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SECURITIES AND EXCHANGE COMMISSION
Washington, D. C. 20549
FORM 8-K
CURRENT REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of Earliest Event Reported): December 3, 1998
MYERS INDUSTRIES, INC.
(Exact name of registrant as specified in its charter)
OHIO 001-08524 34-0778636
(State or other jurisdiction of (Commission (IRS employer identification
incorporation or organization) file number) number)
1293 S. Main Street Akron, Ohio 44301 (330) 253-5592
(Address of Principal Executive Offices) (Zip Code) (Telephone Number)
Correspondence to:
Kevin C. O'Neil
Brouse & McDowell
500 First National Tower
Akron, Ohio 44308-1471
(330) 434-5207
[email protected]
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ITEM 2. ACQUISITION OR DISPOSITION OF ASSETS
AGREEMENT WITH SOMMER ALLIBERT S.A.
On December 3, 1998, Sommer Allibert S.A. ("Sommer Allibert"), a French
corporation, and Myers Industries, Inc. ("Myers"), an Ohio corporation, entered
into an agreement whereby Myers agreed to acquire the plastic material handling
of division of Sommer Allibert, with facilities throughout Europe and in North
America. The acquisition also includes all of the interests in Allibert-Contico,
LLC, a Missouri limited liability company with facilities primarily in St.
Louis, Missouri, part of which are being acquired pursuant to an agreement with
Contico International, Inc. Closing of the transactions are expected to occur in
the first quarter of 1999, following receipt of regulatory approvals and other
customary conditions of closing.
The combined purchase price is approximately $130.0 million payable in
cash, subject to certain adjustments after closing. The agreements have been
approved by the boards of directors of each of the companies. The acquisition is
not expected to have a material effect on Myers'1999 earnings, and is expected
to be accretive thereafter.
The acquisition will be financed through a new $250.0 million credit
facility which will be effective prior to the acquisition.
On December 3, 1998, Myers issued a press release announcing the
acquisition, a copy of which is included as Exhibit 99 hereto and incorporated
by reference herein.
The preceding description of the agreements are qualified in their
entirety by reference to the copies of the agreements included as Exhibits 10(a)
through 10(e) hereto, and which are incorporated by reference herein.
ITEM 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION AND EXHIBITS
(c) Exhibits
10(a) Protocole between Myers Industries, Inc. and Allibert Holding,
SA, SEDITEP, SA, Sauvagnat Allibert, SA, Allibert Transport
und Lagertechnik GmbH and Sommer Allibert, SA (English
Translation)
10(b) Warranty Agreement between Myers Industries, Inc. and Allibert
Holding, SA, SEDITEP, SA, Sauvagnat Allibert, SA, Allibert
Transport und Lagertechnik GmbH and Sommer Allibert, SA
(English Translation)
10(c) Option Agreement between Myers Industries, Inc. and Allibert
Equipement US, Inc.
10(d) Sale Agreement between Myers Industries, Inc. and Contico
International, Inc.
10(e) Amendment No.1 to Sale Agreement between Myers Industries,
Inc. and Contico International, Inc.
99 Text of Press Release dated December 3, 1998 issued by Myers
Industries, Inc.
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SIGNATURE
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.
MYERS INDUSTRIES, INC.
Dated: December 17, 1998 By: /s/ Gregory J. Stodnick
--------------------------------------
Gregory J. Stodnick, Vice President -
Finance
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MYERS INDUSTRIES, INC.
CURRENT REPORT ON FORM 8-K
INDEX OF EXHIBITS
EXHIBIT
10(a) Protocole between Myers Industries, Inc. and Allibert Holding,
SA, SEDITEP, SA, Sauvagnat Allibert, SA, Allibert Transport
und Lagertechnik GmbH and Sommer Allibert, SA (English
Translation)
10(b) Warranty Agreement between Myers Industries, Inc. and Allibert
Holding, SA, SEDITEP, SA, Sauvagnat Allibert, SA, Allibert
Transport und Lagertechnik GmbH and Sommer Allibert, SA
(English Translation)
10(c) Option Agreement between Myers Industries, Inc. and Allibert
Equipement US, Inc.
10(d) Sale Agreement between Myers Industries, Inc. and Contico
International, Inc.
10(e) Amendment No.1 to Sale Agreement between Myers Industries,
Inc. and Contico International, Inc.
99 Text of Press Release dated December 3, 1998 issued by Myers
Industries, Inc.
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EXHIBIT 10(a)
On behalf of Myers Industries, Inc., the undersigned hereby certifies that the
following Exhibit 10(a) is a fair and accurate English translation of the
Protocole between Myers Industries, Inc. and Allibert Holding, SA, SEDITEP, SA,
Sauvagnat Allibert, SA, Allibert Transport und Lagertechnik GmbH and Sommer
Allibert, SA.
Myers Industries, Inc.
Dated: December 17, 1998 By: /s/ Gregory J. Stodnick
--------------------------------------
Gregory J. Stodnick, Vice President -
Finance
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AGREEMENT
---------
BETWEEN THE UNDERSIGNED:
Myers Industries, Inc., a company organized under the law of the State of Ohio,
U.S.A., whose registered office is at 1293 South Main Street, Akron, Ohio,
United States of America.
Represented by Mr. Stephen E. Myers, in its capacity of Chief Executive Officer,
specially delegated pursuant to a resolution of the Board of Directors dated
September 28, 1998, fully empowered for the purposes hereof,
Hereinafter referred to as the "Purchaser,"
Of the first part,
ALLIBERT HOLDING, a societe anonyme with a capital of FRF 107,261,500, whose
registered office is at 2 rue de l'Egalite, 92748 Nanterre Cedex - SIREN 722 055
571 - R.C.S. Nanterre,
Represented by Mr. Michel Cognet, fully empowered pursuant to a power of
attorney dated December 1, 1998 signed by Mr. Marc Assa, Chairman of the Board
of Directors, the latter being specially delegated for the purposes hereof
pursuant to a resolution of the Board of Directors dated October 1, 1998.
SEDITEP, a societe anonyme with a capital of FRF 35,700,000, whose registered
office is at 3 rue Montesquieu, 92748 Nanterre Cedex - SIREN - 722 016 508 -
R.C.S. Nanterre,
Represented by Mr. Philippe Chaubeau, Chairman of the Board of Directors,
SAUVAGNAT ALLIBERT, a societe anonyme with a capital of FRF 100,000,000, whose
registered office is at 2 rue de l'Egalite, 92748 Nanterre Cedex - SIREN - 352
849 210 - R.C.S. Nanterre,
Represented by Mr. Michel Cognet, fully empowered pursuant to a power of
attorney dated December 1, 1998 signed by Mr. Marc Assa, Chairman of the Board
of Directors, the latter being specially delegated for the purposes hereof
pursuant to a resolution of the Board of Directors dated September 23, 1998.
ALLIBERT TRANSPORT UND LAGERTECHNIK GmbH, a company organized under German law
with a capital of DEM 14,000,000, whose registered office is at Friesstrae 26 -
60388 Francfort am Main, registered with the Francfort am Main Trade Registry
under the number HRB 46.079,
Represented by Mr. Ph. Chaubeau, pursuant to a the notarized power of attorney,
dated November 5, 1998, granted by Mr. J. Kaziur, Managing Director,
1
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hereinafter referred to collectively by the single term the "Sellers,"
of the second part,
SOMMER ALLIBERT, a societe anonyme with a capital of FRF 107,624,250, whose
registered office is at 2 rue de l'Egalite, 92748 Nanterre Cedex - SIREN 542 050
562 - R.C.S. Nanterre,
Represented by Mr. Michel Cognet, Directeur General, specially delegated for the
purposes hereof pursuant to a resolution of the Supervisory Board (Conseil de
Surveillance) dated September 25, 1998,
hereinafter referred to as "SOMMER ALLIBERT,"
of the third part,
AND:
ALLIBERT EQUIPEMENT US, INC. a company organized under the laws of the State of
Delaware, USA, whose registered office is c/o The Prentice-Hall Corporation
System, Inc., 1013 Center Road, Wilmington, Delaware 19805, RC State of Delaware
No. 2409931,
Represented by Mr. Michel Cognet, Vice President, specially delegated pursuant
to a resolution of the Board of Directors dated November 24, 1998, fully
empowered for the purposes hereof,
hereafter referred to as "AE U.S.,"
of the fourth part,
2
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WITNESSETH:
PREAMBLE
I/ ALLIBERT HOLDING, SEDITEP, ALLIBERT Transport und Lagertechnik GmbH
currently operate:
- - in the European Union, through the companies:
- ALLIBERT EQUIPEMENT, a Societe Anonyme,
Registered office:
2 rue de l'Egalite, 92748 Nanterre
352 849 160 RCS Nanterre (89B05888) - SIRET 352 849 160 00010
Share Capital: FRF 85,000,000 divided into 850,000 shares of
FRF 100
- ATMP, a Societe Anonyme,
Registered office:
------------------
Les Courtils de Sauxcelles, 91860 Prunay sur Essonne
785 233 339 RCS Evry (72B00168) - SIRET 785 233 339 00015
Share Capital: FRF 3,000,000 divided into 10,000 shares of
FRF 300
- SCI de la Plaine, a (Societe Civile Immobiliere organized
under French law)
Registered office:
------------------
3 rue de Montesquieu, 92748 Nanterre
Share Capital: FRF 200,000 divided into 2,000 shares of
FRF 100
- ALLIBERT EQUIPEMENT Sprl (company organized under Belgian
law),
Registered office:
------------------
Rue du Commerce, 12, Boite 8 Zoning Industriel B, 1400
Nivelles
RC Nivelles No. 83135
Share Capital: BEF 20,000,000 divided into 20,000 shares of
BEF 1,000
- ALLIBERT MANUTENCION S.A. (company organized under Spanish
law),
Registered office:
------------------
Cami Reial, 8 Poligono Industrial Riera de Caldes, 08184
Palau de Plegamans
RC Barcelona Tomo 4223, Libro 3559, Seccion 2(degree), Folio
197, Hoja 44716
Share Capital: ESP 162,000,000 divided into 162,000 shares of
ESP 1,000
- SOMMER ALLIBERT UK Ltd (company organized under British law),
whose name is in
3
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the process of being changed to ALLIBERT HANDLING,
Registered office:
-----------------
Berry Hill-Industrial Estate-Droitwich, (Worcestershire) WR9
9AB, RC 945.934
Plant:
-----
Cattle Market-St Oswald's Road-Gloucester GLI 2UG
Share Capital: GBP 1,450,000 divided into 1,450,000 shares of
GBP 1.00
- ALLIBERT TRANSPORT UND LAGERTECHNIK VERWALTUNG-SGESELLSCHAFT
mbH (company organized under German law),
Registered office:
Sudring 1-5, D-63165 Muhlheim
Share Capital: DEM 50,000
R.C. Offenbach-a-Main n(degree)5HRB 10.833
- ALLIBERT TRANSPORT UND LAGERTECHNIK GmbH & CO. KG (company
organized under German law),
Registered office:
Sudring 1-5, D-63165 Muhlheim
Share Capital: DEM 2,500,000
In the process of being constituted and will be registered
with the R.C. of Offenbach-a-Main
- ALLIBERT TRANSPORT UND LAGERTECHNIK GmbH (company organized
under Austrian law),
Registered office:
------------------
Rottenhauserstrasse, 8, A-3250 Wieselburg
RC Amtsgericht Offenbach No. HRB 10183
Share Capital: ATS 500,000 divided into 500 shares of ATS 100
- ALLIBERT CONTENITORI (company organized under Italian law)
Registered office:
------------------
Via Mascheroni, 29, 20145 Milan
RC Milan 333390/1993, Prima Strada No. 2, Interporto Sito,
10043 Orbassano
Share Capital: ITL 200,000,000 divided into 400,000 shares of
ITL 500
- ALLIBERT CONTENTORES (company organized under Portuguese law),
Registered office:
------------------
Travessa Dr Carlos Felgueiras 34, 1 Freguesia da Maia Concelho
da Maia Distuto do Porto RC Porto No. 1298
Rua do Outeiro, 1024, Zona Industrial Maia I, Sector I, No.
145, Lote 324 Gemunde, 4470 Maia
Share Capital: PTE 13,000,000 divided into 13,000 shares of
PTE 1,000
- - in North America, through the following companies:
4
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- ALLIBERT EQUIPEMENT US INC. (company organized under the laws
of the State of Delaware, USA)
Registered office:
------------------
c/o The Prentice-Hall Corporation System, Inc., 1013 Center
Road, Wilmington, Delaware 19805, USA
RC State of Delaware No. 2409931
Share Capital: USD 1,000 divided into 100 shares of USD 10
- ALLIBERT CONTICO LLC (a " limited liability company "
organized under the laws of the State of Missouri, USA),
Registered office:
------------------
305 Rock Industrial Park Drive, Bridgeton, MO 63044, USA
Plant:
------
2727 N. Partnership Blvd - Springfield, MO 65803
- ALLIBERT INDUSTRIE LIMITEE (company organized under the laws
of the Province of Quebec, Canada),
Registered office:
------------------
615 Ouest, Bd R.-Levesque, Bureau 1010, Montreal H3B 1P9
RC Montreal No. 26108-4
Place of business:
------------------
300 rue Berge du Canal, Bureau 304, Ville Saint Pierre H8R 1H3
Share Capital: CAD 180,000 divided into 180,000 ordinary
shares.
- - and in China, through ANSHAN ALLIBERT CUVES SARL (semi-public company
organized under Chinese law governed by contract No. CF/AS-3-9501)
50.1%-held,
Registered office:
------------------
3 Anteng Road, Tiexi District, Anshan
Share Capital: FRF 13,756,878
an activity consisting of the manufacture and sale of articles intended for
handling, i.e.:
- - cylindrical tanks and trays (including trays that can be stacked and
fitted into each other, storage and isotherm trays),
- - trays to store small parts,
- - accessories for trays,
- - covers for trays,
- - boxes,
- - trolleys, rolls and mobile scaffold boards,
- - large containers,
- - palettes,
- - coating duckboards and carrier duckboards,
- - containers for waste and trash cans,
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- - shelving,
- - lockers,
- - guardrails,
hereinafter referred to as the "Handling Branch."
ALLIBERT HOLDING also operates in France, and will operate with retroactive
effect to September 1, 1998 following a contribution of assets, through its
sub-subsidiary HOLDIPLAST - SIREN 414 773 044 - RCS Nanterre, controlled by its
subsidiary, Sauvagnat Allibert, an activity consisting of the manufacture and
sale of articles intended for hospitals, i.e.:
- - dispensing trolleys and accessories (drawers, draws for toxic
substances, separating trays, mobile separators, shelves),
- - multi-purpose trolleys,
- - technical medical equipment,
- - suspended modules,
- - medical cabinets,
- - accessories and other products used in the medical area and in
hospitals,
hereinafter referred to as the "Medical Branch."
The above mentioned companies, except for the Sellers, are collectively referred
to herein as the "Companies." They include all activities of the Handling Branch
and of the Medical Branch of the SOMMER ALLIBERT Group.
II/ After acknowledging hereafter :
- - that the design and manufacturing activities of products in the
handling branch were essentially carried out in Gaillon (France),
Prunay (France), Gloucester (Great Britain), Barcelona (Spain), Anshan
(China) and Springfield (USA),
- - that the selling and distribution activities were carried out in
Europe, the USA and China by the companies listed above and by
retailers or independent agents,
- - that the design and manufacturing activities of the products of the
medical branch were essentially carried on in France,
- - that the SOMMER ALLIBERT company is the owner of an ALLIBERT trademark
registered in certain countries,
after the Purchaser has had access for a period of 3 days, from August 26 to
August 28, 1998, to a Data
6
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Room organized by the Sellers and the company SOMMER ALLIBERT, where it was able
to conduct a preliminary review of certain documents contained in the Data Room,
and particularly, documents copies of which were provided for information
purposes only to the Purchaser and are attached hereto in EXHIBIT NO. 1.
After the Purchaser and the Sellers have already determined, for the shares of
the Companies listed below from A1 to A6 :
- - A Basic Price for the purchase of these shares, based upon the
forecasts of the combined Operating Result for the 12 month period
constituting the 1998 fiscal year and adjusted in order to take into
account non-recurring operating items, of fifty three million French
francs (FRF 53,000,000) for all the Companies, excluding ALLIBERT
CONTICO LLC and ALLIBERT INDUSTRIES LIMITEE, and based upon a forecast
of the consolidated EBIT for the 12 month period constituting the 1998
fiscal year of four million three hundred and eighteen thousand
American dollars (USD 4,318,000) for ALLIBERT CONTICO LLC and ALLIBERT
INDUSTRIES LIMITEE.
- - A principle of Adjustment of the Basic Price to take into account the
difference between these forecasts of the Operating Result (or EBIT)
and the Final Corrected Operating Result (or Final EBIT for ALLIBERT
CONTICO) for the 12 month period ending on December 31, 1998, according
to the procedure set forth in Article 5.2 and adjusted in accordance
with the method of calculation presented in EXHIBIT NO. 2.
the parties have agreed that the best way of achieving a prompt sale of this
complex unit consisting of the Handling Branch and the Medical Branch of the
SOMMER ALLIBERT group would be:
A/ For the Purchaser:
------------------
to purchase, on the date hereinafter defined in Article 4 and called the
"Closing Date", 100% of the shares of the companies:
1/ ALLIBERT EQUIPEMENT
2/ ATMP
3/ SCI DE LA PLAINE
4/ ALLIBERT TRANSPORT UND LAGERTECHNIK VERWALTUNG SGESELLSCHAFT mbH,
5/ ALLIBERT TRANSPORT UND LAGERTECHNIK GmbH & Co. KG,
6/ HOLDIPLAST,
ALLIBERT EQUIPEMENT should on the Closing Date, as hereinafter defined,
obligatorily be the owner, directly or indirectly through the other companies
listed in points A2/ to A6/ above, of:
- - all of the shares of the Belgian company ALLIBERT EQUIPEMENT, the
Spanish company ALLIBERT MANUTENCION S.A., the British company SOMMER
ALLIBERT UK Ltd, the Austrian company ALLIBERT TRANSPORT UND
LAGERTECHNIK GmbH, the Italian company ALLIBERT CONTENITORI and the
Portuguese company ALLIBERT
7
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CONTENTORES,
- - 100% of ALLIBERT EQUIPEMENT US Inc., itself still holding 50% of the US
company ALLIBERT CONTICO LLC (for information, the other 50% are held
by CONTICO INTERNATIONAL, Inc. "CONTICO"), ALLIBERT CONTICO LLC still
holding 100% of the Canadian company ALLIBERT INDUSTRIE LIMITEE,
- - owner of 50.1% of the Chinese company ALLIBERT ANSHAN CUVES SARL.
The shares of the companies listed in points A1/ to A6/ will be purchased for a
global price, hereinafter referred to as the "Global Purchase Price", as defined
in Article 5 below.
B/ For the Sellers:
----------------
to sell on the Closing Date the same shares referred to in points A/1 to A/6,
C/ For the Sellers and the Purchaser:
----------------------------------
to make the adjustment, hereinafter the Adjustment to the Global Basic Price in
accordance with the provisions of article 5 of this agreement.
The Global Basic Price in this way adjusted is referred to hereinafter by the
term Global Purchase Price.
D/ For the company SOMMER ALLIBERT:
--------------------------------
to grant a license of the ALLIBERT trademark which it owns to ALLIBERT
EQUIPEMENT, under the conditions hereinafter defined and to act as joint and
several, and indefinite guarantor of the Sellers pursuant to the warranty
agreements to be executed between the parties, and set forth in EXHIBITS NO. 19
AND NO. 20 hereof.
IT WAS THEN AGREED AS FOLLOWS:
- ------------------------------
ARTICLE 1 - PURPOSE OF THE AGREEMENT
------------------------------------
The purpose of the present agreement (the "Agreement") is to define:
- - the principles, conditions and terms subject to which the undersigned
will complete the acquisition by the Purchaser of the "handling" branch
and the "medical" branch indicated above.
- - the terms and conditions of the administrative, industrial and
commercial collaboration between the Purchaser and the Sellers to
complete the transfer of these activities,
- - the measures to be taken to materialize and formalize all the
provisions of this Agreement.
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For the performance hereof, the Purchaser and the Sellers may associate with or
substitute for themselves one or more affiliated companies of their group,
without this resulting in additional costs for the other party, or for any
company, or modifying the obligations of the parties. In this case, each shall
remain the joint and several and indefinite guarantor of the companies
substituted for them for all obligations, without exception, required to be
performed by each of them hereunder or as a result hereof.
For the application of this Agreement, affiliate of one of the parties shall
mean any company controlling, controlled by or under the same control as such
party.
Control shall mean the direct or indirect holding of at least fifty per cent of
the capital or voting rights.
Each party undertakes that each of its affiliates, insofar as any such affiliate
benefits from all or part of the rights hereunder, shall be bound by the
corresponding obligations herein.
ARTICLE 2 - AGREEMENT
---------------------
The Sellers irrevocably undertake to sell or cause to be sold to the Purchaser,
which irrevocably undertakes to purchase or cause to be purchased, subject to
the complete fulfillment of all the conditions precedent stipulated hereinafter
in article 11:
- - The 850,000 shares of 100 francs par value each, that they own or
guarantee that they will own, by the Closing Date, composing the entire
share capital upon the Closing Date of ALLIBERT EQUIPEMENT, a societe
anonyme organized under French law, whose registered office is at 2 rue
de l'Egalite, 92748 Nanterre Cedex - SIREN - 352 849 160 - R.C.S.
Nanterre.
The sale may only concern the full ownership of all the 850,000 shares
mentioned above.
- - The 10,000 shares of 300 francs par value each, that they own or
guarantee that they will own by the Closing Date, composing the entire
share capital upon the Closing Date of ATMP, a societe anonyme
organized under French law, whose registered office is at Les Courtils
de Sauxcelles, 91720 Prunay-sur-Essonne - SIREN 785 233 339 - RCS Evry.
The sale may only concern the full ownership of all the 10,000 shares
mentioned above.
- - The 2,000 shares of 100 francs par value each, that they own or
guarantee that they will own by the Closing Date, composing the entire
share capital upon the Closing Date of Societe Civile Immobiliere de la
Plaine, a societe civile organized under French law, whose registered
office is at 3, rue Montesquieu, 92748 Nanterre Cedex.
The sale may only concern the full ownership of all the 2,000 shares
mentioned above. The share purchase agreement for these shares shall
conform to the model attached hereto in EXHIBIT NO. 3.
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- - The 33,500 shares of 100 francs par value each, that they will own or
guarantee that they will own by the Closing Date, composing the entire
share capital upon the Closing Date of HOLDIPLAST, a societe anonyme
organized under French law, whose registered office is at 2 rue de
l'Egalite, 92748 Nanterre Cedex - SIREN 414 773 044 - R.C.S. Nanterre.
The sale may only concern the full ownership of all the 33,500 shares
mentioned above.
- - The 2 shares of DEM 25,000 par value each, that they own or that they
will guarantee that they will own by the Closing Date, composing the
entire share capital upon the Closing Date of ALLIBERT TRANSPORT UND
LAGERTECHNIK VERWALTUNGSGESELLSCHAFT mbH, a company organized under
German law, whose registered office is at Sudring 1-5, 63165 Mulheim am
Main, registered with the Offenbach am Main Trade Registry under the
number 5HRB 10833.
- - The shares that they guarantee that they will own by the Closing Date,
composing the entire share capital upon the Closing Date of ALLIBERT
TRANSPORT UND LAGERTECHNIK GmbH & Co. KG, a company organized under
German law (presently being constituted), whose registered office is at
Sudring 1-5, 63165 Mulheim am Main, which will be registered with the
Offenbach am Main Trade Registry.
The sale may only concern the full ownership of all the shares of the
two German companies mentioned above. The share purchase agreement for
these shares shall conform to the model attached hereto in EXHIBIT NO.
4.
The shares mentioned above are herein collectively referred to as the "Shares."
It is expressly agreed that, in the common intention of the parties, all phases
and aspects, particularly legal and financial, of the sales of shares provided
for in this article shall constitute an indivisible and inseparable whole.
ARTICLE 3 - WHAT IS INCLUDED IN THE TRANSACTION
-----------------------------------------------
By express agreement between the parties, it is specified that the following
shall not form part of the transferred assets:
- - the "ALLIBERT" trade sign and trade name,
- - the "ALLIBERT" trademark,
- - the logo of the SOMMER ALLIBERT group,
- - the corporate names including the name "ALLIBERT",
such elements remaining the Sellers' property.
The ALLIBERT trademark as represented in EXHIBIT NO 5 shall be the subject of a
license granted by the SOMMER ALLIBERT company as indicated hereinafter in
article 16.
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The use by the Purchaser, or any company it controls or will control, of the
corporate names, trade-name or trade sign, including the name ALLIBERT, shall be
authorized for a period of 3 years as indicated hereinafter in article 16, with
a right of renewal for further 3-year periods that the SOMMER ALLIBERT company
may not refuse if the provisions of this Agreement concerning the use of the
name ALLIBERT have been fully respected.
The SOMMER ALLIBERT company, on the one hand, and each of the Companies wishing
to continue to use the name ALLIBERT in its corporate name, on the other hand,
shall materialize these renewals in documents signed by the parties concerned.
It is henceforth specified that the name ALLIBERT can and may only be used in a
corporate name, trade- name or trade sign, on condition that it is always
associated with another word or name that is substantially different and
materially important; the failure by the Purchaser or any company it controls or
will control, or their beneficiaries, to respect this obligation shall result in
the termination of the authorization to use the name ALLIBERT, which will become
effective by operation of law after notice to the Purchaser and its failure to
cure this non-respect, within ten (10) days following such notice.
ARTICLE 4 - DATE OF COMPLETION OF THE SALE
------------------------------------------
The transfer of the Shares referred to in article 2 - AGREEMENT shall take place
on February 1, 1999, the date on which the transfer of ownership and of risks
will occur, subject to the complete fulfillment of all the conditions precedent
stipulated hereinafter in article 11, the Purchaser and the Sellers having
already agreed on an automatic extension of the period necessary to obtain the
authorization referred to in article 11.1.3, which is limited to a maximum of 30
days.
The date on which this transfer will occur is designated hereinafter by the term
Closing Date.
The Shares shall be sold in full ownership with acquisition of rights as of the
Closing Date, and shall in any event be freely transferable and negotiable, and
free from any pledges, restrictions or liens whatsoever.
ARTICLE 5 - PRICE
-----------------
5.1 Basic Price
-----------
The Global Basic Price of the Shares, which will represent on the
Closing Date the entire share capital of the companies referred to from
A1 to A6, has been set by agreement between the Purchaser and the
Sellers at four hundred and seventy six million of French francs (FRF
476,000,000) plus nineteen million five hundred thousand of Dollars
(USD 19,500,000 or USD 19,000,000 if the USD 500,000 price reduction
referred to in Article 4.7 of the Warranty Agreement concerning
ALLIBERT CONTICO attached as Exhibit No. 20 is made). The FRF
476,000,000 are deemed to represent the Basic Price for the Handling
and Medical activities, excluding ALLIBERT CONTICO LLC and ALLIBERT
INDUSTRIE LIMITEE (hereinafter referred to as the Allibert Equipement
Europe Basic Price), and the USD 19,500,000 are deemed
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to represent the Basic Price of 50% of Allibert Contico LLC
(hereinafter referred to as the Basic Price of the 50% of Allibert
Contico).
The Global Basic Price shall be adjusted, if need be, pursuant to the
provisions of Article 5.2 below; the final price determined after the
Adjustment shall be designated by the term Global Purchase Price.
5.2 Calculation of the price Adjustment (the Adjustment)
---------------------------------------------------
5.2.1 The Adjustment shall be calculated depending on the results
reflected in the combined or consolidated accounts as at
December 31, 1998. It may be positive (price increase) or
negative (price reduction). An adjustment shall be made on the
one hand to the Basic Price of the 50% of Allibert Contico
(the Allibert Contico Adjustment), an adjustment which will be
made to the Basic Price of the 50% of Allibert Contico, and on
the other hand an adjustment shall be made to the Allibert
Equipement Europe Basic Price (the Allibert Equipement Europe
Adjustment), an adjustment which will be made to the Allibert
Equipement Europe Basic Price. No set off will be made between
the two above mentioned adjustments.
The final price calculated after the Adjustment of the Basic
Price of the 50% of Allibert Contico shall be hereinafter
designated the Purchase Price of the 50% of Allibert Contico.
The final price calculated after the Adjustment of the Basic
Price of Allibert Equipement Europe shall be hereinafter
designated the Allibert Equipement Europe Purchase Price.
5.2.2 Allibert Contico Adjustment
The Basic Price of the 50% of Allibert Contico (i.e. USD
19,500,000) shall be adjusted upwards or downwards, depending
on the difference between the actual consolidated EBIT of
Allibert Contico for the 12-month period ending on December
31, 1998, as reflected in the audited consolidated accounts,
and the consolidated EBIT forecasts for the same period, i.e.
four million three hundred and eighteen thousand American
dollars (USD 4,318,000). As mentioned in the "Sale Agreement",
the term "EBIT" means "net income of the Company for such
period plus the sum of (a) all interest expense during such
period, plus (b) all income, franchise, gross receipts and
excise tax expense during such period; in each case, to the
extent such expense is deducted from income in determining net
income".
The Allibert Contico Adjustment shall be equal to one-half of
this difference, multiplied by 10.4215. It will be added or
deducted from the Basic Price of the 50% of Allibert Contico.
The resulting amount shall be called the Purchase Price of the
50% of Allibert Contico.
12
<PAGE> 14
Only for example, (1) if the actual Consolidated EBIT as
defined above is equal to USD 5,000,000, the Purchase Price of
the 50% of Allibert Contico shall be:
5,000,000 - 4,318,000
19,500,000 + ( x 10.4215)
--------------------------
2
= USD 23,053,730
(2) If the actual Consolidated EBIT is equal to USD 3,500,000,
the Purchase Price of the 50% of Allibert Contico shall be:
3,500,000 - 4,318,000
19,500,000 + ( x 10.4215)
--------------------------
2
= USD 15,237,606
If the USD 500,000 price reduction referred to in Article 4.7 of the Warranty
Agreement concerning Allibert Contico in Exhibit No. 20 is made, the amounts of
USD 19,500,000 mentioned in article 5.2.2 hereto, will be reduced to USD
19,000,000 and the amounts resulting from the calculations given as examples
will be therefore reduced by USD 500,000.
5.2.3 The Allibert Equipement Europe Adjustment
The Allibert Equipement Europe Basic Price shall be adjusted
upwards or downwards depending on the difference between the
Final Corrected Operating Result as at December 31, 1998 of
Allibert Equipement Europe for the 12-month period ending on
December 31, 1998, calculated from the Combined Accounts as at
December 31, 1998 and corrected according to the method
defined in EXHIBIT NO. 2 "Calculation of the Final Corrected
Operating Result of Allibert Equipement Europe" and the
forecast of the Corrected Operating Result for the same
period, i.e., fifty three million French Francs (FRF
53,000,000).
The Allibert Equipment Europe Adjustment shall be equal to
this difference, multiplied by 8.981. It will be added or
deducted from the Allibert Equipement Europe Basic Price. The
resulting amount shall be the Allibert Equipement Europe
Purchase Price.
It is however expressly agreed between the parties that in the
event of a positive Adjustment (leading to an increase in the
Allibert Equipement Europe Purchase Price), this Adjustment
may not exceed FRF 64,000,000 and consequently the Allibert
Equipement Europe Purchase Price may not exceed FRF
540,000,000.
13
<PAGE> 15
5.2.4 Global Purchase Price
The Global Purchase Price for the acquisition of the Shares of
the companies shall therefore be equal to:
- an amount in French francs (FRF) equal to the Allibert
Equipement Europe Purchase Price,
- plus an amount in US dollars (USD) equal to the
Purchase Price of the 50% of Allibert Contico.
5.2.5 Breakdown of the Global Purchase Price
The breakdown of the Global Purchase Price between the various
Shares shall be determined pursuant to the method set forth in
EXHIBIT NO. 6. This exhibit gives an example of the breakdown
of the Global Basic Price based on the corrected operating
results of the Companies as at August 31, 1998.
The breakdown of the Global Purchase Price may not give rise
to any claim on the part of the Purchaser as to the estimated
value of the elements taken separately.
5.3 Accounts as at December 31, 1998 of Allibert Equipement Europe
Under this article 5.3, Allibert Equipement Europe shall mean all the
companies mentioned in I/ Preamble of this Agreement, with the
exception of ALLIBERT CONTICO and ALLIBERT INDUSTRIES LIMITEE.
5.3.1 Corporate accounts as at December 31, 1998
The Allibert Equipement Europe companies shall prepare their
corporate accounts as at December 31, 1998 as promptly as
possible, and by January 31, 1998, while respecting the
continuity and coherence of the methods in accordance with the
accounting principles generally admitted by the various
jurisdictions of the Companies.
For the activity of "Equipement in Germany", the German
company ALLIBERT TRANSPORT UND LAGERTECHNIK GmbH shall prepare
an income statement of its Equipment activity for the whole of
fiscal year 1998. This income statement shall be verified by
the Statutory Auditor of ALLIBERT TRANSPORT UND LAGERTECHNIK
GmbH, who will be requested to issue an opinion on this income
statement.
The corporate accounts shall be audited and certified by the
current Statutory Auditors (or Auditors) of the Companies.
14
<PAGE> 16
The Purchaser may designate a firm of auditors which may
assist the auditing of the corporate accounts (for example:
inventories, ...) and shall have access to all documents or
files it might consider necessary based on the usual practice
of the profession. The fees of this firm of auditors shall be
borne by the Purchaser.
In this respect, the Sellers will obtain from their Statutory
Auditors or Auditors, the authorization allowing the
Purchaser's auditors to have access to the documents that they
will deem necessary to accomplish their mission.
5.3.2 Combined accounts of Allibert Equipement Europe as at
December 31, 1998
SOMMER ALLIBERT shall prepare the combined accounts of
Allibert Equipement Europe.
The combined accounts shall be audited jointly by the firm
Gesbert, Rey et Associes, 2 Rue de Marengo, 75001 Paris, and
by a firm of auditors chosen by the Seller. Their mission
shall consist of i) giving an opinion on the combined
accounts, ii) calculating the Final Corrected Operating
Result, according to the method presented in Exhibit No. 2,
iii) determining the amount of the Allibert Equipement Europe
Adjustment, in accordance with Article 5.2.3 above. They shall
deliver the results of their mission and all the necessary
explanations and supporting documents (the "Notice") to the
parties no more than 30 days after the Closing Date.
All these works shall be performed in compliance with
generally accepted accounting principles in France while
respecting the continuity and coherence of the methods. An
example of these methods is given in Exhibit No. 7, which
presents the combined accounts of all the companies concerned
(including 50% of ALLIBERT CONTICO, and ALLIBERT INDUSTRIES
LIMITEE) closed as at August 31, 1998.
The fees of each firm of auditors shall be borne by the party
designating each such firm.
5.3.3 Disagreement as to the accounts and/or results and/or the
calculation of the Allibert Equipement Europe Adjustment
If a disagreement as to the accounts and/or results and/or
calculation of the Allibert Equipement Europe Adjustment is
reported in the Notice, the parties will then meet in order to
reach an agreement or the said disagreement(s).
In the event that the Purchaser and the Sellers do not agree
within 10 clear days of the Notice, the points of disagreement
shall be submitted to the firm KPMG (France) or, if such firm
does not accept its mission, to the firm Deloitte Touche
Tohmatsu (France) designated as third party auditor (the Third
Party Auditor).
15
<PAGE> 17
If the firm Deloitte Touche Tohmatsu (France) does not accept
its mission or is unable to perform it successfully pursuant
to this article, and if the Purchaser and the Sellers do not
agree within 3 days on another name, the Purchaser or the
Sellers may obtain the designation of an international firm of
auditors having offices in Paris by order of the Presiding
Judge of the Paris Commercial Court ruling in summary
proceedings. The fees and disbursements of the Third Party
Auditor shall be borne equally by the Purchaser and the
Sellers.
The parties shall each prepare as promptly as possible (and in
any event within 5 clear days of the expiration of the 10-day
period indicated above) a note (accompanied by all necessary
evidence) concerning the points of disagreement to be
submitted to the final decision of the Third Party Auditor and
shall deliver this note immediately to such Third Party
Auditor.
The Third Party Auditor shall:
(i) resolve only the points of disagreement between the
Purchaser and the Sellers and determine the Final Corrected
Operating Result as at December 31, 1998 and the amount of any
resulting Adjustment pursuant to Article 5.2, and
(ii) provide the parties, within 10 clear days of delivery by
one of the parties or by the parties of the note concerning
the points of disagreement mentioned above, a final report
which shall indicate its decision as to the amount of the
Final Corrected Operating Result as at December 31, 1998 and
the Allibert Equipement Europe Adjustment.
