OFFICE DEPOT, INC.
Dated as of June 10, 1995
Between OFFICE DEPOT having its registered office at 220 Old Germantown Road,
Delray Beach, Florida 33445, USA represented by Mr. David Fuente, (hereafter
referred to as "OD") and
CARREFOUR, a joint stock company incorporated under French law, having its
registered office at 6 Avenue Raymond Poincare, 75116 Paris, France, acting in
its own name and on behalf of the other companies in the CARREFOUR Group,
represented by Mr. Daniel Bernard, (hereafter referred to as "Carrefour").
(The parties are hereinafter collectively referred to as the "Partners").
OD carries on, in the USA and Canada, the activity of selling office supplies,
office services, business machines, computer equipment and office furniture at
discount prices in the retail format of warehouse formats (the "Business").
Carrefour carries on, in countries throughout the world, an activity
establishing and operating hypermarkets proposing self-service at discount
prices of a large assortment of food and non-food items, as well as various
The Partners have decided to pool their knowledge and experience and
to create a joint venture company as described hereinafter, with the
object of developing together a chain of stores that sells at discount
prices office supplies, office services, business machines, computer
equipment, and office furniture in the retail warehouse format similar
to the format that OD operates in North America (the "Joint Venture").
The territory in which the Joint Venture will exercise its activity
shall be France (the "Territory").
3. JOINT VENTURE VEHICLE
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3.1 The Partners shall cause a Societe par Actions Simplifiee
("SAS"), a company having limited liability under French law, to be
formed with the name "Office Depot France SAS" (hereinafter the "Joint
Venture Company"), in which the Partners shall each hold 50% of the
capital stocks and 50% of the voting rights.
3.2 The initial share capital of the Joint Venture Company shall
be 5,000,000 FF divided into 50,000 shares having a par value of 100
FF each. Initial capital contribution shall be the equivalent of
2,500,000 FF for each of Carrefour and OD.
3.3 The Partners may initially hold their respective interests in
the Joint Venture Company either directly or through affiliated
companies and hereby expressly warrant to each other that they will
continue to have lasting control over these companies (the
"Affiliates"). For purposes of this Agreement, the term control shall
mean the relevant Partner holding more than 50% of the voting stock
shares or a majority of the voting rights in the relevant Affiliate
3.4 Additionally subsidiary companies, such as a Societe en Nom
Collectif with the name "Office Depot France SNC" ("SNC"), may be
organized, if justified by practical commercial grounds or for other
sound reasons. Unless such companies are fully owned by the Joint
Venture Company, the principle of equality of the shareholding ratio
between Partners and all other
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provisions of this Agreement will apply to those companies on the same
basis. Upon mutual consent of the Partners, the SAS form of the Joint
Venture Company shall be converted into any other suitable form of
limited liability entity.
3.5 One of the goals of the Joint Venture being to arrange for the
listing of the Joint Venture Company, the Partners agree that in the
event of listing, they will make such changes to the present Agreement
and the Joint Venture Company as may be necessary or desirable.
4.1 The Joint Venture Company shall be controlled by a Board of
Directors (the "Board") comprised of six directors, three of whom shall
be appointed by OD and three of whom shall be appointed by Carrefour.
All decisions of the Board except those specified in Article 4.5,
shall be adopted by majority decisions of all members present or
represented. The Chairman of the Board will be elected by the Board.
In addition, the General Manager will sit on the Board and shall have
no voting rights on matters brought before the Board.
4.2 OD shall be responsible for the operation and management of
the Joint Venture Company. The OD Directors shall have the right to
appoint and replace the General Manager, who shall initially be Mr.
Bernard Louvat. The General Manager shall be empowered to take all
decisions concerning the Joint Venture
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Company which arise in the ordinary course of business.
4.3 The General Manager shall be responsible for preparing an
annual budget for the Joint Venture Company, to be submitted to the
Board of Directors for approval. The General Manager shall also be
responsible for the preparation, monitoring, and updating of a
four-year business plan and shall provide all relevant financial
information to the Board of Directors.
4.4 The General Manager shall manage the Company in accordance
with the approved budget and business plan. The initial business plan
will be prepared and submitted to the Board of Directors within four
months of signing, will be duly approved for the next four years by
the Partners and will be reviewed annually.
