EXHIBIT 2.2
SALE AND PURCHASE AGREEMENT
This Agreement is entered into on [*], 2003, in [*], by and between:
(1) IMPCO Technologies Inc., a company incorporated and existing under the
laws of State of Delaware U.S.A. with registered offices at ▇▇▇▇▇,
▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇, ▇▇., ▇.▇.▇., represented by its director and
attorney-in-fact, ▇▇. ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇ (hereinafter referred to as
"Impco"); and
(2) ▇▇. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇, born in Narzole, on 15 March 1951, and domiciled
at ▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇ ▇▇▇▇▇, ▇, married, in a separation of assets regime;
(3) Mr. Pier ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇, born in Narzole, on 22 July 1952, and
domiciled at ▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇ ▇▇▇▇▇, ▇, married, in a separation of
assets regime;
(4) ▇▇▇. ▇▇▇▇▇ ▇▇▇▇▇▇▇▇, born in Cherasco, on 4 November 1956, domiciled at
Cherasco, ▇▇▇ ▇▇ ▇▇▇▇▇, ▇, married, in a separation of assets regime;
(5) ▇▇▇. ▇▇▇▇▇ ▇▇▇▇▇▇▇▇, born in La ▇▇▇▇▇, on 16 March 1957, domiciled at
Cherasco, ▇▇▇ ▇▇ ▇▇▇▇▇, ▇, married in a separation of assets regime
(Messrs. ▇▇▇▇▇▇▇ and Pier ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ and ▇▇▇▇▇
▇▇▇▇▇▇▇▇ are hereinafter jointly referred to as the "Sellers").
(Impco and ▇▇▇▇▇▇▇▇▇▇ hereinafter individually referred to as one "Party",
collectively referred to as the "Parties").
WHEREAS:
The Sellers are the controlling shareholders of B.R.C. Societa a
Responsabilita Limitata, with registered offices at Cherasco Via la ▇▇▇▇▇
1, registered with the Court of Alba under the no. 02811070040
(hereinafter referred to as the "Parent").
(B) The Parent, in turn, in addition to certain assets and liabilities
belonging to the Sellers' family, holds a quota representing 100% of the
issued and outstanding corporate capital of M.T.M. S.r.l., a limited
liability company with registered offices at Cherasco Via la ▇▇▇▇▇ 1,
registered with the Court of Alba under the no. 00525960043 (hereinafter
referred to as the "Company").
(C) Impco and the Sellers have entered into negotiations aimed at considering
the possible acquisition by Impco of the Company and/or the integration
of the Company's operations with the operations of Impco's international
group of companies.
(D) Following several meetings and discussions, on 17 April 2002 Impco and
the Company entered into a Confidentiality Agreement which included as an
attachment a Term Sheet (all such documents are hereinafter referred to
as the "Letter of Intent"), setting out reciprocal confidentiality
undertakings of the Parties and the basic arrangements reached by the
parties in relation to the envisaged transaction.
(E) In accordance with the terms of the Letter of Intent, from 22/04/02 to
07/05/02 Impco carried out a due diligence on the Parent's and the
Company's legal and accounting
situation (the "Due Diligence"); from 13/05/02 to 14/05/02 the Sellers
carried out a due diligence on Impco's legal and accounting situation.
(F) On the basis of the Due Diligence findings Impco and the Sellers have
agreed certain amendments to their basic arrangements which were
reflected in an Amendment to the Letter of Intent signed on 21 June 2002
(the "Amendment" and, together with the Letter of Intent, the "Amended
Letter of Intent").
(G) On 3 October 2002, following further negotiations among the Parties, the
Sellers have granted to Impco an option (the "Signing Option") to enter
into this Sale and Purchase Agreement, the Shareholders Agreement and the
other agreements referred to herein and, in consideration thereof, Impco
has paid to the Sellers the Signing Option Price as provided for in the
Signing Option.
(H) In accordance with the Signing Option terms and conditions,
simultaneously with the granting of the Signing Option the Quota (as
defined below) has been transferred by the Sellers to Cititrust S.p.A.
(the "Fiduciary Company") to be held in escrow by the latter pursuant to
the Irrevocable Instructions and the Fiduciary Terms signed between the
Fiduciary Company, the Sellers and Impco on that same date (such
documents are, hereinafter, jointly referred to as "Escrow Documents").
(I) Impco has exercised the Signing Option in accordance with its terms and,
as a consequence, by this Agreement the Parties intend to implement the
arrangements reflected in the Signing Option and to undertake binding
obligations in respect thereof.
NOW, THEREFORE, the Parties hereto have agreed as follows:
1. DEFINITIONS
The following terms, when used herein with capital letters, shall have
the meanings respectively ascribed thereto in this Clause 1:
1.1 "Accounting Principles" means the accounting principles established by
the Italian Chartered Accountants Association (Ordine dei Dottori
Commercialisti) supplemented, where necessary, by the International
Accounting Standards (IAS).
1.2 "Amended Letter of Intent" shall have the meaning attributed thereto in
Recital F.
1.3 "Amendment" shall have the meaning attributed thereto in Recital F.
1.4 "Articles of Association" means the Parent's articles of association in
the form attached hereto as Annex 1.4.
1.5 "Auditors" means the auditing company which, from time to time, will be
auditing the Parent's consolidated accounts, and which, for the first
period, will be Ernst & Young.
1.6 "Business Day" means any day on which banks are open for business in
Turin, Italy and Los Angeles, California, U.S.A.
1.7 "Company" shall have the meaning attributed thereto in Recital B.
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1.8 "Deferred Portion of the Purchase Price" means the amount of USD
7,000,000 which, pursuant to Clause 3.2.4 hereof, is to be paid on or
before 30 September 2003.
1.9 "Encumbrance" means, in relation to an asset, a pledge, mortgage, option
or third party right of any kind whatsoever, including, without
limitation, rights to purchase or to sell the relevant asset, rights to
exercise any of the rights pertaining to the asset or rights to otherwise
dispose of the assets or of any of the rights pertaining thereto.
1.10 "Escrow Documents" means the Irrevocable Instructions and the Fiduciary
Terms and all documents amending or supplementing the same.
1.11 "Euro Cash Portion" shall have the meaning attributed thereto in Clause
3.2.3.
1.12 "Execution Date" means the date of execution of this Agreement.
1.13 "Fiduciary Company" means Cititrust S.p.A., a fiduciary company
incorporated and operating in accordance with Italian law, with
registered offices at Foro Buonaparte,16, Milan.
1.14 "Fiduciary Terms" means the general terms and conditions adopted by the
Fiduciary Company in its operations signed between the Fiduciary Company,
the Sellers and Impco on 3 October 2002, which, together with the
Irrevocable Instructions, govern the escrow of the Quota.
