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EXHIBIT 2(a)
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SALE AND PURCHASE AGREEMENT
BY AND BETWEEN
XXXXX TELECOM GROUP (ITALIA) S.R.L.
(Purchaser)
and
[Name]
(Seller)
OF A PRE-EMPTIVE RIGHT FOR THE SUBSCRIPTION
TO NEW SHARES OF COMMON STOCK OF FOR.E.M. S.P.A.
Dated as of May 30, 1997
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TABLE OF CONTENTS
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1. RECITALS AND EXHIBITS page
2. DEFINITIONS
2.1 Xxxxx page
2.2 Xxxxx Common Stock page
2.3 Business Day page
2.4 Closing page
2.5 Closing Date page
2.6 Cash Payment page
2.7 FOREM page
2.8 Pre-emptive Right page
2.9 Price page
2.10 Purchaser's Dispute Notice page
2.11 Purchaser's Indemnification Claim page
2.12 Purchaser's Loss page
2.13 Purchaser's Notice of Contest Period page
2.14 Purchaser's Resolution Period page
2.15 Seller's Dispute Notice page
2.16 Seller's Indemnification Claim page
2.17 Seller's Loss page
2.18 Seller's Notice of Contest Period page
2.19 Seller's Resolution Period page
3. SALE AND PURCHASE OF PRE-EMPTIVE RIGHT page
4. PRICE
4.1 Price page
4.2 Payments page
5. CONDITIONS PRECEDENT TO CLOSING
5.1 Conditions Precedent to the Obligations of the Parties page
5.2 Conditions Precedent to the Obligations of Purchaser page
5.3 Conditions Precedent to the Obligations of Seller page
6. CLOSING page
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7. REPRESENTATIONS AND WARRANTIES OF SELLER
7.1 Capacity of Seller. Authorisation. Binding Effect page
7.2 Non-violation of Laws. Orders and Agreements page
7.3 Pre-emptive Right page
8. REPRESENTATIONS AND WARRANTIES OF PURCHASER
8.1 Capacity. Authorisation. Binding Effect page
8.2 Non-violation of Laws. Orders and Agreements page
8.3 Organisation, Qualification and Corporate Power page
8.4 Xxxxx Common Stock page
9. INDEMNIFICATION BY SELLER
9.1 Indemnification Generally page
9.2 Indemnification Rights for Direct Claims page
9.3 Seller's Indemnification Claims for Third Party Claims page
10. INDEMNIFICATION BY PURCHASER
10.1 Indemnification Generally page
10.2 Indemnification Rights for Direct Claims page
10.3 Purchaser's Indemnification Claims for Third Party Claims page
11. TERMINATION
11.1 Termination page
11.2 Effect of Termination page
12. MISCELLANEOUS
12.1 Entire Agreement page
12.2 Amendments page
12.3 Costs page
12.4 Effects page
12.5 Rights and Remedies page
12.6 Notices page
12.7 Counterparts page
12.8 Interpretation page
12.9 Arbitration page
12.10 Exchange Rate page
12.11 Governing Law page
12.12 Business Days page
12.13 Xxxxx page
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12.14 Survival page
EXHIBITS
EXHIBIT A Details of Seller's bank account
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EXHIBIT B1 Form of "Certificate and Agreement with respect to
---------- the Purchase of Securities outside the United
States"
EXHIBIT B2 Form of Letter Agreement of Xxxxx
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EXHIBIT C Form of Letter of Waiver
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SALE AND PURCHASE AGREEMENT
---- --- -------- ---------
This Sale and Purchase Agreement dated as of May 30, 1997 is entered into by and
between
- XXXXX TELECOM GROUP (ITALIA) S.R.L., an Italian company with registered office
at Xxxxxx Xxxxxxxxxx xx. 0, Xxxxx, tax number 11319940158
(hereinafter, "PURCHASER")
- on the one side -
and
-[Name] (hereinafter, "SELLER")
- on the other side -
(Purchaser and Seller hereinafter, collectively, the "PARTIES")
WITNESSETH:
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A. WHEREAS, Seller owns ____________ shares of common stock of FOR.E.M.
S.p.A., an Italian company with registered office at Xxx Xxxxxxxxx xx.
