (including VAT) paid by the
LESSOR in connection with the operation. It is herewith specified that
sums paid in respect of VAT which can be recovered shall bear interest
over a fixed period of four months.
104.3 After the effective date of the lease, the interest referred to in
paragraph 104.2 shall continue to be collected on each amount paid in
connection with VAT which can be recovered.
*104.4 Financial engineering costs
The amount of these costs and their terms of payment are fixed in the
Special Terms.
*104.5 Other fees and costs
A management fee, whose amount shall be the same as that stipulated in
paragraph 207.5 of the Special Terms, shall be collected together with
each pre-rent.
The other costs are specified and fixed in the Special Terms.
104.6 The pre-rent shall be subject to VAT; which shall be borne by the
LESSEE, which shall further bear any tax added to or substituted for
VAT.
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105. RESOLUTION DURING THE PERIOD PRIOR TO THE EFFECTIVE DATE OF THE LEASE
105.1 It is expressly agreed that:
a. In the event that, irrespective of the reason, whether
technical, legal, administrative or other, even in case of
force majeure not under the LESSOR's control, the
constructions cannot be completed, delivered and put at the
LESSEE's disposal by the date stipulated in paragraph 102.6 of
the Special Terms;
b. Or failing payment, at its due date, of any sum owed by the
LESSEE to the LESSOR under this contract, from the date on
which it is signed until the effective date of the lease, or
failing performance of one or more of the obligations
incumbent on the LESSEE during this period;
c. In the event that the activity planned on the premises to be
erected is jeopardized further to recourse by third parties
against a government authorization, notably a prefectural
authorization to establish classified facilities under the Act
of 19 July 1976 or authorization from the District Commission
for Commercial Facilities;
This contract shall be automatically and fully terminated at the
LESSOR's discretion, without legal formality, one month after the
LESSEE is served a bailiff's writ containing the LESSOR's decision,
or a summons to pay or perform containing the LESSOR's declaration
that it intends to use the benefit of this clause has not been
acted upon, notwithstanding payment or performance after expiration
of this period of one month.
105.2 The LESSEE shall pay the LESSOR, within maximum one month from
termination, by way of damages under the Articles 1152 and 1226 of
the Civil Code, an indemnity equal to the amount of the financing
ceiling stipulated in paragraph 103.2 plus VAT to be paid by the
LESSOR to the Treasury, incremented by 20% over the total.
Said termination indemnity shall be incremented by the applicable
VAT.
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105.3 However, the LESSEE shall be entitled, but only in the case provided for
in paragraph 105.1.a and provided it has duly performed all its
contractual obligations, to acquire the real rights held by the LESSOR
to the site as well as the constructions, in consideration of a price
equal to the total expenses incurred by the LESSOR at the day of the
sale and all sums due on works, including indemnities if any due to
participants in the construction, the whole being increased by 10%.
In order to be admissible, the acquisition request must be sent by
registered letter with notice of receipt accompanied by the price and
the amount of costs within one month from the notice served in
accordance with paragraph 105.1.
Moreover, the sale shall be consummated on the terms and conditions laid
out in the paragraphs 303.4 and 303.10 below.
105.4 If the notarized sales deed cannot be signed for failure to pay the
price or for any other reason due to the LESSEE, within four months
from the aforesaid notice, the resolution clause provided for above
shall apply.
105.5 Pre-rent shall remain due until the termination date of the lease or
until the notarized property sales deed is signed.
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TITLE 2 OF THE GENERAL TERMS
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200 LEASE
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201 EFFECTIVE DATE - TERM
201.1 The lease shall take effect at the date on which construction is
completed.
*201.2 From this date, the lease shall have the term stipulated in the Special
Terms.
In any event, as the constructions concerned are leased bare, the lease
shall take effect in accordance with the foregoing, even if the LESSEE
has not yet installed the facilities and equipment connected with its
business.
201.3 The completion date shall become official by the signing of a works
acceptance report, even if this document includes reservations.
201.4 The LESSEE undertakes not to demand any indemnity from the LESSOR in the
event that completion of the constructions is overdue.
202 DEFECTS IN LEASED PROPERTY
202.1 The LESSEE, which has chosen the site, conceived the construction
program and been mandated to have other parties carry out the works and
to monitor progress, shall deal personally, without recourse against the
LESSOR, with all urban development rules, formalities and government
authorizations connected with the site and the constructions as well as
their use and, as applicable, their opening to the public. The LESSEE
releases the LESSOR from any obligation to provide a guarantee against
visible or hidden defects, bad workmanship or faults, as well as
easements of any and all kinds capable of affecting the leased property,
even if such defects and faults emerge during the lease and even if they
would prevent use of the property. The LESSEE notably undertakes not to
demand any reduction in rent or any indemnity on this ground.
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202.2 The LESSEE undertakes to inform the LESSOR of any bad workmanship,
defects and faults affecting the constructions, within one month from
their being noticed.
The LESSOR herewith fully empowers the LESSEE to dispute the quality of
the works vis-a-vis the architects, contractors and other parties having
participated in the erection of the constructions.
If such dispute cannot be settled amicably, the LESSOR shall be entitled
to bring any necessary suit, provided recourse times have not lapsed.
All cots, duties and fees generated by these actions shall be borne
exclusively by the LESSEE.
203 ENJOYMENT AND PURPOSE OF PROPERTY
*203.1 The property shall be occupied exclusively for the purpose provided for
in the Special Terms.
The LESSEE represents that it takes sole responsibility for the
declaration made under paragraph 203.1 of the Special Terms with respect
to the use of the premises covered by this contract.
It herewith undertakes to preserve this use for the entire term of the
property lease or to use said premises only for a purpose compatible
with the law on property leasing in force at the day of the change in
purpose, subject to the LESSOR's prior written consent. The LESSEE
expressly represents that it shall deal personally with all legal and
fiscal consequences of a change in purpose of the premises.
The LESSEE shall use the property in such a way as not to disturb the
quiet or peaceful enjoyment by other occupants or neighbors of the
property. It shall bear all consequences of actions brought by said
occupants or neighbors in this respect.
This lease does not offer any guarantee of exclusive occupancy or
non-competition on the part of the LESSOR, which reserves the right to
lease any and all premises other than those governed by this contract
for the exercise of any and all similar or identical activities,
regardless of the place where they are located.
203.2 The premises shall at all times be furnished with the equipment,
furnishings and movables in sufficient quantity and of sufficient
quality to cover payment of the rent and to ensure performance of all
lease terms.
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203.3 In accordance with the Preliminary Declaration, the LESSEE shall during
the entire lease term hold full surveillance, management and inspection
powers over the leased property.
During the entire term of the lease, the LESSEE shall ensure compliance
with the government regulations and safety rules applicable to the class
of building concerned. It shall accomplish all formalities and bear all
costs necessary to carry out its business and accordingly releases the
LESSOR from any responsibility in this respect.
The LESSEE undertakes to comply with the laws and regulations applicable
to environmental protection. It releases the LESSOR from any
responsibility in this respect, notably in the event that soil pollution
is discovered. In this case, the LESSEE alone shall bear all study and
analysis costs and all expenses necessary to comply with all demands
from the authorities or third parties. The LESSOR shall as necessary be
entitled to demand that the LESSEE order an expert analysis at the
LESSEE's own expense.
The LESSEE shall also bear the cost of all soil and subsoil removal and
restoration works. Such works shall be carried out in accordance with
the regulations applicable to the type of activity carried on and on the
terms in paragraph 206.3 et seq.
For the entire lease term, the LESSEE undertakes not to bring any
recourse against the LESSOR for compliance with environmental
regulations and to make sure that the LESSOR is not wanted in the event
that this contract is transferred or terminated or that the property is
subsequently sold.
203.4 The LESSEE also releases the LESSOR from any liability for disruption of
enjoyment by third parties.
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203.5 The LESSEE alone shall bear all consequences of bodily injuries or
tangible damage caused to third parties by the site or the constructions
or by the existence or use of the fixtures or installations (water, gas,
electricity and heating installations, etc.; elevators and freight
elevators, escalators, etc.) or by the LESSEE's employees as well as all
consequences of recourse brought by social security against the LESSOR
further to job-related accidents.
203.6 In the event that the property belongs to a co-ownership or a regulated
zone, the LESSEE undertakes to comply with the provisions of the
co-ownership regulations, the zone regulations, the specifications or
the internal rules.
204. TRANSFER OF CONTRACT
Transfer of the contract shall be subject to the LESSOR's prior written
acceptance. In any event, transfer shall be authorized only if it
complies with the following terms:
204.1 It shall be a total transfer; partial transfers of any kind shall be
forbidden.
204.2 The LESSEE shall transfer to the transferee, in one and the same deed,
the lease and the unilateral sales undertaking which, by express
agreement between the parties and because of the very nature of the
lease transactions, form an indivisible whole.
204.3 The transferee shall respect the exclusive purpose for the property
referred to under paragraph 203.1 above.
If the transferor operates a classified facility, said transferor shall
file a declaration of change of operator or cessation of business prior
to transfer. In the event that the transferor ceases business, it shall
complete all soil and subsoil removal and restoration works and prove by
means of an expert analysis conducted at its expense that no pollution
or trace of substances capable of contaminating the site remains.
204.4. The LESSEE shall remain the joint guarantor of the transferee and
subsequent transferees, without being able to oppose the benefit of
discussion or division.
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204.5 In case of court-ordered reorganization or liquidation, transfer of the
contract by the trustee in bankruptcy or by the debtor, assisted by the
trustee in bankruptcy, shall be subject to the terms and conditions
stipulated in this Article. In this case, the transferor's joint
guarantee shall be replaced by a joint guarantee from a bank.
204.6 Transfer shall take place by notarized deed, executed with the
participation of the LESSOR's notary. The LESSOR shall be invited to
intervene in this deed by registered letter with notice of receipt and
shall receive a binding copy without cost for said LESSOR.
204.7 The foregoing stipulations (paragraph 204.1 to 204.6 above) shall apply
to all transfer cases, regardless of their form, as well as to
assignment of the lease right to any company of any form, whether such
assignment is to a new company or to an already existing company.
205 SUBLET - PLEDGE OF BUSINESS
205.1 Sublet
205.1.1 The LESSEE shall be authorized to sublet the property to one or
more users.
205.1.2 Any sublet contract shall contain the following stipulations:
"The lessor, itself a lessee, has the enjoyment of the leased
property by virtue of a lease contract expiring on ......... (to be
filled out by the lessor, itself a lessee, in the sublet deed).
The sublessee acknowledges that it has been informed that the
rights it is granted herein are linked to the existence of the
aforesaid lease and that the lease is not governed by the
stipulations of the decree of 30 September 1953 on commercial
leases.
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Accordingly, this sublease shall automatically end on expiration of
the aforesaid lease contract if the lessor, itself a lessee, has
not requested consummation of the property sale, or before this
date if the lease contract itself is terminated at an early date,
irrespective of the reason.
In such case, the sublessee shall immediately release the premises
without being able to claim any right against the lease company
which is the owner."
205.1.3 The parties expressly acknowledge that, in their common intention,
the premises governed by the lease for an indivisible whole.
205.1.4 All layout or repair works further to sublets and connected with
either the constructions or the soil or subsoil shall be borne
exclusively by the LESSEE, as shall all indemnities which the
sublessees may claim from the LESSOR for any reason whatsoever.
205.2 Pledge of business
The LESSEE shall only be entitled to pledge the business carried on
in the property covered by this contract after having informed the
LESSOR by registered letter with notice of receipt and having
received the latter's written permission.
In the event that a pledge is granted in violation of this clause
or in the event that a privilege is registered by a third party, as
validated by final court order with the force of RES JUDICATA, the
LESSOR shall be entitled to terminate the contract at its sole
discretion and apply the provisions stipulated in paragraph 209
below.
206. WORKS
206.1 Repair and maintenance works
The LESSEE shall not only be in charge of rental repairs and small
maintenance works (Article 1720 paragraph 2 and Article 1754
paragraph 1 of the Civil Code) but shall also be responsible for
major maintenance and repairs which become necessary during the
contract, including the major repairs defined in Article 606 of the
Civil Code, regardless of the origin of damage (construction
defects or faults, wear, etc.).
The LESSEE shall immediately destroy all rodents, insects and other
parasites appearing on the leased property.
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The LESSEE shall promptly notify the insurers and the LESSOR of any
damage, destruction or accident to or caused by the leased premises.
On normal expiration of the contract, if the LESSEE has not requested
the sale to be consummated, or in case of early termination, the LESSEE
shall prove by means of an inventory, prepared at its expense and
approved by the parties, that the premises are well maintained and in
excellent repair in all respects. Failing this, it shall reimburse the
LESSOR the cost of the necessary repair works.
206.2 Improvement or layout works
At its own discretion but at its exclusive expense, the LESSEE shall be
entitled to carry out such works.
Works entailing demolitions or piercing of walls, beams, floors or
roofs, or extension or elevation, or a change in indoor layout, shall
require prior written permission from the LESSOR which, in case of
authorization, shall be entitled to impose inspection by its architect,
whose fees shall be borne by the LESSEE.
206.3 Works imposed by the regulations
The LESSEE shall furthermore see personally to all works, irrespective
of their cost, imposed by existing laws or regulations, or by order from
the authorities, notably in order to obtain the health and safety
certificate of conformity. The LESSEE shall not be entitled to claim the
benefit of Article 1755 of the Civil Code in this respect.
The LESSEE undertakes to comply with applicable laws and regulations on
protection against risks connected with asbestos and releases the LESSOR
from any liability in respect of these provisions.
If the property covered by this lease is to be subjected to inspection,
surveillance or works operations, the LESSEE shall deal personally with
the performance of such obligations and alone shall bear the cost.
The LESSEE undertakes to provide the LESSOR with evidence of the
accomplishment of such operations on the conditions stipulated in
Article 711 of the Special Terms.
206.4 The LESSEE shall carry out all of the foregoing works on its sole
responsibility and shall have no recourse against the LESSOR. It shall
take out all necessary insurance policies, notably legally necessary
policies or any policies which may be advisable and shall require
contractors to take out adequate insurance for their risks.
<PAGE>
206.5 In the event that the LESSEE fails to carry out the works provided for
in paragraph 206.1 and 206.3, the LESSOR shall be entitled to substitute
itself for the LESSEE, after a summons has not been acted upon within
one month, and have such repairs or works carried out by a contractor of
its choice. In the event, the LESSEE shall promptly reimburse the amount
plus 10% to the LESSOR as soon as it is requested to do so, and shall
alone remain responsible for any consequences of failure to carry out
the said works by the stipulated date.
206.6 The LESSEE shall not be entitled to demand any reduction of rent or
termination of the contract, regardless of the scope or length of works,
and whether such works are carried out by the LESSEE or by the LESSOR.
206.7 All real property added by the LESSEE shall be deemed to be the LESSEE's
property during the entire term of the lease and shall automatically and
without indemnity become the LESSOR's property by accretion on normal
expiration of the contract if the LESSEE has not exercised the option,
or on early termination of the contract, irrespective of the reason for
such termination.
