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 28, 1999
(December 16, 1999)
CUISINE SOLUTIONS, INC.
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
DELAWARE 0-12800 52-0948383
(STATE OR OTHER JURISDICTION OF (COMMISSION (I.R.S. EMPLOYER
INCORPORATION OR ORGANIZATION) FILE NUMBER) IDENTIFICATION NO.)
85 SOUTH BRAGG STREET, SUITE 600, ALEXANDRIA, VA 22312
(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES)(ZIP CODE)
REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE: (703) 750-9600
Not Applicable
(FORMER NAME OR FORMER ADDRESS, IF CHANGED SINCE LAST REPORT)
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ITEM 2. ACQUISITION OR DISPOSITION OF ASSETS
On December 16, 1999, Cuisine Solutions, Inc. (the "Company") issued 1,500,000
shares of the Company's Common Stock par value $.01 per share (the "Common
Stock"), to Food Research Corporation, the majority stockholder of the Company,
in exchange for all of the issued and outstanding equity interests in NOUVELLE
CARTE France ("Nouvelle Carte") pursuant to agreements dated as of October 29,
1999 (collectively, the "Agreement"). Pursuant to the Agreement, the Company
also agreed to issue additional Common Stock in an amount to be determined based
upon Nouvelle Carte's operating performance for the two years ended June 30,
2001. The additional consideration to be paid will be determined as follows: if
Nouvelle Carte's operating income is less than FFr 1,500,000 for the year ended
June 30, 2000, no additional shares will be issued in respect of such year; if
operating income is more than FFr 1,500,000, but less than FFr 2,000,000 for
such year, 375,000 shares of Common Stock will be issued; if operating income
exceeds FFr 2,000,000 for such year, 500,000 shares of Common Stock will be
issued; if Nouvelle Carte's operating income is less than FFr 2,000,000 for the
year ended June 30, 2001, no additional shares will be issued in respect of such
year; if operating income is more than FFr 2,000,000, but less than FFr
2,500,000 for such year, 375,000 shares of Common Stock will be issued; and if
operating income exceeds FFr 2,500,000 for such year, 500,000 shares of Common
Stock will be issued. Accordingly, an aggregate additional 1,000,000 shares of
Common Stock are issuable if the maximum performance targets are achieved for
both years. The purchase price was negotiated between a committee of independent
directors of the Company who are not affiliated with the Company's majority
stockholder, and such majority stockholder, and was intended to approximate the
book value of the net assets acquired.
Prior to giving effect to the acquisition, Food Research Corporation was the
beneficial owner of 7,020,588 shares, or 52.9%, of the Company's Common Stock.
Food Research Corporation is owned by Jean Louis Vilgrain, Chairman of the Board
of Directors of the Company, Stanilas Vilgrain, President and Chief Executive
Officer and a member of the Board of Directors of the Company and Alexandre
Vilgrain, a member of the Board of Directors of the Company. After giving effect
to the issuance of 1,500,000 shares of Common Stock as a result of the
transaction, Food Research Corporation is the beneficial owner of approximately
57.7% of the Company's outstanding Common Stock.
Nouvelle Carte is a sous vide manufacturer of fresh and frozen entrees and
sauces marketed throughout Europe to retail and food service customers. As a
result of the acquisition, the Company acquired a manufacturing facility in
Louviers, France and related property, plant and equipment which it intends to
continue to use for sous vide manufacturing. The Company anticipates that the
acquisition will enable it to expand sales through existing distribution
channels and to meet increased demand from airline customers for products served
on flights originating in Europe.
ITEM 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION AND EXHIBITS.
(a) Financial Statements - not applicable.
(b) Pro Forma Financial Information - not applicable.
(c) Exhibits
10.1 Agreement Guaranteeing Assets and Liabilities dated as of October
29, 1999 by and between Food Research Corporation and Cuisine
Solutions, Inc.
10.2 Letter Agreement dated as of October 29, 1999 between Food
Research Corporation and Cuisine Solutions, Inc.
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
Date: December 28, 1999 CUISINE SOLUTIONS, INC.