00/00, Xxxxxx Brianza, having an issued and outstanding capital of
ItL. 3,000,000,000 par value divided into 3,000,000 shares of common
stock having an ItL. 1,000 par value each (hereinafter, "FOREM");
B. WHEREAS, by resolution of an extraordinary shareholders' meeting held
on the date hereof FOREM approved an increase in its share capital by
ItL. 5,000,000,000 to be implemented by issuing 5,000,000 new shares
of common stock having an ItL. 1,000 par value each subject to the
shareholders' pre-emptive rights provided for by Article 2441 of the
Italian Civil Code;
C. WHEREAS, Seller owns a pre-emptive right in and with respect to
___________ FOREM shares of common stock to be issued in
implementation of the capital increase resolution referred to in
recital B above pursuant to said Article 2441 of the Italian Civil
Code (hereinafter, the "PRE-EMPTIVE RIGHT");
D. WHEREAS, Purchaser currently owns 2,400,000 shares of common stock of
FOREM;
E. WHEREAS, Seller wishes to sell, transfer and convey to Purchaser, and
Purchaser wishes to purchase from Seller, the Pre-emptive Right
subject to the terms and conditions set forth in this agreement
(hereinafter, the "AGREEMENT");
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NOW, in consideration of the recitals and mutual representations,
warranties and covenants hereunder, the Parties agree as follows:
ARTICLE 1
RECITALS AND EXHIBITS
1.1 The recitals contained in, and the Exhibits annexed to, this Agreement
constitute an integrating and substantial part hereof.
ARTICLE 2
DEFINITIONS
As used in this Agreement, the following terms and expressions shall have the
meanings indicated below unless the context requires otherwise:
2.1 "XXXXX": Xxxxx Telecom Inc., a Delaware (U.S.A.) corporation with
principal offices at 00000 Xxxxxxx Xxxxxxxxx, Xxxxxxxxx, Xxxx 00000.
2.2 "XXXXX COMMON STOCK": common stock, par value U.S.D. 1 per share, of
Xxxxx.
2.3 "BUSINESS DAY": any day other than a holiday on which banks are open
to the public in Milan for the carrying out of their ordinary
business.
2.4 "CLOSING": the transfer to Purchaser of all right, title and interest
in and to the Pre-emptive Right currently owned by Seller, the payment
by Purchaser of the Cash Payment and the delivery of the Xxxxx Common
Stock due to Seller on the Closing Date and, more generally, the
performance of all the obligations which have to be fulfilled by the
Parties on the Closing Date pursuant to Article 6 hereof and subject
to the conditions precedent set forth in Article 5 of this Agreement.
2.5 "CLOSING DATE": the date of this Agreement or any such other date no
later than October 31, 1997 as may be mutually agreed to by the
Parties.
2.6 "CASH PAYMENT" shall have the meaning assigned to such expression by
Section 4.2 hereof.
2.7 "FOREM" shall have the meaning assigned to such term by recital C
hereof.
2.8 "PRE-EMPTIVE RIGHT" shall have the meaning assigned to such expression
by recital C hereof.
2.9 "PRICE" shall have the meaning assigned to such expression by Section
4.1 hereof.
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2.10 "PURCHASER'S DISPUTE NOTICE" shall have the meaning assigned to such
expression by Paragraph 10.3 hereof.
2.11 "PURCHASER'S INDEMNIFICATION CLAIM" shall have the meaning assigned to
such expression by Paragraph 9.2 hereof.
2.12 "PURCHASER'S LOSS" shall have the meaning assigned to such expression
by Paragraph 9.1 hereof.
2.13 "PURCHASER'S NOTICE OF CONTEST PERIOD" shall have the meaning assigned
to such expression by Paragraph 9.2 hereof.
2.14 "PURCHASER'S RESOLUTION PERIOD" shall have the meaning assigned to
such expression by Paragraph 9.2 hereof.
2.15 "SELLER'S DISPUTE NOTICE" shall have the meaning assigned to such
expression by Paragraph 9.3 hereof.
2.16 "SELLER'S INDEMNIFICATION CLAIM" shall have the meaning assigned to
such expression by Paragraph 10.2 hereof.
2.17 "SELLER'S LOSS" shall have the meaning assigned to such expression by
Paragraph 10.1 hereof.
2.18 "SELLER'S NOTICE OF CONTEST PERIOD" shall have the meaning assigned to
such expression by Paragraph 10.2 hereof.
2.19 "SELLER'S RESOLUTION PERIOD" shall have the meaning assigned to such
expression by Paragraph 10.2 hereof.
ARTICLE 3
SALE AND PURCHASE OF PRE-EMPTIVE RIGHT
3.1 Seller hereby agrees to sell, transfer and convey to Purchaser, and
Purchaser hereby agrees to purchase from Seller, the Pre-emptive Right
on the Closing Date subject to the terms and conditions set forth in
this Agreement.
ARTICLE 4
PRICE
4.1 PRICE. In consideration of the sale, transfer and conveyance of the
Pre-emptive Right, Purchaser agrees to pay Seller a purchase price
equal to U.S.D. ______________ (hereinafter, the "PRICE").
