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EXHIBIT 2.1
ACQUISITION AGREEMENT
This Agreement is made and entered into in Milan, Italy on this 3rd day
of June, 1999 by and among:
IDEX CORPORATION, a U.S. company organized under the laws of Delaware, with its
principal office at 000 Xxxxxx Xxxx, Xxxxx 000, Xxxxxxxxxx, Xxxxxxxx 00000,
U.S.A., represented by Xxxxx X. Xxxxxx, in his capacity as Vice President and
General Counsel, in force of resolution of the board of directors dated April
23, 1999 (hereafter "Buyer"),
and
GECOFIN S.P.A., an Italian company with registered offices in xxx Xxxxxxxxx 00,
00000, Xxxxxxxxx Xxxxxxx (XX), hereby represented by Mr. A. R. Arabnia, in his
capacity as President, in force of resolution of the shareholders' meeting dated
May 28, 1999 (hereafter "Gecofin"), and PL&C S.R.L., an Italian company with
registered offices in xxx Xxxxxxxxx 00, 00000, Xxxxxxxxx Xxxxxxx (XX), hereby
represented by Mr. A. R. Arabnia, in his capacity as Sole Director, in force of
the by-laws (hereafter "PL&C"; Gecofin and PL&C will hereafter be referred to
collectively as "Sellers"), as well as Xxx. Xxxxxx Zone, born in X. Xxxxxx
Lomellina (PV) on January 3, 1935, C. F. ZNOTRS35A431276V, Mr. A. R. Arabnia,
born in Teheran on June 16, 1955, C. F. RBNLRZ55H16Z224J, Xx. Xxxxxx Xxxx, born
in Milan on April 8, 1961, C. F. NRESGP61D08F205D and Xxx. Xxxxx Xxxx, born in
Milan on February 11, 1955, C. F. NRELCR55B51F205V, for the limited purpose of
Articles 4, 5, 6, 7, 9, 12, 13, 14 and the other provisions related to them
(hereafter collectively referred to as the "Shareholders" and individually as a
"Shareholder").
RECITALS
A. FAST S.p.A. is an Italian company with registered offices in xxx
Xxxxxxxxx 00, Xxxxxxxxx Xxxxxxx (XX) (hereafter the "Company"), which directly
owns 99.80% of the corporate capital of FAST Iberica de Tintometros S.A., a
Spanish company with registered offices in Xxxxx Xxxxxxxxxxx 00, Xxxxxxxxxx,
Xxxxxxxxx ("FAST Iberica") and 100% of the corporate capital of FAST UK Ltd., an
English company with registered offices in Xxxx X0 Xxxxxx Xxxx Xxx. Xxxxxx,
Xxxxxxxxxx 7, Telford, Shropshire, TFI 44X ("FAST UK"; FAST Iberica and FAST UK
are hereafter referred to collectively as the "Subsidiaries" and individually as
a "Subsidiary").
B. The corporate capital of the Company is equal to nominal Lit.
1,044,000,000, divided in no. 1,044,000 shares of nominal Lit. 1,000 each,
represented by share certificate nos. 54 and 55, owned by the Sellers as
follows:
Name No. Shares Share Cert. Nominal Value Cap. %
---- ---------- ----------- ------------- ------
Gecofin 991,800 55 991,800,000 95%
-- ------
PL&C 52,200 54 52,200,000 5%
-- ------
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C. FAST America Inc. is a U.S. company organized under the laws of New
Jersey with its registered offices at 00 Xxxxx Xxxxxx Xxxxxx, Xxxxxxxxxxx, Xxx
Xxxxxx, X.X.X. (hereafter "FAST America"; FAST America, the Company and the
Subsidiaries are hereafter referred to collectively as the "FAST Operating
Entities" and individually as a "FAST Operating Entity").
D. Gecofin owns 100 shares of common stock, without par value, of FAST
America, represented by share certificate no. 1, which constitute all of the
issued and outstanding shares of FAST America ("FAST America Shares"), as well
as 0.2% of the corporate capital of FAST Iberica.
X. Xxxxxxx conduct through the FAST Operating Entities the business of
designing, manufacturing and distributing color formulation equipment and
equipment used for the mixing, storage, handling and dispensing of paints, inks
and other fluids (the "Business").
F. In accordance with the clauses, terms and conditions set forth in
this Agreement, the Sellers are willing to sell and Buyer is willing to purchase
all of the outstanding shares of the Company and FAST America with the intent
for Buyer to so acquire through the present acquisition all the assets of the
Business.
G. The Shareholders are the controlling shareholders of the Sellers,
they are actually engaged in the current conduct of the Business through the
FAST Operating Entities and are willing to guarantee Sellers' obligations
hereunder and to undertake a non-compete commitment to preserve the goodwill of
the Business in favor of Buyer, upon the terms and conditions provided in this
Agreement.
NOW THEREFORE, in consideration of the mutual understandings and
covenants contained in this Agreement, Buyer, Sellers and Shareholders agree as
follows:
ARTICLE 1 - PREMISES
The RECITALS A, B, C, D, E, F and G, the Definitions below, as well as
any Exhibits attached to this Agreement constitute an integral and substantive
part of this Agreement.
ARTICLE 2 - DEFINITIONS
2.01 "Accounts Payable" shall mean (i) all accounts payable of the FAST
Operating Entities on a combined basis (other than accounts payable relating to
any Indebtedness) as determined in accordance with GAAP and (ii) all checks
written on any FAST Operating Entity's "zero balance" or other bank account on
or prior to the Closing Date which have not cleared as of the Closing Date;
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2.02 "Accounts Receivable" shall mean all accounts and "amounts"
receivable (net of reserves for doubtful accounts) of the FAST Operating
Entities on a combined basis as determined in accordance with GAAP. For the
purpose of the calculation of the Combined Working Capital and the Closing Date
Working Capital Adjustment the reserves for doubtful accounts shall be included
at an amount equal to Lit. 57,000,000;
2.03 "Accrued Liabilities" shall mean (i) accrued liabilities, expenses
and deferred income ("ratei e risconti passivi") of the FAST Operating Entities
on a combined basis as determined in accordance with GAAP, except for the Income
Tax Liability as defined hereunder and except for deferred tax liability ("fondo
imposte differite"), and (ii) accrued severance indemnities or compensations
(such as "T.F.R." for employees, retirement accruals, termination indemnities
for agents etc.) for termination of staff of the FAST Operating Entities;
2.04 "Affiliate" (or "Affiliated") shall mean with respect to any
Person, any other Person directly or indirectly controlling, controlled by or
under common control with such Person, it being understood that, for purposes of
this definition, control shall be determined in accordance with Article 2359 of
the Italian Civil Code and, with respect to individuals, control shall be
considered as existing whenever the individuals are relatives ("parenti" o
"affini") within the 4th degree according to the Italian Civil Code, and it
being further understood that the Shareholders are Affiliated with Sellers;
2.05 "Business" shall mean the business of designing, manufacturing and
distributing color formulation equipment and equipment used for the mixing,
storage, handling and dispensing of paints, inks and other fluids, which is
currently carried out by Sellers through the FAST Operating Entities;
2.06 "Cash" shall mean cash and cash equivalents, securities and
similar short-term financial instruments held by the FAST Operating Entities;
2.07 "Closing" shall mean the consummation of the actions set forth in
Article 6;
2.08 "Closing Date" shall mean the date on which the Closing shall take
place as indicated in Article 6.01;
2.09 "Closing Date Combined Indebtedness" shall mean the Combined
Indebtedness as of the Closing Date, less Cash as of the Closing Date;
2.10 "Closing Date Combined PP&E Gross Book Value" shall mean the
Combined PP&E Gross Book Value as of the Closing Date calculated for purpose of
determining the Closing Date Combined PP&E Gross Book Value Adjustment;
2.11 "Closing Date Combined PP&E Gross Book Value Adjustment" shall
mean (i) if the Closing Date Combined PP&E Gross Book Value is equal to or
greater than Lit. 21,145,605,000, Zero Liras (Lit. 0), or (ii) if the Closing
Date Combined PP&E
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Gross Book Value is less than 21,145,605,000, the difference, expressed as a
negative number, between Lit. 21,145,605,000 and the Closing Date Combined PP&E
Gross Book Value;
2.12 "Closing Date Combined Working Capital" shall mean the Combined
Working Capital as of the Closing Date calculated for purpose of determining the
Closing Date Combined Working Capital Adjustment;
2.13 "Closing Date Combined Working Capital Adjustment" shall mean (i)
if the Closing Date Combined Working Capital is greater than Lit.
20,248,482,000, the amount, expressed as a positive number, by which the Closing
Date Combined Working Capital exceeds Lit. 20,248,482,000, or (ii) if the
Closing Date Combined Working Capital is less than Lit. 20,248,482,000, the
amount, expressed as a negative number, by which the Closing Date Combined
Working Capital is less than Lit. Lit. 20,248,482,000, it being understood that
the Lit. 20,248,482,000 was calculated as set forth in Exhibit 2.13, without the
inclusion of Income Tax Liability, "fondo imposte differite" and "TFR", which
will however be included in the Closing Date Combined Working Capital;
2.14 "Closing Date Financial Report" shall mean collectively the
financial documents and information prepared and to become final and conclusive
in accordance with Article 7 for purpose of final determination of the Purchase
Price;
2.15 "Combined Indebtedness" shall mean the Indebtedness of the FAST
Operating Entities on a combined basis as determined in accordance with GAAP;
2.16 "Combined PP&E Gross Book Value" shall mean the book value (before
allowance for depreciation and amortization) of Tangible Personal Property and
Real Property owned or leased pursuant to financial or capitalized leases by the
FAST Operating Entities on a combined basis as determined in accordance with
GAAP, it being agreed that notwithstanding that in accordance with GAAP goods
held under financial leasing agreements are not recorded on the asset side of
the balance sheet until the year in which the redemption right is exercised, the
book value of goods held under financial leasing arrangements shall be included
in the Combined PP&E Gross Book Value;
2.17 "Combined Working Capital" shall mean (i) the sum of (A) Accounts
Receivable, (B) Inventory, (C) Other Current Assets, (D) prepaid expenses
("risconti attivi") and (E) accrued income ("ratei attivi") minus (ii) the sum
of (A) Accounts Payable, (B) Accrued Liabilities, (C) Income Tax Liability and
(D) deferred tax liability ("fondo imposte differite"), on a combined basis, as
determined in accordance with GAAP;
2.18 "Company" shall mean FAST S.p.A., an Italian company with
registered offices in xxx Xxxxxxxxx 00, Xxxxxxxxx Xxxxxxx (XX);
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2.19 "Company Shares" shall mean all the shares of the outstanding
capital of the Company, which are owned by the Sellers as indicated in the
recitals to this Agreement;
2.20 "December 31 Combined Financial Statements" shall mean the
consolidated financial statements of the FAST Operating Entities as of December
31, 1998 (which shall include also the comparative results of the previous
fiscal year 1997) audited by KPMG and presented on a combined basis with the
financial statements of FAST America, and attached to this Agreement as Exhibit
2.20;
2.21 "Encumbrance" shall mean any mortgage, lien, pledge, usufruct,
encroachment, option, claim, reservation, encumbrance (servitu) or restriction
of any type;
2.22 "Escrow Agent" shall mean Citibank, N.A. Milan with a registered
office at Xxxx Xxxxxxxxxx 00, 00000, Xxxxx which will act as escrow agent under
the Escrow Agreement described in Article 5.03;
2.23 "Escrow Agreement" shall mean the escrow agreement in the form
attached to this Agreement as Exhibit 5.03 to be executed by the parties and the
Escrow Agent on the Closing Date in accordance with Article 5.03;
2.24 "FAST America" shall mean FAST America Inc., a U.S. company
organized under the laws of New Jersey, with its principal place of business at
Xxxxx Xxxxxx Xxxxxx, Xxxxxxxxxxx, Xxx Xxxxxx, X.X.X.;
2.25 "FAST Iberica" shall mean FAST Iberica de Tintometros S.A., a
Spanish company with registered offices in Xxxxx Xxxxxxxxxxx 00, Xxxxxxxxxx,
Xxxxxxxxx;
2.26 "FAST UK" shall mean FAST UK Ltd., an English company with
registered number 2863066 and registered offices at Xxxx X0, Xxxxxx Xxxx, Xxx.