By: /s/ Robert E. Murphy
------------------------------------------
Vice President and Chief Financial Officer
Exhibit 10.1
- --------------------------------------------------------------------------------
AGREEMENT GUARANTEEING ASSETS AND LIABILITIES
BETWEEN THE UNDERSIGNED:
- - FOOD RESEARCH Corp.
Corporation under US law with capital of US $ 10,701,874, having its
corporate headquarters at 85 South Bragg Street, Alexandria, 22312 Virginia,
USA,
Registered with Federal Income Tax ID 13-2806674,
Represented by Mr. Jean-Louis VILGRAIN acting as "President and Chief
Executive Officer,"
Hereinafter called "THE GUARANTOR"
ON THE ONE HAND,
AND:
- - CUISINE SOLUTIONS Inc.
Corporation under US law with capital of US $21,493,000, having its
corporate headquarters at 85 South Bragg Street, Alexandria, 22312 Virginia,
USA,
Registered with Federal Income Tax ID 52-0948383,
Represented by Mr. Stanislas VILGRAIN acting as "President and Chief
Executive Officer,"
Hereinafter called "THE BENEFICIARY"
ON THE OTHER HAND
RECITALS:
The GUARANTOR is the owner of four hundred and twenty-five thousand two hundred
(425.200) shares, of one hundred (100) Francs, each fully paid, of the Company
NOUVELLE CARTE France, a corporation with capital of 42.520.000 Francs, having
its corporate headquarters at 1 Allee des Tilleuls, Ecoparc - 27400
Heudebouville - France, registered with the Registry of Commerce and Companies
of Louviers under number B 348 006 677 (hereinafter called "the COMPANY," which
are to be exchanged for shares of the company CUISINE SOLUTIONS Inc.,
The GUARANTOR hereby acknowledges that the BENEFICIARY has accepted the exchange
of the shares based only on the statements made and the guarantees given below
by the GUARANTOR and that these statements and guarantees constitute an
essential and determining condition for the exchange of the Shares by the
BENEFICIARY, and without which the transaction would not have taken place.
<PAGE>
1. GUARANTEES
1.1. GUARANTEES RELATING TO THE BALANCE SHEET
The GUARANTOR hereby guarantees the regularity and the truthfulness of the
balance statement, the profit and loss statement and the annex, unaudited,
hereinafter called the "accounts," as they appear in ANNEX 1 and that they give
a faithful and complete picture of its equity and financial situation and the
results of the COMPANY.
Moreover he guarantees that they have been prepared in accordance with the
generally accepted accounting principles in France, that they are applied in the
same manner for the five (5) previous years, that all the transactions of the
COMPANY prior to September 30, 1999 are reflected in the accounts, that they are
normal and were carried out in the interest of the COMPANY, as well as those
transactions subsequent to that date up until the signing of the present
agreement.
The COMPANY is not bound by any guarantee or surety bond, particularly any asset
and liability guarantee, surety or any other off-balance sheet commitment
(resulting, for example, from a loan contract promising payment when business
improves), other than those included in ANNEX 2;
All reserves resulting from good accounting and financial management shall be
recorded in the accounting statement, regardless of their tax deductibility or
the possibility that they do not constitute reserves or constitute such in part
from a tax standpoint.
