Exhibit 4.2
STOCK PURCHASE AGREEMENT
This Stock Purchase Agreement is entered into effective as of the ___th
day of February, 1999, between Interleaf, Inc., of 00 Xxxxxx Xxxxxx, Xxxxxxx
Xxxxxxxxxxxxx XXX ("Buyer") and Finpiave, S.P.A. of Xxx Xxxxxxxx x. 00, 00000
Xxxxx xx Xxxxx, Xxxxxxx Xxxxx (the "Seller"). Certain capitalized terms used
herein and not otherwise defined are defined in Article 5.
RECITALS
WHEREAS, the Seller and the Buyer together own all of the outstanding
stated capital of Interleaf Italia Srl an Italian company with registered
offices at Xxxxxxx Xx. 0 Xxxxxx Xx. 0, XXX 00000, Registration No.: 285263, with
the Companies' Register at the Tribunal of Milan, corporate capital of Lire
65,000,000 (the "Company"), with the Seller owning a quota in the Company having
a nominal value of Lire 45,000,000 representing approximately 69% of the entire
corporate capital (the "Purchased Quota") and with Buyer owning a quota in the
Company having a nominal value of Lire 20,000,000 representing approximately the
remaining 31% (including a quota in the nominal amount of 500,000 Lira held by
Mr. Xxxx Xxxxxxx); and
WHEREAS, Buyer wishes to acquire all of the capital of the Company owned
by the Seller; and
WHEREAS, Seller has negotiated to sell the Purchased Quota to Buyer;
NOW, THEREFORE, in consideration of the mutual agreements contained herein
and for other good and valuable consideration, the receipt and sufficiency of
which are hereby acknowledged, the parties hereto agree as follows:
ARTICLE 1. PURCHASE AND SALE OF QUOTA.
1.1 PURCHASE OF PURCHASED QUOTA. Subject to the provisions of this Agreement,
the Seller agrees to sell, and Buyer agrees to purchase, at the Closing the
Purchased Quota, and to pay for the Purchased Quota the following amounts (the
"Purchase Price"):
(a) At the Closing, Buyer shall issue 275,000 shares of Buyer's Common
Stock, $ .01 par value ("Buyer's Stock") to Seller, and 16,667 shares of Buyer's
Stock to Seller's designee Xx. Xxxxxxx Xxxxxxxxxx, all subject to the
requirements of Sections 1.2 and 1.4 below; and
(b) At the Closing, Buyer shall pay Seller the amount of Two Hundred
Thousand Dollars ($200,000.00) payable in cash, by certified check or wire
transfer of immediately available funds;
(c) Within 15 days after the Closing, Buyer shall deliver to Seller one,
two or three Stock Purchase Warrant(s) substantially in the form of EXHIBIT A
hereto. The number of shares of Buyer's Stock subject to such Warrant(s) and
the(ir) exercise price(s) shall be designated by the Seller within 15 days after
the date of this Agreement, in accordance with EXHIBIT B (and such shares shall
be issued subject to the requirements of Sections 1.2 and 1.4 below);
(d) Within 15 days after the Closing, Buyer shall deliver to Seller one
additional Stock Purchase Warrant substantially in the form of EXHIBIT A hereto,
under which Seller may purchase 66,667 shares of Buyer's Stock (subject to the
requirements of Sections 1.2 and 1.4 below) at an exercise price of $ .01 per
share, which shall be deemed to have been exercised 12 months from the Closing;
provided, that at Seller's sole option pursuant to written notice given at least
30 days prior to the date such Warrant is deemed to have been exercised, such
Warrant shall be cancelled and Buyer shall pay Seller the amount of Two Hundred
Thousand Dollars ($200,000.00) in cash, by certified check or wire transfer of
immediately available funds; and
(e) 24 months from the Closing, Buyer shall pay Seller the amount of Two
Hundred Thousand Dollars ($200,000.00) payable in cash, by certified check or
wire transfer of immediately available funds.
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1.2 REGISTRATION OF BUYER's Stock. Buyer agrees to use its best efforts to
insure that the shares of Buyer's Stock which are issued pursuant to Sections
1.1(a) above (and which are issued pursuant to the exercise of Warrants
delivered under Sections 1.1 (c) and (d) above other than in connection with a
"net issue exercise" under Section 2.2 of such Warrant(s)) are effectively
registered for resale by Seller under the Securities Act, pursuant to a
registration statement filed with the SEC within 30 days after each issuance of
such shares to Seller.