The LESSEE shall not be entitled to remove or demolish them without the
LESSOR's express consent. The LESSOR shall always be entitled to demand
that the premises be restored in their original state at the LESSEE's
cost and risk.
In case of departure, the LESSEE shall leave all existing telephone
lines at the LESSOR's disposal.
206.8 The LESSOR's representatives shall be authorized to enter the leased
property freely, subject to advance notice for the LESSEE.
206.9 If the leased property is part of a co-ownership, the obligations
incumbent on the LESSEE by virtue of the foregoing stipulations shall
only concern works connected with the leased private elements.
As regards works connected with the common elements, as approved and
carried out by the co-ownership organization, the LESSEE shall reimburse
the LESSOR its share of the expenses charged to the leased property, as
part of the charges governed by paragraph 208 below.
<PAGE>
207. RENT
It is herewith specified that the word "rent" is used here for convenience but
should be considered a financial fee which comprises the interest on and
amortization of the capital invested by the LESSOR in the operation.
The frequency and date of each rental payment are specified in paragraph 207.5
below.
The periodic rent shall be calculated and collected on the following conditions:
The rent shall be equal to the addition of the following two elements:
- - Rent on the share invested by SLIBAIL IMMOBILIER
- - Rent on the share invested by NORBAIL IMMOBILIER
RENT ON THE SHARE INVESTED BY SLIBAIL IMMOBILIER
207.1 AMOUNT OF PERIODIC BASIC NET RENT
207.1.1 At each rental term, the amount of the periodic basic net rent
shall be equal to the addition of, first, an amount representing
financial amortization, and, secondly, an amount representing
interest.
*207.1.1.1 At each rental term of the periodic rent, the amount of financial
amortization shall be determined by applying the percentages given
in column 1 of the table in the Special Terms to the "total
investment cost" defined in paragraph 207.1.2 below.
*207.1.1.2 At each rental term of the periodic rent, the amount of interest
shall be calculated by applying, to the financial outstandings,
according to the formula indicated below, the proportional annual
rate T stipulated in the Special Terms. The financial outstandings
themselves are determined at each rental term of the period rent by
applying the percentages given in column 2 of the table in the
Special Terms to the "total investment cost" defined in paragraph
207.1.2 below.
<PAGE>
The amount of interest, "i", included at each rental term in the
amount of the periodic basic net rent shall therefore be
determined according to the following formula:
in = PR x Pn x T x NB
---
360
where:
in Amount of interest included in the periodic basic net rent at
term n
PR the "total investment cost" defined in paragraph 207.1.2
Pn The percentage indicated in column 2 of the table in the
Special Terms for term n
T The proportional annual rate stipulated in the Special Terms
Nb 182.5 for a whole calendar period of six months and
91.25 for a whole calendar quarter
*207.1.2 "Total investment cost" is defined as the total sums, not including
VAT which can be recovered, disbursed by the LESSOR, irrespective
of the reason, in connection with this lease operation.
If the "total investment cost" is not definitively known at the
effective date of the lease, the rent shall provisionally be
calculated on the basis of the sums disbursed by the LESSOR by this
date.
Disbursements, excluding recoverable VAT, made after the effective
date of the lease shall generate complementary rent calculated by
applying proportionally to the amount of such disbursements,
excluding recoverable taxes, the annual rate used to calculate the
due amount, prorated between the date of such disbursement and the
date of their inclusion in the "total investment cost".
<PAGE>
Moreover, in order to respect the financial amortization pace
provided for in the contract (without changing the percentages
included in the columns 1 and 2 of the table referred to in the
paragraphs 207.1.1.1 and 207.1.1.2 above), the complementary rent
shall be incremented by the financial amortization which had to be
applied to disbursements excluding recoverable taxes if they had to
be made at the effective date of the lease.
The foregoing disbursements excluding recoverable taxes shall be
included in the "total investment cost". The non-indexed and
indexed parts of the effective periodic rent excluding taxes
defined in the paragraphs 207.2 and 207.3 below shall be modified
accordingly at the date on which these disbursements are factored
in.
After expiration of the second lease year, no more disbursements
may be requested from the LESSOR, even if the financing ceiling
stipulated in title 1 of these General Terms has not been reached
at the time.
<PAGE>
*207.2 INDEXATION OF PERIODIC BASIC NET RENT
Said rent shall be indexed at each term, at the percentage stipulated
in, the Special Terms, against the national construction cost index
published by INSEE. The balance shall remain non-indexed during the
entire term of the lease.
In indexing the periodic basic net rent, the initial reference index
shall be the index for the antepenultimate calendar quarter preceding
the calendar quarter in progress at the effective date of the lease(1)
The periodic rent shall automatically vary at each term in the same
direction as the said index.
The comparison index used to calculate each term of the periodic rent
shall be the index for the antepenultimate calendar quarter preceding
the quarter in which this term falls due.
In the event that the INSEE index goes down, the periodic rent shall go
down as well. However, given the financial nature of this lease
contract, it is expressly agreed that the periodic rent, after impact of
indexation, shall in no event be less than the periodic basic rent.
If the national construction cost index issued by INSEE ceases to be
published or if recourse to this index is forbidden by future
regulations, it will be replaced, failing an official replacement index,
by an equivalent index chosen by agreement or, failing this, by a
single expert, appointed by agreement between the parties or by order of
the Chief Judge of the District Court at the petition of the first party
to act; the expert's costs and fees shall be borne exclusively by the
LESSEE.
- ----------------------
(1) Antepenultimate quarter: quarter prior to the before-last quarter.
Example: if the lease took effect during the first quarter of year n,
the reference will be the index for the second quarter of year n-1. If
the lease took effect during the fourth quarter of year n, the reference
index is the index of the first quarter of year n.
<PAGE>
Moreover, should all indexation be forbidden by future regulation, the
parties shall meet in order to replace the indexation provided for in
the lease with another formula which complies with the applicable
regulations and is designed to maintain the financial equilibrium of the
contract.
207.3 FORMULA FOR CALCULATING PERIODIC BASIC NET RENT
The periodic basic net rent to be paid by the LESSEE shall be equal to
the result of applying the indexation to the periodic basic net rent.
This periodic basic net rent shall consist of a Non Indexed Part: PNI,
and an Indexed Part: PI, calculated as follows:
- for the period between the effective date of the lease and the end of
the calendar period (corresponding to the frequency of the rent
specified in paragraph 207.5 below) then in progress, according to the
following formula:
PNI1 = L1 x (1 - H1)
PI1 = L1 x HI IND1
----
INDo
L'1 = PNI1 + PI1
- at subsequent terms according to the following formula:
PNIn = PNIn-1 x Ln
----
Ln-1
PIn = PIn-1 x LN x INDn
-- ----
LN-1 INDn-1
L'n = PNIn + PIn
In the foregoing formulas:
HI Height, as a percent, of the periodic basic net rent subject
to indexation, as defined in paragraph 207.2
PNI1 Non Indexed Part of the first due periodic basic net rent
<PAGE>
PI1 Indexed Part of the first due periodic basic net rent
PNIn Non Indexed Part of term n of the first periodic basic net
rent
PNIn-1 Non Indexed Part of term n-1 of the first periodic basic net
rent
PIn Indexed Part of term n of the first periodic basic net rent
PIn-1 Indexed Part of term n-1 of the first periodic basic net rent
L1 Periodic basic net rent of the first term stipulated in
paragraph 207.1
Ln Periodic basic net rent of term n stipulated in paragraph
207.1
Ln-1 Periodic basic net rent of term n-1 stipulated in paragraph
207.1
INDn National construction cost index issued by INSEE applicable to
term n as defined in paragraph 207.2
INDn-1 National construction cost index issued by INSEE applicable to
term n-1 as defined in paragraph 207.2
IND1 National construction cost index issued by INSEE applicable,
by way of comparison, to term 1 as defined in paragraph 207.2
INDo National construction cost index issued by INSEE applicable,
by way of initial reference, to term 1 as defined in paragraph
207.2
L'1 Periodic basic net rent of the first term
L'n Periodic basic net rent of term n
<PAGE>
RENT ON THE SHARE INVESTED BY NORBAIL IMMOBILIER
The second part of the rent, connected with the share of NORBAIL IMMOBILIER, is
defined in the Special Terms.
207.4 VAT ON RENT
Rent shall be subject to VAT (see 705 below). This tax shall be paid by
the LESSEE, which shall also bear any tax added to or substituted for
VAT.
*207.5 PAYMENT OF RENT
The periodic basic net rent, incremented by due VAT, shall fall due and
be payable at the dates and according to the calendar frequency
stipulated in the Special Terms.
A management fee, whose amount is fixed in the Special Terms, shall be
payable together with each rental term.
If the effective date stipulated in paragraph 201.1 of the General Terms
becomes only officially known afterwards to the LESSOR, the LESSOR,
because the time needed to prepare the invoice, shall be entitled to
postpone the term for payment of the first effective periodic rent. In
this case, the amount of the first term shall simply be incremented by
the impact of such postponement at the pro-rated agreed interest rate.
207bis TEMPORARY COMPLEMENTARY RENT
207bis 1 In the event that the investment is subject to VAT because of
acquisition of the building, the seller's delivery of a VAT
attestation or financing of works by the LESSOR, the LESSEE shall
owe complementary rent calculated as follows.
*207bis 2 Each amount disbursed by the LESSOR for recoverable VAT shall be
subject to interest calculated over a fixed period of four months
in proportion to the annual rate specified in the Special Terms.
207bis 3 This complementary rent, incremented by due VAT, shall be payable
in arrears at the end of each calendar period defined in paragraph
207.5 of the Special Terms and for the first time on expiration of
the calendar period in progress at the effective date of the lease.
<PAGE>
208 CHARGES
208.1 All charges connected with the property - services and supplies,
insurance premiums, taxes and levies, even though normally incumbent on
the owner (notably annual tax on office premises located in the
Ile-de-France region, land tax and insurance premiums on the property)
shall without exception be borne exclusively by the LESSEE, which
undertakes to pay them or to reimburse them promptly to the LESSOR when
requested to do so.
As regards the annual tax on office premises located in the
Ile-de-France region, created by Article 40 of the Supplementary
Budget Act for 1989 (No 89.936 of 29 December 1989), the LESSEE, after
having duly performed its obligation, shall send the LESSOR, without
prompting, by registered letter with notice of receipt, for the
latter's signature, thirty days before the regulatory filing deadline,
the applicable declaration, indicating the address of the Treasury
accountant in the district of the taxable premises who is to receive
it. Should the LESSEE fail to send this document or should the
information on this declaration be inexact, said LESSEE shall bear all
consequences.
208.2 Charges normally incumbent on the LESSOR but which, further to
paragraph 208.1 above, are incumbent on the LESSEE, being considered by
the tax authorities as complementary rent subject to VAT like the basic
rent, shall be billed additionally.
208.3 In the event that the premises belong to a co-ownership or a regulated
zone, the related share of the common charges shall be borne entirely
by the LESSEE.
208.4 The LESSEE shall see personally to all water, gas and electricity
subscriptions, etc. whose cost it shall bear exclusively.
208.5 Suspension or breakdown of various supplies or services shall in no
event justify a request for lower rent.
209. TERMINATION
209.1 It is expressly agreed that if the LESSEE fails to pay a single rental
term at its due date, a fraction of such term or the corresponding VAT
or fails to pay the charges referred to in paragraph 208 or fails to
perform one or more of the other contractual stipulations (notably
failure to deliver the certificate of conformity within two years from
the effective date of the lease or refusal to deliver this document),
this contract shall be automatically canceled, at the LESSOR's
discretion, without need for
<PAGE>
court order, if the LESSEE fails to remedy such non-performance within
one month from receipt of a summons served by bailiff's writ.
If this contract provides for enrollment in group death and disability
insurance contract UAP/CL No 2310, on the terms stipulated in Article
402 below, application of the termination clause shall automatically
entail cancellation of enrollment in this group death and disability
insurance.
If the property covered by this lease is designed for an activity to be
carried on by classified facilities which require authorization, it is
expressly agreed that this contract shall be terminated, at the
LESSOR's discretion, without any legal formality, if, on expiration of
the period of recourse available to third parties under Act No 76-663
of 19 July 1976, the operating authorization has not become final,
either because of absence of recourse during the legal period or
because a final court order further to recourse.
209.2 In accordance with the Articles 1152 and 1226 of the Civil Code, even
in case of partial performance, the LESSEE shall owe the LESSOR, by way
of damages, a termination indemnity equal to the sales price defined in
paragraph 303.2 below, determined at the effective termination date,
incremented by the amount of tax repayments in accordance with
paragraph 303.3, the whole increased by two years of rent, based on the
latest effective periodic rent demanded from the LESSEE prior to
termination. This indemnity shall be incremented with due VAT.
The LESSEE formally recognizes the LESSOR's right to this indemnity,
given the essentially financial aspect of this lease operation and the
fact that the LESSOR enters into this operation at the LESSEE's express
request and in consideration of the LESSEE's person and needs.
Accordingly, it is expressly agreed that this penalty clause shall be a
substantive and decisive condition without which the LESSOR would not
have entered into a contract.
210 TERMINATION AT THE LESSEE'S REQUEST
210.1 The LESSEE shall be entitled to request termination of this contract
from expiration of the --th year of lease, on the following terms and
conditions.
210.2 Said termination shall be possible only each year at the anniversary of
the effective date of the lease.
The LESSEE shall notify the LESSOR at most twelve months and at least
nine months in advance, by registered letter with notice of receipt, of
its decision to use the termination option.
<PAGE>
Termination shall be by notarized deed, whose cost shall be borne
exclusively by the LESSEE.
210. 3 The LESSEE shall vacate the property at least ten days before the
effective termination date.
210.4 An inventory drawn up at the LESSOR's initiative and at the LESSEE's
cost shall show that the property is perfectly maintained and in
perfect repair, in accordance with the stipulations in paragraph 206,
and that it can be leased for its design purpose without cost for the
LESSOR.
210.5 The LESSEE shall be up to date on all its contractual obligations, in
such a way that the termination clause in paragraph 209 does no apply.
210.6 The certificate of conformity shall have been obtained.
210.7 The LESSEE shall have paid the LESSOR, by way of agreed
lump-sum indemnity, a sum equal to the sales price defined in Article
303.2 below, determined at the effective termination date, plus the
amount of tax repayments covered by paragraph 303.3.
210.8 If one or more of the above conditions is not met at least ten days
before the effective termination date, the LESSOR shall be entitled,
at its own discretion, to consider the termination request made by the
LESSEE void, subject to notice served at least ten days before the
scheduled termination date by registered letter with notice of receipt,
specifying the condition(s) which has/have not been met.
210.9 However, the LESSEE shall be exonerated from the obligation to pay an
indemnity if, before the date set for termination, it has ensured
acquisition of the building by a third party on the following
conditions:
210.9.1 The price shall be at least equal to the sales price defined in
paragraph 302.2, as determined at the day of the notarized sales deed,
plus tax (notably on capital gains) due on the sale as well as the
amount of tax repayments referred to in paragraph 303.3.