The amount of the Adjustment (if any) resulting from the Third
Party Auditor's report shall be definitively binding on the
parties without any possible recourse.
For purposes of this article, the Sellers shall:
(i) ensure to the Purchaser, its representatives and auditors,
and the Third Party Auditor, access to all of the Sellers'
documents and to the Sellers' personnel, and
(ii) ensure that the statutory auditors and auditors of the
Sellers cooperate fully with the Third Party Auditor and in
particular provide the latter with all of their files and
documents.
In order to determine the Final Corrected Operating Result as
at December 31, 1998, the parties and the Third Party Auditor
shall strictly apply the following principles and provisions:
(a) the terms of this Agreement,
(b) the Accounting Principles, and particularly the respect of
the continuity and constancy of the methods,
16
<PAGE> 18
(c) the parties and/or their representatives and the Third
Party Auditor shall refrain from making adjustments,
particularly with regard to reserves or provisions, founded on
their own assessment, unless such adjustment is founded on an
objective factual basis.
5.4 Accounts as at December 31, 1998 of ALLIBERT CONTICO
5.4.1 Corporate accounts as at December 31, 1998
As promptly as possible after December 31, 1998, ALLIBERT
CONTICO and ALLIBERT INDUSTRIE LIMITEE shall prepare their
corporate accounts for the fiscal year 1998.
5.4.2 Consolidated accounts as at December 31, 1998 of ALLIBERT
CONTICO
ALLIBERT CONTICO shall prepare, as promptly as possible, its
consolidated accounts for the fiscal year 1998.
The consolidated accounts (including their appendices) shall
be audited by the firm of ARTHUR ANDERSEN LLC, which will be
responsible for i) giving an opinion on these accounts, ii)
calculating the 1998 Consolidated EBIT, as defined in Article
5.2.2 above, iii) calculating the ALLIBERT CONTICO Adjustment,
in accordance with Article 5.2.2 above. The auditor shall
deliver the results of its mission to the parties and to
Contico no more than 30 days after the Closing Date.
The Purchaser shall have the right, at its expense, to observe
the preparation of ALLIBERT CONTICO's consolidated accounts,
according to the procedures that ARTHUR ANDERSEN will
establish.
All this work shall be carried out in compliance with
generally accepted accounting principles (GAAP) in the USA,
while respecting the continuity and coherence of the methods.
5.4.3 Disagreement as to the accounts and/or results and/or the
calculation of the Allibert Contico Adjustment
If the Purchaser or the Sellers dispute the conclusions of the
firm of auditors rendered in accordance with Article 5.4.2
above, whether concerning the consolidated accounts, or the
results, or the calculation of the Allibert Contico
Adjustment, they shall notify their position to the other
party and to Contico within the 10 days following the receipt
of these conclusions.
The parties shall request the company and the firm of auditors
to provide each party with the information and documents which
each party may need to reasonably substantiate its position.
17
<PAGE> 19
If the Purchaser and the Sellers do not reach an agreement on
the audited accounts or the calculation of the EBIT or the
Allibert Contico Adjustment within the 10 days following the
receipt of the notice sent by one of the parties, the parties
shall have a period of 5 days to submit their respective
positions and any supporting documents to Deloitte Touche
Tohmatsu (Saint Louis, Missouri, USA) designated as the Third
Party Auditor. If Deloitte Touche Tohmatsu is unable to accept
or perform this mission, the most recent Managing Partner of
this firm shall designate another firm of auditors which shall
then become the Third Party Auditor.
The Third Party Auditor shall have a period of 10 clear days
after receiving any documentation sent by the parties to
communicate its conclusions which shall be binding on all the
parties concerned.
The costs of intervention of the Third Party Auditor shall be
borne one-half by the Purchaser and one-half by the Sellers
and Contico.
ARTICLE 6 - PAYMENTS
--------------------
The selling companies hereby expressly appoint ALLIBERT HOLDING, in their name
and on their behalf, to receive the Global Purchase Price of the Shares sold to
the Purchaser by each of them. ALLIBERT HOLDING represents that it undertakes
and shall be the only person in charge of allocating the Global Purchase Price
between the Sellers, no liability will be incurred by the Purchaser in this
respect.
6.1 On the Closing Date:
The Purchaser shall pay ALLIBERT HOLDING FRF 380,800,000 and USD
15,600,000.
The Purchaser shall pay FRF 95,200,000 into an escrow account in French
francs, and USD 3,900,000 into an escrow account in US dollars. The
functioning of these two escrow accounts shall be governed by two
escrow agreements which shall be signed on the Closing Date, according
to the text of the draft agreements attached as Exhibit No. 8 hereto.
6.2 Once the Allibert Equipement Europe Purchase Price has been determined
in accordance with Article 5.2 above:
6.2.1 If the Allibert Equipement Europe Purchase Price exceeds FRF
476,000,000:
a) The FRF 95,200,000 of the escrow account in French francs
shall be transferred wholly to ALLIBERT HOLDING, increased by
the interest accrued on this account,
b) The Purchaser shall immediately transfer to ALLIBERT
HOLDING the amount corresponding to the difference between the
Allibert Equipement Europe Purchase Price and the Allibert
Equipement Europe Basic Price. It is expressly agreed that
this difference
18
<PAGE> 20
may not be more than FRF 64,000,000.
6.2.2 If the Allibert Equipement Europe Purchase Price is equal to
FRF 476,000,000:
The FRF 95,200,000 of the escrow account in French francs
shall be transferred wholly to ALLIBERT HOLDING, increased by
the interest accrued on this account.
6.2.3 If the Allibert Equipement Europe Purchase Price exceeds FRF
380,800,000 but does not exceed FRF 476,000,000:
a) An amount equal to the difference between the Allibert
Equipement Europe Purchase Price and FRF 380,800,000,
increased by the interest produced by this amount in this
escrow account shall be transferred from the escrow account in
French francs in favor of ALLIBERT HOLDING.
b) The balance of the escrow account in French francs and the
interest produced by this balance in this escrow account shall
be transferred to the Purchaser.
6.2.4 If the Allibert Equipement Europe Purchase Price does not
exceed FRF 380,800,000:
a) The total amount of the escrow account in French francs and
the interest produced by this amount in the escrow account
shall be transferred to the Purchaser.
b) ALLIBERT HOLDING shall immediately transfer to the
Purchaser an amount equal to the difference between FRF
380,800,000 and the Allibert Equipement Europe Purchase Price.
6.3 Once the Purchase Price of the 50% of Allibert Contico has been
determined in accordance with Article 5.4 above:
6.3.1 If the Purchase Price of the 50% of Allibert Contico exceeds
USD 19,500,000:
a) The USD 3,900,000 of the escrow account in US dollars shall
be transferred wholly to ALLIBERT HOLDING, increased by the
interest produced in this escrow account in US dollars.
b) The Purchaser shall immediately transfer to ALLIBERT
HOLDING the amount corresponding to the difference between the
Purchase Price of the 50% of Allibert Contico and the Basic
Price of the 50% of Allibert Contico.
6.3.2 If the Purchase Price of the 50% of Allibert Contico is equal
to USD 19,500,000:
The USD 3,900,000 of the escrow account in US dollars shall be
transferred wholly in favor of ALLIBERT HOLDING, increased by
the interest produced by this amount in the escrow account in
US dollars.
19
<PAGE> 21
6.3.3 If the Purchase Price of the 50% of Allibert Contico exceeds
USD 15,600,000 but does not exceed USD 19,500,000:
a) An amount equal to the difference between the Purchase
Price of the 50% of Allibert Contico and USD 15,600,000,
increased by the interest produced by this amount in this
escrow account shall be transferred from the escrow account in
US dollars in favor of ALLIBERT HOLDING.
b) The balance of the escrow account in US dollars and the
interest produced by this balance in this escrow account shall
be transferred to the Purchaser.
6.3.4 If the Purchase Price of the 50% of Allibert Contico does not
exceed USD 15,600,000:
a) The total amount of the escrow account in US dollars and
the interest produced by this amount in the escrow account
shall be transferred to the Purchaser.
b) ALLIBERT HOLDING shall immediately transfer to the
Purchaser an amount equal to the difference between USD
15,600,000 and the Purchase Price of the 50% of Allibert
Contico.
6.4 Reduction of the Purchase Price of 50% of Allibert Contico
If the USD 500,000 price reduction referred to in Article 4.7 of the
Warranty Agreement concerning Allibert Contico attached as Exhibit No.
20 hereto is applied, the amounts of USD 15,600,000 and USD 19,500,000
aforementioned in Articles 6.1 and 6.3 will be reduced respectively to
USD 15,100,000 and USD 19,000,000.
ARTICLE 7 - OPTION IN FAVOR OF THE PURCHASER TO ACQUIRE,
--------------------------------------------------------
AND IN FAVOR OF THE SELLER TO SELL, THE 50% OF ALLIBERT CONTICO
---------------------------------------------------------------
Immediately upon signature of this Agreement, ALLIBERT EQUIPEMENT US Inc. shall
grant the Purchaser an option to buy and the Purchaser shall grant ALLIBERT
EQUIPEMENT US Inc. an option to sell the shares representing 50% of the share
capital of ALLIBERT CONTICO LLC held by ALLIBERT EQUIPEMENT US Inc., in
accordance with the "Option Agreement" attached as Exhibit No. 9 hereto.
These options shall be exercisable during a period of 5 working days beginning
on the Closing Date or on any other later date agreed upon by the parties, only
if the transfer of the Shares is not completed on the Closing Date or on any
other later date agreed upon between the parties and that consequently the
Purchaser is unable to acquire the Shares.
The purchase or sale conditions shall then be identical to those set forth for
the acquisition of the 50% of ALLIBERT CONTICO LLC, in accordance with the "Sale
Agreement" signed between CONTICO and
20
<PAGE> 22
the Purchaser, and attached as Exhibit No. 10, and in particular:
- - The Basic Price of the 50% of Allibert Contico shall be USD 22,500,000.
- - The transfer of shares and the payment of the amount of USD 21,500,000
to ALLIBERT EQUIPEMENT US INC. and USD 1,000,000 to an escrow account
shall be made 5 working days after the exercise date of the option (or
on any later date which the parties agree upon).
- - The downward Adjustment of this price shall be limited to USD 1,000,000
and there shall be no upward limit. Consequently, the Purchase Price of
the 50% of Allibert Contico may not be less than FRF 21,500,000.
- - The payment of the amount corresponding to the Adjustment shall be made
in accordance with Article 1.3.c "Adjusting Payment" of the "Sale
Agreement".
- - If the USD 500,000 price reduction referred to under Article 4.7 of the
Warranty Agreement concerning Allibert Contico attached as Exhibit No.
20 hereto, is applied, the amounts of USD 22,500,000 and USD 21,500,000
aforementioned, will be reduced respectively to USD 22,000,000 and USD
21,000,000.
These options shall remain valid and in effect until the expiration of the 5
working days period starting on the Closing Date, even if the Sellers exercise
their unilateral termination right stipulated in Article 11.2 and/or if the
transfer of the Shares hereunder is not completed.
ARTICLE 8 - ACCOUNTING, FINANCIAL, LEGAL AND TAX DUE DILIGENCE
--------------------------------------------------------------
BY THE PURCHASER
----------------
The Sellers shall, as from the date hereof and during the maximum period of 40
working days, cause the Purchaser and the advisors of its choice to have access
during the business hours, to the premises of these Companies, the managers of
these Companies and the documents they might reasonably require in order to
carry out complete verifications, particularly in respect of accounting,
environmental, financial, legal, tax and computing matters.
These verifications shall be carried out in coordination with Mr. Jean-Paul
LESAGE or any person that the latter might designate and, in any event, in such
a manner as not to affect the normal operation of the companies indicated above.
The Sellers shall notify the Purchaser immediately of any event preventing or
delaying the normal course of the verifications provided for above and shall use
their best efforts to cause the Purchaser to have access to the documents or
information necessary for its verifications.
In the course of the execution of their mission, the representatives of the
Purchaser shall, however, not cause any unusual disturbances to the proper
operation of the services of the Companies, particularly during the period of
the preparation of the 1998 accounts.
21
<PAGE> 23
ARTICLE 9 - OPERATIONS PRIOR TO THE SALE
----------------------------------------
9.1 Withdrawal from the cash pooling system
---------------------------------------
Prior to the Closing Date, all the companies in the handling branch
included in a cash pooling system, both in France and abroad, shall
withdraw from such system.
In replacement, ALLIBERT HOLDING will grant ALLIBERT EQUIPEMENT
(France) a short term 4.5% per annum interest-bearing loan of FRF 60
million ; this loan will be reimbursed by ALLIBERT EQUIPEMENT (France)
on the Closing Date at the same time as the sale of the shares referred
to in article 2 above. The Purchaser i) undertakes to take all
necessary measures so that ALLIBERT EQUIPEMENT (France) is in a
position to make the reimbursement, and ii) guarantees that this
reimbursement will be made.
9.2 Currency Edge
-------------
In July 1998, the SOMMER ALLIBERT company assigned to ALLIBERT
EQUIPEMENT six put options of GBP for FRF according to the contract
attached as EXHIBIT NO. 11.
ALLIBERT EQUIPEMENT will continue to benefit from these options until
their due date.
9.3 Occupancy of the Nanterre premises
----------------------------------
The Purchaser and the Sellers, after examining the sublease agreement
granted on July 1, 1993 by the company SETEPP to the company ALLIBERT
EQUIPEMENT, agree that the latter company may leave the premises that
are the subject matter of this agreement at any time upon giving a
prior notice of 3 months, the Sellers guaranteeing both that the
company SETEPP will accept this provision, the other clauses of the
sublease agreement still being applicable, and that the lessor
("Credit-bailleur") under the financed lease will accept.
9.4 Expatriates
-----------
The Purchaser shall as from the Closing Date take over the management
of the expatriates of the handling branch listed in EXHIBIT NO. 12, who
were previously managed by the SOMMER ALLIBERT company, and in
particular the payment of the contributions to the French health/old
age insurance organizations.
9.5 Financing
---------
9.5.1 French financing
The medium term loan of one hundred and fifty million French
francs granted to
22
<PAGE> 24
ALLIBERT EQUIPEMENT by the SOMMER ALLIBERT company, and the
interest accrued since December 31, 1998 until the Closing
Date, shall be reimbursed to the latter company by ALLIBERT
EQUIPEMENT (France) on the Closing Date.
The Purchaser i) undertakes to take all necessary measures so
that ALLIBERT EQUIPEMENT (France) is in a position to make the
reimbursement, and ii) guarantees that this reimbursement will
be made.
9.5.2 Foreign financing
-----------------
ALLIBERT CONTICO currently benefits from a medium term loan
and a short term credit facility, both granted by Societe
Generale in New York, attached hereto in Exhibit No. 13.
These financing arrangements were the subject of comfort
letters issued by the SOMMER ALLIBERT company, attached hereto
in the above-mentioned Exhibit, which allow the bank to
require the reimbursement of the financing mentioned above in
the event of the sale of the ALLIBERT CONTICO shares.
Upon signature of this Agreement, the SOMMER ALLIBERT company
shall introduce the bank to the Purchaser, which shall be
personally responsible for providing substitute financing if
the bank decides to exercise its right of withdrawal.
9.6 Services
--------
All the services provided by the SOMMER ALLIBERT group (head office
expenses, computer services, administrative services, photocopying,
mail, insurance etc.) to the Companies shall terminate on the Closing
Date, with the exception however of the computer services and telephone
services which will be the subject matter of services agreements to be
entered into between SOMMER ALLIBERT and the Companies, the terms and
conditions of which are set forth in EXHIBIT 26.
The estimated amounts to be paid for these services from September to
December 1998 are indicated in EXHIBIT NO. 14.
The amounts for the services referred to under the present article, for
the period between January 1st, 1999 and the Closing Date, shall not
exceed in any event, an amount of 420,000 per month. This amount does
not include any trademark royalty, the said royalty is no longer due
after January 1, 1998.
All amounts owed by ALLIBERT EQUIPEMENT and its subsidiaries for the
services referred to above will be paid upon their due date.
The Purchaser and the SOMMER ALLIBERT company may agree subsequently,
as the case may be, on new terms and conditions for the provision of
all or part of the services referred to above.
23
<PAGE> 25
9.7 Inter-company receivables and debts
-----------------------------------
All inter-company debts and receivables of the Companies in respect of
the SOMMER ALLIBERT group shall be paid at the agreed due dates.
9.8 Guarantees and undertakings supplied by the Sellers and/or the SOMMER
---------------------------------------------------------------------
ALLIBERT company
----------------
The Purchaser undertakes to take the necessary measures so that the
Sellers and the SOMMER ALLIBERT company are discharged from the
undertakings and receive the release of the guarantees listed in
EXHIBIT NO. 15 on the Closing Date.
9.9 ALLIBERT ANSHAN CUVES SARL
--------------------------
On July 20, 1995 a J.V. contract n(degree) CF/AS-3-9501 has been signed
between the Chinese company UPCA and ALLIBERT EQUIPEMENT for the
creation of ALLIBERT ANSHAN CUVES. Article 8-01 "Products Distribution"
of such contract stipulates that the products will be distributed under
the trademark ALLIBERT plus logo. SOMMER ALLIBERT confirms as of now
its agreement for such tacit sub-license granted by ALLIBERT EQUIPEMENT
in favor of ALLIBERT ANSHAN CUVES, knowing that from the Closing Date,
ALLIBERT ANSHAN CUVES will be able to continue to use this tacit
sub-license in compliance with the provisions of Article 18 of the
Agreement hereof and of the trademark license contract attached as
EXHIBIT 25.
ARTICLE 10 - THE SELLERS' OBLIGATIONS
-------------------------------------
From the date hereof until the Closing Date, the Sellers shall cause the
activities of the Companies to be managed in the normal course of business in a
careful and prudent manner. The Companies may not take, or authorize to be
taken, any of the following decisions (except insofar as they might be required
to do so by law or because of a legal obligation existing on the date hereof),
without the Purchaser's agreement (agreement which may not be unreasonably
withheld) (except for what is indicated in EXHIBIT NO. 16):
(a) amend their by-laws, internal regulations or any of their other
incorporation documents;
(b) acquire, or agree to acquire, by any means whatsoever, particularly by
merger, contribution, acquisition of shares or assets, any entity
(whether a stock company or a partnership, association or any entity
whatsoever, whatever its form) or any business; become a member of a
GIE;
(c) modify their capital or the securities they have issued, or declare,
reserve, decide or pay any dividend in cash or in any other form, or
acquire or cancel shares or other securities;
(d) issue or sell, or agree to issue or sell, a part of their capital or of
the securities issued by them, or options, subscription warrants or any
other right to acquire shares or other securities or stock that are
convertible into or exchangeable for shares or securities, or acquire,
or agree to acquire, such stock from a third party;
(e) decide to reorganize or dissolve one or more of the Companies, or
initiate any liquidation or
24
<PAGE> 26
dissolution plan or a similar procedure;
(f) sell, or agree to sell, any asset, whether tangible or intangible,
having an individual value exceeding FRF 500,000 (other than products
in the normal course of business);
(g) terminate or cancel an insurance policy, unless they replace it with a
new insurance policy providing at least the same coverage as and having
equivalent premiums to those of the terminated insurance policy;
(h) grant any borrowing, excluding intercompany loans and borrowings, or
forgive any receivable, excluding loans granted to employees not
exceeding a total amount of FRF 300,000.
(i) The Sellers also undertake to obtain resignation letters from the
statutory auditors of the Companies effective as from the close of the
Ordinary General Meetings deciding on the accounts of the fiscal year
1998.
In addition to the provisions set forth above, from the date hereof until the
Closing Date, the Sellers may not, without the Purchaser's agreement (agreement
which may not be unreasonably withheld) grant, or allow to be granted, any
encumbrance, right, security interest or pledge on the Companies' assets or
grant any collateral security or any other guarantee to a third party.
In addition, the Purchaser will be provided, as soon as they are issued, with
the usual monthly reporting documents of ALLIBERT EQUIPEMENT.
ARTICLE 11 - CONDITIONS PRECEDENT -
-----------------------------------
SELLERS' UNILATERAL TERMINATION RIGHT
-------------------------------------
11.1 Conditions precedent
--------------------
This Agreement is subject to the conditions precedent hereinafter
stipulated, it being understood that the Purchaser may freely waive the
conditions set forth under 11.1.1, 11.1.2 and 11.1.4 which are
stipulated in its favor.
11.1.1 ALLIBERT EQUIPEMENT must hold, directly or indirectly:
the entire share capital of the following companies:
- ALLIBERT EQUIPEMENT (company organized under Belgian
law),
- ALLIBERT MANUTENCION S.A. (company organized under
Spanish law),
- SOMMER ALLIBERT UK Ltd (company organized under
British law),
- ALLIBERT TRANSPORT UND LAGERTECHNIK GmbH (company
organized under Austrian law),
- ALLIBERT CONTENITORI (company organized under Italian
law),
- ALLIBERT CONTENTORES (company organized under
Portuguese law),
25
<PAGE> 27
with the exception of three (3) shares which must be
held by individuals (M. JP Lesage, M.M. Eskandar,
M.J.A. Gonzalez).
- ALLIBERT EQUIPEMENT US Inc. (company organized under
US law),
And:
- 50% of the share capital of ALLIBERT CONTICO LLC which
itself must hold 100% of the share capital of ALLIBERT
INDUSTRIES LIMITEE (company organized under Canadian
law)
- 50.1% of the share capital of Anshan ALLIBERT CUVES
SARL (company organized under Chinese law),
50.1%-held.
11.1.2 The non-occurrence as from the date of this Agreement:
(i) of any deterioration of a significant portion of the
physical assets, (ii) of any major labor conflict, (iii) of
any significant deterioration in the operation of the
Companies, (iv) of any judicial, governmental or
administrative injunction or order,
resulting, or which can reasonably be expected to result, in a
reduction in production and/or turnover of more than 20% for 3
consecutive months in the country in which such event occurs
compared to the same period of the previous year.
11.1.3 The necessary authorizations shall have been obtained for the
countries concerned in light of antitrust legislation.
11.1.4 On the Closing Date, the medical activity shall have been
contributed to HOLDIPLAST.
The fulfillment of all the conditions precedent listed above
and the acknowledgment of such fulfillment in a document
signed by the two parties shall occur on or before the Closing
Date, each party undertaking to use its best efforts to
achieve the fulfillment of the conditions under its own
control by such date.
Upon signature of the document acknowledging the fulfillment
of the conditions precedent, the undersigned shall be
definitively and irrevocably required to complete the sale of
the shares referred to in article 2 above, according to the
terms and conditions agreed in this Agreement, subject to
articles 11.2 and 7 hereof.
In the absence of this fulfillment and the acknowledgment
referred to above on or before the Closing Date or on any
other later date agreed upon by the parties, this Agreement
shall be null and void without any indemnity being due by any
of the parties, the parties being
26
<PAGE> 28
released from any reciprocal obligations.
11.2 The Sellers' unilateral termination right
In the event that the Total Amount of the Costs or the Global Estimate
Amount as defined in Article 14 hereinafter should exceed 50 (fifty)
million French francs, the Sellers, and the Sellers exclusively, shall
have the right, at their sole discretion, to terminate this Agreement,
without any indemnity on either side, by sending a notice in accordance
with Article 34 below, within 6 working days following the latest of
the following dates (i) their receipt of the Letter defined in Article
14.9 or (ii) their receipt of the decision of the Third Party
Environmental Auditor indicating its decision to apply this provision.
Thereafter, the Sellers may not terminate unilaterally the Agreement
and will have to execute the Rehabilitation Works pursuant to Article
14 hereof.
Notwithstanding this termination, the option to buy and the option to
sell mentioned in Article 7 shall continue to be valid and in force.
ARTICLE 12 - DELIVERY OF DOCUMENTS AT CLOSING
---------------------------------------------
12.1 On the Closing Date, in consideration for the payments made according
to the provisions referred to under 12.2., ALLIBERT HOLDING, SEDITEP,
SAUVAGNAT ALLIBERT, ALLIBERT TRANSPORT UND LAGERTECHNIK GMBH and SOMMER
ALLIBERT shall hand over the following documents:
- the reiteration of the execution of the Warranty Agreement
(and the update of the Exhibits in accordance with Article
14.2 of the Warranty Agreement) and the reiteration of the
Environmental warranties given by the Sellers according to
Article 14 hereof.
- temporary service agreement concerning the telephone, entered
into between SOMMER ALLIBERT and ALLIBERT EQUIPEMENT;
- computer service agreement between SOMMER ALLIBERT and the
Companies in respect of the year 2000 and EURO compliance;
- resignation letters of the directors of the Companies sold,
directly or indirectly, according to the list and model
attached hereto (EXHIBIT NO. 17);
- resignation letter of the manager ("Gerant ") of SCI DE LA
PLAINE in the form of the model attached hereto (EXHIBIT NO.
18);
- resignation letters of the Statutory Auditors of the
Companies, effective as of the date of the general meeting
approving the accounts of the fiscal year ending on December
31, 1998;
- The share transfer orders, duly signed by all the current
shareholders of ALLIBERT
27
<PAGE> 29
EQUIPEMENT, ATMP, HOLDIPLAST, in favor of the Purchaser or the
designated transferees, in accordance in each case with the
applicable local law, and any other similar documents for the
transfers of SCI DE LA PLAINE, ALLIBERT TRANSPORT UND
LAGERTECHNIK VERWALTUNGSGESELLSCHAFT MBH and ALLIBERT
TRANSPORT UND LAGERTECHNIK GMBH UND CO. KG;
- the exhibits to the Sellers' Warranty Agreement, including
corporate accounts certified as at December 31, 1998 for the
companies subject to the said Warranty and, eventually, the
exhibits which shall be updated pursuant to Article 14.2.b. of
the said Warranty Agreement.
- the two escrow agreements referred to in Article 6.1;
- the minutes certified as true by the Chairman of the board of
directors of ALLIBERT EQUIPEMENT, ATMP, HOLDIPLAST, of the
ordinary general meeting of the shareholders of ALLIBERT
EQUIPEMENT, ATMP, HOLDIPLAST, designating the new directors
chosen by the Purchaser and the minutes certified as true by
the manager of SCI DE LA PLAINE of the ordinary general
meeting of SCI DE LA PLAINE designating the new manager chosen
by the Purchaser;
- the following documents concerning ALLIBERT EQUIPEMENT, ATMP,
HOLDIPLAST:
. lease of the premises occupied by ALLIBERT EQUIPEMENT
or certificate of domiciliation,
. certified true copy of the by-laws,
. list of shareholders,
. Trade Registry excerpt issued not more than one month
prior to the Closing Date,
. statement of registrations with the Trade Registry
issued not more than one month prior to the Closing
Date,
. share transfer register and corresponding transfer
forms,
. individual share accounts,
. attendance register of board of directors' meetings,
. register of the minutes of the board of directors,
. registry of the minutes of general meetings of the
shareholders,
. incorporation file of the company (list of
subscribers, certificates of payment, declaration of
conformity),
. legal announcement journals, certificates of filing
documents with the court registry,
. files of ordinary and extraordinary shareholders'
meetings (copies of letters of convocation and return
receipts, board of directors' reports, tables of
results, balance sheets and operating accounts,
statutory auditor's reports, attendance sheets, powers
of attorney, legal announcement journals),
. obligatory accounting records (book of original entry,
general ledger, inventory ledger),
. payroll journal.
28
<PAGE> 30
- Any supporting evidence showing that:
The authorizations and the necessary consents have been given
by the shareholders and/or the directors and/or the relevant
corporate structures of the Companies in respect to the
acquisition of the Shares by the Purchaser pursuant to this
Agreement and in particular, that the Purchaser has been
approved as shareholder of the Companies in accordance with
the by-laws of the Companies.
The directors of the Companies have been duly convened to a
meeting of the Board of Directors to be held on the Closing
Date in order to acknowledge the resignation of the directors
and officers of the Companies whose name are indicated in
Exhibit 17, and to appoint, by co-optation, the individuals
and/or the legal persons who shall be proposed by the
Purchaser.
The organizations representing the personnel existing in the
Companies have been duly informed and consulted about the
proposed transfer of the Shares to the Purchaser.
After the Closing Date, the Sellers and the Purchaser shall
sign all additional documents and shall take all steps which
either party may reasonably require in order to complete the
operations contemplated in this Agreement.
12.2 On the Closing Date the Purchaser shall make the payments provided for
in Article 6 - PAYMENT.
The payments in favor of ALLIBERT HOLDING shall be made by the Purchaser to the
bank accounts which will have been indicated to the Purchaser at least ten clear
days before the Closing Date by ALLIBERT HOLDING.
The payments on the escrow accounts shall be made by the Purchaser to the bank
accounts which will have been indicated to the Purchaser at least ten clear days
before the Closing Date by the escrow agent.
ALLIBERT EQUIPEMENT shall reimburse the financing granted (including the
interests owed) by SOMMER ALLIBERT. This reimbursement shall be made by ALLIBERT
EQUIPEMENT by transfer to the bank account indicated by SOMMER ALLIBERT at least
ten clear days before the Closing Date.
12.3 On the Closing Date, the SOMMER ALLIBERT company shall deliver the
license agreement concerning the "Allibert" trademark referred to in
Article 15 and the warranty agreements referred to in Article 13.
ARTICLE 13 - WARRANTIES
-----------------------
29
<PAGE> 31
13.1 Common provisions
-----------------
13.1.1 It is expressly agreed that the warranty granted pursuant to
this Agreement shall take the form of two guaranties operating
independently of each other.
A) One concerning the companies:
- ALLIBERT EQUIPEMENT
- ATMP
- SCI DE LA PLAINE
- HOLDIPLAST
- ALLIBERT EQUIPEMENT US Inc. (USA)
- ALLIBERT CONTENITORI Spa (Italy)
- ALLIBERT CONTENTORES (Portugal)
- ALLIBERT HANDLING (Great Britain, ex SOMMER
ALLIBERT UK Ltd)
- ALLIBERT MANUTENCION S.A. (Spain)
- ALLIBERT EQUIPEMENT Sprl (Belgium)
- ANSHAN ALLIBERT CUVES (China)
- ALLIBERT TRANSPORT UND LAGERTECHNIK Ges mbH
(Austria)
- ALLIBERT TRANSPORT UND LAGERTECHNIK GmbH UND
Co. KG (Germany)
- ALLIBERT TRANSPORT UND LAGERTECHNIK
VERWALTUNGSGESELLSCHAFT mbH (Germany)
and which is the subject of the Sellers' Warranty
Agreement. This warranty is not applicable to the
following Companies: ALLIBERT CONTICO LLC (USA) and
ALLIBERT INDUSTRIE LIMITEE (Canada).
B) The other warranty concerning ALLIBERT CONTICO LLC and
ALLIBERT INDUSTRIE LIMITEE and which is the subject of
the Warranty Agreement concerning ALLIBERT CONTICO.
13.1.2 It is understood that the implementation of one of the
Warranties shall not, in any case, lead to a double economical
charge for the Seller, in particular for, all losses,
liabilities, damage or others which have already been
compensated by the price Adjustment or by the implementation
of the other warranty.
13.1.3 The Sellers make no other representations and grant no other
warranties to the Purchaser apart from those expressly and
specifically made and granted herein. Without limiting the
general nature of the foregoing, the Sellers do not make any
representations or warranties as to:
(i) the accuracy or completeness of any forecast, business
plan, budget or other prospective information supplied by the
Sellers, the SOMMER ALLIBERT company or
30
<PAGE> 32
their advisors, to the Purchaser or its advisors,
(ii) matters concerning the future relations of the companies
enumerated under A/ of the preamble with all public
authorities, clients, suppliers, salaried employees, except
for what is already mentioned hereof.
13.1.4 the companies SEDITEP, Sauvagnat Allibert, ALLIBERT TRANSPORT
& LAGERTECHNIK (5HRB 10183) hereby delegate authority to
ALLIBERT HOLDING to receive any claim for indemnification from
the Purchaser, discuss the amounts, negotiate, settle, pay
and, on a more general basis, carry out what is necessary.
13.2. Sellers' Warranty Agreement
---------------------------
In case of the completion of the sale of the shares according to the terms
hereof, for the Companies excluding ALLIBERT CONTICO and ALLIBERT INDUSTRIES
LIMITEE, this sale will be subject to the representations, warranties and
indemnification undertakings provided for in the Sellers' Warranty Agreement
signed at the same time as this Agreement.
The above Sellers' Warranty Agreement is attached to the present Agreement as
EXHIBIT NO. 19 and forms an integral and not separable part of it.
13.3. Warranty Agreement concerning ALLIBERT CONTICO LLC
--------------------------------------------------
In case of the completion of the indirect sale of the 50% of ALLIBERT CONTICO
according to the terms of the present Agreement or of the execution of the
direct sale according to the terms of the "Option Agreement", this sale will be
subject to the representations, warranties and indemnification undertakings
provided for in the Warranty Agreement concerning ALLIBERT CONTICO LLC signed
together with the signature of the present Agreement. The Warranty Agreement
concerning ALLIBERT CONTICO LLC is attached (i) to the present Agreement as
EXHIBIT NO. 20 and (ii) to the "Option Agreement" as Exhibit D, and forms an
integral and not separable part of these two agreements.
ARTICLE 14 - AGREEMENTS AND WARRANTIES
--------------------------------------
RELATING TO THE ENVIRONMENT
---------------------------
THE FOLLOWING IS EXPOSED AS A PREAMBLE TO ARTICLE 14 HEREOF:
The Sellers are fully aware of the importance that the Purchaser gives to
environmental questions and aspects. The Sellers acknowledge that the warranty
against environmental risks is an essential condition to the execution of the
Agreement for the Purchaser.
The Sellers and the Purchaser have thus agreed on the present article and to use
their best efforts in order to present and estimate the environmental risks
affecting the real estate of the Companies.
31
<PAGE> 33
IT WAS THEN AGREED AS FOLLOWS:
14.1 Introduction:
-------------
14.1.1 Intention of the parties
------------------------
The Purchaser's intention is that the Sites transferred to the
Purchaser should not have environmental risks affecting the
real estate of the Companies.
The Sellers' intention is to accept the liability resulting
from these environmental risks but subject to the conditions
and limits agreed by them.
The Sellers and the Purchaser have therefore agreed to the
present and agreed to use their best efforts in order to:
- present the said environmental risks,
- estimate the said environmental risks, and
- rehabilitate the real estate of the Companies subject
to the terms and conditions of Article 14 hereof.
14.1.2 General Provisions
------------------
The Purchaser and the Sellers irrevocably agree, pursuant to
this article, to have, immediately and as indicated below, an
environmental due diligence of certain industrial sites
carried out and that the completion of the operation referred
to in this Agreement may depend on the result of the
environmental investigations, insofar as the Sellers, and the
Sellers exclusively, shall have the right to terminate this
Agreement unilaterally, without any indemnity on either side,
if the global costs for the restoration of the sites as
estimated by the environmental auditors were to exceed fifty
(50) million French francs without taxes.
14.2 Definitions:
------------
For the present Agreement the terms mentioned hereafter shall have the
following meaning:
- - "Phase I Due Diligence": is defined as an environmental due diligence
aimed at identifying potential environmental problems of a site and
having as objective:
1. To ascertain the environmental context of the site.
2. To determine the status of the site in terms of "operating permit"
and in terms of established Non-compliance.
3. To assess, in a preliminary manner, if the past or current
activities have generated or may generate environmental problems
(i.e. impacts).
32
<PAGE> 34
4. To evaluate the needs for subsequent investigations, (i.e. Phase II
Due Diligence).
- - "Phase II Due Diligence ": is defined as an environmental due
diligence aimed at completing site investigations including
especially the collection and analysis of samples of the soil, of
sediments, of surface and/or underground water, of wastes, of air
or of waste water, in order to identify and/or to detect pollution,
define the polluted zones and define the following steps (e.g. risk
assessments, restoration, etc.). The auditor's task will include
the evaluation of remediation techniques in terms of feasibility
and cost.
- - "Audit" designates collectively Phase I and Phase II Due Diligence.
- - "Compliance": is defined as any compliance on the day of the due
diligence, with all legislative, administrative and regulatory
provisions relating to environmental matters, in effect and
applicable to any of the Sites, it being specified that in case of
a disagreement between legislative and/or regulatory provisions and
more favorable instructions from authorities competent for
environmental matters such as the DRIRE in France, the later shall
prevail.
- - "Established Non-compliance": is defined as any sort of
non-compliance, on the day of the due diligence, with any
legislative, administrative and regulatory provisions relating to
environmental matters, in effect and applicable to any of the Sites
even in the absence of a formal notice from authorities competent
on this subject.