1.3 SECURITY FOR CASH PAYMENTS. As security for Buyer's obligations under
Section 1.1(d) and its obligations to deliver cash under Section 1.1(e), Buyer
shall deliver to Seller at the Closing security consisting of an irrevocable
stand-by letter of credit in substantially the form attached as EXHIBIT D.
1.4 RESTRICTIONS ON RESALE OF BUYER's Stock. Seller agrees to resell any and all
Buyer's Stock issued to Seller under this Agreement subject to the following:
(i) Seller shall effect all sales through a broker/dealer registered
with the SEC;
(ii) Seller shall not, without Buyer's consent:
(a) offer to sell during any given week more than 50% of the
Average Daily Volume (measured on the first trading day of
that week); or
(b) offer to sell on any given trading day more than the lesser of
(x) 10% of all Buyer's Stock delivered by Buyer under this
Agreement, or (y) 25% of the Average Daily Volume; and
(iii) Seller shall not, either directly, indirectly or through any of its
affiliates, employees or agents, or anybody acting on their behalf,
engage in any short sales, swaps, purchasing of puts, or other
hedging activities that involve the direct or indirect use of
Buyer's Stock or securities derivative from Buyer's Stock, for any
reason.
The restrictions of this Section 1.4 shall expire, as to each installment of
Buyer's Stock delivered to Seller hereunder, on the earlier of (i) twelve (12)
months after such Buyer's Stock is either registered pursuant to Section 1.2
above or an exemption from such registration is available as determined by
opinion of counsel reasonably acceptable to the Buyer, or (ii) such time as FMV
is greater than $12.00.
1.5 TIME AND PLACE OF CLOSING. The Closing shall be held at the offices of
Seller at 10:00 a.m., on February 23, 1999, or at such other place, date or time
as may be fixed by mutual agreement of the parties (the "Closing Date");
provided, however, that in no event shall the Closing Date be extended beyond
March 15, 1999.
1.6 FORMALITIES FOR TRANSFER OF THE PURCHASED QUOTA. On Closing Date, in
order to comply with Italian tax and corporate law related to the transfer of
quotas, the Seller and the Buyer shall execute before Xx. Xxxxxxx, notary public
in Milan, one deed of transfer substantially in the text attached hereto as
EXHIBIT C (the "Deed of Transfer"). The Notary Public shall take care of the
filings with the Registro delle Imprese of Milan, the Tax Office, and all of the
other filings and formalities required by Italian law. The Deed of Transfer
shall not amend, supersede or novate any of the obligations of the parties set
forth herein, and in the case of any discrepancy between the Deed of Transfer
and this Agreement, the provisions of this Agreement shall prevail.
It is agreed that all actions and transactions described in paragraphs 1.1. to
1.6. shall be regarded as one and single transaction so that, at the option of
the party having interest to the carrying out of the specific action or
transaction, no action or transaction shall be deemed to have taken place if and
until all other actions and transactions shall have taken place. The parties
acknowledge the essential nature of this provision.
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1.7 COMPANY CASH BALANCE. At or immediately prior to the Closing, the Seller and
Buyer shall cause the Company to distribute up to $200,000.00 of the Company's
cash to the Seller, which shall be in the form of a distribution of paid-in
capital. The Company may borrow to fund such payment; provided, that after such
payment the net worth of the Company as of 12-31-98 shall be at least Lit.
504,862,336.
1.8 FURTHER ASSURANCES. The Seller from time to time after the Closing, at the
request of Buyer and without further consideration, shall execute and deliver
such further instruments of transfer and assignment and take such other action
as Buyer may reasonably require to more effectively transfer the Purchased Quota
to the Buyer.
ARTICLE 2. REPRESENTATIONS AND WARRANTIES OF THE SELLER.
The Seller hereby represents and warrants to Buyer as follows:
2.1 TITLE TO QUOTA. Seller is the record and beneficial owner of the Purchased
Quota. Seller does not own of record or beneficially any other shares of capital
stock of the Company, or any rights, options, or warrants with respect thereto.
The Purchased Quota to be transferred by Seller to Buyer pursuant to this
Agreement will be, when delivered, duly authorized, validly issued, fully paid
and nonassessable, and will be free and clear of all Encumbrances.
