EX-2.1
2
a6130392ex2-1.htm
EXHIBIT 2.1
Exhibit
2.1
________________________________________________
Sale
and Purchase Agreement
by
and between
Fidia
Farmaceutici S.p.A.
as
seller
and
Anika
Therapeutics Inc.
as
buyer
_______________________________________________
Table
of contents
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ARTICLE
I
Whereas - Interpretation - Certain
Definitions
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1.01
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Whereas.
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1.02
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Interpretation.
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1.03
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Certain
Definitions.
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ARTICLE
II
The Transaction
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2.01
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The
Sale and Purchase of the Quota.
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2.02
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Closing
Date.
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2.03
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Closing
Obligations.
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2.04
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Board
of Directors Resignations and Quotaholders Meeting.
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2.05
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Receivables
of the Company.
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ARTICLE
III
The Purchase Price
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3.01
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The
Purchase Price.
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3.02
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Payment
of the Purchase Price.
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3.03
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Dividends.
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3.04
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Seller’s
Undertakings.
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ARTICLE
IV
Purchase Price
Adjustment
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4.01
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Estimated
Closing Balance Sheet - Estimated Net Working Capital.
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4.02
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Preparation
of the Final Closing Balance Sheet.
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4.03
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Working
Capital Adjustment.
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4.04
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Cash
Availability.
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ARTICLE
V
Representations and Warranties of the
Buyer
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5.01
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Representations
and Warranties of the Buyer.
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5.02
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Certain
Definitions.
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ARTICLE
VI
Representations and Warranties of the
Seller
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6.01
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Representations
and Warranties of the Seller.
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ARTICLE
VII
Survival of Representations and
Warranties
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7.01
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Survival
of Representations and Warranties of the Seller.
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7.02
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Survival
of Representations and Warranties of the
Bayer.
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2
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ARTICLE
VIII
Indemnification
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8.01
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Seller’s
Indemnification.
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8.02
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Seller’s
Indemnification - Limitation.
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8.03
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Buyer’s
Indemnification.
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8.04
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Indemnification
Procedure.
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8.05
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Escrow
Shares.
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8.06
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Other
Remedies.
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ARTICLE
IX
Miscellaneous
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9.01
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Lock
Up.
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9.02
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Anika’s
Board of Directors.
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9.03
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US
GAAP Account.
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9.04
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GAAP
Accounts and SEC Requirements.
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9.05
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Release
of the Guarantees.
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9.06
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Seller’s
Receivables.
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9.07
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Non
Competition.
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9.08
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Further
Assurances.
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9.09
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Use
of Names.
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9.10
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Records
Retention.
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9.11
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Waiver
of Action.
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9.12
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Employee
Stability.
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9.13
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Administrative
Requirements.
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9.14
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Integration
Services.
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9.15
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Insurances.
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9.16
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Confidentiality
- Public Announcement.
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9.17
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Changes
in Writing.
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9.18
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Successors.
Assignment Prohibited.
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9.19
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Notices.
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9.20
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Domicile.
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9.21
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Severability.
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9.22
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Fees
and Expenses.
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ARTICLE
X
Law - Jurisdiction
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10.01
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Applicable
Law.
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10.02
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Arbitration.
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10.03
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Enforceability.
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3
LIST
OF EXHIBITS
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Exhibit
A
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Powers
of the Seller.
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Exhibit
B
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Powers
of the Buyer.
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Exhibit
1.03(I)
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Amendments
to Existing Product Agreements.
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Exhibit
1.03(II)
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Final
drafts of the Commercial Agreements.
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Exhibit
1.03(III)
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Company’s
Receivables.
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Exhibit
1.03(IV)
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Executed
copy of the Escrow Agreement.
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Exhibit
1.03(V)
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Financial
statements for the years ended on December 31, 2007 and December 31,
2008.
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Exhibit
1.03(VI)
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Interim
Financial Statements.
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Exhibit
1.03(VII)
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Registration
Rights Agreement.
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Exhibit
1.03(VIII)
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Seller’s
Receivables.
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Exhibit
2.03(a)(ii)
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Executed
copies of (i) product registration transfer agreement and (ii)
trademark transfer agreements.
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Exhibit
2.03(a)(v)
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Deed
of Transfer.
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Exhibit
2.04(b)
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New
Board of Directors.
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Exhibit
3.02
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Bank
account details.
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Exhibit
4.01
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Estimated
Closing Balance Sheet and Estimated Net Working
Capital.
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Exhibit
4.02
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Table
related to (i) the Closing Balance Sheet and (ii) the Closing Net Working
Capital.
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Exhibit
9.05
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Assumed
Obligations.
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Exhibit
9.15
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Insurances.
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4
LIST
OF SCHEDULES
Buyer’s
Schedules.
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Schedule
5.01.3
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No
Third Party Consent.
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Schedule
5.01.4
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No
Breach.
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Schedule
5.01.9
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Litigation.
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Schedule
5.01.14
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Permits.
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Schedule
5.01.16
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No
Material Adverse Change.
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Schedule
5.01.17
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Brokers.
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Schedule
5.01.21
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Compliance
with Law – Violations.
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Seller’s
Schedules.
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Schedule
6.01.3
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No
breach.
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Schedule
6.01.6
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Subsidiaries.