1.2. GUARANTIES OF NO CHANGES
The GUARANTOR hereby declares and guarantees that from September 30, until the
date the exchange is carried out:
1.2.1. that he has managed the COMPANY as a "responsible head of household";
1.2.2. that he has ensured that no agreement or commitment has been made by the
COMPANY other than in the normal course of business; and more broadly that he
has not changed in one way or another the situation and the current commitments
of the COMPANY;
1.2.3. that he has brought to the attention of the BENEFICIARY, during the
current period up to the effective date, any specific transaction of the COMPANY
or a technical, legal, business or financial nature, likely to negatively and/or
significantly affect the situation or the business of the COMPANY;
The GUARANTOR further declares and guarantees that since September 30, 1999
until the effective date of the exchange, there has been:
1.2.4. no change in the liabilities, activities or prospects of the COMPANY,
other than changes that have occurred in the normal course of business, of which
none has been significantly unfavorable for the COMPANY, and more broadly, no
event or situation of any nature whatsoever that has significantly affected its
business or its assets,
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1.2.5. no direct or indirect change in its short-term, medium-term or long-term
indebtedness;
1.2.6. no creation or granting of easement, privilege, mortgage, surety,
collateral, or any guarantee whatsoever, or any promise having the same effects
other than those envisaged in ANNEX 3 ;
1.2.7. no damage, destruction or loss (whether covered by an insurance policy or
not) or any other event that has had a significantly unfavorable effect on the
assets, activities or prospects of the COMPANY;
1.2.8. no decision to pay a distribution, or any payment of dividends,
reimbursement or other distribution of any amount whatsoever, whether paid by
the COMPANY to its shareholders, or any amortization or reduction of its
capital, any possible decision to make a distribution prior to September 30,
1999 has already been carried out and paid and is fully reflected in the
accounts;
1.2.9. no increase by the COMPANY in the level of remuneration of any one of its
administrators, directors, managers or other employees, no distribution of
bonuses, or any modification in the system for incentives or remunerations
involving sharing in the profits or the sales figures, since September 30, 1999
other than those that appear in ANNEX 4;
1.2.10. no transfer or promise to transfer, no rentals or transfers in any way
so ever of assets or property;
1.2.11 no change in the accounting methods and practices followed by the
COMPANY, and no change in the rules for depreciation, except to the extent
required by new laws or regulations;
1.2.12 no cancellation or substantial modification in contracts involving
leases, suppliers, concessionaries, distributors, agents, commissions or
representatives, etc... and more generally, contracts of any nature whatsoever
likely to have a significantly unfavorable effect on the activities of the
COMPANY other than those envisaged in ANNEX 5;
1.2.13 no lay-off, resignation, strike or other circumstance, event or situation
that affects the company climate or might later have a significantly unfavorable
effect on the activities of the COMPANY;
The GUARANTOR and the BENEFICIARY furthermore are perfectly aware of the
consequences of the implementation of the "35-hour work week" within the
COMPANY;
1.2.14. no transaction, no abandonment of action or settlement of signification
of claims or major litigation, no waiver of the recourse to any right whatsoever
other than those envisaged in ANNEX 6;
<PAGE>
1.2.15. finally, any changes that have occurred or may occur (notwithstanding
the preceding declarations), both in the contents of the assets and liabilities
of the COMPANY and in the conduct of its operations (particularly in its average
level of profitability) will not prevent the company from being operated under
the current conditions, nor will they be of such a nature as to significantly
depreciate the value of the Shares, and these changes are not such that a "good
head of household" would not wish to proceed with the exchange of the aforesaid
Shares under the conditions stipulated, were he aware that they had occurred.
1.3 QUALITATIVE GUARANTEES
Moreover the GUARANTOR declares and guarantees that, as of this day:
1.3.1 He has full ownership of the Shares being transferred, which are fully
released and free of all liens and other contractual commitments, whether firm
or conditional (in terms of offers of contracts, shareholder agreement, options,
promises to sell or purchase shares or rights or otherwise) and that there
exists no obstacle, restriction or impediment of any kind, whether direct or
indirect, to their sale with the fullness of the rights attached thereto, so
that the sale of the Shares to the BENEFICIARY is not contrary to any commitment
or agreement bearing upon the Shares or to any court decision or arbitration
applicable thereto or to any legal, regulatory or by-law provision;
1.3.2 all the Shares issued by the COMPANY have the same rights and there exists
no provision in the by-laws of the COMPANY in terms of double voting rights or
limiting the voting rights in shareholders' meetings;
1.3.3 the COMPANY has not issued any negotiable bonds not yet amortized, or any
convertible or exchangeable bonds with stock purchase warrants, or certificates
of investment, or transfer or founder's shares and that there exists no decision
or authorization relating to any such issuance, and in general, that it has not
issued any security that confers any right, by conversion, exchange,
reimbursement, presentation of a warrant or any other manner, to the
acquisition, either at any time or on a determined data, of securities of any
nature whatsoever, which have been or will be issued to represent a proportion
of the capital of the COMPANY;
1.3.4 the COMPANY has regularly set up and registered and its acts of formation
and amendments thereto have been regularly registered and published in
compliance with the law;
All the company record books and documents, which the COMPANY must keep, are up
to date, and that all the decisions of the organs of the company were validly
made and validly recorded in said record books.
