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Exhibit 10.1
AGREEMENT
FOR THE SALE OF A BUSINESS
AGREEMENT FOR THE SALE OF A BUSINESS (this "Agreement") dated May 4, 1999 by
and among
- Caggiati S.p.A., an Italian corporation with registered offices in Colorno
(Parma), Xxx Xxxxxxx xxxxx Xxxxxxx Xx. 00, tax code / VAT No. 00534620349,
registered with the register of companies of Parma under No. 9592, represented
herein by Xx. Xxxxxxx Xxxxxxxx, (hereinafter the "Seller"), and
- Xx. Xxxxxxx Xxxxxxxx and Xxx. Xxxxxxxx Xxxxxxxx, all domiciled in Colorno
(Parma), Xxx Xxxxxxx xxxxx Xxxxxxx Xx. 00, (hereinafter "Messrs. Caggiati"),
- on the one side -
and,
- Xxxxxxxx International Corporation, a US corporation with corporate offices
at Two NorthShore Center Xxxxxxxxxx, Xxxxxxxxxxxx, 00000-0000 XXX, represented
by Xxxxxx X. Xxxxxxxxxx, acting for itself or for an Affiliate to be indicated
by the same no later than the date of the Closing (collectively, the "Buyer")
- on the other side -
W I T N E S S E T H
WHEREAS, the Seller owns and operates a business engaged in the production and
sale of bronze products;
WHEREAS, the Seller and Messrs. Caggiati collectively own (i) 98% of the
corporate capital of Caggiati Espana s.a., a Spanish corporation with offices
in Valencia (Spain), Arquit. Xxxxxx xx Xxxx 24 ("Xxxxxxxx Espana") and (ii)
100% of the corporate capital of Caggiati France SARL, a French corporation
with offices in Saint Genis Laval (France), Parc des Aqueducs ("Caggiati
France" and together with Caggiati Espana, the "Foreign Subsidiaries");
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WHEREAS, the Seller desires to sell to the Buyer its business (azienda),
subject to the terms and conditions contained in this Agreement.
NOW, THEREFORE, in consideration of the mutual promises and covenants and upon
the terms and subject to the conditions hereafter set forth, the parties hereto
agree as follows:
1. Recitals; Definitions.
1.1 Recitals. All the foregoing recitals represent an integral and material
part of this Agreement.
1.2 Definitions. As used in this Agreement, defined terms shall have the
respective meanings set forth in Schedule A.
2. Transfer of the Business.
2.1 On the Closing Date, subject to the terms and conditions hereof, the
Seller shall sell and transfer, and the Buyer shall purchase and accept, the
Caggiati Business.
2.2 For the purposes of this Agreement, the "Caggiati Business" shall mean:
(i) all assets of the Seller including those described in Schedule B, pages 2
through 5 (including inter alia, (a) 100% of the capital of the Foreign
Subsidiaries, and (b) the tradename/trademark Caggiati), except for the assets
described in Schedule B, page 1 (the "Excluded Assets"), and (ii) the
liabilities described in Schedule B, page 6, with the limitations contained in
Schedule C (the "Transferred Liabilities").
2.3 Attached as Schedule D to this Agreement is the 1998 Trial Balance. The
1998 Trial Balance is the one provided by Caggiati to Price Waterhouse Coopers
for their tax and accounting due diligence.
3. Liabilities Assumed by the Buyer.
The Seller and the Buyer hereby agree that the Buyer shall take over only and
exclusively the Transferred Liabilities, and only to the extent that such
Transferred Liabilities are evidenced in the compulsory accounting books of the
Seller, as provided by art. 2560 of the Italian Civil Code. The Buyer shall
assume no other liability of the Seller.
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4. Price.
4.1 In consideration for the sale of the Caggiati Business, at the Closing the
Buyer shall pay to the Seller a total price of Lit 34.6 billion (the "Price").
4.2 The Price shall be paid as follows: Lit. 20.2 billion at Closing;
Lit. 7.2 billion on the first anniversary (one year) after Closing; and Lit.
7.2 billion on the second anniversary (two years) after closing. Interest at
the rate of 5% shall accrue on the two installment payments.