2.2 AUTHORIZATION OF TRANSACTION. The Seller has the unrestricted and absolute
power, authority and capacity to execute and deliver this Agreement and to
perform its obligations hereunder, and to carry out the transactions
contemplated hereby. All necessary action, corporate or otherwise, has been
taken by Seller to authorize the execution, delivery and performance of this
Agreement and the transactions contemplated hereby. This Agreement has been duly
executed and delivered by the Seller and is the legal, valid and binding
obligation of the Seller, enforceable against the Seller in accordance with its
terms. Buyer acknowledges that Mr. Xxxx Xxxxxxx has a right of first refusal to
purchase the Purchased Quota, and Buyer will be responsible for obtaining the
waiver from Xx. Xxxxxxx of this right.
2.3 FINANCIAL STATEMENTS.
(a) Attached as SCHEDULE 2.3 hereto are the following financial
statements of the Company, all of which, to the best of the Seller's knowledge,
are complete and correct and present fairly the assets, liabilities, and
financial position of the Company on the date thereof, and the results of
operations and changes in the financial condition of the Company for the periods
covered thereby:
Balance Sheet, Statement of Profit and Loss and Statement of Cash Flows
for the calendar years 1997 and 1998
(b) To the best of the Seller's knowledge, the books of account of the
Company for the periods of the financial statements referred to in paragraph (a)
are complete and correct in all material respects and have been maintained on a
consistent basis.
2.4 ABSENCE OF UNDISCLOSED LIABILITIES. To the best of the Seller's
knowledge, the Company has no liabilities of any nature, whether accrued,
absolute, contingent or otherwise (including without limitation liabilities as
guarantor or otherwise with respect to obligations of others, or liabilities for
taxes due or then accrued or to become due), except for liabilities stated or
adequately reserved against on the Balance Sheet dated as of December 31, 1998
(the "1998 Balance Sheet") or incurred after the date of the 1998 Balance Sheet
in the ordinary course of business. To the best of the Seller's knowledge, there
is no fact which materially adversely affects, or may in the future (so far as
can now be reasonably foreseen), materially adversely affect, the business,
properties, operations or conditions of the Company which has not been
specifically disclosed herein or on a schedule hereto.
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2.5 PAYMENT OF TAXES. The Company has duly and timely filed all Tax Returns
with respect to all Taxes. All of the Tax Returns are complete and correct in
all respects. All Taxes shown to be due on the Tax Returns have been paid, and
there are no Taxes which are being contested in good faith by the Company. With
respect to all other Taxes for which no return is required or which have not yet
accrued or otherwise become due, adequate provision has been made in the
financial statements referred to in Section 2.3 above. All Taxes and other
assessments and levies which the Company is required to withhold or collect have
been withheld or collected and paid over or will be paid over to proper
governmental authorities as required. All transfer, excise and other Taxes
payable to any jurisdiction by reason of the transfer of the Purchased Quota
pursuant to this Agreement shall be paid or provided for by Seller after the
Closing at no cost to Buyer.
2.6 LABOR AND EMPLOYEE RELATIONS. The Company has paid in full (or made
accrual or provisions for payment in full) to its employees, agents and
contractors all wages, salaries, commissions, bonuses and other direct
compensation for all services performed by them through the end of the Company's
most recent pay period. The Company does not have any contingent liability for
sick leave, vacation time, holiday pay, severance pay or similar items not set
forth on the 1998 Balance Sheet. The Company has complied with and has no
liabilities whatsoever with respect to payroll, social security, and other
employment related taxes for its employees and independent contractors. The
execution, delivery and performance of this Agreement and the consummation of
the transactions contemplated hereby will not trigger any severance pay
obligation under any contract or at law. All of the representations of Seller in
this Section 2.6 are made to the best of the Seller's knowledge.
2.7 MINUTE BOOKS. To the best of the Seller's knowledge, the minute books and
stock records of the Company accurately record all action taken by the
stockholders, board of directors and committees thereof of the Company and all
issuances and transfers of capital stock of the Company. Complete and accurate
copies of all minute books and stock records of the Company have been delivered
to or made available for inspection by Buyer.
2.8 INVESTMENT MATTERS.
(a) Seller is an "accredited investor" within the meaning of Rule
501(a)(3) under the Securities Act.