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4.2 PAYMENTS. The Price shall be paid on the Closing Date as follows:
- Purchaser shall pay Seller U.S.D. _________________ (hereinafter,
the "CASH PAYMENT") in immediately available funds wire transferred to
the bank account of Seller the details of which are listed in EXHIBIT
A hereto; and
- Purchaser shall pay Seller U.S.D. ____________________ in the form
of _______________ shares of Xxxxx Common Stock subject to the
agreements set forth in EXHIBIT B1 and EXHIBIT B2 hereto.
ARTICLE 5
CONDITIONS PRECEDENT TO CLOSING
The obligations of each of the Parties to consummate the transactions which are
contemplated by this Agreement to occur at Closing shall be subject to the
fulfillment or the waiver by both Parties or the other Party, as applicable, of
the conditions set out in this Article 5 below on or before the Closing Date.
5.1 CONDITIONS PRECEDENT TO THE OBLIGATIONS OF THE PARTIES:
(a) Immediately prior to the Closing Date, there shall be no action or
proceeding initiated by any governmental agency or by any other
national or supranational authority or by any third party which seeks
to restrain, prohibit or invalidate this Agreement or the transactions
contemplated herein or to recover substantial damages or other
substantial relief with respect thereto, and no injunction or
restraining order shall have been issued by any court whether domestic
or foreign restraining, prohibiting or invalidating this Agreement or
the transactions contemplated therein; and
(b) The FOREM shareholders other than Purchaser and Seller shall have
waived their statutory rights of first refusal in respect of the sale
and transfer of the Pre-emptive Right by executing a letter in the
form of EXHIBIT C hereto in duplicate original and delivering one
original of such letter to each of Purchaser and Seller.
5.2 CONDITIONS PRECEDENT TO THE OBLIGATIONS OF PURCHASER:
(a) Seller shall have duly performed all his material obligations
which, pursuant to this Agreement, are required to be performed prior
to the Closing Date;
(b) The representations and warranties of Seller contained in this
Agreement, the Exhibits and the documents executed and delivered to
Purchaser pursuant hereto or simultaneously herewith, shall be true
and correct in all material respects as of the date hereof and as of
the Closing Date; and
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(c) Seller shall have executed and delivered to Xxxxx a "Certificate
and Agreement with respect to the Purchase of Securities Outside the
United States" in the form of EXHIBIT C1 hereto dated as of the Closing
Date.
5.3 CONDITIONS PRECEDENT TO THE OBLIGATIONS OF SELLER:
(a) Purchaser shall have duly performed all its material obligations
which, pursuant to this Agreement, are required to be performed prior
to the Closing Date;
(b) The representations and warranties of Purchaser and Xxxxx contained
in this Agreement, the Exhibits and the documents executed and
delivered to Seller pursuant hereto or simultaneously herewith, shall
be true and correct in all material respects as of the date hereof and
as of the Closing Date; and
(c) Purchaser shall have delivered to Seller a letter-agreement of
Xxxxx in the form of EXHIBIT B2 hereto.
ARTICLE 6
CLOSING
Subject to the satisfaction or waiver of the conditions precedent contemplated
by Section 5 hereof, Closing shall take place at the Milan offices of Gianni,
Origoni & Partners, Xxxxxx Xxxxxxxxxx Xx. 0 (or such other place as may be
agreed upon by Purchaser and Seller before Closing) on the Closing Date. On the
Closing Date the Parties shall comply with their respective obligations as set
out in this Section 6 and shall take any other action and/or sign any other
document which may be required by law or this Agreement. At Closing:
6.1. SELLER shall:
(i) execute a notarial instrument of transfer of the Pre-emptive Right
to Purchaser in a form consistent with this Agreement; and
(ii) execute and deliver to Purchaser any such other documents as are
contemplated by this Agreement to be executed and delivered to
Purchaser at Closing or as may be reasonably requested by Purchaser in
order to complete the Closing transactions or in connection therewith.
6.2 PURCHASER shall:
(i) execute the notarial instrument contemplated by Paragraph 6.1(i)
above;
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(ii) make the payments to Seller contemplated by Paragraph 4.2 hereof
(including delivery to Seller of the certificate representing
___________________ shares of Xxxxx Common Stock duly registered in the
name of Seller); and
(iii) execute and deliver to Seller any such other documents as are
contemplated by this Agreement to be executed and delivered to Seller
at the Closing or as may be reasonably requested by Seller in order to
complete the Closing transactions or in connection therewith.
ARTICLE 7
REPRESENTATIONS AND WARRANTIES OF SELLER
As a material inducement to the Purchaser's decision to enter into this
Agreement, Seller hereby represents and warrants to Purchaser that:
7.1 CAPACITY OF SELLER. AUTHORISATION. BINDING EFFECT. Seller has full
right, power and authority to enter into this Agreement. No consent of,
notice to, or filing with the Seller's spouse or any third party or
entity whatsoever is required for Seller to enter into this Agreement
or to consummate the transactions contemplated herein. This Agreement
has been duly executed by Seller and shall constitute the legal, valid
and binding obligations of Seller, enforceable against him in
accordance with its terms.