Xxxxxx, Xxxxxxxxxx 7, Telford, Shropshire, TFI 44X;
2.27 "FAST Operating Entities" shall mean the Company, the Subsidiaries
and FAST America;
2.28 "Financial Lease Obligation" shall mean a commitment to effect
residual payments under a financial leasing agreement or other agreement for the
use of property which is recorded (or should be recorded in accordance with
GAAP) at the bottom of the balance sheet in the memorandum accounts;
2.29 "Gecofin and PL&C Administrative Services Agreements" shall mean
the agreements regarding the supply of administrative services to be entered
into between Gecofin and PL&C and the Company at Closing in the forms attached
to this Agreement as Exhibits 6.08 and 6.08bis;
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2.30 "Generally Accepted Accounting Principles" or "GAAP" shall mean
the Italian generally accepted accounting principles prepared by the Xxxxxxxxx
Nazionale degli Ordini dei Dottori Commercialisti e dei Ragionieri applied on a
basis consistent with past practice of the Company, with the exceptions and
clarifications indicated in Exhibit 2.30 to this Agreement;
2.31 "Governmental Authority" shall mean any federal, state, local or
foreign government, or any political subdivision of any of the foregoing, or any
court, agency or other entity, body, organization or group, exercising any
executive, legislative, judicial, quasi-judicial, regulatory or administrative
function of government;
2.32 "Guarantee" shall mean (without duplication on a combined basis)
all obligations (other than endorsements in the ordinary course of business of
negotiable instruments for deposit or collection) of any Person guaranteeing any
Indebtedness, dividend or other obligation of any other Person (the "primary
obligator") in any manner, whether directly or indirectly, including, without
limitation, all obligations incurred through an agreement, contingent or
otherwise, by such Person: (i) to purchase such Indebtedness or obligation or
any property or assets constituting security therefor, (ii) to advance or supply
funds (x) for the purchase or payment of such Indebtedness or obligation, (y) to
maintain working capital or other balance sheet condition or otherwise to
advance or make available funds for the purchase or payment of such Indebtedness
or obligation, (iii) to lease property or to purchase securities or other
property or services primarily for the purpose of assuring the owner of such
Indebtedness or obligation of the ability of the primary obligator to make
payment of such Indebtedness or obligation, or (iv) otherwise to assure the
owner of the Indebtedness or obligation of the primary obligator against loss in
respect thereof;
2.33 "Income Tax Liability" shall mean any liability for federal,
state, local or foreign income, business and occupation or similar taxes, and
any interest, fines or penalties relating thereto, owing by any FAST Operating
Entity to any Governmental Authority attributable to the operations and
activities of the FAST Operating Entities for any period ending on or prior to
the Closing Date, including, without limitation, taxes, and any interest, fines
or penalties relating thereto, for a partial year ending on the Closing Date,
which shall be calculated on the assumption that the books are closed on the
Closing Date and that taxes are due on the Closing Date;
2.34 "Indebtedness" shall mean, with respect to any Person, (without
duplication on a consolidated or combined basis), (i) all obligations of such
Person for borrowed money, including without limitation all obligations for
principal and interest, and for prepayment and other penalties, fees, costs and
charges of whatsoever nature with respect thereto, (ii) all such obligations of
such Person evidenced by bonds, debentures, notes or similar instruments, (iii)
all obligations of such Person under conditional sale or other title retention
agreements relating to property purchased by such Person, (iv) all obligations
of such Person issued or assumed as the deferred purchase price of property or
services (other than accounts payable to suppliers and similar accrued
liabilities incurred in the ordinary course of business and paid in a manner
consistent with industry
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practice and other than any such obligations for services to be rendered in the
future), (v) all Indebtedness of others secured by (or for which the holder of
such Indebtedness has an existing right, contingent or otherwise, to be secured
by) any lien or security interest on property owned or acquired by such Person,
but only if such security is or will be enforced/foreclosed over such property
or, if the security is not enforced or foreclosed, only to the extent the
obligations secured thereby are or will be assumed by such Person in order to
avoid such enforcement/foreclosure, (vi) all Indebtedness of others guaranteed
by (or for which the holder of such Indebtedness has an existing right,
contingent or otherwise, to be guaranteed by) any Guarantee issued by such
Person, but only to the extent such Indebtedness is or will be actually enforced
against the Person under such Guarantee, (vii) all obligations (including but
not limited to reimbursement obligations) relating to the issuance of letters of
credit for the account of such Person, (viii) all obligations arising out of
foreign exchange contracts and (ix) all obligations arising out of interest rate
and currency swap agreements, cap, floor and collar agreements, interest rate
insurance, currency spot and forward contracts and other agreements or
arrangements designed to provide protection against fluctuation in interest or
currency exchange rates;
2.35 "Independent Accountants" shall mean PricewaterhouseCoopers,
Milan;
2.36 "Interim Financial Information" shall mean the unaudited interim
financial information since December 31, 1998 delivered to Buyer before
execution of this Agreement and attached to this Agreement as Exhibit 2.36;
2.37 "Inventory" shall mean all raw material, work-in-process and
finished goods inventory of the Business. Solely for purpose of calculation of
the Combined Working Capital, "Inventory" shall mean Inventory of the FAST
Operating Entities on a combined basis relating to the Business after reduction
for reserves for Inventory which is damaged or obsolete (as determined in
accordance with GAAP);
2.38 "Lease" shall mean any and all lease agreements ("contratti di
locazione") entered into by the FAST Operating Entities;
2.39 "Losses" shall mean all losses, liabilities, deficiencies, damages
(including, without limitation, consequential damages), Encumbrances, fines,
penalties, claims, costs and expenses (including, without limitation, all fines,
penalties and other amounts paid pursuant to a judgement, compromise or
settlement), court costs and reasonable legal and accounting fees and
disbursements.
2.40 "Other Current Assets" shall mean all current assets of the FAST
Operating Entities on a combined basis (other than Cash, Accounts Receivable,
Inventory, deferred tax receivables and assets, or prepayments relating to any
Indebtedness) all as determined in accordance with GAAP;
2.41 "Person" shall mean any Governmental Authority, individual,
association, joint-venture, partnership, corporation, limited liability company,
trust or other entity;
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2.42 "Purchase Price" shall mean Lit. 112,585,000,000, adjusted by the
Closing Date Combined Working Capital Adjustment and the Closing Date Combined
PP&E Gross Book Value Adjustment and minus the Closing Date Combined
Indebtedness to be paid by Buyer in consideration for the transfer of the
Company Shares and the FAST America Shares in accordance with Article 4.01 of
this Agreement;
2.43 "Real Property" shall mean all real property owned or leased by
any FAST Operating Entity together with (i) all buildings and improvements
located thereon and (ii) all rights, privileges, interests, easements,
hereditaments and appurtenances thereunto in any way incident, appertaining or
belonging, it being agreed that Real Property shall include the real property
located at via Lavoratori, Cinisello Xxxxxxx (MI) currently owned by Gecofin and
leased to the Company which is to be conveyed to the Company on or prior to the
Closing in accordance with Article 4.02 (d);
2.44 "Sellers' Accountants" shall mean KPMG, Milan;
2.45 "Service Agreements" shall mean the agreements to be entered into
at Closing between Buyer and Mr. A. R. Arabnia, Xxx. X. Xxxx, Xx. Xxxxxxx and
between the Company and Xx. Xxxxxx according to Article 6.07;
2.46 "Shareholders" shall mean collectively Xxx. Xxxxxx Zone, Mr. A. R.
Arabnia, Xx. Xxxxxx Xxxx and Xxx. Xxxxx Xxxx, which together own all of the
issued and outstanding shares of capital stock of Sellers;
2.47 "Subsidiaries" shall mean FAST Iberica and FAST UK;
2.48 "Subsidiaries' Shares" shall mean all the shares of the
outstanding capitals of the Subsidiaries, which are owned by the Company and
Gecofin as indicated in the Recitals to this Agreement;
2.49 "Tangible Personal Property" shall mean all tangible personal
property of the Business (other than Inventory) owned or leased by any FAST
Operating Entity or in which any FAST Operating Entity has any interest,
including, without limitation, show equipment, productions and processing
equipment, warehouse equipment, computer hardware, furniture and fixtures,
transportation equipment, leasehold improvements, supplies and other tangible
assets, together with any transferable manufacturer and vendor warranties
related thereto;
2.50 Other less recurring capitalized terms may be defined below in the
Agreement. In particular, the following terms shall have the meanings defined
for such terms in the Articles set forth below:
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Term Article
---- -------
Claims Period 12.11
Closing Certificate 5.01
Employees 9.11
Escrow Fund 5.03
Excess Inventory 12.10
Excess Old Spare Parts Inventory 12.10
Final Purchase Price 7.03
Old Spare Parts Inventory 12.10
Permits 9.13
Preliminary Closing Date Indebtedness 5.01
Preliminary Purchase Price Closing Date Adjustment 5.01
Via Lavoratori Property 4.02 (d)
ARTICLE 3 - PROMISE TO SELL AND PURCHASE
3.01 On the Closing Date and subject to the terms and conditions
contained in this Agreement, (a) Sellers shall sell and transfer to Buyer, and
Buyer shall purchase from Sellers, all but not part of the Company Shares, free
and clear of any Encumbrance and (b) Gecofin shall sell and transfer to Buyer,
and Buyer shall purchase from Gecofin, all but not part of the FAST America
Shares, free and clear of any Encumbrance.
3.02 Buyer shall be entitled to designate one or more corporations
directly or indirectly controlled by it - except for Fluid Management and/or any
corporation directly or indirectly controlled by Fluid Management - to assume
Buyer's obligations in Article3.01 or any other Article of this Agreement. In
the event of such designation, the corporations so designated shall adhere to
this Agreement and become parties hereto, but Buyer shall remain liable, jointly
and severally with them, for the correct performance of this Agreement by said
corporation or corporations.
ARTICLE 4 - PURCHASE PRICE
4.01 The Purchase Price for the Company Shares and the FAST America
Shares shall be Lit. 112,585,000,000 adjusted by the Closing Date Combined
Working Capital Adjustment and the Closing Date Combined PP&E Gross Book Value
Adjustment and minus the Closing Date Combined Indebtedness. On the Closing
Date, Buyer shall (i) assume or pay to the Company's lenders the Closing Date
Combined Indebtedness, (ii) transfer to and deposit with the Escrow Agent the
Escrow Fund to be held and released in accordance with the Escrow Agreement and
(iii) pay to Sellers an amount equal to the Purchase Price less the Escrow Fund.
The Purchase Price shall be allocated to the Company Shares and the FAST America
Shares as follows: Lit. 427,000,000 (four hundred twenty seven million) ] to the
FAST America Shares, and the balance to the Company Shares. It is agreed that
with respect to that portion of the
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purchase price allocated to the Company Shares, 95% less Lit. 1,500,000,000
shall be considered paid to Gecofin and 5% plus Lit. 1,500,000,000 shall be
considered paid to PL&C.
4.02 More in particular, the parties agree that in the determination of
the Purchase Price, Buyer has taken into account the December 31 Combined
Financial Statements and the assumptions that:
(a) the Closing Date Combined Working Capital will be Lit.
20,248,482,000; and
(b) the Closing Date Combined PP&E Gross Book Value will be Lit.
21,145,605,000; and
(c) (i) the Company Shares are and will be continuously owned until
Closing by Sellers; (ii) the tax basis of the Company Shares and Fast America
shares for respectively Sellers and Gecofin is equal to Lit. 1,710,032,590 as to
the Company and Lit. 156,809,000 as to Fast America; (iii) the capital gain
deriving from the consummation of the transaction contemplated by this Agreement
will therefore correspond to the difference between the Purchase Price and such
Lit. 1,710,032,590 plus Lit. 156,809,000 and will be included by Sellers and
Gecofin in their taxable income in accordance with applicable laws and, as to
the gain realized on the Company's Shares, it will be equal or more than the
merger loss in the case of a merger according to Article 6, Paragraph 3 of the
Legislative Decree No. 358/97, assuming that such merger occurred on the Closing
Date based on the balance sheet of the Company as used for the purposes of the
Closing Financial Report as per Article 7.02 below; and
(d) the Company will at Closing be the full and unconditional owner of
certain real property located at Via Lavoratori, Cinisello Xxxxxxx (MI),
currently owned by Gecofin and leased to the Company, as better described and
identified in Exhibit 4.02(d) attached to this Agreement (the "Via Lavoratori
Property"), free of any Encumbrance other than mortgages to secure Indebtedness
of the Company only, and such real property will have at Closing a gross book
value (before allowance for depreciation and amortization) in the Company books
equal to Lit. 1,500,000,000 (corresponding to the purchase price) plus the book
value of the improvements made by the Company with respect to such property and
already reflected in its accounting books at the date of the transfer; and
(e) except for the agreements in Exhibit 6.08, none of the FAST
Operating Entities will at Closing have any agreement, contract, relationship or
arrangement with any of Sellers or their Affiliates providing for the payment
now or in the future of any royalties or other consideration for the use of any
intellectual property rights.
4.03 With respect to Articles 4.02 (a) and (b), the parties agree that,
immediately after the Closing, the Closing Date Financial Report shall be
prepared and become final between the parties in accordance with Article 7. The
Purchase Price shall
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be finally determined based on the Closing Date Financial Report. The Purchase
Price to be paid at Closing shall be calculated based on the Preliminary
Purchase Price Closing Adjustments and the Preliminary Closing Date Indebtedness
according to Article 5.01.
4.04 With respect to Article 4.02 (c), the Sellers and Shareholders
hereby acknowledge that Buyer has agreed to pay the Purchase Price in the above
indicated amount based also on the assumption that Buyer will be able in
principle to take advantage of the tax benefit deriving from the free step-up of
the Company's assets according to Article 6, Paragraph 3 of the Legislative
Decree No. 358/97 as a consequence of either the inclusion by the Sellers in
their current taxable income of the relevant capital gain realized by them as
consequence of the sale of the Company Shares to Buyer as contemplated by this
Agreement or the separate taxation of such relevant capital gain, by applying
the 27% substitute tax provided for by the Legislative Decree No. 358/97.
Therefore, Sellers undertake to promptly deliver to Buyer any information and/or
documentation that Buyer may reasonably request in order to support the
stepping-up of the tax basis of the Company's assets in case of merger according
to the Article 6, Paragraph 3 of the Legislative Decree No. 358/97. In
particular, as soon as possible after the filing of their next tax return
regarding the current fiscal year and in any event not later than 30 days
thereafter, each Seller shall deliver to Buyer an "affidavit" duly notarized in
Italy ("atto notorio") in the form attached to this Agreement as Exhibit 4.04,
evidencing the amount of the capital gain realized by the Sellers out of the
sale of the Company Shares and either included in their respective taxable
incomes or separately taxed by applying the 27% substitute tax provided for by
the Legislative Decree No. 358/97, as well as deliver any documentation or carry
out in good faith any other action required in order to permit Buyer to take
advantage of the above tax benefit. It is further understood that in case of
violation by Sellers of the above representation and/or obligations, Sellers and
the Shareholders shall be jointly liable vis-a-vis Buyer for a "penale" equal to
Lit.27,800,000,000 pursuant to Article 1382 of the Italian Civil Code, and save
any claims for any other further damages. On the Closing Date, Sellers and
Shareholders shall deliver to Buyer the documents indicated in Article 6.04(h).
Within 5 days from the date when the Closing Date Financial Report has become
conclusive between the parties according to Article 7.02, Sellers and
Shareholders shall also deliver to Buyer a notarized excerpt of the Sellers'
accounting books evidencing the registration of the transaction and the capital
gain realized by them as consequence thereof.
4.05 With respect to Article 4.02(d), the Sellers declare that, as of
December 31, 1998, the Company was not the owner of the Via Lavoratori Property,
which was and is still used under lease. It is hereby agreed that Sellers shall
cause the Company to acquire such real property on or before the Closing and
that, as a consequence of such acquisition, the gross book value (before
allowance for depreciation and amortization) of such real property in the
Company's books at Closing will equal Lit. 1,500,000,000 (corresponding to the
purchase price) plus the book value of the improvements made by the Company with
respect to such property already reflected in its accounting books at the date
of the transfer.
