Contract
Exhibit
10.1
Preliminary
Contract for Share Transfer by and between QR Imaging S.r.l., NIM
S.r.l.,Xxxxxxxxx Xxxxxxx, xxxx Xxxxxxx, Xxxxxxx Xxxxxxx and Xxxxx Xxxxxxxxx,
dated February 22, 2007\
Between
NIM
S.R.L.,
with
registered office in Verona, Xxx Xxxxxxxxxxx Xx. 00, registered in the Verona
Register of Companies under No. 01737460236;
Xxxxxxxxx
Xxxxxxx,
born in
Xxxxxx di Valpolicella on May 4th, 1943 and resident in Verona in Xxx Xxxxx
Xxxxxxx Xx. 000, tax code XXXXXX00X00X000X
Xxxx
Xxxxxxx
born in
Verona on July 4th, 1955 and resident in Xxxxxxxxxxx di Verona, Via del Fante
14
and Xxxxxxx
Xxxxxxx
born in
Verona on November 23rd, 1943 and resident in Verona, Xxx Xxxxxxxxxx Xx. 0
and
Xxxxxxxxx
Xxxxx
born in
San Giovanni Lupatoto on March 5th, 1950 and therein resident in Xxx Xxxxxx
xxx
Xxxxxx 0 as owners by means of trustee registration to VER.FID
S.R.L.
with
registered office in Verona, Xxxxx Xxxxx Xxxxx 00, registered in the Verona
Register of Companies under No. 01383610233, hereinafter referred to
collectively as the “Selling Parties” or also as the “Sellers”
on
the one
hand
and
QR
Imaging S.r.l.,
, with
registered office in Milan, Xxx Xxxxxx Xx. 00, registered in the Milan Register
of Companies under No. 05408370962 hereinafter referred to also as “Imaging”
or the
“Purchaser”
on
the
other hand
1
In
the
following Imaging and the Selling Parties shall be referred to collectively
as
the “Parties” and, individually, a “Party”.
Whereas:
-
The
Selling Parties are owners of 100% of the capital of QR srl of nominal 10,400
Euros, with registered office in Verona, Xxxxx Xxxxx Xxxxx Xx. 00 - registered
in the Verona Register of Companies under No. 02164000230 - (hereinafter also
referred to as “QR” or the “Company”) and intend to transfer their respective
capital shares to Imaging;
-
Imaging
is interested in purchasing the totality of shares representing the entire
company’s capital of QR hereinafter also referred to as the
“Participation”);
-
a due
diligence on company’s legal and accounting situation respectively as of May 17
and as of June 30, 2006 was performed on behalf of the Purchaser.
Given
all
the above which, together with the attachments to this Contract, is an integral
part thereof,
it
is
hereby agreed and stipulated as follows:
1. Sale
of the Participation
1.1 At
the
Closing date (hereinafter also referred to as “Closing Date”), in accordance
with the provisions of this Contract and of applicable law, the Sellers shall
sell, assign, transfer to the Purchaser and the Purchaser shall purchase from
the Sellers 100% of the capital of QR srl divided between the Selling Parties
as
follows:
2
Name
of
seller Quotas
in the Company
Tommasi
Gianmaria 7.5%
Mozzo
Pierluigi (held
through fiduciary company Verfid srl)30
%
Xxxxxxx
Xxxx (held
through fiduciary company Verfid srl)5
%
Xxxxxxx
Xxxxxxx (held
through fiduciary company Verfid srl)7,5
%
Nim (held
through fiduciary company Verfid srl)
50%
TOTAL
- 100%
1.2 Each
of
the Sellers shall sell, transfer, assign to the Purchaser and this latter party
shall purchase from each of the Sellers all rights arising from the shares
held
in the Company.
1.3 Conclusion
of sale of 100% of the capital of QR srl shall take place the last week of
the
month of March 2007 and in any case no later than April 15, 2007 (the “Closing
Date”). This date is held by the parties, to safeguard the economic character of
the deal, to be an essential term. Passage of this term without stipulation
of
the definitive contract shall be equivalent to withdrawal (also in accordance
with point 3.2) and shall cause loss of the deposit or payment of the double
in
accordance with point 3 of this Contract, depending on which Party is to
exercise the right of withdrawal.