- - "Potential Non-compliance": is defined as any non-compliance not
yet established on the day of the due diligence but which shall be
established:
- upon the coming into effect or the application to the Sites
after the Final Report Submission Date of legislative,
administrative and/or regulatory provisions, definitively
passed on the Final Report Submission Date by the relevant
national legislative body (in France the promulgation of the
text will be a definitive adoption of the said text). If the
text requires compliance works to be performed under a
schedule, only the schedules not exceeding February 1, 2004
will be taken into account,
or
- upon the expiration of compliance works schedule not exceeding
February 1, 2004 authorized by legislative, administrative or
regulatory provisions (including in particular all site
authorizations granted by administrative decree, formal
administrative decree, branch administrative decree, and/or
general administrative decree of February 2nd, 1998).
- - "Norms of references": are defined for:
33
<PAGE> 35
- the soils and the underground waters, as the norms, standards
and practices described in the Evaluation Methodology Guide
(Version 1) for the Management of Potentially Polluted Sites
(Edition BRGM, June 1st, 1997) (the " Methodology Guide "). It
is agreed by the parties that the Methodology Guide will also
apply to the Sites which are not located in France; and for
- the air, the water, the wastes, the noise, substances
involving a risk (including notably the radioactive wastes,
the PCBs, asbestos or the CFCs) as the norms, standards and
practices described in the legislative, administrative and
regulatory provisions in effect on the date of the due
diligence.
- - "Environmental Risks": are defined as all risks connected to the
conditions of the site or its current or past exploitation which may
have had, have, or may have an adverse and significant effect on the
environment in terms of liability and/or of costs.
14.3 Principle
---------
The parties acknowledge that the legislative, administrative and
regulatory provisions in effect in each country considered and the
Norms of Reference may not contemplate norms, standards or practices
enabling to assess, qualify and quantify all the Environmental Risks
affecting the Sites. Therefore, the parties agree that for all
Environmental Risks for which the present Agreement does not provide
norms of references, the applicable norms of references, shall be in
case of disagreement between WCI and DCM the current admitted
international standards for risks analysis (with remediation goals)
notably the norm CONCAWE.
14.4 Sites concerned by this article:
--------------------------------
The present article exclusively concerns the following industrial
sites:
- Gaillon (France)
- Prunay (France)
- Gloucester (Great Britain)
- Palau de Plegamans (Spain)
- Santa Perpetua (Spain)
hereafter collectively referred to as the "Sites."
14.5 Environmental auditors chosen and Third Party Environmental Auditor:
--------------------------------------------------------------------
34
<PAGE> 36
14.5.1 Environmental Auditor chosen by the Purchaser and the Sellers
- Auditors of the Purchaser: Dames & Moore
87 Avenue Francois Arago
92022 Nanterre Cedex
hereinafter referred to as "D&M"
- Auditors of the Sellers: WCI - EcoConcept SA
4, rue du Vieil Renvers
69005 Lyon
hereinafter referred to as "WCI"
and hereafter referred to as the "Auditor" and collectively the
"Auditors"
14.5.2 Third Party Environmental Auditor
The Parties agree to designate jointly Jean-Francois BERAUD,
residing at 27 avenue Vanves in Boulogne Billancourt, 92100
(the "Third Party Environmental Auditor") who has declared,
prior to the signing hereof, accepting its mission of Third
Party Environmental Auditor in order to settle disagreements
between Auditors within a two week period following the
request which will be made by registered mail, returned
receipt requested, at the most diligent party's initiative.
The Third Party Environmental Auditor may only settle
disagreements and discrepancies between Auditors specifically
referred to in Article 14 hereof. Any other problem will be
resolved in accordance with Article 27 hereof. At any moment,
the Purchaser and the Sellers may, under a common agreement,
interrupt the mission of the Third Party Environmental
Auditor, who shall therefore not be required to render a
decision.
The Third Party Environmental Auditor will make its decision
based on all available Final Reports and Summary Reports. It
will not be necessary to make supplementary investigations and
analysis and the Third Party Environmental Auditor shall use
international norms currently admitted (rehabilitation
objectives) and/or works estimate obtained by the parties.
Following this two week period, the Third Party Environmental
Auditor shall notify to the Purchaser and to the Sellers in
accordance with Article 34 hereof, its decision which shall be
definitive and subject to no appeal.
The fees of the Third Party Environmental Auditor will be
borne and shared in half by the parties. If the Third Party
Environmental Auditor can not achieve its mission, the parties
35
<PAGE> 37
agree to ask the Presiding judge of the General Court of Paris
to designate a Third Party Environmental Auditor.
14.6 Phase I Due Diligence:
----------------------
14.6.1 Phase I Due Diligence by WCI
----------------------------
The Sellers have already forwarded to D&M the reports by WCI
of October 20, 1998, relating to the Phase I Due Diligences
for the Sites which are attached hereto in EXHIBIT NO. 21. The
cost for these Phase I Due Diligences shall be borne
exclusively by the Sellers.
14.6.2 Phase I Due Diligence by D&M
----------------------------
The Sellers authorize D&M to carry out a Phase I Due Diligence
of the Sites which shall take place on the days and at the
times to be agreed with the person in charge for each Site.
The cost for this due diligence by D&M shall be borne by the
Purchaser. The English report of this due diligence shall be
transmitted simultaneously and immediately to the Sellers and
to WCI. D&M and WCI may, at all times, consult with one
another, directly out of the presence of the Purchaser and/or
the Sellers.
14.6.3 Conclusions of the Phase I Due Diligences
-----------------------------------------
The Sellers and the Purchaser have hereby already agreed that
subsequent investigations were necessary and have therefore
granted permission for WCI and D&M to carry out Phase II Due
Diligences.
14.6.4 Works following the Phase I Due Diligence
-----------------------------------------
The works recommended in the Phase I Due Diligence Report (the
"Phase I Works") will be integrated and their scope specified
in terms of technicality and costs in the Final Phase II Due
Diligence Report of WCI and the costs for the said Phase I
Works will be taken into account in the entire estimate of the
costs of rehabilitation recommended by the Auditors after the
Phase II Due Diligence and referred to in the Letter
(hereinafter defined in section 14.9).
14.7 Phase II Due Diligence:
-----------------------
Considering the importance which the Purchaser has given to the
environmental aspect of the operation contemplated by the Agreement,
the Sellers and the Purchaser have agreed to appoint their Auditors for
the completion of complete, extensive and in-depth Phase II Due
Diligences, in order to identify the environmental risks affecting the
Sites.
14.7.1 Costs of Phase II Due Diligence:
--------------------------------
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<PAGE> 38
For this Phase II Due Diligence, each party shall bear the
costs of its Auditor, the investigation, excluding the costs
of the Auditors, and analysis costs being shared in half. The
additional costs for the subsequent investigations which are
not included in the Program shall be borne by the party having
requested the subsequent investigation. The costs relating to
the analysis completed in 48 hours shall be borne by both
parties. The costs of the Third Party Environmental Auditor
shall be borne by both parties.
14.7.2 Investigation Program of Phase II Due Diligence (the
----------------------------------------------------
"Program"):
-----------
A program proposal of a Phase II Due Diligence was forwarded
by WCI to D&M on November 5, 1998 and has been completed by
D&M and WCI, and these documents are attached hereto in
EXHIBIT 27.
The content of the Phase II Due Diligence Program shall be
defined, Site by Site, by a common agreement between WCI and
D&M, following the Phase I Due Diligence completed by D&M. A
copy of the Program shall be communicated immediately to the
Sellers and the Purchaser.
WCI will organize the works described in the Program by hiring
qualified sub-contractors (companies specializing in drilling,
public works company for the use of a mechanical shovel if
necessary, etc.), which shall have been approved by D&M.
The Parties agree that LISEC laboratory (Gand, Belgium),
certified in France, is selected to conduct the analysis.
WCI will supervise the works on the Sites. A representative of
D&M will be present on the Site during the completion of the
site works. Its task will be to validate the procedures used
by WCI and to approve the validity of the collection of
samples. The planed investigation program having been
previously proposed by WCI and approved by D&M, any
modification may only be submitted by the representative of
D&M or WCI under to the following conditions:
1. the program must be modified because of particular soil
conditions (moving the site of a sample because of technical
or safety restrictions).
2. The program is modified in order to obtain a better
characterization of a contamination (analysis, number of
polls, etc.) only if the means of investigation remain
identical and do not result in extra costs greater than 20% of
the total amount for the investigations of the audited site.
Above this limit, the oral or written agreement of the
Purchaser and of the Sellers will be required.
The decision to modify the program will be taken in common by
the authorized representatives of WCI and D&M during the work
completion, and without any suspension.
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<PAGE> 39
This decision will be immediately recorded under the form of a
written amendment to the "Cahier de Chantier" (work site
logbook) and countersigned by the two representatives of D&M
and WCI.
WCI will be responsible for collecting samples with D&M. D&M
may collect a duplicate of each sample.
WCI will be responsible for the transportation of the samples
to LISEC.
LISEC will provide D&M and WCI respectively, with the results
of the analysis and therefore all correspondence between LISEC
and one of the Auditors will also be communicated to the other
Auditor.
14.7.3 Timetable for the Phase II Due Diligence:
-----------------------------------------
<TABLE>
<S> <C> <C>
- week 1 & 2: Phase I of D&M and validation of the WCI Program by
D&M, (i.e. week 47/1998 and 48/1998)
- week 2, 3 & 4: Investigation works of Phase II Due Diligence, (i.e. week
48/1998, 49/1998 and 50/1998)
- week 4 & 5: Analysis by LISEC. (i.e. week 50/1998 and 51/1998)
- week 5 & 6: Editing of D&M's Preliminary Report and of WCI's
Preliminary Report, (i.e. week 51/1998 and 1/1999)
- week 7: Editing of D&M's Final Report, of WCI's Final Report and
of the Summary Reports, (i.e. week 2/1999)
- week 8: Discussion between WCI and D&M on the conclusions in
the Final Reports, (i.e. week 3/1999)
</TABLE>
14.7.4 At the beginning of week 4, D&M and WCI will agree on the
environmental context of the Sites and of other settings
necessary for the implementation of the Norms of reference.
The Parties agree that in case of a disagreement between D&M
and WCI on the applicable environmental context, the latter
shall be determined by the Third Party Environmental Auditor.
14.8 Phase II Due Diligence Reports:
-------------------------------
38
<PAGE> 40
14.8.1 General Provisions
------------------
WCI and D&M, independently from one another, will edit, based
on their investigations and the results of the analysis, a
preliminary report (i.e. a summarized document with a chart)
(the " Preliminary Report ") followed by a final report (the "
Final Report ") for each Site. WCI and D&M will also prepare a
summary report concerning all of the Sites (the "Summary
Report").
Each Final Report and the Summary Report of D&M will be in
English and transmitted immediately to the Sellers and to WCI.
Each Final Report and the Summary Report of WCI will be
transmitted immediately to the Purchaser and to D&M in French
and in English, and in case of a discrepancy between the
English and French versions of the Final Report and of the
Summary Report of WCI, the French versions of the Final Report
and of the Summary Report of WCI shall prevail over the
English versions of the Final Report and the Summary Report of
WCI.
In order to facilitate the analysis by the parties of each
Final Report and Summary Report, the Auditors will endeavor to
have a similar table of content and similar structures of
documents, as the ones proposed by WCI and D&M.
All Final Reports and Summary Reports concerning all Sites
will have to be submitted to the parties not later than
January 18, 1999 (" Final Report Submission Date ").
Any delay in the submission of the Final Reports and of the
Summary Reports caused by a delay of the investigations
resulting from bad weather conditions or from Force Majeure
shall not be considered as a breach hereof.
The Sellers and the Purchaser shall obtain respectively from
their Auditors that they comply with and meet all deadlines
indicated in this article 14 of the Agreement.
14.8.2 Content of the Final Report:
----------------------------
The Final Report of WCI and the Final Report of D&M
respectively shall integrate the conclusions of the Phase I
Due Diligences completed by the Auditors and specifically
cover the following items:
1) The Compliance and Established Non-compliance of the
Sites.
Each Auditor will establish the budget for each
mandatory corrective action which will have to be
carried out pursuant to legislative, administrative or
regulatory applicable provisions, in order to have the
Sites in Compliance. This budget shall only include an
estimate of the direct costs in connection with
Compliance (including as an example: the moving of
machinery), and not indirect costs in connection with
Compliance such as an interruption of the production
or operating
39
<PAGE> 41
losses.
2) The Potential Non-compliance.
Each Auditor will establish, for the Potential
Non-compliances, a list of the recommended corrective
actions and the budget for each of these actions. This
budget shall only include direct costs in connection
with compliance, excluding the ancillary and indirect
costs in connection with compliance, such as the
moving of the machinery, an interruption of the
production or operating losses.
3) The Environmental Risks.
Each Auditor shall identify in its Final Report the
Environmental Risks linked to the past and present
activities of the Sites as well as the Environmental
Risks linked to the pollution resulting from external
sources. Their assessment will be completed in
accordance with the Norms of Reference or with any
other norm of reference that the Auditors will have
selected based on a common agreement or which shall
have been determined by the Third Party Environmental
Auditor, if the auditors fail to reach an agreement.
Taking into account these assessments, each Auditor
will choose to make or not to make a recommendation.
Each Auditor shall establish a budget for each of the
corrective actions including corrective actions aimed
at treating Environmental Risks linked to pollution
resulting from external sources.
Each Auditor shall try to explain in each of its Final
Report the reason why an environmental risk was not
taken into account in the budget.
This budget shall only include direct costs in
connection with compliance, excluding the ancillary
and indirect costs in connection with compliance, such
as the moving of the machinery, an interruption of the
production or operating losses.
4) Conclusions.
Each Auditor will make a list of all the corrective
actions which it will have recommended, indicating the
estimated corresponding costs. Each Auditor will then
give the total of the estimated costs. The Auditors in
their estimates of the costs and of the total of the
costs may use a range of costs providing a "Best
estimate" and an amount corresponding to a 0,9
probability (according to international practice). Any
calculation method of the total of the estimated costs
which may have been chosen by the Auditors, shall be
explained in the Final Report.
14.8.3 The content of the Summary Report
---------------------------------
40
<PAGE> 42
The Summary Report of each Auditor shall specifically:
(i) indicate the corrective actions recommended for each of
the Sites, indicating the corresponding estimated costs and
the total of the estimated costs for each Site,
(ii) convert the total of the estimated costs for a Site which
may have been given in local currencies in the Final Report
into French Francs, applying the rate in effect as at October
30, 1998 (1 FRF = 0,10772 (pound) = 25,3589 Pesetas),
(iii) indicate the total of the estimated costs in French
Francs for all corrective actions recommended for all Sites.
Each Auditor shall indicate the calculation method which it
will have used.
14.9 Letter from D&M and WCI to the Purchaser and to the Sellers
-----------------------------------------------------------
Two days after the Final Reports Submission Date, WCI and D&M shall
meet in order to prepare a letter addressed to the Purchaser and to the
Sellers (hereinafter referred to as the "Letter").
Pursuant to section 14.6.4, Phase I Works shall be described in the
Letter and shall be taken into account by the Auditors.
In the Letter, WCI and D&M shall enumerate for each Site the
recommendations, the corrective actions and the corresponding estimated
costs in French Francs (without taxes) on which they agree. WCI and D&M
shall give their joint estimation of the total of the costs in French
Francs (without taxes) for all corrective actions for all Sites on
which they agree (the "Total Amount of the Costs").
In the Letter, each Auditor may indicate which of the conclusions
contained in the Summary Report and in the Final Report of the other
Auditor it does not agree with. Each Auditor shall explain the reasons
why it does not agree (the "Disagreements") and put a figure on these
Disagreements (the "Cost of the Disagreements").
The Letter shall be submitted to the Sellers and to the Purchaser, at
the latest, 7 days after the Final Report Submission Date.
14.10 Disagreements between the Consultants
-------------------------------------
41
<PAGE> 43
Three cases may appear:
14.10.1 First case
----------
If the Total Amount of the Costs exceeds 50 million French
Francs, it will not be necessary for WCI and D&M to try to
find a solution to the Disagreements except if the Sellers so
require. At the request of the Sellers, the Disagreements may
be resolved by the Third Party Environmental Auditor in
accordance with the terms hereof, it being understood that
under the present circumstances the fees of the Third Party
Environmental Auditor will be borne exclusively by the
Sellers.
14.10.2 Second case
-----------
If the sum of the Total Amount of the Costs and the Cost of
the Disagreements exceeds 50 million French Francs, the
Purchaser, the Sellers and the Auditors will meet on the 9th
day following the Final Report Submission Date in order to
find an amicable solution to the Disagreements and to reach a
compromise. The Purchaser, the Sellers and the Auditors will
have 2 days to settle the Disagreements. Thereafter and, if no
agreement is reached, the Disagreements will be settled
definitely and irrevocably, by the Third Party Environmental
Auditor.
14.10.3 Third case
----------
If the Amount of the Global Estimate does not exceed 50
million French Francs, the Purchaser, the Sellers and the
Auditors will meet on the 9th day following the Final Reports
Submission Date in order to find an amicable solution to the
Disagreements and to reach a compromise on the corrective
actions mentioned in the Disagreements which will have to be
carried out by the Sellers.
The Auditors will have two days to find a solution to the
Disagreements. Thereafter, the remaining Disagreements will be
settled by the Third Party Environmental Auditor.
14.10.4 Definition of the "Amount of the Global Estimate"
-------------------------------------------------
The "Amount of the Global Estimate" means the sum of the Total
Amount of the Costs and of the Cost of the Disagreements (the
latter being either assessed in part or in total by WCI and
D&M or, as the case may be, by the Third Party Environmental
Expert).
14.11 Effects of the Letter:
----------------------
42
<PAGE> 44
14.11.1 Consequences of the Letter
--------------------------
Two events may occur:
14.11.1.1 Event where the rehabilitation works must be
--------------------------------------------
complete.
---------
In the event provided for in Article 14.10.3 or
Article 14.10.2, if the Amount of the Global Estimate
does not exceed fifty million French Francs, the
Sellers, at their own costs, shall organize and have
performed under their exclusive liability (it being
specified that the Purchaser will have the right to
attend to the works but will not incur any liability
in that regard), by qualified professionals and
according to professional standards, the following
works:
- the works recommended in the Letter
corresponding to the Total Amount of the
Costs, and;
- the works corresponding to the Cost of the
Disagreements such as these latter works will
have been modified pursuant to the compromise
reached by the parties or the Third Party
Environmental Auditor.
hereinafter together referred to as the
"Rehabilitation Works."
It is expressly agreed that if in the course of
executing the Rehabilitation Works, one or several
pollutions not revealed in the Phase II Due Diligence
were found and/or that the scope of pollutions was in
excess of the initial estimate of the scope of
pollutions and/or that the competent authorities like
the DRIRE in France, require additional rehabilitation
works, and that the Auditors agreeing among
themselves, or if not, the Third Party Environmental
Auditor, decide that one or several additional
corrective actions are necessary (hereby called
Additional Corrective Actions), the Sellers would bear
the direct cost of the Additional Corrective Actions
(and not ancillary or indirect costs like the
interruption of production or operating losses)
subject to Article 14 below.
For example :
- If the Amount of the Global Estimate is FRF
45 million and if, when executing the
Rehabilitation Works, one or several
pollutions not found in Phase II Due
Diligence were found, bringing the actual
total cost to FRF 60 million, the Sellers
would pay FRF 58,5 million (45 x 1,3) and the
Purchaser would pay the remaining FRF 1,5
Million.
14.11.1.2 Event where the Sellers may decide whether or not
-------------------------------------------------
to perform the Rehabilitation Works
-----------------------------------
43
<PAGE> 45
In the event provided for in articles 14.10.1 or
14.10.2, if the Amount of the Global Estimate exceeds
fifty million French Francs, and if the Sellers decide
not to terminate the Agreement pursuant to article
14.11.3 hereof, the Sellers shall, at their own cost,
organize and have performed, under their exclusive
liability (it being specified that the Purchaser will
have the right to attend to the works but will not
incur any liability in that regard), by qualified
professionals and according to professional standards,
the Rehabilitation Works, i.e.:
- the works recommended in the Letter
corresponding to the Total Amount of the
Costs; and
- the works corresponding to the Costs of the
Disagreements as these later works may have
been modified by the compromise reached by
the parties or by the Third Party
Environmental Auditor.
It is expressly agreed that, if in the course of
executing the Rehabilitation Works, one or several
pollutions not revealed in Phase II Due Diligence were
to be found and/or that the scope of such pollutions
was in excess of the initial estimate scope of
pollution and/or that the competent authorities like
the DRIRE in France, require additional rehabilitation
works, and that the Auditors agreeing among themselves
or if not the Third Party Environmental Auditor decide
that one or several Additional Corrective Actions are
necessary, the Sellers would bear the direct cost of
the Additional Corrective Actions (and not ancillary
or indirect costs like the interruption of production
or operating losses) subject to Article 14.14 below.
For example :
If the Amount of the Global Estimate is FRF
60 million, and if, when executing the
Rehabilitation Works, one or several
pollutions not found in the Phase II Due
Diligence were found, bringing the actual
total cost to FRF 90 million, the Sellers
would pay FRF 78 million (60 x 1,3) and the
Purchaser would pay the remaining cost of FRF
12 million.
14.11.2 Exoneration from liability as a result of the Phase II Due
----------------------------------------------------------
Diligence
---------
14.11.2.1 Exoneration Principle resulting from the
----------------------------------------
Phase II Due Diligence
----------------------
The Sellers remain liable for any environmental
problem existing until the Closing Date.
In consideration for the completion of the
Rehabilitation Works, the Audit will have the effect
of exonerating the Sellers from their liability and
any non-compliance and/or Environmental Risks which it
would not have disclosed will not be covered
44
<PAGE> 46
by the Sellers' warranty.
Any non-compliance resulting from activities or events
after the Closing Date will not be covered by the
Seller's Warranty.
The Purchaser acknowledges that through the Phase II
Due Diligence it will be aware of the Environmental
Risks identified in the Reports of D&M.
Consequently, in the event that a case of pollution
not disclosed in the Letter would appear after the
Closing Date and would lead to a necessary or
mandatory restoration of the Sites, the Purchaser
undertakes to treat it as a personal matter, at its
own cost, waiving the right to any action against the
Sellers, including the case of disturbances in its
production units for reasons linked to the nature of
the soil and/or the subsoil and in particular its
chemical composition
It is expressly agreed that the Purchaser shall not
incur any liability or bear any cost in connection
with the discovery during the Phase II Due Diligence
of any environmental problem which would require an
immediate information of the competent authorities
and/or an immediate corrective action (ground water
pollution, etc.).
As long as the Rehabilitation Works will not have been
duly completed and/or that the objectives of the said
Rehabilitation Works will not have been achieved
(objectives of remediation have been achieved when the
Sites have been rehabilitated and that they comply
with the norms used by D&M and WCI to determine the
Rehabilitation Works), the Sellers shall remain
responsible for all environmental problems mentioned
to in the Letter and for their consequences.
The Purchaser grants to the Sellers or any person
designated by the Sellers access to the Sites, notably
in order to carry out, if need be, survey as to the
completion of the works.
14.11.2.2 Full completion guarantee
-------------------------
Vis-a-vis the Purchaser and solely as of the Closing
Date and for a period of three years (3) starting as
of the date of the fulfillment of the Rehabilitation
Works, the Sellers shall remediate to any damage
suffered by the Purchaser, such damage being the
consequence of:
- either the non-execution, faulty, incomplete
or insufficient execution of the
Rehabilitation Works (including those
relating to the Additional Corrective
Actions),
45
<PAGE> 47
- or the fact that the rehabilitation
objectives which had been fixed and agreed
upon by the Auditors, or if not agreed among
themselves, by the Third Party Environmental
Auditor, have not been achieved as a result
of the Rehabilitation Works (including those
relating to Additional Corrective Actions).
in reimbursing to the Purchaser all the costs and
expenses actually paid by the Purchaser and as a
consequence of such damage.
The Sellers will have to indemnify the Purchaser if
the Purchaser has addressed its claim in compliance
with the procedure and the modalities of section 3.5
of the Warranty which provisions will apply mutatis
mutandis to this warranty.
It is expressly agreed that the Sellers will be
substituted into the Purchaser's rights against
companies having planned and/or executed the
Rehabilitation Works.
14.11.3 Termination right conferred upon the Sellers alone
--------------------------------------------------
When the Total Amount of the Costs or the Amount of
the Global Estimate exceeds fifty million French
Francs, including investments necessary for the
restoration of damages caused by third parties, the
Sellers, solely, may decide not to have the
Rehabilitation Works recommended by the Auditors
performed and consequently may unilaterally terminate
the Agreement, in accordance with article 11.2
"Sellers' unilateral termination right."
14.12 Right of recourse against third parties
---------------------------------------
If pursuant hereof, the Sellers rehabilitate the Sites because of a
pollution caused to the Sites by a third party, the Purchaser
undertakes to cooperate with the Sellers so that the latter may benefit
from all rights of recourse which the Purchaser and/or the Companies
may benefit from or may benefit from in the future against this third
party in order to recover the rehabilitation costs incurred by the
Sellers.
14.13 Rehabilitation Works
--------------------
The aggregate cost for the Rehabilitation Works as identified and
described in the Letter and determined, if need be, by the Third Party
Environmental Auditor, shall be borne by the Sellers. SOMMER ALLIBERT
shall be the joint guarantor for all the undertakings made by the
Sellers under this article 14 and notably for the obligations in
connection with the completion of the Rehabilitation Works. The
Purchaser may chose to submit the Rehabilitation Works to the competent
authorities (e.g. in France, the DRIRE) and obtain the approval of
these authorities on the Rehabilitation Works. It shall exercise this
right by the Closing Date and shall notify it to the Sellers.
46
<PAGE> 48
The necessary and selected Rehabilitation Works will be completed
pursuant to a timetable agreed between the Sellers and the Purchaser.
They will be performed in accordance with the "Cahier des Charges"
(Articles and Conditions) prepared by WCI and D&M jointly, by one or
more companies appointed by the Sellers and under their liability, with
the Purchaser's agreement. During the works, external participants
shall comply with the instructions and/or the internal regulations of
the Sites (working hours, working permits, hygiene and safety access,
etc.). The rehabilitation objectives shall be clearly established and
provided to the companies by WCI and D&M. The works program and the
means used shall be clearly specified in the technical proposal of the
participant or participants.
The participants shall be insured (and provide insurance certificates
in this respect) in order to cover all accidents occurring on the Site
and for which they may be held liable, as well as any environmental
pollution which they may cause in executing the Rehabilitation Works
(e.g. Environmental Insurance and Civil Liability Insurance). All the
works will be planned in order to reduce to a minimum the disturbance
caused to the exploitation of the Sites. Excavation or digging works
shall be validated by the Company concerned in order to avoid any
damage to the existing installations and utilities. For the duration of
the works, the Sellers, their architect as well as WCI and D&M may have
access to the Sites and supervise the companies. The Purchaser may also
at any moment, obtain information about the state of progress of the
works and the achievement of the objectives. At the end of the works,
the Sites shall be returned in a state which would correspond to the
initial state.
When the Sellers will consider that the Rehabilitation Works have been
completed, they will provide to the Purchaser a Declaration of
Completion of the Works. The Rehabilitation Works will be accepted
jointly by the Sellers and the Purchaser, or by their respective
representatives, as soon as the Rehabilitation Works will have been
completed in accordance with the "Cahier des Charges" without any
liability for the Purchaser in that regard. All disagreements relating
to the delivery of the Rehabilitation Works will be definitely settled
by the Third Party Environmental Auditor.
14.14 Limits
------
The total amount of all costs to be borne by the Sellers pursuant to
article 14 hereof (except for articles 14.11.2.2. and 14.15.), shall
not, in any case, exceed a ceiling equal to 130% of the Amount of the
Global Estimate, any costs exceeding this maximum will be borne by the
Purchaser.
This present article 14.14 does not apply to the Full completion
guarantee of article 14.11.2.2. which is unlimited as to the amount.
14.15 Warranties related to the environment applying exclusively to sites
-------------------------------------------------------------------
other than those listed under 14.4.
-----------------------------------
14.15.1 Sites of ALLIBERT CONTICO LLC as its subsidiary ALLIBERT
--------------------------------------------------------
INDUSTRIE Limited.
------------------
These sites are expressly excluded from the present
guarantee and are subject to the
47
<PAGE> 49
dispositions of a separate document.
14.15.2 Sites of ALLIBERT ANSHAN CUVES
------------------------------
The Sellers represent that the Sites occupied by ALLIBERT
ANSHAN CUVES in China are complying with all existing
environmental laws, administrative and regulations provisions
presently applicable and in effect in the People Republic of
China, on the day hereof.
This site is expressly excluded from the warranty hereof.
14.15.3 Installations, properties, sites, other than (i) the Sites
----------------------------------------------------------
and (ii) those listed in 14-15-1 and 14-15-2 above, which
---------------------------------------------------------
were owned by the Companies and for which the Companies would
-------------------------------------------------------------
remain liable pursuant to legal or regulatory provisions.
---------------------------------------------------------
The Sellers represent and warrant that there is no fact or
event which would trigger the liability of the Companies with
respect to the Environmental legislation and regarding the
sites that they have occupied and/or exploited in the past.
14.15.4 Environmental Warranties applying exclusively to the sites
----------------------------------------------------------
other than those listed under 14.15.1, 14.15.2 and 14.15.3.
-----------------------------------------------------------
Notwithstanding the foregoing, the Sellers warrant the
Purchaser against any environmental liabilities and any
Established Non-compliance affecting all the other
installations, properties and sites other than the Sites
belonging to the Companies (hereinafter the "Other Sites").
The Sellers represent and warrant that no financial
investment is necessary for the Other Sites to be and to
remain in compliance with legislative, administrative and
regulatory provisions relating to the environment, even in
the absence of a formal notice in this respect by the
competent authorities, or to avoid the cancellation or
suspension of any environmental permits or other
authorizations.
The Sellers declare and warrant that there is no fact or
event which could be attributable to the Companies and for
which the Companies could be held liable pursuant to
environmental law.
This environmental warranty applicable to the Other Sites and
to the sites referred to under section 14.15.3, will be
governed by the Seller's Warranty Agreement attached hereto
as EXHIBIT NO. 19.
14.16 Particular warranty applicable to Gloucester site
-------------------------------------------------
The Sellers inform the Purchaser (i) that WCI has found that the plant
in Gloucester is built on a garbage dump of domestic and industrial
waste (the "Pollution") and (ii) that to obtain a "clean" site all the
site area would have to be excavated to a depth of 4 meters. According
to the foregoing:
48
<PAGE> 50
If these information are confirmed by D & M, the parties agree not to
put into question the transfer of shares, object of the present
Agreement on the Closing Date and the Sellers warrant the following:
If by February 1, 2004, i.e. 5 years after the Closing Date, Gloucester
must be rehabilitated in order not to breach any law applicable and in
force prior to February 1, 2004, the parties undertake to meet in order
to find a solution which could consist either to rehabilitate the site
in compliance with the applicable law or to suggest to the Purchaser
similar premises (geographic, area, valuation) with similar
exploitation conditions.
The most economic solution will be retained.
Whatever the solution retained, the Sellers will reimburse to the
Purchaser and/or the Companies any amounts that it/they will have paid
on account of the Pollution (including as an example, any fees charged
by local authorities).
It is already agreed that prior to incurring any expenses or bringing
any action, the Purchaser and the Sellers will jointly undertake any
proceeding or action with the competent authorities to obtain from the
latter that they take care of the costs of rehabilitation determined by
such authorities. Each party will bear the costs of its counsel.
If after a maximum of 6 months from the notice of the local authorities
to the Purchaser and/or the Company of the obligation to rehabilitate,
the Purchaser and/or the Company have not been able (i) to obtain an
exemption from carrying out the rehabilitation or (ii) to obtain from
the local authorities that they take care of the rehabilitation, the
Sellers warrant that they will carry out the works required or that
they will move the plant in accordance with the foregoing, it being
specified that if the Purchaser is moved, the Sellers undertake to buy
Gloucester back for 1(pound) and to assume any liability attached to it
because of the Pollution.
Consequently and after the Purchaser is reimbursed, any right to an
indemnity, subsidy, or any amount which could be due to the Company
(including the price of the sale of the plant) because of the Pollution
will be subrogated by the Purchaser to the Sellers.
ARTICLE 15 - RESTRICTIVE PROVISIONS
-----------------------------------
15.1 Non-competition
---------------
The Sellers and any company of their group expressly undertake, for a
period of five years as from the Closing Date, not to acquire an
interest, directly or directly, in any firm working in the area of the
products of the "handling" branch and/or the "medical" branch, the list
of the products defined in the Preamble not constituting an exhaustive
list of "Handling" products and "Medical" products
49
<PAGE> 51
(hereinafter the "Handling/Medical Products").
This prohibition shall apply to the territory of the European Union,
the USA, Canada and the People Republic of China.
In the event that the Sellers take control of a firm that has amongst
its activities an activity in the area of Handling/Medical Products,
they undertake to inform the Purchaser thereof and to propose that the
Purchaser acquire the activity concerned which, in the absence of an
agreement between the Sellers and the Purchaser as to the price, shall
result in the appointment of an expert by the Presiding Judge of the
Paris Commercial Court, at the request of the most diligent party; this
expert shall for the valuation of the purchase price of this branch of
activity based itself on the same rules as those agreed on for the
Sellers' acquisition of such firm. In any event, the Purchaser shall
have full discretion as to whether or not it carries out the
acquisition of this branch of activity, and in the event the Purchaser
fails to acquire it, the Sellers may operate the branch of activity in
question or sell it to a third party.
15.2 Non-solicitation of employees
-----------------------------
For a period of five (5) years after the Closing Date, the Sellers
undertake not to solicit any full time or part time manager who has
been taken over by the Purchaser hereunder with a view to hiring such
manager, directly or indirectly, with the exception of those managers
listed in EXHIBIT NO. 19.
ARTICLE 16 - CORPORATE NAME
---------------------------
The parties agree that the corporate name of the Companies may be used for a
period of 3 years after the Closing Date, with the option of renewal for further
3-year periods, on condition that the provisions of this Agreement concerning
the use of the name ALLIBERT have been fully respected.
In the event of the non-renewal of the authorization to use the name ALLIBERT,
the Purchaser undertakes irrevocably and definitively, with immediate effect,
not to use, and to cause the companies it controls not to use, the name ALLIBERT
in its corporate name, as a trade name, trade sign or otherwise.
The Purchaser, which is fully aware of the importance for the Sellers of the
provisions hereof concerning the non-use of the name ALLIBERT, on any grounds
whatsoever, in view of the undertakings otherwise made by the Sellers in this
regard, shall justify immediately to the Seller the measures taken intended to
comply with the provisions set forth in this article. Upon failure to comply
strictly with the provisions set forth in this article, the Purchaser
undertakers to reimburse any damages and interests borne by any company that is
a member of the SOMMER ALLIBERT group because of the failure by the Purchaser
and/or the companies, which the latter controls, to respect the obligations set
forth in this article.
ARTICLE 17 - LICENSE OF THE ALLIBERT TRADEMARK
----------------------------------------------
The SOMMER ALLIBERT Company, owner of a French trademark "Allibert" filed on
March 5, 1986
50
<PAGE> 52
No. 784563 and registered under number 1345306, renewed on March 4, 1996 in
France and in various other countries, intervening herein, explains that
pursuant to a document entered into with the STICHTING ANDLINGER EUROPE trust,
it has undertaken not to exploit such trademark except for products called
"Professional Products," as defined in EXHIBIT NO. 23.
It also informs the Purchaser that the ANDLINGER group is the owner of an
"ALLIBERT" trademark represented in the attached EXHIBIT NO. 24.
The trademark license agreements currently in force between SOMMER ALLIBERT and
ALLIBERT EQUIPEMENT and the companies that the latter controls, shall terminate
as from the Closing Date.
The SOMMER ALLIBERT company undertakes to grant, on the Closing Date, after
payment of the price referred to in Article 5, to ALLIBERT EQUIPEMENT, a
trademark license represented in the attached EXHIBIT NO. 25, but which will be
strictly limited to the above-mentioned "Professional Products."
ARTICLE 18 - LOGO OF THE SOMMER ALLIBERT GROUP
----------------------------------------------
The logo of the SOMMER ALLIBERT group may be used for one year from the Closing
Date, but solely by this group's former subsidiaries manufacturing and/or
marketing the Professional Products.
Thereafter, the logo must no longer be used by the Purchaser and the companies
it controls and/or will control.
ARTICLE 19 - EFFECTIVE DATE
---------------------------
This Agreement shall take effect on the date of its signing.
ARTICLE 20 - PERFORMANCE AND INTERPRETATION OF THE AGREEMENT
------------------------------------------------------------
If the performance of this Agreement were to be the subject of implementing
agreements in accordance with the regulations of each country concerned, such
contracts must not modify either the spirit or the terms and conditions of the
rights and obligations contracted hereunder.
This Agreement and its Exhibits (which form an integral part hereof) listed in
Article 38 below shall prevail over all prior written or oral contracts, and
agreements regarding the operation referred to therein.
In the event of a discrepancy between this Agreement and its implementing
agreements, this Agreement shall prevail.