1.15 "Financial Statements" means the consolidated financial statements of the
Parent attached hereto as Annex 1.15 as of 31 December, 2001, drafted in
accordance with the Accounting Principles and approved by the Parent's
shareholders' meeting on 29/06/02.
1.16 "Impco Revenues" shall have the meaning attributed thereto in Clause 10.2
and Clause 10.6.
1.17 "Impco's Earn Out Call Option" means the earn out call option attributed
to Impco in relation to the Quota pursuant to Clause 8 hereof.
1.18 "Impco Shares" means no. 2,309,469 newly issued ordinary shares of Impco
which, at the price of 4.33 S, shall equal the Securities Portion of the
Purchase price.
1.19 "Irrevocable Instructions" means the irrevocable instructions granted
jointly by the Sellers and Impco to the Fiduciary Company on 3 October
2002, which, together with the Fiduciary Terms, govern the escrow of the
Quota.
1.20 "Lease Agreement" means the lease agreement entered into on [.] by the
Company and Imcos Due S.r.l. in relation to the Real Estate, in the form
attached hereto as Annex 1.20.
1.21 "Lease of Intent" shall have the meaning attributed thereto in Recital D.
1.22 "Lock-Up Agreement" means the agreement signed by the Sellers and Impco
on [.] in the form attached hereto as Annex 1.22 pursuant to which the
Sellers undertook not to sell the Lock-Up Impco Shares prior to the dates
set out in the following timetable: (i) no Lock-Up Impco Shares may be
sold until 31 July 2004; (ii) up to 277,690 of the Lock-Up Impco Shares
can be sold commencing from 1 August 2004; (iii) an additional
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amount of 460,600 of the Lock-Up Impco Shares can be sold commencing from
1 February 2005; (iv) an additional amount of 460,600 of the Lock-Up
Impco Shares can be sold commencing from 1 August 2005; (v) the remaining
463,928 Lock-Up Impco Shares can be commencing from 1 February 2006.
1.23 "Lock-Up Impco Shares" means 1,622,818 ordinary shares of Impco, being
72% of the Impco Shares.
1.24 "Losses" shall have the meaning attributed thereto in Clause 7.1.
1.25 "Material Adverse Change" means any event or circumstance relating to the
Parent or the Company not known to Impco as at the Execution Date which
has a substantial negative impact on the economics of the transactions
contemplated hereby taken as a whole.
1.26 "Option Deed" means the notarial deed attached hereto as Annex 1.26
signed on the Execution Date to implement the Options, and the Sellers'
Default Call Option Two pursuant to Italian law. The Parties agree that
the Option Deed shall be executed and interpreted taking into account the
generality of the provisions of this Agreement, and are therefore
intended solely to implement and not to amend or supplement to any extent
their agreement on the Options, and the Sellers' Default Call Option Two
pursuant to this Agreement.
1.27 "Options" means the Impco's Earn Out Call Option and the Sellers' Earn
Out Put Option, collectively.
1.28 "Parent" shall have the meaning attributed thereto in Recital A.
1.29 "Pledge Agreement" means the pledge agreement entered into between the
Sellers and the Fiduciary Company on the date hereof, pursuant to which
the Quota has been pledged in favour of the Sellers to secure payment by
Impco of the Deferred Portion of the Purchase Price.
1.30 "Purchase Price" shall have the meaning attributed thereto in Clause 3.1.
1.31 "Quota" means a quota having a nominal value of EURO 750,000.00 and
representing, on the Execution Date, 50% of the Parent's issued and
outstanding voting capital.
1.32 "Real Estate" means the property situated in Cherasco and identified in
the cadastrial map as follows ▇▇▇▇▇▇ 95 mappale 133, ▇▇▇▇▇▇ ▇▇ ▇▇▇▇▇▇▇
▇▇▇, ▇▇▇▇▇▇ ▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇ ▇▇▇▇▇▇▇ ▇▇▇, ▇▇▇, ▇, 2, 12, 20,
272, 316, which on 05/08/2002-23/09/2002 has been sold by the Company for
a consideration of EURO 6,306,900.00, a portion of which on 23/09/2002
has been rented by the Company pursuant to the lease agreement attached
hereto as Annex 1.20.
1.33 "Receivables" means all the receivables of the Parent, the Company and
the Subsidiaries outstanding as at the Execution Date, not including the
Special Receivables.
1.34 "Securities Portion" shall have the meaning attributed thereto in Clause
3.2.3.
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1.35 "Seimandi Agreement" means the agreement between the Company and ▇▇.
▇▇▇▇▇ ▇▇▇▇▇▇▇▇ signed on 01/10/2002 and attached hereto as Annex 1.35.
1.36 "Sellers' Default Call Option One" means the call option attributed to
the Sellers in relation to the Quota pursuant to Clause 9.1 hereof, in
case of failure by Impco to pay the Deferred Portion of the Purchase
Price.
1.37 "Sellers' Default Call Option Two" means the call option attributed to
the Sellers in relation to the Quota pursuant to Clause 9.2 hereof.
1.38 "Sellers' Earn Out Put Option" means the earn out put option attributed
to the Sellers in relation to the Quota pursuant to Clause 8 hereof.
1.39 "Sellers' Quota" means the participation held from time to time by the
Sellers, directly or indirectly, in the Parent's capital after the
Execution Date.
1.40 "Sellers' Turnover Related Call Option" means the call option attributed
to the Sellers in relation to the Quota pursuant to Clause 10 hereof.
1.41 "Shareholders Agreement" means the agreement governing the relationship
of the Sellers and Impco as quotaholders of the Parent and the corporate
governance and operations of the parent and the Company which is attached
hereto as Annex 1.41 and has been signed and become effective on the
Execution Date.
1.42 "Signing Option" has the meaning attributed thereto in Recital G.
1.43 "Signing Option Price" means the amount of USD 11,500,000 paid by Impco,
partly in cash, partly by delivery of the Impco shares, pursuant to the
Signing Option and which, in accordance with the Signing Option terms,
upon exercise of the Signing Option is to be deemed advance payment of
the Purchase Price hereunder.
1.44 "Special Receivables" means the receivables listed in Annex 1.44.
1.45 "Slow Moving Stock" means the Company's inventory listed and evaluated in
Annex 1.45 which did not move during the period between 1 April 2001 and
30 April 2002.
1.46 "Subsidiaries" means the companies listed in Annex 1.46 which are
controlled, within the meanings of Section 2359 of the Italian Civil
Code, directly or indirectly by the Parent.
1.47 "USD Cash Portion" shall have the meaning attributed thereto in Clause
3.2.2.
2. OBJECT OF THE AGREEMENT
2.1 Impco hereby purchases the Quota from the Sellers, in consideration of
all the representations, warranties and undertakings of the Sellers
hereunder and pursuant to all terms and conditions hereof.