(b) Seller is not a U.S. person, or is not acquiring Buyer's Stock for
the account or benefit of a U.S. person within the meaning of Rule 902(k) under
the Securities Act.
(c) Seller acknowledges that Buyer's Stock issued pursuant hereto
constitute restricted securities within the meaning of Rule 144 of the
Securities Act and Seller may not and will not resell, transfer or otherwise
dispose of any Buyer's Stock unless (i) pursuant to a registration statement
filed with the Securities and Exchange Commission pursuant under the Securities
Act with respect thereto which is in effect or an exemption from such
registration is available, including without limitation, Regulation S (Rule 901
through Rule 905) under the Securities Act; or (ii) in accordance with Rule 144
under the Securities Act. Seller further acknowledges and agrees that hedging
transactions involving Buyer's Stock issued pursuant hereto may not be
conducted. Any certificates of Buyer's Stock issued pursuant hereto shall bear a
legend as to the restrictions contained in this Section.
2.9 DISCLOSURE OF MATERIAL INFORMATION. To the best of Seller's knowledge,
neither this Agreement nor the financial statements, any Schedule, any exhibit,
document or certificate delivered by or on behalf of the Seller pursuant hereto
contains any untrue statement of a material fact, or omits to state a material
fact necessary to make the statements herein or therein not misleading in light
of circumstances under which made.
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ARTICLE 3. REPRESENTATIONS AND WARRANTIES OF BUYER.
Buyer hereby represents and warrants to Seller as follows:
3.1 ORGANIZATION OF BUYER. The Buyer is a corporation duly organized, validly
existing and in good standing under the laws of the Commonwealth of
Massachusetts with full corporate power and authority to own or lease its
properties and to conduct its business in the manner and in the places where
such properties are owned or leased or such business is conducted by it.
3.2 CAPITALIZATION. The Company is authorized to issue (a) 50,000,000 shares
of common stock, $.01 par value per share, of which 7,651,828 shares were issued
and outstanding as of December 31, 1998 (after giving effect to a one-for-three
reverse split), and (b) 5,000,000 shares of preferred stock, $.10 par value per
share, of which (i) 726,003 shares designated as Senior Series B Convertible
Preferred Stock were outstanding as of December 31, 1998, and (ii) 1,350 shares
designated as 6% Convertible Preferred Stock were issued and outstanding as of
December 31, 1998. Any shares of Buyer's Stock issued to Seller under this
Agreement will be, when issued in accordance with this Agreement, duly
authorized, validly issued, fully paid, nonassessable and free of all preemptive
rights and Buyer will use its best efforts to insure that such shares are
registered for resale by the Seller on an effective registration statement under
the Securities Act filed with the SEC within 90 days from their issuance.
3.3 AUTHORIZATION OF TRANSACTION. Buyer has the full power and authority to
execute and deliver this Agreement and to perform its obligations hereunder. The
execution and delivery of this Agreement and the performance of this Agreement
and the consummation by the Buyer of the transactions contemplated hereby and
thereby have been duly and validly authorized by all necessary corporate action.
This Agreement has been duly and validly executed and delivered by the Buyer and
constitutes a valid and binding obligation of the Buyer, enforceable against the
Buyer in accordance with its terms.
3.4 NO CONFLICT OF TRANSACTION WITH OBLIGATIONS AND LAWS.
(a) Neither the execution, delivery and performance of this Agreement,
nor the performance of the transactions contemplated hereby, will (i) conflict
with or constitute (with or without the passage of time or the giving of notice)
a breach of, or default under any material agreement, instrument or obligation
to which the Buyer is a party or by which its assets are bound which would
materially affect the performance by the Buyer of its obligations under this
Agreement; or (ii) result in a violation of Law or Court Order applicable to the
Buyer.
(b) The execution, delivery and performance of this Agreement and the
transactions contemplated hereby by the Buyer do not require the consent,
waiver, approval, authorization, exemption of or giving of notice to any
Governmental Authority or other third party.