7.2 NON VIOLATION OF LAWS. ORDERS AND AGREEMENTS. The execution and
delivery of this Agreement by Seller and the performance of his
obligations hereunder are not in violation or breach of, do not
conflict with, or constitute a default under, and will not accelerate
or permit the acceleration of the performance required by any of the
terms or provisions of the Certificate of Incorporation or the By-laws
of FOREM or any law, order, decree, note, debt instrument, security
agreement, written or oral, to which Seller or FOREM is a party or by
which Seller or FOREM is bound, and will not be an event which, after
notice of lapse of time or both, will result in any such violation,
breach, conflict, default or acceleration.
7.3 PRE-EMPTIVE RIGHT. Seller is the legal and beneficial owner of the
Pre-emptive Right pursuant to a resolution of an extraordinary
shareholders' meeting of FOREM held on the date hereof subject to court
sanction ("omologa"). The owner of the Pre-emptive Right is entitled to
subscribe to and acquire 635,000 FOREM shares of common stock, free and
clear of any pledges, liens, claims, security interests, encumbrances,
any third party's rights of any nature whatsoever, and nonassessable
subject to the terms and conditions of the above resolution and the
applicable provisions of the Italian Civil Code. By effect of the
execution of the notarial instrument indicated in Paragraph 6.1 (i) and
Paragraph 6.2 (i) hereof, Purchaser will validly acquire title to the
Pre-emptive Right free and clear of any
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pledges, liens, claims, security interests, encumbrances and any third
party's rights of any nature whatsoever.
ARTICLE 8
REPRESENTATIONS AND WARRANTIES OF PURCHASER
As a material inducement to the Seller's decision to enter into this Agreement
Purchaser hereby represents and warrants to Seller that:
8.1 CAPACITY. AUTHORISATION. BINDING EFFECT. Purchaser has full right,
power and authority to enter into this Agreement. No consent of, notice
to, or filing with any third party or entity whatsoever is required for
Purchaser to enter into this Agreement or to consummate the
transactions contemplated herein. The execution and delivery of this
Agreement and the consummation of the transactions contemplated herein
have been duly authorised by the proper body of Purchaser. This
Agreement has been duly executed by Purchaser and constitutes the
legal, valid and binding obligations of Purchaser enforceable against
it in accordance with its terms.
8.2 NON-VIOLATION OF LAWS, ORDERS AND AGREEMENTS. The execution and
delivery of this Agreement by Purchaser and the performance of its
obligations hereunder are not in violation or breach of, do not
conflict with or constitute a default under, and will not accelerate or
permit the acceleration of the performance required by, any of the
terms or provisions of its Certificate of Incorporation or By-laws or
any law, order, decree, note, debt instrument, security agreement,
debenture or mortgage or any other contract or agreement, written or
oral, to which Purchaser is a party or by which Purchaser is bound, and
will not be an event which, after notice or lapse of time or both, will
result in any such violation, breach, conflict, default or
acceleration.
8.3 ORGANISATION, QUALIFICATION AND CORPORATE POWER. Purchaser is duly
incorporated, validly existing and fully qualified to carry on its
business under the laws of Italy.
8.4 XXXXX COMMON STOCK. All of the shares of Xxxxx Common Stock to be
transferred to Seller pursuant to Paragraph 4.2 hereof shall be
transferred out of Xxxxx'x Treasury Stock and shall be free and clear
of any pledges, liens, claims, security interests, encumbrances and
third party's right, and are duly authorized, validly issued, fully
paid and nonassessable, and none of Xxxxx'x stockholders nor any other
person has any pre-emptive right or any other right of purchase in
respect thereof.
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ARTICLE 9
INDEMNIFICATION BY SELLER
9.1 INDEMNIFICATION GENERALLY. From and after the Closing Date, Seller
shall indemnify and hold Purchaser harmless against and from any and
all costs, expenses, losses, damages and liabilities (including,
without limitation, reasonable attorneys' fees) incurred by Purchaser
with respect to or in connection with any breach of any of the
representations and warranties of Seller under this Agreement
(hereinafter, the "PURCHASER'S LOSSES" and each a "PURCHASER'S LOSS").
Notwithstanding anything to the contrary contained in this Agreement,
Seller shall have no indemnification obligations to Purchaser under
this Article 9 with respect to any claim made by Purchaser for any
Purchaser's Loss, whether or not arising as a result of a claim made by
a third party, of which Seller is notified after the first anniversary
of the Closing Date.