2.2 The Sellers hereby sell the quota to Impco, in consideration of all the
representations, warranties and undertakings of Impco hereunder and
pursuant to all terms and conditions hereof.
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2.3 The Sellers guarantee that the Quota is fully paid in, free from any
Encumbrance and fully entitled to all rights pertaining to the Parent's
quotas pursuant to the law and the Articles of Association, including,
without limitation, the voting rights, the right to collect dividends and
the preemption rights on any issue of new capital by the Parent.
2.4 In addition, pursuant to this Agreement and to the other related
agreements between the Parties hereto or provided for hereunder, the
Parties intend to establish terms and conditions of their relationship as
shareholders of the Parent, set out the guidelines of the Parent's and
the Company's corporate governance and future operations and agree on
certain put and call options on the respective participations in the
Parent's capital.
3. PURCHASE PRICE
3.1 In consideration for the transfer of the Quota Impco hereby agrees to pay
to the Sellers, in accordance with the terms hereof, the amount of USD
22,550,000 (US Dollars twenty-two million five hundred and fifty
thousand) plus EURO 1,250,000 (Euro one million two hundred thousand
and fifty) (aggregately, the "Purchase Price").
3.2 The Purchase Price shall consist of four portions and shall be paid as
follows:
3.2.1 the Signing Option Price equal to USD 11,500,000 (US Dollars
eleven million five hundred thousand) which has heretofore paid
by Impco to the Sellers pursuant to the terms of the Signing
Option, and following exercise of the Signing Option is accounted
as advance payment of part of the Purchase Price;
3.2.2 the USD Cash Portion equal to USD 4,050,000 (US Dollars four
million and fifty thousand) which is paid by Impco to the Sellers
by crediting the amount thereof to the Fiduciary Company on the
Execution Date;
3.2.3 the Euro Cash Portion equal to EURO 1,250,000 (Euro one million
two hundred fifty thousand) which is paid by Impco to the Sellers
by crediting the amount thereof to the Fiduciary Company on the
Execution Date;
3.2.4 the Deferred Portion of the Purchase Price equal to USD 7,000,000
(US Dollars seven million), which shall be paid by Impco to the
Sellers by crediting the amount thereof to the Fiduciary Company
on or before 30 September, 2003.
3.3 The Parties hereby acknowledge that the number of Impco Shares delivered
to the Sellers as part of the Signing Option Price has been mutually
agreed and determined, such determination being final and conclusive in
any respect.
4. PURCHASE PRICE ASSUMPTIONS
4.1 The Purchase Price has been determined taking into account a specific
additional bad debt provision equal to EURO 446,000.00 made in the
Financial Statements in relation to the Special Receivables; in view of
the foregoing the Parties agree the following:
4.1.1 should the Company collect any or all of the Special Receivables,
Impco shall pay to the Sellers an amount equal to the actual
amount of the Special Receivables collected, it being agreed that
the relevant payment shall be paid (i) in relation to Special
Receivables collected up to 30 September 2003, within
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31 October 2003, and (ii) in relation to Special Receivables
collected after 30 September 2003, every last day of the month
subsequent to the end of every six months period; it is hereby
agreed that the provisions of this Clause 4.1.1 shall apply only
to Special Receivables collected up to the expiry of the term of
exercise of the Options pursuant to Clause 8.2 hereunder;
4.1.2 the Sellers shall have the right to acquire and collect directly
the outstanding Special Receivables at no cost with simultaneous
reduction for an equivalent amount of the provision made in the
Financial Statements.
4.2 In the event that on 30 September 2003 the amount collected by the
Parent, the Company and the Subsidiaries towards the Receivables is less
than the face value of the Receivables reduced by the amount of the
consolidated bad debt provision resulting from the Financial Statements
(not including the additional bad debt provision relating to the Special
Receivables) the Sellers agree to purchase from the Parent, the Company
and the Subsidiaries, as the case may be, unpaid Receivables having a
face value equal to the amount of such shortfall and to pay to the
Parent, the Company and the Subsidiaries, as the case may be, a purchase
price equal to such shortfall. The purchase will be effected on or before
31 October 2003.
4.3 The Purchase Price has also been determined on the basis of the Sellers'
representation that BRC Argentina will not suffer losses or liabilities
whatsoever, whether contingent or not, which:
4.3.1 depend upon actions, omissions or circumstances occurred prior to
the Execution Date; or
4.3.2 derive from the trade and financial credits of the Parent or the
Company towards it as at the Execution Date;
in excess of the amount of EURO 1,100,000.00 (made in the Financial
Statements and taken into account in the determination of the Purchase
Price). Should any such losses or liabilities in excess of
EURO 1,100,000.00 arise in BRC Argentina (after deduction of any
supervening assets (soprauvenienze arrive) depending upon facts or
circumstances preceding the Execution Date which may have arisen in BRC
Argentina as at such date), the Purchase Price shall be automatically
reduced by an amount equal to the difference between EURO 1,100,000.00
and the actual amount of such losses and liabilities, and the Sellers
shall immediately pay to Impco a sum equal to the aforesaid difference.
The Parties agree that this Clause 4.3 shall not apply to losses (other
than those provided for under Clause 4.3.1 above), arisen during the
period from 3 October 2002 to the Execution Date, provided that such
losses are due to adverse market conditions which are beyond the control
of the Sellers.
5. EXECUTION
5.1 The Parties hereby acknowledge that all the activities as set out in
Clause 5.2 hereunder have been completed to their mutual satisfaction on
the Execution Date.
5.2 On the Execution Date:
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5.2.1 Impco has paid to the Sellers the USD Cash Portion and the Euro
Cash Portion of the Purchase Price in accordance with Clause 3
above.
5.2.2 The quotaholders meetings of the Parent and the Company have
resolved on: (i) the appointment of new boards of directors of
the Parent and the Company composed of seven members, three of
which (Messrs ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇, Pier ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇
▇▇▇▇▇▇▇▇) were designated by the Sellers and four of which
(Messrs ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇, ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇ and
Pier Luigi Moncalyo i) were designated by Impco, as indicated by
the Shareholders Agreement; (ii) the appointment of new boards of
statutory auditors whose Chairmen (▇▇. ▇▇▇ ▇▇▇▇▇▇▇ both for the
Parent and for the Company) was designated by Impco and the
remaining members (Messrs ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ e ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ both
for the Parent and for the Company) were designated by the
Sellers; (iii) the appointment of Ernst & Young, designated by
Impco, as Auditors (iv) a waiver of any action against the ceased
directors (Messrs ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇, Pier ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇▇▇, Marteo Asteggiano according
with the draft attached hereto as Annex 5.2.2
5.2.3 The Sellers and Impco have signed the Shareholders Agreement.
5.2.4 The Sellers and Impco have signed the Option Deed.
5.2.5 The Sellers and the Fiduciary Company have signed the Pledge
Agreement.