3.5 REPORTS. Buyer's Common Stock is registered under the Exchange Act, and
Buyer is subject to the periodic reporting requirements thereof. The Buyer has
previously furnished to the Seller complete and accurate copies, as amended or
supplemented, of its (a) Annual Report on Form 10-K for the fiscal years ended
March 31, 1997 and 1998, as filed with the SEC, (b) proxy statements relating to
all meetings of its stockholders (whether annual or special) since January 1,
1997 and (c) all other reports filed with the SEC pursuant to the Exchange Act
since January 1, 1997 (such annual reports, proxy statements and other filings,
together with any amendments or supplements thereto, are collectively referred
to herein as the "Buyer Reports"). Buyer Reports (i) comply as to form in all
material respects with applicable accounting requirements and the published
rules and regulations of the SEC with respect thereto, (ii) have been prepared
in accordance with GAAP applied on a consistent basis throughout the periods
covered thereby (except as may be indicated therein or in the notes thereto),
(iii) fairly present the consolidated financial condition, results of operations
and cash flows of the Buyer as of the respective dates thereof and for the
periods referred to therein, and (iv) are consistent in all material respects
with the books and records of the Buyer.
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ARTICLE 4. INDEMNIFICATION.
4.1 Subject to the limitations in paragraph 4.2 below, the Seller agrees to
defend, indemnify and hold harmless Buyer's Indemnified Persons from and against
all Losses directly or indirectly incurred by or sought to be imposed upon any
of them:
i) resulting from or arising out of any breach of any of the covenants,
representations or warranties made by Seller in this Agreement, or
in any agreement, document or instrument executed and delivered
pursuant hereto or in connection with the Closing;
ii) resulting from or arising out of the intentional misrepresentation
or breach of warranty of the Seller or any intentional failure of
the Seller to perform or comply with any covenant or agreement of
the Seller contained herein;
iii) resulting from or arising out of any breach of the representations
or warranties set forth in Section 2.5 of this Agreement;
iv) resulting from or arising out of any breach of the representations
or warranties set forth in Section 2.6 of this Agreement; or
v) equal to the amount by which the net worth of the Company at
12-31-98 is less than Lit. 504,862,336.
4.2 The right to indemnification under section 4.1 is subject to the following
limitations:
i) The Seller shall have no liability under section 4.1 unless one or
more of the Buyer's Indemnified Persons gives written notice to the
Seller asserting a claim for Losses, including reasonably detailed
facts and circumstances pertaining thereto, before a period of two
(2) years from the Closing Date; provided, that for any claim based
upon a covenant or undertaking which by its terms is to be performed
after the Closing, then the period above shall commence on the date
when such covenant or agreement should have been performed.
ii) Seller shall not be liable to Buyer under this Agreement for any
Losses which result from or arise out of the conduct of the
Company's business after the Closing.
iii) Except for Losses arising under Sections 4.1(ii) and 4.1(iii), and
except for Seller's fraud, Seller's liability shall not exceed the
amount of the consideration paid by Buyer hereunder. The foregoing
notwithstanding, Seller's liability for Losses arising under Section
4.1(iii) shall be limited to $2,000,000, solely if and to the extent
that Seller had no actual or constructive knowledge of the breach of
the representation(s) or warranty(ies) contained in Section 2.5
which directly caused such Losses.
iv) Indemnification shall be payable by Seller only if the aggregate
amount of all Losses hereunder by Buyer's Indemnified Persons shall
exceed $10,000, at which point Seller shall be responsible for all
Losses, including the first $10,000 of such Losses.
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v) The indemnification provisions of this Article 4 state the Buyer's
sole and exclusive recourse, and the Seller's sole and exclusive
liability, for any claims, damages or Losses arising under or out of
this Agreement or the transactions contemplated hereunder.
4.3 DEFENSE OF THIRD PARTY ACTIONS.
(a) Within 30 days after receipt of notice of any Third Party Action,
any person who believes he, she or it may be an Indemnified Person will give
notice to Seller of such action. The omission to give such notice to the Seller
will relieve the Seller of any liability hereunder, to the extent that it was
actually prejudiced thereby.
(b) Upon receipt of a notice of a Third Party Action, the Seller shall
have the right, at its option and at its own expense, to participate in and be
present at the defense of such Third Party Action, but not to control the
defense, negotiation or settlement thereof, which control shall remain with the
Indemnified Person, unless the Seller makes the election provided in paragraph
(c) below.