9.2 INDEMNIFICATION RIGHTS FOR DIRECT CLAIMS. In order to be held
indemnified and harmless against and from Purchaser's Losses under this
Article 9 (other than Purchaser's Losses arising from a claim made by a
third party, as to which Section 9.3 shall apply):
(a) Purchaser shall give written notice to Seller of any claim (the
"PURCHASER'S INDEMNIFICATION Claim"), which notice shall set forth a
reasonably detailed statement of the Purchaser's Indemnification Claim
and the cost, expense, loss, damage and liability Purchaser incurred
and/or expects to incur by reason thereof;
(b) such indemnification payment shall be made on the later of (i) the
expiration of thirty (30) days from the date of such notice
(hereinafter, the "PURCHASER'S NOTICE OF CONTEST PERIOD") or, (ii) if
such claim is contested as hereinafter provided, the date the dispute
is resolved in accordance with this Section 9.2, or (iii) the date in
which such Purchaser's Indemnification Claim becomes liquidated in
amount; and
(c) if, prior to the expiration of the Purchaser's Notice of Contest
Period, Seller notifies Purchaser in writing of his intention to
dispute the Purchaser's Indemnification Claim, and if such dispute is
not resolved within thirty (30) days after the expiration of such
period (hereinafter, the "PURCHASER'S RESOLUTION PERIOD"), then such
dispute shall be resolved by a committee of three arbitrators who shall
be appointed (within 60 days of the expiration of the Purchaser's
Resolution Period) and shall be acting in accordance with Section 12.9
below. The Parties shall cooperate and diligently pursue the
arbitration of such Purchaser's Indemnification Claim in order for a
decision to be made by the arbitrators within 45 days after their
appointment.
9.3 PURCHASER'S INDEMNIFICATION CLAIMS FOR THIRD PARTY CLAIMS. The
provisions of this Section shall apply to any Purchaser's Losses which
arise or may arise as a
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result of a claim made by a third party and any related litigation or
proceeding (hereinafter, the "THIRD PARTY CLAIM").
(a) Purchaser shall give notice to Seller promptly after Purchaser
becomes aware of any Third Party Claim, which notice shall include a
copy of any letter, complaint or similar writing received by Purchaser
and/or FOREM or any of FOREM's consolidated subsidiaries setting out
such Third Party Claim or a written description of any oral notice
received by Purchaser or FOREM or any of FOREM's consolidated
subsidiaries; PROVIDED, HOWEVER, that any delay in providing such
notification shall not constitute a bar or defense to indemnify except
to the extent Seller has been prejudiced thereby.
(b) Within ten (10) days from the date of such notice, Seller shall
notify Purchaser in writing if he intends to dispute that such Third
Party Claim constitutes or will constitute Purchaser's Losses subject
to indemnification hereunder (hereinafter, the "SELLER'S DISPUTE
NOTICE"). If the Seller's Dispute Notice is given within said ten (10)
day period, the issue of whether such Third Party Claim constitutes or
will constitute Purchaser's Losses subject to indemnification hereunder
may be submitted to arbitration in accordance with Section 12.9 hereof
unless an agreement is subsequently reached between the Parties.
(c) For the purpose of this Paragraph (c) and subsequent Paragraphs (d)
and (e) of this Section 9.3 the defense of a Third Party Claim by
either Purchaser or Seller shall include, as the case may be, the
Purchaser's or the Seller's right to designate counsel to be employed
by Purchaser or FOREM or any of FOREM's consolidated subsidiaries in
defending the Third Party Claim and to provide such counsel with
instructions with respect to the defense thereof, as well as the power
to settle the Third Party Claim on behalf of Purchaser or FOREM or any
of FOREM's consolidated subsidiaries in the cases and subject to the
conditions set forth by this Section 9.3. If a Seller's Dispute Notice
with respect to a Third Party Claim is given then: (i) Purchaser shall
have the right to defend such Third Party Claim and the costs of such
defense shall be added to Purchaser's Losses, (ii) Seller shall have
the right to participate in the defense of the Third Party Claim at his
own costs and expenses provided that such right is not exercised in a
way which may prejudice the Purchaser's defense of the Third Party
Claim, and (iii) Purchaser shall consult with Seller prior to reaching
a settlement of the Third Party Claim, if any.
(d) Seller shall have the right to assume the defense of a Third Party
Claim unless:
(i) a Seller's Dispute Notice is sent to Purchaser pursuant to
Paragraph 9.3 (b) hereof; or
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(ii) the named parties to any action constituting such Third Party
Claim (including any impleaded parties) include Seller or any member of the
Seller's family or any party belonging to a group in which Seller may have a
business interest.