5.2.6 The Sellers and Impco have issued a jointly agreed press release,
announcing the completion of the transaction.
5.3 The Parties hereby agree that the waiver resolved by the quotaholders
meetings of the Parent and the Company, mentioned in Clause 5.2.2 (iv)
above, shall not affect in any manner any of Impco's rights, demands,
claims whatsoever towards the Sellers (and shall not mitigate any of the
Sellers' related obligations) under this Agreement.
6. REPRESENTATIONS AND WARRANTIES
6.1 The Sellers hereby make the following representations and warranties to
Impco in relation to the Parent, the Company, the Subsidiaries and their
respective assets, situations and operations by reference to the
circumstances existing on the Execution Date, subject to the exceptions
set out in Annex 6.1:
6.1.1 Sellers' Authority
The Sellers have all requisite power and authority to dispose of
the Quota and to enter into this Agreement and carry out the
transactions contemplated herein.
The entering into this Agreement, and the performance of the
obligations contemplated herein by the Sellers does not violate
any undertaking or contractual provision by which the Sellers are
bound.
6.1.2 The Quota
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The Quota is free and clear of any pledge, guarantee, beneficial
interest, charge, claim, or rights of third parties and
limitations of any kind including, as an example only,
limitations concerning voting rights and transfer.
6.1.3 Articles of Association
The Articles of Association are in force at the Execution Date
and have not been amended by resolutions taken by the Company.
6.1.4 Parent and Company Validly Incorporated and in Good Standing
Both the Parent and the Company are societa a responsabilita
limitata duly organized, validly existing and in good standing
under the laws of Italy. The Parent was duly transformed from a
Societa in Accomandita per Azioni into a Societa a Responsabilita
Limitata on 8 July 2002 in accordance with applicable laws and
such a transformation will not result in any liability of any
kind whatsoever.
6.1.5 Title to the Assets
The Parent does not own assets and liabilities, contingent or
otherwise, other than the 100% participation in the Company.
The Company and the Subsidiaries have valid title to the assets
instrumental to its activities and recorded as property in the
Financial Statements or in the Company's or the Subsidiaries
accounts. Such property is clear of pledges or mortgages.
With respect to the Real Estate or other instrumental assets used
in the Company's or the Subsidiaries' operations which are not
recorded as the Company's property, agreements have been entered
into by which the Company is entitled to use such Real Estate and
other instrumental assets according to the terms and conditions
at which they are currently used. To the Sellers' best knowledge,
there is no interference by third parties which may prevent the
Company from using such real estate freely. The sale and purchase
agreement entered into between the Company and Imcos Due S.r.l
was duly signed and performed and neither the Company, nor the
Parent or any of the Subsidiaries will incur any Loss of any
nature whatsoever, including Losses for tax matters (other than
taxes due on the plusvalue deriving from values declared in the
notarial deed) or for indemnities to Imcos Due or any third
party, in relation to or as a consequence of the sale of the Real
Estate.
The Company is the registered owner or licensee of the
trademarks, copyrights, know-how, patents and other intangible
assets presently used by the Company in the course of its
business (all of which are listed in Annex 6.1.5 attached hereto)
and has duly paid all registration fees and taxes due in relation
to such rights. The Company is not involved in any pending
proceeding before any courts, including an administrative court
or other judicial authority or arbitration panel, aimed at
challenging the rights at issue. The Parent's, the Company's and
the Subsidiaries' operations are not conducted in breach of any
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third party's trademarks, copyrights, know-how, patents or other
intangible assets to an extent which may result in the Parent or
the Company or any of the Subsidiaries becoming liable to pay any
indemnification to such third parties or being subjected to
orders restraining any of them from continuing to carry out all
or any part of their respective operations in the way they are
presently conducted.
6.1.6 Financial Statements and Accounts
The Financial Statements have been drawn up in compliance with
the Accounting Principles and provide a true and complete view of
the Parent's, the Company's and the Subsidiaries' assets,
liabilities (contingent or otherwise) and results of operations.
Without limiting the generality of the foregoing, full disclosure
of, and adequate provisions for, bad and doubtful debts and all
liabilities (actual, contingent or otherwise) and all financial
commitments in existence have been made in the Financial
Statements and, as the case may be, in the Parent's the Company's
and the Subsidiaries' accounts.
The books and accounting records of the Parent, the Company and
the Subsidiaries represent all the books and accounting records
required by, and have been kept in accordance with, all
applicable laws in regulations.
6.1.7 No Material Adverse Change
During the period between 1 January 2002 and the Execution Date,
except as expressly contemplated by the Amended Letter of Intent
or this Agreement or otherwise permitted in writing by Impco, and
except for events arisen during the period from 3 October 2002 to
the Execution Date which are due to adverse market conditions
beyond the control of the Sellers:
(a) The Parent's, the Company's and the Subsidiaries' business
has been conducted only in the ordinary course of business
and in accordance with past practices, and no liability
unrelated to the ordinary course of business or in excess of
EURO 250,000.00 has been incurred.
(b) No action has been taken by the Sellers, the Parent, the
Company or any of the Subsidiaries that has resulted in a
Material Adverse Change.
(c) No contracts unrelated to the ordinary course of business or
having a value of more than EURO 250,000.00 have been
entered into, amended or terminated by the Parent, the
Company or the Subsidiaries.
(d) None of the Parent, the Company or the Subsidiaries has
commenced any litigation unrelated to the ordinary course of
business or having a value higher than EURO 100,000.00,
except for those which are aimed at preserving their
business or their rights.
(e) No transaction has taken place between any of the Parent
and/or the Company and/or the Subsidiaries on one side and
the Sellers, their
- 10 -
relatives and their respective subsidiaries or affiliates on
the other side, except transactions at arm's length.
(f) No loans or credit agreement having a value of more than
EURO 250,000.00 have been entered into, amended or
terminated by the Parent, the Company or any Subsidiary.
(g) None of the Parent, the Company or any Subsidiary has made
any distribution of dividends or of any nature whatsoever;
the proceeds of the operations of the Parent, the Company
and the Subsidiaries (including, without limitation, the
proceeds of the sale of the Real Estate) have not been
distributed to the shareholders not paid out to any other
third party, and are held by the Parent, the Company and the
Subsidiaries, save to the extent that they have been
employed by the Parent, the Company and the Subsidiaries in
the ordinary course of their business consistent with past
practices.
6.1.8 Taxes
The Parent and the Company: (i) are in substantial compliance
with all applicable tax and social security laws and regulations;
(ii) have filed accurate and complete tax and social security
returns and any other report, notice, or documentation with the
competent tax and social security authorities; (iii) have made
all required payments and withholdings with respect to taxes and
social security matters; (iv) have not received any assessment,
injunction, request for payment or other communication from any
tax or social security authority over the last six years.