(c) By written notice within forty-five (45) days after receipt of a
notice of a Third Party Action, Seller may elect to assume control of the
defense, negotiation and settlement thereof, with counsel reasonably
satisfactory to the Indemnified Person; provided, however, that the Seller
agrees (i) to promptly indemnify the Indemnified Person for its expenses to
date, and (ii) to hold the Indemnified Person harmless from and against any and
all Losses caused by or arising out of any settlement of the Third Party Action
approved by the Seller or any judgment in connection with that Third Party
Action. The Seller shall not in the defense of the Third Party Action enter into
any settlement which does not include as a term thereof the giving by the third
party claimant of an unconditional release of the Indemnified Person, or consent
to entry of any judgment except with the consent of the Indemnified Person.
4.4 MISCELLANEOUS.
(a) Indemnified Persons shall be entitled to indemnification regardless
of whether the matter giving rise to the applicable liability, payment,
obligation or expense may have been previously disclosed to any such person
unless expressly disclosed on each particular Schedule requiring such
disclosure.
(b) Buyer shall first recover any amount owing by the Seller for
indemnification hereunder by setoff against any amounts that may otherwise be
due from the Buyer or the Company to the Seller whether hereunder or otherwise.
(c) Claims for indemnification under this Article 4 shall be paid or
otherwise satisfied by Seller within thirty (30) days after a Final Adjudication
thereof (as defined in Section 6.2 below).
ARTICLE 5. DEFINITIONS.
As used in this Agreement, the following terms have the indicated meanings:
"Average Daily Volume" means the average of the daily trading volume of the
Buyer's Common Stock on the Nasdaq National Market for the 20 trading days
preceding the day in question, divided by two to adjust for Nasdaq reporting of
both sides of a trade.
"Buyer's Stock" means the Common Stock, $.01 par value per share, of Buyer
delivered to Seller pursuant hereto.
"Closing" means the closing of the purchase and sale provided for in this
Agreement.
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"Encumbrance" means any lien, option (including right of first refusal or first
offer), encumbrance, restriction, mortgage, pledge, security interest, claim or
charge of any kind or character.
"Fair Market Value" or "FMV" for a given date means (i) for cash, the nominal
value thereof, and (ii) for Buyer's Stock, the volume-weighted average of the
closing prices of Buyer's Stock on the Nasdaq National Market for the twenty
trading days immediately preceding such date.
"Indemnified Persons" means the Buyer, its subsidiary and affiliated
corporations, their respective directors, officers, employees, stockholders and
agents, the Company after the Closing, and any person serving as a director,
officer, employee or agent of the Company at Buyer's request after the Closing.
"Laws" means all applicable statutes, laws, ordinances, rules and regulations.
"Losses" means the "Applicable Percentage" of all losses, damages (including,
without limitation, punitive and consequential damages), fines, penalties,
liabilities, payments and obligations, and all expenses related thereto. Losses
shall include the Applicable Percentage of any reasonable legal fees and costs
incurred by any of the Indemnified Persons subsequent to the Closing in defense
of or in connection with any alleged or asserted liability, payment or
obligation, whether or not any liability or payment, obligation or judgment is
ultimately imposed against the Indemnified Persons and whether or not the
Indemnified Persons are made or become parties to any such action. The
"Applicable Percentage" shall be 100% for all Losses arising from Seller's fraud
or referred to under Section 4.1(ii) or (iii) above, and 69% for all other
Losses.
"Purchased Quota" means the entire issued quota of the capital of the Company
having a nominal value of 45,000,000 Lire owned by the Seller prior to the
Closing.
"SEC" means the Securities and Exchange Commission.
"Securities Act" means the Securities Act of 1933, as amended.
"Taxes" means all applicable taxes, including without limitation, income,
profit, franchise, sales, use, real property, personal property, ad valorem,
excise, employment, social security and wage withholding taxes, severance,
stamp, occupation, and windfall taxes, of every kind, character or description
imposed by any governmental or quasi-governmental authority (domestic or
foreign), and any interest or fines, and any and all penalties or additions
relating to such taxes, charges, fees, levies or assessments.
"Tax Returns" means all Federal, state, local, and foreign, government income,
excise, gross receipts and franchise tax returns, real estate and personal
property tax returns, sales and use tax returns, employee tax and contribution
returns and all other tax returns, reports and declarations, including valid
extensions therefor, or estimated taxes required to be filed by it, with respect
to all Taxes.