3
2. Transfer
of the Participation
2.1 (i)
On
March 15th, 2007 the Selling Parties shall provide the Purchaser’s consultants
including for instance, auditing firm and financial advisors (hereinafter
referred to as (the “Consultants”), for all opportune assessments, a balance
sheet made with reference to February 28th, 2007, according to which the Net
Worth of QR shall be determined as of February 28th, 2007 (hereinafter, in
this
contract, the term Net Worth, even if written as accounting net worth, shall
refer to the description given in art. 2424 of the Civil Code). The Consultants,
as part of these assessments, may, at their own discretion, participate in
the
phases of drawing up of the aforementioned balance sheet. When exercising this
right the Consultants can, among other things, participate in informative
meetings organized by the Sellers without this hampering or hindering the
procedures for drawing up of the balance sheet by the Selling
Parties.
(ii)
Whenever remarks are made by the Consultants that render the Net Worth of QR
as
of February 28th, 2007, lower than the amount guaranteed at points 7.2 (i)
and
7.2 (ii) of this Contract then the Purchaser shall have the task of notifying
these remarks by and no later than March 20th, 2007 as the Parties hold 5 days
to be sufficient for formulating the remarks even in accordance with the powers
granted to the Consultants in the previous point. In said assumption the Parties
shall discuss the facts that emerged in order to find a shared
solution.
(iii)
Whenever no shared solution is forthcoming the Sellers undertake to issue,
at
the closing, which shall in any case take place according to the required terms
and procedures, a guarantee from a primary bank to be used at the outcome and
in
accordance with the decision of the arbitrator specified in the following point,
for an amount equal to the amount of difference between guaranteed net worth
and
what was detected by the Consultants.
(iv)
The
Parties shall therefore rely, following the closing, on the decision of a third
arbitrator, appointed by the President of the Court of Verona, who must decide
on the remarks raised by the auditing firm and consequently determine the Net
Worth and the amount that can in case be used on the guarantee that was issued
and also determine the Party which is to pay, in addition to his own fees,
also
the costs for the guarantee.
4
2.2 Sale
of
the Participation shall be performed at the Closing Date by signing of the
deed
certified by notary public in Verona named by the Sellers in order to give
correct and full execution to the provisions of this Contract.
2.3 The
Parties take note that signing of the notarized deed shall not constitute
novation with respect to the agreements in this Contract, having the only
purpose of transferring ownership of the Participation.
2.4 Transfer
of ownership of the Participation in accordance with this Contract shall take
place at the Closing Date, with effect and enjoyment starting that same
date.
2.5 The
Sellers shall deliver to Imaging, at the Closing Date, a legal opinion signed
by
an attorney-at-law chosen by the Sellers which certifies that, at the Closing
Date:
(i) the
Company is a limited liability company duly organized and validly existing
in
accordance with Italian law, has the capacity necessary for being owner of
its
assets or for leasing them and performing its business, is not undergoing
winding-up, is not insolvent, is not subject to any bankruptcy procedure or
the
like and has not stipulated any agreement according to which its own assets
are
placed under the control of creditors or of an official receiver or a special
administrative receiver and that no circumstances exist that could give rise
to
one of these situations;
(ii) the
Contract is valid and binding upon the Sellers when it is signed without any
further authorizations whatsoever being required;
(iii) the
Contract can be executed against the Sellers in accordance with the Italian
law;
(iv)
The
Company’s quotas are free from any encumbrances, it being meant by “encumbrance“
any
lack
of title, claim, privilege, obligation, burden, pledge, real or personal rights
by third parties, attachment or any other burden of whatever nature, and are
freely transferable
5
3.
Deposit
3.1 The
Purchaser undertakes to pay or cause its holding AFP Imaging Corporation in
the
name and on behalf of the Purchaser , within and not later than March 2, 2007
(terms deemed as essential by the parties) pay to the Sellers a €1,000,000.00
(one million/00) as penalty deposit through wire payment by means of bank
transfer on bank account XXXX.