4.3 As guarantee for the installment payments, Buyer shall grant a stand-by
letter of credit or a bank guarantee. The stand-by letter of credit or bank
guarantee, shall provide that in the event of any formal claim (i.e. legal
proceeding or administrative action) of the Buyer to be indemnified pursuant
to this agreement, the bank shall refrain from effecting payment for the amount
equal to the claim, if Xxxxxxxx will provide evidence of a pledge established
by it on 30% of the capital of Caggiati s.r.l. in favor of the Seller, securing
payment of such amount.
5. Conditions to Closing.
5.1 Conditions to obligations of the Buyer. The obligations of the Buyer to
purchase and pay for the Caggiati Business are subject to fulfillment of the
following conditions (any of which may be waived in whole or in part by
the Buyer):
5.1 (a) no legal proceeding shall be pending or overtly threatened, or any
basis for such a proceeding asserted, before any court or any governmental
body, governmental agency or regulatory authority of any jurisdiction or before
any arbitrator or any other Person directed against the consummation of any of
the transactions contemplated by this Agreement which, in the reasonable
opinion of the Buyer, after consulting with the Seller, makes it impracticable
or inadvisable to proceed with the transactions contemplated by this Agreement;
5.1 (b) the notification procedure to the Trade Unions under Article 47 of Law
no. 428 of December 29, 1990 shall have been completed;
5.1 (c) the Seller's Representations and Warranties set forth in Schedule E
hereof shall be true and correct as of the Closing Date and with respect to the
entire time periods to which they refer;
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5.1 (d) the Seller shall have performed and complied with all of their
obligations under this Agreement which were required to be performed or
complied with on or before the Closing Date;
5.1 (e) the Seller and Messrs. Caggiati shall have obtained from each party
(excluding suppliers) to the contracts transferred with the Caggiati Business
their consent, if required, to the relevant transfer to the Buyer;
5.1 (f) between the date of this Agreement and the Closing Date there shall not
have occurred any event (regardless of whether such event is disclosed to the
Buyer) that could result, directly or indirectly, in a material adverse effect
on the economic or financial condition of the Caggiati Business; and,
5.1 (g) The Board of Directors and the Members of the Board of the Statutory
Auditors of the Foreign subsidiaries, if any, shall have submitted their
written resignation from the offices held in the Foreign subsidiaries.
5.2 Conditions to Obligations of the Seller. The obligation of the Seller to
sell the Caggiati Business shall be subject to the following conditions:
5.2 (a) the Buyer's representations and warranties as set forth in Schedule F
shall be true and correct as of the Closing Date and with respect to the entire
time periods to which they refer; and
5.2 (b) the Buyer shall have performed and complied with all of its obligations
under this Agreement which were required to be performed or complied with
between the date of this Agreement and the Closing Date.
6. Closing.
6.1 The Closing shall take place on June 1, 1999 (the "Closing Date") at the
offices of Gianni, Origoni & Partners, Xxxxxx Xxxxxxxxxx 0, Xxxxx, or at such
other date and place as the parties may mutually agree. The parties shall
execute a deed of conveyance (the "Deed of Conveyance") for the Caggiati
Business in a form substantially similar to Schedule G. The Italian Notary who
will certify the Deed of Conveyance will be selected by the Buyer. The Deed of
Conveyance will be executed for the purpose of giving effect to the sale of the
Caggiati Business as required by Article 2556 of the Italian Civil Code, being
it understood that such Deed of Conveyance shall in no way impair or alter the
rights and obligations of the parties set forth in this Agreement, which shall
survive in full the execution of the Deed of Conveyance. In case of conflict
between any provisions of this Agreement and the Deed of Conveyance, this
Agreement shall prevail and the Deed of Conveyance shall not
constitute novation.
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6.2 At the Closing, the Buyer will acquire full, unencumbered and unrestricted
title to the Caggiati Business as of 0.01 a.m. of the Closing Date.
6.3 At and after the Closing, the Seller and Messrs. Caggiati shall also
deliver or shall cause to be delivered to the Buyer all other necessary
endorsements, assignments and other good and sufficient instruments of
conveyance and transfer, as shall be effective to vest in the Buyer all the
right, title and interest in and to the Caggiati Business as
contemplated hereby.