The decisions of the COMPANY, which must receive the authorization or the
ratification by the organs of the company, particularly the agreements envisaged
in articles 101 and following of the law of July 24, 1966, have been brought to
the attention of the account auditors and have been the subject of an
authorization appearing in the record books of the COMPANY.
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1.3.5 The COMPANY does not have any subsidiary nor does it control any company
in the sense of article 355-1 of the law of July 24, 1966, nor does it hold any
stake in another company, partnership or commercial enterprise. By "subsidiary"
is meant any company in which the COMPANY has or controls, either directly or
indirectly, at least 25% of the capital and/or of the voting rights, other than
those envisaged in ANNEX 7.
1.3.6 The COMPANY does not hold any stake or rights in a company or business
likely to entail any joint or several, undivided and/or undefined liability,
other than that envisaged in ANNEX 8.
1.3.7 other than minor exceptions, the regularization of which would have no
major harmful effect on the situation of the COMPANY, the company is in complete
compliance in terms of its situation with respect to government administrations
dealing with taxes, levies, social and other regulations, government or
otherwise, whether national or international, which may be applied to it by
reason of its location or its activity, all in such a way so as not to incur any
additional levy, any penalty, or any fee or interest for late payment.
1.3.8 The COMPANY has not been the object of any criminal conviction.
1.3.9 The COMPANY has not opted for the system of assuming tax liability for
subsidiaries.
1.3.10 The COMPANY has valid and transferable titles of ownership on its
property and assets, both movable and real estate, tangible and intangible, used
in its activities, which are actually in the inventory, which may have been
acquired by it up to this date; these assets actually exist and conform, both in
their consistency and in their valuation on the balance sheet, to actual purpose
or use that is assigned to them by the COMPANY;
1.3.11 The property and assets, envisaged in paragraph 1.3.10, are not subject
to any collateral, mortgage, opposition, privilege, easement, or other
encumbrances by law or by agreement of any nature whatsoever, other than those
envisaged IN ANNEX 3;
1.3.12 The property and assets, envisaged in paragraph 1.3.10, are not affected
by any proceeding or measure or any threat to take measures (notification or
injunction by government authorities such as labor inspection, inspection of
equipment...) which might constitute a financial burden for the COMPANY or a
restriction or constraint in their possession or use or negatively affect their
operation;
1.3.13 The real estate assets have received a valid building permit, a
declaration of completion or a certificate of compliance, as well as a
certificate of non-use of asbestos in said assets and have received a complete
approval without reserve, and all of these documents are found IN ANNEX 9 and
the locations designated as "offices" have this status in the sense envisaged in
the laws and regulations applicable in the matter, all the work done on the real
estate assets have received the necessary authorizations that are customary or
mandated by regulations.
<PAGE>
1.3.14 The COMPANY does not own nor does it operate any specially classified
facility or one, which would be subject to government authorization on the land,
which it owns or rents, other than those envisaged in ANNEX 10;
1.3.15 There does not exist any building lease, commercial leases, commitments
to rent or sub-rent, commitments to provide residence and/or agreements for
temporary shelter or storage, other than those envisaged in ANNEX 11;
1.3.16 The risks connected with construction (biennial, ten-year guarantee...)
are adequately covered in the insurance policies required by applicable law or
regulations and the premiums for these policies have been and are currently
being paid as of this day;
1.3.17 The COMPANY has not granted its customers, in the course of normal
operations, any guarantee of the work or services it has performed that would go
beyond common and normal usages as practiced by the profession and/or those
customarily followed in this matter by the COMPANY;
1.3.18 The COMPANY, with possible minor exceptions, has complied with all the
laws and all the regulations applicable in the area of environment. The COMPANY
has made all the appropriate declarations and is the holder of the various
permits, licenses, registrations, inscriptions, approvals, certifications and/or
government authorizations relative to environmental regulations, which are
necessary to the exercise of its activity;
Other than possible minor exceptions, the resolution of which would not have any
major or harmful affect on the COMPANY, the COMPANY is completely in compliance
with respect to the use, storage, disposal of polluting, infectious, toxic or
hazardous products of any kind, or emissions thereof or exposure thereto, as
well as clean-up and environmental protection.