For collection of transfer duty, the market value of the property, if
higher than the sales price, shall be covered by an estimate agreed
between the parties in a declaration in the deed.
210.9.2 The sale shall furthermore be completed on the terms and conditions
stipulated in the paragraphs 303.4 to 303.10 below.
<PAGE>
210.9.3 The LESSEE shall inform the LESSOR, by registered letter with notice of
receipt, of the name and address of the future buyer of the building
and shall deal personally with all formalities to be accomplished by
such buyer until completion of the sale. In this respect, the LESSOR
does not intend to accept any liability vis-a-vis the LESSEE.
210.9.4 This contract shall end at the date on which the authentic sales deed
is signed. The LESSEE shall intervene in this deed in order to
terminate the contract and to accept personally vis-a-vis the buyer the
undertaking to vacate the premises promptly.
210.10 Rent and charges shall be due until the termination date or until the
notarized sales deed. Any excess payments shall be charged to sums owed
by the LESSEE, if any, or shall be reimbursed.
210.11 The indemnity provided for in paragraph 210.7 shall also be due in the
event that termination is due to the decision of the trustee appointed
by judgment in bankruptcy or liquidation proceedings (Article 37 of Act
No 85.98 of 25 January 1985).
211 EXPROPRIATION
211.1 TOTAL EXPROPRIATION
If the site and constructions are entirely expropriated, the lease
shall automatically be terminated at the date of the order entailing
transfer of ownership to the expropriating organization.
211.1.1 However, as enjoyment of the expropriated property can only revert to
the expropriating organization after the LESSOR is paid the
expropriation indemnity, the LESSEE shall owe the LESSOR, from the date
of the aforesaid order and until actual payment of the expropriation
indemnity, the date on which the premises shall be immediately vacated,
an occupancy indemnity equal to the amount of rent due for this period,
which indemnity shall be payable on the same conditions and at the same
time as the rent. Moreover, the LESSEE shall continue to pay the amount
of charges provided for in the terminated contract.
<PAGE>
211.1.2 If the expropriation indemnity paid to the LESSOR is less than the
sales price stipulated in paragraph 303.2, as determined at the day of
payment of said indemnity, plus tax (notably on capital gains) due on
the transfer of ownership, as well as the amount of tax repayments
referred to in paragraph 706, the LESSEE shall pay the LESSOR the
difference plus due VAT by way of termination indemnity.
In the opposite case, the difference plus due VAT shall be paid by the
LESSOR to the LESSEE, also by way of termination indemnity.
211.2 PARTIAL EXPROPRIATION
If the site and constructions are only partly expropriated, the lease
shall remain in effect for the remainder.
211.2.1 In this case, this contract shall be covered by an amendment recording
the change in surface area of the property and modifying the financial
terms to factor in the amount of the expropriation indemnity received
by the LESSOR less all costs and expenses incurred by the latter and
all taxes owed by it, notably capital gains tax and tax repayments in
connection with the expropriation, as stipulated under paragraph 706
below.
211.2.2 Free transfer to government authorities
In the event that parts of the building (notably land parcels) have to
transferred for free to a government authority, the financial terms of
this lease (rent and sales undertaking) shall not be modified despite a
change in surface area of the property.
211.3 REQUISITION
In case of requisition or occupancy of all or part of the site and
constructions, whether temporarily or for the entire lease term, by any
administration authorized to do so, the lease shall remain fully in
effect and the LESSEE shall owe the rent on normal terms.
However, as soon as it has collected, the LESSOR shall pay the LESSEE
the entire requisition or occupancy indemnity. It is herewith expressly
stipulated that no offsetting shall be possible between the rent and
the indemnity concerned.
<PAGE>
212 INSURANCE
212.1 In order to cover its own risks and those transferred to it, the LESSEE
shall, at its own expense and at the latest by the effective date of
this lease, take out all insurance policies it deems necessary.
However, it shall always take out the following policies:
212.1.1 A comprehensive tenant's risk policy (fire, explosions, related risks
and civil liability of the tenant).
Said policy shall cover the LESSEE's furnishings, machinery and goods
against fire, explosions and water damage. Said policy shall also
provide cover against recourse by third parties and neighbors, the cost
of removing and putting back the insured property further to works
after an insured loss, civil liability directly related to operating
risks after delivery. Said policy shall expressly provide for waiver of
recourse against the LESSOR.
212.1.2 A comprehensive building risk policy
Said policy shall provide cover against fire, explosions and water
damage for all constructions and all facilities, fixtures, fixed and
mobile installations, whether outdoor or indoor, whether deemed
fixtures by design or by use, without exception, at full reconstruction
value, pegged to the construction price index established by Federation
Nationale du Batiment et des Activites Annexes. The insured sum or
cover shall include VAT if the LESSEE is not subject to VAT. Otherwise
the insurance shall be taken out excluding VAT. If the LESSEE is only
partly subject to VAT, the insured amount or cover shall provide for
VAT in the adequate proportion.
The policy shall further cover the following risks:
Glass breakage, indirect losses up to 10% (ten percent), fees and urban
development taxes which may be required in case of reconstruction, cost
of earthworks, demolition, removal and transportation of destroyed
parts, loss of rent up to two years of lease payments, deprivation of
enjoyment, recourse of neighbors and third parties, electric damage,
hurricanes, storms, falling aircraft, smoke and fumes, impact of
vehicles, cost of searching for leaks, leaks in automatic fire
extinguisher networks of the SPRINKLERS brand or similar, riots, acts
of terrorism or sabotage, costs and fees of experts.
<PAGE>
The policy shall include a clause canceling the rule on proportional
face amount.
212.1.3 Civil liability policy
Said policy shall cover the civil liability of the LESSEE and the
LESSOR in case of direct bodily injury, tangible or intangible damage
caused to third parties by the property complex.
This policy shall be taken out before the property is acquired by the
LESSOR.
212.2 Enrollment:
The LESSEE shall take out the insurance policies listed in the
paragraphs 212.1.2 and 212.1.3 as part of the "Group" insurance
policies connected with the asset protection plan implemented by the
LESSOR with the assistance of its insurance broker. The purpose of this
plan is to provide the LESSEE with cover meeting the exact requirements
stipulated in the paragraphs 212.1.2 and 212.1.3.
Should the LESSEE exceptionally, on its sole responsibility, decide not
to subscribe to the LESSOR's "group" insurance contracts but to cover
the risks which it is obliged to insure (as stipulated in the
paragraphs 212.1.2 and 212.1.3) by means of "other insurance policies",
it shall provide evidence of subscription of such "other policies" by
supplying the LESSOR's insurance broker with copies thereof, failing
which the LESSOR shall be entitled to cover the foregoing risks at the
LESSEE's expense.
Said "other policies" shall stipulate that the insurance company
concerned may not suspend their covers for any reason, nor refuse to
indemnify the LESSOR in case of loss on the ground that the LESSEE has
not complied with the obligations of the insurance contract, without
notifying the LESSOR at least one month in advance by registered
letter, in which event the LESSOR, at its own discretion, shall be
entitled to pay the premiums in the LESSEE's place.
The "other policies" shall specify that all indemnities payable under
the damage covers shall be paid directly to the LESSOR and shall
necessarily provide for reciprocal waiver of recourse between the
LESSOR and the LESSEE.
Moreover, the LESSEE may or shall take out all complementary policies
it considers useful or necessary.
The LESSOR reserves the right to require subscription of all
complementary policies which turn out to be necessary. Inspection or
lack of inspection of said policies by the LESSOR or its insurance
broker
<PAGE>
shall not entail any liability on its part for lack of insurance or
inadequate insurance.
212.3 Premiums:
As part of the LESSOR's asset protection plan and in application of the
preliminary declaration, the LESSEE shall be solely responsible for
negotiating with the LESSOR's broker both the face amount to be insured
and the premium rate of the subscribed insurance.
Given that the insurance premiums payable by the LESSEE under Article
212.1 above to cover the risks for which the owner is liable are
considered by the tax authorities as complementary rent subject to VAT
like the basic rent, they shall be billed additionally and paid in
accordance with paragraph 208.2 above.
As regards insurance taken out within the framework of the LESSOR's
asset protection plan, the LESSEE shall be sent a complementary rental
term by the LESSOR's insurance broker, mandated to this end by the
LESSOR, which broker shall directly collect its premiums. The
complementary rent shall correspond to the amount of the due annual
premium plus the applicable VAT.
If the LESSEE is not enrolled in the LESSOR's asset protection plan,
premium receipts sent to the LESSOR as proof of payment shall be
prepared in such as way as to distinguish between premiums covering the
owner's risks and premiums covering the LESSEE's risks.
In the event that the property is part of a co-ownership, the LESSEE
shall, in the light of the policies taken out by the LESSOR or the
property manager, subscribe, in the name and on behalf of the LESSOR,
all supplemental policies necessary to cover the risks referred to in
paragraph 212.1 entirely, notably those connected with the works
carried out by the LESSOR as well as the LESSEE itself. Failing this,
the LESSOR shall be entitled to take out insurance for the above risks
at the LESSEE's cost.
The premiums on the policies taken out by the LESSOR or the
co-ownership shall be included in the charges incumbent on the LESSEE
under the paragraphs 208.1 and 208.3.
212.4 Insurance broker
The LESSOR has appointed the following insurance broker:
SGAP
SOCIETE GENERALE D'ASSURANCES ET de PREVOYANCE
<PAGE>
having its registered office at
50 rue de Chateaudun
75009 PARIS
The LESSOR expressly reserves the right to appoint any other insurance
broker in place of the above broker, which the LESSEE herewith accepts.
213. LOSSES
213.1 The LESSEE shall inform the insurer or the LESSOR's broker if it has
enrolled in the LESSOR's asset protection plan, in the name and on
behalf of the LESSOR, and in the form and by the deadline stipulated in
the insurance policy, of any loss to the leased property, regardless of
its extent, even if no visible damage results. The same day, the LESSEE
shall send the LESSOR, by registered letter, a duly certified copy of
its declaration.
The LESSEE shall further make all other declarations and accomplish all
advisable or necessary formalities vis-a-vis all competent authorities
or government services, file all complaints and, in general, carry out
all formalities on behalf of the LESSOR made necessary by the
circumstances.
213.2 In case of a loss, even due to an act of God or force majeure, which
has caused total or partial destruction of the premises, this contract,
by express derogation from the stipulations in the Articles 1184, 1722
and 1741 of the Civil Code, and all other similar legal provisions,
shall not be automatically terminated. The LESSEE shall continue to owe
the entire rent and charges on the agreed terms, regardless of the
period for which enjoyment is suspended.
213.3 After having obtained the necessary administrative authorizations, the
LESSEE shall, as applicable and at its own expense, either repair the
damage to the leased premises or reconstruct the premises identically
or, subject to the LESSOR's written permission, in equivalent form but
in an amount which shall be at least equal to the cost of
reconstructing the premises identically including all taxes.
Repair or reconstruction works shall be carried out on the LESSEE's
sole responsibility within the framework of the mandate granted to said
LESSEE by the LESSOR after the LESSOR has approved all drawings,
quotations and contracts.
213.4 In accordance with the clauses in the policy, the insurance indemnities
shall be paid to the LESSOR, which shall pay for the repair or
reconstruction works conducted by the LESSEE. It is agreed that the
LESSEE alone shall be all excess costs, including VAT, generated by
repair or reconstruction as compared with the amount of the said
indemnities.
<PAGE>
Before commencing such works, the LESSEE shall provide the LESSOR with
a joint guarantee from a bank for payment of such excess.
213.5 However, in case of total destruction of the constructions or partial
destruction considered total destruction, the LESSEE, provided the
conditions in paragraph 301.3 have been met, shall be entitled to
demand, by virtue of the sales undertaking granted to it under
paragraph 301.2, that the sale be consummated, provided it bear the
fiscal consequences, if any, if the tax authorities disqualify the
contract because of its short duration.
The price shall be equal to the sales price stipulated in paragraph
303.2 below, determined at the date of the notarized sales deed,
increased with the amount of tax repayments stipulated in paragraph
706.
By virtue of the sale, the LESSEE shall be subrogated in all of the
LESSOR's rights in respect of the insurance indemnity.
Accordingly, the price shall be payable less any sums received in this
respect by the LESSOR prior to execution of the sales deed.
The sale shall take place on the terms and conditions stipulated in
paragraph 303.4 to 303.10.
213.6 If the LESSEE, at the date on which notice is served of the decision
taken by the authorities concerned in respect of the building permit,
has not used its option under paragraph 213.5 above, it shall be
entitled to:
- if the building permit is delivered without restriction or
reservation:
- opt for reconstruction of the buildings on the conditions
stipulated in paragraph 213.3 and, accordingly, continue the
contract. However, if the LESSEE does not offer the guarantee
provided for excess reconstruction costs compared with the amount
of insurance indemnities (see paragraph 213.4), the LESSOR shall
be entitled to terminate the contract and to apply the provisions
in the paragraphs 213.8, 213.9 and 213.10 below;
- or demand consummation of the sale on the terms and conditions
stipulated in paragraph 213.5.
<PAGE>
- if the building permit is refused or delivered precariously or
with reservation, request consummation of the aforesaid sale or
termination of the contract.
The LESSEE shall have one month from receipt of notice of the
decision of the authorities concerned, given by registered letter
with notice of receipt, to inform the LESSOR of its option.
213.7 Failure to reply by the stipulated deadline shall be considered:
- if the building permit has been delivered, as tacit agreement to
continue the contract;
- if the building permit has been refused, as tacit agreement to
terminate the contract.
213.8 In case of termination request or tacit agreement to termination,
termination shall take effect at the day on which the termination
indemnity provided for below is paid.
213.9 If the sales price stipulated in paragraph 303.2, as determined
at the termination date, plus taxes and other costs owed by the
LESSOR in connection with such termination or collection of the
insurance indemnity, as well as the amount of the tax repayments
referred to in paragraph 706, exceeds the amount of the insurance
indemnity, the LESSEE shall pay the LESSOR the difference plus
due VAT by way of termination indemnity.
In the opposite case, the LESSOR shall pay the LESSEE the
differences, plus due VAT, by way of termination indemnity.
213.10 Rent and charges shall be due until the date on which the
notarized sales deed is signed or until the termination
effective.
Any excess payment shall be charged to sums owed by the LESSEE,
if any, or be reimbursed.
<PAGE>
TITLE 3 OF THE GENERAL TERMS
- --------------------------------------------------------------------------------
300 UNILATERAL UNDERTAKING TO SELL THE LEASED PROPERTY
- --------------------------------------------------------------------------------
301 PURPOSE
301.1 By virtue of the undertaking granted to it, the LESSEE shall be
entitled to request consummation of the sale of the property at the end
of the tenth year and each of the ensuing years of the lease until
expiration of the contract.