(e) In order for Seller to exercise the right to assume the defense of
a Third Party Claim, Seller shall give notice to Purchaser within ten
(10) days after receipt of the notice of the Third Party Claim as to
which no Seller's Dispute Notice was given. If Seller fails to notify
Purchaser within such period, Seller shall be deemed to have waived his
right to defend such Third Party Claim and Purchaser shall have the
right to defend such Third Party Claim and its costs and expense shall
be added to the Purchaser's Losses. If Purchaser assumes the defense of
a Third Party Claim pursuant to this paragraph (e), Purchaser may not
settle such Third Party Claim without the consent of Seller, which
consent cannot be unreasonably withheld. If Seller assumes the defense
of such Third Party Claim then: (i) Purchaser may participate in the
defense of such claim with its own counsel at its own cost and expense,
(ii) Seller may settle such Third Party Claim without the consent of
Purchaser provided such settlement includes an unconditional release of
Purchaser and its subsidiaries from all liability with respect to any
Third Party Claim and does not involve the imposition of any
restriction or obligation on Purchaser or any of its subsidiaries, and
(iii) Seller may not consent to the entry of any judgment (other than a
judgment of dismissal on the merits) except with the written consent of
Purchaser.
ARTICLE 10
INDEMNIFICATION BY PURCHASER
10.1 INDEMNIFICATION GENERALLY. From and after the Closing Date, Purchaser
shall indemnify and hold Seller harmless against and from any and all
costs, expenses, losses, damages and liabilities (including, without
limitation, reasonable attorneys' fees) incurred by Seller with respect
to or in connection with any breach of any of the representations and
warranties of Purchaser under this Agreement (hereinafter, the
"SELLER'S LOSSES" and each a "SELLER'S LOSS").Notwithstanding anything
to the contrary contained in this Agreement, Purchaser shall have no
indemnification obligations to Seller under this Article 10 with
respect to any claim made by Seller for any Seller's Loss, whether or
not arising as a result of a claim made by a third party, of which
Purchaser is notified after the first anniversary of the Closing Date.
10.2 INDEMNIFICATION RIGHTS FOR DIRECT CLAIMS. In order to be held
indemnified and harmless against and from Seller's Losses under this
Article 10 (other than Seller's Losses arising from a claim made by a
third party, as to which Section 10.3 shall apply):
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(a) Seller shall give written notice to Purchaser of any claim (the
"SELLER'S INDEMNIFICATION CLAIM"), which notice shall set forth a
reasonably detailed statement of the Seller's Indemnification Claim and
the cost, expense, loss, damage and liability Seller incurred and/or
expects to incur by reason thereof;
(b) such indemnification payment shall be made on the later of (i) the
expiration of thirty (30) days from the date of such notice
(hereinafter, the "SELLER'S NOTICE OF CONTEST PERIOD") or, (ii) if such
claim is contested as hereinafter provided, the date the dispute is
resolved in accordance with this Section 10.2, or (iii) the date in
which such Seller's Indemnification Claim becomes liquidated in amount;
and
(c) if, prior to the expiration of the Seller's Notice of Contest
Period, Purchaser notifies Seller in writing of its intention to
dispute the Seller's Indemnification Claim, and if such dispute is not
resolved within thirty (30) days after the expiration of such period
(hereinafter, the "SELLER'S RESOLUTION PERIOD"), then such dispute
shall be resolved by a committee of three arbitrators who shall be
appointed (within 60 days of the expiration of the Seller's Resolution
Period) and shall be acting in accordance with Section 12.9 below. The
Parties shall cooperate and diligently pursue the arbitration of such
Seller's Indemnification Claim in order for a decision to be made by
the arbitrators within 45 days after their appointment.
10.3 SELLER'S INDEMNIFICATION CLAIMS FOR THIRD PARTY CLAIMS. The provisions
of this Section shall apply to any Seller's Losses which arise or may
arise as a result of a Third Party Claim.
(a) Seller shall give notice to Purchaser promptly after Seller becomes
aware of any Third Party Claim, which notice shall include a copy of
any letter, complaint or similar writing received by Seller setting out
such Third Party Claim or a written description of any oral notice
received by Seller; PROVIDED, HOWEVER, that any delay in providing such
notification shall not constitute a bar or defense to indemnify except
to the extent Purchaser has been prejudiced thereby.
(b) Within ten (10) days from the date of such notice, Purchaser shall
notify Seller in writing if it intends to dispute that such Third Party
Claim constitutes or will constitute Seller's Losses subject to
indemnification hereunder (hereinafter, the "PURCHASER'S DISPUTE
NOTICE"). If the Purchaser's Dispute Notice is given within said ten
(10) day period, the issue of whether such Third Party Claim
constitutes or will constitute Seller's Losses subject to
indemnification hereunder may be submitted to arbitration in accordance
with Section 12.9 hereof unless an agreement is subsequently reached
between the Parties.