1.3.19 the products that are manufactured, conditioned, sold or distributed by
the COMPANY conform to all the regulations and laws particularly applicable to
the manufacture, conditioning, placement into service, sale and distribution of
these products, and no guarantee for any one of these products has been given in
terms whereby the COMPANY is or could be held liable to an extent exceeding that
prescribed by the law, other than those envisaged in ANNEX 12;
1.3.20 the tangible movable assets and property as well as the real estate
property owned and/or used by the COMPANY are in a normal state of wear, taking
into account their age and the provisions for depreciation that appear in the
accounting statement of August 31, 1999 of the COMPANY and allowing for their
operation in accordance with their purpose and the standards of the market of
the activity of the COMPANY;
1.3.21 risks involving the property and assets, risks of loss of business, as
well as civil liability: operations, after-delivery and/or product) of the
COMPANY are normally covered for adequate amounts by the insurance policies
taken out by a prudent manager and in accordance with the usages of the
profession and also as indicated in the insurance policies that appear in ANNEX
13 and the premiums connected thereto have been and are being paid regularly as
of this day;
1.3.22 the COMPANY has not taken out any loan nor does it have recourse to
overdraft protection or banking services, other than those appearing in the
contracts envisaged in ANNEX 14;
<PAGE>
1.3.23 the COMPANY has not signed any capital lease, or rental or sale or any
leasing contract, other than those envisaged in ANNEX 15; . 1.3.24 the COMPANY
has full title to the trademarks, trade signs and trade name that it uses in the
context of its activity and appear in ANNEX 16 [AND THEY ARE REGULARLY RENEWED];
1.3.25 the COMPANY declares that the patents and software which it owns, as well
any for it holds a user's license, are not the object of any dispute, or
ownership claim, or any proceedings, whether in court or in the process of
amicable settlement (including appraisal), of any kind;
1.3.26 the COMPANY has not signed any licensing agreement or any other agreement
with third parties involving its trademarks, trade signs and trade name;
1.3.27 the COMPANY does not make use of intellectual property rights (literary
and/or artistic) and/or industrial property (patents, designs and models,
know-how, formulas...) or of trademarks, trade signs or trade names belonging to
third parties;
1.3.28 the COMPANY has not become indebted to any of the persons who are, as of
this day, employees, administrators or shareholders of the COMPANY;
1.3.29 The COMPANY has not concluded with any one or more of its shareholder
and/or companies belonging to its group, any contracts, verbal or written
agreements other than those which appear in ANNEX 17;
1.3.30 the COMPANY is not party to any contract which:
- cannot be executed without entailing substantial changes in the
financial and commercial situation of the COMPANY;
- cannot be revoked by the COMPANY without entailing for the COMPANY the
obligation to pay any penalty or contractual indemnity of any nature
whatsoever;
- can be revoked only at the end of an advance notice period of six (6)
months;
- entails any financial commitment by the COMPANY, other than those
already envisaged elsewhere;
- limits, either geographically or by sector of activity, or in any
other manner, the freedom for the COMPANY to market the products
manufactured, conditioned or sold by the COMPANY,
other than those which appear in ANNEX 18;
1.3.31 the COMPANY has not made any contract with its suppliers, its service
providers, its lenders, its subcontractors, its representatives, its agents, its
distributors or its customers, providing for any conditions less favorable to
the COMPANY than those presently in effect, in the event of transfer of all or
part of the Shares of the COMPANY and/or including any cancellation clauses that
could be put into effect in the event of any such transfer, other than those
appearing in ANNEX 19;
1.3.32 the COMPANY has not signed any stock option plan reserved to the
employees and there exists no decision or authorization relating to any such
issuance;
<PAGE>
1.3.33 the informing of the representatives of the employees of the COMPANY,
which respect to the transfer of the shares of the COMPANY to the PURCHASER has
been carried out in compliance with applicable law.