3.2
The
effectiveness of such Contract is conditioned to the to the fact that the
payment has been cashed within and not later than the term provided for in
paragraph 3.1. If such term expires and the
Sellers
have not received the agreed amount as caparra, such contract shall be deemed
as
it has never been subscribed, exception made for the sellers’right to claim for
damages.
3.3 The
Parties, within the Closing Date, can withdraw from this Contract and the
deposit paid, or return of the double its amount in accordance with art. 1386
of
the Civil Code, shall be the sole compensation for failure to perform definitive
contract as the Parties agree that no other compensation shall be
owed.
4. Price
of the Participation
4.1 The
Purchaser shall pay to the Selling Parties, as purchase price of the
Participation specified in previous article 2, an amount of 13,000,000.00 Euros
(thirteen million/00) simultaneous with stipulation of the notarial deed
mentioned in article 2.2. of the present Contract by banker’s draft. In this
case the Selling Parties shall return to Imaging the Deposit given in accordance
with point 3 of this Contract unless Imaging takes measures so that the deposit
is held by the Selling Parties as partial payment of the price, consequently
subtracting it from the amount specified in the previous sentence.
5. Contracts
with some Selling Parties
5.1 Imaging
undertakes, also in accordance with art. 1381 of the Civil Code, to have the
QR
Company, at the Closing date, appoint or maintain appointed xxxxxxxxx Xxxxxxxxx
Xxxxxxx as director of QR. In particular relations between the Company and
xxxxxxxxx Xxxxxxxxx Xxxxxxx, , shall be governed by a contract having the same
form as in attachment 1 to this Contract, which xxxxxxxxx Xxxxxxx undertakes
to
sign at the Closing Date.
5.2 Imaging
undertakes, also in accordance with art. 1381 of the Civil Code, to have the
QR
Company, at the Closing date, appoint or maintain appointed Xxx. Xxxx Xxxxxxx
as
proxy for QR. In particular relations between the Company and Xxx. Xxxx Xxxxxxx,
, shall be governed by a contract having the same form as in attachment 2 to
this Contract, which Xxx. Xxxxxxx undertakes to sign at the Closing
Date.
5.3 Imaging
undertakes, also in accordance with art. 1381 of the Civil Code, to have the
QR
Company, at the Closing date, stipulate a contract with Messrs. Xxxxxxx Xxxxxxx
and Xxxxxxxxx Xxxxx having the same form as in attachment 3 to this Contract,
regarding transfer of ownership of the DTC patent as for Annex 3.1 at the
present Contract and implementation thereof, which Messrs. Tacconi and Mozzo
undertake to sign at the Closing Date.
5.4 The
terms
set at points 5.1, 5.2 and 5.3 are held to be essential by the
Parties.
6
6. Interim
Management
6.1 The
Selling Parties declare and the Purchaser take note that during November 2006
Q.R. srl shareholders’meeting resolved on payment of reserves of retained
earnings or remunerations to directors and proxies as percentages of profits
from the 2006 financial year, for a overall amount not exceeding € 750.000 and
in any case within limits that prevent it from affecting the guaranteed net
worth of the Company as of February 28, 2007.
Save
for
the right to receive the payment of dividends or remunerations described in
the
previous sentence, and save as otherwise provided for by this Contract, the
Selling Parties ensure that, in the period elapsing between the date of signing
of this Contract and the Closing Date, they shall limit themselves to routine
management of the Company according to criteria of prudential and proper
management in order to preserve the financial, assets and commercial situation,
without stipulating any contract or entering into any obligation or debt or
incurring any liability or performing any activity which could:
- make
any
of the Sellers’ representations and guarantees in accordance with this Contract
no longer reflect reality or in any case inexact;
- create
enduring costly commitments for the Company in the future.
7. Guarantees
7.1 The
Selling Parties guarantee full and unconditioned ownership and unimpeded
availability of the assets of QR and of the Participation, stating them to
be
free of any restraint, burden or encumbrance or other charges as well as, in
particular, of any pre-emption rights.