(c) For the purpose of this Paragraph (c) and subsequent Paragraphs (d)
and (e) of this Section 10.3 the defense of a Third Party Claim by
either Seller or Purchaser shall include, as the case may be, the
Seller's or the Purchaser's right
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to designate counsel to be employed by Seller in defending the Third
Party Claim and to provide such counsel with instructions with respect
to the defense thereof, as well as the power to settle the Third Party
Claim on behalf of Seller in the cases and subject to the conditions
set forth by this Section 10.3. If a Purchaser's Dispute Notice with
respect to a Third Party Claim is given then: (i) Seller shall have the
right to defend such Third Party Claim and the costs of such defense
shall be added to Seller's Losses, (ii) Purchaser shall have the right
to participate in the defense of the Third Party Claim at its own costs
and expenses provided that such right is not exercised in a way which
may prejudice the Seller's defense of the Third Party Claim, and (iii)
Seller shall consult with Purchaser prior to reaching a settlement of
the Third Party Claim, if any.
(d) Purchaser shall have the right to assume the defense of a Third
Party Claim unless:
(i) a Purchaser's Dispute Notice is sent to Seller pursuant to
Paragraph 10.3 (b) hereof; or
(ii) the named parties to any action constituting such Third Party
Claim (including any impleaded parties) include Purchaser or any party belonging
to a group in which Purchaser may have a business interest.
(e) In order for Purchaser to exercise the right to assume the defense
of a Third Party Claim, Purchaser shall give notice to Seller within
ten (10) days after receipt of the notice of the Third Party Claim as
to which no Purchaser's Dispute Notice was given. If Purchaser fails to
notify Seller within such period, Purchaser shall be deemed to have
waived its right to defend such Third Party Claim and Seller shall have
the right to defend such Third Party Claim and its costs and expense
shall be added to the Seller's Losses. If Seller assumes the defense of
a Third Party Claim pursuant to this paragraph (e), Seller may not
settle such Third Party Claim without the consent of Purchaser, which
consent cannot be unreasonably withheld. If Purchaser assumes the
defense of such Third Party Claim then: (i) Seller may participate in
the defense of such claim with its own counsel at its own cost and
expense, (ii) Purchaser may settle such Third Party Claim without the
consent of Seller provided such settlement includes an unconditional
release of Seller from all liability with respect to any Third Party
Claim and does not involve the imposition of any restriction or
obligation on Seller, and (iii) Purchaser may not consent to the entry
of any judgment (other than a judgment of dismissal on the merits)
except with the written consent of Seller.
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ARTICLE 11
TERMINATION
11.1 TERMINATION. This Agreement may be terminated at any time prior to the
Closing Date:
(a) by either Seller or Purchaser if Closing has not occurred by
October 31, 1997, PROVIDED, HOWEVER, that if Closing has not occurred
by said date due to the infringement of any of the covenants or
agreements of any of the Parties hereunder, the defaulting Party shall
have no right to terminate this Agreement pursuant hereto;
(b) by Purchaser if any condition in Paragraphs 5.1 and 5.2 cannot be
satisfied by the Closing Date; and
(c) by Seller, if any condition in Paragraphs 5.1 and 5.3 cannot be
satisfied by the Closing Date.
11.2 EFFECT OF TERMINATION. If this Agreement is terminated pursuant to
Section 11.1 hereof, this Agreement shall become void and there shall
be no liability or obligation on the part of Purchaser or Seller under
this Agreement, PROVIDED, HOWEVER, that any provisions hereof which
expressly or by their nature are designed to survive the termination of
this Agreement shall survive the termination of this Agreement.
ARTICLE 12
MISCELLANEOUS
12.1 ENTIRE AGREEMENT. This Agreement, the Exhibits annexed hereto and the
agreements and documents executed and delivered pursuant hereto or
simultaneously herewith constitute the entire agreement between the
Parties in respect to the subject matter hereof and supersede all prior
written and oral agreements and arrangements between the Parties hereto
with regard to the subject matter hereof.
12.2 AMENDMENTS. Any amendment to this Agreement shall be valid and binding
upon the Parties only if made in writing and signed by Seller and a
duly authorized officer of Purchaser.
12.3 COSTS. Except as otherwise set forth in this Agreement (x) each Party
shall bear its own costs in relation to the negotiations leading up to
the sale and purchase of the Pre-emptive Right and to the drafting,
execution and carrying into effect of this Agreement and all the other
documents referred to herein, and (y) all the costs relating to the
transfer of the Pre-emptive Right to Purchaser, including stamp
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duties and registration tax, if any, shall be borne by Purchaser only
(but not capital gains tax which will be borne by Seller).
12.4 EFFECTS. The provisions of this Agreement shall be legally binding upon
the Parties and their respective successors and assigns.
12.5 RIGHTS AND REMEDIES. The exercise or failure to exercise by any Party
any right or remedy arising out of this Agreement shall not constitute
a waiver of that right or remedy or of any other rights or remedies.