1.3.34 the COMPANY is not a party to nor is it threatened with any kind of
arbitration, any lawsuit, any formal notification, injunction, restriction,
government inquiry, complaint or sanction, or any proceeding whatsoever,
verification or claim of any nature whatsoever, originating from suppliers,
customers, its own employees, a government agency, or third parties whoever they
may be, for any cause whatsoever and, in addition, that it is not aware of any
fact that might give rise to any such lawsuit, formal notification, injunction,
restriction, government inquiry, complain or sanction, or any proceeding
whatsoever, or any verification or claim, other than those appearing in ANNEX
19;
1.3.35 the COMPANY has, at all times, made every effort to maintain its
activities and to preserve the cooperation of its employees and to maintain good
relations with its suppliers, its customers, its agents, its licensees, its
clients, its distributors, its franchises... and all other persons with whom it
has business relations;
1.3.36 there exists no fact or act known to the BENEFICIARY, or which he ought
to have known, from which any significant liability to the COMPANY could
reasonably derive or any significant change in its activities;
1.3.37 all the essential information necessary to allow the PURCHASER to know
the true situation of the COMPANY, and particularly with respect to the period
from August 31, 1999 until this day, particularly on the legal, professional,
asset, technical, economic, tax, accounting, juridical and social level, have
been provided to the PURCHASER and no fact or consequence has been hidden, which
might have the consequence of leading the PURCHASER not to purchase the shares
under the modalities stipulated if he had know these facts.
1.4 PROVISIONS COMMON TO ALL THE GUARANTEES AND DECLARATIONS
1.4.1 EFFECTIVE DATE
The guarantees and declarations contained in the present agreement shall go into
full effect on the date the present agreement is signed.
1.4.2 PROCEDURE
The BENEFICIARY must notify the GUARANTOR of any notification of tax or company
audit, any suit, injunction, complaint, arbitration or court appeal, inquiry,
sanction, dispute or claim (hereinafter "the claim") which may jeopardize the
present declarations and guarantees within fifteen (15) days of the receipt of
the claim or immediately, if the claim gives rise to summary proceedings.
The notification must contain a description of the claim, the identity of the
person from whom the claim stems, if applicable, the amount claimed or the
estimate amount of the harm suffered or alleged as well as a copy of the
relevant documents relating thereto.
<PAGE>
Failure to give notification of the claim or notification beyond the required
time shall constitute default of the guarantee obligation in the amount of the
claim for which notice was given after the required time.
The GUARANTOR and/or its counsel, duly empowered to this effect, shall have
access to the books and documents of the COMPANY, with respect to any claim
formulated under the present agreement, in the offices of the COMPANY or in any
other place designated by mutual agreement.
The strategy and the means of defense to be used shall be decided upon by mutual
agreement by the GUARANTOR and the BENEFICIARY, except that in the event of
disagreement between the GUARANTOR and the BENEFICIARY, the final decision shall
in any case be made by the BENEFICIARY, and this decision must be made in view
of maintaining or preserving the company interest.
1.4.3 SCOPE
The GUARANTOR agrees to compensate the BENEFICIARY or the COMPANY, at the option
of the BENEFICIARY:
- - for any payment of additional taxes, fees or levies of any nature, for
any interest, penalties or fines for late payment that may be levied
against the COMPANY and/or its subsidiaries, as the result of a claim
or an audit by tax authorities, or customs, or payroll tax, or labor
inspection authorities, etc... for operations or deeds prior to the
acquisition of the shares by the BENEFICIARY;
- - for any negative difference on any item of the assets and/or for any
unforeseen or insufficiently foreseen liability which might come to
light after September 30, 1999, but having its cause or origin prior to
said date, no matter of what nature it may be;
- - for any harm, whether direct or indirect, which results for the COMPANY
and/or for the BENEFICIARY from the violation or inaccuracy, even
partial, of any of the declarations and guarantees made under present
article 1;
- - for all payments made by the COMPANY to execute any commitment of
surety, guarantee or bill surety contracted before September 30, 1999;
In order to determine the amounts due under the present guarantee, account shall
be taken, on the one hand, of the amount of the recoveries or any savings of
taxes, levies and expenses that the recording of an additional liability might
be made possible, on the other hand, of the amount of the reserve funds on the
books for the coverage of risks of depreciation or loss or expenditures and
which prove to be inapplicable, but after deduction of the additional tax that
the recovery of these funds would entail.