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4.06 With respect to Article 4.02 (e), and except for the agreements
indicated in Exhibit 6.08, it is agreed that Sellers shall cause any agreement,
contract or arrangement therein indicated that may exist as of the execution of
this Agreement to be terminated on or prior to Closing and the relevant
intellectual property rights that may be required to conduct the Business to be
acquired by the FAST Operating Entities on or prior to Closing.
ARTICLE 5 - CLOSING CERTIFICATE; PAYMENTS AT CLOSING
5.01 On the seventh business day prior to the Closing Date, Sellers
shall in good faith have prepared and delivered to Buyer a certificate (the
"Closing Certificate") containing a proforma estimate of (a) the Closing Date
Combined Working Capital, the Closing Date Combined PP&E Gross Book Value, and
the Closing Date Combined Working Capital Adjustment and the Closing Date
Combined PP&E Gross Book Value Adjustment based thereon (the "Preliminary
Purchase Price Closing Adjustments") and (b) the Closing Date Combined
Indebtedness ("Preliminary Closing Date Indebtedness"), which shall be subject
to the limited procedures of inquiry by Buyer and Buyer's accountants as to
reasonableness. The Combined Working Capital, Combined PP&E Gross Book Value and
Combined Indebtedness shall be calculated in the manner provided in this
Agreement. Regardless of any objections by Buyer to the Closing Certificate, the
Closing shall proceed and the payments required to be made on the Closing Date
pursuant to Article 5.02 shall be determined on the basis of the Closing
Certificate, the Preliminary Purchase Price Closing Adjustments and the
Preliminary Closing Date Indebtedness.
5.02 On the Closing Date, Buyer shall pay to Sellers Lit.
112,585,000,000, adjusted by the Preliminary Purchase Price Closing Adjustments,
less (i) the Preliminary Closing Date Indebtedness and (ii) the Escrow Fund, by
transfer of the relevant funds into the following bank accounts: (a) the funds
to be paid to Gecofin shall be transferred 50% to the bank account no. 3590 at
Banca Nazionale del Lavoro - Agenzia Cinisello Xxxxxxx XXX 1005 CAB 32931, and
50% to the bank account no. 13643 at Unicredito - Xxxxxxx xx Xxxxxxxxx Xxxxxxx
XXX 00000 CAB 32930; (b) the funds to be paid to PL&C shall be transferred to
the bank account no. 0000000/01/32 at Banca Commerciale Italiana, filiale Sesto
San Giovanni, ABI 2002 CAB 20700. Sellers may request Buyer to effect the
payment to a different bank account or to effect separate payments to each
Seller of their respective portions, provided however that appropriate
instructions are given to Buyer at least seven (7) days prior to the Closing
Date.
5.03 To secure the obligations of Sellers contained in this Agreement,
on the Closing Date, Sellers, Shareholders and Buyer will execute an Escrow
Agreement substantially in the form attached to this Agreement as Exhibit 5.03,
and transfer to and deposit with the Escrow Agent Lit. 11,258,000,000
(hereinafter the "Escrow Fund") to be held and released in accordance with the
terms specified in the Escrow Agreement.
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5.04 Buyer acknowledges that before Closing the shareholders' meetings
of the Company shall resolve upon the distribution of the dividend accrued as of
December 31, 1998, shown in the financial statements of the Company as of
December 31, 1998. The dividend to be thereby distributed shall not be greater
than Lit. 7,500,000,000, and shall be distributed on or prior to Closing.
ARTICLE 6 - CLOSING
6.01 Unless otherwise agreed in writing by the parties, when all the
conditions precedent indicated in this Article have been met, the Closing shall
take place on or before June 30, 1999 at the offices of Xxxxx & XxXxxxxx in 0,
Xxxxxx Xxxx, Xxxxx (Xxxxx).
6.02 At Closing, the actions mentioned in the following Articles 6.03
through 6.10 will be performed.
6.03 Sellers shall comply with all legal formalities required for the
transfer of the Company Shares and the FAST America Shares to Buyer and comply
with the other obligations to be complied with prior to or at Closing as
provided hereunder. Such legal formalities will include the execution, whenever
applicable, of the "fissati bollati".
6.04 In particular, Sellers and the Shareholders shall:
(a) duly and effectively endorse and deliver to Buyer the share
certificates representing all of the Company Shares and the FAST America Shares;
(b) deliver or cause to be delivered to Buyer the Ledger's Book of the
Company ("libro soci") as well as any other corporate book of the Company, the
Subsidiaries and FAST America, and the share certificates representing the
Subsidiaries' Shares;
(c) deliver or cause to be delivered to Buyer letters of resignation
of all the Directors of the Company, except for A. R. Arabnia, X. Xxxx, X.
Xxxxxxx, and of all of the Statutory Auditors of the Company effective
immediately, such letters to declare that said Directors, Auditors or corporate
officers do not have any right or claim against the Company (Exhibit 6.04 (c) is
a list reflecting the non-resigning directors, auditors and other corporate
officers that would therefore remain in their office after the resignation of
the other members, together with indication of the remaining duration of their
office, and relevant compensation);
(d) cause a special shareholders' meeting of the Company to be held in
order to amend the by-laws of the Company to increase the number of directors of
the Company from five to seven and the ordinary shareholders' meeting of the
Company to be held and resolve upon the appointment of the Directors and the
Statutory Auditors
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designated by Buyer, unless events beyond the control of Sellers occur which
exclude the possibility of the shareholders' meeting to be held in a
totalitarian form;
(e) cause each of the individuals listed on Exhibit 6.04 (e) to
execute IDEX's standard form of Standards of Conduct and Business Ethics Policy
and Employee Inventions and Proprietary Information Agreement as soon as
possible after Closing and in any event not later than 15 days thereafter;
(f) deliver to Buyer a certificate in the form attached to this
Agreement as Exhibit 6.04 (f) stating that all the representations and
warranties made by Sellers and the Shareholders in this Agreement are true and
correct as of the Closing Date, and that all agreements and conditions required
to be performed and complied with by Sellers and the Shareholders prior to or at
Closing have been performed and complied with;
(g) deliver to Buyer the purchase and sale agreement related to the
Via Lavoratori Property together with evidence that such property has been
conveyed to the Company free and clear of any Encumbrances other than mortgages
to secure Indebtedness of the Company only;
(h) deliver to Buyer a document including the written statements
executed by the chairmen of Gecofin and PL&C and irrevocable written
instructions to Studio Associato Legale e Tributario (Associated with E&Y
International) to file the Tax Returns of Gecofin and PL&C regarding the current
fiscal years, in the interest of Buyer also, in the form attached hereto as
Exhibit 6.04 (h), with copy to Buyer;
(i) cause Gecofin to effectively transfer its participation in FAST
Iberica corresponding to 0.2% of the capital to FAST UK at a price equal to Lit.
500,000 (five hundred thousand liras).
6.05 In turn, Buyer shall in particular:
(a) pay the amount due and payable at Closing to Sellers and to the
Escrow Agent in the manner provided in this Agreement;
(b) accept the delivery of the share certificates representing the
Company Shares and the FAST America Shares, and the other documents to be handed
over or caused to be handed over by Sellers and the Shareholders;
(c) deliver to Sellers a certificate in the form attached to this
Agreement as Exhibit 6.05 (c) stating that all the representations and
warranties made by Buyer in this Agreement are true and correct as of the
Closing Date, and that all agreements and conditions required to be performed by
and complied with by Buyer prior to or at Closing have been performed and
complied with;
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6.06 Buyer, Sellers, the Shareholders and the Escrow Agent shall
execute and deliver the Escrow Agreement.
6.07 Buyer and Xx. Xxxxxxx and Xxx. X. Xxxx shall enter into the
Service Agreement in the form attached to this Agreement as Exhibit 6.07, Buyer
and Xx. Xxxxxxx, shall enter into the agreement attached hereto as Exhibit
6.07bis and the Sellers shall cause the Company and Xx. Xxxxxx to enter into the
agreement attached hereto as Exhibit 6.07ter.
6.08 Gecofin and PL&C and the Company shall enter into the Gecofin and
PL&C Administrative Services Agreements in the forms attached to this Agreement
as Exhibits 6.08 and 6.08bis.
6.09 Buyer shall have obtained at its expense a title insurance policy
and survey for the real property owned by FAST America in form and substance
satisfactory to Buyer.
6.10 In addition, the parties will execute and/or deliver any other
document or take such other action as may be provided in this Agreement.
6.11 All the actions indicated from 6.03 to 6.10 above shall be taken
as a whole, and the Closing shall not be effected unless all of them are
perfected. After the Closing, upon request of Buyer, Sellers and the
Shareholders shall take such further actions and shall execute and deliver to
Buyer, from time to time, any reasonable additional instruments or documents
considered necessary or desirable by Buyer to evidence, effect, finalize, record
or perfect the transactions contemplated by this Agreement.
6.12 Within 60 days after the Closing Date Buyer shall take over and
replace with guarantees issued by Buyer any and all Guarantees granted to any
Person by Sellers and Shareholders as a collateral for the Indebtedness of the
FAST Operating Entities. Exhibit 6.12 contains a list of such Guarantees,
specifying the guaranteed Person and the amount of the Guarantee.
ARTICLE 7 - POST-CLOSING ADJUSTMENTS
7.01 Immediately before the Closing, a physical inventory of the
Inventory of the FAST Operating Entities will be made by the FAST Operating
Entities and checked by the Sellers' Accountants, with the right of the Buyer's
accountants to observe it. The physical inventory shall be made by fully
counting 100% of the finished products and 100% of the work-in-process and raw
material items having a value in excess of Lit. 6,000,000. Seller's Accountants
will check and supervise such physical inventory in order to secure that the
above procedure will be applied correctly. The results of the physical inventory
shall be used in the preparation of the Closing Date Financial Report. With
respect to any Inventory located at premises not owned or leased by a FAST
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Operating Entity, or otherwise not included in such physical inventory, Buyer
shall obtain from each Person who is in possession of any such Inventory written
certification as to the amount of such Inventory as of the Closing Date.
7.02 As soon as possible after the Closing, Sellers shall cause
Sellers' Accountants to prepare and deliver to Sellers (i) consolidated
financial statements of the Company and Subsidiaries as of the Closing Date,
duly audited in accordance with GAAP and presented on a combined basis with the
financial statements of FAST America, in the form of the December 31 Combined
Financial Statements, and (ii) a supplemental report setting forth (a) the
Closing Date Combined Working Capital and the Closing Date Combined PP&E Gross
Book Value and (b) the Closing Date Combined Indebtedness (hereafter,
collectively, the "Closing Date Financial Report"). Any third-party expenses or
fees incurred in preparing or in connection with the Closing Date Financial
Report shall be borne by both parties in equal parts. As promptly as reasonably
practicable and, in any event, not later than 90 days after the Closing,
Sellers' Accountants shall deliver to Buyer the Closing Date Financial Report
(it is agreed that the "Nota Integrativa" and the "Relazione sulla Gestione"
will not be required) and shall make available any work papers or other
information then or thereafter requested by Buyer. If Buyer does not object or
otherwise fails to respond within 30 days after delivery to Buyer, the Closing
Date Financial Report shall automatically become final and conclusive (with
effect, for purpose of this Agreement, as of the communication to Sellers of the
non-objection or, in case of no response, with effect as of the last day of such
30-day review period). In the event that Buyer objects within the 30-day review
period, Sellers and Buyer shall promptly meet and endeavor to reach an agreement
as to the content of the Closing Date Financial Report. If Sellers and Buyer
agree on the content, the Closing Date Financial Report shall become final and
conclusive. If Sellers and Buyer are unable to reach an agreement within 15 days
after the end of Buyer's 30-day review period, then the Independent Accountants
shall promptly be retained to undertake a determination of the Closing Date
Financial Report with instructions to the Independent Accountants to complete
such determination within 40 days of their appointment. Only the disputed
item(s) shall be submitted to the Independent Accountants for review. In
resolving any disputed item, the Independent Accountants may not assign a value
to such item greater than the greatest value for such item claimed by either
party, or less then the lowest value claimed by either party, in each case as
presented to the Independent Accountants. Such determination of the Independent
Accountants shall be final and binding on Sellers and Buyer (with effect, for
purpose of this Agreement, as of the day when the relevant communication is
received by the parties from the Independent Accountants), and all expenses of
the Independent Accountants shall be borne by the party found to be in greatest
error in the aggregate. The payments required to be made after the Closing Date
pursuant to Article 7.03 below shall be determined on the basis of the Closing
Date Financial Report as agreed upon by the parties or as set forth by the
Independent Accountants.
7.03 If, as result of the Closing Date Financial Report, Buyer owes
Sellers more under the formula indicated in Article 4.01 than the amount paid to
Sellers at Closing pursuant to Article 5.02, then Buyer shall pay such amount
(95% to Gecofin and 5% to
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PL&C), together with interests from the Closing Date to the date of payment at
the rate of Euribor at 6 months as reported in "Sole 24Ore" issued on the
Closing Date, to the Sellers by wire transferring the funds to the same bank
account(s) as indicated in Article 5.02 above within five (5) days from the date
when the Closing Date Financial Report has become conclusive between the parties
according to Article 7.02. On the other hand, should it be determined that Buyer
owes Sellers less under the formula indicated in Article 4.01 than the amount
paid at Closing pursuant to Article 5.02, the balance, together with interests
from the Closing Date to the date of payment at the rate of Euribor at 6 months
as reported in "Sole 24Ore" issued on the Closing Date, shall be paid by Sellers
and Shareholders to Buyer within the same 5-day period. In case of delay of
payment after the 5-day term indicated above, by Buyer or Sellers and the
Shareholders, as the case may be, the above payments shall bear delay interest
at the rate of 8% per annum from the due date to the date of payment (instead of
the Euribor at 6 months).
ARTICLE 8 - ACTIONS AND CONDUCT OF THE BUSINESS TO THE CLOSING
8.01 Access and Investigations
The parties acknowledge that the access to the information and
documents of the Company and the Subsidiaries before the execution of this
Agreement has been relatively limited due to the confidential nature of the
transactions contemplated by this Agreement and that therefore further access to
such information is expected pending the Closing. In particular, it is agreed
that pending Closing Sellers shall, at Buyer's request supply the same with
information on the Company and the Subsidiaries, to the extent said information
are reasonably available and not of confidential nature according to Sellers'
sole judgment. In no event shall Buyer be entitled to address the request
directly to any FAST Operating Entity or ask access for such information without
the previous consent of Mr. A. R. Arabnia.