12.6 NOTICES. All notices, demands or requests provided for or permitted to
be given pursuant to this Agreement must be in writing. All notices,
demands and requests shall be deemed to have been properly served if
given by personal delivery, or if transmitted by telecopy, or if
delivered to reputable overnight carrier for next Business Day
delivery, charges billed to or prepaid by shipper, or if sent by air
mail, proper postage prepaid, addressed as follows:
If to SELLER: [Name and Address]
With a copy to: Pavia e Ansaldo
Xxx xxxx'Xxxxxxxxxx, 0
00000 Xxxxx, Xxxxx
Attn.: Xxxxxxxxx Xxxxxx
Facsimile No. 00-0-0000000
If to PURCHASER: Xxxxx Telecom Group (Italia) S.r.l.
c/x Xxxxx Telecom Inc.
00000 Xxxxxxx Xxxxxxxxx
Xxxxxxxxx, Xxxx 00000 X.X.X.
Attn.: General Counsel
Facsimile No.: 216-7650410
Gianni, Origoni & Partners
Xxxxxx Xxxxxxxxxx, 0
00000 Xxxxx, Xxxxx
Attn.: Xxxx Xxxxxxxxxx
Facsimile No.: 00-0-00000000
Each notice, demand or request shall be effective upon personal
delivery, or upon confirmation of receipt of the applicable telecopy or two (2)
Business Days after delivery to a reputable overnight carrier in accordance with
the foregoing, or upon arrival at the recipient's address if sent by air mail in
accordance with the foregoing. Rejection or other refusal to accept or the
inability to deliver because of changed address of which no notice was given
shall not adversely impact the effectiveness of any such notice, demand or
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request. Service by personal delivery upon Purchaser shall be valid only if
delivered personally to an officer of Xxxxx.
Any addressee may change its address for notices hereunder by giving
written notice in accordance with this Section.
12.7 COUNTERPARTS. This Agreement may be executed in any number of
counterparts, and each counterpart shall constitute an original
instrument, but all such separate counterparts shall constitute one and
the same agreement.
12.8 INTERPRETATION. The masculine, feminine or neuter pronouns used herein
shall be interpreted without regard to gender, and the use of the
singular or plural shall be deemed to include the other whenever the
context so requires. The headings in this Agreement are inserted for
convenience of reference only and shall not be a part of or control or
affect the meaning of this Agreement. Unless otherwise expressly stated
herein, all references herein to Sections and Paragraphs are to
Sections and Paragraphs in this Agreement and all references herein to
Exhibits are to Exhibits to this Agreement.
12.9 ARBITRATION. Any disputes arising with respect to or in connection with
this Agreement between Purchaser and Seller shall be finally decided by
a panel of three arbitrators in accordance with the Rules of
Arbitration of the Chamber of Commerce and Industry of Geneva. The
arbitration shall be conducted in English.
12.10 EXCHANGE RATE. Except as otherwise set forth in this Agreement or the
Exhibits hereto, to the extent a conversion from U.S. Dollars into
another currency or vice versa is required to be made for the purposes
of this Agreement such conversion shall be made at the exchange rate
published by in Il Sole - 24 Ore for the date on which the circumstance
giving rise to the need to make such conversion under or in connection
with this Agreement shall occur.
12.11 GOVERNING LAW. This Agreement shall be governed by and construed in
accordance with the Italian law without making reference to its
conflict of law rules.
12.12 BUSINESS DAYS. If the date determined pursuant to this Agreement on
which Closing is to occur or any other obligations of the Parties is to
be fulfilled falls on a day other than a Business Day, such date shall
be automatically postponed to the first subsequent Business Day.
12.13 XXXXX. By executing this Agreement, Xxxxx (x) represents and warrants
that the contents of Section 8.4 hereof shall be true and accurate as
of the Closing Date and (y) agrees to indemnify and hold Seller
harmless against and from any Seller's Losses incurred with respect to
or in connection with any breach of Section 8.4 hereof, as well as any
breach of the Xxxxx'x undertakings set forth in EXHIBIT B2
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hereto, under and subject to the terms and conditions of Article 10 of
this Agreement.
12.14 SURVIVAL. Any provision of this Agreement which is expressly stated or,
by its nature, is intended to remain valid after Closing including,
without limitation, Articles 7, 8, 9 and 10 hereof shall survive
Closing and any document executed by the Parties on the date of Closing
including, but not limited to, any notarial instrument of transfer of
the Pre-emptive Right to Purchaser.
XXXXX TELECOM GROUP (ITALIA) S.R.L. [Name]
By: ________________________ ___________________
Name: XxXxxx X. Xxxxx, III
Title: Sole Director
For acceptance of Paragraph 12.13 hereabove:
XXXXX TELECOM INC.
By: _____________________
Name: XxXxxx X. Xxxxx, III
Title: Vice-President
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