7.2 The
Selling Parties also guarantee:
(i) that
the
balance sheet of QR shall show, as of February 28th, 2007, an accounting net
worth not less than € 1.397.320,00 (onemilionthreehundred
ninetyseventhousandthreehundredtwenty/00), (hereinafter also referred to as
the
guaranteed net worth.
(ii) that
compared to the situation guaranteed as of February 28th, 2007 the Net Worth,
at
the Closing Date, shall have varied only due to routine management and in any
case shall not be less than € 1.397.320,00 (onemilionthreehundred
ninetyseventhousandthreehundredtwenty/00.
(iii) that
the
Company’s book entries, books and records have been and shall be kept in
compliance with current laws and with accounting principles;
(iv) that
the
financial statements of the Company as well as the balance sheet made with
reference to the date of February 28th, 2007 have been and shall be drawn up
in
accordance with applicable laws and in compliance with accounting principles
and
represent/shall represent in a truthful manner the balance sheet of the Company
at the dates they refer to;
(v) that
the
Participation is the full and exclusive property of the Selling Parties and
is
not subject to pledge, attachment, usufruct, burdens and any restraints and/or
any other third-party right, whether real or not, prejudicial records and/or
registrations which may even only partially limit enjoyment thereof and that
it
may befreely transferred. No
party
has stipulated any contract or option or is holder of any right which can become
a contract or an option, for the purchase, the subscription, the allocation
or
issue of any shares or other securities whatever, not yet issued, relative
to
the Company. There are not in circulation (i) any convertible securities of,
or
negotiable with, the corporate capital of the Company, (ii) any options or
other
rights to purchase or of subscription of the corporate capital of the Company;
or (iii) any agreement to which the Sellers or the Company are parties in
relation to the issue of or the subscription for any part whatever of the
corporate capital of the Company, or the issue of or the subscription for any
such convertible or negotiable securities or any such options or rights
whatever;
(vi) that
the
Company has not hired nor has undertaken to hire starting January 1st, 2006
any
employee or consultant whose gross monthly remuneration is higher than €5,000.00
(five thousand/00);
(vii) that
the
Company is not involved in lawsuits, legal or administrative proceedings or
of
any other kind;
(viii) that
the
Company has not given any guarantee in favour of or in the interests of third
parties nor have third parties gave guarantees in the interests of the
Company;
(ix) that
the
Company has always acted in accordance with applicable environmental standards
(including any law related to hazardous substances) and that there is no
requirement provided for by applicable environmental regulations that has been
imposed on the Company, nor has any notice been received of the fact that this
requirement could reasonably be imposed on it, related to the activities of
the
Company or environmental liabilities related to the company’s assets which could
increase the relevant costs for adapting to environmental regulations. The
Company has conducted its business, until the Closing Date, in compliance with
regulations on work health and safety;
(x)
that
the Company does not hold, to any extent, neither directly nor indirectly,
any
intellectual property right except for the patents listed in Exhibit 4., which
contains a true and complete list of all the intellectual property rights owned
by or licensed by the Company as of the date of this Contract.
7
The
Company is licensee of the patent DTC. The Sellers hereby represent and warrant
that at the Closing Date, the Company will be the owner of the patent DTC.
Such
patents are free from any encumbrance, and the Company has the right to use
them
without any payment to be due to third parties. In particular no employee or
former employee holds, to any extent, rights for any invention, improvements
or
discoveries related to products or services of the Company Intellectual property
rights means all intellectual property rights held in the capacity of owner,
licensor or licensee of the Company including by way of example and
not exhaustively:
-
the
Company’s name and its distinctive signs (xxxx, firm etc)
-
marks,
trade and other types, registered or not (“Marks”);
-
all
patents and their applications and patentable inventions
(“Patents”);
-
all
copyrights, registered or not even if unedited (“Copyrights”);
- all
know-how, commercial secrets, confidential lists of customers, software of
every
type, technical information, data, technology, plans, projects, designs and
models; and
- all
rights
relating to internet sites and dominions utilized by the
Company.