8.02 Delivery of Interim Financial Information
On and after the date of this Agreement and prior to the Closing Date,
Sellers undertake to deliver to Buyer financial information of a type attached
to this Agreement as Exhibit 2.36. Upon delivery, such financial information
shall automatically become and be deemed to be Interim Financial Information for
purposes of this Agreement.
8.03 Operation of the Business and Confidentiality
Between the date of this Agreement and the Closing Date, the Sellers
shall cause the FAST Operating Entities to conduct the Business in good faith,
in compliance with the applicable laws and only in the ordinary course of
business consistent with past practice.
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8.04 Notification
Between the date of this Agreement and the Closing Date, Sellers will
promptly notify Buyer in writing if they become aware of any fact or condition
that causes or constitutes a breach of any of the representations and warranties
as of the date of this Agreement or failure to comply with any of their
obligations hereunder, or if they become aware of the occurrence after the date
of this Agreement of any fact or condition that would (except as expressly
contemplated by this Agreement) cause or constitute a breach of any such
representation or warranty had such representation or warranty been made as of
the time of occurrence or discovery of such fact or condition.
ARTICLE 9 - REPRESENTATIONS AND WARRANTIES SELLERS
Sellers and the Shareholders hereby represent and warrant to Buyer that
each of the statements contained in this Article 9 and in any other Exhibit to
this Agreement is true as of the date of this Agreement and will be true as of
the Closing Date:
9.01 Authority - No Conflict
(a) This Agreement constitutes the legal, valid, and binding
obligation of each Seller and each Shareholder, enforceable against each Seller
and each Shareholder in accordance with its terms. Each Seller and each
Shareholder has the absolute and unrestricted right, power, authority, and
capacity to execute and deliver this Agreement, to perform its, his or her
obligations under this Agreement, and no specific authorization is required for
any of them from any third party in this respect. Copies of the relevant
corporate resolutions of Sellers, the Company, the Subsidiaries and FAST America
authorizing the transactions contemplated hereunder and granting the relevant
authorities are attached hereto as Exhibit 9.01(a).
(b) Neither the execution of this Agreement nor the consummation or
performance of any of the transactions hereunder, directly or indirectly (with
or without notice or lapse of time) will:
(i) contravene, conflict with, or result in a violation of (A) any
provision of the Articles of Incorporation, Articles of Associations or
By-laws of any Seller or any FAST Operating Entity or (B) any
resolution adopted by the Board of Directors or the stockholders of any
Seller or any FAST Operating Entity;
(ii) contravene, conflict with, or result in a violation of, or
give any Person the right to challenge any of the transactions
contemplated hereunder, except for actions triggered by Buyer's
violation of any legal requirement or order to which it is subject as a
consequence of the consummation of the transaction hereunder or to
exercise any remedy or obtain any relief under any legal
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requirement or any order to which any Seller, any Shareholder or any
FAST Operating Entity may be subject;
(iii) contravene, conflict with, or result in a violation of any
of the terms or requirements of, or give any Governmental Authority the
right to revoke, withdraw, suspend, cancel, terminate or modify any
permits or any authorization of any Governmental Authority that is held
or will be acquired by any FAST Operating Entity or that otherwise
relates to the Business of, or any of the assets owned or used by, any
FAST Operating Entity;
(iv) cause Buyer or any FAST Operating Entity to become subject
to, or to become liable for the payment of any tax, save what is
indicated with respect to the transfer taxes in Article 14.02 below;
(v) contravene, conflict with, or result in a violation or breach
of any provision of, or give any person the right to declare a default
or exercise any remedy under, or to accelerate the maturity or
performance of, or to cancel, terminate, or modify, any contract to
which any FAST Operating Entity is a party except for the contracts set
forth in Exhibit 9.12 (a) (16);
(vi) result in the imposition or creation of any Encumbrance upon
or with respect to the Company Shares or the FAST America Shares, or
any of the assets of any FAST Operating Entity;
(vii) create or result in any restriction on the operation of the
Business as it has been operated until the date hereof.
(c) Neither any Seller nor any FAST Operating Entity is or will be
required to give any notice to or obtain any consent from any Person in
connection with the execution and delivery of this Agreement or the consummation
or performance of any of the transactions contemplated by this Agreement.
9.02 By-laws and Capitalization
(a) Each FAST Operating Entity is duly organized, validly existing and
functioning in accordance with all applicable laws. Except as set forth in
Exhibit 9.02(a), each FAST Operating Entity has full right and authority to own,
operate and lease its properties and to carry out the Business substantially as
it is being conducted on the date hereof, and pursue the purpose indicated in
its by-laws and incorporation documents, and has at all times had all necessary
governmental licenses, permits and authorizations to carry out the Business as
it is and has been conducted by such entity until the date hereof.
(b) Complete and true copies of the incorporation documents, the
articles of associations and the by-laws of each FAST Operating Entity as
currently in force are attached to this Agreement as Exhibit 9.02(b). Each FAST
Operating Entity is in good standing under its respective laws, all the
formalities under applicable corporate laws
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have been complied with, and no FAST Operating Entity is in default under any
applicable statutory or regulatory provision.
(c) The paid-in capital of each FAST Operating Entity, including the
number of issued and outstanding shares of capital stock, the shares
certificates and the names of their respective registered and beneficiary
owners, is as set forth in Exhibit 9.02(c) to this Agreement. The Company
Shares, the Subsidiaries' Shares and the FAST America Shares are validly issued
and fully paid, they are all and only represented by the relevant shares
certificates and constitute 100% of the capital of the FAST Operating Entities.
There are not and there shall not be at the time of the Closing any outstanding
pre-emptive rights, options, rights of first refusal, claims, obligations or
other rights of or in favor of third parties relating to the Company Shares, the
Subsidiaries' Shares or the FAST America Shares, or any other capital stock of
the Company, the Subsidiaries or FAST America. There are no other share
certificates representing the Company Shares, Subsidiaries' Shares or the FAST
America Shares. There are no options, warrants, conversion or subscription
rights, agreements, contracts or commitments of any kind obligating the Company,
the Subsidiaries or FAST America, conditionally or otherwise, to issue or sell
any new shares of capital stock, or any instrument convertible into or
exchangeable for any shares, or to repurchase or redeem any of their shares.
(d) The corporate records, registers and minute books of the Company,
the Subsidiaries and FAST America contain complete and accurate minutes of the
meetings of directors, shareholders and all reports to shareholders; all such
meetings were duly called and held; the shareholders' ledgers and other
corporate registers of the Company, the Subsidiaries and FAST America are
complete and accurate; and all security transfer taxes payable in connection
with the transfer of any securities of the Company, the Subsidiaries and FAST
America relating to transactions prior to the transactions contemplated by this
Agreement have been duly paid.
(e) Exhibit 9.02(e) hereto lists all directors and corporate officers
of the Company, the Subsidiaries and FAST America, showing each person's name,
position, and annual remuneration, bonuses, and fringe benefits for the current
fiscal year and the most recently completed fiscal year.
(f) Except for the Subsidiaries with respect to the Company and for
that set forth in Exhibit 9.02 (f), none of the Company, the Subsidiaries or
FAST America have any subsidiaries, nor have they had any for the past five (5)
years, nor do they own stock of any other corporation, partnership,
joint-venture, or other business association or entity; and none of the Company,
the Subsidiaries or FAST America have an office, branch, warehouse or
establishment of any kind outside of their country of incorporation.
9.03 Sellers' Rights
Sellers are and shall at the time of the Closing be the legitimate,
exclusive and full beneficial and registered owners as indicated in the Recitals
to this Agreement with good and valid title to the Company Shares. Except for
0.2% of the shares of FAST Iberica
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which are and will at Closing be held by FAST UK, the Company is and shall at
the time of the Closing be the legitimate, exclusive and full beneficial and
registered owner as indicated in the Recitals to this Agreement with good and
valid title to the Subsidiaries' Shares. Gecofin is and shall at the time of
Closing be the legitimate, exclusive and full beneficial and registered owner as
indicated in the Recitals to this Agreement with good and valid title to the
FAST America Shares. The Company Shares, the Subsidiaries' Shares and the FAST
America Shares are free and clear of any Encumbrance.
9.04 Financial Statements
(a) Sellers have delivered to Buyer the December 31 Combined Financial
Statements and the Interim Financial Information. The December 31 Combined
Financial Statements fairly present the financial condition and the results of
operations of the FAST Operating Entities as of December 31, 1998, and for the
period then ended, in accordance with GAAP applied on a consistent basis, they
do not contain any items of special or nonrecurring income or any other income
not earned in the ordinary course of business except as expressly specified
therein, and they include all adjustments, which consist only of normal
recurring accruals, necessary for such fair presentation. The Interim Financial
Information has been prepared in good faith and according to standard internal
procedures for the ordinary monitoring of the interim financial condition and
results of the operations of the FAST Operating Entities. The books and records
of the FAST Operating Entities from which the December 31 Combined Financial
Statements and the Interim Financial Information were prepared reflect in all
material respects the assets, liabilities and operations of the FAST Operating
Entities, and the December 31 Combined Financial Statements and the Interim
Financial Information are in conformity therewith. Any amounts set up for
reserves for liabilities on the December 31 Combined Financial Statements are
accounted in accordance with GAAP. Each FAST Operating Entities has approved and
filed, or will approve and file its annual accounts to be approved and filed
before Closing with competent offices and in accordance with applicable laws.
(b) It is understood that the December 31 Combined Financial
Statements have been prepared by the Sellers. It is therefore to be considered
as a contractual document of one of the parties hereto, and no representations
or warranties granted hereunder by Sellers or the Shareholders shall be limited
or deemed to be limited or restricted in any manner based only on the
circumstance that such financial statements have already been audited.
9.05 Absence of Material Changes
Since December 31, 1998, the business of the FAST Operating Entities
has been properly conducted, without taking any action which exceeds the limits
of ordinary and normal conduct of business, there has not been any material
adverse change in the business, operations, properties, assets or condition of
the FAST Operating Entities, and no event has occurred or circumstance exists
that may result in such a material adverse
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change. Furthermore, since December 31, 1998, none of the FAST Operating
Entities has been affected by any of the following facts or events:
(a) Any damage, destruction or loss by reason of fire, flood, accident
or other casualty of such character as would interfere in any adverse way with
the operations of such FAST Operating Entity, regardless of whether or not such
loss was covered by insurance.
(b) Except for transactions and operations carried out in the normal
course of business and consistently with past practice, any sale or disposition
of or undertaking to sell or dispose of any of its assets or liabilities; except
for the acquisition of the Via Lavoratori Property and for the purchase of
assets from third parties in the ordinary course of business and at arm's length
conditions,, any purchase or undertaking to purchase any real property,
machinery, equipment or other fixed assets related to the Business, any material
change in any manner of the nature or method of business or operation related to
the Business of such FAST Operating Entity.
(c) Any material increase in the compensation payable or to become
payable by such FAST Operating Entity to its managers, employees or agents,
except for those increases applicable in accordance with mandatory provisions of
the relevant National Collective Agreement ("CCNL") and for the increases set
forth in Exhibit 9.11(e)
(d) Any labor disputes or controversies.
(e) Any entry into, earlier termination of, or receipt of notice of
earlier termination of any permits or other governmental licenses,
authorizations, or of any license, distributorship, dealer, sales representative
or similar agreement.
(f) Any conditions or circumstances that would affect the ability of
such FAST Operating Entities to conduct the Business substantially in the same
manner as it had been conducted until December 31, 1998;
(g) Except as provided under Article 5.04 above, any declaration of
dividend, reserving, setting aside or distributing in respect of any capital
stock of such FAST Operating Entity;
(h) Any other event of any kind which may materially adversely affect
the Business of such FAST Operating Entity.
9.06 Taxes
(a) Each FAST Operating Entity has filed, within the applicable
statutory terms, all tax returns required to be filed up to the date of this
Agreement, and shall file all tax returns required to be filed between the date
of this Agreement and the Closing Date. Each FAST Operating Entity has paid or
has made the necessary provisions for the payment of all taxes and duties, the
payment of which was due up to the date of this
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Agreement and shall pay, or (as the case may be) shall make the necessary
provisions for the payment of, all taxes and duties, which will become due or
accrue between the date of this Agreement and the Closing Date. Each FAST
Operating Entity has withheld, or (as the case may be) has made provisions for,
all taxes required to be withheld and has timely paid such taxes in accordance
with applicable laws and regulations. Any amounts set up for reserves for taxes
on the December 31 Combined Financial Statements are accounted for in accordance
with GAAP.
(b) Except for the investigations indicated in Exhibit 9.06 (b)
hereto, from which however no tax liability, deficiency, claim or penalty shall
arise or shall be assessed against any FAST Operating Entity, there is no
action, suit, proceeding, audit, investigation or claim pending or threatened,
in respect of any taxes for which any FAST Operating Entity is or may become
liable, nor has any deficiency or claim for any such taxes been proposed,
assessed, asserted or threatened, and there is no basis for any such deficiency
or claim.
9.07 Tangible Property
(a) Except as otherwise provided in Exhibit 9.07(a) hereto, the FAST
Operating Entities have good, marketable and insurable title to the assets shown
in the December 31 Combined Financial Statement or acquired by them after the
date thereof, free and clear of any Encumbrance, and none of such assets are
used by any FAST Operating Entity as a lessee or as conditional vendee. Except
for the Via Lavoratori Property which will be acquired by the Company prior to
or at the Closing, all properties of the FAST Operating Entities are reflected
in the December 31 Combined Financial Statements and in the books of the FAST
Operating Entities.
(b) Attached hereto as Exhibit 9.07(b) is a list containing a
description of all Real Property owned, leased or subleased, or agreed to be
purchased, leased or subleased by any FAST Operating Entity. Such list is true
and complete and reflects all the Real Property so owned, leased or subleased in
the operations of the FAST Operating Entities, as well as any Encumbrance
thereon. The FAST Operating Entities are the sole, unconditional and exclusive
owners and the sole leaseholders of such Real Property including, without
limitation, all buildings, structures, fixtures and improvements thereon.