7. Representations and Warranties of the Seller and Messrs. Caggiati.
The Seller and Messrs. Caggiati hereby make the representations and warranties
contained in Schedule E, and the Seller and Messrs. Caggiati certify that such
representations and warranties are true and complete as of the date of
execution of this Agreement and shall continue to be true and complete as of
the Closing Date and for the period of 30 months after the Closing Date (except
where other dates are specified herein).
The Seller and Messrs. Caggiati acknowledge that the Buyer is relying thereon
in connection with its entering into this Agreement. The parties hereto agree
that no warranty is granted by the Seller and Messrs. Caggiati for possible
loss deriving from accounts receivable or from differences or obsolescence in
the inventory except for the provision set forth under article 1229 of the
Italian Civil Code.
The parties agree that the above representations and warranties, and the
relevant indemnification, shall be considered as a specific obligation of the
Seller and Messrs. Caggiati. Any limitations applicable to the representations
and warranties shall not apply in the event the Seller and Messrs. Caggiati
have intentionally failed to disclose material facts regarding the Caggiati
Business. The Buyer shall be entitled to indemnification also for any facts
disclosed herein or otherwise known to Buyer, except as otherwise expressly
agreed herein. The Buyer shall not be entitled to indemnification for any
possible loss, cost or expenditure, deriving from the normal wear and tear of
the Business assets. In the event of material breach of the representations and
warranties of Seller and Messrs. Caggiati, Buyer shall be entitled to damages
and termination, or damages alone, in its discretion.
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8. Representations and Warranties of the Buyer.
The Buyer hereby makes the representations and warranties contained in
Schedule F, and certifies that they will be true and complete as of the Closing
Date (except where other dates are specified herein) and acknowledges that the
Seller is relying thereon in connection with its entering into this Agreement.
For all purposes the Buyer represents and warrants that all transferred
liabilities will be taken on and paid in the normal course of business by its
Italian subsidiary as of the date of the Closing.
Indemnification Obligations.
9.1 Indemnification. Except for any possible loss deriving from accounts
receivable or from differences or obsolescence in the inventory, as specified
under art. 7 second paragraph of the present agreement, the Seller and Messrs.
Caggiati shall be responsible, jointly and severally, for any damage, loss,
expense, cost or other liability, including actual legal and procedural fees
("Losses"), incurred by the Buyer, or its directors or employees,
resulting from:
(a) the inaccuracy or untruthfulness of any of the Seller's representations
and warranties;
(b) the failure of the Seller to comply with any obligations resulting from
this Agreement;
(c) all liabilities of the Seller and of the Caggiati Business not expressly
assumed by the Buyer pursuant to Section 3 hereof, whether or not disclosure
thereof has been made to the Buyer. This indemnification shall not be subject
to the Lit. 500.000.000 basket provided herein;
(d) any tax liability (including penalties, surcharges, and relevant legal
costs) of the Caggiati Business pertaining to any date which is before the
Closing Date;
(e) any environmental liability with a Lit. 2 billions "cap" not subject to
the basket of Lit. 500,000,000 indicated hereinafter in this article (including
penalties, clean-up costs, and relevant legal costs) of the Caggiati Business
pertaining to any date which is before the Closing Date;
(f) any social security liability (including penalties, surcharges, and
relevant legal costs) of the Caggiati Business pertaining to any date which is
before the Closing Date;
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(g) any labor liability (including penalties, surcharges, and relevant legal
costs) of the Caggiati Business pertaining to any date which is before the
Closing Date.
The words "liability pertaining to any date which is before the Closing Date"
shall include, without limitation, any liability that arises after the Closing
Date, which is in connection with facts, acts, and/or omissions that have
occurred at any time before the Closing Date.