To extent that the fees, levies and taxes, or tax or payroll tax adjustments
would constitute only a provisional expense for the COMPANY (for example, for a
tax arising from a recovery of amortizations that would be subsequently
deductible), they would not be taken into account.
Any penalties, interest, fees or indemnities that said adjustments might entail,
however, shall be borne by the GUARANTOR.
<PAGE>
It is expressly agreed:
- - that the approval of the accounts recorded as of December 31, 1998 at
the General Shareholders' Meeting of the COMPANY, as full discharge
given to the Board of Directors, shall in no way constitute a release,
in whole or in part, from any of the declarations, assertions and
guarantees signed in the present agreement by the GUARANTOR;
- - that all the declarations, assertions or guarantees contained in the
documents submitted by or in behalf of the GUARANTOR, by virtue of the
present agreement, or by reason of the transfer of the shares to the
BENEFICIARY, shall be considered as being declarations, assertions or
guarantees made by the GUARANTOR by virtue of the present agreement;
- - that the fact that the BENEFICIARY had knowledge about the company,
other than the information appearing in the annexes, prior to the date
the transfer takes place shall not limit in any way the scope of the
declarations, assertions and guarantees made in the present article;
- - that the annexes to the present agreement are given only for purposes
of information and do not limit either the application or the extent of
the obligation of indemnity.
1.4.4 EXCESS
It is expressly agreed that the commitment to indemnify accepted by the
GUARANTOR shall not be put into effect if the amount due by reason of the
implementation of the guarantee (and this for each case said is implanted) does
not exceed the amount of six thousand (6,000) francs.
Beyond this amount of six thousand (6,000) francs, the commitment by the
GUARANTOR to indemnify make put into effect, but GUARANTOR shall be bound to
indemnify from the first franc.
1.4.5 PAYMENTS
The payment of sums that may eventually be owed by the GUARANTOR either to the
COMPANY or to the BENEFICIARY, must be made upon the first request of the
COMPANY or the BENEFICIARY.
This payment may be made ex officio or upon simple request by the BENEFICIARY by
way of compensation and/or delegation to the amount due with all other sums
which may be due to the GUARANTOR, either by the BENEFICIARY or by the COMPANY.
In the event of any dispute over the amount of the sums claimed by the
BENEFICIARY, the GUARANTOR must immediately pay the amount not in dispute.
Any portion that is wrongly claimed shall automatically produce interest at the
average rate of the monetary market (T4M -- Eonia) in effect on the due date of
the sums involved resulting from the application of paragraph 1.4.3, between the
date it is due and the date of its effective payment, without any prior formal
notification.
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1.4.6 DURATION
The guarantees provided by the present agreement shall remain in effect, namely:
- - for the sums that may be due to tax authorities, or other authorities
administering other levies or payroll taxes, until the expiration of
the statute of limitations that can be invoked against these
authorities;
- - for any other sums: until December 31, 2001;
1.4.7 GUARANTEE OF PROPER EXECUTION
On agreement between the parties, it is understood that the guarantor will not
provide a bond as part of the guarantee.
2. DECLARATIONS OF THE BENEFICIARY
The BENEFICIARY acknowledges that he has been informed:
- - of the decision made by the general shareholders' meeting held on June
24, 1994 not to proceed to the dissolution of the COMPANY despite the
loss of over half of the company capital,
- - that the equity capital of the COMPANY has not been reconstituted as of
the date of these declarations.
- - that he is aware of the legal consequences of this situation and that
he agrees to proceed to reconstitute the equity capital upon the first
request,
The BENEFICIARY likewise acknowledges that he is perfectly aware of both the
direct and indirect diversified investments of the GUARANTOR and all the
shareholders of the GUARANTOR and therefore releases the GUARANTOR from the
requirement to provide a list of these investments .