The headings in this Agreement are mentioned for practical purposes and shall
not be considered as explaining, limiting or expanding the provisions contained
herein.
ARTICLE 21 - JOINT LIABILITY
----------------------------
51
<PAGE> 53
These agreements and all their consequences shall, as the case may be, bind the
assigns and beneficiaries of the parties, who shall be jointly and indivisibly
bound to perform them, without the notification provided for in Article 877 of
the Civil Code needing to be made.
ARTICLE 22 - ADDITIONAL ASSISTANCE
----------------------------------
At the Purchaser's request, the Sellers shall sign and register all other
documents and carry out all actions and formalities that the Purchaser might
require:
22.1 to enable the Purchaser to obtain any other license, approval,
permit and authorization that might be necessary or useful to
carry on the activity and which have not been transferred on
the date of this Agreement,
22.2 to enable the Purchaser to obtain the full benefit of this
Agreement.
ARTICLE 23 - IMPLEMENTATION
---------------------------
The parties undertake to vote, and to cause their respective representatives to
vote, in all board of directors' meetings and general meetings of the
shareholders, and to accomplish, and cause to be accomplished, all formalities
required to complete each of the operations referred to herein within the time
periods mentioned above.
ARTICLE 24 - AMENDMENTS
-----------------------
This Agreement may only be modified by a written document signed by the two
parties.
ARTICLE 25 - VALIDITY
---------------------
In the event that one or more provisions hereof, or its or their application,
might be held to be invalid, illegal or unenforceable in any manner whatsoever
by a court, arbitration tribunal, government authority or competent authority,
the provision in question would be null or unenforceable in such a case,
depending on the circumstances; and the validity, legality or enforceability of
the other provisions hereof would not be affected in any manner whatsoever, and
the parties would negotiate in good faith to replace the provision concerned by
another enforceable, valid and legal provision having the same economic effect
for the transaction, or as similar an effect as possible as that stipulated in
the provision concerned.
ARTICLE 26 - ASSIGNMENT
-----------------------
All the provisions, representations, warranties and conditions of this Agreement
shall be binding and shall inure to the benefit of the parties hereto and be
respected by them, and by any company or person that might be substituted for
them in conformity with the provisions hereof.
No party may assign its rights and obligations contracted hereunder to a third
party without the other party's prior written agreement, with the exception of
any company or person that might be substituted for
52
<PAGE> 54
it in conformity with the provisions hereof.
ARTICLE 27 - GOVERNING LAW - JURISDICTION
-----------------------------------------
27.1 This Agreement is governed by French law.
27.2 All disputes arising out of or in connection with this Agreement shall
be submitted to the jurisdiction of the Paris Commercial Court, subject
to the implementation of Article 14.16 set forth below.
ARTICLE 28 - CONFIDENTIALITY
----------------------------
The Sellers and the Purchaser undertake to consider the information and
documents exchanged in the context of this Agreement as being strictly
confidential and also undertake not to communicate them to third parties without
the other party's agreement, with the exception of the banks participating in
the financing of the operation and their advisors.
The Sellers and the Purchaser undertake not to use the information of which they
may be aware in the course of the operations carried out hereunder for purposes
other than the completion of these operations.
The parties also undertake to keep this Agreement strictly confidential and to
disclose only that which may be necessary to carry out formalities in connection
with the implementation of the operations decided herein.
As the case may be, the consequences that might result from the untimely
production of this Agreement shall be borne by the party by which such
production is made.
Notwithstanding any Section herein or termination of this Agreement, this
confidentiality obligation shall bind the parties for a period of five (5) years
from the Closing Date.
ARTICLE 29 - PUBLICITY
----------------------
The text of any public announcement or communication concerning this operation
shall be subject to the parties' prior agreement.
However, the Sellers and the Purchaser shall have the possibility of
communicating all information concerning the legal obligations whatever they may
be and, as the case may be, in connection with their situation as a listed
company.
ARTICLE 30 - EXPENSES
---------------------
All costs, duties and taxes (including Notary expenses, Bailiff expenses,
publicity, notifications...), relating to operations for the transfer and sale
of shares referred to in Article 2 and Article 7 hereof shall
53
<PAGE> 55
be borne by the Purchaser. All costs, duties and taxes relating to the transfer
of titles to the Sellers and to the Companies, which will allow the Sellers to
hold directly or indirectly 100% of the Companies, shall be borne by the
Sellers.
All the escrow expenses shall also be borne by the Purchaser.
Attorneys or legal or tax experts fees incurred by any of the parties shall be
borne by the party incurring them, counsel's fees shall be borne by each party
having instructed them.
ARTICLE 31 - MERGER CONTROL
---------------------------
The operation provided for herein shall be notified, if the parties determine it
is legally mandatory; in the event of a disagreement between them as to the
obligation to notify, the notification of the concerned authority will be
carried out:
- to the French Ministry of the Economy and Finance under the
merger control procedure,
- to the Bundeskartellamt (Germany),
- to the US antitrust authorities.
For countries in which each Parties shall carry out distinct notifications, each
party will bear the costs in connection with these formalities and
notifications. In other countries, each Party will bear 50% of the cost but the
fees of the counsel will be borne exclusively by the party having instructed
them.
ARTICLE 32 - REGULATIONS CONCERNING FOREIGN INVESTMENTS
-------------------------------------------------------
The Purchaser shall, upon the Closing Date , send the French Treasury (Direction
du Tresor) the administrative declaration stipulated by French exchange control
laws. The Purchaser shall be personally responsible for any formalities that
might be required for the other countries.
ARTICLE 33 - INSURANCE
----------------------
The Purchaser is informed that the insurance coverage of the companies referred
to in A/1 to A/6 of the Preamble and of their subsidiaries will end upon the
Closing Date.
ARTICLE 34 - NOTICES
--------------------
34.1 Any notice or other communication to be given or sent to one of the
parties hereto shall be made in written form delivered by hand or sent
by registered letter with return receipt requested, or through a widely
known international courier (DHL, FEDEX, UPS...) with return receipt
requested.
For the Purchaser to:
54
<PAGE> 56
MYERS INDUSTRIES
1293 South Main Street
Akron, Ohio 44301 - USA
To the attention of: Stephen E. Myers
For the Sellers to:
ALLIBERT HOLDING
2, rue de l'Egalite
92748 Nanterre Cedex
France
To the attention of: Legal Department
or to any address notified ten days in advance by either of the parties
to the other. This notice or other communication sent in this way (or
its copy) shall be delivered by hand or sent by registered letter with
return receipt requested, duly stamped, and addressed to the parties as
indicated in this Article. The notice shall be deemed to have been made
immediately when delivered by hand, or ten days after being sent by
registered letter with return receipt requested to a person in charge
at the address of the recipient.
34.2 Copy of the notice to the Purchaser will be sent by fax for information
to:
Brouse & McDowell, L.P.A.
500 First National Tower
Akron, Ohio 44308
Attn: Kevin O'Neil
Facsimile: 330/253-8601
and
Cabinet Salans Hertzfeld & Heilbronn
9, rue Boissy d'Anglas
75008 Paris
Attn. Me Armelle Walters-Renaud and Me Nathalie Duguay
Facsimile: 01 42 68 15 45
ARTICLE 35 - REGISTRATION
-------------------------
The registration of this Agreement is not required.
ARTICLE 36 - INTRODUCTION OF THE SINGLE EUROPEAN CURRENCY
---------------------------------------------------------
As necessary, and in accordance with the general principles of the laws on
money, the prices and amounts of warranties expressed and payable in French
francs shall be automatically deemed to be expressed and
55
<PAGE> 57
payable in the single European currency when the French franc ceases to be legal
tender or, more generally, is replaced by the single European currency, in
accordance with the applicable Community or national regulations.
The rate and conditions of conversion of the French franc shall be those
resulting from the application of the provisions of Article 109-L of the Treaty
of the European Union.
ARTICLE 37 - EXHIBITS
---------------------
In the event of a discrepancy between the foregoing provisions and the exhibits
listed in this article, articles 1 to 36 and the preamble shall prevail.
The following exhibits form an integral part of this Agreement:
Exhibit No. 1: List of documents supplied of which a copy was
transmitted to the Purchaser
Exhibit No. 2: Calculation of the Final Corrected Operating Result of
ALLIBERT EQUIPEMENT Europe
Exhibit No. 3: Share purchase agreement of the SCI DE LA PLAINE
shares
Exhibit No. 4: Share purchase agreement of the ALLIBERT TRANSPORT UND
LAGERTECHNIK VERWALTUNGSGESELLSCHAFT MBH SHARES and
the ALLIBERT TRANSPORT UND LAGERTECHNIK GMBH & CO. KG
SHARES
Exhibit No. 5: Representation of an ALLIBERT trademark, the property
of the SOMMER ALLIBERT company
Exhibit No. 6: Breakdown of the price
Exhibit No. 7: Opinion on the combined accounts of ALLIBERT
EQUIPEMENT as at August 31, 1998 and Consolidated
Financial Statements ALLIBERT CONTICO LLC as of
August 31, 1998
Exhibit No. 8: Escrow agreements
Exhibit No. 9 Option to buy and option to sell
Exhibit No. 10 Sale Agreement
Exhibit No. 11: Put options of GBP for FRF
Exhibit No. 12: List of expatriates
56
<PAGE> 58
Exhibit No. 13: Medium term loan agreement and short term credit
facility agreement of Societe Generale granted to
ALLIBERT CONTICO
Exhibit No. 14: Estimate of the amounts to be paid for the months of
September to December 1998 for the services provided
by the SOMMER ALLIBERT company
Exhibit No. 15: Undertakings and guarantees for which a release must
be given by the Purchaser - None
Exhibit No. 16: Decisions authorized notwithstanding what is
stipulated in Article 10 concerning the normal and
ordinary course of business
Exhibit No. 17: List and model of resignation letter as a Director and
as Director and Chairman
Exhibit No. 18: Model of resignation letter as Gerant
Exhibit No. 19: Seller's warranty agreement
Exhibit No. 20: Warranty Agreement concerning Allibert-Contico LLC.
Exhibit No. 21 Reports by WCI in English referred to under Article
14.6.1.
Exhibit No. 22: Managers that may be solicited
Exhibit No. 23: Professional Products
Exhibit No. 24: Representation of the ALLIBERT trademark and the
ANDLINGER LOGO
Exhibit No. 25: License agreement of an ALLIBERT trademark to be
granted by the SOMMER ALLIBERT company
Exhibit No. 26: Computer and Telephone Services Agreements
Exhibit No. 27: Program of the Phase II Due Diligence of November 5,
1998
IN WITNESS WHEREOF, the parties have signed this Agreement in Nanterre in 7
originals on December 3, 1998.
MYERS INDUSTRIES, INC.
/s/ Stephen E. Myers
-------------------------------------
(M. Stephen Myers)
57
<PAGE> 59
For the Sellers
ALLIBERT HOLDING SEDITEP
/s/ Michel Cognet /s/ Philippe Chaubeau
- ---------------------------------- -------------------------------------
Michel Cognet Philippe Chaubeau
SAUVAGNAT ALLIBERT ALLIBERT T&L
/s/ Michel Cognet /s/ Philippe Chaubeau
- ---------------------------------- -------------------------------------
Michel Cognet Philippe Chaubeau
SOMMER ALLIBERT ALLIBERT EQUIPEMENT US INC.
/s/ Michel Cognet /s/ Michel Cognet
- ---------------------------------- -------------------------------------
Michel Cognet Michel Cognet
58
<PAGE> 1
EXHIBIT 10(B)
On behalf of Myers Industries, Inc., the undersigned hereby certifies that the
following Exhibit 10(b) is a fair and accurate English translation of the
Warranty Agreement between Myers Industries, Inc. and Allibert Holding, SA,
SEDITEP, SA, Sauvagnat Allibert, SA, Allibert Transport und Lagertechnik GmbH
and Sommer Allibert, SA.
MYERS INDUSTRIES, INC.
Dated: December 17, 1998 By: /s/ Gregory J. Stodnick
----------------------------------
Gregory J. Stodnick,
Vice President - Finance
<PAGE> 2
WARRANTY AGREEMENT
CONCERNING THE FOLLOWING COMPANIES
Allibert Equipement, ATMP, SCI de la Plaine, Holdiplast,
Allibert Transport und Lagertechnik Verwaltungsgesellschaft mbH,
Allibert Transport und Lagertechnik GmbH & Co Kg,
Allibert Equipement US INC.
Allibert Contenitori SpA, Allibert Contentores, Sommer Allibert (UK) Ltd,
Allibert ManutenciUn S.A., Allibert Equipement Sprl,
Allibert Anshan Cuves SARL, Allibert Transport und Lagertechnik Ges. mbH
Hereinafter referred to collectively as the "Companies" and individually
designated by the term "Company."
BETWEEN THE UNDERSIGNED:
Allibert Holding, a societe anonyme with a capital of FRF 107,261,500, whose
registered office is at 2 rue de l'Egalite, 92748 Nanterre Cedex - SIREN - 722
055 571 - R.C.S. Nanterre, Represented by Mr. Marc Assa, Chairman of the Board
of Directors, specially delegated for the purposes hereof pursuant to a
resolution of the Board of Directors dated October 1, 1998.
SEDITEP, a societe anonyme with a capital of FRF 35,700,000, whose registered
office is at 3 rue Montesquieu, 92748 Nanterre Cedex - SIREN - 722 016 508 -
R.C.S. Nanterre, Represented by Mr. Philippe Chaubeau, Chairman of the Board of
Directors,
Sauvagnat Allibert, a societe anonyme with a capital of FRF 100,000,000, whose
registered office is at 2 rue de l'Egalite, 92748 Nanterre Cedex - SIREN - 352
849 210 - R.C.S. Nanterre, Represented by Mr. Marc Assa, Chairman of the Board
of Directors,
Allibert Transport und Lagertechnik GmbH (soon to be SAI Automotive
Grundstuckverwaltungsgesellschaft), a company organized under German law with a
capital of DEM 14,000,000, whose registered office is at Friesstrabe 26-60388,
Frankfort am Main, registered with the Frankfort am Main Trade Registry under
the number HRB 46.079, Represented by Mr. Ph. Chaubeau, pursuant to powers
notarized on November 5, 1998, that were conferred upon him by Mr. J. Kaziur,
Managing Director,
hereinafter referred to as the "Guarantors", it being expressly provided that
they do not act jointly and severally for the purposes hereof
ON THE ONE HAND,
AND:
-1-
<PAGE> 3
Myers Industries, Inc., a company organized under U.S. law (State of Ohio) whose
registered office is Myers Industries, Inc. 1293 South Main Street, Akron, Ohio
44301, U.S.A.,
Represented by Mr. Stephen E. Myers, its Chief Executive Officer, or any other
company that it may substitute for itself on the Closing Date,
hereinafter referred to as the "Beneficiary,"
ON THE OTHER HAND,
IN THE PRESENCE OF
Sommer Allibert, a societe anonyme with a capital of FRF 107,624,250, whose
registered office is at 2 rue de l'Egalite, 92748 Nanterre Cedex - SIREN - 542
050 562 - R.C.S. Nanterre, represented by Mr. Michel Cognet, Directeur General,
participating herein in order to act as joint and indefinite guarantor of the
Guarantors, their successors, assigns and beneficiaries, pursuant to the
obligations subscribed by the Guarantors pursuant hereof, in accordance with a
decision of the Supervisory Board dated September 25, 1998, pursuant to the
provisions of Article 128 paragraph 2 of the law of July 24, 1966 on commercial
companies.
WITNESSETH:
The Guarantors have irrevocably undertaken to transfer upon the Closing Date as
defined under Article 4 of the Protocol entered into this same day (the
"Protocol Agreement"), to the Beneficiary who has irrevocably undertaken to
purchase them, all of the shares and the interests composing the capital of the
companies listed below:
A1/ Allibert Equipement
A2/ ATMP
A3/ SCI de la Plaine
A4/ Allibert Transport und Lagertechnik Verwaltungsgesellschaft mbH,
A5/ Allibert Transport und Lagertechnik GmbH & Co KG,
A6/ Holdiplast,
the Beneficiary becoming on the Closing Date, directly or indirectly through the
other companies listed in points A1/ to A6/ above, the owner of:
- - all of the shares of the Belgian company Allibert Equipement, the
Spanish company Allibert Manutenciun S.A., the British company Sommer
Allibert UK Ltd, the Austrian company Allibert Transport und
Lagertechnik Ges. mbH, the Italian company Allibert Contenitori and the
Portuguese company Allibert Contentores,
- - 100% of the US company Allibert Equipement US Inc., itself still
holding 50% of the US company Allibert Contico LLC, the latter still
holding 100% of the Canadian company Allibert Industries Limitee,
-2-
<PAGE> 4
- - 50.1% of the Chinese company Allibert Anshan Cuves SARL.
The purchase of the shares and interest of the Companies listed from A1/ to A6/
will be made for a price, hereinafter referred to as the "Global Base Price," of
four hundred seventy six million French Francs (FF. 476,000,000) plus nineteen
million five hundred thousand US dollars (19,500,000 US dollars), this later
amount may be reduced to nineteen million US dollars (19,000,000 US dollars) if
the five hundred thousand US dollars (500,000 US dollars) price reduction
referred to in Article 4.7 of the Warranty Agreement concerning Allibert-Contico
LLC is applied.
Such Global Base Price may be subject to an Adjustment as defined and according
to the provisions in Article 5.2 of the Protocol Agreement signed on this same
day.
This Warranty Agreement is concluded pursuant to such Protocol and constitutes
an integral and undivided part hereof.
As an essential condition of the sale, the Beneficiary has requested:
(1) from the Guarantors, as former direct or indirect shareholders of these
Companies, which have accepted, to provide the Beneficiary with warranties as
defined below,
(2) from Sommer Allibert as a shareholder of the Guarantors, which has accepted,
to act as joint and indefinite guarantor of the Guarantors with respect to the
obligations and warranties of the latter pursuant to hereof.
WHEREAS
Pursuant to the Protocol Agreement as of this day, it has been expressly agreed
that the warranty granted in respect of the said Protocol Agreement must be in
the form of two warranties operating independently from one another:
A/ This Warranty concerns the Companies :
- ALLIBERT EQUIPEMENT
- ATMP
- SCI DE LA PLAINE
- HOLDIPLAST
- ALLIBERT EQUIPEMENT US INC. (USA)
- ALLIBERT CONTENITORI Spa (Italy)
- ALLIBERT CONTENTORES (Portugal)
- ALLIBERT HANDLING (UK, ex- SOMMER ALLIBERT UK)
- ALLIBERT MANUTENCION S.A. (Spain)
- ALLIBERT EQUIPEMENT Sprl (Belgium)
- ANSHAN ALLIBERT CUVES (China)
- ALLIBERT TRANSPORT UND LAGERTECHNIK Ges. mbH (Austria)
-3-
<PAGE> 5
- ALLIBERT TRANSPORT UND LAGERTECHNIK GmbH UND CO. KG (Germany)
- ALLIBERT TRANSPORT UND LAGERTECHNIK VERWALTUNGSGESELLSCHAFT
mbH (Germany)
and applying in particular to the corporate accounts as at August 31,1998, which
will be replaced by the corporate accounts as at December 31, 1998, when the
latter will have been drawn up and audited as indicated in Article 5 of such
Protocol Agreement, it being expressly agreed that such warranty is not
applicable to the companies: Allibert Contico LLC (USA) and Allibert Industries
Limitee (Canada).
B/ The other warranty concerning Allibert Contico LLC and Allibert Industries
Limited, and applying in particular on consolidated accounts of Allibert Contico
as at August 31, 1998.
Such last warranty, which is an integral and undivided part of the
aforementioned Protocol Agreement, is the subject of a separate agreement signed
this same day and named Warranty Agreement concerning Allibert Contico LLC.
Consequently, it is expressly agreed that the person liable for the guarantees
which may be due hereunder as well as for those resulting from other commitments
shall not bear a double economic burden, particularly as regards any loss, any
liability, damage, or other burdens which may already have been compensated for,
indemnified or taken into account.
NOW THEREFORE IT HAS BEEN AGREED AS FOLLOWS:
- --------------------------------------------
SECTION I - REPRESENTATIONS AND WARRANTIES
------------------------------
The Guarantors make the following representations and warranties on the
date hereof (with a reiteration upon the Closing Date each time that
such a reiteration will be mentioned), it being specified that the
information provided to the Beneficiary in the Exhibits hereto (except
for Exhibits 1, 2 and 18) shall not in any manner limit the scope and
extent of the representations and warranties set forth in Sub Section
II - REPRESENTATION AND WARRANTIES RELATING TO THE COMPANIES and the
related Guarantors' indemnification obligations hereunder, subject to
the provisions set for hereafter in respect of tax consolidation in
Subsection III - SPECIAL PROVISIONS - TAX CONSOLIDATION and it being
expressly agreed that the industrial sites of :
- Gaillon (France)
- Prunay (France)
- Gloucester (Great Britain)
- Palau de Plegamans (Spain)
- Santa Perpetua (Spain)
are expressly excluded from the scope of the present warranty as for
the environmental regulations. The agreements relating to these sites,
in respect to the environment, are referred to under article 14 of the
above mentioned Protocol Agreement.
-4-
<PAGE> 6
SUB-SECTION I - REPRESENTATION AND WARRANTIES OF THE SELLERS
------------------------------------------------------------
1. OWNERSHIP OF THE SHARES OF THE COMPANIES
----------------------------------------
1.1. On this day and upon the Closing Date, all the shares
and interest (hereinafter the "Shares") of the
Companies are and shall be freely negotiable and/or
transferable, they represent and shall represent,
directly or indirectly, 100% of the share capital of
the Companies, with the exception of Allibert Anshan
Cuves for which the Shares represent 50.1% of the
later's capital.
The Shares are and shall be free from any restrictions
or security interests.
The Shares are not and shall not be listed for trading
on a stock market.
The Companies have not and shall not have issued any
preferred shares, non-voting preferred shares, bonds
convertible into or exchangeable for shares or giving
a right to subscribe for shares, and in general, these
Companies have not and shall not have issued any
securities giving a right by means of conversion,
exchange, reimbursement, presentation of a warrant or,
in any event, to the allotment at any time or on a
fixed date, of shares which in this regard are or will
be issued to represent a fraction of the share capital
of the Companies.
Similarly there are no and there shall not exist any
Shares with double voting rights and no limitation has
been applied to the voting right pursuant to the
applicable regulations in France, Belgium, Italy,
Portugal, Great Britain, Spain, Austria, Germany, the
USA or China.
The Shares are not and shall not be the subject of any
agreement or claim of any kind whatsoever nor of any
litigation.
The share accounts, register of transfers and transfer
orders and/or all other necessary documents such as
share certificates are and shall be in compliance with
the applicable regulations and have been kept
up-to-date.
At the time of the transfer by the Guarantors to the
Beneficiary, the Shares shall be freely negotiable and
free from any option or preemption rights, claims,
liens, sureties, pledges, security interests, charges,
encumbrances or restrictions of any kind whatsoever.
Following the transfer of the Shares, in the manner
provided for in Articles 2 and 11 of the Protocol
Agreement to the Beneficiary, the latter will have
acquired full ownership of the Shares, free from any
option or preemption rights, claims, liens, sureties,
pledges, security interests, charges, encumbrances or
restrictions of any kind whatsoever.
The Companies have not decided any dividend
distribution since August 31, 1998, and shall not
carry out any distribution until the Closing Date.
-5-
<PAGE> 7
2. POWERS
------
The Guarantors (each of them individually) have been granted
all powers, rights, authorities and capabilities to sign the
Protocol Agreement, transfer the Shares of the Companies to
the Beneficiary and to agree to the present Warranty
Agreement.
3. EFFECTS OF THE SALE
-------------------
The transfer of all the Shares or the modification of the
boards of directors of the Companies shall not and may not,
with the exception of the effects mentioned in EXHIBIT 1,
result in:
(a) a violation of any legislative or regulatory
provision, agreement, undertaking, by-laws of a
company or any decision whatsoever, whether judicial
or otherwise, or
(b) an early termination or modification of an agreement
having an adverse effect on the Companies, or
(c) any registration or the constitution of a lien,
guarantee, pledge or other security interest on the
assets of the Companies, or
(d) the right for anyone to withdraw from a surety,
guarantee, comfort letter or similar document issued
in favor of any one of the Companies, or
(e) the right for anyone to modify, cancel or revoke one
of the permits, authorizations or licenses necessary
for the lawful exercise by any one of the Companies of
their activities or for any favorable tax regime or
subsidy or any other public aid, or
(f) the right for anyone to seek the early reimbursement
of a loan or credit facility or any other financing
granted to any one of the Companies or to modify the
terms thereof.
4. CONTRACTS IN PROGRESS
---------------------
The sale of the Shares shall not have any effect on the
contracts existing between the Companies and third parties and
there is no and shall not be upon the Closing Date any
contract to which the Companies are a party that provides for
early termination or a
-6-
<PAGE> 8
modification in the conditions in the event of a change of
majority in the general meetings of the shareholders or in the
event of a modification in the composition of the
administrative or management structures of the Companies, with
the exception of those in the exhibits (EXHIBIT 18).
5. MANAGEMENT OF THE COMPANIES
---------------------------
As of the date hereof and until the Closing Date:
(a) There shall not be any material changes having a
significant effect on the financial or commercial
situation, the assets or the operations of the
Companies and the Guarantors are not aware of any
event or modification likely to have such a
consequence.
(b) The Companies shall be managed in a careful and
prudent manner and in a manner consistent with the
previous management and according to the same methods
as during previous fiscal years and shall have
conducted only ordinary operations in the normal
course of business. In particular they shall not have
disposed of or acquired any tangible or intangible
fixed assets, with the exception of those in the
exhibits (EXHIBIT 2).
(c) No dividend has been or shall be declared or
distributed by the Companies and no profit of one of
the Companies has been distributed and no share of any
of the Companies has been redeemed or amortized
directly or indirectly by any of them.
(d) The Companies shall not make any commitment or
obligation exceeding the normal course of business in
accordance with past practice and for amounts and
periods comparable with those of the commitments they
made in the past.
(e) The Companies shall not acquire or sell assets, or
waive any receivable or right, or make any remission
of debt, except in the normal course of business, and
for sales of assets, in consideration for a price
consistent with their real value.
(f) The Companies shall not increase the salaries and
shall not modify the terms of the employment contracts
to which they are a party or the social benefits
received by their employees and managers (except for
the applicable general increases carried out pursuant
to collective bargaining agreements).
(g) The Companies shall not promise to increase the
salaries, premiums or other benefits of any one of
their employees or managers (except for the applicable
general increases carried out pursuant to collective
bargaining agreements).
SUB-SECTION II - REPRESENTATION AND WARRANTIES RELATING TO THE
----------------------------------------------------------------
COMPANIES
---------
-7-
<PAGE> 9
1. INCORPORATION AND EXISTENCE OF THE COMPANIES
--------------------------------------------
1.1 The Companies have been duly incorporated. The
Companies validly hold, currently and upon the Closing
Date their corporate names, subject to the provisions
of Article 3 of the Protocol Agreement.
1.2 The list of directors, chairman, general managers and
statutory auditors or other corporate managers,
established this present day, is in the exhibits
(EXHIBIT 3).
1.3 The registers of deliberations of the board of
directors and general meeting of the shareholders, the
attendance register of board of directors' meetings
and the attendance sheets of the general meetings, or
other necessary documents, are and shall be upon the
Closing Date in compliance with the applicable
regulations and all initials and signatures relating
to board meetings and general meetings that have been
held up until the Closing Date shall be added thereto.
The by-laws of the Companies are and shall be up to
date with all amendments and are attached in EXHIBIT
4.
All necessary publication formalities following
decisions taken by the Company's structures have been
and shall be carried out in accordance with the
applicable regulations.
1.4 The Companies operate and shall operate until the
Closing Date their businesses, property and assets in
accordance with the laws and regulations applicable to
them and with the provisions of their by-laws, and
they hold as of this day all the necessary permits,
approvals and authorizations for their activities,
subject to what is provided for in Article 14 of the
Protocol Agreement.
1.5 As of this day, there is no (and upon the day of the
Closing there shall not be) any procedure or action
seeking the dissolution or liquidation of the
Companies or declaring them to be in judicial
reorganization or liquidation, or involved in any
other bankruptcy proceeding.
1.6 Allibert Equipement, ATMP and Holdiplast are included
in the composition of a tax integration, the group
leader being Sommer Allibert, pursuant to a tax
integration agreement in the exhibits hereto (EXHIBIT
5). The above-mentioned transfer of the shares of
Allibert Equipement, ATMP and Holdiplast shall
immediately cause the withdrawal of these companies
from the above-mentioned composition retroactively to
the opening day of the fiscal year during which the
withdrawal occurs; accordingly Allibert Equipement,
ATMP and Holdiplast will become taxable again, if they
are individually making a profit, on the result and
net long term capital gain realized at the close of
fiscal year 1999.
-8-
<PAGE> 10
In accordance with the provisions of the tax
integration regime (Articles 223 A et seq. of the
French Tax Code), Allibert Equipement, ATMP and
Holdiplast will lose any loss carry forwards they may
have realized during the integration period and the
possibility of distributing their reserves exempt from
the tax on dividend distribution corresponding to the
profits they realized during the integration period.
2. ACCOUNTS OF THE COMPANIES
-------------------------
2.1. Accounts of the Companies as at August 31, 1998
The guaranty contemplated herein relates in particular
to the Accounts as at August 31, 1998 of the following
companies:
- ALLIBERT EQUIPEMENT
- ATMP
- SCI DE LA PLAINE
- HOLDIPLAST
- ALLIBERT EQUIPEMENT US INC. (USA)
- ALLIBERT CONTENITORI Spa (Italy)
- ALLIBERT CONTENTORES (Portugal)
- ALLIBERT HANDLING ( ex- SOMMER ALLIBERT UK)
- ALLIBERT MANUTENCION S.A. (Spain)
- ALLIBERT EQUIPEMENT Sprl (Belgium)
- ALLIBERT ANSHAN CUVES (China)
- ALLIBERT TRANSPORT UND LAGERTECHNIK Ges.mbH
(Austria)
(the "Companies")
A copy of the Accounts of the Companies (balance
sheets, income statements and appendices) closed as at
August 31, 1998, as certified by the Statutory
Auditors and for Companies without Statutory Auditors,
attached with an opinion without reservations issued
by an auditor is in the exhibits hereto (EXHIBIT 6).
They are true and sincere and give a fair image of the
results of the operations from January 1, 1998 to
August 31, 1998, as well as of the financial situation
and assets and liabilities of these Companies as at
August 31, 1998.
The Companies are at the date hereof the valid
legitimate owners, without any dispute, restriction or
reservation, of all assets reflected in the Balance
Sheets as at August 31, 1998, whether movable or
immovable, tangible or intangible.
These assets and rights shall not be encumbered by any
security interest, lien, mortgage or pledge, with the
exception of those in the exhibits (EXHIBIT 8).
-9-
<PAGE> 11
UNDISCLOSED LIABILITIES
Except for liabilities and operations reflected in the
Accounts as at August 31, 1998 and for expenses and
other debts incurred in the ordinary course of
business to the Seller's knowledge, the Companies, as
at August 31, 1998, have no material obligation or
significant liability of the Companies, certain or
probable, of a type required to be set forth in the
Accounts as at August 31, 1998, prepared in accordance
with GAAP.
2.2. Corporate Accounts as at December 31, 1998
A copy of the Corporate Accounts (balance sheets,
income statement and appendices) as at December 31,
1998 certified by the Statutory Auditors and for
companies without Statutory Auditors, attached with an
opinion without reservations issued by an auditor,
having been prepared in accordance with applicable
accounting principles, as mentioned in Article 53.1 of
the Protocol Agreement of the companies hereinafter,
will be appended hereto in Exhibit 7 after their
drawing up:
- ALLIBERT EQUIPEMENT
- ATMP
- SCI DE LA PLAINE
- HOLDIPLAST
- ALLIBERT EQUIPEMENT US INC. (USA)
- ALLIBERT CONTENITORI Spa (Italy)
- ALLIBERT CONTENTORES (Portugal)
- ALLIBERT HANDLING (UK, ex- SOMMER ALLIBERT
UK)
- ALLIBERT MANUTENCION S.A. (Spain)
- ALLIBERT EQUIPEMENT Sprl (Belgium)
- ALLIBERT ANSHAN CUVES (China)
- ALLIBERT TRANSPORT UND LAGERTECHNIK Ges. mbH
(Austria)
- ALLIBERT TRANSPORT UND LAGERTECHNIK GmbH UND
CO. KG (Germany)
- ALLIBERT TRANSPORT UND LAGERTECHNIK
VERWALTUNGSGESELLSCHAFT mbH (Germany)
(the "Companies")
As soon as they are drawn up as specified above, the
said corporate accounts as at December 31, 1998 shall
replace the accounts as at August 31, 1998 referred to
in article 2.1 above for the implementation hereof.
They will be true and sincere and will give a fair
image of the results of the operations of fiscal year
1998 as well as of the financial situation and assets
and liabilities of the Company as at December 31,
1998.
-10-
<PAGE> 12
The Companies shall be upon the Closing Date the valid
legitimate owners, without any dispute, restriction or
reservation, of all the assets reflected in their
Balance Sheet as at December 31, 1998, whether movable
or immovable, tangible or intangible.
These assets and rights shall not be encumbered by any
security interest, lien, mortgage or pledge, with the
exception of those appearing in the exhibits (EXHIBIT
8).
UNDISCLOSED LIABILITIES
-----------------------
Except for liabilities and operations reflected in the
Corporate Accounts as at December 31, 1998 and for
expenses and other debts incurred in the ordinary
course of business, there shall not exist since
December 31, 1998 and until the Closing Date, to the
Seller's knowledge, any material obligation or
significant liability of the Companies, certain or
probable, of a type required to be set forth in the
Corporate Accounts as at December 31, 1998, prepared
in accordance with GAAP.
2.3. The accounting books and records required by the
applicable regulations have been and shall have been
properly kept, and they reflect and will reflect the
exact up-to-date situation of the Companies.
3. REAL ESTATE, LEASES AND FINANCED LEASES (CREDIT-BAIL)
-----------------------------------------------------
The Companies occupy at the date hereof and will occupy on the
Closing Date the real estate appearing in EXHIBIT 9 pursuant
to title deeds, commercial leases and construction leases,
rental contracts or all other occupancy agreements on any
grounds whatsoever, which have all been validly entered into.
Subject to what is mentioned hereafter in EXHIBIT 9 and to
what is agreed upon in Article 14 of the Protocol Agreement in
respect of the environment, the buildings referred to in
EXHIBIT 9 are and shall be on the Closing Date in a good
general condition and ordinarily maintained, their occupancy
and operation by the Companies complies and shall comply on
the Closing Date with the laws and regulations including
standards in matters of safety and hygiene and with the
contractual provisions applicable to them.
The Companies have not entered into any real property or
movable property financed leases, with the exception of those
listed hereto (EXHIBIT 10).
No party to any of these financed leases or agreements
previously mentioned in the first paragraph hereof contravenes
with any of its obligations and with the terms of any of such
financed leases or agreements, and such financed leases and
agreements are valid and binding.
-11-
<PAGE> 13
Their rent has been revised in accordance with legal
provisions, the applicable regulations and leases, and they
have not been the subject of any notice or exchange of
correspondence seeking their termination.
The Companies are and shall be on the Closing Date up to date
with the payment of all rents, charges, taxes, fees and other
sums payable for the real estate mentioned in EXHIBIT 9.
No decision has been notified by a competent authority that
may have the effect of restricting or modifying the use of the
real estate properties used by the Companies or of requiring
new investments (subject to what will be mentioned in the
Phase 1 and Phase 2 audits conducted by WCI and Dames Moore in
accordance with Article 14 of the Protocol Agreement) and no
such decision is likely to be taken due to the Beneficiary's
acquisition of the Shares.
4. MATERIALS, INSTALLATIONS AND EQUIPMENTS
---------------------------------------
Upon the date hereof, the Companies own the materials,
installations and equipments appearing in the balance sheets
as at August 31, 1998, and upon the Closing Date they will own
the materials, installations and equipments which will appear
in the Corporate Balance Sheets as at December 31, 1998
pursuant to valid title deeds. The said materials,
installations and equipments are at the date hereof and shall
be upon the Closing Date, in a normal condition of use,
maintenance and repair and in compliance with the legal or
regulatory requirements applicable to them.
5. INTELLECTUAL PROPERTY RIGHTS
----------------------------
5.1 Upon the date hereof the Companies hold, and on the
Closing Date the Companies shall have (subject to the
fact that the protection periods have not yet come to
their definite term), full title to the trademarks,
corporate names, trade names, trade signs, patents,
models, copyright and know-how listed in the exhibits
(EXHIBIT 11).
5.2 The Companies validly use, currently and on the
Closing Date, the trade sign, corporate name and
trademark Allibert; it is recalled that, as provided
for above, they must cease, unless the authorization
is renewed, using the name Allibert as a trade sign,
trade name or otherwise, subject to what is indicated
above concerning the use of the corporate names
including the name Allibert, in accordance with the
provisions of the Protocol Agreement.