(c) Except as otherwise indicated in Exhibit 9.07(c), all buildings,
structures, fixtures and improvements on the Real Property owned or used by the
FAST Operating Entities, and in general all Tangible Personal Property currently
owned, used or leased by the FAST Operating Entities, are in good operating
condition and repair and conform to all laws, statutes, ordinances and
regulations relating thereto, including, without limitation, zoning and building
laws and regulations, environmental, health and security laws and, with respect
to Italy, D.L. 626\94, and no notice of violation relating to same has been
threatened to or received by the FAST Operating Entities. The buildings,
structures, fixtures and improvements on each parcel of the Real Property lie
entirely
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within the boundaries of such parcel of the Real Property as described in
Exhibit 9.07(b) hereto, and no structures of any kind encroach on the Real
Property.
(d) All leases of the FAST Operating Entities are in full force and
effect and both the lessor and the lessee have fully complied with all terms and
conditions of such leases, and there exist no restrictions on the use of the
leased premises in connection with the Business now conducted by the FAST
Operating Entities or any other matter which prevents or impairs the use of the
entire leased premises for the purpose now used or any similar purpose, except
as set forth in Exhibit 9.07 (d).
(e) Attached to this Agreement as Exhibit 9.07(e) is a list containing
a description of all Tangible Personal Property (described by category as
currently described in the "lista cespiti" of the Company) owned, leased or
subleased or agreed to be purchased, leased or subleased or obligated to be
purchased, leased or subleased by the FAST Operating Entities. Such list is true
and complete and reflects all the Tangible Personal Property so owned, leased or
subleased in the operations of the FAST Operating Entities, as well as any
Encumbrance thereon. All of the Tangible Personal Property owned, leased or
subleased by the FAST Operating Entities is in good working order and condition.
The purchase price of such assets has either been paid in full or, if not paid
in full, the delay of payment has been made in the ordinary course of business
and according to commercial practice and the relevant liability for the balance
to be paid will result included in the Closing Date Financial Report for purpose
of Purchase Price adjustment, and no pledge or industrial privilege, reserve of
title, lien or any type of Encumbrance or claim or other charges in favor of
third party exists. Except as set forth in Exhibit 9.07 (e) bis, the assets
constituting the Tangible Personal Property of the FAST Operating Entities are
all in possession of the FAST Operating Entities and are all the tangible assets
now used in and reasonably necessary and/or useful for and/or normally utilized
in the conduct of the Business of the FAST Operating Entities as presently
conducted.
(f) All items of Inventory have been manufactured according to
specification, if any, and their value on the December 31 Combined Financial
Statements, net of the appropriate reserves as reflected therein, does not
exceed the lower of the cost or market.
9.08 Intellectual Property Rights
The FAST Operating Entities own or possess or are entitled to use as
licensee all patents, trademarks, trade names, copyrights, drawings, technical
data, formulae, manufacturing processes, proprietary information and any other
intellectual property rights used and/or necessary to conduct the Business free
and clear of any Encumbrances and without conflict with any rights of others.
Exhibit 9.08 attached to this Agreement is an accurate list and summary
description of all patents, trademarks, trade names and copyrights presently
used by the FAST Operating Entities and, to the best of Sellers' and
Shareholders' knowledge and belief, all are valid and in good standing. Except
as set forth in Exhibit 9.08bis, the Sellers and the FAST Operating Entities
have not and are not now using, in connection with the Business, any names,
patents, know-how, trade secrets,
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intellectual property rights or proprietary information owned by others and are
not bound by any license agreement providing for the payment now or in the
future of any royalties or other consideration for the use of intellectual
property rights. No claim for infringement of any such patents, trademarks,
trade names or copyrights of others is pending or, to the knowledge of the
Sellers or Shareholders, threatened against the FAST Operating Entities, and
Sellers and Shareholders know of no basis for any such claim. The FAST Operating
Entities have verified that any products manufactured or traded in the Business
and any programs used by them in the Business are fully complying with the Y2K
requirements.
9.09 (Intentionally blank)
9.10 Environmental, Health and Safety Matters
The FAST Operating Entities are in full compliance with, and have not
been and are not in violation of or liable as a consequence of their operations
and activities at any title under any environmental or health and safety law
applicable in any of the jurisdictions in which they operate. The FAST Operating
Entities have no basis to expect, nor have they or any other Person for whose
conduct they are or may be held to be responsible as a consequence of their
operations and activities, received, any actual or threatened order, notice, or
other communication for (i) any actual or potential violation or failure to
comply with, or liability under, any environmental or health and safety law, or
(ii) any actual or threatened obligation to undertake or bear the cost of any
environmental, health, and safety liabilities with respect to their Business, or
with respect to any real property at or to which hazardous or dangerous
materials or ordinary waste material were generated, manufactured, refined,
transferred, imported, used, or processed by the FAST Operating Entities or any
other Person for whose conduct they are or may be held responsible as a
consequence of their operations and activities.. All the waste material as
defined by the law has always been treated and disposed of according to the
laws, and the relevant registers duly kept and updated, and any discharge
system, including emission in the air, duly authorized and operated accordingly.
Except as indicated in Exhibit 9.10 to this Agreement, none of the FAST
Operating Entities have any asbestos material, either externally or internally
to the plant; there are no tanks of any type underground; and the real estate on
which they operate is not affected by any pollution or other negative
environmental conditions attributable to the operations and activities of the
FAST Operating Entities or the Business on or prior to the Closing Date which
would create the obligation for the FAST Operating Entities or other third
parties to assume any obligations of clearance of the land or similar liability
under environmental laws and regulations, or any other liability towards third
parties under the same laws. The Company is under all aspects in compliance with
the law 626\94, and all the investments required under the same laws and under
the relevant security report contemplated by it to be necessarily done before
the Closing Date have already been done or will have already been done at
Closing.
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9.11 Employees
(a) The personnel employed by each FAST Operating Entity as of April
30, 1999 (collectively the "Employees") is specified in Exhibit 9.11(a) to this
Agreement, together with indication of level and seniority of employment, and
relevant compensation, including fringe benefits, as well as specific type of
contract (e.g. definite duration, training, part time etc.). Except as otherwise
indicated in Exhibit 9.11 (a), all Employees have been validly employed for
indefinite duration and according to the applicable laws, and are regularly
recorded in the relevant books of the FAST Operating Entities together with the
aggregate compensation paid to each of them, all in accordance with applicable
laws and regulations. The Employees are and will at the Closing Date be the only
employees of the FAST Operating Entities, and the FAST Operating Entities do not
have any liabilities under labor laws (including under Italian law 1369/60
regarding intermediation of labor services and Spanish law 31/1995 dated
November 8, 1995 on labor safety) except vis-a-vis the Employees and except as
reflected in the December 31 Combined Financial Statements and in the Closing
Date Financial Report. With respect to the Company, only the National Collective
Labor Agreement of metalworkers ("Metalmeccanici") and Industry as to the
executive officers ("Dirigenti Industria") apply to the Employees. There are no
shop contracts applicable to any of the Employees.
(b) Except as set forth in Exhibit 9.11(b) or as otherwise provided
under applicable laws, regulations or national collective bargaining agreements,
the FAST Operating Entities are not bound by any profit sharing, insurance or
pension plans, incentive schemes, stock option or other benefit plans in favor
of any current or former employees of the FAST Operating Entities and of their
Business.
(c) The amount shown on the December 31 Combined Financial Statements
for the staff leaving indemnities ("TFR") represents the full amount which the
FAST Operating Entities will be required to pay to their employees for all
periods through December 31, 1998, to cover termination pay upon cessation of
the employment relationship up to that date. None of the directors, employees,
agents or sales representatives of any FAST Operating Entity has been granted
any special termination pay or other termination benefit in excess of what is
provided by law.
(d) The FAST Operating Entities have filed all declarations, returns
and reports required to be filed with respect to social security and welfare
laws and regulations. All social and welfare charges of the FAST Operating
Entities through the Closing have been or will be paid in full and are fully
accrued on the books of the FAST Operating Entities.
(e) Except as set forth in Exhibit 9.11 (e) since December 31, 1998,
no increase in compensation, either in the form of directors' fees or salary, in
excess of that required by the law or nationwide collective labor contracts, has
been granted, directly or indirectly, to any directors, officers, employees, or
agents or sale representatives of any FAST Operating Entity, and no such Person
has received, directly or indirectly, funds or
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assets belonging to any FAST Operating Entity, other than their respective fee
or salary entitlements applicable as of said date.
(f) Except as otherwise indicated in Exhibit 9.11(f) attached to this
Agreement, during the past three (3) years none of the FAST Operating Entities
has suffered any strikes or work stoppage by its employees except for national
strikes, nor have its employees carried out any unfair action or behavior
vis-a-vis the unions, and the relationship between the unions and the FAST
Operating Entities have been within limits ordinary in this type of relationship
for such business.
(g) The transaction contemplated by this Agreement will not trigger
any specific right in favor of any of the Employees or constitute an automatic
termination event of any employment relationship between any of the Employees
and any FAST Operating Entity.
9.12 Contracts
(a) Exhibit 9.12 (a) attached hereto is a true and complete list of
all written and oral contracts belonging to the types hereinafter specified to
which any FAST Operating Entity is a party as of the date of this Agreement.
None of the hereafter-listed contracts contain terms and conditions which are
inconsistent with the terms and conditions normally used in the Business. All
such contracts are in full force and effect and constitute legal, valid and
binding obligations of, and are legally enforceable against, the respective
parties thereto; all necessary governmental approvals with respect thereto have
been obtained; all necessary filings or registrations therefor have been made;
and there have been no threatened cancellations thereof and there are no
outstanding disputes thereunder. No party is in default or in the grace default
period in any respect under any of such contracts and there has not occurred any
event which (whether with or without notice, lapse of time or the happening or
occurrence of any other event) would constitute such a default. All contracts
with any Affiliate of the Company or the Sellers are at arm's length. No
contract contains a change of control clause or any term or condition triggering
termination or other new obligation of any FAST Operating Entity upon direct or
indirect change of control of its capital, except for those indicated in (16)
below.
(1) Contracts of employment with the indication of the names of
each employee and the yearly amount of each of their salaries;
(2) Shop regulations;
(3) Contracts for the employment of personnel and consultants;
(4) Contracts concerning any pension, bonus incentive, or
retirement concerning any employee of any FAST Operating Entity;
(5) Contracts with agents and distributors with the indication of
each of their names, of the compensation paid or to be paid to each of
them and length
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of termination notices with the amount of compensation due upon
termination agreed between the parties;
(6) Contracts for the purchase of materials and supplies, in
excess of Lit. 40,000,000;
(7) Contracts providing for the sale or delivery of any FAST
Operating Entity's products in excess of Lit. 20,000,000;
(8) Contracts providing for the rendering of services, including
with consultants, to or by any FAST Operating Entity for a term
exceeding six (6) months or for value greater than Lit. 20,000,000;
(9) Contracts with any subcontractor;
(10) Contracts or agreements in general with any individuals,
firms or corporations Affiliated with any FAST Operating Entity, and/or
with any of the their directors and/or any of the Sellers, the
Shareholders or their Affiliates, that are currently in force or that
have been entered into in the last 5 (five) years;
(11) Contracts having a term of no less than one year and/or
having a value in excess of Lit. 20,000,000 and/or not cancelable on a
6-month notice without penalty;
(12) Licensing agreements;
(13) Lease or rental agreements;
(14) Policies of insurance;
(15) Loan or financing agreement;
(16) Any contract containing a change of control clause (i.e., any
provision triggering termination or any new or different obligation of
any FAST Operating Entity upon the direct or indirect changing of
control of the capital of such FAST Operating Entity);
(17) Any contract or agreement of a material nature not made in
the ordinary course of business.
(b) None of the FAST Operating Entities has given any irrevocable
power of attorney to any person for any purpose whatsoever, and Exhibit 9.12 (b)
lists all current existing powers of attorney issued by the FAST Operating
Entities;
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(c) Schedule 9.12(c) lists each bank account in which any FAST
Operating Entity has an account or safe deposit box and each person authorized
to draw thereon or who have access thereto;
(d) Attached hereto as Exhibit 9.12(d) is a list of the suppliers to
each FAST Operating Entity and the balances owned by those suppliers as of the
date hereof;
(e) Neither any of the FAST Operating Entities nor any of the Sellers
has been advised by or knows that any main customer or supplier intends to
terminate or fail to continue its business relationship with the FAST Operating
Entities;
(f) Sellers and the Shareholders are not aware of any situation which
might directly materially negatively impact the Business after the Closing.
9.13 Permits and Compliance
(a) Except as otherwise set forth in Exhibit 9.13 (a), each FAST
Operating Entity is in possession of any and all permits, concessions, decrees,
resolutions, permissions, authorizations and licenses from any Governmental
Authorities (hereinafter the "Permits") which are necessary to run the Business;
and each FAST Operating Entity has been in full compliance with each legal
requirement and/or governmental authorization necessary to permit such FAST
Operating Entity to lawfully conduct and operate the Business in the manner it
currently conducts and operates the Business, and to permit it to own and use
its assets in the manner in which it currently owns and uses such assets.
(b) No event has occurred or circumstance exists which (with or
without notice or lapse of time) (1) may constitute or result directly or
indirectly in a violation of or a failure to comply with any term or requirement
of any Permits or other governmental authorization, or (2) may result directly
or indirectly in the revocation, withdrawal, suspension, cancellation, or
termination of, or any modification to, any Permits or any other governmental
authorization required in order to conduct the Business.
(c) Except as otherwise set forth in Exhibit 9.13 (c), all
applications required to have been filed for the renewal of any Permits or other
governmental authorizations have been duly filed on a timely basis with the
appropriate Governmental Authorities, and all other filings required to have
been made with respect to such Permits and governmental authorizations have been
duly made on a timely basis with the appropriate Governmental Authorities.