There are no pending proceedings with the tax or social
securities authority.
6.1.9 Employees
The Parent has not, and has never had, employees. There are not
individuals who may claim to be, or to have been, employed by the
Parent due to a labour agreement or any other contractual
relationship or behaviour.
The number and position of the employees of the Company and the
Subsidiaries are listed in Annex 6.1.9 and the terms and
conditions of their employment are those established by
applicable general or local collective bargaining agreements,
except as indicated in the same Annex 6.1.9.
The employees have been regularly remunerated for all services
carried out in the course of their employment relationships with
the Company or the Subsidiaries, in accordance with all
applicable provisions of law and contract. With respect to
remuneration paid to the employees, all payments due in relation
to obligatory insurance, severance pay and withholding taxes
required by law have been regularly effected.
There are no contracts in place with consultants, agents,
collaborators or intermediaries which are binding upon the
Parent, the Company or the
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Subsidiaries and have a duration of more than 12 months or an
annual remuneration higher than EURO 50,000.00
6.1.10 Contracts
No event, and specifically including a change in the shareholding
structure of the Parent or an unfulfilment or breach whatsoever,
is capable of adversely affecting the continuation of the
existing contracts or causing their suspension or termination, or
acceleration of any payment hereunder.
All written or oral contracts, agreements and conventions to
which the Parent or the Company or any of the Subsidiaries are
party have not been entered into under unusual conditions which
would unfavourably affect its financial position or otherwise
than in accordance with the professional practices.
All contracts in which the Parent, the Company or any of the
Subsidiaries are party to (i) do not contain provisions contrary
to mandatory provisions of law (ii) have been duly, timely and
fully complied with by the Parent, the Company or the relevant
Subsidiary, as the case may be (iii) were executed, and filed
(both in their form and substance) in compliance with all the
applicable provisions of law.
There are no binding contractual relationships involving the
Parent or the Company or any of the Subsidiaries, on the one
side, and the Sellers, their relatives or entities controlled by
and/or related to, the Sellers, on the other, which are not at
market terms.
6.1.11 Environmental
The Company's and the Subsidiaries' industrial activity has been
carried out in compliance with all the laws concerning the
environment, polluting working methods, asbestos, air, soil and
water emissions, waste and flat batteries disposal and any other
related or connected provisions of law.
No proceedings have been issued by competent authorities against
the Company or any of the Subsidiaries in respect of the above.
6.1.12 Licenses and Authorisations
The Parent, the Company and the Subsidiaries have all the
governmental authorizations, licenses, permits, certifications
and registrations necessary for the carrying out of their
activities as currently carried out, and for the regular use of
their assets as currently used and any such government
authorizations, licenses, permits, certifications and
registrations are in full force and effect.
6.1.13 Compliance with Laws
The Parent, the Company and the Subsidiaries carry out their
activity in full compliance with the applicable laws and
regulations, including, without limitations, those concerning the
environment and safety of the work environment and products.
During the last two years neither the Parent nor the
- 12 -
Company or any Subsidiary have received any notices from public
authorities alleging the breach of any laws or regulations.
6.1.14 Litigation
The Parent, the Company and the Subsidiaries are not party to any
judicial or arbitration suits or actions, administrative or
fiscal proceedings; there are no proceedings of any such nature
threatened in writing nor other outstanding circumstances that
could give rise to any litigation against the Parent, the Company
or any of the Subsidiaries.
6.2 Impco hereby represents and warrants to the Sellers, in relation to the
sale of the Impco Shares and by reference to the circumstances existing
on the Execution Date that Impco carries out its activity in full
compliance with the applicable laws and regulations, including, without
limitations, those concerning the environment and safety of the work
environment.
7. INDEMNIFICATION
7.1 The Sellers hereby undertake to indemnify and hold Impco harmless against
any claim, loss, cost or liability (hereinafter referred to as "Losses")
suffered by Impco, the Parent, the Company or any of the Subsidiaries
after the Execution Date and which, had the representations and
warranties made by the Sellers pursuant to Clause 6 been true, accurate,
complete and not misleading, would have not been suffered or incurred.
7.2 Impco shall give written notice to the Sellers of any breach of the
representations and warranties of which Impco becomes aware and which may
result in a Loss being suffered, upon becoming aware thereof.
7.3 Upon receipt of any such notice of breach the Sellers shall have the
right to object that the circumstance raised by Impco does not constitute
a breach of the representations and warranties, by giving written notice
to such effect to Impco, providing the grounds therefor and attaching all
supporting documentation evidencing such position. Should Impco not agree
on such objection the Parties shall have the right to refer the dispute
to arbitration pursuant to Clause 14 below. Should the Sellers not file
any such objection within 15 (fifteen) Business Days of the date of
receipt of the notice of breach, the claim of Impco shall be deemed
accepted by the Sellers who shall be liable for indemnification in
accordance with the Clause 7 for all Losses deriving to Impco, the
Parent, the Company or any Subsidiary therefrom.
7.4 Upon acceptance of its indemnification obligation in relation to a
specific notice of breach, the Sellers shall have the right to direct the
actions to be taken by the Parent, the Company or the Subsidiaries to
defend such claim. In all other cases, the subject matter of the notice
of breach shall be handled by the Parent or, as the case may be, by the
Company or any Subsidiary in good faith, provided that in no event any
action or omission of the Parent, the Company or any Subsidiary may
result in the indemnification obligation of the Sellers hereunder being
reduced or voided in relation to Losses deriving from a breach of
representations and warranties which has not been accepted by the Sellers
upon receipt of the notice of breach, save in case of gross negligence or
wilful
- 13 -
misconduct of a Managing Director other than ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ or an
individual appointed by the Sellers. Nonetheless in such circumstances
the Sellers shall have the right to appoint a counsel of their choice and
at their expenses, who will be consulted by the counsel appointed by the
Parent or, as the case may be, the Company or the Subsidiaries and shall
have the right to be informed about all developments of the proceedings.
7.5 The Sellers' indemnification obligation hereunder will be discharged on
the earlier of: (a) the date on which the Loss has become final and non
appealable; and (b) the date on which the Loss has been actually
sustained by the Parent or the Company or any Subsidiary (as a
consequence of a mandatory provisional order of a Court or other
competent authority) by paying to the Parent, the Company or the relevant
Subsidiary an amount equal to 100% of the Loss net of (i) the amount of
the reserves set aside in relation to such potential liability in the
Financial Statements; (ii) the amount of any supervening assets depending
upon actions, omissions or circumstances occurred prior to the Execution
Date and not shown in the Financial Statements or in the accounts of the
Parent, the Company or the relevant Subsidiary as at the Execution Date;
(iii) the amount of any tax benefit actually enjoyed by the Parent, the
Company or the relevant Subsidiary as a direct consequence of the Loss.