-12-
<PAGE> 14
The use by the companies of an Allibert trademark
solely for professional products is the subject of a
license entered into on the Closing Date.
5.3 The rights indicated in the exhibits (EXHIBIT 11) are
and shall be on the Closing Date validly registered in
the name of the Companies and have been regularly
renewed. The rights to the trademarks, patents,
models, copyrights and know-how indicated in the
exhibit are not and shall not be subject to any use
limitation in favor of third parties, which might
result in particular from coexistence agreements.
The intellectual property rights indicated in the
exhibits (EXHIBIT 11) are and shall be on the Closing
Date free of any security interests or guarantees.
As of this day, the Companies have not granted to
third parties any right of use or exploitation,
option, license or right whatsoever, for no
consideration or for valuable consideration, to the
intellectual property rights indicated in (EXHIBIT
11), other than those referred to in (EXHIBIT 12).
In general, the Companies currently hold and shall
hold on the Closing Date full title to all the
intellectual property rights concerning the objects
manufactured and/or sold in the context of the
transferred activity and/or that are necessary to
conduct the sold activity, except with regard to:
- the elements (and particularly the third
party software packages) indicated in the
exhibits (EXHIBIT 13) for which the Companies
only hold license,
- the Allibert trademark, the use of which by
the Companies must be in compliance with the
above-mentioned license agreement,
- the logo of the Sommer Allibert group, of
which a facsimile is attached in the exhibits
(EXHIBIT 14), which may however be duly used
by the Companies for no consideration for one
(1) year as from the Closing Date.
The Guarantors are not aware of any action brought by
third parties against the Companies for invalidity,
forfeiture because of failure to exploit or
insufficient exploitation, violation or infringement
of intellectual property rights (EXHIBIT 11), other
than those referred to in the exhibits (EXHIBIT 15).
The Companies' conduct of their activities does not, in the
countries where the products of these companies are currently
marketed, infringe any patent, trademark, model, copyright or
other industrial or intellectual property or possession right
not held by the Companies, and does not require for the
above-mentioned countries that a license be obtained for any
of these rights from a third party, except for what is
specified in EXHIBIT NO. 18. In particular, none of these
rights is held by an employee or corporate manager
-13-
<PAGE> 15
of one of the Companies, by one of the Guarantors, a direct or
indirect shareholder of the Guarantors or an Affiliate of the
Guarantors.
6. BANK ACCOUNTS
-------------
On the date hereof and on Closing Date, the Companies hold and
shall hold the bank and postal accounts appearing in their
balance sheets.
The Companies can freely dispose of all the sums credited to
such bank and postal accounts, after cross-checking the
accounts.
The details of these bank accounts appear in the exhibits
(EXHIBIT 16).
7. SECURITY INTERESTS
------------------
On the date hereof and on the Closing Date, the movable assets
are not and shall not be subject to any surety or pledge and
the fixed assets are not subject to any mortgage, charge or
right in favor of a third party, with the exception of those
appearing in the exhibits (Exhibit 8).
The Companies have not given any warranty, guaranty, or
permission for the performance of the undertakings contracted
either by third parties or by the Companies.
8. OFF BALANCE SHEET COMMITMENTS
-----------------------------
There are no off balance sheet commitments and in particular
no financed leases (credit- bail), with the exception of those
that are mentioned in EXHIBIT 17 which corresponds to the
commitments as at August 31, 1998. Off balance sheets as at
December 31, 1998 shall be mentioned in the Corporate Accounts
of the different companies on the same date. They shall only
include elements resulting from a normal and common
management.
9. PROVISIONS
----------
All provisions needing to be established pursuant to
accounting principles and consistent with a good accounting
and financial management have been written up in the accounts
as at August 31, 1998, and shall be written up in the accounts
as at December 31, 1998, in particular all necessary
provisions shall have been made for any direct or indirect
taxation applying or that may be applied to the Companies for
the period ending on December 31, 1998.
Taking into account undertakings by the Sellers in respect of
the environment (Article 14 of the Protocol Agreement), no
provisions for environmental risks shall be implemented in the
Accounts of the Companies as at December 31, 1998.
-14-
<PAGE> 16
10. CONTRACTS IN PROGRESS
---------------------
EXHIBIT 18 herein lists also all the contracts to which one of
the Companies is a party at the date hereof:
(i) granting an exclusivity;
(ii) with a term of more than one year or requiring a
consideration exceeding FRF 1,000,000 (one million);
or
(iii) requiring in case of termination, the payment of an
indemnity, fine or other amount exceeding FRF
1,000,000 (one million) or in the case of an
employment contract the payment of an indemnity
exceeding the indemnity provided for by law or under
collective agreements.
None of the contracts breaches a mandatory provision of a law
or of a by-law and the Companies may require that the said
contracts be performed according to their terms. None of the
parties to these contracts have breached the obligations which
would result in the termination of the contract and in the
payment of an indemnity. No discussions are in progress
seeking to modify or terminate one of these contracts, with
the exception of those contained in EXHIBIT 18.
Between the date hereof and the Closing date, no contract
within one of the above categories shall be concluded without
the prior and written consent of the Beneficiary.
11. INVENTORY
---------
The inventory, goods in process and finished products of the
Companies are correctly inventoried and valued in the accounts
as at August 31, 1998 and shall be inventoried and valued in
the Corporate Accounts as at December 31, 1998 correctly and
in accordance with the accounting principles and the inventory
that is unable to be sold or is out of date have been, for the
accounts as at August 31, 1998, and shall be for the corporate
accounts as at December 31, 1998, the subject of a due
provision, in continuation of the methods used by the
Companies.
12. CUSTOMERS
---------
All accounts receivable appear in the accounts as at August
31, 1998 and shall appear in the Corporate Accounts as at
December 31, 1998.
The net amount of provisions for each account receivable
appearing in the Balance Sheets as at August 31, 1998 and
which will appear in the Corporate Balance Sheets as at
December 31, 1998 will actually be collected by the Companies
on the proper date.
-15-
<PAGE> 17
As far as the Guarantors are aware, on the date hereof, none
of the major customers of the Companies (representing 3% of
the turn over as it will result from the combined accounts
defined in article 5.3.2. of the Protocol Agreement) has ended
or interrupted nor threatened to end or interrupt its
relationship with the Companies, except for those referred to
in EXHIBIT 19. Between the date hereof and the Closing Date,
as soon as the management of the Companies will have informed
the Guarantors, the Guarantors will inform the beneficiary of
any termination of relations or menace to terminate relations
with the Companies from the part of the said important
clients.
13. INSURANCE POLICIES
------------------
The Companies are and shall be until the Closing Date properly
and sufficiently insured in view of the specific activities
carried on by each of the Companies and the custom in the
profession and are up-to-date with their premiums. It is
however pointed out that the insurance coverage of these
Companies will cease on the Closing Date and consequently the
Purchaser shall enter into the necessary insurance policies
for the Closing Date.
None of the Companies has and shall have breached until the
Closing Date any one of its obligations under these policies
or has and shall have neglected to notify in a timely, precise
and accurate manner all required facts and information.
Major accidents and claims that have occurred and been
declared since January 1, 1997 are indicated in the exhibits
(EXHIBIT 20).
There have not been any accidents or claims for more than one
million (1,000,000) francs that have occurred and not been
declared.
14. EMPLOYMENT CONTRACTS - PARTICULAR BENEFITS
------------------------------------------
A) No employment contract or particular benefit has been
on the date hereof nor shall be until the Closing
Date granted by the Companies to any of their
directors or general managers and there are no and
there shall not be any employment contracts granted
by such Companies to an employee containing
provisions that are more favorable, particularly in
the matter of severance payments, that those set
forth in the applicable collective bargaining
agreement, with the exception of those appearing in
the exhibits (Exhibit 21).
B) The retirement and risk insurance regimes available
to the personnel and executives of Allibert
Equipement, ATMP, Holdiplast are a result of both
obligatory legal provisions and the agreements
indicated below:
- executive risk insurance contract "UAP"
No. 708 347-AXA Courtage
- medical expenses contract "UAP/Uni
Prevoyance" No. 5 304 0003
- medical expenses contract "UAP" 708 351-AXA
Courtage
-16-
<PAGE> 18
C) The Companies are and shall be on the Closing Date
up-to-date in the payment of salaries, commissions
and other direct and indirect compensation (including
in particular the overtime hours) and the
reimbursement of expenses due to the employees.
D) The Companies have complied and shall comply until
the Closing Date with all of the provisions of the
employment contracts and/or collective bargaining
agreement. There are no and on the Closing Date there
shall not be any other company agreements (accord
d'entreprise) in the Companies or collective
bargaining agreement applicable to the Companies
other than the plastic transformation collective
bargaining agreement and the plastics industry
collective bargaining agreement and the company
agreements appearing in the exhibits (Exhibit 21).
15. LITIGATION
----------
On the date hereof, the Companies are not parties as applicant
or defendant in any contentious suit, litigation or any
arbitration (the "Litigation"), with the exception of those
appearing herein (EXHIBIT 22). This Exhibit shall be updated
on the Closing Date. This exhibit shall be up dated on the
Closing Date in case of new litigation occurring within the
Closing Date.
As far as the Guarantors are aware, it being understood that
any failure to be aware does not exempt them from the warranty
provided for hereunder, no procedure, action or claim of any
kind whatsoever is on the point of being brought either by or
against the Companies or against any person whose improper
actions might be likely to incur the Companies' liability.
16. SOCIAL REGULATIONS
------------------
On the date hereof the Companies have, and on the Closing Date
they shall have always complied with the social legislation
(including in particular in matters of hygiene and safety in
the work place) and are, on the date hereof, and shall be on
the Closing Date up-to-date with the payment of all their
contributions to the Social Security, family allowance and
various retirement, unemployment and various social benefits
organizations. The Companies have also paid all the amounts
owed to various collecting entities because of tax adjustment.
17. TAX REGULATIONS
---------------
On the date hereof the Companies have, and on the Closing Date
they shall have always complied with the tax regulations and
are on the date hereof and shall be on the Closing Date up to
date with the payment of their direct or indirect taxes; as of
today, there are no claims, requests for information or
disagreements on the part of the tax authorities, with the
exception of those appearing in the exhibits (EXHIBIT 23).
-17-
<PAGE> 19
18. CRIMINAL LIABILITY ECONOMIC REGULATIONS
---------------------------------------
On the date hereof the Companies have and on the
Closing Date the Companies shall have complied with
both French and European economic regulations,
particularly in the area of competition, and they are
not subject to any action, procedure or complaint on
the part of the competent administrations or
authorities.
On the date hereof the Companies have, and on the
Closing Date they shall have complied with criminal
law and are not the subject of any criminal
proceedings and their corporate managers are not the
subject of any actions for criminal infringements
committed during the course of their duties.
19. REGULATIONS GOVERNING FINANCIAL RELATIONS WITH FOREIGN
------------------------------------------------------
COUNTRIES - CUSTOMS
-------------------
On the date hereof the Companies have, and on the Closing Date
they shall have complied with the regulations on financial
relations with foreign countries and with the applicable texts
in customs matters. They are not the subject of any action,
procedure or complaint whatsoever in this regard on the part
of the competent authorities.
20. INTERESTS HELD IN OTHER COMPANIES
---------------------------------
On the date hereof the Companies do not hold and shall not
hold on the Closing Date any interest in a company likely to
incur their joint and indefinite liability and, more
generally, do not hold on the date hereof, and shall not hold
on the Closing Date any interest in a company, grouping or
firm other than those mentioned in the Preamble.
21. REPRESENTATIONS AND UNDERTAKING CONCERNING THE HYGIENE AND
----------------------------------------------------------
SAFETY OF THE INSTALLATIONS
---------------------------
The Guarantors represent that the industrial facilities at
Gaillon, Prunay, Gloucester and Barcelona have obtained all
the administrative permits, licenses and authorizations
required by the applicable published laws and regulations
concerning hygiene and safety that are necessary to operate
and conduct the activity carried on at the sites in the
context of the peaceful enjoyment due to the Beneficiary.
The Guarantors represent that, as far as they are aware, until
the Closing Date, the industrial activity has been carried on
and will be carried on by the operating Companies in
compliance with applicable regulations and the Companies have
not received any injunction, formal notice or letter from an
administrative, judicial or other authority indicating to them
that their fixed assets and activities did not comply with
safety or hygiene standards, with the exception of those
appearing in EXHIBIT 24.
More generally, as far as the Guarantors are aware, the
Companies are in compliance with the regulations concerning
safety and hygiene.
-18-
<PAGE> 20
22. PROHIBITION
-----------
On the date hereof, there is no administrative, judicial or
other prohibition likely to block, wholly or partially, the
activities of the Companies and no fact is known that would be
likely to interrupt the continuation of the operations,
subject to the application of article 14 of the Protocol
Agreement. As far as the Guarantors are aware, there is no
element likely to lead, on the Closing Date, to an
administrative, judiciary or another kind of interdiction ,
likely to paralyze, in full or in part, the activities of the
Companies or to lead to the suspension of the operations,
subject to the implementation of Article 14 of the Protocol
Agreement.
23. PRODUCTS
--------
On the date hereof and on the Closing Date, as far as the
Guarantors are aware, it being understood that any failure to
be aware does not exempt them from the warranty provided for
hereunder, the products manufactured and/or sold up to this
day by the Companies have no manufacturing faults or defects
of any kind that might justify a request for cancellation of
the sale and/or damages on the part of any buyer, consumer or
third party, with the exception of those appearing in the
exhibits (EXHIBIT 25).
All the products sold by the Companies are in compliance with
the laws and regulations applicable to them and to the
specifications imposed by customers, particularly in matters
of safety. The Companies are not aware of any accident
concerning the products likely to incur its liability.
The products sold by the Companies are the subject of a
warranty in a form similar to the contract attached in EXHIBIT
25. The sales and inventory have been the subject of a
provision for warranty mentioned above.
With the exception of the abovementioned warranties, the
companies have no obligation to take back, modify or repair
for any reason whatsoever the products it has sold before the
date hereof and no customer has made a request that it takes
back, modify or repair its products sold, with the exception
of those mentioned in EXHIBIT 25.
24. SUBSIDIES
---------
On the date hereof, The Companies have not benefitted during
the last five (5) years from any government, regional,
departmental or other subsidy or aid, including in the form of
leases, credits or other contracts with preferential
conditions (the "Subsidies"), with the exception of those
appearing in the exhibits (EXHIBIT 26) the said Exhibit will
be up dated on the Closing Date in the event that Subsidies
would be allocated within the Closing Date.
None of the Companies will in any manner be required to
reimburse such aids already received for any reason
whatsoever.
-19-
<PAGE> 21
25. YEAR 2000 COMPLIANCE
--------------------
(a) Software programs developed in the Sommer Allibert
Group for the companies.
Common provisions
-----------------
All the files of the software programs developed by the Sommer
Allibert Group and used by the Companies have the century zone
and it will therefore be unnecessary to modify the layout of
the files in question.
Computer assisted production control software program (GPAO)
------------------------------------------------------------
The computer assisted production control software program has
been the subject of a "Year 2000 Validation" procedure
consisting of:
- Itemizing all the files including a date.
- Itemizing all the programs accessing files including
a date.
- Verifying by application each program using any file
including a date, and making the correction, if
necessary.
- Testing all applications in the situation of the
arrival of the Year 2000.
At the end of this procedure, which has occurred as of this
day and for which certain applications specific to the
"Equipment" division, such as "Workshop Follow-up" and
"Manufacturing Orders" should be accepted by the user, this
software program's adaptation to the Year 2000 will not create
any computer disturbance.
Accordingly, the Guarantors declare that the GPAO software
programs developed within the Sommer Allibert Group will be
Year 2000 compliant, with the exception of the menu options
attached hereto (EXHIBIT 27). It being specified that certain
peripheral software provided by external suppliers, are not
available on the date hereof under there Year 2000 compliant
version.
For purposes hereof, the term " Year 2000 compliant" means
that:
- the computer functions, calculations and processes
operate consistently and continuously, whatever the
date on which the processing is really carried out
and whatever the input or output of the data, whether
before, at the time of, during or after January 1,
2000, and whether or not the data is affected by leap
years;
-20-
<PAGE> 22
- the date-related data are accepted, calculated,
compared, sorted, extracted, sequenced or otherwise
processed, and restored and displayed, in a
consistent manner, whatever the dates used in these
data, whether before, at the time of, during or after
January 1, 2000.
(b) External software packages installed on computers
belonging to the Companies
The Companies using these programs will benefit from
any contractual stipulations concerning the arrival
of the Year 2000 that may appear in the license
agreements they have entered into with the companies
supplying these programs.
26. EURO COMPLIANCE
---------------
As of the date hereof and on the Closing Date
(a) Software programs developed in the Sommer Allibert
Group for the Companies.
The software programs concerning:
- production management (purchasing software
programs)
- commercial management (AdV software program),
have been adapted to process the Euro so that it is
now possible to make purchases and/or sales in this
new currency, the currency for internal management
memorized in all the files (outstanding amounts,
continuity schedules, etc.) shall continue to be the
franc in 1999.
(b) External software packages installed on computers
belonging to the Companies
The Companies using these programs will benefit from
any contractual stipulations concerning the Euro that
may appear in the license agreements they have entered
into with the companies supplying these programs.
27. ENVIRONMENT
-----------
The Guarantors' representations and warranties relating to
environmental matters are the subject of an agreement between
the parties separate and distinct from this Warranty, in
accordance with the terms of Article 14 of the Protocol
Agreement signed on the date hereof, it being expressly
specified that the warranties given by the Guarantors under
paragraphs 14.15.3 and 14.15.4 at the Protocol Agreement are
governed by the present agreement.
-21-
<PAGE> 23
SUB-SECTION III - SPECIAL PROVISION - TAX CONSOLIDATION
Allibert Equipement, ATMP and Holdiplast shall provide until December
31, 1998, their tax results to the tax integration group, of which
Sommer Allibert is the group leader and which they belonged to.
Therefore the consequences of their belonging and/or withdrawing are
hereafter set forth:
- suspended taxation of capital gains on sale of fixed assets
(Article 223 F of the French Tax Code),
- recovery of the neutralized subsidies and forgiveness of
debts,
- penalties resulting from the taxation of the regularization of
reserves, following the subsidiaries' withdrawal from the
group, neutralized in the course of the tax consolidation
pursuant to Article 223 B of the French Tax Code,
- implementation of the recovery subject to past regulation
(exemption pursuant to Article 223 L6B of the French Tax Code
applicable in 1991),
shall exclusively be borne by the Guarantors and/or their shareholders.
However, the following consequences in respect to the above-mentioned
companies' belonging to the above-mentioned tax integration group:
- loss of the benefit of carrying forward the losses incurred
during the consolidation,
- loss of the possibility to distribute exempt from the tax on
dividend distribution their reserves corresponding to the
benefits made in the course of the consolidation period,
are expressly excluded from the warranties given.
The Beneficiary is informed that the Companies Allibert Equipement,
ATMP and Holdiplast will have, prior to December 31, 1998, agreed with
Sommer Allibert that there would not be indemnification for a damage
resulting from their withdrawal of the scope of the above-mentioned tax
consolidation, and that consequently there could be no claims from
their part in respect of an indemnification submitted to Sommer
Allibert resulting from this withdrawal, which the Beneficiary accepts
expressly.
SECTION 2 - SUBJECT OF THE WARRANTY
- -----------------------------------
The Guarantors warrant in proportion to the fraction of the capital
sold, i.e., 100%, with the exception of Allibert Anshan Cuves, where in
this case the fraction of capital sold is 50.1%,
- all of the assets and liabilities appearing in the accounts as
at August 31, 1998 referred to under article 2.1. hereof which
will be replaced by the corporate accounts as at December 31,
1998 referred to in article 2.2 hereof
- as well as all representations and warranties made and given
by the Guarantors herein and specifically in Section 1 above.
-22-
<PAGE> 24
SECTION 3 - REPAYMENT AND INDEMNIFICATION OBLIGATION
- ----------------------------------------------------
3.1 PRINCIPLES
----------
The Guarantors undertake to indemnify the Beneficiary for:
(i) any damage resulting from an inaccuracy or breach of
any representations found in Sub- section I
-Representations and Warranties of the Sellers.
(ii) any liability not accounted for or not supported by
any reserves or sufficient reserves (the "New
Liability"), as for any reduction of assets (the
"Assets Reduction") compared to the balance sheets of
the Companies for the business year ending on August
31, 1998, which shall be replaced by the balance
sheets as at December 31, 1998, whether the New
Liability or the Assets Reduction may have been
caused by or originate from facts dating before
December 31, 1998, or whether the New Liability or
the Assets Reduction result from commercial facts or
civil liability, or whether they should originate
from tax issues, para-tax issues, social issues or
others, particularly concerning:
- contributions owed to the Social Security
administration, and to all unemployment and
retirement schemes,
- taxes and various duties applied to the
turnover,
- adjustments made by the tax and social
authorities, not reserved for, resulting
from an event which might have occurred
prior to December 31, 1998.
or whether the New Liability or the Assets reduction
would be attributable to the inaccuracy or to the
incomplete declarations or to the non compliance with
the warranty obligations provided above, in Sub
Section II -Representations and Warranties Relating
to the Companies.
(iii) any additional liability resulting from a fact known
by the Guarantors or from a commitment occurring
between December 31, 1998 and the Closing Date, which
would not fall within the usual management of the
Companies and which would not have been disclosed to
the Beneficiary in accordance to the terms hereof,
(hereinafter referred to as the "Damage").
It is understood that the Guarantors shall not be
obliged to indemnify the Beneficiary for the Damage
which might already have been taken into
consideration in the adjustment of the Purchase Price
of Allibert Equipement Europe as defined in Articles
5.2.1 and 5.2.3 of the Protocol Agreement.
-23-
<PAGE> 25
Likewise, the warranty applying to the Corporate
Accounts and not on the combined accounts the
Guarantors shall only have the responsibility of
indemnifying the company having suffered the damage
but it will not be taken into account, and the
Guarantors will not have to indemnify the
repercussions which this damage might have on the
accounts of another company, in particular the ones
of its parent company (for example: reserves on the
shares of the company having suffered the damage,
debt on the same company, or any other intercompany
account).
In order to estimate the amount of the damage, only
this damage will be taken into consideration and the
Guarantors shall not in any manner be held liable for
any unforeseeable or indirect damages, particularly
any loss of profits or benefits in connection with
the damage.
The parties agree upon a "De Minimis" of 12,000
(twelve thousand) French Francs. Consequently any
liability or claim in an individual amount equal or
less than this sum or its equivalent in a foreign
currency shall not be taken into account in the
assessment of the Damage.
3.2 EXEMPTION - CEILING
-------------------
It is specified that the total accrual of the sums that will
be due pursuant to the warranties may not exceed a maximum
amount equal to thirty percent (30%) of the Purchase Price of
Allibert Equipement Europe as defined in Article 5.2.1 of the
Protocol Agreement.
The payment obligation arising out of the application of this
warranty shall become effective only if the total amount of
the sums due by the Guarantors exceeds, in one or more times,
a total of ten million francs (FRF 10,000,000) and shall only
concern the sum of those amounts that is higher than an
exemption of five million francs (FRF 5,000,000), it being
understood that the Guarantors shall only pay the Beneficiary
the fraction of the sums due hereunder that exceeds five
million francs.
It is understood that in any event, the exemption of FRF
5,000,000 shall only be deductible a single time and, once the
exemption has been deducted, the Beneficiary shall be
indemnified on a franc for franc basis for any other sum
subsequently due under the warranty.
3.3 DETERMINATION OF THE INDEMNITY
------------------------------
The Guarantors shall indemnify the Beneficiary by paying
directly to the Company or the Companies which suffered the
Damage defined in Article 3.1 a sum equal to the entire damage
(hereafter "the Indemnity"), subject to the provisions of
article 3.2 above.
-24-
<PAGE> 26
Furthermore, the parties agree expressly that all sums which
will be paid in respect of an event covered by an insurance
contract, indemnities actually received from insurance
companies will be deducted from the sums due by the
Guarantors, subject to effective payment, it being understood
that in all cases, the Guarantors may not base their claim on
the provisions of the present article in order to delay or
refuse any payment due by him hereunder.
In the process of evaluating the amount of the Indemnity, only
the Damage shall be taken into account and the Guarantors
shall, in no event, be liable for enforceable or indirect
damages, particularly for any loss of profit or of benefits
related to the Damage.
In the case of implementation of the Warranty, the Guarantors
shall indemnify the Beneficiary by directly paying the Company
or Companies which have suffered the Damage. The Beneficiary
may, however, choose to be compensated directly.
In the event of a payment to the Company or Companies that
suffered the damage, the amount of the indemnity will be equal
to the amount of the damage.
In the event of a payment to the Beneficiary, this payment
will be characterized as a price reimbursement and will be
equal to the amount of the damage suffered by the company or
companies in question, less any immediate or potential tax
savings that might result for such company or companies. The
tax saving will be considered in each case as equal to the
amount of the damage incurred by the Company, multiplied by
the applicable Company profit tax at the time that the damage
was covered by the Company, even if the Company is not subject
to taxation pursuant to the business year in question (i.e. in
the event that the Company has a loss carry forward).
In the event of a verification carried out by the tax or
social authorities, the possible adjustments shall have the
following consequences:
a) if the claim by the tax or social administrations
results in a sum being due and deductible from the
profit subject to the corporate tax (imput sur les
societes), for a fiscal year prior to the transfer,
this additional liability shall be taken into account
only after a possible adjustment of the corporate tax
savings it would have caused if the Companies had
made profits;
b) if the adjustments which has been carried out makes
the Companies accountable for a liability which is
not legally deductible (non deductible expenses as
defined in the tax regulations), this liability shall
entirely trigger the guarantee for its total amount,
to the extent it has given rise to tax disbursement;
c) the adjustments corresponding to a mere delay in
making a payment in respect of a tax shall not be
taken into account, except for the effect of the
related interest for late payment and penalties, as
well as the effect resulting from a modification of
the tax regulations from one fiscal year to the
other;
-25-
<PAGE> 27
d) the adjustments resulting from a decrease of loss
carry forwards or from an amortization which is
deemed deferred, if they do not give rise to an
immediate payment of the tax, shall give rise to a
payment only on the day on which the effective
payment of the related tax is made;
e) to the extent the VAT may be recoverable, the amount
of the adjustments in respect of VAT would only be
withheld for the payment of interest for late
payment, fines and penalties as well as for the
possible related financial costs.
3.4 TERM OF THE GUARANTEE
---------------------
Any claim for payment by the Beneficiary pursuant to these
provisions shall be notified by the Beneficiary to the
Representative of the Guarantors hereinafter designated in
Article 11 no later than the last day of the 18th month
following the Closing Date.
Any claim for payment made after such date shall not be
admissible and guaranties that have not been validly
implemented by no later than the last day of the 18th month
following the closing date will be extinguished on such date.
Notwithstanding the foregoing, any claim for payment resulting
from a tax, social (URSSAF, ASSEDIC or assimilated
institutions and accident insurance) or customs liability
shall be notified by the Beneficiary to the Representative of
the Guarantors no more than 30 days after the statute of
limitations for the recourse concerned for the warranty of
tax, para-fiscal, customs and social liabilities (URSSAF,
ASSEDIC or assimilated institutions and accident insurance).
This warranty will end 30 days after the final amicable,
litigious or court solution arising from the administration's
verifications.
3.5 IMPLEMENTATION
--------------
The Guarantors shall not have to indemnify the Damage (defined
in article 3.1 hereof) if the claims addressed by the
Beneficiary, pursuant to the said Damage, will not have been
executed in accordance with the procedure and the process
defined in article 3.5 hereof:
3.5.1 In the event that (A) any claim, demand or procedure
is asserted or instituted by any party other than the
parties hereto (or their respective Affiliates) which
could give rise to a Damage as defined in article 3.1
hereof, (any such claim, demand or procedure,
hereinafter referred to as a "Third Party Claim"), or
(B) the Beneficiary shall have a claim to be
indemnified for a Damage which does not involve a
Third Party Claim (any such claim, hereinafter
referred to as a "Beneficiary Direct Claim"), the
Beneficiary shall:
(i) in the case of a Third Party Claim,
addressed to the Guarantors as promptly as
possible and no later than 20 days of
receipt, by the
-26-
<PAGE> 28
Company in question, of notice of such Third
Party Claim (and imperatively in all shorter
delays in order to avoid any preclusion,
other cancellation of rights or shift of the
burden of proof, which may be damaging for
the concerned Company) a written notice
specifying the nature of such claim and the
amount of the Third Party Claim, providing
Guarantors with a copy of the said Third
Party Claim as well as all documents
received by the Third Party in support of
its claim (hereinafter the "Claim Notice");
or
(ii) In the event of a Direct Claim by the
Beneficiary, addressed to the Guarantors as
soon as the Beneficiary will have knowledge
of a Damage, a written notice specifying the
nature of such claim and the amount or
estimated amount of the Damage (the said
estimate will not be decisive on the final
amount of the Damage (hereinafter the "Claim
Notice").
3.5.2 In the event of a Beneficiary Direct Claim, the
Guarantors shall have ninety (90) days following
receipt of the relevant Claim Notice (the "Review
Period") to make such investigation of the underlying
claim and gather from the Beneficiary and from the
Company in question all explanations and
justifications that the Guarantors will considers
necessary in order to make a decision on the validity
of the Beneficiary's Claim. If the Guarantors and the
Beneficiary agree, during the Review Period, upon the
validity and amount of the Beneficiary Direct Claim,
the Guarantors shall pay to the Beneficiary, within
thirty (30) days following the date of such
agreement, the full agreed amount claimed to the
Company in question or to the Beneficiary in
accordance with article 3.3 above. If the Beneficiary
and the Guarantors are unable to reach an agreement
prior to the expiration of the Review Period, the
matter shall than be settled pursuant to the
provisions of Article 6 hereof.
3.5.3 In the event of a Third Party Claim
(A) The Guarantors shall have the right to
conduct any defense of the claim against the
Third Party Claim and to retain counsel of
their choice, to represent the Beneficiary
and any other person the Guarantors may
designate in connection with such Third
Party Claim and shall pay the fees and
disbursements of such counsel and persons
designated by the Guarantors. If requested
by the Guarantors, the Beneficiary agrees to
cooperate and to have the staff of the
Company concerned by the Third Party Claim
cooperate with the Guarantors and their
counsel in contesting any such Third Party
Claim; the Beneficiary shall refrain from
taking any action likely to jeopardize or
interfere with the defense of such claim by
the Guarantors. If so requested by the
Guarantors, the Beneficiary shall make and
have prepared by the Company concerned by
the Third Party Claim any written document
(i.e. counterclaim) necessary to counter any
assertions in respect to the validity of the
Third Party Claim.
-27-
<PAGE> 29
(B) In the event that the Guarantors should
choose not to assure themselves the defense
against the Third Party Claim, the
Beneficiary undertakes and/or to have the
company concerned by the Third Party Claim
to institute proceedings or to assure the
legal defense, in all judicial or
administrative proceedings, and to pursue
these proceedings until their ultimate point
if the Guarantors require so and in case of
emergency, without any specific request, and
in order to avoid any foreclosure or
extinctive prescription, in order to reserve
the Guarantors' rights and to limit the
Guarantors' liability. The Guarantors shall
have the right, at their own expenses, to be
represented by an agent appointed to follow
the discussion with the proceedings with the
Third Party concurrently with the
representative of the Beneficiary and/or of
the companies and may reasonably inform
itself and take copies of all useful
documents related to the Claims, subject to
the Third Party Claim.
(C) No Third Party Claim may be settled without
the prior written consent of the Guarantors;
in particular, the Beneficiary shall obtain
the Guarantors' prior written approval for
any acceptance of claim, any acknowledgment
or settlement with Third Parties, it being
understood that the Guarantors may oppose to
the acceptance the acknowledgment or to the
Settlement only if they give prior notice to
the Beneficiary for their irrevocable and
unconditional acceptance to bear all costs
for the fees incurred by the Beneficiary in
the context of the Third Party claim before
and after the Guarantors refusal.
3.5.4 Common rules for "Beneficiary Direct Claims" and to
---------------------------------------------------
"Third Party Claims."
---------------------
(A) Upon formal notice, and upon the request of
the Guarantors, the Beneficiary shall grant
the Guarantors and their representatives
reasonable access to books, record and
assets of the Companies to the extent that
they are related to the Beneficiary Direct
Claim or to the Third Party Claim, subject
of the Claim Notice. The Guarantors will
not, and shall require as well from its
representatives not to use (except in
connection with the Beneficiary's Direct
Claim or the Third Party Claim) any
information disclosed pursuant to the
paragraph hereof which is defined as
confidential by the Beneficiary. Access to
these documents shall be granted during
normal business hours and shall not cause
unusual disturbance s to the operations of
the Beneficiary.
(B) The Beneficiary, undertakes not to come to
terms, settle, go to arbitration, in respect
of issues likely to incur the Guarantors'
liability under this Warranty without first
having obtained the Guarantors' agreement,
which must express their answer, whether
positive or negative, within eight (8) days
of a request for acceptance.
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<PAGE> 30
3.6 NOUGHT
------
3.7 PAYMENT
-------
Any claim for payment made by the Beneficiary, resulting from
a Third Party Claim, shall be payable by the Guarantors within
thirty (30) days following its notification, provided that the
Company concerned is obliged, pursuant to the regulations in
effect or to a writ of execution, to meet the requirements
expressed in such claim, without having any recourse
whatsoever. In the event of a recourse, the indemnity shall be
payed to the Company within 5 bankable days upon the payment
date by the Company to a third party, should no disagreement
remain between the Guarantors and the Beneficiary concerning
the said Third Party Claim.
Without prejudice to the right of the Beneficiary to avail
itself, if necessary, of its rights arising out of the last
paragraph of article 1153 of the French Civil Code, if
payments have not been made at the agreed upon date, the sum
due shall immediately and without prior notice bear interest
at a rate equal to three (3) month PIBOR increased by two (2)
points. This provision may not be considered as allowing the
Parties to make late payments.
Any other request for payment from the Beneficiary will only
be due by the Guarantors within thirty (30) days of either the
acceptance by the Guarantors or the definitive establishment
of its validity pursuant to Article 6 hereof.
SECTION 4 - COLLATERAL SECURITY
- -------------------------------
In the normal course of business of the Companies, the Guarantors have
given collateral securities to the banks which are appended in Exhibit
28 hereto.
The Beneficiary shall take the necessary measures to obtain the release
of these security interests within two months of the Closing Date.
SECTION 5 - TRANSFER OF THE BENEFIT OF THIS AGREEMENT AND THE COMMITMENTS
- -------------------------------------------------------------------------
HEREUNDER
---------
The warranties granted by the Guarantors are non-assignable and
non-transferable, but in the event of the subsequent transfer (or
allotment) of all or part of the Shares to a company of the
Beneficiary's group, the Beneficiary may transfer to this company of
its group all or part of the benefit of these warranties, on condition
however that this transfer is notified to the Guarantors within thirty
days, respecting the provisions of Article 1690 of the Civil Code, and
on condition also that such company of its group has expressly taken
over the commitments made in the Protocol Agreement, in this Warranty
and, as the case may be, in any subsequent agreements.
-29-
<PAGE> 31
It is expressly agreed between the parties that the Guarantors shall
not have the option of transferring to any person whatsoever their
obligation hereunder. In the event the Guarantors cease to exist, their
successors shall be indivisible and jointly liable for the performance
of the obligations of this Warranty.
The Warranty will still be valid notwithstanding the termination of one
of the Companies or of the Beneficiary following a merger or an
absorption by another company.
Consequently, the Guarantors may not argue the termination of any of
the Companies or of the Beneficiary in order not to perform their
obligations under the Warranty.
SECTION 6 - DISPUTES
- --------------------
Any disputes arising out of the validity, interpretation, performance
of this agreement, between the Guarantors and the Beneficiary shall be
submitted to the jurisdiction of the Commercial Court of Paris.
SECTION 7 - ELECTION OF DOMICILE
- --------------------------------
The parties elect domicile at their respective registered offices, the
addresses of which are indicated at the beginning of this Agreement.
SECTION 8 - ASSIGNMENT BY THE GUARANTORS
- ----------------------------------------
Neither Guarantors, nor Sommer Allibert may substitute a third party
for themselves in any manner whatsoever for the performance of the
obligations under this Warranty.
SECTION 9 - THE GUARANTORS' AND BENEFICIARY'S ASSIGNS
- -----------------------------------------------------
The obligations provided for herein shall be binding on the heirs,
successors, assigns and beneficiaries of the Guarantors, Sommer
Allibert, and of the Beneficiary, who shall remain jointly and
severally responsible between them for the performance of any
obligations arising herefrom.