9.14 Legal Proceedings
(a) None of the FAST Operating Entities is a party to any pending
litigation, whether before the ordinary courts or before administrative or other
courts or arbitrations and, to the best knowledge of Sellers or the
Shareholders, no such litigation is threatened against any FAST Operating
Entity, nor are there any judgments, decrees or orders
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binding any FAST Operating Entity or enjoining any FAST Operating Entity or any
director, officer or key employee of any FAST Operating Entity in respect of, or
the effect of which is to prohibit, any business practice which is material to
the Business or the transactions contemplated by this Agreement;
(b) No work stoppage which could adversely affect the results of
operations of any FAST Operating Entity has occurred, is continuing or, to the
best knowledge of Sellers or the Shareholders, is threatened and no material
labor representation questions exist in respect of the Employees;
(c) There are no charges of unfair labor practices pending or, to the
best knowledge of Sellers or the Shareholders, threatened before any
Governmental Authority nor, to the best knowledge of Sellers or the
Shareholders, are there any pending labor negotiations or union organizational
efforts involving or affecting Employees nor, to the best knowledge of Sellers
or the Shareholders, is any main customer or main supplier of any FAST Operating
Entity involved in or threatened with or affected by any labor dispute or other
proceeding or order relating to it which could materially adversely affect the
Business of such FAST Operating Entity;
(d) There have not been nor are there, to the best knowledge of
Sellers or the Shareholders, threatened any proceedings against the FAST
Operating Entities in respect of any product safety, liability, warranty
(whether express or implied, but excluding warranty claims in the ordinary
course of business) or similar claims or in respect of any personal injury,
occupational safety, health or welfare conditions arising from the operation of
the Business or with respect to the Business under any applicable laws or
regulations relating to product safety, liability, warranties or guarantees, or
personal injury, occupational safety, health or welfare conditions.
9.15 Insurance
The FAST Operating Entities maintain policies of fire, casualty, civil
liability and other forms of insurance in connection with the conduct of their
Business as set forth in Exhibit 9.15 to this Agreement, specifying the name of
the insurance company, risk insured, maximum amount insured, premiums payable,
applicable deductibles, if any, date of expiration and such insurance policies
are in full force and effect and are "occurrence based". Such insurance policies
are adequate for the Business and the FAST Operating Entities have not done
anything, either by way or action or inaction, which may invalidate or prejudice
recovery thereunder. There is no claim by or on behalf of the FAST Operating
Entities pending under any of such policies or bonds as to which coverage has
been questioned, denied or disputed by the underwriters of such policies or
bonds. All premiums payable under all such policies and bonds have been paid,
and the FAST Operating Entities have otherwise complied fully with the terms and
conditions of all of such policies and bonds. There is no threatened termination
of, or retrospective charges with respect to, any such policies or bonds.
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9.16 Equity Holdings
Except for their interests in the Company, and except as indicated in
Exhibit 9.16 to this Agreement, none of the Sellers or the Shareholders owns any
interest in any business, partnership, corporation, firm, joint venture or
enterprise which is in competition with the Company or with a supplier or
customer of the FAST Operating Entities. As used herein, an interest shall mean
the direct or indirect ownership by any Seller or Shareholder, or a member of
his or her family to the second degree (as defined in Article 74 et seq.,
Italian Civil Code, i.e., in the direct line as many degrees are computed as
there are generations, excluding the common ancestor, and in the collateral
line, degrees are computed by generations, moving up from one of the relatives
to the common ancestor and down from the latter to other relative, always
excluding the common ancestor), or collectively, of any class of equity
securities.
9.17 Compliance with Law
Except as differently and expressly stated elsewhere in this Agreement
or in Exhibit 9.17 hereto, none of the FAST Operating Entities is in violation
of any applicable provisions of any law or regulations (including, for what
concerns the Company and without limitation, the privacy law no. 675\96 for
which all required notifications have been done). None of the FAST Operating
Entities directly or indirectly in the last two years has made any payments or
provided anything else of value to governmental officials or employees of any
country (including officials and employees of governmental instrumentalities),
or made any payments contrary to the laws of the country in which they were made
or received.
9.18 No Brokers
The Sellers have not incurred any liability for any brokerage, finder's
or similar fees or commissions in connection with the transactions contemplated
by this Agreement, the payment of which could be validly claimed from Buyer or
any FAST Operating Entity.
9.19 Undisclosed Liabilities
(a) None of the FAST Operating Entities has any liabilities, whether
known or unknown, matured or unmatured, or otherwise, and whether or not
required to be disclosed or provided for in the financial statements in
accordance with GAAP, other than (i) liabilities incurred in or as a result of
the normal and ordinary course of business and as set forth in the December 31
Combined Financial Statements or (ii) liabilities incurred between December 31,
1998 and the Closing Date in the ordinary course of business (none of which
results from, or arises out of, or relates to any breach of contract, breach of
contractual warranty, tort, infringement or violation of law). All known
liabilities have been incurred consistent with past practices, and such
liabilities have been and will be properly reflected in the December 31 Combined
Financial Statements, the Interim Financial Information and in the Closing Date
Financial Report.
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(b) Except for the securities pledged to CARIPLO in connection with
CARIPLO guarantee of the payment of obligations of the Company vis-a-vis IMI,
none of the FAST Operating Entities has guaranteed the performance of any
obligation undertaken by any of the Sellers or the Shareholders or by any other
third party.
(c) None of the FAST Operating Entities has any returns of products
from any customers or distributors other than those customary in the ordinary
course of business.
(d) It is further understood that in the event that any representation
or warranty in this Article 9.19 is breached or untrue, then Buyer shall have a
claim for indemnification under Article 12.01(a) notwithstanding that any other
representations or warranties contained in Article 9 are not breached or untrue.
9.20 Products: Product Warranties
(a) A form of the standard written product warranty relating to
products manufactured or sold by the FAST Operating Entities at any time during
the 2-year period preceding the date of this Agreement is attached to or set
forth in Exhibit 9.20.
(b) There are no material defects in design, material or manufacture
in any products heretofore distributed or sold by the FAST Operating Entities on
or before the Closing or manufactured on or before the Closing and sold by the
FAST Operating Entities within 1 month of the Closing Date, or any defects in
repair to or replacement of any such products by the FAST Operating Entities
that would reasonably be expected to constitute a "defect" for the purposes of
applicable product liability laws.
(c) Except as provided in any of the product warranties described in
paragraph (a) of this Article, and except for any warranty arising by operation
of law, none of the FAST Operating Entities has sold any products or services
which are subject to any warranty extending beyond 18 months after the date of
the sale.
9.21 Disclosure
The representations, warranties and guarantees made by Sellers and the
Shareholders in this Agreement and the statements, documents and certificates
furnished or to be furnished by or on behalf of Sellers and the Shareholders to
Buyer in connection with the transactions contemplated in this Agreement, do not
and will not contain any untrue statement of a material fact, and do not and
will not omit any statement of a material fact necessary to make any of said
representations, warranties, guarantees, statements, documents and certificates
not misleading. All representations, warranties and guarantees and undertakings
made by Sellers and Shareholders herein and the obligations thereon shall
survive the Closing Date in accordance with Article 12.11, notwithstanding any
investigation and/or due diligence review which has been or will be carried out
by Buyer.
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ARTICLE 10 - REPRESENTATIONS AND WARRANTIES OF BUYER
Buyer hereby makes the following representations and warranties to the
Sellers, each of which shall be true and correct also on the Closing Date.
10.01 Organization and Standing
Buyer is a corporation duly organized, validly existing and in good
standing under the laws of Delaware, and has full power and authority to conduct
its business as presently conducted and to own its assets and properties as
presently owned.
10.02 Authorization
(a) All corporate proceedings required to be taken by or on behalf of
Buyer to authorize Buyer to enter into and to carry out this Agreement have been
duly and properly taken, and this Agreement has been duly executed and delivered
by Buyer and constitutes the valid and binding obligation of Buyer in accordance
with its terms.
(b) No application or filing with, or consent, authorization or
approval of, or exemption by any Governmental Authority is required of Buyer in
connection with the execution and performance of this Agreement.
10.03 No Conflict
The execution and delivery of this Agreement and the consummation of
the transactions contemplated by this Agreement will not conflict with, or
result in a breach of, or constitute a default under the Articles of
Incorporation or the By-laws of Buyer, or any agreement or instrument by which
Buyer is bound, or violate any judgment, order, injunction, award, decree, law
or regulation applicable to Buyer.
10.04 No Broker
Buyer has not incurred any liability for any brokerage, finder's or
similar fees or commissions in connection with the transactions contemplated
hereby, the payment of which could be validly claimed from the Sellers or the
Shareholders.
ARTICLE 11 - TERMINATION
11.01 This Agreement may be terminated at any time prior to the Closing
Date as follows:
(a) By mutual written agreement of Buyer and Sellers, or
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(b) By Buyer and Sellers by written notice to the other in the event
that the Closing has not occurred on or prior to June 30, 1999 due to the breach
of any provision of this Agreement by Buyer or Sellers, as the case may be;
11.02 Save the case in Article 11.01 (a), in the event of the
termination of this Agreement by any party as provided in the preceding Article,
the terminating party shall be entitled to avail itself of any and all remedies
provided for by applicable law, also in connection with the possible damages
arising from said termination.
ARTICLE 12 - INDEMNIFICATION
12.01 Sellers and the Shareholders shall defend at their own expense
and indemnify and hold harmless Buyer and its Affiliates (which shall after the
Closing include the FAST Operating Entities), and their respective directors,
officers and employees, in respect of:
(a) any and all Losses resulting from, arising out of or in any
manner attributable to, any breach of any representation or warranty of Sellers
and the Shareholders contained in this Agreement including, without limitation,
the representations and warranties contained in Article 9), or material omission
from any certificate, exhibit or other instrument furnished or caused to be
furnished to Buyer or its Affiliates in connection with this Agreement;
(b) any and all Losses resulting from, arising out of or in any
manner attributable to, the non-fulfillment of any obligation, covenant or
agreement by Sellers or the Shareholders contained in this Agreement or in any
agreement delivered or to be delivered in connection with the transactions
contemplated by this Agreement (including, without limitation, the payment by
any Sellers and Shareholders of the adjustments to the Purchase Price, if any,
the covenant indemnities under Article 4, the obligations to cause the Company
or other third parties to carry out the actions contemplated hereunder, the
environmental remediation obligations under Article 12.09, the obligations
regarding the Accounts Receivables and Excess Inventory under Article 12.10, the
non-compete covenants under Article 13, and any other obligations of Sellers and
the Shareholders contained in this Agreement);
(c) any and all Losses resulting from, arising out of or in any
manner attributable to any Income Tax Liability; provided, however, that Buyer
and its Affiliates shall not be entitled to indemnification if and to the extent
that such Income Tax Liability has been accounted for in the Closing Date
Financial Report; and
(d) any and all Losses resulting from, arising out of or in any
manner attributable to any Indebtedness attributable to operations of the FAST
Operating Entities carried out on or before Closing; provided, however, that
Buyer and its Affiliates shall not be entitled to indemnification if and to the
extent that such Indebtedness has been accounted for in the Closing Date
Financial Report.
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12.02 Buyer shall defend at its own expense and indemnify and hold
harmless Sellers and the Shareholders in respect of:
(a) any and all Losses resulting from, arising out of, or in any
manner attributable to, any breach of any representation or warranty of Buyer
contained in this Agreement; and
(b) any and all Losses resulting from, arising out of, or in any
manner attributable to, the non-fulfillment of any obligation, covenant or
agreement of Buyer contained in this Agreement or in any agreement delivered or
to be delivered in connection with the transactions contemplated by this
Agreement.
12.03 As used in this Article, any party seeking indemnification
pursuant to this Article is referred to as an "indemnified party" and any party
from whom indemnification is sought pursuant to this Article is referred to as
an "indemnifying party". An indemnified party which proposes to assert the right
to be indemnified under this Article shall submit a written demand for
indemnification setting forth in summary form the facts as then known which form
the basis for the claim for indemnification. In this particular respect, Sellers
have expressed a concern that the delay by Buyer in notifying Sellers and the
Shareholders of a demand for indemnification may prejudice their possibility of
defense against the claim on which the demand is based. On the other hand, Buyer
has expressed a concern that a time limit on Buyer's ability to serve a demand
for indemnification could give rise to unjustified objections by Sellers to such
demand. In light of the above concerns, it is therefore agreed, as a general
principle and in good faith, that in the event that (i) Buyer or its Affiliates
suffer a Loss, or receives a written claim based on an action by a third party
which could result in a Loss, and (ii) Buyer has actual knowledge that such Loss
gives it a claim against the Sellers or the Shareholders for indemnification,
Buyer shall notify the Sellers and the Shareholders of its indemnification
demand not later than 45 days after Buyer has had such actual knowledge thereof;
provided, however, that the failure to so notify Sellers and the Shareholders of
any such claim shall not relieve Sellers and the Shareholders from any liability
which they may have to Buyer, except to the extent that Sellers and the
Shareholders are prejudiced thereby, and provided further, that, in no event
shall Sellers and the Shareholders be relieved from any liability if any of them
had actual knowledge of the events giving rise to the Loss. It is also agreed
that, under the above indicated circumstances, provided Sellers and the
Shareholders in good faith assert that they have been prejudiced by Buyer's
delay and set forth in writing the reasons therefor, Buyer shall have the burden
of proving that Sellers and the Shareholders have not suffered the prejudice
that they claim to have suffered as consequence of the delay. It is further
understood that such prejudice shall refer exclusively to the defense that
Sellers and the Shareholders could have had for the benefit of Buyer or its
Affiliates against the third-party's claim on which the indemnification demand
is based, had the delay not occurred, and not to the events or facts affecting
or regarding Sellers and the Shareholders (such as their financial conditions,
their relationships with third parties, etc.).
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12.04 If a third-party claim is made for which Sellers and the
Shareholders are entitled to indemnification pursuant to this Article 12, then
Buyer shall be entitled to participate in the defense of such claim and, if
Buyer so chooses, and provided that Buyer acknowledges Buyer's obligation to
indemnify Sellers and the Shareholders, to assume primary responsibility for the
defense of such claim with counsel selected by Buyer and not reasonably objected
to by Sellers and the Shareholders. If Buyer assumes the defense of a
third-party claim as set forth in this paragraph, then (A) in no event shall
Sellers and the Shareholders admit any liability with respect to, or settle,
compromise or discharge, any such claim without Buyer's prior written consent
and (B) Sellers and the Shareholders shall be entitled to participate in, but
not control, the defense of such claim with their own counsel at their own
expense. If Buyer does not assume the defense of any such claim, Sellers and the
Shareholders may defend such claim in a manner as they may deem appropriate
(including, but not limited to, settling such claim, after giving twenty (20)
days prior notice of such settlement to the Buyer, on such terms as Sellers and
the Shareholders may deem appropriate).