(xi)
that
all tax declarations by the Company have been prepared and filed within the
times and in the forms prescribed by the rules applicable thereto. All the
aforesaid declarations are true, exact and complete. All payments relating
to
imposts, taxes, contributions and withholdings have been effected timorously
(or, where applicable, all setting aside of funds to reserves for payment
thereof have been made) and for all the correct amounts and all tax requirements
have been correctly and timely carried out. There
are
no pending investigations, assessments, searches, inspections or applications
relative to taxes regarding which the Company could be liable. The Company
has
retained and paid all taxes in regard to which withholdings were required and
also paid all taxes in regard to sums paid or due to employees, independent
workers, creditors or third parties in general.
(xii)
that
no representation, warranty, or agreement made by the Company or the Sellers
in
the Contract or in its Exhibits contains or will contain any untrue statement
or
omits or will omit to state anything necessary for the proper fulfilment of
the
obligations contained in this Contract. The Sellers are not aware of any fact
which can adversely affect the value of the Participation or of the assets
of
the Company. The Sellers shall disclose to the Purchasers prior to the Closing
Date any fact, information or document that may either have an effect on any
statement, covenant, representation, warranty, or agreement contained in this
Contract or in any document mentioned therein.
7.3 The
Parties mutually agree to exclude any form of the Sellers’ guarantee as to the
product liability sold or services provided by QR, it remaining clear that
no
product or service provided by the Company in recent years has ever been found,
according to the Sellers’ knowledge, defective to the point of requiring any
compensation from the Company nor does there exist, as far as the Sellers know,
any claim whatsoever for product liability. The relevant contingent liabilities,
therefore, remain entirely to the Company’s account, excluding any kind of
indemnity as governed by point 8 of this Contract.
8. Indemnity
8.1 Whenever
due to whatever debt, liability, contingent liability and/or inexistence and/or
depreciation of the assets stated in the balance sheet, with the exception
of
losses caused by product liability, (the “Losses”), already existing at the
Closing Date or in any case arising from facts prior to that date and not
reflected in the accounting data at the Closing Date, to an extent whereby
at
the Closing Date the Net Worth is lower than what was guaranteed at points
7.2
(i) and 7.2 (ii) of this Contract, the Selling parties must hold the Purchaser
and/or the Company, according to Purchaser’s instruction, harmless from the
Losses by paying a sum equal to the loss (Indemnity) in proportion to their
respective quotas (Indemnity). The
Sellers also undertake to indemnify and compensate the Purchaser and/or
the
Company, according to Purchaser’s instruction, for
any
further damages, losses, expenses (including legal costs) or costs which are
the
consequence of breach, falsity, non-conformity with the truth, non-compliance
or
lack of exactness of the representations warrantees or agreements, of this
Contract. This
Indemnity obligations shall arise immediately but shall be payable only at
the
time when QR is required to make the relevant payment.
8.2 The
Selling Parties’ Indemnity obligations shall have a duration equal to that of
the applicable prescription related to claims from third parties being
understood that the notice of a claim for Indemnity interrupts calculation
of
the terms.
8.3 Whenever
an event arises which could give rise to Indemnity by the Selling Parties,
according to what is set at point 8.1, Imaging is obliged to involve the Selling
Parties in management of the dispute (irrespective of its nature) and they
shall
also have the right to concur in determining important choices in managing
the
dispute (for example: appointing professional consultants, possibility of
settling, possibility of challenging, etc.). Whenever the Parties are in
disagreement regarding these choices they shall put the decision up to a third
party appointed by the President of the Court of Verona who shall act as
arbitrator and decide without appeal.
8.4 The
parties agree that the Indemnity obligations shall be valid and effective up
to
an overall amount of €13,000,000 (thirteen million).
8.5 Refund
of
any contingent liabilities, if tax deductible, shall be performed with a
reduction equal to the consequent savings for reduced taxes to be sustained
by
the Company;. any contingent assets can also be compensated net of the
corresponding current and/or deferred taxes where applicable.