Buyer's right to indemnification shall expire:
- with respect to the above paragraphs (a) and (b) after a period of 30 months
from the Closing Date;
- with respect to the above paragraph (c), after 10 years from the
Closing Date;
- with respect to the above paragraph (d) until expiration of the relevant
statute of limitations;
- with respect to the above paragraph (e) after 5 years from the Closing Date
with a Lit.2 billions cap not subject to the basket of Lit. 500.000.000
indicated hereinafter in this article;
- with respect to the above paragraph (f), after 5 years from the Closing Date
in the case of actions instituted by INAIL; and 10 years from the Closing Date
for actions instituted by employees, and
- with respect to the above paragraph (g), after 5 years from the Closing Date.
The Seller and Messrs. Caggiati shall not be required to indemnify the Buyer
under this article 9 until the aggregate of all Losses exceeds Lit 500,000,000,
provided that if such limit is exceeded the Seller and Messrs. Caggiati shall
indemnify the Buyer not only for the amount in excess of such limit but for the
whole amount of the Losses.
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10. Covenants of the Seller and Messrs. Caggiati.
10.1 Non-competition. Without prejudice to any other provision of this
Agreement, for a period of 5 (five) years from the Closing Date, the Seller and
Messrs. Caggiati will abstain from taking any of the following actions,
directly or indirectly:
(a) engage, acquire or have an interest (whether as owner, partner, lender or
otherwise) in any manufacturing or trade activity which is in competition with
the Caggiati Business;
(b) offer to employ or otherwise engage or solicit any Person who is or has
been a manager, employee, sales representative, agent or other trade
intermediary of the Seller.
The above non-competition covenant will extend to the territory of Italy and
of the following countries:
Spain, France, Germany and Belgium.
The Seller and Messrs. Caggiati hereby acknowledge and agree that the
consideration for their non-compete commitment provided for in Section 10.1
hereof has been already included in the Price, and that therefore no further
payment will be due to any of them by the Buyer in connection with
such commitment.
10.2 Access to Information / Cooperation. Until the Closing Date, the Seller
and Messrs. Caggiati shall:
(a) afford the Buyer and its representatives access to any type of information
or documents relating to the Caggiati Business;
(b) cause the Seller's employees to furnish the Buyer and its representatives
with such information, facts or explanations requested by them and to discuss
openly with the Buyer and its representatives any aspects related to the
condition and activity of the Caggiati Business;
(c) furnish to the Buyer and its representatives, upon their request, extracts
or copies of documents relating to the Caggiati Business.
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10.3 Conduct of the Caggiati Business. Between the date of this Agreement and
the Closing Date, the Seller shall cause the Caggiati Business to be conducted
only in the ordinary course and maintain in good condition all of its assets
and maintain its economic and commercial relationships. In particular, at all
times before the Closing, the Seller shall (a) maintain its corporate existence
in good standing, (b) operate the Caggiati Business substantially as presently
operated and only in the ordinary course and consistent with past operations
and its obligations under any existing agreements, (c) use its reasonable best
efforts to preserve intact the present organization and employees of the
Caggiati Business and the Seller's relationships with Persons having business
dealings with the Caggiati Business, (d) comply in all respects with all Laws,
rules and regulations applicable to the Caggiati Business, (e) maintain its
insurance coverages with respect to the Caggiati Business, (f) pay all Taxes,
charges and assessments with respect to the Caggiati Business when due, subject
to any valid objection or contest of such amounts asserted in good faith and
adequately reserved against, (g) make all debt service payments with respect
to the Caggiati Business when contractually due and payable, (h) pay all
accounts payable and other current liabilities with respect to the Caggiati
Business when due, and (i) maintain the property, plant and equipment included
in the Caggiati Business in good operating condition in accordance with
industry standards taking into account the age thereof.
Between the date hereof and the Closing Date, and except as provided in this
Agreement or as otherwise consented to in writing by the Buyer, neither Seller
(with respect to the Caggiati Business) nor Messrs. Caggiati shall:
(i) modify, change or otherwise alter the fundamental nature of the Caggiati
Business or the way it is conducted;
(ii) write-up inventory;
(iii) make any capital expenditure or commit to make any capital expenditure;
(iv) enter into any supply contract or obligation having a present value in
excess of Lire 20 million or into any other contract other than with customers
having a present value in excess of Lire 20 million or duration of more than
1 (one) year;
(v) enter into any contract with customers upon terms and conditions different
from terms and conditions applied up to the date of execution of this
Agreement;
(vi) default under any obligation under any contract; or
(vii) limit the transferability of any transferred assets.