The Sellers shall not be under an obligation to make any payment for
indemnification to the Parent, the Company or the relevant Subsidiary, in
the manner set out in this Clause 7.5, until and unless the aggregate
amount of the indemnification due by the Sellers shall have exceeded the
amount of EURO 5,000.000, whereupon the Sellers shall be under an
obligation to indemnify the full amount of the Losses, including the EURO
5,000.00. Notwithstanding the foregoing, the Sellers shall pay
indemnification amounts due hereunder to Impco for any Losses which
derive form the breach of the representations and warranties set out in
Clause 6.1.1., 6.1.2., 6.1.3. and 6.1.4.
7.6 For the purposes of the foregoing Clause 7.5, Losses which result in
disbursement of amounts of money or other assets or in failed collection
of amounts of money or other assets will be deemed to have occurred on
the date on which they have been actually sustained by the Parent, the
Company or any Subsidiary. Losses which do not result in disbursement of
amounts of money or other assets or in failed collection of amounts of
money or other assets will be deemed to have occurred on the date on
which they have been directly or indirectly shown in the financial
statements of the damaged party.
7.7 Notwithstanding anything to the contrary herein contained, the Sellers
shall not be liable for indemnification of Losses:
7.7.1 which depend upon a breach of any representations and warranties,
other than those set out in Clause 6.1.8 (Taxes), 6.1.9
(Employees) and 6.1.11 (Environmental), 6.1.13 (Compliance with
laws), notice of which has been given by Impco after the fourth
anniversary of the Execution Date;
7.7.2 which depend upon a breach of the representations and warranties
set out in Clause 6.1.8 (Taxes), 6.1.9 (Employees) and 6.1.11
(Environmental), 6.1.13 (Compliance with laws), notice of which
has been given by Impco after the
- 14 -
expiration of the applicable statutes of limitation in relation
to the underlying liability.
7.8 The Sellers hereby undertake to purchase at the book value attributed
thereto in the Financial Statements all the Slow Moving Stock still held
by the Company on 31 December 2006 or destroyed between 30 April 2002 and
31 December 2006; payment of the relevant price will be effected by the
Sellers on or before 31 January 2007 on the basis of the inventory of the
Company's stock as at 31 December 2006. This undertaking of the Sellers
rules out any other remedy available to Impco in relation to the Slow
Moving Stock, including, without limitation, any claim for breach of the
representations and warranties.
8. EARN OUT PUT AND CALL OPTIONS
8.1 The Sellers hereby undertake to grant to Impco the right to purchase the
Sellers' Quota and, in turn, Impco hereby undertake to grant to the
Sellers the right to sell the Sellers' Quota to Impco, under the terms
and conditions set out in this Clause 8. The Options shall be granted
pursuant to Italian law through signature of the Option Deed.
8.2 The Options may be exercised by giving written notice to such effect to
the other Party during the 60 (sixty) days period following the date on
which the financial statements of the Company relating to the fiscal year
2006 have been approved by the shareholders of the Company or such later
period as may be agreed by the Parties pursuant to Clause 8.5.. Without
prejudice to the generality of the foregoing, in the event that ▇▇.
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ceases to be a director of the Companies:
(i) due to health-related reasons which prevents ▇▇ ▇▇▇▇▇▇▇▇▇▇ from
fulfilling his duties, the Options may be exercised in advance by
giving written notice to such effect to the other Party during
the 60 (sixty) days period following the date on which ▇▇.
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ceases from the office;
(ii) due to any reason other than health-related reasons -such as,
without limitation, dismissal, resignation, etc.- Impco's Earn
Out Call Option may be exercised in advance by giving written
notice to such effect to the Sellers during the 60 (sixty) days
period following the date on which ▇▇. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ceases
from the office.
8.3 The Options will be exerciseable in one instance and for all of the
Sellers' Quota, provided that, if at the date on which Impco's Earn Out
Call Option is exercised, any of the Sellers and/or ▇▇. ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇
and/or ▇▇. ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ is a member of the board of directors of the
Company or an employee of the Company, the Sellers shall have the right
to retain a 10% participation in the Parent's capital, thereby reducing
the Sellers' Quota for which the Impco's Earn Out Call Option has been
exercised, provided that, in such case, Impco shall have the right to
exercise the Option on such 10% participation during the 60 (sixty) days
period commencing on the date on which none of the Sellers and/or ▇▇.
▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ and/or ▇▇. ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ is any longer a member of
the board of directors of the Company or an employee of the Company.
- 15 -
8.4 The price at which the Options may be exercised shall be a percentage
equal to the Sellers' Quota (minus the 10% in the event that the Sellers
exercise the retention right provided for in Clause 8.3) of the higher
of: (i) 5.5 times the average consolidated EBITDA of the Parent during
the last two financial years preceding the date of exercise of the
Options (as shown by the approved financial statements of the Parent and
the Company) less the aggregate amount of dividends paid by the Parent to
its quotaholders after 1 January 2002; and (ii) 2.5 times the
consolidated capital and reserves of the Parent as shown by the approved
financial statements of the Parent for the last financial year. The
higher of such amount shall be increased by EURO 3,806,900 (Euro three
million eight hundred six thousand nine hundred), being 60,36 per cent of
the price for the sale of the Real Estate, provided that the same was
actually collected by the Company; in the event that the Sellers exercise
the retention right provided for in Clause 8.3, the option price shall be
increased by EURO 3,045,520 (Euro three million fourty five thousand five
hundred and twenty) and the balance of EURO 761,380 (Euro seven hundred
sixty one thousand three hundred and eighty) shall be added to the price
of the residual 10% if and when the same shall be purchased by Impco
pursuant to the relevant call option. The determination of the price
shall be made by the Auditors by applying the foregoing formula, provided
that, should any of the Parties disagree with the outcome of the
Auditors' calculation, the solution of the dispute shall be deferred to
binding arbitration ("arbitraggio") to be conducted by Deloitte & Touche,
Milan branch by applying the foregoing formula in accordance with the
terms of this Agreement.
8.5 The Parties shall have the right to renew the period of exercise of the
Options for one or more instances and for all or any part of the Sellers'
Quota, at any time prior to expiration of the Options.
8.6 Formalization of the transfer of the Sellers' Quota for which the Options
have been exercised and payment of the price therefor, subject to any
reduction pursuant to Clause 8.3 above, shall occur simultaneously on a
date, indicated by the purchasing Party, being not later than 10 (ten)
Business Days after the date on which the relevant option has been
exercised, unless the transfer is subject to any condition precedent
provided for by applicable laws (such as any competition clearance) in
which case the transfer shall occur not later than 10 (ten) days after
the date on which such condition precedents have been duly met.