8.6 The
Selling Parties’ obligations to indemnify as per the previous points shall take
effect only after, regarding one or more debit charges, deducting the amounts
set at point 8.5, a cumulative deductible is exceeded, mutually agreed by the
parties to be €25,000 (twenty five thousand/00). Below this amount,
consequently, Imaging cannot ask for any amount as Indemnity.
8.7 The
Selling Parties, to guarantee the indemnity obligations governed by the previous
points, must deliver a guarantee issued by a primary bank for the amount of
€1,000,000 (one million) at the Closing Date. This guarantee must retain
validity for five years after the Closing Date.
8.8 Imaging,
for itself and for its assignees, taking note of the Selling Parties’ commitment
to indemnify Losses, undertakes not to bring, and not to have third parties
bring, in any cases, lawsuits against the Selling Parties and the directors
for
facts related to management of the Company prior to the Closing
Date.
8
9. Non-competition
agreements
9.1 The
Sellers undertake to refrain from performing activities that are directly or
indirectly competitive with those of the Company in Italy and in the rest of
the
world with the exclusion of Iran, Cuba and Vietnam. They take due note that
all
consideration of this non-competition agreement is understood to be already
included in the sale price of the Participation. This clause shall have a
duration of five years from the date of termination of all collaboration
relationship by each of the Sellers with the Company with the clarification
that
competition is understood to be such if it refers to activities in the dental
radiology sector using the “cone beam” technique.
9.2 The
Seller
who infringes the agreement, in case of breach of the non-competition agreement,
shall be required to pay the Company a penalty for the amount of €150,000 as
well as to compensate the Company for damage.
10. Court
of jurisdiction and applicable law
10.1 The
Court
of Verona shall have sole jurisdiction for all disputes as to this Contract
or
the agreements ancillary and/or consequent thereto.
10.2 The
parties agree that this Contract, or the agreements ancillary and/or consequent
thereto, shall be governed by Italian law.
11. General
Provisions
11.1 This
Contract is drawn up in Italian and in English. In case of any discrepancy
between the texts in the two languages the Italian language shall
prevail.
11.2 Costs.
Each Party shall pay its own costs and it is clarified in this regard that
the
amounts due to the Consultants, including those regarding the procedures called
for at point 2 of this Contract, are totally owed by the Purchaser. If one
party
brings a legal suit against the other Party in accordance with this Contract
the
losing Party shall pay the other Party an amount equal to the costs, including
legal expenses, sustained for the suit.
11.3 All
notices required by this Contract must be made in writing and delivered by
hand
(including by courier), by telefax or telegram, or by registered letter with
return receipt to the following addresses:
-
if to
the Selling Parties, collectively or individually, to:
Xxxxxxxxx
Tommasi c/o NIM S.r.l.
Xxx
Xxxxxxxxxxx 00
00000
Xxxxxx
Telefax:
xx 00 000 0000000
-
if to
Imaging to:
Studio
Albertazzi
Xxxxxxxx
xxx Xxxxx 0
00000
Xxxxx
Telefax:
+
39 02 76 02 57 73
Changes
in
the addresses and fax numbers of the Parties must be notified in the same
procedures as provided for by this article with a minimum seven days’ notice.
Communications and notices are understood to have been received the moment
they
reach the addressee’s address (if made by hand delivery, telegram or registered
letter) or the moment the addressee confirms (including confirmation by telefax)
having received notice by telefax.
Signed
in
Verona February 22, 2007
Xxxxxxxxx
Xxxxxxx /s/
Xxxxxxxxx Xxxxxxx
Xxxxxxx
Xxxxxxx /s/
Xxxxxxx Xxxxxxx
Xxxxxxx
Xxxx /s/
Xxxx Xxxxxxx
Mozzo
Pierluigi /s/
Xxxxxxxxx Xxxxx
per
Nim
srl
Xxxxxxxxx
Xxxxxxx /s/
Xxxxxxxxx Xxxxxxx
per
Imaging
Xxxxxx
Xxxxxxxxxx /s/
Xxxxxx Xxxxxxxxxxx
President
9