"Third Party Action" means any written assertion of a claim, or the commencement
of any action, suit, or proceeding, by a third party as to which any person
reasonably believes it may be an Indemnified Person hereunder.
ARTICLE 6. MISCELLANEOUS.
6.1 SURVIVAL OF WARRANTIES. All representations, warranties, agreements,
covenants and obligations herein or in any schedule, certificate or financial
statement delivered by any party to another party incident to the transactions
contemplated hereby are material, shall be deemed to have been relied upon by
the other party and shall survive the Closing for the applicable periods set
forth in Article 4 and shall be further
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actionable subject to the limitations set forth therein, regardless of any
investigation and shall not merge in the performance of any obligation by either
party hereto.
6.2 RIGHT TO OFFSET. Buyer has the right to offset and credit any and all
payments to be made by it under this Agreement to or for the benefit of the
Seller by reason of the Final Adjudication in favor of Buyer of any claim by
Buyer against Seller for indemnification pursuant to Section 4.1 hereof. If the
Buyer does exercise its right of set-off hereunder, it shall give Seller 10
calendar days advance written notice thereof. If a Buyer's Indemnified Person
has claim(s) pending against Seller for indemnification of Losses pursuant to
Article 4 hereof at a time when payments are otherwise due to be paid by Buyer
to Seller, Buyer may withhold from such payments an amount equal to Buyer's
reasonable estimate of the amount of such Losses, until such time as the Final
Adjudication of such claim(s). If it is ultimately determined (by final judgment
of a court of competent jurisdiction not subject to further appeal, by binding
arbitration award, or by agreement between the parties, referred to herein as a
"Final Adjudication") that Buyer was not entitled to set off the amount set-off,
Buyer shall pay Seller interest on the amount withheld from the date when it
should have been paid to the date of payment at an interest rate equal to the
rate at which Buyer could then borrow funds from its principal commercial
lending bank.
6.4 FEES AND EXPENSES. Each of the parties will bear its own expenses in
connection with the negotiation and the consummation of the transactions
contemplated by this Agreement, or its negotiation and termination (if
terminated), including without limitation all legal, accounting and investment
banking or advisory fees.
6.5 NOTICES. All notices, requests, demands and other communications required
or permitted to be given (i) hereunder by any party hereto shall be in writing
and shall be deemed to have been duly given when received if delivered
personally, or (ii) on the third business day following the day sent if sent by
prepaid internationally recognized overnight receipted courier or when receipt
is telephonically acknowledged if sent by telecopier transmission on a business
day or, if not a business day, on the next following business day, or parties at
the following addresses (or at such other addresses as shall be specified by the
parties by like notice):
If to the Seller, to:
Finpiave, S.P.A.
Xxx Xxxxxxxx x. 00
00000 Xxxxx xx Xxxxx
Xxxxxxx Xxxxx
Attn: Xxxx Xxxxx
Tel: 00-0000-000-000
Fax: 00-0000-000-000
with a copy to:
Xxxxxx Xxxxxxx Xxxxxxxx & Xxxxxx
000 Xxxx Xxxx Xxxx
Xxxx Xxxx, XX 00000-0000 XXX
Attn: Xxxxxx X. Xxxxx, Esq.
Tel: 0-000-000-0000
Fax: 0-000-000-0000
If to the Buyer, to:
Interleaf, Inc.
00 Xxxxxx Xxxxxx
Xxxxxxx, XX 00000 XXX
Attn.: Xxxxx Xxxxxxxx, V.P. & General Counsel
Tel: 0-000-000-0000
Fax: 0-000-000-0000
with a copy to:
Xxxxxx, Casati e Associati / Xxxxx & Xxxxx
Xxxxx Xxxxxxxx Xxxxxxxx XX, 00
00000 Xxxxxx Xxxxx
Attn.: Xxxxx Xxxxxx
Tel: 00-000-0000000
Fax: 00-000-000000
and in any case at such other address as the addressee shall have specified by
written notice.
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6.6 PUBLICITY AND DISCLOSURES. Except as may be otherwise required for
compliance by Buyer with applicable stock market rules or securities laws (and
subject to applicable limitations contained in contracts to which the Company is
a party), neither Buyer nor Seller shall issue nor approve any news release or
other public announcement concerning this Agreement (or any schedules or
exhibits hereto) without the prior written approval of the other.