8.7 The representations and warranties of the Sellers in relation to
circumstances existing on the Execution Date as set out in Clause 6 shall
apply to the sale and purchase of all or any part of the Sellers' Quota
as a result of exercise of the Options in accordance with the provisions
of Clause 6 and 7, to the extent then still applicable, except that the
Sellers shall be liable for indemnification in favor of Impco, in
accordance with Clause 7, in relation to any Loss which derives from
actions or omissions of the Parent or the Company occurred prior to the
date of purchase of the Sellers' Quota pursuant to the Options to the
extent they have been decided by any of the Sellers or their relatives
who are directors of the Parent or the Company without authorisation from
the board of directors.
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9. SELLERS' DEFAULT CALL OPTIONS
9.1 Sellers' Default Call Option One
In the event that Impco fails to pay the Deferred Portion of the Purchase
Price on 30 September 2002 in accordance with Clause 3.2.4 of this
Agreement, the Sellers shall have the right to purchase the Quota from
Impco, to be exercised within [31 October 2003] by giving written notice
to the Fiduciary Company, in accordance with Clause 7.3 of the
Irrevocable Instructions, for a consideration equal to USD 10,000,000 (US
Dollars ten million), to be paid as follows: (a) a cash portion equal to
USD 4,285,712 (US Dollars four million two hundred eighty five thousand
seven hundred and twelve), and (b) a security portion consisting in a
number of Lock-Up Impco Shares necessary to equal the overall value of
USD 5,714,288 (US Dollars five million seven hundred fourteen thousand
two hundred eighty and eight), at a price per share equal to the higher
between USD 4.33 and the average closing price during the period from 15
September 2003 to 30 September 2003. Upon exercise of the Sellers'
Default Call Option One:
(i) the Sellers shall deliver to the Fiduciary Company for the
account of Impco the cash portion of the purchase price;
(ii) the Sellers shall deliver to the Fiduciary Company written
instructions to release to Impco the security portion of the
purchase price;
(iii) the Fiduciary Company shall record the Sellers as beneficial
owners of the Quota.
9.2 Seller's Default Call Option Two
Impco hereby undertakes to grant to the Sellers the right to purchase the
Quota from Impco in accordance with the terms and conditions of this
Clause 9 through signature of the Option Deed. In the event that,
following exercise of the Options, Impco fails to purchase the Sellers'
Quota for which the Option was exercised or fails to pay the relevant
price in accordance with the provisions of Clause 8 above the Sellers
shall have the right, to be exercised within 30 (thirty) days from the
expiry of the term provided for in Clause 8.6, to terminate the sale and
purchase of the Sellers' Quota occurred pursuant to the exercise of the
Options in accordance with Clause 8 above and, in turn, shall have an
option to purchase all or any part (but not less than 20% thereof) of the
Quota at a price determined and payable in accordance with Clause 8.4,
except that the amount of EURO 3,806,900 (Euro three million eight
hundred and six thousand, nine hundred) shall not be added to the amount
resulting from application of the formula. The price so calculated shall
be reduced by the amount of USD 8,000,000 (US Dollars eight million) if
all the Quota is purchased, or any pro-rata portion of such amount if
less than the entire Quota is purchased.
10. SELLERS' TURNOVER RELATED CALL OPTION
10.1 Impco hereby grants to the Sellers the right to purchase the Quota from
Impco in accordance with the terms and conditions of this Clause 10.
10.2 The Sellers' Turnover Related Call Option may be exercised only in the
event that, following the Execution Date, the business brought by Impco
to the Company, measured
- 17 -
in terms of revenues derived by the Company from sales to new customers,
increased revenues derived by the Company from sales to existing
customers and revenues derived by the Company from sales to Impco or its
subsidiaries (hereinafter referred to as "Impco Revenues") has been lower
than the following yearly targets: (i) EURO 5,000,000.00 (Euro five
million) in the calendar year 2003; (ii) EURO 7,500,000.00 (Euro seven
million five hundred thousand) in the calendar year 2004; (iii) EURO
10,000,000.00 (Euro ten million) in the calendar year 2005; (iv) EURO
15,000,000.00 (Euro fifteen million) in the calendar year 2006. Impco
Revenues shall be calculated on a monthly basis.
10.3 In the event that in any of the foregoing calendar years the Impco
Revenues have been less than the amount set out in relation to such year
in Clause 10.2, the Sellers shall have the right to exercise the Sellers'
Turnover Related Call Option during the month of March of the following
calendar year by giving written notice to such effect to Impco. The
Sellers' Turnover Related Call Option may be exercised by the Sellers in
one instance only and for all of the Quota.
10.4 The price payable by the Sellers to Impco for the purchase of the Quota
pursuant to the Sellers' Turnover Related Call Option shall be determined
in accordance with Clause 8.4, except that the amount of EURO 3,806,900
(Euro three million eight hundred and six thousand, nine hundred) shall
not be added to the amount resulting from application of the formula. The
Sellers shall have the right to pay part of such price by transfering to
Impco all or any portion of the Impco Shares held by them, which, for
such purposes, shall be valued at the average closing stock market price
of the 30 (thirty) Business Days preceding the date of exercise of the
Sellers' Turnover Related Call Option, discounted by 5%.
10.5 Formalization of the transfer of the Quota for which the Sellers'
Turnover Related Call Option has been exercised and payment of the price
therefor shall occur simultaneously on a date, indicated by the Sellers,
being not later than 10 (ten) Business Days after the date on which the
Sellers' Turnover Related Call Option has been exercised, unless the
transfer is subject to any condition precedent provided for by applicable
laws (such as any competition clearance) in which case the transfer shall
occur not later than 10 (ten) days after the date on which such condition
precedents have been duly met.
10.6 Notwithstanding the foregoing, the Sellers' Turnover Related Call Option
may not be exercised in the event that, although the Impco Revenues have
been in any given calendar year lower than the amounts indicated in
Clause 10.2: (i) the Company's prices or other terms of sale or the
quality of products or services of the Company were, during all or a
substantial part of such calendar year not competitive with those of
competitors based in Europe, North or South America, South Korea or any
other country where the Company shall directly or indirectly establish
manufacturing facilities or with companies of Impco Group; (ii) failure
to reach such amount of Impco Revenues is attributable to managerial
choices made by the Company with the consent of the board of directors;
or (iii) failure to reach such amount of Impco Revenues is attributable
to adverse market conditions affecting the market in general or to other
circumstances outside the reasonable control of Impco.
- 18 -
11. SERVICES AND NON COMPETE AGREEMENT
11.1 ▇▇▇▇▇▇▇ and Pier ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ hereby agree to continue rendering
their services to the Parent; the Company and the Subsidiaries until 30
June 2007 in substantially the same manner and with substantially the
same level of commitment as they have been rendered until the date
hereof.