301.2 The LESSEE shall also be entitled to request consummation of the sale
in case of total loss or a similar event (see paragraphs 213.5 and
213.6).
301.3 The LESSEE shall only be entitled to request consummation of the sale
if it has duly performed its obligations under the contract.
301.4 Termination of the lease, irrespective of the reason, shall void this
sales undertaking.
302 REQUEST TO CONSUMMATE SALE
302.1 The LESSEE shall only be entitled to request consummation of the sale
by registered letter with notice of receipt.
In the cases provided for in paragraph 301.1, the registered letter
shall be sent to the LESSOR at most twelve months and at least nine
months before the end of the lease year.
For the case provided for in paragraph 301.2, the maximum deadline at
the LESSEE's disposal to request consummation of the sale is stipulated
in paragraph 213.6.
302.2 If the LESSEE has not requested consummation of the sale at least nine
months before the end of the last year of the lease, the sales
undertaking shall become void, unless the LESSOR agrees to extend the
term.
<PAGE>
302.3 The request for consummation shall not entail transfer of ownership,
which shall be by notarized sales deed.
However, in case of sale on termination of the contract, transfer of
ownership shall be deferred until expiration of the lease if the
notarized deed is signed before this date.
303 TERMS AND CONDITIONS OF SALE
303.1 The sale shall be consummated by notarized deed.
303.2 At the end of a given lease year, the sales price shall be equal to the
indexed residual financial value of the "total investment cost".
*303.2.1 The residual financial value before indexation of the
"total investment cost" shall be obtained by applying to the "total
investment cost" as defined in paragraph 207.1.2 the percentages fixed
in the Special Terms, the result being increased with any sums still to
be disbursed by the LESSOR in connection with this lease operation.
303.2.2 The resulting residual financial value shall be pegged, in the same
percentage as used for indexation of the periodic basic net rent
stipulated in paragraph 207.2 of the Special Terms, to the national
construction cost index issued by INSEE.
The basic reference index shall be the index for the antepenultimate
calendar quarter preceding the calendar quarter in progress when the
lease takes effect, the comparison index being the index for the
antepenultimate calendar quarter preceding the quarter in which the
sales deed is signed.
In the event that this index is not known at this date, the comparison
index shall provisionally be the latest published index, in which case
readjustment shall occur within eight days following publication of the
aforesaid chosen comparison index.
<PAGE>
However, it is expressly agreed that the sales price resulting from
such revision shall in no event be less than the non indexed residual
financial value determined in accordance with paragraph 303.2.1.
In the event that the INSEE index ceases to be published or recourse to
this index or to any indexation is forbidden, the parties shall apply
the provisions applicable in the same situation to the effective
periodic rent.
303.2.3 Given the essentially financial nature of the LESSOR's intervention in
this lease operation, as explained in the PRELIMINARY DECLARATION, it
is expressly agreed between the parties, as a substantive condition of
this contract, without which it would not have been entered into, that,
if, for any reason connected with a fact under the LESSEE's control or
connected with applicable laws or regulations, the periodic net rent
effectively paid by the LESSEE is higher or lower than the periodic
effective net rent defined in paragraph 207.3, the amount of such
increase or reduction, shall respectively be reduced from or added to
the amount of the sales price stipulated in paragraph 303.2.
Accordingly, in case of reduction of the agreed periodic effective net
rent, the sales price shall be increased by adding the following
elements:
- amount of difference between the total periodic effective net rent
stipulated contractually and the effective rent actually received
by the LESSOR;
- amount of interest calculated proportionally at the base rate of
CREDIT LYONNAIS plus three points, pro-rated in time over the
difference resulting from the foregoing paragraph.
In case of a rental increase imposed by the applicable laws or
regulations, the sales price shall be reduced by the above elements.
303.3 The resulting sales price shall be increased with the amount of tax
repayments stipulated in paragraph 706 below.
303.4 The sales price shall be paid cash at the day on which the sales deed
is signed. However, the additional price if any resulting from index
adjustment shall be paid within eight days from the date on which the
accounts are drawn up and the invoice is issued. In this respect, the
LESSOR expressly reserves the right to exercise the seller's privilege
as well as the termination action.
<PAGE>
303.5 All costs, duties, emoluments, taxes and levies connected with the sale
shall be borne exclusively by the LESSEE.
303.6 The sale shall take place at the LESSEE's exclusive risk, without
guarantee on the LESSOR's part, neither as regards eviction nor for
faults or hidden defects in the sold property.
Consequently, the LESSEE:
- shall take the property as-is at the date on which ownership is
transferred, without being entitled to bring any recourse against
the LESSOR for bad condition of the soil, the subsoil or the
buildings, construction defects, even if hidden, an error in
description or surface area, any difference, up or down, even if
such difference should exceed one-twentieth, to be the LESSEE's
loss or gain;
- shall bear all negative easements and profit from all positive
easements, at its own risk, and shall see personally to all
administrative easements.
303.7 The LESSEE shall see personally to the continuation or termination of
all insurance policies and all subscriptions, in such a way that no
recourse can be brought against the LESSOR.
303.8 The sales deed shall be signed with the participation of the LESSOR's
notary.
303.9 In the cases provided for in paragraph 301.1, the sales deed shall be
signed at the latest at the expiration date of the lease year during
which the LESSEE validly requests consummation of the sale. In the
cases provided for in paragraph 301.2, it shall be signed within three
months from the sales consummation request.
If it was impossible to execute the notarized deed by these deadlines
due to an event ascribable to the LESSEE, the sales consummation
request shall be deemed null and void, unless the LESSOR agrees to
extend the term.
303.10 After acquisition of the property, the LESSEE shall comply with the
provisions in Article 239 SEXTIES et seq. of the General Tax Code,
whose text is contained in the appendix hereto titled "Regulatory
texts".
<PAGE>
TITLE 4 OF THE GENERAL TERMS
- --------------------------------------------------------------------------------
400 GUARANTEES OFFERED BY THE LESSEE
- --------------------------------------------------------------------------------
401 PERSONAL GUARANTEE
Not applicable.
402 DEATH AND DISABILITY INSURANCE
Not applicable.
*403 OTHER GUARANTEES
As applicable specified in the Special Terms.
<PAGE>
TITLE 5 OF THE GENERAL TERMS
Not applicable.
<PAGE>
TITLE 6 OF THE GENERAL TERMS
- --------------------------------------------------------------------------------
600 CONDITION PRECEDENT
- --------------------------------------------------------------------------------
As the LESSOR has received this day, by notarized deed, the rights
referred to under paragraph 101 of the General Terms, this contract is
not subject to any condition precedent.
<PAGE>
TITLE 7 OF THE GENERAL TERMS
- --------------------------------------------------------------------------------
700 MISCELLANEOUS PROVISIONS AND REPRESENTATIONS
- --------------------------------------------------------------------------------
*701 TERMS OF PAYMENT GOVERNING SUMS OWED BY THE LESSEE
All sums owed by the LESSEE to the LESSOR, regardless which, shall be
debited by the LESSOR by debit advice from the LESSEE's bank account
specified in the Special Terms.
To this end, the LESSEE irrevocably undertakes to sign a "debit
request" for the LESSOR and a "debit authorization" for its bank.
Before each due date, the LESSOR shall inform the LESSEE of the amount
of due sums. Should the LESSOR for one or more terms forego issuing a
debit advice and instead request the LESSEE to make payment by
transfer, said LESSEE shall make such transfer to the LESSOR's bank
account specified in the Special Terms, at the value date stipulated in
the term advice, in order to comply with the financial nature of the
contract.
702 LATE-PAYMENT INTEREST
In case of late payment of any sum due under this contract, the LESSEE
shall owe the LESSOR, for every past-due month, a net indemnity
calculated over the due amount and billed monthly in arrears at the
base rate of CREDIT LYONNAIS in force at the first day of the period
covered by the invoice for late-payment interest, plus six points. Said
rate shall in no event be less than the annual proportional rate
applied to the last periodic effective net rent prior to the late
payment. Any month which has begun shall be counted as a full month.
This indemnity shall be automatically due without prior summons and its
payment shall in no event be construed as approval of additional time
for payment for the LESSEE.
<PAGE>
703 VACATION OF PREMISES
703.1 In the event that no sales consummation request is made and no new
lease is signed between the parties and in the event of early
termination, the LESSEE and any occupant for whom it is answerable
shall vacate the premises at the latest by the expiration or
termination date of this contract.
In case of late departure from the premises, the LESSEE shall pay the
LESSOR an occupancy indemnity equal to three times the rent of the last
lease term, including VAT, calculated pro-rata temporis month by month.
Each month which has begun shall be due. This indemnity shall be
independent from the termination indemnity provided for in the
paragraphs 209.2 and 210.7.
The LESSEE may further be constrained to leave the premises at once by
order in summary proceedings finding in favor of termination of the
contract and ordering the LESSEE's expulsion.
703.2 If the LESSEE carries on a business entailing pollution risks, notably
of the subsoil, it shall, if no sales consummation request is made and
in case of early termination, carry out the necessary soil and subsoil
removal and restoration works and provide evidence of an expert
analysis, conducted at its own expense, showing that no pollution
remains, nor any trace of substances capable of contaminating the site.
If a classified facility, the LESSEE shall also produce the receipt for
its declaration that it has ceased business.
704 LESSOR'S PRIVILEGE
It is expressly stipulated that the LESSOR's privilege shall guarantee
not only payment of the rent and charges but also all complementary
rent, all occupancy indemnities and all termination indemnities
provided for in the contract.
705 VAT OPTION
At the LESSEE's request, the LESSOR declares that it opts for
value-added tax on the income of this lease.
<PAGE>
706 REPAYMENT OF VAT TO THE TREASURY BY WAY OF REGULARIZATION
706.1 In the event that, by virtue of applicable tax laws and regulations,
notably Article 210, Appendix II, of the General Tax Code, the LESSOR
has to repay VAT on the investment to the Treasury, the amount of such
repayments shall be borne by the LESSEE or the buyer of the property on
the following conditions.
706.2 If repayment is further to the sale of the property by virtue of any of
the clauses of the contract, whether to the LESSEE or to a third party,
the sales price, as defined in paragraph 303.2, shall be incremented by
the amount of VAT repayments, in accordance with paragraph 303.3.
In consideration of this price increase, the LESSOR, in its capacity as
seller, shall supply the buyer with an the affidavit provided for in
paragraph IV of the before-mentioned Article 210, which shall enable
the buyer to deduct the amount of VAT mentioned therein within the
limits of its own rights.
If repayment is further to total expropriation, it shall be taken into
account in calculating the lease termination indemnity incumbent on the
LESSOR or the LESSEE, as applicable.
706.3 In all other cases of VAT repayment by the LESSOR, the LESSEE shall pay
the LESSOR complementary net rent equal to the amount of the repayment,
incremented by the corresponding VAT.
<PAGE>
*707 LAND REGISTRATION
This deed shall be registered at the competent mortgage registry at the
LESSEE's cost.
For collection of the land registration tax and the emoluments of the
mortgage registrar, the parties shall value the cumulative rent for all
years of the lease, the sale price to the LESSEE on expiration of the
lease and the amounts of charges stipulated in the Special Terms.
In their common interest, the parties empower the persons designated in
the Special Terms, with the power to act separately, to draw up and
sign all complementary deeds or amendments to this contract necessary
to accomplish the land registration formalities.
708 GENERAL MEETINGS OF CO-OWNERS ASSOCIATION
The LESSOR mandates the LESSEE to represent it at the General Meetings
of the Co-Owners Association, if there is one, and on its behalf to
take part in all deliberations and votes at such General Meetings.
The LESSEE shall send the LESSOR within fifteen days a report on such
General Meetings.
<PAGE>
709 MISCELLANEOUS COSTS
All costs, duties and emoluments connected with this contract, the deed
recording performance of the condition precedent if there is one, the
binding copy to be delivered to the LESSOR and all future costs, duties
and emoluments connected with this, shall be borne exclusively by the
LESSEE, which so accepts.
*710 MANAGEMENT POWERS (if the LESSOR is an undivided entity)
As applicable specified in the Special Terms.
*711 OTHER PROVISIONS
As applicable specified in the Special Terms.
712 LESSEE'S WARRANTIES AND REPRESENTATIONS
The LESSEE warrants and represents that it is a company governed by
French law.
The LESSEE warrants and represents that it is not subject to any
request for nullity or dissolution.
The LESSEE warrants and represents that it has no objection to the
LESSOR's mentioning in its corporate documents the location of the
lease property and the name of the LESSEE's business as well as the
amount of the investment, as determined in this contract.
713 ELECTION OF DOMICILE - JURISDICTION
For the purpose of this contract and any deeds and documents further
hereto, the parties elect domicile at the respective registered offices
of the companies represented by them.
Moreover, it is agreed that all disputes connected with this lease
contract and the unilateral sales undertaking contained herein shall be
the exclusive jurisdiction of the courts of PARIS.
<PAGE>
- --------------------------------------------------------------------------------
PART TWO
SPECIAL TERMS
- --------------------------------------------------------------------------------
This second part only refers to those General
Terms which are complemented or modified in
application of this contract.
<PAGE>
TITLE 1 OF THE SPECIAL TERMS
- --------------------------------------------------------------------------------
100 AGREEMENT REGARDING THE PERIOD PRIOR TO THE EFFECTIVE DATE OF THE LEASE
- --------------------------------------------------------------------------------
101 PURCHASE OF SITE
The notarized deed of the LESSOR's acquisition of the rights referred to in
paragraph 101 of the General Terms is signed this day in the presence of
Maitre Francis BERGERAULT, the aforesaid notary.
An authentic copy of this deed shall be published at the competent mortgage
registry.
102 ERECTION OF CONSTRUCTIONS
102.6 Works completion deadline: 31 March 1998
103 FINANCING OF WORKS
103.2 The LESSOR agrees to finance the investment up to the following ceiling:
- acquisition of site FRF 5,000,000 ex-VAT
- provision for acquisition costs FRF 75,000
- construction FRF 25,925,000 ex-VAT
-----------------------
FRF 31,000,000
(THIRTY-ONE MILLION FRANCS)
To this ceiling shall be added the corresponding VAT.
The investment shall be financed as follows:
- Financing by SLIBAIL IMMOBILIER FRF 15,500,000
- Financing by NORBAIL IMMOBILIER FRF 15,500,000
--------------
FRF 31,000,000
It is herewith specified that the LESSEE, in accordance with
paragraph 403 of the Special Terms, in order to guarantee the
financings provided by SLIBAIL IMMOBILIER and NORBAIL IMMOBILIER,
the LESSEE shall pay an advance of FRF 8,000,000, including FRF
4,000,000 onto the account of SLIBAIL IMMOBILIER and FRF
4,000,000 onto the account of NORBAIL IMMOBILIER.
<PAGE>
104 PRERENT
104.1 Commitment fee
Calculation basis: financing ceiling excluding recoverable VAT as
defined above in the chapter "Works Financing".
Annual rate: 0.25% (zero unit and twenty-five centimes per cent).