12.05 If a third-party claim is made for which Buyer or its Affiliates
are entitled to indemnification pursuant to this Article 12, then subject to
Article 12.06, Buyer shall be entitled to assume primary responsibility for the
defense of such claim with counsel selected by Buyer and not reasonably objected
to by Sellers and the Shareholders. If Buyer assumes the defense of a
third-party claim as set forth in this Article, then (A) in no event shall
Sellers and the Shareholders admit any liability with respect to, or settle,
compromise or discharge, any such claim without the Buyer's prior written
consent and (B) Sellers and the Shareholders shall be entitled to participate
in, but not control, the defense of such claim with their own counsel at their
own expense. If Buyer does not assume the defense of any such claim, Sellers and
the Shareholders may defend such claim in a manner as they may deem appropriate
(including, but not limited to, settling such claim, after giving twenty (20)
days prior written notice of such settlement to Buyer, on such terms as Sellers
and the Shareholders may deem appropriate).
12.06 If a third-party claim involving only monetary interests is made
for which Buyer or its Affiliates are entitled to indemnification pursuant to
this Article 12, and Sellers and the Shareholders acknowledge their obligation
to indemnify Buyer or its Affiliates and thereafter pay (directly or through the
Escrow Agent) to Buyer or its Affiliates funds sufficient to cover the potential
liability associated with such claim, then Sellers and the Shareholders may
defend such claim in a manner as they may deem appropriate (including, but not
limited to, settling such claim, after giving twenty (20) days prior written
notice of such settlement to Buyer, on such terms as the Sellers and the
Shareholders may deem appropriate); provided, however that (A) such defense
shall in no manner affect any interest of Buyer or its Affiliates other than the
monetary interests that have been object of the indemnification and to the
extent of such indemnification and (B) Buyer shall be entitled to participate in
the defense of such claim with its own counsel at its own expense.
12.07 In the event that, pursuant to Article 12.05, Buyer has assumed
primary responsibility for the defense of a third-party claim, and Buyer
proposes in good faith to
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settle such third-party claim (with a proposal acceptable for the third party),
then, provided that Sellers and the Shareholders have acknowledged their
obligation to indemnify Buyer and provided further that the settlement does not
involve non-monetary interests of Buyer or its Affiliates, Buyer shall give
Sellers and the Shareholders ten (10) days prior written notice of such proposed
settlement. Sellers and the Shareholders shall notify Buyer prior to the end of
such 10-day period as to whether Sellers and the Shareholders accept or reject
such proposed settlement; provided however, that notwithstanding anything to the
contrary contained in this Article 12, if Sellers and the Shareholders reject
the proposed settlement and the settlement is not made, they shall be liable
for, and shall prior to the expiration of such 10-day period post a performance
bond, letter of credit or other similar security in each case reasonably
satisfactory to Buyer in an amount which equals the amount claimed pursuant to
such third-party claim, unless the Escrow Fund is sufficient to cover such
amount, as well as any other claim notified by Buyer to the Escrow Agent until
the date of the proposed settlement, and further provided that, if the above
security is not posted within the indicated term, the settlement shall be
considered as having been definitively accepted by the Sellers and the
Shareholders. If Sellers and Shareholders propose in good faith to settle such
third-party claim (by proposing to accept a proposal made by the third party
itself, or by making a proposal in any event acceptable for him), and Buyer does
not accept the proposed settlement within 10 days of receipt of the relevant
proposal from Sellers and Shareholders, then provided that Sellers and
Shareholders have acknowledged their obligations to indemnify Buyer and that the
proposal does not affect non-monetary interests of Buyer or its Affiliates,
Sellers and Shareholders shall be relieved from any liability hereunder
exceeding the amount of the proposed settlement. In this respect, and without
any other limitation to the previous sentence, the parties further agree that,
exclusively with reference to possible claims by the tax authorities, such
claims will be considered as not involving any "non-monetary interest", it being
however understood that Sellers and Shareholders shall not be relieved from
their liabilities exceeding the amount of a settlement proposed by them and
refused by Buyer according to the preceding sentence if such settlement also
refers to or involves liabilities or obligations of the FAST Operating Entities
regarding tax periods after the Closing Date.
12.08 In the event that any claim for indemnification is made with
respect to any third-party claim pursuant to this Article, (A) the party
assuming primary responsibility for the defense of such claim shall at all times
keep the other party informed as to the status of such claim and (B) the party
not primarily responsible for the defense of such claim shall cooperate fully
with the other party in connection with such defense.
12.09 Buyer engaged Xxxxxx Associates to conduct a Phase II
environmental assessment of the Cinisello Xxxxxxx (MI) real property to
determine whether any remedial action would be required as the result of the
activities and operations of the Company and the Business (see Exhibit 12.09).
Sellers and the Shareholders have expressed a concern that the conduct of such
Phase II environmental assessment prior to the Closing could jeopardize the
confidentiality of the transactions contemplated by this Agreement. On the other
hand, Buyer has expressed a concern about the unknown costs to remediate any
environmental conditions or hazardous materials at the property
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attributable to the operations and activities of the Company and the Business on
or prior to Closing. In consideration for Buyer agreeing to delay its Phase II
environmental assessment of the Cinisello Xxxxxxx (MI) real property until after
the Closing, the parties are as follows:
(a) the Phase II environmental assessment shall be made after the Closing Date
and a copy of the relevant assessment report released by Xxxxxx Associates
shall be promptly delivered to Sellers and Shareholders. In particular,
the parties agree that such assessment shall start as soon as reasonably
possible after Closing, and in any event not later than 30 days thereafter
and Buyer shall diligently pursue it to its completion;
(b) regardless of any different provision under this Article 12, possible
indemnification claims by Buyer hereunder shall be submitted in writing to
Sellers and Shareholders within 30 days of the completion of the above
assessment;
(c) subject to the occurrence of the conditions under paragraphs (a) and (b)
above, and save what indicated in the following paragraph (e), Sellers and
Shareholders shall indemnify Buyer or its Affiliates for the costs to
remediate any environmental conditions or hazardous materials at the
Cinisello Xxxxxxx (MI) real property attributable to the operations and
activities of the Company and the Business on or prior to Closing,
recommended by Xxxxxx Associates;
(d) save what indicated in the following paragraph (e), payment of
indemnifications due by Sellers and Shareholders in accordance with
paragraph (c) above, shall be made within 30 days upon completion of the
remedial actions taken and shall relieve Sellers and Shareholders from any
liability which they may have to Buyer in connection with the
environmental issues included in the scope of the assessment assigned to
Xxxxxx Associates. Consequently the representation and warranty of Sellers
and Shareholders contained in Article 9.10 shall survive the Closing Date
for the duration set forth in Article 12.11 only with reference to the
issues thereof which will not be object of the assessment to be carried
out by Xxxxxx Associates;
(e) should the Sellers and the Shareholders not agree with the remediation
activities recommended by Xxxxxx Associates, they can object to such
recommendation within 30 days from the receipt of the relevant report
according to paragraph (a). In such a case, they shall send a notice of
objection ("Notice of Objection") to Buyer within the same term,
indicating the activities they do not consider required and indicating an
international and reputable environmental auditor to which they would
submit the objected items for an additional separate assessment. The
parties will then meet in order to find an amicable solution to the
dispute. Should they not reach such an agreement within 10 days from the
receipt by Buyer of the Notice of Objection, Sellers shall submit to the
assessment of the auditor indicated in the Notice of Objection the
activities that they have objected (it being understood that the
activities which have not been objected shall be considered as
definitively agreed), within the following 10 days, and with instructions
to complete such assessment within 20 days from the appointment. The costs
of the second auditor shall be borne entirely by the Sellers and
Shareholders. Should the costs of the remediation activities identified as
necessary by such second auditor result to be lower than those recommended
by Xxxxxx Associates and objected by Sellers, and such difference be no
more than 5%,
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the assessment indicated by Golder Associate shall be considered as a
final and binding for the parties. On the other hand, should the costs of
the remediation activities identified as necessary by such second auditor
result to be lower than those recommended by Xxxxxx Associates and
objected by Sellers, and such difference be more than 5%, either party
shall have the right to submit the final decision to Xxxxxxxxxx Xxxxxx
(Milan)("Independent Environmental Auditor"), within the following 20
days, with instructions to release a final assessment within 20 days from
the appointment, which assessment shall be final and binding for the
parties. The costs of the Independent Environmental Auditor shall be borne
by the party which shall be found in greatest error in aggregate as to the
required costs of remediation.
12.10 (a) Sellers and the Shareholders shall indemnify Buyer or its
Affiliates for any Accounts Receivable reflected in the Closing Date Financial
Report which shall thereafter result not to be valid or collectable or which, in
any event, Buyer or its Affiliates shall not have collected within a period of
fifteen (15) months following the Closing Date, by repurchasing them within
thirty (30) days following their tender in a form which properly conveys without
recourse all of such rights and interest in the uncollected portion of such
Accounts Receivable for a consideration equal to the uncollected face value of
such Accounts Receivable (i.e. net of the amount of Lit. 57,000,000 set aside
for reserves for doubtful accounts as reflected in the Closing Date Combined
Working Capital shown in the Closing Date Financial Report). In the event of
delay of payment to Buyer or its Affiliates beyond the above 30-day term,
Sellers and the Shareholders shall also pay interest thereon at the interest
rate of 8% per annum.
(b) Sellers and the Shareholders shall indemnify Buyer or its
Affiliates for any Inventory reflected in the Closing Date Financial Report
which shall result not to have been sold on or before July 31, 2000 ("Excess
Inventory"), by paying to Buyer an amount equal to the value of such Excess
Inventory as reflected in the Closing Date Financial Report. It is hereby agreed
that the value of the Excess Inventory to be so reimbursed shall be decreased by
an amount equal to the value of the Inventory reflected in the Closing Date
Financial Report which constitutes of (i) spare parts held exclusively for
machines that were no longer in production at the Closing Date and (ii) modular
systems held exclusively for refinishing equipment that were no longer in
production at the Closing Date (collectively, the "Old Spare Parts Inventory").
The Sellers and the Shareholders shall however indemnify Buyer or its Affiliates
for any Old Spare Parts Inventory which shall result not to have been sold on or
before July 31, 2001 ("Excess Old Spare Parts Inventory"), by paying to Buyer an
amount equal to the value of such Excess Old Spare Parts Inventory as reflected
in the Closing Date Financial Report. To these effects, Buyer shall have its
accountants make physical inventories as soon as possible after July 31, 2000
and July 31, 2001, that the Sellers' Accountants will have the right to observe.
Should the Sellers' Accountants not agree with the determination of the Excess
Inventory or the Excess Old Spare Parts Inventory made by the Buyer's
accountants within 20 days from such determination, such determination shall be
remitted within the following 10 days to the final decision of the Independent
Accountants, which shall decide within 20 days from appointment. The costs of
the Independent Accountants
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shall be borne by the party which shall eventually result to be in greatest
error. The Sellers and Shareholders shall pay the relevant amount to Buyer
within 5 days from the final determination of the Excess Inventory or the Excess
Old Spare Parts Inventory according to this Agreement. Any delay in payment
shall trigger the application of delay interests at a rate of 8% per annum from
the due date to the actual payment.
12.11 All representations and warranties of Sellers and the
Shareholders contained in this Agreement shall survive the Closing Date for the
duration of two (2) years, except for representations and warranties in Article
9.06 (Taxes) which shall survive the Closing Date for the duration of six (6)
years, and those in Article 9.10 (Environmental, Health and Safety Matters),
which shall survive the Closing Date for the duration of six (6) years (the
"Claims Periods"), and except that any representations and warranties regarding
title to the assets of the FAST Operating Entities, title to the Company Shares,
the Subsidiaries' Shares or the FAST America Shares shall not be subject to any
contractual term. Any claim made by Buyer with respect to the representations
and warranties of Sellers and Shareholders contained in this Agreement must be
initiated by Buyer during the relevant Claims Period. Unless otherwise
specifically indicated, all covenants and agreements made by Sellers and
Shareholders contained in this Agreement which are required to be performed
prior to the Closing Date shall survive the Closing for the duration of the two
(2) years, and any claim made by Buyer with respect thereto must be initiated
during such period. All covenants and agreements made by Sellers and
Shareholders contained in this Agreement which are required to be performed on
or after the Closing Date (including, without limitation, the obligation to
deliver title to the Company Shares and the FAST America Shares free and clear
of any Encumbrances) and the indemnification obligations of Sellers set forth in
this Article shall survive the Closing Date until fully performed or discharged.
It is further understood that the indemnification obligations of Sellers and
Shareholders arising under Article 12.01(a) shall arise only if and when the
Losses for which Buyer claims to be indemnified thereunder exceed in aggregate
Lit. 1,200,000,000, it being however understood that in such a case the
indemnification obligations shall refer to the entire amount of the Losses and
not only to the portion in excess of such Lit. 1,200,000,000. It is also hereby
agreed that the amount that Sellers and the Shareholders may have to pay to
Buyer in compliance with their indemnification obligations under Article
12.01(a) shall in no event exceed, in the aggregate, Lit. 56,000,000,000, it
being further understood that claims for breach of the environmental
representations and warranties under Article 9.10 shall not exceed in the
aggregate Lit. 28,000,000,000. For the avoidance of doubt, the preceding caps
and limitations to the liabilities of Sellers and the Shareholders under Article
12.01(a) do not apply to the liabilities of Sellers and the Shareholders under
other Articles of this Article 12 (including, without limitation Articles
12.01(b), (c) and (d)) or other Articles of this Agreement. It is also hereby
agreed that the preceding caps and limitations shall not apply in case of breach
to the representation contained in Article 9.07 (e) regarding Tangible Property
which has not yet been paid in full (i.e. the representation and warranty that
the delay of payment has been made in the ordinary course of business and
according to commercial practice and the relevant liability for the balance to
be paid will result included in the Closing Date Financial Report for purpose of
Purchase Price adjustments). Further, the preceding caps
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and other limitations to the liabilities of Sellers and the Shareholders under
Article 12.01(a), as well as any other limitation to liabilities that may be
provided in any other provisions of this Agreement, shall not be applicable in
case of fraud or gross negligence on the part of any of the Sellers or the
Shareholders.