4.5 The unanimous approval of all members of the Board shall be
required for the Joint Venture Company to carry out the following
a) any modifications to the Articles of the Incorporation of the
Joint Venture Company;
b) any modifications to, or the adoption of, expansion of
financing strategies of the Joint Venture Company and
adoption/approval of the business plan and each annual budget.
4.6 The Board of Directors shall meet at least twice a year upon
the written request of the Chairman of the Board or the General
Manager. The written request shall be sent 15 days in advance. At
least one Board meeting may be held in
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the United States if contemporaneously held with the OD Board
5. TECHNICAL ASSISTANCE
Carrefour shall enter into certain service arrangement contracts with
the Joint Venture Company for purposes of providing the necessary
technical expertise, as set forth in the Technical Assistance
Agreement in the form annexed hereto. The fee as outlined in the
Technical Assistance Agreement of two-tenths of one percent (2/10%) of
net sales payable to Carrefour. The fee structure cannot be changed
without the agreement of the Partners.
6. MASTER AGREEMENT
OD and the Joint Venture Company shall enter into the Master
Agreement, which is annexed hereto, for purposes of granting OD rights
and trademarks to the Joint Venture Company. The fee structure is as
outlined in the Master Agreement of .50% (1/2 of one percent) of Net
Sales payable to Office Depot in addition to the initial fee for
France of USD$400,000 for the software licenses. The fee structure
cannot be changed without the agreement of the Partners.
7. SHARE TRANSFERS
The Partner that wishes to transfer, sell or otherwise dispose of any
of its shares must first obtain the written consent of
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the non-transferring Partner. In the case of transfer by a Partner to
an Affiliate of that Partner, the consent of the other Partners shall
not be unreasonably withheld.
8. TERMINATION/DEFAULTING PARTNER
8.1 Term Unless earlier terminated as provided herein, the
Joint Venture shall continue as long as the Partners remain
Shareholders of the Joint Venture Company.
8.2 A notice of termination of this Agreement may be given by a
Partner in the event that the other Partner is in material breach of
any of its obligations under this Agreement (or any of the other
agreements contemplated hereby), where such breach has not been cured
within a reasonable time, which in no event shall be less than 30
working days after receipt of such notification by such other Partner,
provided that the cure for such breach is commenced within such 30-day
8.3 In the event this Agreement is terminated under Section 8.2,
the effect will be to compel the defaulting Partner, at the
non-defaulting Partner's option, to either offer to sell its shares to
the non-defaulting Partner or purchase the non-defaulting Partner's
shares in each case at a price determined by an independent expert.
The expert shall be named by mutual agreement of the Partners or,
failing agreement, by the President of the Commercial Court of Paris
upon the request of the most diligent Partner. The expert shall
render his determination within three months after nomination and his
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determination shall be final and not subject to appeal.
8.4 Bankruptcy The Joint Venture will automatically terminate and
the Joint Venture Company will be dissolved upon the bankruptcy,
resignation or expulsion of either Partner.
OD and Carrefour agree that for the term of this Agreement they shall
not engage or take any interest or shareholding, whether directly or
indirectly, in any entity in the territory having an activity
identical or similar to the Business, provided, however, that
Carrefour shall reserve the right to sell office equipment, furniture
and products in its hypermarkets.
10. DISPUTE RESOLUTION AND DEADLOCK
10.1 The Partners hereby agree that in the event of major or
persistent disagreement between the Partners concerning the business
plan or the management of the Joint Venture Company which leads to the
inability of the Joint Venture Company to conduct business in due
course, or a disagreement between the Partners involving a transfer of
shares, the procedure set forth in Section 10.2 shall apply.
10.2 Either Partner may, upon written notice, call a meeting of the
President of each Partner. The purpose of the meeting shall be to
resolve amicably, and in good faith, any dispute. In the event that
the dispute cannot be resolved successfully
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within one month of the delivery of such notice (the "Notice") date,
then for a period of three months, OD shall have the option to
purchase all of Carrefour's shares in the Joint Venture Company at a
price to be determined by an independent expert in accordance with the
procedure described in Article 8.3.
10.3 In the event that OD does not exercise its option, then for a
succeeding period of three months, Carrefour shall have the option to
purchase all of OD's shares in the Joint Venture Company at the same
10.4 If neither OD nor Carrefour exercise their options, then the
Joint Venture shall terminate and the Joint Venture Company either be
sold to a third party with the agreement of both Partners or shall be
11. TRANSPARENCY AND ACCESS TO THE BOOKS OF THE JOINT VENTURE COMPANY
The Partners subscribe to the principle of transparency in connection
with the Joint Venture Company.