11.2 In consideration for the services which will be rendered pursuant to
Section 11.1 and for the undertakings pursuant to Section 11.3, the
Company shall recognise to ▇▇▇▇▇▇▇ and Pier ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ an overall
annual compensation of Euro 100,000 (Euro one hundred thousand) each
which will be paid as compensation as members of the board of directors.
11.3 ▇▇▇▇▇▇▇ and Pier ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ hereby undertake, jointly and
severally, not to commence, acquire, pursue or otherwise and in any
manner whatsoever (including, without limitation, as shareholders,
venturers, consultants, advisors, agents or providers of funding),
directly or indirectly (including, without limitation, through their
spouses, sons or other close relatives), engage in, any activity in
direct competition with the activity currently carried out by the Parent,
the Company or the Subsidiaries.
11.4 The non compete undertaking of each of ▇▇▇▇▇▇▇ and Pier ▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇ hereunder shall have a duration until the end of the third
year following the later of the respective dates on which ▇▇▇▇▇▇▇ or, as
the case may be, Pier ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇: (i) shall no longer hold any
participation in the Company; or (ii) shall no longer render their
services to the Parent, the Company or the Subsidiaries.
11.5 The Parties agree and acknowledge that, as at the date hereof, ▇▇▇▇▇▇▇
and Pier ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ own controlling participations and are
members of the board of directors of TCN Vehicles Division S.r.l., TCN
S.r.l., Europlast S.r.l. and MTM Hydro S.r.l., which companies carry out
activities similar to, but not directly competing with, the Company and
the Subsidiaries. ▇▇▇▇▇▇▇ and Pier ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ will be permitted
to continue operating the business of such companies, provided that the
same is not expanded in a manner which may bring it in direct competition
with the activities carried out by the Company and the Subsidiaries and
that the activity made by ▇▇▇▇▇▇▇ and Pier ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ for the
account of such companies does not restrain their ability to render
services to the Parent, the Company and the Subsidiaries pursuant to
Section 11.1.
The Parties furtherly agree and acknowledge that, as at the date hereof,
▇▇▇▇▇▇▇ and Pier ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ own controlling participations and
are members of the board of directors of B.R.C. S.r.l. It is agreed
between the Parties that the activity of such company may be subject to
non-compete restrictions on the basis of specific agreements to be
subsequently reached between the Parties.
11.6 ▇▇▇▇▇▇▇ and Pier ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ hereby agree that the compensation
established for their rendering services pursuant to Section 11.2 above,
as well as the Purchase Price, are meant to include compensation also for
the non compete undertakings assumed hereunder, as the same constitute an
essential element of the overall transaction contemplated by this
Agreement. As a consequence, in the event of breach of the non-compete
undertakings, without prejudice to any other rights and remedies
available to
- 19 -
Impco pursuant to the law, ▇▇▇▇▇▇▇ and Pier ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ will be
liable to pay to Impco, by way of liquidated damages, an amount equal to
Euro 1,000,000.00 for each breach.
12. MISCELLANEA
12.1 All the obligations of the Sellers hereunder shall be joint and several.
12.2 The sellers hereby acknowledge that Impco is listed on an official stock
exchange and that, as a consequence, it is subject to severe rules in
relation to release of communications to the market. As a consequence the
Parties agree that no communication shall be publicly made by either of
the Parties without the written consent of the other Party. The Parties
shall use their best efforts to coordinate the respective communications
to the public. The provisions of this Clause 11.2 shall not apply to any
disclosure which any of the Parties may be forced to make for the
purposes of enforcing judicially any of its rights or that is required by
an order of a competent public authority or to comply with mandatory
provisions of law, provided that in all such cases the disclosing Party
shall give the other Party written notice of such disclosure as soon as
legally possible and will be under an obligation to limit the disclosure
to the extent strictly necessary for the relevant purposes.
12.3 Without prejudice to the foregoing, the Sellers hereby agree that at any
moment after the Execution Date they shall not (and shall cause the
Company not to) make any communication or release concerning the Parent
and/or the Company, which may have a direct or indirect impact on Impco's
stock price, whether positive or negative, without the prior consent of
Impco.
13 NOTICES
13.1 Any communication or notice in relation to this Agreement shall be
effected in writing and in English language and delivered by registered
letter with receipt by return mail and, if necessary, sent by telegram or
fax in advance, and shall take effect from the date in which the
registered letter is sent.
13.2. The aforesaid communications or notices shall have to be sent to the
following addresses:
13.2.1 If to Impco:
IMPCO Technologies Inc., ▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇, ▇▇.,
▇.▇.▇., Fax no. ▇▇▇▇▇▇▇▇▇▇▇▇▇, attn. ▇▇▇ ▇▇▇▇▇▇▇▇, with copy to
Studio ▇▇▇▇▇▇▇▇ e Associati. ▇▇▇ ▇▇▇ ▇▇▇▇▇ ▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇,
attn. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇, fax no. ▇▇▇▇▇▇▇▇▇▇▇▇▇;
13.2.2 If to the Sellers collectively:
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇, c/o Studio Tibaldi ▇▇▇▇▇▇▇, via S. Margherita
& Alba (CN) (Italy), fax no. ▇▇▇▇▇▇▇▇▇▇▇▇▇, with copy to ▇▇▇.
▇▇▇▇▇ ▇▇ ▇▇▇▇, ▇.▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ (▇▇▇▇▇), fax no.
▇▇▇▇▇▇▇▇▇▇▇▇.
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13.3 It is understood that any communication sent to the above addresses shall
be considered as received when effectively delivered to the relevant
Party. Any change of address shall only be valid if communicated in
writing to the other Party.
14. GOVERNING LAW AND JURISDICTION
14.1 This Agreement and all Ancillary Agreements shall be governed by and
interpreted in accordance with the laws of the Republic of Italy.
14.2 Any dispute in relation to the validity, interpretation, execution or
performance of this Agreement or any Ancillary Agreement shall be
submitted to arbitration under the rules of the Amsterdam Chamber of
Commerce by three arbitrators, fluent in Italian and in English, one of
whom will be appointed by Impco, one by the Sellers and the third, who
will act as Chairman, by the first two arbitrators or, in the event of
their failure to reach an agreement within thirty days of their
appointment, in accordance with the arbitration rules of the Amsterdam
Chamber of Commerce. The seat of arbitration shall be Amsterdam.
IN WITNESS WHEREOF, the Parties have executed this Agreement in the place and as
of the date first above written.
Impco Technologies Inc. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇
/s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇
------------------------ ---------------------------
Pier ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇
/s/ Pier ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇
---------------------------
▇▇▇▇▇ ▇▇▇▇▇▇▇▇
/s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇
---------------------------
▇▇▇▇▇ ▇▇▇▇▇▇▇▇
/s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇
---------------------------
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