Terms of payment:
Quarterly in advance on 1 January, 1 April, 1 July and 1 October
of each year, from 30 November 1996 until the end of the calendar
quarter during which the lease takes effect and, for the first
time, at the day on which this contract is signed, for the period
running until the end of the current calendar quarter.
104.2 Interim interest
Annual rate for calculating interest according to the terms specified in
the General Terms:
Average monthly money market rate paid on the interbank market,
established by Association Francaise des Banques and officially
published by Societe des Bourses Francaises for the month preceding the
month of the term, plus 1.00 point.
104.4 Financial engineering costs
FRF 50,000 paid when this contract is signed and divided as follows:
- SLIBAIL IMMOBILIER: FRF 40,000
- NORBAIL IMMOBILIER: FRF 10,000
104.5 Other costs
Not applicable.
<PAGE>
TITLE 2 OF THE SPECIAL TERMS
200 LEASE
201 EFFECTIVE DATE - TERM
201.2 From its effective date, the lease shall have a term of 12 whole
and consecutive years.
203 ENJOYMENT AND PURPOSE OF PREMISES
203.1 The premises shall be occupied exclusively for industrial use.
207 RENT
On the terms stipulated in paragraph 207.5 of the Special Terms, the
periodic basic net rent shall fall due and be payable in advance, each
calendar quarter.
207.1 Amount of periodic basic net rent
1) SHARE OF SLIBAIL IMMOBILIER
207.1.1.1 and 207.1.1.2
By exception to the General Terms, given that the
LESSEE must pay SLIBAIL IMMOBILIER on the effective
date of the lease an initial advance of FRF 4,000,000,
as specified in Article 403 of the Special Terms, the
rent shall consist of two elements:
1) FIRST ELEMENT
This first element shall be calculated by applying the
percentages stipulated below, in accordance with paragraph
207.1 of the General Terms, to the "net total investment
cost", as defined in paragraph 207.1.2 of the General Terms,
less the amount of the initial advance paid by the LESSEE.
The first element shall be calculated in accordance with the
terms laid out in the General Terms in application of the
table below.
<PAGE>
2) SECOND ELEMENT
This element, which shall consist only of
amortization of the principal, shall be calculated
by applying the same percentages as used for the
first element to the amount of the initial advance
paid by the LESSEE, assuming that the lease takes
effect on the first day of a calendar period.
The net amount, ex-VAT, of this second element
shall be paid by offsetting it with the
amortization of the LESSEE's advance, as
stipulated in paragraph 403 of the Special Terms.
If the LESSEE's advance of FRF 4,000,000 is not
paid at the effective date of the lease, the first
element of the periodic rent shall be calculated
over the total investment cost as defined in
paragraph 207.1.1 of the General Terms.
As the percentages to be applied to the "total
investment cost" at each term of the periodic rent in
order to determine, first, the amount of the financial
amortization (column 1) and, secondly, the financial
outstandings (column 2) used to calculate the amount of
interest - established on the assumption that the
effective date of the lease will fall on the first day
of a calendar period - they shall therefore be revised,
if the effective date of the lease occurs during a
calendar period - have been fixed as follows:
<PAGE>
Column 1: Financial amortization as a percent
Column 2: Interest calculation basis as a percent
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------
Due dates Column 1 Column 2
- --------------------------------------------------------------------------------
<S> <C> <C>
1 2.94371 97.05629
two units and ninety-four ninety-seven units and
thousand three hundred five thousand six hundred
seventy-one thousandth twenty-nine thousandth
percent percent
- --------------------------------------------------------------------------------
2 2.88903 94.16726
two units and eighty- ninety-four and sixteen
eight thousand nine thousand seven hundred
hundred three thousandth twenty-six thousandth
percent percent
- --------------------------------------------------------------------------------
3 2.83579 91.33147
two units and eighty- ninety-one units and
three thousand five thirty-three thousand one
hundred seventy-nine hundred forty-seven
thousandth percent thousandth percent
- --------------------------------------------------------------------------------
4 2.78397 88.54751
two units and seventy- eighty-eight units and
eight thousand three fifty-four thousand seven
hundred ninety-seven hundred fifty-one
thousandth percent thousandth percent
- --------------------------------------------------------------------------------
5 2.73353 85.81398
two units and seventy- eighty-five three hundred
three thousand three ninety-eight thousandth
hundred fifty-three percent
thousandth units
- --------------------------------------------------------------------------------
</TABLE>
<PAGE>
Column 1: Financial amortization as a percent
Column 2: Interest calculation basis as a percent
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------
Due dates Column 1 Column 2
- --------------------------------------------------------------------------------
<S> <C> <C>
6 2.68445 83.12953
two units and sixty-eight eighty-three units and
thousand four hundred twelve thousand nine
forty-five thousandth hundred fifty-three
percent thousandth percent
- --------------------------------------------------------------------------------
7 2,63670 80.49283
two units and sixty-three eighty units and forty-
thousand six hundred nine thousand two hundred
seventy thousandth eighty-three thousandth
percent percent
- --------------------------------------------------------------------------------
8 2.59026 77.90257
two units and fifty-nine seventy-seven units and
thousand twenty-six ninety thousand two
thousandth percent hundred fifty-seven
thousandth percent
- --------------------------------------------------------------------------------
9 2.54510 75.35747
two units and fifty-four seventy-five units and
thousand five hundred ten thirty-five thousand
thousandth percent seven hundred forty-seven
thousandth percent
- --------------------------------------------------------------------------------
10 2.50119 72.85629
two units fifty thousand seventy-two units and
one hundred nineteen eighty-five thousand six
thousandth percent hundred twenty-nine
thousandth percent
- --------------------------------------------------------------------------------
</TABLE>
<PAGE>
Column 1: Financial amortization as a percent
Column 2: Interest calculation basis as a percent
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------
Due dates Column 1 Column 2
- --------------------------------------------------------------------------------
<S> <C> <C>
11 2.45851 70.39778
two units and forty-five seventy units and thirty-
thousand eight hundred nine thousand seven
fifty-one thousandth hundred seventy-eight
percent thousandth percent
- --------------------------------------------------------------------------------
12 2.41704 67.98074
two units and forty-one sixty-seven units and
thousand seven hundred ninety-eight thousand
four thousandth percent seventy-four thousandth
percent
- --------------------------------------------------------------------------------
13 2.37675 65.60400
two units and thirty- sixty-five units and
seven thousand six sixty thousand four
hundred seventy-five hundred thousandth
thousandth percent percent
- --------------------------------------------------------------------------------
14 2.33762 63.26638
two units and thirty- sixty-three units and
three thousand seven twenty-six thousand six
hundred sixty-two hundred thirty-eight
thousandth percent thousandth percent
- --------------------------------------------------------------------------------
15 2.29963 60.96674
two units and twenty-nine sixty units and ninety-
thousand nine hundred six thousand six hundred
sixty-three thousandth seventy-four thousandth
percent percent
- --------------------------------------------------------------------------------
</TABLE>
<PAGE>
Column 1: Financial amortization as a percent
Column 2: Interest calculation basis as a percent
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------
Due dates Column 1 Column 2
- --------------------------------------------------------------------------------
<S> <C> <C>
16 2.26276 58.70398
two units and twenty-six fifty-eight thousand
thousand two hundred units and seventy
seventy-six thousandth thousand three hundred
percent ninety-eight thousandth
percent
- --------------------------------------------------------------------------------
17 2.22699 56.47699
two units and twenty-two fifty-six units and
thousand six hundred forty-seven thousand six
ninety-nine thousandth hundred ninety-nine
percent thousandth percent
- --------------------------------------------------------------------------------
18 2.19229 54.28470
two units and nineteen fifty-four units and
thousand two hundred twenty-eight thousand
twenty-nine thousandth four hundred seventy
percent thousandth percent
- --------------------------------------------------------------------------------
19 2.15865 52.12605
two units and fifteen fifty-two units and
thousand eight hundred twelve thousand six
sixty-five thousandth hundred five thousandth
percent percent
- --------------------------------------------------------------------------------
20 2.12605 50.0000
two units and twelve fifty units percent
thousand six hundred five
thousandth percent
- --------------------------------------------------------------------------------
</TABLE>
<PAGE>
Column 1: Financial amortization as a percent
Column 2: Interest calculation basis as a percent
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------
Due dates Column 1 Column 2
- --------------------------------------------------------------------------------
<S> <C> <C>
21 2.09447 47.90553
two units and nine forty-seven units and
thousand four hundred ninety thousand five
forty-seven thousandth hundred fifty-three
percent thousandth percent
- --------------------------------------------------------------------------------
22 2.06389 45.84164
two units and six forty-five units and
thousand three hundred eighty-four thousand one
eighty-nine thousandth hundred sixty-four
percent thousandth percent
- --------------------------------------------------------------------------------
23 2.03429 43.80735
two units and three forty-three units and
thousand four hundred eighty thousand seven
twenty-nine thousandth hundred thirty-five
percent thousandth percent
- --------------------------------------------------------------------------------
24 2.00566 41.80169
two units and five forty-one units and
hundred sixty-six eighty thousand one
thousandth percent hundred sixty-nine
thousandth percent
- --------------------------------------------------------------------------------
25 1.97798 39.82372
one unit and ninety-seven thirty-nine units and
thousand seven hundred eighty-two thousand three
ninety-eight thousandth hundred seventy-two
percent thousandth percent
- --------------------------------------------------------------------------------
</TABLE>
<PAGE>
Column 1: Financial amortization as a percent
Column 2: Interest calculation basis as a percent
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------
Due dates Column 1 Column 2
- --------------------------------------------------------------------------------
<S> <C> <C>
26 1.95123 37.87249
one unit and ninety-five thirty-seven units and
thousand one hundred eighty-seven thousand two
twenty-three thousandth hundred forty-nine
percent thousandth percent
- --------------------------------------------------------------------------------
27 1.92540 35.94709
one unit and ninety-two thirty-five units and
thousand five hundred ninety-four thousand
forty thousandth percent seven hundred nine
thousandth percent
- --------------------------------------------------------------------------------
28 1.90047 34.04661
one unit and ninety thirty-four units and
thousand forty-seven four thousand six hundred
thousandth percent sixty-one thousandth
percent
- --------------------------------------------------------------------------------
29 1.87643 32.17018
one unit and eighty-seven thirty-two units and
thousand six hundred seventeen thousand
forty-three thousandth eighteen thousandth
percent percent
- --------------------------------------------------------------------------------
30 1.85327 30.31691
one unit and eighty-five thirty units and thirty-
thousand three hundred one thousand six hundred
twenty-seven thousandth ninety-one thousandth
percent percent
- --------------------------------------------------------------------------------
</TABLE>
<PAGE>
Column 1: Financial amortization as a percent
Column 2: Interest calculation basis as a percent
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------
Due dates Column 1 Column 2
- --------------------------------------------------------------------------------
<S> <C> <C>
31 1.83096 28.48596
one unit and eighty-three twenty-eight units and
thousand ninety-six forty-eight thousand five
thousandth percent hundred ninety-six
thousandth percent
- --------------------------------------------------------------------------------
32 1.80950 26.67646
one unit and eighty twenty-six units and
thousand nine hundred sixty-seven thousand six
fifty thousandth percent hundred forty-six
thousandth percent
- --------------------------------------------------------------------------------
33 1.78887 24.88759
one unit and seventy- twenty-four units and
eight thousand eight eighty-eight thousand
hundred eighty-seven seven hundred fifty-nine
thousandth percent thousandth percent
- --------------------------------------------------------------------------------
34 1.76906 23.11854
one unit and seventy-six twenty-three units and
thousand nine hundred six eleven thousand eight
thousandth percent hundred fifty-four
thousandth percent
- --------------------------------------------------------------------------------
35 1.75005 21.36848
one unit and seventy-five twenty-one units and
thousand five thousandth thirty-six thousand eight
percent hundred forty-eight
thousandth percent
- --------------------------------------------------------------------------------
</TABLE>
<PAGE>
Column 1: Financial amortization as a percent
Column 2: Interest calculation basis as a percent
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------
Due dates Column 1 Column 2
- --------------------------------------------------------------------------------
<S> <C> <C>
36 1.73185 19.63664
one unit and seventy- nineteen units and sixty-
three thousand one three thousand six
hundred eighty-five hundred sixty-four
thousandth percent thousandth percent
- --------------------------------------------------------------------------------
37 1.71442 17.92221
one unit and seventy-one seventeen units and
thousand four hundred ninety-two thousand two
forty-two thousandth hundred twenty-one
percent thousandth percent
- --------------------------------------------------------------------------------
38 1.69777 16.22445
one unit and sixty-nine sixteen units and twenty-
thousand seven hundred two thousand six hundred
seventy-seven thousandth forty-five thousandth
percent percent
- --------------------------------------------------------------------------------
39 1.68188 14.54257
one unit and sixty-eight fourteen units and fifty-
thousand one hundred four thousand two hundred
eighty-eight thousandth fifty-seven thousandth
percent percent
- --------------------------------------------------------------------------------
40 1.66674 12.87583
one unit and sixty-six twelve units and eighty-
thousand six hundred seven thousand five
seventy-four thousandth hundred eighty-three
percent thousandth percent
- --------------------------------------------------------------------------------
</TABLE>
<PAGE>
Column 1: Financial amortization as a percent
Column 2: Interest calculation basis as a percent
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------
Due dates Column 1 Column 2
- --------------------------------------------------------------------------------
<S> <C> <C>
41 1.65234 11.22348
one unit and sixty-five eleven units and twenty-
thousand two hundred two thousand three
thirty-four thousandth hundred forty-eight
percent thousandth percent
- --------------------------------------------------------------------------------
42 1.63867 9.58481
one unit and sixty-three nine units and fifty-
thousand eight hundred eight thousand four
sixty-seven thousandth hundred eighty-one
percent thousandth percent
- --------------------------------------------------------------------------------
43 1.62573 7.95908
one unit and sixty-two seven units and ninety-
thousand five hundred five thousand nine
seventy-three thousandth hundred eight thousandth
percent percent
- --------------------------------------------------------------------------------
44 1.61349 6.34559
one unit and sixty-one six units and thirty-four
thousand three hundred thousand five hundred
forty-nine thousandth fifty-nine thousandth
percent percent
- --------------------------------------------------------------------------------
45 1.60196 4.74362
one unit and sixty four units and seven-four
thousand on hundred thousand three hundred
ninety-six thousandth sixty-two thousandth
percent percent
- --------------------------------------------------------------------------------
</TABLE>
<PAGE>
Column 1: Financial amortization as a percent
Column 2: Interest calculation basis as a percent
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------
Due dates Column 1 Column 2
- --------------------------------------------------------------------------------
<S> <C> <C>
46 1.59113 3.15249
one unit and fifty-nine three units and fifteen
thousand one hundred thousand two hundred
thirteen thousandth forty-nine thousandth
percent percent
- --------------------------------------------------------------------------------
47 1.58098 1.57151
one unit and fifty-eight one unit and fifty-seven
thousand and ninety-eight thousand one hundred
thousandth percent fifty-one thousandth
percent
- --------------------------------------------------------------------------------
48 1.57151 0.0000
one unit and fifty-seven zero unit percent
thousand one hundred
fifty one thousandth
percent
- --------------------------------------------------------------------------------
</TABLE>
<PAGE>
207.1.1.2
The annual proportional rate T referred to in paragraph 207.1.1.2 of the
General Terms shall be determined as follows:
T = 6.75%
Calculated according to the refinancing rates based on resources from
industrial development accounts (CODEVI), currently subject to interest
of 3.50%, this rate shall vary the same way as the average interest rate
on the credit balance of such industrial development accounts (CODEVI)
during the three (3) months preceding the month in which the periodic
rental term is due.