A pre-condition of the validity of such transfer of shares under
Section 7 is that the acquiring party must expressly and
simultaneously accept to be bound by the terms of this Agreement and
that the Partner transferring the shares
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guarantees the due performance of all obligations hereunder if so
required by the other Partner.
The accounts of the Joint Venture Company shall be audited once per
year by Deloitte and Touche.
Each Partner shall have the right to carry out a supplementary
independent audit of the Joint Venture Company, no more than once per
year and at its own cost, and the Joint Venture Company shall
cooperate in supplying the necessary information.
This Agreement may not be modified except by written agreement signed
by both the Partners.
15. WHOLE AGREEMENT
This Agreement and the related agreements annexed hereto constitute
the entire agreement between the Partners and supersede any prior
understanding, whether written or oral concerning the present Joint
In the event that any of the provisions of this Agreement should prove
to be invalid or illegal, this fact shall not affect the validity of
the remaining provisions and the
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offending provision shall be severed from this Agreement. The
Partners undertake to replace the invalid or illegal provision with a
permissible provision which as nearly as possible reproduces the legal
and financial purposes of the invalid or illegal provision.
No failure or delay on the part of either Partner hereto to exercise
any right, power or remedy hereunder shall operate as a waiver
thereof, nor shall any express waiver or assent to any breach or
default operate as a waiver or assent to any subsequent breach or
default of the same or any other term or condition of this Agreement.
The Partners agree, both during this Agreement and after its
termination for whatever reason, except as otherwise required by
applicable law, to keep strictly confidential all technical,
financial, commercial, and other confidential information obtained by
them during the course of the Agreement and the related agreements
19. APPLICABLE LAW
This Agreement shall be governed and construed in accordance with the
law of France.
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This Agreement is executed in the English language and any
translations made into another language for the convenience of the
Partners shall in no way prevail over the English version, which is
the sole binding Agreement between the Partners.
21. RELATION AMONG AGREEMENTS
The Partners agree that the present Agreement and all other agreements
and documents attached or relating to the Joint Venture shall be
considered as one complete whole. In the event of inconsistency or
disagreement among such agreements and/or documents, the terms of the
Partnership Agreement shall prevail. In the event of termination of
the Joint Venture for any reason, all of such agreements shall
terminate (except for clauses expressly surviving termination). All
disputes between the Partners concerning any of such agreements shall
be resolved in a consistent and coordinated manner by arbitration as
set forth herein.
22. AUTHORIZATIONS - DECLARATIONS
The Partners agree to take all necessary steps to obtain any
authorizations and to complete any declarations which may be necessary
for the proper performance of this Agreement.
23.1 In the event of any dispute concerning the
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interpretation, validity, or performance of this Agreement, and any
other agreement relating to the Joint Venture, the Partners agree that
they shall meet, with a view to finding an amicable resolution.
Failing such an amicable resolution within 30 days from the date of
the meeting between the Partners to which they have been called by
either Partner, by way of registered letter, the question shall be
submitted to arbitration in accordance with the rules of the
International Chamber of Commerce.
23.2 The Partners shall each name an arbitrator in the month
following the expiration of the 30-day delay referred to above. Each
Partner shall notify the other by registered letter of the name of the
arbitrator chosen and the questions it wishes to submit for decision.
The arbitrators chosen shall have a further 30 days in which to
appoint a third arbitrator, who shall preside as Chairman of the
23.3 In the event that one of the Partners fails to designate an
arbitrator, or the two arbitrators fail to agree on the appointment of
the third, any missing arbitrator shall be designated in accordance
with the ICC Rules.
23.4 The arbitration shall take place in Geneva and the arbitrators
shall use their best efforts to render a decision in the shortest time
possible. The language of the arbitration shall be English.
23.5 The decision of the arbitrators shall be final and binding and
incapable of appeal. The decision may be
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registered with a competent Court, upon the request of either of the
Signed this 10th day of June, 1995
/s/ D. Bernard /s/ D. Fuente
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CARREFOUR OFFICE DEPOT
D. Bernard D. Fuente
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