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Between the date of this Agreement and the Closing Date, and except as provided
in this Agreement, the Seller shall not cause or permit Caggiati S.p.A., other
than in the ordinary course, to do the following:
(a) acquire or convey any material assets of the Caggiati Business;
(b) create any Lien or otherwise encumber any assets;
(c) purchase raw materials or supplies;
(d) alter production schedules;
modify or cancel any contract or Authorization;
(e) amend or curtail any purchase orders or distribution arrangements;
(f) hire new personnel and/or consultants, increase or create salaries,
benefits, severance pay or other remuneration of Employees, directors
and consultants;
(g) pay bonuses or distribute dividends, in any form; or
(h) take any other action which may result in an adverse change in the
condition, results, or prospects of the Caggiati Business.
10.4 Exclusive Dealing. Neither the Seller, nor its Employees, shareholders,
agents or representatives shall negotiate with Persons other than the Buyer for
the transfer, in whole or in part, of the Caggiati Business nor shall any
information be furnished for such purpose.
10.5 Lease Agreement. On the Closing Date the Buyer and the Seller shall
enter into a lease agreement substantially in the form attached hereto as
Schedule H. The rent shall be equal to Lit. 400 million for the first three
years and Lit. 670 million thereafter.
(ISTAT adjustment shall be calculated starting from the third year with a "cap"
of Lit 12,000,000).
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10.6 Use of trademark and tradenames. The Seller and Messrs. Caggiati
acknowledge that, as the purchaser of the Caggiati Business, the Buyer shall
enjoy an unlimited free use of the tradename/trademark "Caggiati" or other
tradenames/trademarks from time to time chosen by the Buyer, which may include
the name "Caggiati" also in association with other names or logos, provided
that such use shall be connected with the Caggiati Business. The Seller shall
change its name within 30 days from the Closing Date.
10.7 Activity of Seller after the Closing. The Seller and Messrs. Caggiati
undertake that, after the Closing Date, for a period of three years and without
the consent by the Buyer (i) the Seller shall not incur indebtedness or grant
any personal or real guarantees (including pledges and mortgages), (ii) they
shall not establish or permit others to establish Liens of any kind on the
shares or the assets of the Seller, (iii) Messrs. Caggiati shall continue to
own the stock of the Seller. However consent to any of the foregoing
transaction will not be unreasonably withheld by the Buyer.
11. Taxes and Other Expenses.
11.1 All income and capital gain Taxes due as a consequence of the sale to the
Buyer of the Caggiati Business shall be borne and paid for by the Seller.
11.2 The Buyer and the Seller shall each pay the fees, expense and
disbursements incurred by their respective auditors, consultants and
legal advisors.
11.3 Registration tax shall be borne by the Buyer.
12. Miscellaneous.
12.1 Confidentiality and Publicity. None of the parties shall make public
releases or announcements concerning the transactions contemplated in this
Agreement without the prior consent of the other party (which consent shall not
unreasonably be withheld) and the approval of the wording of the release or the
announcement, except as such release or announcement may be required by Law or
the rules or regulations of any Governmental Authority, in which case the party
required to make the release or announcement shall allow the other party
reasonable time to comment on such release or announcement in advance of
such issuance.
12.2 Notice of Certain Events. Each of the Seller and the Buyer agree to give
prompt notice to the other of any event which could result in a default of any
obligation provided under this Agreement or result in any representation or
warranty contained in this Agreement to be untrue. The Party notifying the
other shall furnish all available documentation relating to the notified event;
provided, however, that the delivery of any notice pursuant to this Section
12.2 shall not limit or otherwise affect the rights of the party receiving
such notice.