For example, if the average interest rate on the credit balance of
CODEVI accounts is lowered from 3.50% to 3.00% (i.e. a decrease of 0.50
point), the proportional annual rate T shall also be lowered by 0.50
point to 6.25%.
In the event that the average interest rate on the credit balance of
CODEVI accounts can no longer be determined, irrespective of the reason,
and no official replacement rate is provided, the proportional annual
rate T applicable to each due date of the periodic rent shall be
determined as follows:
T = M.TRM02 + 2.00 point. M.TRM02 shall be equal to the arithmetic mean
of the average yield (TRM) on blue chip private-sector bonds on the
secondary market, at the end of the week, calculated by Caisse des
Depots et Consignations during the month preceding the month in which
the periodic rental term falls due.
2) SHARE OF NORBAIL IMMOBILIER
The quarterly basic net rent (ex-VAT) shall be equal to the sum of the
following elements.
1. 1ST ELEMENT
1ST PART
Reimbursement of principal over the term of the lease
according to the accelerated amortization method, in
accordance with the foregoing table, for the entire principal
invested in the operation by NORBAIL IMMOBILIER less the
amount of the initial advance paid by the LESSEE.
<PAGE>
SECOND PART
This second part, which shall only include amortization of the
principal, shall be calculated at the same amortization rate as the
first part, over the amount of the initial advance paid by the LESSEE,
on the assumption that the lease takes effect on the first day of a
calendar period.
The ex-VAT amount of this second part shall be paid by offsetting it
with the amortization of the LESSEE's advance, as stipulated in
paragraph 403 of the Special Terms.
If the LESSEE's advance of FRF 4,000,000 is not paid at the effective
date of the lease, the first element of the periodic rent shall be
calculated over the total principal invested by NORBAIL IMMOBILIER and
the LESSOR shall be entitled to demand application of the resolution
clause, in accordance with paragraph 403 of the Special Terms.
2ND ELEMENT
Interest calculated pro-rata temporis, i.e. by entering under the
numerator the exact number of days of the calendar year and under the
denominator the financial year, and applying to the financial
outstandings, after amortization of the principal invested by NORBAIL
IMMOBILIER in the operation over interest-bearing resources, a quarterly
coefficient equal to:
TC + 3.25 (nominal advance rate)
---------
4
where TC stands for the interest rate on CODEVI savings accounts opened
at CREDIT DU NORD with a minimum of 3.50%.
The TC shall be the rate in force at the date of the rental term.
For example, for an investment net of subsidies of FRF 1,000,000,
excluding VAT, based on a quarter of 90 days and reference rate
"TC" for March 1996, i.e. 3.50%, the straight-line constant
quarterly rent, excluding VAT, would be FRF 30,230.76 during 48
quarters.
207.2 Indexation of periodic basic net rent
- percentage of indexable quarterly basic net rent: 0% (zero
percent)
- percentage of indexable quarterly basic net rent: 100% (one
hundred percent)
<PAGE>
207.5 Payment of rent
The periodic effective net rent, plus due VAT, shall fall due and be
payable quarterly in advance on 1 January, 1 April, 1 July and 1
October of each year and for the first time at the effective date of
the lease, for the period remaining until the end of the calendar
period then in progress.
No management fee shall be collected at each due date.
207bis TEMPORARY COMPLEMENTARY RENT
207bis 2 Annual rate to be retained for calculating interest according to the
conditions stipulated in the Special Terms.
Average monthly money market rate paid on the interbank
market, established by Association Francaise des Banques and
officially published by Societe des Bourses Francaises for
the month preceding the month of the term, plus 1.00 point.
<PAGE>
TITLE 3 OF THE SPECIAL TERMS
- --------------------------------------------------------------------------------
300 UNILATERAL UNDERTAKING TO SELL THE LEASED PROPERTY
- --------------------------------------------------------------------------------
301 PURPOSE
301.1 By derogation from the provisions in the General Terms, the LESSEE
shall be entitled to request consummation of the property sale by the
end of the 5th year and each of the following lease years until
expiration of the contract, subject to compliance with the option
terms and deadlines stipulated in paragraph 302.2.
303 TERMS AND CONDITIONS OF SALE
303.2 Given the above derogation to paragraph 301.1 of the General Terms and
if the stipulations in these Articles are exercised by the LESSEE, the
sales price including an indemnity shall be calculated as follows:
The total rent remaining due after discounting at the
contract rate less 2.50%. The contract rate would itself be
discount on the basis of T (for SLIBAIL IMMOBILIER) and TC
(for NORBAIL IMMOBILIER) known at the option exercise day,
if the amount of this rate is less than that used to
determine the rent.
303.2.1 At the end of each lease year, the residual financial value before
indexation of the "total investment cost" shall be obtained by adding
up the following two elements:
1ST ELEMENT
This element is obtained by applying the following
percentages to the "total investment cost" defined in
paragraph 207.1.2 of the General Terms less the amount of
the LESSEE's initial advance.
2ND ELEMENT
This element is obtained by applying the same percentages as
to element 1 to that part of the "total investment cost"
defined in paragraph 207.1.2 of the General Terms, financed
from the LESSEE's advance referred to in paragraph 403 of
the Special Terms.
<PAGE>
This second element shall be paid by offsetting it with the
balance of the LESSEE's advance.
It is herewith specified that, although the LESSEE can only
request consummation of the sale by the end of the fifth
lease year at the earliest (paragraph 301.1), the following
percentages are also given for earlier years, to make it
possible, as applicable, to implement the provisions in the
paragraphs 209, 210, 211 and 213 of the General Terms.
<PAGE>
Column 1: end of lease year
Column 2: residual value as a percent
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------
Column 1 Column 2
- --------------------------------------------------------------------------------
<S> <C>
1 88.5475
eighty-eight units and fifty-four thousand seven
hundred fifty-one thousandth percent
- --------------------------------------------------------------------------------
2 77.90257
seventy-seven units and ninety thousand two hundred
fifty-seven thousandth percent
- --------------------------------------------------------------------------------
3 67.98074
sixty-seven units and ninety-eight thousand seventy-
four thousandth percent
- --------------------------------------------------------------------------------
4 58.70398
fifty-eight thousand units and seventy thousand
three hundred ninety-eight thousandth percent
- --------------------------------------------------------------------------------
5 50.0000
fifty units percent
- --------------------------------------------------------------------------------
6 41.80169
forty-one units and eighty thousand one hundred
sixty-nine thousandth percent
- --------------------------------------------------------------------------------
7 34.04661
thirty-four units and four thousand six hundred
sixty-one thousandth percent
- --------------------------------------------------------------------------------
8 26.67646
twenty-six units and sixty-seven thousand six
hundred forty-six thousandth percent
- --------------------------------------------------------------------------------
</TABLE>
<PAGE>
Column 1: end of lease year
Column 2: residual value as a percent
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------
Column 1 Column 2
- --------------------------------------------------------------------------------
<S> <C>
9 19.63664
nineteen units and sixty-three thousand six hundred
sixty-four thousandth percent
- --------------------------------------------------------------------------------
10 12.87583
twelve units and eighty-seven thousand five hundred
eighty-three thousandth percent
- --------------------------------------------------------------------------------
11 6.34559
six units and thirty-four thousand five hundred
fifty-nine thousandth percent
- --------------------------------------------------------------------------------
12 1
one franc
- --------------------------------------------------------------------------------
</TABLE>
<PAGE>
TITLE 1 OF THE SPECIAL TERMS
400 GUARANTEES OFFERED BY THE LESSEE
403 OTHER GUARANTEES
LESSEE'S ADVANCE
At the effective date of the lease, the LESSEE shall pay the
LESSOR an advance of FRF 8,000,000, including FRF 4,000,000
onto the account of SLIBAIL IMMOBILIER and FRF 4,000,000
onto the account of NORBAIL IMMOBILIER, which shall not bear
interest and which shall be deducted from the calculation
basis of the first element of the rent referred to in
paragraph 207.1 of the Special Terms.
This advance shall be reimbursed at each due date by
offsetting it with the amount of the second element of the
rent for SLIBAIL IMMOBILIER and with the second part of the
first element of the rent for NORBAIL IMMOBILIER, as defined
in paragraph 207.1 of the Special Terms.
In case of early exercise of the option, the balance of the
advance shall be reimbursed by offsetting it with the sales
price defined in paragraph 303.
The amount of the advance not yet reimbursed shall consist
of cash pledged in favor of the LESSOR to guarantee that the
LESSOR will be paid all sums due by the LESSEE under this
contract.
Failure to pay the said advance of FRF 8,000,000 shall
entail, at the LESSOR's discretion, application of the
resolution clause referred to in paragraph of the General
Terms.
<PAGE>
TITLE 7 OF THE SPECIAL TERMS
700 MISCELLANEOUS PROVISIONS AND REPRESENTATIONS
701 TERMS OF PAYMENT GOVERNING SUMS OWED BY THE LESSEE
Reference of LESSOR's bank accounts to be credited:
For SLIBAIL IMMOBILIER
- - Name of LESSOR: SLIBAIL IMMOBILIER
- - Name of bank: CREDIT LYONNAIS (Code 30002)
- - Designation and address of bank branch:
Agence ABI (Code 00880)
20 rue Treilhard, 75008 PARIS
- - Account No: 2P, bank sort code 46
For NORBAIL IMMOBILIER
- - Name of LESSOR: NORBAIL IMMOBILIER
- - Name of bank: CREDIT DU NORD (Code 30076)
- - Designation and address of bank branch:
Agence Centrale Entreprises 02020
- - Account No: 27457200200, bank sort code 35
Reference of LESSEE's bank accounts:
For SLIBAIL IMMOBILIER
- - Name of bank: CREDIT LYONNAIS (Code 30002)
- - Designation and address of bank branch:
CAE LEVALLOIS 796 Nanterre
- - Account No: 100 Z, bank sort code 09
For NORBAIL IMMOBILIER
- - Name of bank: CREDIT DU NORD (Code 30076)
- - Designation and address of bank branch:
Agence de Puteaux, rue Bellini
- - Account No: 300760206310597700200, bank sort code 74
The share of each LESSOR in the rent shall be debited separately.
<PAGE>
707 LAND REGISTRATION
Since this property lease does not exceed twelve (12) years,
it will not be subjected to land publication formalities.
VALUATION
a) For the purpose of land publication, as applicable, the
parties value:
- All cumulative years of rent, ex-VAT, at the sum of
FORTY-TWO MILLION SIXTY-FIVE THOUSAND SIX HUNDRED TWENTY
FRENCH FRANCS (FRF 42,065,620 ex-VAT), including ELEVEN
MILLION SIXTY-FIVE THOUSAND SIX HUNDRED TWENTY FRENCH FRANCS
(FRF 11,065,620 ex-VAT) for financial costs paid by the
LESSEE, i.e. an assessment basis of THIRTY-ONE MILLION
FRENCH FRANCS (FRF 31,000,000) for land publication tax.
b) For the emolument of the Registrar, as applicable, the
parties value:
- All cumulative years of rent, including value-added
tax, at the sum of FIFTY MILLION SEVEN HUNDRED THIRTY-ONE
THOUSAND ONE HUNDRED THIRTY-SEVEN FRENCH FRANCS (FRF
50,731,137 including VAT).
- The residual price in consideration of which the sale
will be consummated in favor of the LESSEE when the
operation is settled, if the aforesaid sales undertaking is
exercised, shall be ONE FRENCH FRANC (FRF 1).
c) For the land publication tax and for the emolument of
the Registrar, as applicable, the parties value the charges
incumbent on the LESSEE, which would be due to the LESSOR,
at the sum of THREE HUNDRED SEVENTY-TWO THOUSAND FRENCH
FRANCS (FRF 372,000).
The parties further specify that the amount of the total
investment projected by the LESSOR for this operation
amounts to the net sum of THIRTY-ONE MILLION FRENCH FRANCS
(FRF 31,000,000 ex-VAT), i.e. including all taxes the sum of
THIRTY-SEVEN MILLION THREE HUNDRED SEVENTY THOUSAND FIVE
HUNDRED FIFTY FRENCH FRANCS (FRF 37,370,550 including VAT).
<PAGE>
710 MANAGEMENT POWERS
Mrs Morane Gaillard, ex-officio as the representative of
NORBAIL IMMOBILIER, herewith mandates SLIBAIL IMMOBILIER,
for the entire term of this lease, to carry out all
day-to-day management and administration operations
connected with the said lease, notably:
- to collect all sums by way of pre-rent, ordinary and
extraordinary charges, termination indemnities, sales price,
levies and taxes, except NORBAIL IMMOBILIER's share in the
rent, which it shall bill directly.
- to divide the income from its management between
SLIBAIL IMMOBILIER and NORBAIL IMMOBILIER in proportion to
their participation in this operation.
Mr Hiebel, ex-officio as the representative of SLIBAIL
IMMOBILIER, expressly accepts the mandate hereby vested in
SLIBAIL IMMOBILIER.
The LESSEE takes note of the above agreements and
undertakes:
- to pay SLIBAIL IMMOBILIER all sums which it must pay
the LESSOR in any respect by virtue of this lease, except
NORBAIL IMMOBILIER's share in rent, which shall be paid
directly.
- to send SLIBAIL IMMOBILIER notice of all option
exercise requests, whether at an early date or not, or lease
termination requests and to send it notice of all transfers
or contributions of the right to this lease.
However, it is herewith specified:
- that VAT shall be managed separately by each property
financing company;
- that the mandator's prior agreement shall be obtained for
all decisions exceeding the framework of day-to-day management
(early termination, transfer, expropriation of the building,
insurance losses, legal actions, etc.).
<PAGE>
711 OTHER PROVISIONS
- REGULATED ZONE
It is herewith stipulated that the property leased under
this contract is part of the ZONE D'AMENAGEMENT CONCERTE DE
L'ECHANGEUR ("Cloverleaf" concerted development zone),
created by resolution of the town council of the city of
BOURGES on 26 October 1989 and approved by the Prefect of
the Cher district on 26 October 1989, of which the documents
are filed with Maitre BOUTET, notary in partnership in
BOURGES.
The LESSEE warrants and represents that it has acquainted
itself with the terms and conditions of these development
regulations (concession agreement, concession
specifications, land transfer specifications) and
undertakes, in the LESSOR's place, to comply with and to
accomplish all obligations and conditions resulting from
these documents, in such a way that the LESSOR can never be
wanted in this respect for any reason whatsoever.