SECTION 10 - NOTICES
- --------------------
10.1 All notices or communications hereunder shall be effective
only if they are made in writing and sent by registered letter
with return receipt requested, or by telex or telefax (telex
and telefax shall be confirmed the same day by registered
letter with return receipt requested) to the address and for
the attention of the recipient as indicated in Article 10.2.
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<PAGE> 32
Such notices shall be deemed to have been received, in the
case of telefaxes or telexes, on the business day following
the day on which they are sent, in the case of registered
letters with return receipt requested, on the third business
day following the day on which they are sent, and in the case
of notices delivered by hand, on the day on which they are
handed over.
For the purposes of Article 3 above, the Guarantors expressly
agree that Allibert Holding, which accepts, is designated as
the "Representative of the Guarantors", and that consequently,
a copy of all notices or communications must be addressed to
it in accordance with the present article.
10.2 The addresses of the parties for the purposes of Article 10.1
are the following:
Representative of the Guarantors:
Company: Allibert Holding
Address: 2 rue de l'Egalite
92748 Nanterre - France
Telefax: 01 41 20 47 03
For the attention of: Legal Department
The Guarantors:
Company: Allibert Holding
Address: 2 rue de l'Egalite
92748 Nanterre - France
Telefax: 01 41 20 47 03
For the attention of: Legal Department
Company: Seditep
Address: 3 rue Montesquieu
92748 Nanterre - France
Telefax: 01 41 20 47 03
For the attention of: Legal Department
Company: Sauvagnat Allibert
Address: 2 rue de l'Egalite
92748 Nanterre - France
Telefax: 01 41 20 47 03
For the attention of: Legal Department
Company: Allibert Transport und
Lagertechnik GmbH
-31-
<PAGE> 33
Address: Friesstrabe 26-60388,
Frankfort am Main
Telefax: 01 41 20 47 03
For the attention of: Legal Department
The Beneficiary:
Company: Myers Industries, Inc.
Address: 1293 South Main Street
Akron, Ohio 44301
U.S.A.
Telefax: (1) 330 761 6156
For the attention of: Mr. Stephen Myers
10.3 A copy of the notice to the Beneficiary shall be addressed by
telefax, for information purposes to:
Brouse & McDowell, L.P.A.
500 First National Tower
Akron, Ohio 44308
For the attention of: Kevin O'Neil
Telefax: 330/253-8601
and
Cabinet Salans, Hertzfeld & Heilbronn
9, rue Boissy d'Anglas
75008 Paris
For the attention of: Me Armelle Walters-Renaud
and Me Nathalie Duguay
Telefax: 01 42 68 15 45
10.4 In the event of a change of address or recipient, the party
concerned shall inform the other party as provided for above.
SECTION 11 - WAIVER
- -------------------
The Beneficiary's failure to exercise a right provided for herein may
not in any event be interpreted as a waiver of any such right and shall
not in any manner affect the Beneficiary's right to exercise such
right.
No waiver of any contractual or legal representation or warranty shall
be effective unless the Beneficiary notifies such waiver to the
Guarantors by means of a written and signed declaration.
-32-
<PAGE> 34
SECTION 12 - SEVERABILITY
- -------------------------
If any one of the provisions hereof were held to be invalid,
unenforceable, lapsed, illegal or inapplicable, it shall not affect the
validity, legality or applicability of the other provisions of the
warranty and shall not exempt the Guarantors from the performance of
the warranty. In such a case the parties shall negotiate in good faith
and shall substitute if possible another provision that is lawful
corresponding to the spirit and purpose of the unlawful provision.
SECTION 13 - ENTIRE AGREEMENT
- -----------------------------
This Warranty constitutes the sole and entire agreement between the
parties as to the provisions that are the subject matter hereof.
Accordingly, it cancels and replaces all contracts, covenants,
exchanges of letters or oral agreements that may have existed between
the parties prior to the date hereof and concerning the same subject
matter, except for the provisions in the above mentioned Agreement
which shall prevail over the provisions hereof in case of discrepancy.
The Sellers make no other representations and grant no other warranties
to the Purchaser apart from those expressly and specifically made and
granted herein. Without limiting the general nature of the foregoing,
the Seller does not make any representations or warranties as to:
- the accuracy or completeness of any forecast, business plan,
budget or other prospective information supplied by the
Seller, the Sommer Allibert company or their advisors, to the
Purchaser or its advisors;
- with respect to the future relations of the Companies with any
public authority, customers, suppliers, employees, with the
exception of what is expressly mentioned herein.
SECTION 14 - EXHIBITS
- ---------------------
14.1 The following exhibits form an integral part of this Warranty
Agreement:
1 Effect of the Sale
2 Deed of disposal or acquisition of tangible or
intangible fixed assets
3 List of directors, Chairman, general managers and
statutory auditors or other corporate managers
4 By-laws of the Companies
5 Tax integration agreements
6 Corporate Accounts drawn up as at August 31, 1998
-33-
<PAGE> 35
7 Corporate accounts of the Companies closed as at
December 31, 1998
8 Security, pledge, mortgage, warranties, guarantees,
charge
9 Real estate occupied by the Companies
10 Real estate financed leases
11 Intellectual property rights
12 Licenses or other rights granted on the intellectual
Property Rights
13 Intellectual Property Rights for which the Companies
only hold a license
14 Facsimile of the logo of the Sommer Allibert Group
15 Actions brought by third parties in the matter of
Intellectual Property
16 Details of the bank accounts
17 Off balance sheet commitment
18 Contracts on which the sale of shares would have an
effect
19 Accounts receivable for which recovery appears
doubtful - Substantial customers having threatened to
cease all relations
20 Important accidents having occurred and having been
declared since January 1, 1997
21 Employment contracts containing provisions more
favorable than those provided for in the applicable
collective bargaining agreements. Company agreements
(accord d'entreprise)
22 Disputes, litigation or arbitration
23 Claims, requests for information from the tax
authorities
24 Injunctions and formal notices concerning compliance,
safety or hygiene standards
25 Products with manufacturing faults or defects -
Warranty Agreement
26 Governmental, regional or departmental subsidies
received during the last five (5) years
-34-
<PAGE> 36
27 Menu options for GPAO software remaining to be tested
for Year 2000 conformity.
28 Collateral securities granted
14.2 The following is expressly agreed :
a) the accounts of the Companies described in
Sub-section II - paragraph 2.2 Corporate Accounts as
at December 31, 1998 will be, on the Closing Date,
appended hereto as EXHIBIT 7.
b) If necessary, exhibits referred to in 14.1 above will
be up dated on the Closing Date with the
Beneficiary's agreement.
SECTION 15 - EFFECTIVE DATE
- ---------------------------
The present Warranty Agreement bounds the parties upon the signature
hereof and shall be null and void in the event of the non-occurrence of
the Protocol Agreement Share transfer, subject to the
[The rest of the page was left blank intentionally]
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<PAGE> 37
Executed in Nanterre, On December 3, 1998 in 3 originals
For the Guarantors For the Beneficiary
ALLIBERT HOLDING MYERS INDUSTRIES, INC.
/s/ Michel Cognet /s/ Stephen E. Myers
- --------------------------------- -----------------------------------
Michel Cognet Stephen E. Myers
SEDITEP
/s/ Philippe Chaubeau
- ---------------------------------
Philippe Chaubeau
SAUVAGNAT ALLIBERT
/s/ Michel Cognet
- ---------------------------------
Michel Cognet
ALLIBERT TRANSPORT UND LAGERTECHNIK GmbH
/s/ Philippe Chaubeau
- ---------------------------------
Philippe Chaubeau
The undersigned, Allibert Holding, represented by Mr. Michel Cognet, empowered
by Mr. Marc Assa, Chairman of the Board of Directors, hereby declares that it
gives the Beneficiary its joint collateral security for all sums that may be
owed to it by SEDITEP, SAUVAGNAT ALLIBERT, ALLIBERT TRANSPORT UND LAGERTECHNIK
under this warranty agreement, in accordance with the authorization of its Board
of Directors, a certified true copy of which is remitted to the Beneficiary.
For ALLIBERT HOLDING
/s/ Michel Cognet
- ---------------------------------
Michel Cognet
-36-
<PAGE> 38
IN THE PRESENCE OF
/s/ Michel Cognet
- ---------------------------------
For SOMMER ALLIBERT*
By Michel Cognet
* Add written in your own hand "Good for acting as joint and indefinite
guarantor for all the obligations subscribed by the Guarantors, their
successors, assigns and beneficiaries pursuant to this Agreement".
-37-
<PAGE> 1
Exhibit 10(c)
OPTION AGREEMENT
----------------
OPTION AGREEMENT made as of this 3rd day of December, 1998, by and
between ALLIBERT EQUIPEMENT U.S., INC., a Delaware corporation ("AE U.S."), and
MYERS INDUSTRIES, INC., an Ohio corporation ("Myers"), and joined in by SOMMER
ALLIBERT S.A., a French societe anonyme ("Sommer Allibert").
RECITALS
--------
A. Sommer Allibert, which is the ultimate parent of AE U.S., and Myers
have signed, on even date herewith, a certain Protocole d'Accord (the
"Protocole") which provides, inter alia, for the indirect sale of the
50% percentage interest in ALLIBERT-CONTICO, L.L.C., a Missouri limited
liability company ("Allibert Contico"), owned by AE U.S. (the "Allibert
Interest"), to Myers or to a direct or indirect subsidiary of Myers
(for purposes hereof, also hereinafter referred to as "Myers").
B. Under the Protocole, the parties may terminate their agreement, on or
prior to the closing of the transactions contemplated, for various
reasons as therein set forth, and Sommer Allibert has the unilateral
right, in the event the costs of environmental remediation as defined
in the Protocole are greater than 50,000,000 French francs, to
terminate the Protocole.
C. Myers has also entered into the Contico Sale Agreement with CONTICO
INTERNATIONAL, INC. ("Contico") which provides for the direct sale of
the 50% percentage interest in Allibert- Contico owned by Contico (the
"Contico Interest") to Myers.
D. Because it is possible that in the event of termination of the
Protocole on or prior to closing, either Myers will nonetheless wish to
acquire, or AE U.S. will nonetheless wish to sell, the Allibert
Interest so that notwithstanding the termination of the Protocole,
Myers has the ability to acquire 100% of the percentage interest in
Allibert-Contico and Sommer Allibert can thereby terminate its
involvement in such company, the Protocole provides that AE U.S. shall
offer to Myers a call option, and Myers shall offer to AE U.S. a put
option with respect to the Allibert Interest.
E. The parties hereto therefore wish to set forth the terms and conditions
pertaining to the put and call options to be conferred further to the
Protocole.
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AGREEMENT
1. DEFINITIONS. The following terms shall have the meanings as herein set
forth:
"Business Day" shall mean the time between the hours of 9:00 a.m. and
5:00 p.m. on any day other than Saturday, Sunday or a day on which
banks in either Akron, Ohio or St. Louis, Missouri are not open for the
transaction of business.
"Exercise Notice" shall have the meaning set forth in Section 5 hereof.
"Option Exercise Period" shall mean the five (5) Business Day period
commencing upon the closing date set under the Protocole, as the same
may be extended, delayed or adjourned by agreement of the parties
thereto.
"Option Price" shall be equal to the sum of Twenty-Two Million Five
Hundred Thousand Dollars ($22,500,000.00), adjusted in the same manner
as the Contico Interest Purchase Price in accordance with the
provisions of Article 1 and Section 6.10 of the Contico Sale Agreement,
as the same has been amended, provided, however, that in no event shall
the Option Price be less than Twenty-One Million Five Hundred Thousand
Dollars ($21,500,000.00), reduced by any adjustment made pursuant to
Section 6.10 of the Contico Sale Agreement, as such Section has been
amended.
"Option Settlement Date" shall mean the day occurring five (5) Business
Days after the Option Exercise Date, or such later date as the parties
may together agree.
"Option Settlement Place" shall mean the offices of Pavia & Harcourt,
600 Madison Avenue, New York, New York, USA.
2. INCORPORATION BY REFERENCE. To the extent required by this Option
Agreement, the terms of the Contico Sale Agreement, as amended, annexed
hereto as Exhibit A, are hereby incorporated by reference as though
fully set forth herein. In the event of an inconsistency between the
terms of the Contico Sale Agreement and any particular disposition of
this Option Agreement, the terms and conditions hereof shall be
controlling.
3. GRANT OF PUT OPTION. Myers hereby grants to AE U.S. an option (the
"Put Option"), exercisable as hereinafter provided, to sell to Myers
the Allibert Interest at the Option Price.
4. GRANT OF CALL OPTION. AE U.S. hereby grants to Myers an option (the
"Call Option"), exercisable as hereinafter provided, to purchase from
AE U.S. the Allibert Interest at the Option Price.
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5. EXERCISE OF PUT AND CALL OPTION. The Put Option or the Call Option,
as the case may be, may be exercised at any time during the Option
Exercise Period by the party holding such option, in the event the
closing under the Protocole does not occur, by delivery of its Exercise
Notice to the other party with a copy to Allibert-Contico, sent in the
manner provided in Section 12, stating that the notifying party wishes
to exercise its option and making reference to this Option Agreement.
The Exercise Notice, if sent by AE U.S., shall also designate the
account or accounts to which the sums payable to AE U.S. for the
purchase of the Allibert Interest shall be paid. If the Exercise Notice
is sent by Myers, AE U.S. shall send a responding notice, within two
(2) Business Days after receipt of the Exercise Notice, in which shall
be designated the account or accounts to which the sums payable to AE
U.S. for the purchase of the Allibert Interest shall be paid. The
sending of the Exercise Notice shall be an irrevocable obligation on
the part of the notifying party to complete the sale or purchase, as
the case may be, of the Allibert Interest in accordance with the terms
hereof. Receipt of the Exercise Notice shall obligate the recipient to
perform the transaction contemplated by the Option in accordance with
the terms hereof.
6. CLOSING OF THE OPTION TRANSACTION. On the Option Settlement Date,
and at the Option Settlement Place, AE U.S. shall, in exchange for the
Option Price, sell, convey, transfer and assign to Myers, and Myers
shall acquire from AE U.S., the Allibert Interest, free and clear of
all liens, security interests, claims, encumbrances and transfer
restrictions, but subject to the terms of the Operating Agreement of
Allibert-Contico, as amended (any such amendment since the date of the
Contico Sale Agreement to be of the kind and in the manner set forth in
Section 6.12 of the Contico Sale Agreement) and as the same shall be in
effect on such date. The Option Price shall be determined as provided
in Article 1 of the Contico Sale Agreement, including the procedure for
resolution of disagreement, shall be further adjusted as provided in
Section 6.10 of the Contico Sale Agreement, as such Section has been
amended, if applicable, and shall be paid in such manner, in such
installments and at such times as are set forth in Article 1 of the
Contico Sale Agreement, including payments into escrow. The payment
into escrow shall be made further to an Escrow Agreement in the form
annexed hereto as Exhibit B, to be executed by AE U.S. and Myers at the
closing of the transaction contemplated by this Option Agreement. The
Escrow Agreement provides that the fees and expenses of the Escrow
Agent, other than investment commissions and fees properly chargeable
to the escrow account, shall be for the account of Myers. Also at such
closing, AE U.S., Sommer Allibert and Myers will enter into the
Non-Competition Agreement referred to therein, annexed hereto as
Exhibit C.
7. BINDING AGREEMENT OF AE U.S.. AE U.S. has the right, power and
authority to enter into this Agreement and to consummate the
transaction contemplated hereby and otherwise to perform its
obligations hereunder. The execution, delivery and performance by AE
U.S. of this Agreement and the consummation of the transaction
contemplated hereby have been duly authorized by all necessary
corporate action on the part of AE U.S. This Agreement constitutes the
valid and binding agreement of AE U.S., enforceable against AE U.S. in
accordance with its terms. AE U.S. has the power to perform all of its
obligations under this Agreement, the execution,
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delivery and/or performance of which will not constitute a violation
of, be in conflict with or constitute a default under any contract,
agreement, commitment, undertaking or understanding to which AE U.S. is
a party or to which it or any of its properties is subject; any
judgment, decree or order of any governmental authority or court to
which AE U.S. or its properties is subject or bound; or any applicable
law; or any governing or applicable agreements, instruments or other
documents.
8. BINDING AGREEMENT OF MYERS. Myers has the right, power and authority to
enter into this Agreement and to consummate the transaction
contemplated hereby and otherwise to perform its obligations hereunder.
The execution, delivery and performance by Myers of this Agreement and
the consummation of the transaction contemplated hereby have been duly
authorized by all necessary corporate action on the part of Myers. This
Agreement constitutes the valid and binding agreement of Myers,
enforceable against Myers in accordance with its terms. Myers has the
power to perform all of its obligations under this Agreement, the
execution, delivery and/or performance of which will not constitute a
violation of, be in conflict with or constitute a default under any
contract, agreement, commitment, undertaking or understanding to which
Myers is a party or to which it or any of its properties is subject;
any judgment, decree or order of any governmental authority or court to
which Myers or its properties is subject or bound; or any applicable
law; or any governing or applicable agreements, instruments or other
documents. With respect to the representations and warranties of Myers
contained in this Section 8, the term [Agreement] includes,
specifically, the guarantee obligations of Myers further to the
contingent guarantee extended in favor of AE U.S. further to Section
10.
9. GUARANTEE OF SOMMER ALLIBERT. Sommer Allibert hereby guarantees to
Myers the timely and complete performance by AE U.S. of each and all of
AE U.S.' obligations under this Agreement, and the making of all
payments herein required of AE U.S., all as in accordance with the
terms hereof as the same may be amended. No consent of Sommer Allibert
will be required with respect to any amendment of this Agreement as
permitted hereunder, and this guarantee will apply to the obligations
of AE U.S. hereunder as so amended. The liability of Sommer Allibert
with respect to its guarantee obligations under this Agreement is
primary, and Myers shall not be required to make any demand on AE U.S.
for performance of any obligation under this Agreement, nor to exhaust
any legal, contractual or equitable remedies against AE U.S. prior to
proceeding against Sommer Allibert pursuant hereto. Sommer Allibert
represents and warrants to Myers that the execution, delivery and
performance by Sommer Allibert of its guarantee obligations under this
Agreement have been duly authorized by all necessary corporate action
on its part; that its guarantee obligations hereunder constitute the
valid and binding guarantee of Sommer Allibert, enforceable against
Sommer Allibert in accordance with its terms; that Myers Industries,
Inc. has the power to perform its guarantee obligations under
this Agreement, the execution, delivery and/or performance of which
will not constitute a violation of, be in conflict with or constitute a
default under (i) any contract, agreement, commitment, undertaking or
understanding to which Sommer Allibert is a party or to which it or any
of its properties is subject; (ii) any judgment, decree or order of any
governmental authority
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or court to which Sommer Allibert or its properties is subject or
bound; or (iii) any applicable law; or any governing or applicable
agreements, instruments or other documents.
10. CONTINGENT GUARANTEE OF MYERS INDUSTRIES, INC.. In the event of an
assignment by Myers of its obligations hereunder in accordance with the
terms of Section 14, Myers hereby guarantees to AE U.S. the timely and
complete performance by its assignee of each and all of the obligations
under this Agreement, including those other agreements to be executed
by Myers pursuant hereto and assumed by its assignee, namely the Escrow
Agreement, the Warranty Agreement and the Non-Competition Agreement,
all of which shall be assumed by such assignee, and the making of all
payments herein required of said assignee further to the assignment,
all as in accordance with the terms hereof as the same may be amended.
No consent of Myers will be required with respect to any amendment of
this Agreement as permitted hereunder, and this guarantee will apply to
the obligations of Myers' assignee hereunder as so amended. The
liability of Myers with respect to its guarantee obligations under this
Agreement is primary, and AE U.S. shall not be required to make any
demand on Myers' assignee for performance of any obligation under this
Agreement, nor to exhaust any legal, contractual or equitable remedies
against such assignee prior to proceeding against Myers pursuant
hereto.
11. REPRESENTATIONS AND WARRANTIES. The consummation of the sale/purchase
of the Allibert Interest in accordance with this Agreement will be
subject to the representations and warranties provided for under the
Warranty Agreement executed simultaneously with the execution of this
Agreement. The Warranty Agreement is annexed hereto as Exhibit D.
12. NOTICES. Any notices or other communications required or permitted
hereunder to any party hereto shall be sufficiently given if (a)
delivered in person, (b) sent by certified or registered mail, postage
prepaid, (c) dispatched by reputable overnight delivery service, or (d)
transmitted by facsimile machine if an answerback is received and
notice is confirmed by any other manner provided herein, in each case
addressed as follows:
In the case of AE U.S.:
Allibert Equipement U.S., Inc.
c/o Sommer Allibert S.A.
2 rue de l'Egalite
92748 Nanterre Cedex
France
Attn: Michel Cognet
Facsimile: 011-33-1-41-20-47-04
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With a copy to:
Pavia & Harcourt
600 Madison Avenue
New York, New York 10022
U.S.A.
Attn: Stephen D. Kramer
Facsimile: 1-212-980-3185
In the case of Sommer Allibert:
Sommer Allibert S.A.
2 rue de l'Egalite
92748 Nanterre Cedex
France
Attn: Michel Cognet
Facsimile: 011-33-1-41-20-47-04
With a copy to:
Pavia & Harcourt
600 Madison Avenue
New York, New York 10022
U.S.A.
Attn: Stephen D. Kramer
Facsimile: 1-212-980-3185
In the case of Myers and/or its assignee:
Myers Industries, Inc.
1293 South Main Street
Akron, Ohio 44301
U.S.A.
Attn: Gregory J. Stodnick,
Vice President- Finance
Facsimile: 1-330-761-6156
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With a copy to:
Brouse & McDowell, L.P.A.
500 First National Tower
Akron, Ohio 44308
U.S.A.
Attn: Kevin C. O'Neil
Facsimile: 1-330-253-8601
or such substituted address as either party shall have given notice to
the other in writing in the manner set forth in this Section 11.
13. AMENDMENT. This Agreement may be amended or modified in whole or in
part only by an agreement in writing executed by the parties hereto and
making specific reference to this Agreement.
14. BINDING ON SUCCESSORS AND ASSIGNS. Neither party hereto may assign this
Agreement without the express written consent of the other, provided,
however, that Myers may assign its rights and obligations hereunder and
under those other agreements to be executed by Myers pursuant hereto,
namely the Escrow Agreement, the Warranty Agreement and the
Non-Competition Agreement, to a wholly-owned subsidiary (including an
indirect subsidiary) if such assignee executes a written assumption
agreement reasonably satisfactory to AE U.S., in which event the
contingent guarantee accorded in Section 10 hereof shall become
effective. Subject to the foregoing, this Agreement shall be binding
upon, inure to the benefit of and be enforceable by and against the
parties hereto and their respective successors and assigns in
accordance with the terms hereof.
15. SEVERABILITY. In the event that any one or more of the provisions
contained in this Agreement or any application thereof shall be
invalid, illegal or unenforceable in any respect, the validity,
legality or enforceability of the remaining provisions of this
Agreement and any other application thereof shall not in any way be
affected or impaired thereby; provided, however, that to the extent
permitted by applicable law, any invalid, illegal or unenforceable
provision may be considered for the purpose of determining the intent
of the parties in connection with the other provisions of this
Agreement.
16. ENTIRE AGREEMENT; GOVERNING LAW. This Agreement represents the entire
understanding of the parties regarding the subject matter and
supersedes all prior negotiations and agreements between the parties
with regard thereto. This Agreement shall be governed by and construed
and interpreted in accordance with the laws of the State of Missouri,
without reference to conflicts of laws principles.
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17. DISPUTE RESOLUTION; EQUITABLE REMEDIES. Any and all disputes arising in
connection with the subject matter of this Agreement shall be
determined exclusively before the courts, state or federal, sitting in
the State of Missouri. The parties acknowledge that the prejudice
caused to either by the failure of the other to satisfy its obligations
hereunder is incapable of being measured in money damages, and each
consents to the remedy of specific performance of the terms hereof in
addition to any other remedies available to a party at law or in equity
for breach of this Agreement.
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by their duly authorized representatives on the day and year first
above written.
MYERS INDUSTRIES, INC.
By: /s/ Stephen E. Myers
---------------------------------------
Stephen E. Myers
President and Chief Executive Officer
ALLIBERT EQUIPEMENT U.S., INC.
By: /s/ Michel Cognet
---------------------------------------
Michel Cogent
SOMMER ALLIBERT S.A.
(with respect to Section 9 only)
By: /s/ Michel Cognet
---------------------------------------
Michel Cogent
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LIST OF EXHIBITS
----------------
Exhibit A - Contico Sale Agreement
Exhibit B - Form of Escrow Agreement
Exhibit C - Form of Non-Competition Agreement
Exhibit D - Warranty Agreement
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EXHIBIT 10(d)
SALE AGREEMENT
THIS SALE AGREEMENT (the "Agreement") is entered into as of the 2nd day
of November, 1998, by and between MYERS INDUSTRIES, INC., an Ohio corporation
(the "Buyer"), and CONTICO INTERNATIONAL, INC., a Missouri corporation
("Contico").
RECITALS:
A. Allibert-Contico, L.L.C., a Missouri limited liability company (the
"Company"), (i) owns and operates a manufacturing facility in Springfield,
Missouri, (ii) manufactures, distributes and sells industrial containers, totes
and pallets for materials handling, and (iii) owns all of the outstanding stock
of Allibert Industries Limitee, a Quebec corporation ("AIL"), that is engaged in
distribution of industrial containers.
B. Contico holds fifty percent (50%) of the outstanding percentage
interests in the Company, and Allibert Equipement U.S., Inc., a Delaware
corporation ("Allibert"), holds the remaining fifty percent (50%) of the
outstanding percentage interests in the Company.
C. The Buyer and Contico have reached an understanding concerning the
Buyer's purchase from Contico of its percentage interest in the Company.
AGREEMENT:
IN CONSIDERATION OF the respective representations, warranties and
covenants of the parties contained in this Agreement, and intending to be
legally bound, the parties agree as follows:
ARTICLE 1
---------
Purchase and Sale of Contico Interest
-------------------------------------
1.1 PURCHASE AND SALE. At the Closing (as defined in Article 5),
subject to the terms and conditions set forth in this Agreement, Contico shall
sell to the Buyer, and the Buyer shall purchase from Contico, all of the
percentage interest in the Company owned by Contico (which represents fifty
percent (50%) of the outstanding percentage interests in the Company), free and
clear of all liens, security interests, claims, encumbrances and transfer
restrictions, but subject to the terms of the Operating Agreement of the
Company, as amended. The percentage interest of Contico is sometimes referred to
in this Agreement as the "Contico Interest."
1.2 CONTICO INTEREST PURCHASE PRICE. The aggregate consideration to be
paid by the Buyer to Contico for the Contico Interest (the "Contico Interest
Purchase Price") shall be $22,500,000, adjusted as calculated in Section 1.3(b)
based on the difference, if any, between the Company's projected EBIT (as
hereinafter defined) for calendar year 1998 of $4,318,000, and the actual EBIT
for calendar year 1998 as determined from the Final Audited Financial Statements
as defined in Section 1.3. The Contico Interest Purchase Price shall be adjusted
by an amount equal to one-half of the difference between the EBIT projected by
the Company of $4,318,000 for the 12 months
<PAGE> 2
ended December 31, 1998, and the actual EBIT for such period based upon the
Final Audited Financial Statements ("Actual EBIT"). One-half of the Actual EBIT
shall be multiplied by a factor of 10.4215. The Contico Interest Purchase Price
shall either be increased or decreased based upon such calculation, but in no
event shall the Contico Interest Purchase Price be adjusted downward by more
than One Million Dollars ($1,000,000) (the "Maximum Decrease") as a result of
such adjustment. The term "EBIT" means the net income of the Company for such
period, plus the sum of (a) all interest expense during such period, plus (b)
all income, franchise, gross receipts and excise tax expense during such period;
in each case to the extent such expense is deducted from income in determining
net income; all of the foregoing being determined on a consolidated basis in
accordance with United States generally accepted accounting principles ("GAAP")
consistently applied.
1.3 CONTICO INTEREST PURCHASE PRICE PAYMENT AND ADJUSTMENT.
(a) CLOSING PAYMENTS. At the Closing, Buyer shall wire transfer
$22,500,000 of immediately available funds, $21,500,000 of which (the "Closing
Payment") shall be paid to the account(s) directed by Contico, and the remaining
$1,000,000 of which shall be deposited into an escrow account, to be held,
invested and paid pursuant to the terms of an Escrow Agreement in substantially
the form of EXHIBIT A attached hereto ("Escrow Agreement").
(b) CONTICO INTEREST PURCHASE PRICE ADJUSTMENT. Promptly following
December 31, 1998, Contico shall cooperate with Allibert to cause the financial
books of the Company and AIL to be closed and shall instruct the Company's
independent public accounting firm, Arthur Andersen, L.L.P. ("Accounting Firm"),
to commence its audit of the Company's consolidated balance sheet and
consolidated statements of income and cash flows as of and for the fiscal year
ended December 31, 1998, and to issue an audit opinion of such Accounting Firm
thereon. The Buyer and its professional representatives shall be entitled, at
Buyer's expense, to observe the preparation of such financial statements in
accordance with such reasonable procedures as the Accounting Firm shall
establish. Within forty-five (45) days after the Closing Date, Contico shall
deliver to the Buyer (i) the audited consolidated balance sheet of the Company
as of December 31, 1998, and related audited consolidated statements of income
and cash flow for the 12 month period then ended, including the notes thereto,
prepared by the Accounting Firm, and (ii) the Accounting Firm's calculation of
the Company's EBIT and any Contico Interest Purchase Price adjustment. If the
Buyer objects to any aspect of such financial statements or calculations, the
Buyer shall notify Contico in writing within ten (10) business days after its
receipt of such statements, and thereafter representatives of the parties shall
meet promptly to resolve any disagreements. All parties shall instruct the
Company and the Accounting Firm to make available to each party such supporting
information and work papers as any party shall reasonably request in its review.
The financial statements of the Company as of December 31, 1998, as agreed by
the parties or as determined under Section 1.3(d) below, are referred to
collectively as the "Final Audited Financial Statements."
(c) ADJUSTING PAYMENT. If the Contico Interest Purchase Price
adjustment represents an increase of the Contico Interest Purchase Price above
$22,500,000, then (i) Contico shall be entitled to receive the entire escrow
account and all earnings thereon, and (ii) the Buyer shall
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pay the amount of such increase by wire transfer of immediately available funds
to such account(s) as Contico shall direct. If the Contico Interest Purchase
Price adjustment results in the Contico Interest Purchase Price decreasing by
the Maximum Decrease, then the Buyer shall be entitled to receive the entire
escrow account and all earnings thereon. If the Contico Interest Purchase Price
adjustment results in the Contico Interest Purchase Price decreasing by less
than the Maximum Decrease, then (1) the Buyer shall be entitled to receive from
the escrow account an amount equal to such decrease in Purchase Price, (2)
Contico shall be entitled to receive the balance of the principal of the escrow
account, and (3) the earnings shall be paid over to the parties in the same
proportions as the principal is paid over. Any payment required to be made by a
party under this Section 1.3(c), shall be made within three (3) business days
after agreement on, or determination of, the Final Audited Financial Statements.
(d) RESOLUTION. If, within ten (10) days after receipt of notice of
the buyer's objections, Buyer and Contico cannot agree on any aspect of the
Final Audited Financial Statements or the computation of EBIT or the Contico
Interest Purchase Price adjustment, then the parties shall submit their
respective positions and any appropriate supporting documentation within the
following five days to the St. Louis, Missouri office of Deloitte & Touche LLP.
If such firm shall be unable to accept its dispute resolution function, then its
most recent managing partner shall designate an alternate. The decision of such
firm, which shall be rendered within ten (10) days after submission of all
documentation, shall be binding on all interested parties. The cost of such firm
shall be shared equally by the Buyer on the one hand and Contico and Allibert on
the other hand.
1.4 ALLOCATION OF PURCHASE PRICE. The parties acknowledge that, for
federal income tax purposes, the purchase of the Contico Interest by the Buyer
is treated as a purchase of one-half of the assets of the Company. The parties
hereby acknowledge and agree that the assets of the Company are being purchased
at their adjusted book value for federal income tax purposes, and that to the
extent the Contico Interest Purchase Price exceeds such book value, the excess
is being paid by the Buyer for goodwill and going concern value.
ARTICLE 2
---------
Representations and Warranties Relating to Company and AIL
----------------------------------------------------------
Contico hereby represents and warrants to Buyer as follows:
2.1 STATUS.
(a) EXISTENCE AND STATUS. The Company is a duly organized, validly
existing limited liability company in full force and effect under the laws of
the State of Missouri. AIL is a duly organized, validly existing corporation in
good standing in full force and effect under the laws of the Province of Quebec.
(b) CONSTITUENT DOCUMENTS. Attached to this Agreement as EXHIBIT B
are copies of (i) the original articles of organization of the Company and all
amendments, restatements or other
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filings with respect thereto, (ii) the currently effective operating agreement
of the Company, as amended (the "Operating Agreement"), (iii) the articles of
incorporation of AIL, as amended, and (iv) the bylaws of AIL, as amended; which
are all of the constituent documents of the Company and AIL.
(c) POWER AND AUTHORITY. Each of the Company and AIL has the power
and authority to own and lease its properties and otherwise to conduct its
business as currently conducted.
(d) QUALIFICATION. SCHEDULE 2.1(d) lists the jurisdictions in which
the Company is qualified to do business as a foreign limited liability company,
and in which AIL is qualified to do business.
(e) OWNERSHIP INTERESTS. Except for its wholly owned subsidiary
AIL, the Company has no subsidiaries or any equity securities of, investment in
or loans or advances to any business enterprise or person or any agreements or
commitments for such (other than trade terms and similar arrangements extended
to customers in the ordinary course of business), and is not subject to any
arrangement that should be treated as a partnership for federal income tax
purposes.
(f) RECORDS. The record books of the Company and AIL are complete,
accurate and up to date in all material respects with all necessary signatures
and set forth, where legally required or as required under the Operating
Agreement, all meetings held and actions taken by the managers and members of
the Company and directors and shareholders of AIL, respectively, and all
transactions involving ownership interests in the Company and AIL, respectively.
(g) ABSENCE OF VIOLATIONS OR CONFLICTS. Except as disclosed in
SCHEDULE 2.1(g), the consummation of the sale of the Contico Interest does not
and will not with or without the passage of time or giving of notice or both:
(i) constitute a violation of, be in conflict with, constitute
a default or require any payment under, permit a termination of, require any
consent or authorization under, or result in the creation or imposition of any
material lien, encumbrance or other adverse claim or interest upon the Contico
Interest or any assets or properties of the Company or AIL under (A) any
contract, agreement, commitment, undertaking or understanding to which the
Company or AIL is a party or to which it or any of its assets or properties are
subject or bound, (B) any judgment, decree or order of any governmental
authority to which the Company or AIL or any of their respective assets or
properties are subject or bound, (C) any applicable law, or (D) any governing or
applicable agreements, instruments or other documents (including organizational
documents); or
(ii) create, or cause the acceleration of the maturity of, any
material debt, obligation or liability of the Company or AIL.
(h) NO GOVERNMENTAL CONSENTS REQUIRED. Except as set forth in
SCHEDULE 2.1(h), no consent, approval, order or authorization of, or
registration, declaration or filing with, any
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governmental authority on the part of Contico, the Company or AIL is required in
connection with the consummation of the sale of the Contico Interest.
2.2 FINANCIAL MATTERS.
(a) INTERIM FINANCIAL STATEMENTS. Attached as SCHEDULE 2.2(a) are:
(i) copies of the audited consolidated balance sheet of the Company as of
August 31, 1998, and related audited statements of income and cash flow for the
eight month period then ended (all of which, including the notes thereto, are
collectively referred to in this Agreement as the "Interim Financial
Statements;" with the consolidated balance sheet relating to August 31, 1998
referred to separately as the "Interim Balance Sheet"). The Interim Financial
Statements are complete and accurate in all material respects, have been
prepared in accordance with GAAP applied on a consistent basis, and fairly
present the consolidated financial position of the Company as of their
respective dates and the consolidated results of operations of the Company for
the respective periods then ended.
(b) ABSENCE OF UNDISCLOSED LIABILITIES. Except (i) as and to the
extent expressly reflected or specifically reserved against in the Interim
Balance Sheet, and (ii) for accrued expenses, trade payables and other
liabilities incurred in the ordinary course of business since the date of the
Interim Balance Sheet, to Contico's knowledge the Company has no liability of a
type required to be set forth in a balance sheet prepared in accordance with
GAAP.
(c) CAPITAL LEASES. SCHEDULE 2.2(c) lists all lease agreements
regarding the leasing of assets to the Company or AIL which are recorded on the
Interim Financial Statements as capital leases.
