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LIABILITY AND ASSET GUARANTEE

Guarantee Agreement

LIABILITY AND ASSET GUARANTEE | Document Parties: QEP CO INC | VALFIN SA You are currently viewing:
This Guarantee Agreement involves

QEP CO INC | VALFIN SA

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Title: LIABILITY AND ASSET GUARANTEE
Date: 9/27/2004
Industry: Misc. Fabricated Products     Sector: Basic Materials

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Exhibit 10.2

 

LIABILITY AND ASSET GUARANTEE

 

Between the undersigned

 

VALFIN SA

A Business Corporation under French Law, with a capital of 500 000 Euros

Whose registered office is at 24 Rue des Teinturiers, 84000 Avignon (France)

On the Avignon Trade and Companies Register under No 385 386 834

Represented by Mr Jean Patrice DAIRE

 

Hereinafter called the Assignor or the Guarantor, the first party

 

AND

 

Q.E.P. Co. INC

A Delaware company

Whose registered office is at 1081 Holland Drive, Boca Raton, Florida 33487

Represented by its Chairman, Mr Lewis GOULD

 

Hereinafter called the Assignee, the second party

 

The following was set out and agreed:

 

PREAMBLE

 

In terms of the agreement dated             of the                      (“the Agreement”) the two parties signing below agreed to assign all 8,200 shares in PRCI for a mutually agreed price based on the Company’s Balance Sheet as of 31 December 2003 (“the Balance Sheet”).

 

The price was confirmed in the light of the Company’s financial situation as shown in the Balance Sheet as of 30 June 2004, provided this shows shareholders’ equity of the same or a greater amount than that shown on the Balance Sheet of 31 December 2003.

 

The transfer taking place in accordance with the agreement shall be covered by a guarantee of the Company’s assets and liabilities, as at the date of this Guarantee and as at the date of transfer of the shares in PRCI.

 

The Guarantor declares and acknowledges that the accounting documents handed to the Assignee were drawn up in accordance with the generally accepted accounting standards and practices allowed in France, and that the tax forms used are those required by the tax authorities.

 


GIVEN THE ABOVE PREAMBLE THE PARTIES AGREED AS FOLLOWS:

 

The Assignor hereby declares and certifies, warrants and represents as at the date of this agreement and as at the date of transfer of the shares in PRCI (the “Completion”):

 

 

a)

The Articles of Incorporation of the Company (which expression throughout this document shall include both PRCI and COMETEL) are up-to-date and in full compliance with current legislation, that the general meetings of shareholders and board of directors’ meetings are held regularly, and that the minutes of these meetings are recorded in a numbered, dated and signed minute books. The Shares are the only shares of the Company in issue and no agreement exists whereby any person may call for or receive additional shares of the Company.

 

 

b)

The Company is the sole owner, not subject to any restriction or reserve, of all tangible and intangible assets shown on the Balance Sheet and of all assets acquired in the interval, the said assets not having been pledged or otherwise given as security. The Company does not have any subsidiary; the Company does not hold shares in any other company and is not a partner in any Partnership or a participant in any joint venture. None of the debts owed to the Company will remain uncollected.

 

 

c)

The Company has not entered into any agreement that might affect its activities in a significant way. It is also not bound by any contract or undertaking, with the exception of insurance policies, whose termination without compensation requires notice of more than three months. In addition, none of the Company’s customers or suppliers have expressed any desire to or intention of termination any existing contract or of refusing to renew existing contracts when they expire. There are no arrangements with customers which in accordance with their terms are or may be terminable on a change of control of the Company.

 

The premises occupied by the Company for the exercise of its function are not the Company’s property, but are rented under a commercial lease in accordance with French legislation. The afore-mentioned lease is annexed to this Guarantee (Schedule 1). However in order for the Assignee to have a complete understanding, it should be noted that commercial leases have specific conditions, namely regarding the duration of contracts and compulsory notices which are in excess of the three months above-mentioned. In particular the current commercial lease, which PRCI is bound to, has a duration of three years and can only be terminated, except with the lessor’s agreement, at the end of this period and only with six months’ prior notice. The Company does not own or lease any other real estate.

 

 

d)

The property and equipment, comprising the Company’s assets are sufficient for PRCI to operate its business as it has done since 1 January 2003 and is in a state of normal wear and tear for its age. All the Company’s assets are insured under policies currently in force. To date, all requisite action has been taken to ensure that these policies are valid, and in particular that their premiums have been paid on the due dates. The Company owns or is licensed for all intellectual property rights used in its business.

 

 

e)

As part of its business activities, the Company has never prejudiced the rights of any third party and has duly respected its contractual and other obligations. The Company is not involved in, or been forewarned of any legal process, action, appeal, dispute, claim or administrative enquiry, and is not subject to any legal judgment or sentence. The only

 

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exception to the above is the 1993 lawsuit brought against the company by Mr Franze; however by utilising the principle of prudence, the Company has made provisions for this, up to and including the budget drawn up at the closing of the financial year 2003. Furthermore, should the lawsuit be held up in court, it should not have any financial consequences on the Company due to the third party liability insurance policy held by the Company.

 

 

f)

The Company is not currently and is not likely to be involved in any dispute before the industrial arbitration.

 

No employee has any special contract and the Company’s arrangements with its employees are in compliance with current legislation and regulations. Only Mr Rene Condomines has an individual agreement which he has explained to the Buyer who acknowledges.

 

As of this day, the Company has 10 in situ, 11 sales representatives, 5 of which have a statute of REP Multicard, and 6 of which are non-salaried sales agents. A list of employees showing their length of service, the gross salaries in 2003 and 2004 other benefits (e.g. pension) and the bonus paid in 2003, the commission rates and commissions paid in 2003, is annexed together with details of bonus and commission arrangements for 2004 (Schedule 2).

 

 

g)

Since 1 January 2004, the Company has pursued its normal, current operations only, it has not transferred or yielded up any asset, reached any composition with creditors, or made any unusual investment or failed to pay its creditors in accordance with normal practice.

 

The Company has not distributed dividends. The transfers to the Assignee are realized inclusive of dividends, i.e. all the Company’s earning remain acquired to the Ass


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