In accordance with paragraph 208.3 of the General Terms, the
LESSEE shall also bear all charged resulting from these
regulations, in such a way that the LESSOR can never be
wanted in this respect for any reason whatsoever.
- BUILDING PERMIT
At the date on which this contract is signed, the period for
recourse further to delivery of building permit No 018033 97
P0025 of 7 March 1997 has not yet expired.
This lease shall automatically be terminated, at the
LESSOR's discretion, without legal formality, if, by 31
December 1997, the LESSEE has not obtained, for the premises
governed by this contract, a building permit which has
become final because of absence of recourse during the legal
period of recourse or because of a final court order
pronounced further to recourse.
Termination shall take effect at the date on which the
LESSEE receives a registered letter informing it of the
LESSOR's decision or a bailiff's writ with the same purpose.
<PAGE>
The LESSEE shall pay the LESSOR, within maximum one month
from termination, by way of damages under the Articles 1152
and 1226 of the Civil Code, an indemnity equal to the amount
of the financing ceiling stipulated in paragraph 102.2 plus
VAT to be paid by the LESSOR to the Treasury, incremented by
20% over the total.
Said termination indemnity shall be incremented by the
applicable VAT.
However, the LESSEE shall be entitled, provided it has duly
performed all its contractual obligations, to acquire the
real rights held by the LESSOR to the site as well as the
constructions, in consideration of a price equal to the
total expenses incurred by the LESSOR at the day of the sale
and all sums due on works, including indemnities if any due
to participants in the construction, the whole being
increased by 10%.
In order to be admissible, the acquisition request must be
sent by registered letter with notice of receipt accompanied
by the price and the amount of costs within one month from
notification.
Moreover, the sale shall be consummated on the terms and
conditions laid out in the paragraphs 303.4 and 303.10 of
the General Terms.
If the notarized sales deed cannot be signed for failure to
pay the price or for any other reason due to the LESSEE,
within four months from the aforesaid notice, the resolution
clause provided for above shall apply.
Pre-rent (or rent if termination occurs after the effective
date of the lease) shall remain due until the termination
date of the lease or until the notarized property sales deed
is signed.
- RELIEF FOR CAUSE OF LESION
The site covered herein was acquired by SEMARB, the previous
owner, less than two years ago. Accordingly, the period for
bringing an action for relief for cause of lesion has not
lapsed.
Consequently, further to transfer of the risks to the
LESSEE, as stipulated in the PRELIMINARY DECLARATION to this
contract, the LESSEE undertakes to reimburse the LESSOR all
sums which the latter may be obliged to pay if this action
is brought, to stop it from going further, notably a fair
price complement.
<PAGE>
Said sums shall be incremented with interest calculated
pro-rata temporis at the rate of this contract.
712 LESSEE'S WARRANTIES AND REPRESENTATIONS
* REPRESENTATION REGARDING THE VALUE OF THE SITE
The LESSEE further warrants and represents that the value of
the property site covered by this property financing
contract is (FRF 5,000,000) ex-VAT at the acquisition date
by the LESSOR. It undertakes to bear all consequences
resulting from the foregoing declaration.
* REPRESENTATION REGARDING CLASSIFIED FACILITIES
Lastly, the LESSEE warrants and represents that it fully
acquainted with the laws and regulations on classified
facilities (Act No 76-663 of 19 July 1976 and Decree No
77-1133 of 21 September 1977, modified by Decree No 89-837
of 14 November 1989, and Decree No 80-813 of 15 October
1980).
It warrants and represents that the activity it plans to
carry on at the premises covered herein fall within the
scope of the declaration, as witnessed further by an
affidavit issued by the Prefecture of Cher on 10 February
1997.
It undertakes to comply with said laws and regulations on
classified facilities and to bear all consequences resulting
from the aforesaid declaration.
713 SUBSIDIES
The LESSEE has informed the LESSOR that this property
financing operation may be subject to subsidies.
The LESSEE declares that it has taken the initiative to
request from:
1) FERI a subsidy of FRF 1,950,000 and a concessionary
subsidy of FRF 650,000 to be applied to the rental terms;
<PAGE>
2) the CONSEIL GENERAL OF THE CHER DISTRICT a subsidy in
the amount of FRF 1,200,000, partly in the form of a
concessionary subsidy to be applied to the rental terms;
in order to help finance this operation.
It is here agreed that in the remainder of this text, the
term "subsidy" shall be used to designate all subsidies
requested by the LESSEE for the property operation described
in the preamble.
In this respect, the LESSEE warrants and represents that it
is aware of the obligations resulting from delivery of such
subsidy and undertakes to comply with them and promptly to
produce evidence of compliance with such agreements when
requested to do so.
In practice, this subsidy will be granted to the LESSOR
which, at the LESSEE's express request, shall offer the
latter its benefit by reducing the amount of periodic rent,
net of tax, based on the net cash received on this head.
Said reduction shall be found by applying to the amount of
the subsidy actually received by the LESSOR the same
coefficients as applied to the total investment cost to
determine the periodic basic rent.
Subsidies in the form of abatements shall be granted to the
LESSOR which, at the LESSEE's express request, shall offer
the latter the benefit thereof by reducing the amount of
periodic rent, net of tax, as defined in paragraph 207.1 of
the General Terms, in the amount of the net abatements
received on this head.
As regards the share financed by NORBAIL IMMOBILIER, the
bill for each rental term shall take account of
reinstatement, over the term of the contract, in accordance
with the applicable laws, of a fraction of the equipment
subsidies granted in the form of a credit, net of
value-added tax, at the same pace as the pace used for
financial amortization on the rental scale.
Moreover, as it is the LESSEE which will benefit from the
subsidy, the LESSEE alone shall be responsible for
compliance with all conditions, if any, determining delivery
or continuance of such assistance by the authority
concerned.
<PAGE>
The LESSEE shall also bear all consequences of termination of
such assistance.
Thus, if the conditions laid down by the authority having
granted the subsidy are not complied with, the LESSEE shall
pay, by way of non-interest bearing guarantee deposit, a sum
equal to the amount of the reimbursement requested by such
authority.
It is herewith also noted that the LESSEE is and shall
remain exclusively responsible for monitoring of such
subsidy, in the broadest meaning of the term. Accordingly,
the LESSOR assumes no responsibility in this respect, has no
tangible charge and can in no event be held liable or wanted
in case of difficulties.
For example, preparation of the application file, follow-up
of disbursement planning, and submission of all information
or evidence to the authority having paid the subsidy shall
remain the LESSEE's responsibility.
In the event that the LESSOR has to intervene in respect of
the authority charged with paying the subsidy, whether to
send a file, to request actual payment of the subsidy or to
submit documents claimed in connection with said subsidy,
the LESSEE shall send the LESSOR all draft letters or
documents necessary to submit the requested documents.
Accordingly, the LESSOR shall in no event be liable for late
availability of the subsidy if due to late delivery of
papers or documents because said LESSOR was not informed in
time by the LESSEE.
More generally, the LESSEE undertakes to make sure that the
LESSOR does not suffer any prejudice because of the approval
and processing of the subsidy, in accordance with the
stipulations in the PRELIMINARY DECLARATION "TRANSFER OF
RISKS TO THE LESSEE" in this lease contract.
<PAGE>
Drawn up on ninety-two (92) pages
With the participation of Maitre Jean TARRADE, associate notary in PARIS,
counsel for NORBAIL IMMOBILIER,
And with the participation of Maitre Francis BERGERAULT, the aforesaid notary,
counsel for the LESSEE,
After reading, the parties have signed with the undersigned associate notary
Twenty-nine April
Nineteen hundred ninety-seven
Six referrals
Twenty-five crossed-out blank spaces
Twenty-four crossed-out figures
Nine lines and eighteen words void
Referrals:
page 39
1) sixth
page 65
1) in column 1 of the following table
page 80
1) fifth
page 86
1) directly to the latter
page 5
1) March
page 89
1) Five million French francs ex-VAT
<PAGE>
At the notarial office / 75001 PARIS
Maitre Francois THESSIEUX, notary in partnership of a company holding a
notarial office at 20, rue des Pyramides, 75001 Paris, received this deed in
authentic form.
INFORMATION ABOUT THE PARTIES
I. LESSORS
1. SLIBAIL IMMOBILIER
A public limited company,
governed by existing laws, notably Article 2 of Act No 66-455 of 2 July 1966,
modified by government order No 67-837 of 28 September 1967, with respect to
enterprises carrying on a leasing business, and by its bylaws,
with a capital of two hundred twenty million French francs (FRF 220,000,000),
having its registered office at 19 boulevard des Italiens, 75002 Paris,
entered in the Register of Companies of Paris under No B 682 039 086 (68B03908),
approved for the benefit of the tax rules applicable to SICOMIs (French
tax-exempt commercial property companies) by an order from the Ministry of
Finance dated 3 October 1968, whose decision to preserve the benefit of this tax
regime on the conditions stipulated in Article 96.I, second paragraph, of Act
90.1168 (Budget Act for 1991) was recorded on 4 July 1991 by the Ministry of the
Economy, Finance and the Budget,
originally incorporated under the name "SOCIETE LYONNAISE IMMOBILIERE POUR LES
COMMERCE ET L'INDUSTRIE - SLICOMI" and having:
- - changed its name to "SLIBAILSICOMI" by virtue of a resolution adopted by
the Extraordinary General Meeting of partners of the said company on 9 November
1992, a duly certified copy of whose minutes was appended, after mention, to an
office copy of a deed recording their registration, received by Maitre
Jean-Louis REGNIER, notary in partnership in Paris, on 21 December 1992,
<PAGE>
- - adopted its current name by virtue of a resolution adopted by the
Extraordinary General Meeting of partners of the said company on 29 January
1996, a duly certified copy of whose minutes was appended, after mention, to an
office copy of a deed recording their registration, received by Maitre
Jean-Louis REGNIER, notary in partnership in Paris, on 4 March 1996,
represented by:
Mr , notarial clerk, domiciled at 20 rue des Pyramides, 75001 PARIS,
acting on behalf of and as attorney in fact for Mr Hubert GAVAU, Vice-President
Sales, domiciled at 106 rue des Trois Fontanot, Nanterre, Hauts de Seine, duly
empowered to act herein by virtue of a private deed dated , Nanterre,
appended hereto after mention,
in which power Mr GAVAU, with the right of substitution, acted on behalf of and
as attorney in fact for Mr Claude VIVIEN, General Manager of the said company,
being at the time domiciled at 34 rue Laffitte, 75009 Paris and currently
domiciled at 106 rue des Trois Fontanot, Nanterre, Hauts de Seine, under a deed
received by Maitre Jean-Louis REGNIER, the aforesaid notary on 22 May 1995,
in which power Mr VIVIEN himself acted by virtue of his functions, confirmed for
an indefinite time, with the right of substitution and with the broadest
possible powers to act under all circumstances on behalf of the said company,
including the power to act before the courts, by virtue of a resolution adopted
by the Board of Directors of the said company on 16 February 1995, a duly
certified copy of whose minutes was appended, after mention, to an office copy
of a deed recording their registration, received by Maitre Jean-Louis REGNIER,
the aforesaid notary, on 22 May 1995.
2. NORBAIL IMMOBILIER
A public limited company,
with a capital of FRF 50,000,000,
having its registered office at 16 rue Le Peletier, 75009 Paris,
entered in the Register of Companies of Paris under No B 352 109 656 (89B14721),
represented by:
<PAGE>
Mr , notarial clerk, domiciled at 20 rue des Pyramides, 75001 PARIS,
by virtue of
SLIBAIL IMMOBILIER and NORBAIL IMMOBILIER as well as their representatives are
herein referred to as the "LESSOR", acting jointly and respectively up to 50%
for SLIBAIL IMMOBILIER, the lead manager, and up to 50% for NORBAIL IMMOBILIER,
PARTY OF THE FIRST PART
<PAGE>
II. LESSEE
AUXITROL SA
A public limited company,
with a capital of FRF 25,000,000,
having its registered office at Centre d'Affaires Esplanade ***, 5 Allee Charles
Pathe, 18941 Bourges Cedex 9,
entered in the Register of Companies of Bourges under No B 602 023 251 (63B64),
represented by:
Mr , notarial clerk, domiciled at 20 rue des Pyramides, 75001 PARIS,
by virtue of
AUXITROL SA and its representative are herein referred to as the "LESSEE",
PARTY OF THE SECOND PART
<PAGE>
PREAMBLE
WITNESSETH
1. The LESSEE wishes to have industrial premises with a net leasing area of
10,183 sq.m., to be constructed on the site described hereinafter, located
in BOURGES (Cher) and currently owned by SEMARB, hereinafter referred to as
the OWNER OF THE SITE.
2. Without intervention by the LESSOR, the LESSEE has taken the initiative to
negotiate its acquisition terms directly with the OWNER OF THE SITE.
3. The LESSEE arranged to have established, according to its needs, the
construction program for the premises to be erected at the site.
4. On 10 February 1997, the LESSEE filed a building permit application.
On 7 March 1997, the LESSEE obtained a building permit bearing No 018033 97
P0025, delivered by the Commune of BOURGES.
This permit was displayed at the townhall of BOURGES, as witness an
affidavit issued by the said townhall on 14 April 1997, and was displayed
at the site, as witness a report drawn up on 11 March 1997 by Maitre Jean
CHASTEL, bailiff in partnership in BOURGES.
5. The LESSEE has asked the LESSOR for the following property financing
transaction in its favor, including:
- - acquisition of the said site by the LESSOR,
- - construction by the LESSOR of the premises needed by the LESSEE,
- - and lease by the LESSEE of the building, under a lease tied to a sales
undertaking.
6. The LESSOR has agreed to carry out this financing transaction in the light
of the LESSEE's person and the guarantees which the LESSEE has agreed to
provide.
<PAGE>
7. Under a deed received on 29 April 1997 by Maitre Francis BERGERAULT, notary
in partnership in BOURGES, the LESSOR accordingly acquired the said site at
a price of FIVE MILLION FRANCS excluding VAT (FRF 5,000,000 ex-VAT),
incremented by ONE MILLION THIRTY THOUSAND FRENCH FRANCS (FRF 1,030,000) by
way of VAT, paid cash and of which a receipt was given in the said deed.
The LESSOR has further paid the notary the sum of SEVENTY-FIVE THOUSAND
FRANCS (FRF 75,000) by way of provision for the duties, taxes, costs and
emoluments due in connection with said acquisition.
An office copy of this deed was published at the BOURGES mortgage registry
on 13 May 1997, volume 1997 P, number 2704.
DESCRIPTION OF PROPERTY
LAND TO BE ACQUIRED
In BOURGES (Cher).
A building site survey section 2M number 139 at the site known as "Le Noir a
Beurat", with a content of five hectares thirty-seven areas and ninety-one
centiares (5ha 37a 91ca).