12.12 Any payment to Buyer or its Affiliates for indemnification under
this Article 12 shall be made from the Escrow Fund while and to the extent that
the Escrow Fund retained by the Escrow Agent is sufficient to make such payment,
except that any such funds that are held pending resolution of any dispute
between any parties hereto as to any claimed indemnity payment shall not be
deemed available for the purpose of paying any other or further demand for
indemnity.
ARTICLE 13 - NON COMPETITION
13.01 Sellers and the Shareholders (the latter in their capacity as
controlling shareholders of the Sellers) hereby undertake that, for a period of
five (5) years following the Closing Date, none of Sellers, Shareholders or any
of their Affiliates severally or jointly shall:
(a) engage in or carry on, within the geographical area encompassed
(as of the dated hereof) by the boundaries of the Republic of Italy, the
countries of Spain, the United Kingdom or the United States, or any other area
where the Business is now conducted, any business which is directly or
indirectly competitive with the business conducted by the FAST Operating
Entities as of the Closing Date;
(b) have any direct or indirect interest in any firm, partnership,
joint venture, corporation or unincorporated organization, whether as employee,
officer, director, consultant or agent, or as security holder or investor owning
more than five (5) percent of any class of the issued and outstanding traded
securities of a corporation, which engages in any business directly or
indirectly competitive with the business conducted by the FAST Operating
Entities as of the Closing Date;
(c) solicit the employment of any employees of the FAST Operating
Entities which, as of the date of this Agreement, are comprised in the
categories of "dirigenti" or "quadri", or which occupy equivalent positions in
countries other than Italy; and
(d) directly or indirectly, at any time reveal, make known, or use,
any confidential information relating to the FAST Operating Entities for any
purpose or benefit that could reasonably be expected to have an adverse effect
upon the business of the FAST Operating Entities.
13.02 Sellers and the Shareholders recognize that any breach of the
covenants contained in this Article 13 would cause irreparable damages to Buyer
and its Affiliates, although difficult to be liquidated, and therefore accept
that Buyer and its Affiliates, shall, under those circumstances, be entitled to
obtain a Court's order for specific
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performance, as well as adequate injunctive relief ("provvedimento cautelare")
or any other adequate judicial measure, to immediately stop such breach. Sellers
and the Shareholders also recognize that this Agreement would by itself
constitute sufficient and final Court evidence of the requirements necessary in
order to obtain any of the above judicial measures, except for summary evidence
concerning the specific activity carried out by Sellers or the Shareholders and
deemed in breach of this Agreement. The above is with no prejudice to any other
right of Buyer or its Affiliates as a result of said breach.
ARTICLE 14 - GENERAL PROVISIONS
14.01 Securities Matters
If at any time within three (3) years of the date hereof, Buyer
proposes to register under the Securities Act of 1933 any securities of Buyer in
connection with any registered offering thereof and in connection therewith the
Securities Exchange Commission makes any comments or requests any information
with respect to accounting information presented in the registration statement
pertaining to any period prior to the Closing Date, then Sellers and the
Shareholders will use reasonable efforts to respond promptly to such comments or
questions, and will use their reasonable best efforts to cause the Company's
pre-Closing accountants to respond to comments on the relevant financial
statements or to provide such information as the Securities Exchange Commission
requests in order to cause the Securities Exchange Commission to declare
effective such registration statement, at the expense of Buyer or its designated
Affiliates, as the case may be. In connection with any information or
cooperation provided by Sellers and the Shareholders pursuant to this Article,
Buyer shall pay all reasonable out-of-pocket costs incurred, and shall provide
to Sellers and the Shareholders customary protections and indemnities.
14.02 Expenses
Except as otherwise expressly provided in this Agreement, each party to
this Agreement will bear its respective expenses incurred in connection with the
preparation, execution, and performance of this Agreement, including all fees
and expenses of agents, representatives, counsel, and accountants. Sellers and
the Shareholders will cause the FAST Operating Entities not to incur any
expenses in connection with this Agreement. All the notarial fees and expenses
in connection with the transfer of the Company Shares, as well as transfer taxes
such as "stamp duties" ("fissati bollati"), shall be paid by Buyer.
14.03 Public Announcements
Unless required by legal requirements, any public announcement or
similar publicity with respect to this Agreement will be issued, if at all, at
such times and in such manner as Sellers and Buyer mutually agree. Unless
consented to by Buyer in advance or required by legal requirements, prior to the
Closing Sellers shall, and shall cause the FAST Operating Entities to, keep this
Agreement strictly confidential and not to make
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any disclosure of this Agreement to any Person. Sellers and Buyer will consult
with each other concerning the means by which employees, customers and
suppliers, and others having dealings with the FAST Operating Entities, will be
informed of the transactions contemplated by this Agreement, and Buyer will have
the right to be present for any such communication.
14.04 Confidentiality
Between the date of this Agreement and the Closing Date, Buyer, Sellers
and the Shareholders will maintain in confidence, and will cause the directors,
officers, employees, agents, and advisors of Buyer, Sellers, the Shareholders
and the FAST Operating Entities to maintain in confidence, any written, oral or
other information obtained in confidence from the other party or any company in
connection with this Agreement, unless (a) such information is already known to
such party or to others not bound by a duty of confidentiality or such
information becomes publicly available through no fault of such party, (b) the
use of such information is necessary or appropriate in making any filing or
obtaining any consent or approval required for the consummation of the
transactions contemplated hereunder, or (c) the furnishing or use of such
information is required by legal proceedings.
14.05 Notices
All notices, consents, waivers, and other communications under this
Agreement must be in writing and will be deemed to have been duly given when (a)
delivered by hand (with written confirmation of receipt), (b) sent by telecopier
(with written confirmation of receipt), or (c) when received by the addressee,
if sent by an internationally recognized overnight delivery service (receipt
requested), in each case to the appropriate addresses and telecopier numbers set
forth below (or to such other addresses and telecopier numbers as a party may
designate by notice to the other parties):
Sellers:
Gecofin S.p.A.
Xxx Xxxxxxxxx, 00
00000 Cinisello Xxxxxxx
Attention: A. R. Arabnia
Facsimile No. (00)-00-00000000
with a copy to:
Ernst & Young
Xxx Xxxxxxxxx, 00
00000 Xxxxx
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Attention: Xxxxxx Xxxxx Papa
Xxxxxxxxxx Xx Xxxxxx
Facsimile No. x00 00 00000000
Buyer:
IDEX Corporation
000 Xxxxxx Xxxx, Xxxxx 000
Xxxxxxxxxx, Xxxxxxxx 00000
Attention: Xxxxx X. Xxxxxx
Xxxxx X. Xxxxxx
Facsimile No. 00-000-000-0000
with a copy to:
Xxxxx & XxXxxxxx
0, Xxxxxx Xxxx
Xxxxx, Xxxxx
--------------------------------
Attention: Xxxxxxx Xxxxxxx
Facsimile No. 011-39-02-76231679
and
Xxxxxxx Xxxx Xxxxxxx Xxxxx & Goodyear, LLP
0000 Xxx X&X Xxxxx
Xxxxxxx, Xxx Xxxx 00000
Attention: Xxxx X. Xxxxxxxxxxx, Esq.
Facsimile No. 00-000-000-0000
14.06 Waiver
The rights and remedies of the parties to this Agreement are cumulative
and not alternative. Neither the failure nor any delay by any party in
exercising any right, power or privilege under this Agreement or the documents
referred to in this Agreement will operate as a waiver of such rights, power or
privilege, and no single or partial exercise of any such right, power or
privilege will preclude any other or further exercise of such right, power or
privilege or the exercise of any other right, power or privilege. To the maximum
extent permitted by applicable law, (a) no claim or right arising out of this
Agreement or the documents referred to in this Agreement can be discharged by
one
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party, in whole or in part, by a waiver or renunciation of the claim or right
unless in writing signed by the other party; (b) no waiver that may be given by
a party will be applicable except in the specific instance for which it is
given; and (c) no notice to or demand on one party will be deemed to be a waiver
of any obligation of such party or of the right of the party giving such notice
or demand to take further action without notice or demand as provided in this
Agreement or the documents referred to in this Agreement.
14.07 Entire Agreement and Modification
This Agreement supersedes all prior agreements between the parties with
respect to its subject matter, and constitutes (along with the documents
referred to in this Agreement) a complete and exclusive statement of the terms
of the agreement between the parties with respect to its subject matter. This
Agreement may not be amended except by a written agreement executed by the party
to be charged with the amendment. The headings of the Articles in this Agreement
are for convenience of reference only and shall not affect the meaning or
interpretation of this Agreement.
14.08 Sellers and Shareholders as One Party
It is understood that for purpose of this Agreement all Sellers and the
Shareholders shall be considered as one party and that they shall be jointly and
severally liable to Buyer or its Affiliates for any obligation of any of them
arising under this Agreement.
14.09 Assignments, Successors, and No Third-Party Rights
No party may assign any of its rights under this Agreement without the
prior consent of the other parties, which will not be unreasonably withheld,
except that Buyer may assign any of its rights under this Agreement according to
Article 3.02. Subject to the preceding sentence, this Agreement will apply to,
be binding in all respects upon, and inure to the benefit of the successors and
permitted assigns of the parties. Nothing expressed or referred to in this
Agreement will be construed to give any Person other than the parties to this
Agreement any legal or equitable right, remedy or claim under or with respect to
this Agreement or any provision of this Agreement. This Agreement and all of its
provisions and conditions are for the sole and exclusive benefit of the parties
to this Agreement and their successors and assigns.
14.10 Severability
Should one or more provisions contained herein be invalid or
unenforceable under the applicable provisions of law, such provisions shall be
severed from the Agreement and not affect the validity and enforceability of the
other provisions, and shall be considered as having been automatically replaced
by a provision having the same economic effect or the closest possible effect to
the original intent of the parties to the maximum extent permitted by the law.
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14.11 Shareholders Guarantee
The Shareholders hereby jointly guarantee the compliance by Sellers of
all their obligations hereunder with the same caps and limitations set forth in
Article 12.11.
The parties acknowledge that the logo of FAST is owned and registered
in the name of Geico S.p.A. (and Geico S.p.A. has undertaken to let Gecofin
apply for the renewal of the relevant registration) but has always been used by
the FAST Operating Entities in force of a non-written intercompany
free-of-charge license agreement. Sellers and Shareholders hereby undertake and
guarantee in accordance with art. 1381 civil code to cause Geico S.p.A. and
Gecofin to execute (with authenticated signature before notary public for
purpose of registration at the relevant trademark offices) a 10-year free of
charge license agreement in favor of the Company for the use of such logo by the
Company and the other FAST Operating Entities with exclusivity on the products
produced and traded by them, in the form attached hereto as Exhibit 14.11.
14.12 Governing Law
This Agreement will be governed by, and construed in accordance with,
the substantive laws of Italy.
14.13 Controversies
Any dispute arising in connection with this Agreement, which cannot be
amicably settled between the parties, shall be finally settled by arbitration in
law in accordance with the International Rules of the Chamber of the National
and International Arbitration of Milan. The arbitrators, who must be fluent in
English, shall be three and be appointed and decide according to such rules,
which the parties hereby acknowledge to know and accept. In case of arbitration
started by Buyer, Sellers and the Shareholders shall be considered as one party.
The arbitration will be held in Milan, Italy.
14.14 Counterparts
This Agreement may be executed in one or more counterparts, each of
which will be deemed to be an original copy of this Agreement and all of which,
when together, will be deemed to constitute one and the same agreement. The
original language of this Agreement is English and in case of any inconsistency
with versions in any other language, the English version shall have priority.
14.15 Registration
In the event that registration of this Agreement in Italy becomes
necessary in connection with any legal or arbitration proceedings, any and all
expenses, including without limitation any registration taxes and fines arising
out of such registration shall be borne by that party against whom an
arbitration award or a judgment by a court in said legal proceedings is
directed.
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In witness whereof, this Agreement has been executed by the duly
empowered representatives of Buyer and Sellers, and by the Shareholders, on the
day and place first above written.
Buyer IDEX Corporation
By:
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Xxxxx X. Xxxxxx
Vice President and General Counsel
Sellers: Gecofin S.p.A.
By:
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A. R. Arabnia
President
PL&C S.r.l.
By:
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A. R. Arabnia
Sole Director
Shareholders:
-----------------------------------------
Xxxxxx Zone
-----------------------------------------
A. R. Arabnia
-----------------------------------------
Xxxxxx Xxxx
-----------------------------------------
Xxxxx Xxxx
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Table of Exhibits
Exhibit Description
------- -----------
2.13 Calculation of reference in order to calculate Closing Date
Combined Working Capital Adjustment
2.20 December 31 Combined Financial Statements
2.30 Exceptions to GAAP
2.36 Interim Financial Information
4.02(d) Via Lavoratori Property
4.04 Atto Notorio
5.03 Escrow Agreement
6.04(c) List of Directors and other corporate officers retaining
their offices at Closing
6.04(e) Individuals Executing IDEX Business Ethics Policy 6.04(f)
Closing Certificate of Sellers and the Shareholders 6.04(h)
Statements by Sellers on taxable capital gain and
irrevocable
instructions to E&Y concerning tax returns
6.05(c) Closing Certificate of Buyer
6.07 Service Agreement and other agreements to be entered with
officers at Closing
6.08 Gecofin and PL&C Administrative Services Agreements
6.12 List of Guarantees to be replaced by Buyer
9.01(a) Corporate Resolutions
9.02(a) Exceptions to Authority
9.02(b) Organizational Documents
9.02(c) Capitalization
9.02(e) Directors and Officers
9.02(f) Subsidiaries
9.06(b) Tax Audits
9.07(a) Title to Assets
9.07(b) Real Property
9.07(c) Condition of Property
9.07(d) Exceptions to Leases
9.07(e) Tangible Personal Property
9.07(e) bis Assets on Consignment
9.08 Intellectual Property
9.08 bis Exceptions to Intellectual Properties
9.10 Environmental Matters
9.11(a) Employees
9.11(b) Employee Benefit Plans
9.11(e) Increases in personnel's compensations
9.11(f) Work Stoppages
9.12(a) Contracts
9.12(b) Powers of Attorney
9.12(c) Bank Accounts
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9.12(d) Suppliers
9.13(a) Permits
9.13(c) Permit Renewals
9.15 Insurance
9.16 Equity Holdings
9.17 Exceptions to compliance with laws
9.20 Product Warranties
12.09 Scope of Phase II Environmental Audit
14.11 Logo license agreement
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