(d) ABSENCE OF CERTAIN CHANGES. Except as set forth in SCHEDULE
2.2(d), since the date of the Interim Balance Sheet there has not been:
(i) any material adverse change in the assets, operations,
liabilities, earnings, business or condition (financial or otherwise) of the
Company;
(ii) any occurrence of physical damage, destruction or casualty
loss which has been materially adverse to the assets, operations, liabilities,
earnings, business or condition (financial or otherwise) of the Company;
(iii) any material increase in the compensation payable by the
Company or AIL to any director, officer, employee or agent other than routine
increases made in the ordinary course of business consistent with past practice,
or any bonus, incentive compensation, service award or other like benefit,
granted, made or accrued, contingently or otherwise, to or to the credit of any
of such director, officer, employee or agent, or any employee welfare, pension,
retirement or similar payment or arrangement made or agreed to by the Company or
AIL with respect to any such director, officer, employee or agent, other than
pursuant to the existing plans disclosed on SCHEDULE 2.8 or in the ordinary
course of business consistent with past practice;
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<PAGE> 6
(iv) any addition to, or modification of, any profit sharing,
bonus, deferred compensation, insurance, pension, retirement or other employee
benefit plan, arrangement or practice described on SCHEDULE 2.8, other than
accruals made for fiscal year 1998 in accordance with the normal practices of
the Company and AIL and the extension of coverage to employees who became
eligible after the date of the Interim Balance Sheet;
(v) any sale, assignment or transfer (including without
limitation any collateral assignment or the granting or permitting of any lien,
encumbrance or other claim) of any material asset, property or right of the
Company or AIL other than in the ordinary course of business (and the phrase
"ordinary course of business" includes monthly distributions by the Company to
its members of 45% of the Company's pretax income);
(vi) any amendment, modification, waiver or cancellation of any
material debt owed to, or material claim of, the Company or AIL, other than in
the ordinary course of business;
(vii) incurrence of any material obligation or liability
(whether absolute or contingent), other than current liabilities incurred in the
ordinary course of business and draws on existing lines of credit to fund
operating expenses in the ordinary course of business and in amounts consistent
with historical practice;
(viii) any material capital expenditure or commitment to make a
material capital expenditure by the Company or AIL (exclusive of expenditures
for repair or maintenance of equipment in the ordinary course of business);
(ix) any actual or, to Contico's knowledge, threatened
cancellation, termination or material amendment of any material contract,
agreement, license, permit or other instrument or right to which the Company or
AIL is a party or which it holds in connection with the conduct of its business;
(x) any contract or transaction outside of the ordinary course
of business or failure on the part of the Company or AIL to operate its business
in the ordinary course; or
(xi) any change in the identity of the members of the Company,
or any change in the Articles of Organization or Operating Agreement of the
Company or any organizational document of AIL.
(e) BUSINESS RECORDS AND SYSTEMS. Except as set forth in SCHEDULE
2.2(e), all business records and systems of the Company and AIL have been
maintained in the ordinary course of business, and are complete, accurate and up
to date in all material respects.
2.3 TAXES.
(a) DEFINITIONS. For purposes of this Agreement:
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(i) the term "Code" shall mean the Internal Revenue Code of
1986, as amended;
(ii) the term "Returns" shall mean, collectively, (A) all
reports, declarations, estimates, returns, information statements, and similar
documents relating to, or required to be filed in respect of, any Taxes; and (B)
any statements, returns, reports, or similar documents required to be filed
pursuant to Part III of Subchapter A of Chapter 61 of the Code or pursuant to
any similar income, excise, or other tax provision of any federal, territorial,
state, local, or foreign law; and the term "Return" means any one of the
foregoing Returns; and
(iii) the term "Taxes" shall mean (A) all net income, gross
income, gross receipts, sales, use, ad valorem, franchise, profits, license,
lease, service, service use, withholding, employment, payroll, excise,
severance, transfer, documentary, registration, stamp, occupation,
environmental, premium, property, windfall profits, customs, duties, and other
taxes, fees, assessments or charges of any kind whatever, together with any
interest, penalties and other additions with respect thereto, imposed by any
federal, territorial, state, local or foreign government; and (B) any penalties,
interest, or other additions to tax for the failure to collect, withhold, or pay
over any of the foregoing, or to accurately file any Return; and the term "Tax"
shall mean any one of the foregoing Taxes; provided, however, that when used
with reference to a specified person (for example and without limitation,
"Company's Taxes"), the terms "Taxes" and "Tax" shall include only those amounts
for which such person is, or could become, liable in whole or part (including,
without limitation, any obligation in connection with a duty to collect,
withhold, or pay over any Tax, any obligation to contribute to the payment of
any Taxes determined on a consolidated, combined, or unitary basis, any
liability as a transferee, or any liability as a result of any express or
implied obligation to indemnify or pay the Tax obligations of another person).
(b) RETURNS FILED AND TAXES PAID. Except as otherwise set forth in
SCHEDULE 2.3, (i) the Company has duly filed or caused to be filed, on or before
the due date thereof (taking into account timely filed extensions), with the
appropriate taxing authorities, all Returns that it is required to file; (ii)
each such Return (including any amendment thereto) is true, correct, and
complete in all material respects; and (iii) all Taxes of the Company shown to
be due on each such Return (or amendment) or subsequent assessment with regard
thereto, have been timely paid or are being contested in good faith by
appropriate proceedings. Notwithstanding the foregoing, however, Contico makes
no representation or warranty with respect to any Taxes (A) arising as a result
of any changes in Tax laws, regulations or interpretations after the date of the
Interim Balance Sheet, or (B) in respect of deferred taxation attributable to
changes in tax rates which are effective after such date.
(c) TAX LIABILITIES. The Company has collected or withheld all
Taxes that it is required to collect or withhold. The Company is not a party to
or bound by any tax indemnity, tax sharing or tax allocation agreement, or any
other contractual obligation to pay the Tax obligations of another person.
(d) TAX ATTRIBUTES AND ELECTIONS. The Company has been properly
classified as a partnership for all Federal and state income Tax purposes for
all periods since its inception, and
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<PAGE> 8
the Company has never realized any income subject to Tax at the Company level by
a state or other jurisdiction that imposes a Tax on the gross receipts, income,
net income or taxable income of a limited liability company. The Company has
never been a member of an affiliated group of corporations within the meaning of
Section 1504 of the Code. The Company has never been a member of any combined,
consolidated, or unitary group for state income or franchise tax purposes and
does not file (and is not required to file) combined, consolidated, or unitary
Returns for state income or franchise tax purposes.
2.4 PROPERTY.
(a) OWNERSHIP AND TITLE. SCHEDULE 2.4(a) lists all real property
and all material items of tangible personal property (except inventory) to which
the Company or AIL holds legal or equitable title (collectively, "Properties"),
together with copies of the most recent survey and title information in the
Company's possession. Except as set forth on SCHEDULE 2.4(a): (i) the Company
and AIL each has good and marketable title to all of such Properties owned by it
as indicated on SCHEDULE 2.4(a); and (ii) none of such properties is subject to
any lien or encumbrance, except (A) liens for taxes not yet due and payable, (B)
liens securing indebtedness reflected on the Interim Balance Sheet, and (C)
liens imposed by law and incurred in the ordinary course of business for
obligations not yet due and payable to landlords, carriers, warehousemen,
laborers, materialmen and the like (none involving amounts exceeding $5,000, or
aggregating more than $25,000).
(b) LEASES. For purposes of this Agreement, "Lease" means any
written or oral lease, sublease or rental agreement (and any related contract,
agreement, commitment, arrangement, undertaking or understanding) and all
amendments, modifications and supplements thereof and waivers and consents
thereunder pursuant to which the Company or AIL leases, subleases or rents any
real or personal property, either as lessor, lessee, landlord or tenant.
SCHEDULE 2.4(b) lists all Leases, except those which (i) can be canceled by the
Company or AIL upon 30 or fewer days' notice without penalty or the acceleration
of rentals, or (ii) involve an annual rental of $10,000 or less. SCHEDULE 2.4(b)
describes all material oral Leases required to be disclosed in SCHEDULE 2.4(b),
and true and complete copies of all written Leases required to be disclosed have
been delivered to Buyer.
(c) CONDITION. Except as set forth in SCHEDULE 2.4(c): (i) to
Contico's knowledge the Properties and the properties subject to a Lease are
free from defects which would materially impair their use as presently
contemplated; (ii) the Properties and all of the properties subject to a Lease
are each structurally or mechanically (as applicable) sound and in good repair
and operating condition, normal wear and tear excepted; and (iii) the Company
and AIL are in compliance with all applicable building, zoning, land use or
other similar statutes, laws, ordinances, regulations, permits, health and
safety codes or other requirements in respect of any of the Properties or any of
the properties subject to a Lease.
(d) ACCOUNTS RECEIVABLE. The trade receivables, notes receivable
and other accounts receivable (collectively, "Receivables") as reflected on the
Interim Balance Sheet and the Receivables arising since the date of the Interim
Balance Sheet were and are valid and existing and
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<PAGE> 9
represent monies due for goods sold and delivered or services rendered in the
ordinary course of business, except as otherwise disclosed in SCHEDULE 2.4(d).
(e) INVENTORIES. The inventories reflected on the Interim Balance
Sheet, and those reflected on the books of the Company and AIL, have been
determined and valued in accordance with GAAP applied on a consistent basis. The
inventories of the Company and AIL carried for value on the books of the Company
and AIL, taken as a whole, consist of items which are of a quality and quantity
presently usable or saleable in the ordinary course of the Company's and AIL's
business consistent with past practice.
2.5 INTELLECTUAL PROPERTY.
(a) RIGHTS, LICENSES, PROCEEDINGS. All patents, trademarks, service
marks, trade names or copyrights owned or used by the Company or AIL and all
applications or registrations therefor; and all contracts, agreements,
commitments and understandings relating to the use or license of technology,
know-how or processes by the Company or AIL (the "Intellectual Property
Licenses"); are listed in SCHEDULE 2.5. Except as disclosed in SCHEDULE 2.5: (a)
each of the Company and AIL owns, or has the valid right to use, under
Intellectual Property Licenses or otherwise, patents, trademarks, service marks,
trade names, trade secrets, designs, know-how, processes, formulae, engineering
drawings, sales data, mailing lists, catalogues, brochures, artwork, photographs
and advertising materials (collectively, "Intellectual Property") used in or
necessary for the ordinary conduct of its business; (b) neither the Company nor
AIL has assigned any such Intellectual Property to any other person; (c) the
consummation of the transactions contemplated by this Agreement will not alter
or impair any such rights; and (d) to the knowledge of Contico, no Intellectual
Property owned, licensed or used by the Company or AIL, or Intellectual Property
License of the Company or AIL, is the subject of a lawsuit or any other
proceeding, nor has any party challenged or threatened to challenge the
Company's or AIL's right to use such Intellectual Property or Intellectual
Property License or application for any of the foregoing. The Company and AIL
hold valid licenses for all computer software used in their respective
businesses, and to Contico's knowledge the Company and AIL are in compliance
with each such license.
(b) YEAR 2000 ISSUES. Upon the completion of certain remedial
actions being undertaken by the personnel of the Company and certain independent
consultants, the cost of which will not be material to the business or profits
of the Company and AIL, the operations of the Company and AIL from and after
January 1, 2000 shall not be different than the operations immediately prior to
such date (excluding changes effected by Buyer or the Company or AIL after the
Closing), and the financial and operating systems and the proprietary software
of the Company and AIL will be able to process, store, record and present data
containing dates in the year 2000 and thereafter, in the same manner as data
containing dates prior to the year 2000.
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<PAGE> 10
2.6 LOANS AND MATERIAL CONTRACTS.
(a) INDEBTEDNESS. SCHEDULE 2.6(a) sets forth (i) a list or
description of all instruments or other documents ("Debt Instruments")
evidencing any direct or indirect indebtedness of the Company or AIL to any
person for borrowed money, as well as indebtedness by way of capital leases,
lease-purchase arrangements, guarantees, and letters of credit, in an amount
exceeding $25,000, (ii) a list or description of all accelerations or costs
assessable by third parties against the Company due to the sale of the Contico
Interest, and (iii) a list of all loans of money to managers, employees or
members of the Company or AIL (but excluding travel and similar advances to
employees in the ordinary course of business).
(b) MATERIAL CONTRACTS. SCHEDULE 2.6(b) lists each contract,
agreement, commitment, arrangement, undertaking or understanding of the type
listed below (except where the same does not call for the payment or receipt of
cash or other property or services having a value in excess of $25,000 or is
terminable without liability to the Company on 30 days notice or less) to which
the Company is a party or bound or to which it or its property is subject,
whether written or oral ("Material Contract," but such list and the term
"Material Contract" does not include Leases, Intellectual Property Licenses,
Debt Instruments, Insurance Policies and employee-related matters disclosed
elsewhere in this Agreement):
(i) for the purchase or rental of materials, inventory and
supplies by the Company entered into in the ordinary course of business which
individually exceed $25,000 and which are not reasonably expected to be fully
performed within 45 days of their respective dates;
(ii) for the purchase of services by the Company entered into
in the ordinary course of business which are not reasonably expected to be fully
performed within 45 days of their respective dates;
(iii) that were entered into in the ordinary course of business
and involve, or are reasonably expected to involve, an amount in excess of
$25,000 and which are not reasonably expected to be fully performed within 45
days of their respective dates;
(iv) for matters not in the ordinary course of the Company's
business;
(v) making the Company liable, by guaranty, suretyship
agreement, indemnification agreement, contribution agreement or otherwise, upon
or with respect to, or obligating it in any way to provide funds in respect of,
or obligating it to guarantee, serve as surety for or assume, any debt, dividend
or other liability or obligation of any person, corporation, association,
partnership or other entity (except endorsements made in the ordinary course of
business in connection with the deposit of items for collection);
(vi) granting a power of attorney;
(vii) relating to participation in a cooperative, partnership
or joint venture; and
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<PAGE> 11
(viii) restricting or limiting the right of the Company to
compete in any line of business.
SCHEDULE 2.6(b) also describes all oral Material Contracts required to be
disclosed in SCHEDULE 2.6(b), and true and complete copies of all written
Material Contracts (as amended) required to be disclosed in SCHEDULE 2.6(B) have
been delivered to Buyer.
(c) INSURANCE. All insurance policies now in force with respect to
the assets, operations and personnel of the Company (including comprehensive
general liability, comprehensive general casualty and extended coverage,
automobile, boiler and machinery, fire and lightning, and worker's compensation)
("Insurance Policies") are listed in SCHEDULE 2.6(c). Copies of such policies
have been delivered by the Company to Buyer.
2.7 EMPLOYMENT RELATIONSHIPS. SCHEDULE 2.7 contains a true and complete
list of all employees of the Company and AIL as of August 31, 1998, specifying
their titles (if any) and hourly wages or annual rate of compensation. Except as
disclosed pursuant to SCHEDULE 2.7 or SCHEDULE 2.8, the Company and AIL have no
obligations, oral or written, contingent or otherwise: (i) under any employment
contract, agreement, commitment, undertaking, understanding, plan, program,
policy or arrangement; (ii) under any bonus, incentive or deferred compensation
contract, agreement, commitment, undertaking, understanding, plan, program,
policy or arrangement (including one for severance or other payments conditioned
upon a change of control of Company); or (iii) under any pension,
profit-sharing, stock purchase or any other such plan, program or arrangement.
2.8 EMPLOYEE AND FRINGE BENEFIT PLANS.
(a) SCHEDULE OF PLANS. Except as set forth in SCHEDULE 2.8, the
Company does not maintain, is not required to contribute to and otherwise does
not participate in (and has not since its inception maintained, contributed to
or otherwise participated in) any employee pension benefit plan qualified under
Section 401 or 501 of the Code or any multi-employer plan (as such term is
defined in the Employee Retirement Income Security Act of 1974, as amended
("ERISA")). Except as set forth in SCHEDULE 2.8, the Company does not maintain,
is not required to contribute to and otherwise does not participate in (and has
not since its inception maintained, contributed to or otherwise participated in)
any employee pension benefit plan not qualified under Section 401 or 501 of the
Code, or any employee welfare benefit plan ("Welfare Plan") within the meaning
of ERISA (all of the foregoing described in this sentence being referred to
herein collectively as "Employee Plans" and individually as an "Employee Plan").
Except to the extent required by laws relating to the continuation of health
insurance, the Company and AIL are not obligated to provide medical benefits to
their respective retirees.
(b) SELF-INSURANCE. The Company does not self-insure any material
risk relating to its present or former employees.
(c) REPORTING AND DISCLOSURE. Summary plan descriptions and all
other reports, documents, statements and communications which are required to
have been filed, published or disseminated under ERISA or other federal law and
the rules and regulations promulgated by the United
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<PAGE> 12
States Department of Labor under ERISA and the Treasury Department under the
Code with respect to the Employee Plans have been filed, published or
disseminated by the Company on a timely basis.
(d) PROHIBITED TRANSACTIONS; TERMINATIONS; OTHER REPORTABLE EVENTS.
To Contico's knowledge, none of the Employee Plans, and no administrator or any
person or entity holding or controlling assets over which the Company has any
controlling interest, has engaged in any "prohibited transaction" (as such term
is defined in ERISA or the Code) which could subject any of the Employee Plans,
or any administrator thereof, or any person or entity holding or controlling
assets of any of the Employee Plans or any person or entity dealing with them to
any material tax, penalty or other cost or liability of any kind. Except as set
forth in SCHEDULE 2.8, no termination, whether partial or complete, has occurred
with respect to any Employee Plan disclosed in SCHEDULE 2.8.
(e) OTHER. The Company has complied in all material respects with
all of its obligations under each of the Employee Plans and with all provisions
of ERISA and any and all other laws, rules, regulations, releases and other
official pronouncements applicable to the Employee Plans. No written notice has
been received by the Company of any claim by any participant in the Employee
Plans of any violation of such laws, nor is Contico aware of any basis for such
a claim.
2.9 LABOR RELATIONS. Except as disclosed in SCHEDULE 2.9: (a) The
Company and AIL are in compliance with all federal, state, provincial, local and
other applicable law respecting employment and employment practices, terms and
conditions of employment and wages and hours; and (b) there is no unfair labor
practice, complaint, charge or other matter against or involving the Company or
AIL pending or, to Contico's knowledge, threatened before any governmental
authority. Neither the Company nor AIL are parties to nor otherwise bound by any
contract, agreement or collective bargaining agreement with any labor union or
organization. No employees of the Company or AIL are represented by any labor
union or similar organization. Neither the Company nor AIL has experienced any
general labor disputes or any work stoppage due to labor disagreements within
the past three years.
2.10 LITIGATION. Except as disclosed in SCHEDULE 2.10, neither the
Company nor AIL is (i) engaged in, a party to, subject to or, to Contico's
knowledge, threatened with (A) any material claim, legal or equitable action, or
other legal proceeding (whether as plaintiff, defendant or otherwise and
regardless of the forum or the nature of the opposing party) involving an amount
in controversy or a potential award or loss that can reasonably be expected to
exceed $50,000, or (B) any claim with respect to any product manufactured,
processed, sold or distributed by the Company (including without limitation
claims for personal injury or property damage, but excluding ordinary warranty
claims); or (ii) a party to or subject to any judgment, order or decree
applicable to the Company or AIL or its assets.
2.11 COMPLIANCE WITH LAWS. Except as set forth in SCHEDULE 2.11:
(a) CHARGES OR VIOLATIONS. The Company and AIL are not (and during
the preceding two years have not been) either charged with, in receipt of any
notice or warning of, or to Contico's knowledge under investigation with respect
to, any failure or alleged failure to comply in any material respect with any
applicable law.
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<PAGE> 13
(b) PERMITS. To the knowledge of Contico: (i) the Company and AIL
each has all occupancy certificates and other licenses, permits, certificates of
need and other certificates ("Permits") required in connection with its
ownership, possession, use, occupancy or operation of any of the Properties
owned, leased or used by it in the conduct of its business; (ii) all of the
Permits are in full force and effect; (iii) the Company and AIL each is (and has
been) in full compliance with the Permits; and (iv) none of the Permits will be
affected by, or require the consent of any party by reason of, the transactions
contemplated by this Agreement where such effect or failure to obtain such
consent would materially restrict or hamper the operation of any facility owned,
leased or used by the Company or AIL.
(c) ENVIRONMENTAL.
(i) Except as described in SCHEDULE 2.11(c), none of the
Company's or AIL's property are, or to Contico's knowledge have been, used as a
garbage or a refuse dump site, a waste storage or disposal facility, a waste
transfer station, a landfill or disposal site, with the exception in each case
for the ordinary and proper storage of trash commonly generated used or stored
in facilities of the type used by the Company and AIL.
(ii) Except as described in SCHEDULE 2.11(c), to Contico's
knowledge the Company's and AIL's property is not presently contaminated with
hazardous substance in amounts that would result in a federal or state
"superfund" lien under "Environmental Laws" (as defined below), or require
notification or remedial action pursuant to any Environmental Laws.
(iii) Except as described in SCHEDULE 2.11(c), with regard to
the Company's or AIL's property, there are no civil criminal or administrative
investigations, notices of violation, requests for information or "notice
letters" pending, or to Contico's knowledge, threatened or planned, and there
are no judgments, decrees, or orders applicable to such property arising out of
Environmental Laws.
(iv) Except as shown in SCHEDULE 2.11(c), to Contico's
knowledge the Company's and AIL's property, and the operations of the business,
have been and presently are, conducted in compliance with all applicable
Environmental Laws.
(v) To Contico's knowledge, no underground tanks are now or
have been located at any facility now or previously owned or operated by the
Company or AIL, and no toxic or hazardous substances have been generated,
transported, treated, stored, disposed of on or from or otherwise deposited in
or on or allowed to emanate from any such facility by the Company or AIL
(irrespective to whether such substances remain at the facility or were
transferred to or otherwise disposed of off-site), including the surface waters
and subsurface waters thereof, in violation of any federal, state or local
environmental statues, ordinances, regulations or guidelines.
(vi) "Environmental Laws" means the Resource Conservation and
Recovery Act, the Comprehensive Environmental Response Compensation and
Liability Act, the Superfund Amendments and Reauthorization Act, the Toxic
Substances Control Act, the Safe Drinking Water Act, the Federal Water Pollution
Control Act (Clean Water Act), the Clean Air Act, the Powerplant and
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<PAGE> 14
Industrial Fuel Use Act of 1978, the National Environmental Impact Statement,
and antipollution, waste control and disposal and environmental "cleanup"
provisions of similar statutes of any federal, state, local or provincial
governmental authority, and all regulations and standards enacted pursuant
thereto and all permits and authorizations issued in connection therewith.
2.12 BANK ACCOUNTS. SCHEDULE 2.12 lists all bank, money market, savings
and similar accounts and safe deposit boxes of the Company and AIL, specifying
the account numbers and the authorized signatories or persons having access to
them.
2.13 TRANSACTIONS WITH AFFILIATES. Except as disclosed in SCHEDULE
2.13, neither Contico, Allibert nor any manager of the Company, or any
"affiliate" or "associate" (as such terms are defined in the rules and
regulations of the Securities and Exchange Commission under the Securities Act
of 1933, as amended) of any of the foregoing:
(a) has been a party to any lease, sublease, contract, agreement,
commitment, understanding or other arrangement of any kind whatsoever, involving
any such person and the Company which is not disclosed in SCHEDULE 2.13, or
(b) owns directly or indirectly, in whole or in part, any property
that the Company uses or otherwise has rights in respect of, or
(c) has any cause of action or other claim whatsoever against, or
owes any amount to, the Company other than (i) for compensation (including
fringe benefits) to officers, employees and directors disclosed pursuant to
Section 2.7 and for reimbursement of ordinary and necessary expenses incurred in
connection with employment by the Company, (ii) for rights under the employee
benefit plans disclosed pursuant to Section 2.8, and (iii) as otherwise
disclosed pursuant to this Agreement.
2.14 COMMISSIONS. Except for Societe Generale and/or SG Cowen
Securities Corporation, whose fee will be borne by Contico and Allibert no
person, firm or corporation is entitled to any commission or broker's or
finder's fee in connection with the sale of the Contico Interest contemplated by
this Agreement by reason of any act or omission of the Company or Contico.
2.15 ILLEGAL PAYMENTS. No part of the Company's business is dependent
upon, or results from any payments, direct or indirect, in the nature of bribes,
kick-backs, or similar payments to any government or agency thereof or to any
other person, or in the nature of contributions to any domestic or foreign
political party or candidate, and no such illegal payments have been made.
2.16 CUSTOMERS. SCHEDULE 2.16 lists all of the Company's and AIL's
major customers for the past three years (being each party or company
representing three percent or more of the gross sales of the Company in 1996,
1997 and the eight month period ending August 31, 1998), and sets forth the
gross sales to each such customer during those periods. In the six (6) months
preceding the date of this Agreement, management of the Company has not brought
to Contico's attention that any of the customers listed for the period ending
August 31,1998 has indicated an intention to cease doing business with the
Company or AIL.
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ARTICLE 3
---------
Representations and Warranties of Contico
-----------------------------------------
Contico hereby represents and warrants to the Buyer that:
3.1 STATUS OF CONTICO.
(a) EXISTENCE. Contico is a corporation duly organized, entitled to
conduct business and validly existing in good standing under the laws of
Missouri.
(b) POWER. Contico has the power to own and lease its properties,
to conduct its business as currently conducted, and to perform all of its
obligations under this Agreement.
(c) AUTHORIZATION
(i) Contico has the right, power and authority to enter into
this Agreement and to consummate the sale of the Contico Interest contemplated
by, and otherwise to comply with and perform its obligations under, this
Agreement;
(ii) The execution and delivery by Contico of this Agreement,
and the consummation by Contico of the sale of the Contico Interest contemplated
by, and other compliance with and performance of its obligations under, this
Agreement have been duly authorized by all necessary corporate action on the
part of Contico in compliance with governing or applicable agreements,
instruments or other documents (including its articles of incorporation and
bylaws (as amended)) and applicable law; and
(iii) This Agreement constitutes the valid and binding
agreement of Contico that is enforceable against Contico in accordance with its
terms.
(d) ABSENCE OF VIOLATIONS OR CONFLICTS. The execution and delivery
of this Agreement by Contico and the consummation by Contico of the transactions
contemplated by, or other compliance with or performance under, this Agreement,
do not and will not with the passage of time or giving of notice or both:
(i) constitute a violation of, be in conflict with, constitute
a default or require any payment under, permit a termination of, require any
consent or authorization under, or result in the creation or imposition of any
material lien, encumbrance or other adverse claim or interest upon any
properties of Contico under (A) any contract, agreement, commitment, undertaking
or understanding to which Contico is a party or to which it or any of its assets
or properties are subject or bound, (B) any judgment, decree or order of any
governmental authority to which Contico or any of its properties are subject or
bound, (C) any applicable law, or (D) any governing or applicable agreements,
instruments or other documents (including its articles of incorporation and
bylaws (as amended)); or
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<PAGE> 16
(ii) create, or cause the acceleration of the maturity of, any
debt, obligation or liability of Contico.
(e) NO GOVERNMENTAL CONSENTS REQUIRED. Except as noted in Section
6.6, no consent, approval, order or authorization of, or registration,
declaration or filing with, any governmental authority on the part of Contico is
required in connection with its execution or delivery of this Agreement or the
consummation of the sale of the Contico Interest by Contico.
3.2 COMMISSIONS. Except for Societe Generale and/or SG Cowen Securities
Corporation, whose fee will be borne by Contico and Allibert, no person, firm or
corporation is entitled to any commission or broker's or finder's fee in
connection with the purchase of the Contico Interest contemplated by this
Agreement by reason of any act or omission of Contico.
3.3 OWNERSHIP. Contico owns the Contico Interest, representing fifty
percent (50%) of the outstanding equity interests in the Company, free and clear
of all liens, claims, security interest, encumbrances and restrictions on
transfer of any nature whatsoever, but subject to the terms of the Operating
Agreement.
ARTICLE 4
---------
Representations and Warranties of Buyer
---------------------------------------
Buyer hereby represents and warrants to Contico as follows:
4.1 STATUS OF BUYER.
(a) EXISTENCE. Buyer is a corporation duly organized, entitled to
conduct business and validly existing in good standing under the laws of Ohio.
(b) POWER. Buyer has the power to own and lease its properties, to
conduct its business as currently conducted, and to perform all of its
obligations under this Agreement.
(c) AUTHORIZATION
(i) Buyer has the right, power and authority to enter into this
Agreement and to consummate the purchase of the Contico Interest contemplated
by, and otherwise to comply with and perform its obligations under, this
Agreement;
(ii) The execution and delivery by Buyer of this Agreement, and
the consummation by Buyer of the purchase of the Contico Interest contemplated
by, and other compliance with and performance of its obligations under, this
Agreement have been duly authorized by all necessary corporate action on the
part of Buyer in compliance with governing or applicable agreements, instruments
or other documents (including its certificate of incorporation and bylaws (as
amended)) and applicable law; and
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<PAGE> 17
(iii) This Agreement constitutes the valid and binding
agreement of Buyer that is enforceable against Buyer in accordance with its
terms.
(d) ABSENCE OF VIOLATIONS OR CONFLICTS. The execution and delivery
of this Agreement by Buyer and the consummation by Buyer of the transactions
contemplated by, or other compliance with or performance under, this Agreement,
do not and will not with the passage of time or giving of notice or both:
(i) constitute a violation of, be in conflict with, constitute
a default or require any payment under, permit a termination of, require any
consent or authorization under, or result in the creation or imposition of any
material lien, encumbrance or other adverse claim or interest upon any
properties of Buyer under (A) any contract, agreement, commitment, undertaking
or understanding to which Buyer is a party or to which it or any of its assets
or properties are subject or bound, (B) any judgment, decree or order of any
governmental authority to which Buyer or any of its properties are subject or
bound, (C) any applicable law, or (D) any governing or applicable agreements,
instruments or other documents (including its articles of incorporation and
bylaws (as amended)); or
(ii) create, or cause the acceleration of the maturity of, any
debt, obligation or liability of Buyer.
(e) NO GOVERNMENTAL CONSENTS REQUIRED. Except as noted in Section
7.3 and for a notice of nonreviewable acquisition of AIL pursuant to the
Investment Canada Act, no consent, approval, order or authorization of, or
registration, declaration or filing with, any governmental authority on the part
of Buyer is required in connection with its execution or delivery of this
Agreement or the consummation of the purchase of the Contico Interest by Buyer.
4.2 COMMISSIONS. No person, firm or corporation is entitled to any
commission or broker's or finder's fee in connection with the purchase of the
Contico Interest contemplated by this Agreement by reason of any act or omission
of Buyer.
ARTICLE 5
---------
Closing and Closing Date
------------------------
The pre-closing and closing (collectively, "Closing") of the sale of
the Contico Interest contemplated by this Agreement shall take place at the
office of Thompson Coburn commencing at 10:00 a.m. local time on January 5, 1999
(the "Closing Date"), or on a business day subsequent thereto, not later than
February 1, 1999, agreed to by the parties following satisfaction or waiver of
all conditions to Closing set forth herein.
ARTICLE 6
---------
Covenants of Contico
--------------------
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<PAGE> 18
6.1 CONDUCT OF BUSINESS. From the date hereof to the Closing Date,
except for transactions which are approved in writing by the Buyer in its
discretion, and subject to Section 6.11, Contico shall cause the Company and AIL
to refrain from:
(a) Subjecting any of the Company's or AIL's material assets to any
lien, encumbrance or other claim of any kind, exclusive of liens permitted by
this Agreement;
(b) Except for sales of inventory in the ordinary course of
business, selling, assigning, transferring, leasing, licensing or otherwise
disposing of any material portion of the Company's or AIL's assets and
properties;
(c) Modifying, amending, altering or terminating (whether by
written or oral agreement, or any manner of action or inaction) any of the
Leases, Intellectual Property Rights, Contract Rights or Insurance Policies, or
entering into any such arrangement which is outside of the ordinary course of
business or which involves the payment or receipt by the Company or AIL of an
amount in excess of $100,000; and/or
(d) Taking or permitting any other action that, if taken or
permitted immediately prior to the execution of this Agreement, would constitute
an exception to the representations and warranties in Section 2.2(d) hereof.
6.2 AFFIRMATIVE COVENANTS. From the date hereof to the Closing Date,
subject to Section 6.11, Contico shall cause each of the Company and AIL to:
(a) Maintain property and liability insurance with respect to its
assets and properties in amounts and with coverage at least as great as the
amounts and coverage in effect on the date of this Agreement;
(b) Maintain, in a manner consistent with past practice, the
respective assets and properties of the Company and AIL in good repair, order
and condition, reasonable wear and tear excepted, and use its best efforts to
preserve its possession and control of all of such properties;
(c) Maintain the books, accounts and records of the Company and AIL
in a manner consistent with past practice and with sound business practices;
(d) Allow, at all reasonable times, the Buyer's employees,
attorneys, auditors, accountants and other authorized representatives, free and
full access to the facilities, plants, properties, personnel, books, records,
documents and correspondence of the Company and AIL, in order that the Buyer may
have full opportunity to make such investigation as it may desire of the
business of the Company and AIL and the personnel employed in such businesses;
(e) Comply with all applicable law relating to the conduct of its
business, and conduct its business in such a manner so that on the Closing Date
the representations and warranties
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<PAGE> 19
contained in this Agreement shall be true as though such representations and
warranties were made on and as of such date, except for changes permitted or
contemplated by the terms of this Agreement;
(f) Provide the Buyer with (i) prompt written notice of any
material adverse change in the assets, operations, liabilities (whether
contingent or otherwise), earnings, prospects, business or condition (financial
or otherwise) of the Company or AIL, and (ii) monthly financial statements of
the Company and AIL; and
(g) Operate its business in the ordinary course so as to preserve
its business organization intact, including the services of its present officers
and the goodwill of its suppliers, customers and others having business
relations with such Seller.
6.3 CONSENTS OF THIRD PARTIES. Contico shall support and cooperate
with, and offer all reasonable assistance to, the Buyer in negotiating with any
third party under any of the Contract Rights, in order to obtain any consent or
approval that may be required in connection with the sale of the Contico
Interest.
6.4 DUE DILIGENCE. Contico hereby authorizes the Buyer to continue its
due diligence examination of the assets, liabilities, books and records
(including without limitation personnel records and employment histories) of the
Company and AIL for purposes of confirming the representations and warranties of
Contico in this Agreement. Contico shall cause the Company and AIL each (i) to
make available and assemble at all reasonable times during normal business hours
all records, Leases, Debt Instruments, Contract Rights, Insurance Policies,
Intellectual Property Rights and other documents and data related to the
Company's assets and liabilities, (ii) to allow the Buyer and its authorized
representatives (including without limitation its legal, actuarial, accounting
and other professional advisors and its environmental consultants) to make
physical inspections of the Company's and AIL's facilities and, in Buyer's
discretion and at Buyer's expense, to initiate and implement a Phase I
environmental assessment of such facilities by an environmental consulting firm
reasonably satisfactory to Contico, and if recommended by such consultant, a
Phase II investigation (collectively, the "Environmental Assessment"), and (iii)
to reasonably cooperate with the Buyer's other due diligence requirements.
Contico consents to the examination by Buyer's auditors of all work papers and
other records of the independent public accountants of the Company and AIL, and
Contico shall cooperate with the Buyer to obtain such access and related
information from the Company's and AIL's independent public accountants.
6.5 CONSENTS AND CLOSING CONDITIONS. Contico shall use all commercially
reasonable efforts (a) to obtain such consents from third parties and to take
other actions as may be appropriate in order to fulfill the closing conditions
contained herein which are reasonably within Contico's control, and (b) to cause
the representations and warranties in Articles 2 and 3 to be true and correct on
and as of the Closing Date.
6.6 HART-SCOTT-RODINO COMPLIANCE. Within ten (10) business days after
the date of this Agreement, Contico shall file, or cause the Company to file, an
appropriate notification and report form with the Federal Trade Commission and
the Antitrust Division of the Department of Justice (collectively,
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<PAGE> 20
the "Antitrust Authorities") pursuant to The Hart-Scott-Rodino Antitrust
Improvements Act of 1976, as amended ("HSR Act"), and shall request early
termination of the waiting period under the HSR Act. Contico shall furnish to
the Buyer such information as the Buyer shall require to complete its
notification, shall promptly notify the Buyer of any formal or informal request
for additional information received by Contico or the Company, from the
Antitrust Authorities, and shall promptly comply with all such requests.
6.7 NEGOTIATIONS WITH OTHERS. During the period from the date of this
Agreement to the Closing Date, or until such date as this Agreement may be
terminated in accordance with Article 13, neither Contico nor any of its
directors, officers, counsel, accountants, auditors or other agents retained by
or acting on behalf of Contico shall, directly or indirectly, solicit or
encourage, or enter into any agreement with, or hold discussions with, any
corporation, partnership, person or other entity or group (other than Buyer or
an affiliate of Buyer) seeking to make a proposal regarding a sale or purchase
of the Contico Interest in the Company or AIL or a merger, consolidation, sale
or purchase of assets or other similar transaction involving the Company or AIL.