The said site is part of a development program governed by the ZONE
D'AMENAGEMENT CONCERTE DE L'ECHANGEUR (cloverleaf concerted development zone)
procedure adopted by resolution of the town council of the city of BOURGES on 26
October 1989, approved by the Prefect of the Cher district on 26 October 1989,
of which the documents are filed with Maitre BOUTET, notary in partnership in
BOURGES.
The LESSEE has intervened in this sales deed to declare that all clauses and
terms of this deed correspond to those which the LESSEE itself had negotiated
with the seller.
8. Under a deed received on 29 April 1997 by Maitre THESSIEUX, the undersigned
notary in partnership, the LESSOR and the LESSEE agreed to carry out, within the
framework of Act No 66-455 of 2 July 1966 and Article 57 of Act No 95-115 of 4
February 1995, the property financing transaction described in the foregoing
preamble.
Accordingly,
- - the parties have laid down and agreed to their reciprocal obligations
during the construction period ;
- - the LESSOR leases to the LESSEE, which agrees to let, the property
described above;
<PAGE>
- - the LESSOR undertakes to sell said property to the LESSEE, which accepts
this undertaking as an undertaking only, and reserves the right to
acquire or not to acquire said property at its discretion;
Under the said deed, it was notably stipulated as follows, reiterated literally:
TITLE 1 OF THE SPECIAL TERMS
100 AGREEMENT REGARDING THE PERIOD PRIOR TO THE EFFECTIVE DATE OF THE LEASE
101 PURCHASE OF SITE
...
102 ERECTION OF CONSTRUCTIONS
102.6 Works completion deadline: 31 March 1998
103 FINANCING OF WORKS
103.2 The LESSOR agrees to finance the investment up to the following ceiling:
. acquisition of site FRF 5,000,000.00 ex-VAT
. provision for acquisition costs FRF 75,000.00
. construction FRF 25,925,000.00 ex-VAT
FRF 31,000,000.00
(THIRTY-ONE MILLION FRANCS)
To this ceiling shall be added the corresponding VAT.
The investment shall be financed as follows:
- Financing by SLIBAIL IMMOBILIER FRF 15,500,000.00
- Financing by NORBAIL IMMOBILIER FRF 15,500,000.00
FRF 31,000,000.00
It is herewith specified that the LESSEE, in accordance with
paragraph 403 of the Special Terms, in order to guarantee the
financings provided by SLIBAIL IMMOBILIER and NORBAIL IMMOBILIER,
the LESSEE shall pay an advance of FRF 8,000,000, including FRF
4,000,000 onto the account of SLIBAIL IMMOBILIER and FRF 4,000,000
onto the account of NORBAIL IMMOBILIER.
9. The LESSEE has asked the LESSOR to bear the cost of additional works to
be carried on the premises covered by the property lease contract concerned.
<PAGE>
The cost of these works amounts to ONE MILLION EIGHT HUNDRED THIRTY-FIVE
THOUSAND FRENCH FRANCS ex-VAT (FRF 1,835,000 ex-VAT).
Accordingly, the LESSOR and the LESSEE have agreed to raise the ceiling of the
original property lease contract from THIRTY-ONE MILLION FRENCH FRANCS (FRF
31,000,000) to THIRTY-TWO MILLION EIGHT HUNDRED THIRTY-FIVE THOUSAND FRENCH
FRANCS ex-VAT (FRF 32,835,000 ex-VAT).
Further to this new agreement, the parties have agreed to modify the following
paragraph of the property lease contract received by Maitre Francois THESSIEUX,
the undersigned notary, on 29 April 1997.
NOW THEREFORE IT HAS BEEN AGREED AS FOLLOWS:
AMENDMENT
The property lease received by Maitre Francois THESSIEUX, the undersigned
notary, on 29 April 1997, is amended as follows:
TITLE 1 OF THE SPECIAL TERMS
100 AGREEMENT REGARDING THE PERIOD PRIOR TO THE EFFECTIVE DATE OF THE LEASE
...
103 FINANCING OF WORKS
103.2 The LESSOR agrees to finance the investment up to the following ceiling:
.acquisition of site FRF 5,000,000.00 ex-VAT
provision for acquisition costs FRF 75,000.00
construction FRF 27,760,000.00 ex-VAT
FRF 32,835,000.00
<PAGE>
(THIRTY-TWO MILLION EIGHT HUNDRED THIRTY-FIVE THOUSAND FRANCS)
To this ceiling shall be added the corresponding VAT.
The investment shall be financed as follows:
- Financing by SLIBAIL IMMOBILIER FRF 16,417,500.00
- Financing by NORBAIL IMMOBILIER FRF 16,417,500.00
FRF 32,835,000.00
It is herewith specified that the LESSEE, in accordance with
paragraph 403 of the Special Terms, in order to guarantee the
financings provided by SLIBAIL IMMOBILIER and NORBAIL IMMOBILIER,
the LESSEE shall pay an advance of FRF 8,000,000, including FRF
4,000,000 onto the account of SLIBAIL IMMOBILIER and FRF 4,000,000
onto the account of NORBAIL IMMOBILIER.
No other amendment is made to the property lease contract of 29 April 1997.
LAND REGISTRATION - POWERS
Since the aforesaid property lease of 29 April 1997 does not exceed
twelve (12) years, it will not be subjected to land publication
formalities.
Accordingly, this amendment will not be subjected to land
publication formalities.
VALUATION
a) For the purpose of land publication, as applicable, the
parties value:
- All cumulative years of complementary rent, ex-VAT, at the sum
of TWO MILLION FOUR HUNDRED NINETY THOUSAND THIRTEEN FRENCH FRANCS
(FRF 4,490,013 ex-VAT), including SIX HUNDRED FIFTY-FIVE THOUSAND
AND THIRTEEN FRENCH FRANCS (FRF 655,013 ex-VAT) for financial costs
paid by the LESSEE, i.e. an assessment basis of ONE MILLION EIGHT
HUNDRED THIRTY-FIVE FRENCH FRANCS (FRF 1,835,000) for land
publication tax.
b) For the emolument of the Registrar, as applicable, the parties
value:
<PAGE>
- All cumulative years of rent, including value-added tax, at
the sum of THREE MILLION TWO THOUSAND NINE HUNDRED FIFTY-FIVE
FRENCH FRANCS (FRF 3,002,955 ex-VAT).
- The parties note that the residual price in consideration of
which the sale will be consummated in favor of the LESSEE when the
operation is settled, if the aforesaid sales undertaking is
exercised, shall be ONE FRENCH FRANC (FRF 1).
c) For the land publication tax and for the emolument of the
Registrar, as applicable, the parties value the charges incumbent
on the LESSEE, which would be due to the LESSOR, at the sum of
TWENTY-TWO THOUSAND TWENTY FRENCH FRANCS (FRF 22,020).
The parties further specify that the amount of the complementary
investment projected by the LESSOR under this amendment amounts to
the net sum of ONE MILLION EIGHT HUNDRED THIRTY-FIVE FRENCH FRANCS
(FRF 1,835,000 ex-VAT), i.e. including all taxes the sum of TWO
MILLION TWO HUNDRED THIRTEEN THOUSAND AND TEN FRENCH FRANCS (FRF
2,213,010 including VAT) and further specify that, because of this
amendment, the amount of the total investment projected by the
LESSOR amounts to THIRTY-TWO MILLION EIGHT HUNDRED THIRTY-FIVE
THOUSAND FRENCH FRANCS ex-VAT (FRF 32,835,000 ex-VAT), i.e.
including all taxes the sum of THIRTY-NINE MILLION FIVE HUNDRED
EIGHTY-THREE THOUSAND FIVE HUNDRED SIXTY FRENCH FRANCS (FRF
39,583,560 including VAT).
NOTICE
Notice hereof shall be given wherever needed.
MISCELLANEOUS COSTS
All costs, duties and emoluments connected with this amendment and
all resulting or related costs shall be borne by the LESSEE, which
so accepts.
WHEREOF RECORD
<PAGE>
Established on pages.
With the participation of Maitre Jean TARRADE, associate notary in PARIS,
counsel for NORBAIL IMMOBILIER,
And with the participation of Maitre Francis BERGERAULT, the aforesaid notary,
counsel for the LESSEE,
After reading, the parties have signed with the undersigned associate notary
This day,
NINETEEN HUNDRED NINETY-EIGHT
<PAGE>
EXHIBIT 11
ESTERLINE TECHNOLOGIES CORPORATION
Computation of Basic and Diluted Earnings Per Common Share
For the Three Months Ended January 31, 1998 and 1997
(Unaudited)
(In thousands, except per share amounts)
<TABLE>
<CAPTION>
Three Months Ended
January 31,
-----------------------
1998 1997
-------- --------
<S> <C> <C>
BASIC:
- ------
Net Earnings $ 4,836 $ 3,759
======== ========
Weighted Average Number of Common Shares
Outstanding 8,643 8,514
======== ========
Net Earnings per Common Share - Basic $ .56 $ .44
======== ========
DILUTED:
- --------
Net Earnings $ 4,836 $ 3,759
======== ========
Weighted Average Number of Common Shares
Outstanding 8,643 8,514
Net Shares Assumed to be Issued
for Stock Options 199 242
-------- --------
Weighted Average Number of Common Shares
and Common Equivalent Shares Outstanding 8,842 8,756
======== ========
Net Earnings per Common Share - Diluted $ .55 $ .43
======== ========
</TABLE>
12
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
ESTERLINE TECHNOLOGIES CORPORATION CONSOLIDATED BALANCE SHEET AT JANUARY 31,
1998 AND THE RELATED CONSOLIDATED STATEMENTS OF OPERATIONS FOR THE THREE MONTHS
THEN ENDED AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL
STATEMENTS.
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> OCT-31-1998
<PERIOD-START> NOV-01-1997
<PERIOD-END> JAN-31-1998
<CASH> 39,446
<SECURITIES> 0
<RECEIVABLES> 62,179
<ALLOWANCES> 2,840
<INVENTORY> 61,382
<CURRENT-ASSETS> 178,204
<PP&E> 180,673
<DEPRECIATION> 118,718
<TOTAL-ASSETS> 291,386
<CURRENT-LIABILITIES> 95,776
<BONDS> 26,283
0
0
<COMMON> 1,729
<OTHER-SE> 167,598
<TOTAL-LIABILITY-AND-EQUITY> 291,386
<SALES> 95,730
<TOTAL-REVENUES> 95,730
<CGS> 59,023
<TOTAL-COSTS> 59,023
<OTHER-EXPENSES> 29,133
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 224
<INCOME-PRETAX> 7,350
<INCOME-TAX> 2,514
<INCOME-CONTINUING> 4,836
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 4,836
<EPS-PRIMARY> .56
<EPS-DILUTED> .55
</TABLE>
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
ESTERLINE TECHNOLOGIES CORPORATION CONSOLIDATE BALANCE SHEETS AT JANUARY 31,
APRIL 30, JULY 31, AND OCTOBER 31, 1997 AND THE RELATED CONSOLIDATED STATEMENTS
OF OPERATIONS FOR THE PERIODS THEN ENDED AND IS QUALIFIED IN ITS ENTIRETY BY
REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<RESTATED>
<MULTIPLIER> 1,000
<S> <C> <C> <C> <C>
<PERIOD-TYPE> 12-MOS 3-MOS 6-MOS 9-MOS
<FISCAL-YEAR-END> OCT-31-1997 OCT-31-1997 OCT-31-1997 OCT-31-1997
<PERIOD-START> NOV-01-1996 NOV-01-1996 NOV-01-1996 NOV-01-1996
<PERIOD-END> OCT-31-1997 JAN-31-1997 APR-30-1997 JUL-31-1997
<CASH> 56,045 47,706 48,638 46,711
<SECURITIES> 0 0 0 0
<RECEIVABLES> 70,380 62,702 64,882 63,779
<ALLOWANCES> 2,860 4,260 2,810 2,777
<INVENTORY> 53,386 48,731 52,813 54,620
<CURRENT-ASSETS> 194,427 172,134 181,391 179,890
<PP&E> 175,615 168,166 169,048 167,471
<DEPRECIATION> 117,239 114,263 115,166 114,126
<TOTAL-ASSETS> 289,847 267,186 275,489 272,442
<CURRENT-LIABILITIES> 100,920 93,190 96,064 92,630
<BONDS> 23,209 29,310 28,809 23,129
0 0 0 0
0 0 0 0
<COMMON> 1,729 1,704 1,707 1,725
<OTHER-SE> 163,989 142,982 148,909 154,958
<TOTAL-LIABILITY-AND-EQUITY> 289,847 267,186 275,489 272,442
<SALES> 390,958 82,198 180,149 282,217
<TOTAL-REVENUES> 390,958 82,198 180,149 282,217
<CGS> 243,197 50,109 109,340 173,586
<TOTAL-COSTS> 243,197 50,109 109,340 173,586
<OTHER-EXPENSES> 108,474 26,191 54,191 81,442
<LOSS-PROVISION> 0 0 0 0
<INTEREST-EXPENSE> 1,206 321 794 1,127
<INCOME-PRETAX> 38,081 5,577 15,824 26,062
<INCOME-TAX> 12,760 1,818 5,463 8,776
<INCOME-CONTINUING> 25,321 3,759 10,361 17,286
<DISCONTINUED> 0 0 0 0
<EXTRAORDINARY> 0 0 0 0
<CHANGES> 0 0 0 0
<NET-INCOME> 25,321 3,759 10,361 17,286
<EPS-PRIMARY> 2.96 .44 1.22 2.02
<EPS-DILUTED> 2.88 .43 1.18 1.97
</TABLE>
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
ESTERLINE TECHNOLOGIES CORPORATION CONSOLIDATED BALANCE SHEET AT OCTOBER 31,
1996 AND THE RELATED CONSOLIDATED STATEMENTS OF OPERATIONS FOR THE TWELVE
MONTHS THEN ENDED AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH
FINANCIAL STATEMENTS.
</LEGEND>
<RESTATED>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> OCT-31-1996
<PERIOD-START> NOV-01-1995
<PERIOD-END> OCT-31-1996
<CASH> 46,436
<SECURITIES> 0
<RECEIVABLES> 73,204
<ALLOWANCES> 4,084
<INVENTORY> 45,399
<CURRENT-ASSETS> 178,780
<PP&E> 160,303
<DEPRECIATION> 106,813
<TOTAL-ASSETS> 276,646
<CURRENT-LIABILITIES> 105,335
<BONDS> 29,007
0
0
<COMMON> 1,700
<OTHER-SE> 140,604
<TOTAL-LIABILITY-AND-EQUITY> 276,646
<SALES> 352,843
<TOTAL-REVENUES> 352,843
<CGS> 215,015
<TOTAL-COSTS> 215,015
<OTHER-EXPENSES> 103,415
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 2,339
<INCOME-PRETAX> 32,074
<INCOME-TAX> 10,720
<INCOME-CONTINUING> 21,354
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 21,354
<EPS-PRIMARY> 2.70
<EPS-DILUTED> 2.61
</TABLE>