6.7 CONFIDENTIALITY. The parties agree that they will keep confidential and
not disclose or divulge any confidential, proprietary or secret information
which they may obtain from another party hereto in connection with the
transactions contemplated herein, or pursuant to inspection rights granted
hereunder, or reveal the financial or other terms and conditions of this
Agreement unless such information is or hereafter becomes public information
through means other than a default hereof by such party or is required to be
disclosed by applicable law, including applicable securities laws or stock
exchange rules or regulations.
6.8 ENTIRE AGREEMENT. This Agreement (all exhibits or schedules appended to
this Agreement and all documents delivered pursuant to or referred to in this
Agreement, all of which are hereby incorporated herein by reference) and the
Deed of Transfer constitutes the entire agreement between the parties, and all
promises, representations, understandings, warranties and agreements with
reference to the subject matter hereof and inducements to the making of this
Agreement relied upon by any party hereto, have been expressed herein or in the
documents incorporated herein by reference.
6.9 SEVERABILITY. The invalidity or unenforceability of any provision of this
Agreement shall not affect the validity or enforceability of any other provision
hereof.
6.10 ASSIGNABILITY. This Agreement may not be assigned otherwise by operation
of law or otherwise by either party without the prior written consent of the
other. However, any or all rights of Buyer to receive performance (but not the
obligations of Buyer to Seller hereunder) and rights to assert claims against
Seller in respect of breaches of representations, warranties or covenants of
Seller hereunder, may be assigned by Buyer to any direct or indirect subsidiary
or other affiliate of Buyer, but any such assignee of Buyer's rights hereunder
shall take such rights subject to any defenses, counterclaims and rights of
setoff to which Seller might be entitled under this Agreement. This Agreement
shall inure to the benefit of and be binding upon the parties hereto and their
respective successors and permitted assigns.
6.11 AMENDMENT. This Agreement may be amended only by a written agreement
executed by all parties hereto.
6.12 GOVERNING LAW.
(a) This Agreement shall be governed by and construed in accordance with
the laws of the Commonwealth of Massachusetts (other than the choice of law
principles thereof), except that any representations and warranties with respect
to real and tangible property shall be governed by and construed in accordance
with the laws of the jurisdiction where such property is situated.
The foregoing notwithstanding, all matters related to the formalities of
the transfer of the Purchased Quota, and the Deed of Transfer, shall be governed
by Italian law. However, as between the parties, this Agreement shall prevail.
(b) Any claim, action, suit or other proceeding initiated by any party
to this Agreement, under or in connection with this Agreement may be asserted,
brought, prosecuted and maintained in any court in London, England as the party
bringing such action, suit or proceeding shall elect, having jurisdiction over
the subject matter thereof, and the parties hereby waive any and all rights to
object to the laying of venue in any such court and to any right to claim that
any such court may be an inconvenient forum. Each of the
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Parties hereby submit themselves to the jurisdiction of each such court and
agree that service of process on them in any such action, suit or proceeding may
be effected by the means by which notices are to be given to it under this
Agreement.
6.13 REMEDIES. The parties hereto acknowledge that the remedy at law for any
breach of the obligations undertaken by the parties hereto is and will be
insufficient and inadequate and that the parties hereto shall be entitled to
equitable relief, in addition to remedies at law. In the event of any action to
enforce the provisions of this Agreement, Seller shall waive the defense that
there is an adequate remedy at law.
6.14 COUNTERPARTS. This Agreement may be executed in multiple counterparts,
each of which shall be deemed an original but all of which together shall
constitute one and the same instrument.
IN WITNESS WHEREOF the parties hereto have caused this Agreement to be
executed as an instrument under seal in multiple counterparts by their duly
authorized representatives on February ___, 1999, to be effective as of the date
first set forth above.
Interleaf, Inc. Finpiave S.p.A.
By: By:
------------------------------- -----------------------------------
Name: Name:
----------------------------- ---------------------------------
Title: Title:
---------------------------- --------------------------------
Date: Date:
----------------------------- ---------------------------------
SCHEDULES AND EXHIBITS:
SCHEDULE 2.3: Financial Statements
EXHIBIT A: Form of Warrant
EXHIBIT B: Alternative Warrant Specifications
EXHIBIT C: Deed of Transfer
EXHIBIT D: Form of Letter of Credit
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