3. NOTIFICATIONS
All notifications made necessary by the present agreement shall be validly made
by notice delivered in person or by registered letter with an acknowledgment of
receipt sent to the GUARANTOR or to the BENEFICIARY, at the last address
notified by the addressee or, in its absence, the address indicated above, and
they shall be presumed to have been received on the date affixed to the
acknowledgment of receipt by the addressee if delivered in person or the date
noted by the addressee of the registered letter on the acknowledgment of
receipt, if it is sent by registered mail or at the date of the first delivery
by the postal service of said letter.
4. DISPUTES
<PAGE>
All disagreements or conflicts that might arise over the validity, the execution
and/or interpretation of the present agreement shall be resolved by the
competent Courts of Paris.
Given in
on
In three originals
/s/ Jean-Louis Vilgrain /s/ Stanislas Vilgrain
- --------------------------- --------------------------
For FOOD RESEARCH Corp. For CUISINE SOLUTIONS Inc.
Jean-Louis Vilgrain Stanislas Vilgrain
Exhibit 10.2
FOOD RESEARCH CORP
85 SOUTH BRAGG STREET
ALEXANDRIA, VA. 22312
Mr. Stanislas Vilgrain
CUISINE SOLUTIONS INC
85 South Bragg Street
Alexandria, VA 22312
USA
October 29, 1999
Dear Sir,
We are herby following up on our various conversations and we are confirming to
you our agreement for the exchange of four hundred and twenty-five thousand two
hundred (425,200) shares worth one hundred (100) francs each, representing 100 %
of the shares held by FOOD RESEARCH Corporation in the capital of the company
NOUVELLE CARTE France, a company under French law having its corporate
headquarters at 1 Allee des Tilleuls, Ecoparc - 27400 Heudebouville - France,
registered with the Registry of Commerce and Companies of Louviers under number
B 348 066 677 for 1,500,000 shares (unregistered stocks) of the company CUISINE
SOLUTIONS INC.
We confirm that the transaction will take place between FOOD RESEARCH
Corporation, as sole owner of the shares of NOUVELLE CARTE France and Cuisine
Solution, the buyer.
We have noted that this exchange would include an "Earn Out" under the
conditions that follow
In the event of the realization as of June 30, 2000 (period from July 1, 1999 to
June 30, 2000) :
- - of less than 1,500,000 francs of "Operating Results," no share of the
company CUISINE SOLUTIONS INC. will be transferred to us,
<PAGE>
- - between 1,500,001 and 1,999,999 francs of "Operating Results," CUISINE
SOLUTIONS INC. shall transfer to us 375,000 of its own shares (unregistered
stocks),
- - above 2,000,000 francs of "Operating Results," CUISINE SOLUTIONS INC. shall
transfer to us 500,000 of its own shares (unregistered stocks).
<PAGE>
In the event of the realization as of June 30, 2001 (period from July 1, 2000 to
June 30, 2001) :
- - of less than 2,000,000 francs of "Operating Results," no share of the
company CUISINE SOLUTIONS INC. will be transferred to us,
- - between 2,000,001 and 2,499,999 francs of "Operating Results," CUISINE
SOLUTIONS INC. shall transfer to us 375,000 of its own shares (unregistered
stocks),
- - above 2,500,000 francs of "Operating Results," CUISINE SOLUTIONS INC. shall
transfer to us 500,000 of its own shares (unregistered stocks).
We agree to conclude an agreement to guarantee assets and liabilities.
Also we point out to you that CUISINE SOLUTIONS INC will own the Shares
beginning on October 31, 1999 with enjoyment counting retroactively to October
1, 1999. The Shares are free of any privilege, direct or indirect encumbrance or
restriction of any kind whatsoever.
We agree that Mr. Francois Paques and the company SECRIA will tender their
resignation from their functions as Administrators effective October 31, 1999.
Finally, this exchange must take place no later than October 31, 1999, and must
have obtained the approval of the Board of Directors of the companies FOOD
RESEARCH CORP. and CUISINE SOLUTIONS INC.
If this proposal is acceptable to you, please return to us a duplicate of the
present letter signed by you and with the handwritten note "read and approved."
Sincerely yours,
/s/ Jean-Louis Vilgrain
Jean-Louis Vilgrain
President and Chief Executive Officer