6.8 COMPETITION. At the Closing, Contico shall execute and deliver to
Buyer a written agreement not to compete with the Buyer in the form attached as
EXHIBIT C ("Noncompetition Agreement").
6.9 INTEGRATION OF OPERATIONS. During the period from the date of this
Agreement to the Closing Date, Contico shall cause the Company to consult and
cooperate with Buyer to prepare for and facilitate the integration of the
Company's and AIL's operations with the Buyer's operations following the Closing
Date, including, without limitation, preparation for the integration of such
financial and accounting, and management information, systems and operations
(including, without limitation, the preparation for the necessary installation
of all of Buyer's hardware and software systems), employee compensation and
benefit matters, and employee training, provided that all such integration prior
to the Closing Date shall be subject to the approval of the Company.
6.10 ENVIRONMENTAL REMEDIATION. Contico and Allibert shall pay one-half
the cost of any Phase II investigation and testing recommended by the consulting
firm described in Section 6.4, with Buyer to pay the remaining one half. If the
Environmental Assessment identifies any environmental condition affecting the
Company's property, facility or business that requires remediation in order to
comply with applicable law, then Contico and Allibert shall cause such
remediation to be completed at their expense to the extent such remediation can
be completed for an estimated cost of less than One Million Dollars
($1,000,000), and attached to this Agreement as SCHEDULE 6.10 is a Contribution
Agreement between Contico and Allibert to such effect. If such estimated cost is
One Million Dollars ($1,000,000) or more, then Contico shall have the right to
terminate this Agreement in its sole discretion without effecting any
remediation; provided that Buyer may notify Contico in writing that it elects to
close in accordance with this Agreement and to accept the property, facility and
business of the Company in its current condition, in which case this Agreement
shall continue in force and the Contico Interest Purchase Price and Closing
Payment shall be reduced by One Million Dollars ($1,000,000).
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<PAGE> 21
6.11 COVENANTS CONCERNING COMPANY. Notwithstanding the foregoing
provisions of this Article 6, it is understood and acknowledged by the parties
that Contico, as the owner of a one-half interest in the Company, does not own a
controlling interest in the Company and AIL, and that control is shared with
Allibert. Contico shall not be deemed to have breached violated any provision of
this Article 6 by reason of any action or omission of Allibert with respect to
the Company or AIL that results in the nonperformance of any of the foregoing
covenants, as long as Contico did not participate in such action or omission.
6.12 AMENDMENT OF OPERATING AGREEMENT. Notwithstanding the foregoing
provisions of this Article 6, it is understood that Allibert and Contico may
amend the Operating Agreement of the Company to the extent appropriate (a) to
eliminate those provisions that are no longer applicable to the Company or its
members, or that have been fully performed, or that impose duties on Allibert or
Contico that are personal to them or that cannot reasonably be performed by a
transferee of their interests, (b) that conflict with the terms of this
Agreement or any related agreement (including but not limited to the
Noncompetition Agreement), (c) to amend the technology license between Allibert
Equipement S.A. and the Company to provide that no obligation to provide
prospective technology or technical assistance on the part of Allibert
Equipement S.A. shall be the subject of such license, (d) to preserve the
existence of the Company following any sale by Contico and Allibert to the
Buyer, and (e) to make any other changes that the Allibert and Contico deem
appropriate and that are not inconsistent with the sale of the Contico Interest.
Such amendments shall be subject to the approval of the Buyer, which shall not
be unreasonably withheld.
6.13 CONTRIBUTION. As of or prior to the Closing, Contico shall assign
to the Company, for no additional consideration, all rights of Contico with
respect to the collapsible bin technology that is presently licensed from
Contico to the Company, pursuant to a written instrument of assignment
reasonably satisfactory to Buyer.
6.14 NET WORTH. Contico hereby covenants to Buyer that, at all times
during the eighteen month period commencing on the Closing Date, and thereafter
for so long as any indemnification claims asserted against Contico in accordance
with this Agreement remain unresolved, Contico shall maintain a net worth of not
less than Twenty Million Dollars ($20,000,000). Contico shall deliver to the
Buyer in confidence and upon request, but not more frequently than quarterly,
such financial statements or other information as the Buyer shall reasonably
request to confirm Contico's compliance with this Section.
ARTICLE 7
---------
Covenants of the Buyer
----------------------
7.1 CONSENTS AND CLOSING CONDITIONS. The Buyer shall use all
commercially reasonable efforts (a) to obtain such consents from third parties
and to take other actions as may be appropriate in order to fulfill the closing
conditions contained herein which are reasonably within its control, and (b) to
cause the representations and warranties of the Buyer in Article 4 to be true
and correct on and as of the Closing Date.
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<PAGE> 22
7.2 CONFIDENTIALITY OF INFORMATION. Prior to the Closing Date, and for
a period of two years from the date of this Agreement if the Closing Date does
not occur, the Buyer and its employees, agents, auditors, attorneys and other
authorized representatives shall not, without the Company's prior written
consent, communicate or divulge to any person or entity or use for their benefit
any information, other than information becoming public other than by the
Buyer's action and information developed independently by Buyer, concerning any
confidential business information possessed, owned or used by the Company that
may be communicated to, acquired by or learned by the Buyer pursuant to this
Agreement or the Buyer's investigations contemplated hereby.
7.3 HART-SCOTT-RODINO COMPLIANCE. Within ten (10) business days after
the date of this Agreement, the Buyer shall file or cause its ultimate parent
entity to file an appropriate notification and report form with the Antitrust
Authorities pursuant to the HSR Act, and shall request early termination of the
waiting period under the HSR Act. The Buyer shall furnish to Contico such
information as it shall require to complete the notification required of
Contico, shall promptly notify Contico of any formal or informal request for
additional information received by the Buyer or its ultimate parent entity from
the Antitrust Authorities, and shall promptly comply with all such requests.
7.4 NAMES. Within ninety (90) days after the Closing Date, the Buyer
shall cause the Company and AIL (a) to change their respective names to remove
the Contico portions of their names, and (b) to cease all manufacture of
inventory bearing such name or related marks. As promptly thereafter as
reasonable, and in any event within 12 months after the Closing Date, the Buyer
shall cause the Company and AIL to remove or cover all references to the Contico
name and related marks on all Company and AIL property (except unsold inventory
manufactured by the Company before the 90th day after the Closing Date).
Effective as of the Closing, Contico hereby grants to the Company a nonexclusive
limited license to its name and related marks historically used by the Company,
for the limited purposes set forth in this Section 7.4.
7.5 INDEBTEDNESS OF COMPANY. At the time of the Closing, the Buyer
either (a) shall assume, guarantee or accept all then existing indebtedness of
the Company and AIL under agreements and instruments listed on SCHEDULE 2.6(a)
on terms satisfactory to Contico, Allibert and the respective lenders, or (b) at
Buyer's expense shall cause all such indebtedness to be paid in full on the date
of the Closing.
ARTICLE 8
---------
Tax Matters
-----------
8.1 PAYMENT OF TAXES. Contico shall pay in a timely fashion, before the
same shall become delinquent and before penalties accrue thereon, all Taxes
(including any Taxes incurred in connection with the transactions contemplated
by this Agreement, if and to the extent Taxes are the responsibility of Contico)
(a) shown (or required to be shown) on any Return (or amendment thereto) filed
(or required to be filed) by Contico before, on or after the Closing Date, or
(b) that become due from or payable by Contico before, on or after the Closing
Date.
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8.2 COOPERATION AND RECORDS RETENTION. From time to time after the
Closing, Contico and the Buyer shall permit reasonable access, and shall cause
their respective accountants and other representatives to permit reasonable
access to each other, to the information that they or their accountants or other
representatives have within their control and that may be reasonably necessary
in connection with the preparation of any Return or the examination by any
taxing authority or other administrative or judicial proceeding relating to any
Return. Any party in possession of such information may require that a
commercially reasonable confidentiality undertaking be signed by the party
requesting access to such information under this Section. Each of Contico and
the Buyer shall retain or cause to be retained, until the applicable statutes of
limitations (including any extensions) have expired, copies of all Returns for
all tax periods beginning before the Closing Date, together with supporting work
schedules and other records or information that may be relevant to such Returns.
8.3 TAX ELECTIONS. No new elections with respect to Taxes, or any
changes in current elections with respect to Taxes, affecting any of the assets
shall be made by Contico or the Company after the date of this Agreement without
the prior written consent of the Buyer.
ARTICLE 9
---------
Buyer's Conditions to Closing
-----------------------------
The obligation of the Buyer to purchase the Contico Interest shall be
subject to the fulfillment of each of the following conditions:
9.1 CONTINUED TRUTH OF WARRANTIES. The representations and warranties
of Contico in Articles 2 and 3 hereof shall be true and correct in all material
respects on the Closing Date as if made on such date, except for changes
contemplated or permitted by this Agreement; provided, however, that this
condition shall be deemed satisfied if Contico agrees to indemnify the Buyer and
Company against all losses that may be suffered as a result of any materially
incorrect representation or warranty.
9.2 PERFORMANCE OF COVENANTS. Contico shall have performed all
covenants and obligations and complied with all conditions required by this
Agreement or to be performed or complied with by it on or prior to the Closing
Date.
9.3 HSR ACT. All applicable waiting periods under the HSR Act shall
have expired or been terminated.
9.4 ABSENCE OF LITIGATION. No suit, claim, action, proceeding or
governmental investigation shall have been commenced by a governmental authority
or other third party against any of the parties to this Agreement which
challenges the validity, legality or enforceability of this Agreement or the
performance by the parties hereto of their respective obligations hereunder, or
which could reasonably be expected to have a material adverse effect on the
Company.
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<PAGE> 24
9.5 CERTIFICATE. Contico shall have furnished Buyer with a certificate
dated the Closing Date that, to the best of its knowledge and belief, the
conditions set forth in Sections 9.1 through 9.4 have been satisfied.
9.6 EXTRAORDINARY EVENTS. There shall not have occurred (a) any
impairment of a significant portion of the physical assets of the Company, (b)
any major labor dispute affecting the Company, (c) any significant impairment of
the operations of the Company and AIL taken as a whole, or (d) any judicial,
governmental or administrative injunction which has or which can reasonably be
expected to result in a reduction of production by the Company of more than 20%
for three consecutive months as compared to the same period in the prior year.
ARTICLE 10
----------
Contico's Conditions to Closing
-------------------------------
The obligation of Contico to sell the Contico Interest shall be subject
to the fulfillment of the following conditions:
10.1 CONTINUED TRUTH OF WARRANTIES. The representations and warranties
of the Buyer herein contained shall be true and correct in all material respects
on the Closing Date as if made on such date.
10.2 PERFORMANCE OF COVENANTS. The Buyer shall have performed all
covenants and obligations and complied with all conditions required by this
Agreement to be performed or complied with by it on or prior to the Closing
Date.
10.3 HRS ACT. All applicable waiting periods under the HSR Act shall
have expired or been terminated.
10.4 ABSENCE OF LITIGATION. No suit, claim, action, proceeding or
governmental investigation shall have been commenced by a governmental authority
or other third party against either of the parties to this Agreement which
challenges the validity, legality or enforceability of this Agreement or the
performance by the parties hereto of their respective obligations hereunder, or
which could reasonably be expected to have a material adverse effect on the
Company.
10.5 CERTIFICATE. Buyer shall have furnished Contico with a certificate
dated the Closing Date that, to the best of Buyer's knowledge and belief, the
conditions set forth in Sections 10.1 through 10.4 have been satisfied.
ARTICLE 11
----------
Documents to be Delivered at Closing
------------------------------------
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11.1 DOCUMENTS TO BE DELIVERED BY CONTICO. At the Closing, Contico
shall:
(a) Deliver to the Buyer a certified copy of the resolutions
adopted by the board of directors of Contico, authorizing the execution and
delivery of this Agreement and the consummation of the transactions contemplated
hereby, duly certified as of the Closing Date by the Secretary or an Assistant
Secretary of Contico;
(b) Deliver to Buyer certificates of good standing or their
equivalent, dated not more than ten days prior to the date of Closing, attesting
to the good standing of the Company under the laws of the State of Missouri and
AIL under the laws of the Province of Quebec;
(c) To the extent any consents or approvals shall be necessary to
any of the transactions herein contemplated, deliver to Buyer copies of all such
consents or approvals;
(d) Execute and deliver a Transition Services Agreement
substantially in the form of EXHIBIT D attached to this Agreement ("Transition
Services Agreement");
(e) Execute and deliver the Noncompetition Agreement and Escrow
Agreement; and
(f) Execute and deliver to Buyer an appropriate instrument of
transfer and assignment, providing good and marketable title with respect to the
Contico Interest, consistent with the terms of this Agreement.
11.2 DOCUMENTS TO BE DELIVERED BY BUYER. At the Closing, Buyer shall:
(a) Deliver to Contico a certified copy of the resolutions adopted
by the board of directors of Buyer, authorizing the execution and delivery of
this Agreement and the consummation of the transactions contemplated hereby,
duly certified as of the Closing Date by the Secretary or an Assistant Secretary
of Buyer;
(b) Deliver to Contico a certificate of good standing or its
equivalent, dated not more than ten days prior to the Closing Date, attesting to
the good standing of Buyer as a corporation under the laws of the State of
Missouri;
(c) To the extent any consents or approvals shall be necessary to
any of the transactions herein contemplated, deliver to Company upon request
copies of all such consents or approvals as obtained by Buyer;
(d) Execute and deliver the Transition Services Agreement,
Noncompetition Agreement and Escrow Agreement; and
(e) Deliver the Contico Interest Purchase Price to Contico as set
forth in Section 1.3 of this Agreement.
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<PAGE> 26
ARTICLE 12
----------
Survival and Indemnification
----------------------------
12.1 SURVIVAL. The representations, warranties, covenants and
agreements set forth in this Agreement or in any certificate or other writing
delivered in connection with this Agreement shall survive the Closing and the
sale of the Contico Interest contemplated hereby, but only to the extent
provided in Section 12.4 below.
12.2 GENERAL INDEMNIFICATION.
(a) BY CONTICO. Subject to Section 12.4 below, by execution of
this Agreement, Contico agrees to indemnify the Buyer, the Company and their
respective successors and assigns and hold them harmless against and in respect
of:
(i) fifty percent (50%) of (A) any and all loss, liability,
cost, expense or damage (including judgments and settlement payments) incurred
by any of them incident to, arising in connection with or resulting from any
breach of a representation, warranty or covenant made or contained in Article 2
or Article 6 (excluding Sections 6.6, 6.7, 6.8, 6.13 and 6.14) of this Agreement
or in any Exhibit, Schedule, certificate or other document executed and
delivered to Buyer by or on behalf of Contico under or pursuant to this
Agreement or the transactions contemplated herein, together with (B) all costs,
expenses and all other actual damages incurred by any of them in claiming,
contesting or remedying any such breach or inaccurate representation described
in this paragraph (i), such costs, expenses and damages to include, by way of
illustration and not limitation, all legal and accounting fees, other
professional expenses and all filing fees and collection costs incident thereto
and all such fees, costs and expenses incurred in defending claims which, if
successfully prosecuted, would have resulted in Damages (as defined below); and
(ii) one hundred percent (100%) of (A) any and all loss,
liability, cost, expense or damage (including judgments and settlement payments)
incurred by any of them incident to, arising in connection with or resulting
from any breach of a representation, warranty or covenant of Contico made or
contained in Article 3 or Section 6.6, 6.7, 6.8, 6.13 or 6.14 of this Agreement,
together with (B) all costs, expenses and all other actual damages incurred by
any of them in claiming, contesting or remedying any breach or incorrect
representation described in this paragraph (ii), such costs, expenses and
damages to include, by way of illustration and not limitation, all legal and
accounting fees, other professional expenses and all filing fees and collection
costs incident thereto and all such fees, costs and expenses incurred in
defending claims which, if successfully prosecuted, would have resulted in
Damages.
(b) BY BUYER. By execution of this Agreement, Buyer agrees to
indemnify Contico and its successors and assigns and hold them harmless against
and in respect of:
(i) any and all loss, liability, cost, expense or damage
(including judgments and settlement payments) incurred by any of them incident
to, arising in connection with or resulting
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<PAGE> 27
from any breach of a representation, warranty, or covenant of the Buyer made or
contained in this Agreement or in any Exhibit, Schedule, certificate or document
executed and delivered by or on behalf of Buyer under or pursuant to this
Agreement or the transactions contemplated herein; and
(ii) any and all costs, expenses and all other actual damages
incurred by such Selling Party in claiming, contesting or remedying any breach
or incorrect representation of Buyer described above, including, by way of
illustration and not limitation, all legal and accounting fees, other
professional expenses and all filing fees and collection costs incident thereto
and all such fees, costs and expenses incurred in defending claims which, if
successfully prosecuted, would have resulted in Damages.
(c) DAMAGES. Any and all of the items set forth in Section 12.2(a)
or (b) for which a party is entitled to be indemnified hereunder are
collectively called "Damages." The computation of Damages shall take into
account any benefit received and receivable by an Indemnitee in respect of an
indemnifiable matter, including without limitation amounts received under
policies of insurance, tax benefits and other third party reimbursement or
absorption of loss. In no event shall "Damages" include any loss, liability,
damage or expense attributable to any matter to the extent either (i) a reserve
for such matter was included in the Interim Balance Sheet, or (ii) such loss,
liability, damage or expense was taken into account in the determination of the
Contico Interest Purchase Price as adjusted under this Agreement.
(d) PRIOR DISCLOSURE OR KNOWLEDGE. Notwithstanding the foregoing
provisions of this Article 12 or any other provision of this Agreement, a party
shall not be entitled to be indemnified for its Damages incurred in connection
with a purported breach of any representation or warranty if the party from whom
indemnity is sought can demonstrate that the facts or circumstances on which
such indemnity claim was made were, as of or prior to the Closing, disclosed in
writing to or known by the party requesting indemnification or its authorized
representatives.
12.3 NOTICE OF, AND PROCEDURES FOR, COLLECTING INDEMNIFICATION.
(a) INITIAL CLAIM NOTICE. When a party becomes aware of a
situation which may result in Damages for which it would be entitled to be
indemnified hereunder, such party (the "Indemnitee") shall submit a written
notice (the "Initial Claim Notice") to the other party (the "Indemnitor") to
such effect with reasonable promptness after it first becomes aware of such
matter and shall furnish the Indemnitor with such information as it has
available demonstrating its right or possible right to receive indemnity. If the
potential claim is predicated upon, or later results in, the filing by a third
party of any action at law or in equity (a "Third Party Claim"), the Indemnitee
shall provide the Indemnitor with a supplemental Initial Claim Notice not later
than ten (10) days prior to the date on which a responsive pleading must be
filed, and shall also furnish a copy of such claim (if made in writing) and of
all documents received from the third party in support of such claim. Each
Initial Claim Notice shall name, when known, the person or persons making the
assertions which are the basis for such claim.
(b) RIGHTS OF INDEMNITOR. If, prior to the expiration of thirty
(30) days from the mailing of an Initial Claim Notice (the "Claim Answer
Period"), the Indemnitor shall request in writing
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<PAGE> 28
that such claim not be paid, the same shall not be paid, and the Indemnitor
shall settle, compromise or litigate in good faith such claim, and employ
attorneys of its choice to do so; provided, however, that Indemnitee shall not
be required to refrain from paying any claim which has matured by court judgment
or decree, unless appeal is taken therefrom and proper appeal bond posted by the
Indemnitor, nor shall it be required to refrain from paying any claim where such
action would result in the foreclosure of a lien upon any of its assets or a
default in a lease or other contract except a lease or other contract which is
the subject of the dispute. If Allibert and Contico each is responsible for a
portion of the Damages attributable to such claim (a "Joint Indemnity Matter"),
Allibert and Contico must agree on the handling of such claim jointly in order
to have the right to settle, compromise or litigate such claim. Indemnitee shall
cooperate fully to make available to the Indemnitor and its attorneys,
representatives and agents, all pertinent information under its control.
Indemnitee shall have the right to elect to settle or compromise all other
contested claims with respect to which the Indemnitor has not, within the Claim
Answer Period, acknowledged in writing (i) liability therefor (should such
claim, to the extent Indemnitor is ultimately determined to be liable for such
indemnification under this Agreement, ultimately be resolved against
Indemnitee), and (ii) its election to assume full responsibility for the
settlement, compromise, litigation and payment of such claim (and in the case of
a Joint Indemnity Matter, the agreement of Allibert and Contico on the handling
of such claim).
(c) FINAL CLAIMS STATEMENT. At such time as Damages for which the
Indemnitor is liable hereunder are incurred by Indemnitee by actual payment
thereof or by entry of a final judgment, Indemnitee shall forward a Final Claims
Statement to the Indemnitor setting forth the amount of such Damages in
reasonable detail on an itemized basis. All undisputed amounts reflected on each
Final Claims Statement shall be paid promptly by Indemnitor to Indemnitee.
12.4 LIMITATIONS ON INDEMNIFICATION BY CONTICO.
(a) TIME LIMITATION. Notwithstanding the other provisions of this
Article 12, Contico shall not be liable to indemnify Buyer or the Company for
Damages unless the Buyer or the Company delivers an Initial Claim Notice to
Contico of its claim or potential claim for indemnification thereunder not later
than eighteen (18) months after the Closing Date. Such limitation shall not
apply, however, to any claim by Buyer or the Company for indemnification based
on the Buyer's failure to receive good, marketable and indefeasible title to the
Contico Interest free and clear of all liens, claims, encumbrances and transfer
restrictions.
(b) LIMITATIONS ON AMOUNT. Notwithstanding the other provisions of
this Article 12, Contico shall not be liable to indemnify the Buyer or the
Company for Damages attributable to any breach of a representation, warranty or
covenant in this Agreement unless and until the indemnifiable Damages suffered
by Buyer and the Company as a result of such breach exceeds $2,000 on a per
claim basis (the "Indemnifiable Claims") and the aggregate amount of all
Indemnifiable Claims exceeds $500,000 (the "Gross Basket"), and thereafter
indemnification shall be made only to the extent of such excess. In no event
shall Contico be liable to indemnify the Buyer or the Company for Damages that
exceed thirty percent (30%) of the Contico Interest Purchase Price, except for
Damages attributable to the Buyer's failure to receive good, marketable and
indefeasible title to the Contico Interest free and clear of all liens, claims,
encumbrances and transfer restrictions.
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<PAGE> 29
ARTICLE 13
----------
Termination of Agreement
------------------------
13.1 TERMINATION. This Agreement may be terminated and the transactions
contemplated hereby abandoned at any time prior to the Closing:
(a) by mutual written consent of the Buyer and Contico;
(b) upon written notice from the Buyer to Contico if either (i)
any of the conditions precedent to the Buyer's obligations hereunder shall have
become incapable of fulfillment through no fault of the Buyer, or (ii) Contico
is in breach of any covenant of Contico in this Agreement, which breach has
continued for ten (10) days after delivery of written notice to Contico
specifying such breach;
(c) upon written notice from Contico to the Buyer if either (i)
any of the conditions precedent to Contico's obligations hereunder shall have
become incapable of fulfillment through no fault of Contico (ii) Contico has the
right to terminate this Agreement pursuant to Section 6.10, or (iii) Buyer is in
breach of any representation, warranty or covenant of Buyer in this Agreement,
which breach has continued for ten (10) days after delivery of written notice to
Buyer specifying such breach; or
(d) upon written notice from either party to the other party
hereto if the Closing does not occur by February 1, 1999 (unless the failure to
consummate the purchase and sale of the Contico Interest by such date shall be
due to the action or failure to act of the party seeking to terminate this
Agreement or any affiliate thereof).
Any such written notice shall state the grounds for termination asserted by the
party delivering such notice of termination.
13.2 EFFECT OF TERMINATION. If this Agreement is terminated and the
transactions contemplated hereby are abandoned pursuant to Section 13.1, then
this Agreement shall become null and void and of no effect, except for the
provisions of Section 7.2, this Article 13 and Article 14 (relating to, among
other things, notices, contract construction and effect and confidentiality);
PROVIDED, HOWEVER, that such termination shall not affect the right of either
party to bring an action against the other party for a breach occurring prior to
the termination or for a wrongful termination.
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<PAGE> 30
ARTICLE 14
----------
Miscellaneous
-------------
14.1 NOTICES. Any notices or other communications required or permitted
hereunder to any party hereto shall be sufficiently given if (a) delivered in
person, (b) sent by certified or registered mail, postage prepaid, (c)
dispatched by reputable overnight delivery service, or (d) transmitted by
facsimile machine if an answerback is received and notice is confirmed by any
other manner provided herein, in each case addressed as follows:
In the case of Buyer:
Myers Industries, Inc.
1293 South Main Street
Akron, Ohio 44301
Attn: Gregory J. Stodnick, Vice President - Finance
Facsimile: 330/761-6156
With a copy to:
Brouse & McDowell, L.P.A.
500 First National Tower
Akron, Ohio 44308
Attn: Kevin C. O'Neil
Facsimile: 330/253-8601
In the case of Contico:
Contico International, Inc.
1101 Warson Road
St. Louis, Missouri 63132
Attn: Larry M. Hill, Vice Chairman
Facsimile: 314/997-0776
With a copy to:
Thompson Coburn
One Mercantile Center
St. Louis, Missouri 63101
Attn: Ronald E. Haglof
Facsimile: 314/552-7000
or such substituted address as any party shall have given notice to the others
in writing in the manner set forth in this Section 14.1.
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<PAGE> 31
14.2 AMENDMENT. This Agreement may be amended or modified in whole or
in part only by an agreement in writing executed by all parties hereto and
making specific reference to this Agreement.
14.3 COUNTERPARTS. This Agreement may be executed in one or more
counterparts, all of which taken together shall constitute one instrument.
14.4 BINDING ON SUCCESSORS AND ASSIGNS. Prior to the Closing, neither
party hereto may assign this Agreement or any rights or obligations hereunder
except (a) with the prior written consent of the other party hereto, or (b) in
connection with the sale or other disposition of substantially all of such
party's assets or business; provided that Buyer may assign its rights and
obligations hereunder to a wholly owned subsidiary (including an indirect
subsidiary) if (i) such assignee executes a written assumption agreement
reasonably satisfactory to Contico, and (ii) the Buyer executes and delivers a
Guaranty of Performance in the form of Exhibit E attached hereto. From and after
the Closing, either party may freely assign its rights under this Agreement to
any other person, firm or corporation, but such assignment shall not relieve the
assigning party of its obligations hereunder. Subject to the foregoing, this
Agreement shall be binding upon, inure to the benefit of and be enforceable by
and against the parties hereto and their respective successors and assigns in
accordance with the terms hereof.
14.5 SEVERABILITY. In the event that any one or more of the provisions
contained in this Agreement or any application thereof shall be invalid, illegal
or unenforceable in any respect, the validity, legality or enforceability of the
remaining provisions of this Agreement and any other application thereof shall
not in any way be affected or impaired thereby; provided, however, that to the
extent permitted by applicable law, any invalid, illegal, or unenforceable
provision may be considered for the purpose of determining the intent of the
parties in connection with the other provisions of this Agreement.
14.6 PUBLICITY. Except as may be required by law, any public
announcements concerning the transaction contemplated by this Agreement shall be
jointly planned and simultaneously released by Buyer and Contico following
approval by Allibert, and neither party shall act in this regard without the
prior written approval of the other party, which approval shall not be
unreasonably withheld.
14.7 HEADINGS. The headings in the sections and subsections of this
Agreement and in the Schedules are inserted for convenience only and in no way
alter, amend, modify, limit or restrict the contractual obligations of the
parties.
14.8 LIST OF EXHIBITS AND SCHEDULES. As mentioned in this Agreement,
there are attached hereto or delivered herewith, the following Exhibits and
Schedules:
EXHIBITS
--------
<TABLE>
<CAPTION>
Section
Exhibit Document Reference
- ------- -------- ---------
<S> <C> <C>
A Form of Escrow Agreement 1.3(a)
B Organizational Documents 2.1(b)
</TABLE>
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<PAGE> 32
<TABLE>
<S> <C> <C>
C Form of Noncompetition Agreement 6.7
D Form of Transition Services Agreement 11.1(c)
E Form of Guaranty of Performance 14.4
<CAPTION>
SCHEDULES
---------
Schedule
No. Schedule Caption
- ------ ----------------
2.1(d) Qualification
2.1(g) Absence of Violation or Conflicts
2.1(h) No Governmental Consents Required
2.2(a) Financial Statements
2.2(c) Capital Leases
2.2(d) Absence of Certain Changes
2.3 Tax Matters
2.4(a) Real and Personal Property
2.4(b) Leases; Subleases
2.4(c) Condition
2.5 Intellectual Property; Patents
2.6(a) Indebtedness
2.6(b) Other Contracts
2.6(c) Insurance
2.6(d) Status
2.7 Employment Relationships
2.8 Schedule of Plans
2.9 Labor Relations
2.10 Litigation
2.11 Compliance with Laws
2.12 Bank Accounts
2.13 Transactions with Affiliates
9.3 Consents
</TABLE>
Each of the foregoing Exhibits and Schedules is incorporated herein by this
reference and expressly made a part hereof.
14.9 EXPENSES. Except to the extent otherwise provided in this
Agreement, each of the parties hereto shall bear its own expenses incurred in
connection with this Agreement and the transactions herein contemplated,
including, but not limited to, legal and accounting fees and expenses.
14.10 ENTIRE AGREEMENT; LAW GOVERNING. All prior negotiations and
agreements between the parties hereto are superseded by this Agreement. There
are no representations, warranties, understandings or agreements between the
parties with respect to the Contico Interest other than those expressly set
forth in this Agreement, or in an Exhibit or Schedule delivered pursuant hereto
or in the Guaranty, except as modified in writing concurrently herewith or
subsequent hereto. This Agreement
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<PAGE> 33
shall be governed by and construed and interpreted according to the laws of the
State of Missouri, determined without reference to conflicts of law principles.
14.11 ARBITRATION. After the Closing, except for disputes concerning
the Audited Financial Statements and the EBIT calculation, all disputes between
the Buyer and Contico shall be settled by binding arbitration in the City of St.
Louis, Missouri in accordance with the commercial arbitration rules of the
American Arbitration Association. The disputing parties shall select a single
arbitrator, or if they cannot agree on an arbitrator, each shall designate an
arbitrator and the two so appointed shall select a third, with the decision of a
majority to be binding on all parties in interest. Judgment on any award may be
enforced in any court of competent jurisdiction. The costs of such arbitration
shall be assessed against the party whose position has not been accepted, as
determined by the arbitration panel, who may allocate the costs equitably in the
event that neither party's position is accepted in full.
[THE BALANCE OF THIS PAGE HAS BEEN LEFT BLANK INTENTIONALLY.]
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<PAGE> 34
IN WITNESS WHEREOF, the parties hereto have caused this Agreement
to be executed by their duly authorized representatives on the day and year
first above written.
MYERS INDUSTRIES, INC.
By /s/ Gregory J. Stodnick
----------------------------------------
Gregory J. Stodnick
Vice President-Finance
CONTICO INTERNATIONAL, INC.
By /s/ Larry M. Hill
----------------------------------------
Larry M. Hill, Vice Chairman
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<PAGE> 1
Exhibit 10(e)
AMENDMENT TO SALE AGREEMENT
THIS AMENDMENT TO SALE AGREEMENT (the "Amendment") is entered into as
of the 23rd day of November, 1998, between CONTICO INTERNATIONAL, INC., a
Missouri corporation ("Contico"), and MYERS INDUSTRIES, INC., an Ohio
corporation ("Buyer").
RECITALS:
A. Contico and the Buyer have entered into a Sale Agreement, dated as
of November 2, 1998 ("Agreement"), pursuant to which the Buyer has agreed to
acquire Contico's interest in Allibert-Contico, L.L.C., a Missouri limited
liability company (the "Company"), and capitalized terms used in this Amendment
without definition have the respective meanings ascribed to them in the
Agreement.
B. Contico and the Buyer have reached an understanding regarding
certain modifications to the Agreement.
AGREEMENT:
IN CONSIDERATION OF the premises, the covenants and agreements in the
Agreement and this Amendment, and other good and valuable consideration, the
receipt and sufficiency of which hereby are acknowledged, the parties hereto
agree as follows:
1. The first sentence of Section 1.2 of the Agreement is hereby amended
to add the phrase "(or, if the $500,000 reduction in Section 6.10 below applies,
$22,000,000)" immediately following the $22,500,000 figure in such sentence.
2. Section 1.3(a) of the Agreement is hereby amended by the addition of
the following phrase at the end of such subsection:
; provided, however, that if the $500,000 reduction in Section 6.10
below applies, then the first two dollar amounts in this subsection (a)
shall be $22,000,000 and $21,000,000, respectively.
3. The first sentence of Section 1.3(c) of the Agreement is hereby
replaced in its entirety with the following sentence:
If the Contico Interest Purchase Price adjustment represents
an increase of the Contico Interest Purchase Price above $22,500,000
(or, if the $500,000 reduction in Section 6.10 below applies,
$22,000,000), then (i) Contico shall be entitled to receive the entire
escrow account and all earnings thereon, and (ii) the Buyer shall pay
the amount of such increase by wire transfer of immediately available
funds to such account(s) as Contico shall direct.
4. Section 6.10 of the Agreement hereby is amended by (a) deleting the
reference, at the end of that Section, to the amount of One Million Dollars
($1,000,000), and (b) replacing such amount with the amount of Five Hundred
Thousand Dollars ($500,000). For the avoidance of doubt, the other references in
such Section to One Million Dollars ($1,000,000) remain unchanged.
5. Except to the extent modified by this Amendment, the Agreement
remains in force and effect. This Amendment may be executed in multiple
counterparts, with signatures transmitted by facsimile to be original signatures
for all purposes, each of such counterparts constituting an original, and all of
which counterparts taken together shall constitute one instrument.
<PAGE> 2
IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be
executed by their duly authorized representatives on the day and year first
above written.
CONTICO INTERNATIONAL, INC.
BY /s/ LARRY M. HILL
----------------------------------
LARRY M. HILL, VICE CHAIRMAN
MYERS INDUSTRIES, INC.
BY /s/ GREGORY J. STODNICK
----------------------------------
GREGORY J. STODNICK
VICE PRESIDENT-FINANCE
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<PAGE> 1
EXHIBIT 99
Myers Industries Announces Agreement to Acquire Material
Handling Division of Sommer Allibert
AKRON, Ohio-Dec. 3, 1998--Myers Industries, Inc. (AMEX:MYE)has agreed to acquire
for approximately $130 million in cash the plastic material handling division of
Sommer Allibert, with facilities in Europe and North America. The acquisition
includes 100 percent of the partnership interests in Allibert-Contico, a joint
venture between Sommer Allibert and Contico International, Inc., based in St.
Louis, Missouri. The businesses contained in the acquisition had 1997 net sales
of approximately $140 million. Closing of the transaction should be early in the
first quarter of 1999, following required regulatory clearances and customary
conditions of closing. The acquisition should not have a material effect on
Myers' 1999 earnings, however it is expected to be accretive thereafter.
"We are enthusiastic about the opportunities this acquisition offers," said
Stephen E. Myers, president and chief executive officer of Myers Industries. "It
will establish an immediate and significant international presence for our
Company and provide us with excellent competitive tools for sustainable
long-term growth.
"The addition of Sommer Allibert's material handling division will broaden our
existing product offering, expand our resource pool of talent, increase our
manufacturing capacity, and add significant market share in both Europe and the
United States."
Sommer Allibert's material handling division, based in France, is a leading
supplier of plastic bulk containers, totes, pallets, and tanks to the European
and North American markets. The division operates seven manufacturing
facilities--two each in France and Spain, one in the United Kingdom, one in the
United States, and a 50 percent interest in a joint venture in china. Most of
these facilities are ISO 9000 certified and utilize injection molding,
rotomolding, winding extrusion, and structural foam injection molding processes
to produce more than 1,000 products. Additional sales offices are located in
Austria, Belgium Canada, Germany, Italy, Portugal, and the United States. The
products meet diverse shipping, handling, and storage needs in many industries,
including agriculture, appliance, automotive, chemical, food, logistics,
medical, plastics, and rubber. The material handling division employs more than
900 people.
"We at Myers industries have a strong admiration and respect for Sommer
Allibert, its product lines, management and employees," Mr. Myers continued.
"Our commitment to this financial investment is an important indicator of our
determination for the success of this venture. It will be a welcome addition to
Myers Industries."
Myers Industries, Inc. is a manufacturer of polymer and metal products for
industrial, commercial, and consumer markets, and the largest wholesale
distributor of tools, equipment, and supplies for the tire service and
automotive underbody repair industry in the United States.
Safe Harbor Statement: Statements in this press release may include
forward-looking statements that involve a number of risks and uncertainties that
could cause actual results to materially differ from those discussed. For this
purpose, any statement that is not a statement of historical fact may be deemed
to be a forward-looking statement.
Contact:: Myers Industries, Inc., Stephen Durinsky, 330253/5592