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12.3 Notices. (a) Any notices relating to this Agreement shall be made in
writing by facsimile transmission with confirmation by registered letter with
return receipt addressed as follows:
If to the Buyer to:
Xxxxxxxx International Corporation
Two NorthShore Center
Xxxxxxxxxx, Xxxxxxxxxxxx, 00000-0000
XXX
FAX int+0 (000) 000-0000
To the attention of Xx. Xxxxxx X. Xxxxxxxxxx
With copy to:
Gianni, Origoni & Partners
000 Xxxxx Xxxxxx, Xxxxx 0000
Xxx Xxxx, Xxx Xxxx 00000
XXX
FAX No. int+0 (000) 000-0000
To the attention of Xxxxxxxxxx Xxxxxxxx
If to the Seller to:
Xx. Xxxxxxx Xxxxxxxx
Xxx. Xxxxxxxx Xxxxxxxx
Xxx Xxxxxxx xxxxx Xxxxxxx, 00 Xxxxxxx (XX)
FAX No. 00-000-000-000
With copy to:
Bruni-Gramellini e Associati
Xxxxx xx Xxxxx Xxxxxxxx, 00
Xxxxx, Xxxxx
FAX No.: (00) 00 0000000
To the attention of Avv. Gian Xxxxx Xxxxx
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With copy to:
Dott. Fabio Moltalbetti
Xxx X. Xxxxxxxx xx. 00
Xxxxx, Xxxxx
FAX No.: (00) 00 00000000
(b) Any communication sent pursuant to this Section 12.3 shall be deemed made
on the date of confirmed transmission of the telecopy, or on the date of
signature of the notice of receipt of the registered mail, whichever
is earlier.
12.4 Entire Agreement/Waiver. (a) This Agreement and the Schedules contain
the entire understanding and agreement of the parties and supersede all prior
contracts, understandings or arrangements among the parties with respect to the
subject matter hereof. Any amendment to this Agreement shall be valid only if
made by writing and signed by a duly authorized representative of the Party
against whom enforcement of such amendment is invoked.
(b) The default or delay in the exercise of a right resulting from this
Agreement or the failure to contest non-compliance by one of the parties shall
not constitute the other Party's waiver of compliance, unless expressly
provided otherwise in writing.
12.5 Section Headings. The section headings contained in this Agreement are
for reference purposes only and have no relevance for purposes of interpreting
this Agreement.
12.6 Applicable Law/Disputes. This Agreement is governed by the Laws of the
Republic of Italy. All disputes arising in connection with the Agreement shall
be settled by arbitration, in accordance with the Rules of Arbitration and
Conciliation of the Chamber of Commerce of Milan (Italy) - which the parties
acknowledge to know and accept - by three arbitrators appointed pursuant to
such Rules. The place of arbitration shall be Milan (Italy) and the
proceedings shall be conducted in the English language.
12.7 Expenses. Save in case of termination for default of a party, the
parties hereto shall pay their own respective expenses relating to the
negotiation and performance of this Agreement whether or not the transactions
contemplated hereby are consummated.
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12.8 Severability. If any provision of this Agreement shall be held null or
unenforceable by any court or competent authority, the parties agree to
negotiate in good faith a substituting clause that most closely has the legal
and economic effects of the invalidated clause, and the remaining provisions
of this Agreement shall not in any way be affected or impaired.
12.9 Assignment. This Agreement and the rights and obligations thereunder may
not be assigned without the prior written consent of the other party, provided,
however, that the Buyer shall be entitled to assign this Agreement in its
entirety to an Affiliate without the consent of Seller.
12.10 Language. This Agreement shall be executed in 2 original copies in the
English language, one for the Buyer and one for the Seller.
12.11 Adverse Construction. The language in all parts of this Agreement shall
in all cases be construed as a whole according to its fair meaning and without
implying a presumption that the terms thereof shall be more strictly construed
against one party as opposed to another, it being agreed that representatives
of all parties have participated in the preparation hereof and negotiations of
this Agreement.
IN WITNESS WHEREOF, the parties hereto have duly entered into this Agreement,
as of the day and year first above written.
CAGGIATI S.P.A.
By: Xxxxxxx Xxxxxxxx
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Xxxxxxx Xxxxxxxx
By: Xxxxxxxx Xxxxxxxx
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Xxxxxxxx Xxxxxxxx
XXXXXXXX INTERNATIONAL CORPORATION
By: Xxxxxx X. Xxxxxxxxxx
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Xxxxxx X. Xxxxxxxxxx