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Schedule
6.01.13
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Guarantees.
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Schedule
6.01.14
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Litigation.
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Schedule
6.01.15(a)
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Employee
List.
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Schedule
6.01.15(c)
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Supply
of workmanship agreements.
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Schedule
6.01.15(d)
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Collective
Bargaining Agreement.
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Schedule
6.01.16(a)
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IP
List: (i) Patents and Marks; (ii) Licenses In; (iii) Licenses
Out.
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Schedule
6.01.16(b)
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IP
Exceptions.
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Schedule
6.01.17
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Insurance
policies.
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Schedule
6.01.22
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Bank
account and power of attorney.
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Schedule
6.01.23
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Contracts.
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Schedule
6.01.27
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Costumers.
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Schedule
6.01.35
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Restrictive
legends concerning the Shares.
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5
This
Sale
and Purchase Agreement (hereinafter the “Agreement”) is entered in
Milan, on December 30, 2009,
between
(1) Fidia Farmaceutici S.p.A., a
company duly incorporated under the laws of Italy, whose registered office is at
Abano Terme (PD), CAP 35031, Xxx Xxxxx xxxxx Xxxxxxxx 0/X, VAT number and
registered with the Company’s Register of Padua at number 00204260285, acting by
its legal representative Xx. Xxxxxxx Xxxxxxx pursuant to the board of directors
resolutions dated November 19, 2009, attached hereto under Exhibit A
(hereinafter the “Seller”);
and
(2) Anika Therapeutics Inc., a
company duly incorporated under the laws of Massachusetts, whose registered
office is at 00 Xxxxxxx Xxxxxx, Xxxxxxx, Xxxxxxxxxxxxx 00000 Italian tax code
number 97542640152, acting by its legal representative Xx. Xxxxxxx Xxxxxxxx
pursuant to the board of directors resolutions attached hereto under Exhibit B
(hereinafter the “Buyer”
or “Anika”);
(the
Seller and Buyer are hereinafter jointly referred to as the “Parties” and each as a “Party”).
RECITALS
WHEREAS
the Seller is the owner of a quota representing 100% of the issued and
outstanding capital stock of Fidia Advanced Biopolymers S.r.l., whose registered
office is in Abano Terme (PD), C.A.P. 35031, Xxx Xxxxx xxxxx Xxxxxxxx 0/,X
capital stock equal to Euro 1,848,915.00 (one million eight hundred forty eight
thousand nine hundred fifteen/00), VAT number 03641500289 and registered with
the Company’s Register of Padua at number 01510440744 (hereinafter referred to
as the “Company”) and,
therefore, the Seller is the owner of the entire issued and outstanding capital
stock of the Company;
WHEREAS the Company is a company
active in the business of research and development, manufacturing and
distributing of medical products based on hyaluronic acid;
WHEREAS Anika is a company
active in the business of research and development, manufacturing and
distributing of medical products based on hyaluronic acid and whose ordinary
shares are listed on the NASDAQ Stock Exchange;
WHEREAS
the Seller wishes to sell and Buyer wishes to purchase the Quota (as hereinafter
defined) upon the terms and subject to the conditions set forth in this
Agreement;
NOW
THEREFORE, in consideration of the mutual covenants contained herein, the
Parties covenant and agree as follows:
ARTICLE
I
Whereas - Interpretation –
Certain Definitions
1.01
Whereas.
The
WHEREAS clauses to this Agreement constitute an integral and essential part of
the same.
1.02
Interpretation.
In this
Agreement, unless the context requires otherwise, references to:
6
(a) “this Agreement” includes the
Exhibits and the Schedules;
(b) a
statute or statutory provision includes any consolidation, re-enactment,
modification or replacement of the same, any statute or statutory provision of
which it is a consolidation, re-enactment, modification or replacement and any
subordinate legislation in force under any of the same from time to
time;
(c) Articles,
Sections or Paragraphs, contained in this Agreement shall be deemed to be a
reference to Articles, Sections, or Paragraphs hereto;
(d) “Business Day” shall mean each
calendar day other than Saturdays, Sundays and any other days on which credit
institutions are permitted to close in the city of Padua and
Boston;
(e) the
table of contents and the headings are included for convenience only and shall
not affect the interpretation of this Agreement;
(f) a
“Schedule” is to a
Schedule attached to this Agreement;
(g) an
“Exhibit” is to an
Exhibit attached to this Agreement.
1.03 Certain
Definitions.
In
addition to the other terms defined in other clauses and whereas of this
Agreement, for the purposes of the same, the following words and terms shall
have the meaning set forth below:
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“Accountants”:
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shall
have the meaning ascribed to such term in Section 4.02(d)
below;
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“Accounting
Principles”:
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shall
mean the generally accepted accounting principles established by the
“Xxxxxxxxx Nazionale dei
Dottori Commercialisti e Xxxxxxxxx Nazionale dei Ragionieri”, as
further amended and integrated by the “Organismo Italiano di
Contabilità”, or in their absence, the international accounting
standards established by the International Accounting Standards
Board;
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“Affiliate”:
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shall
mean with respect to any person, an individual, corporation, partnership,
firm, association, unincorporated organization or other entity directly or
indirectly Controlling, Controlled by or under common Control with such
person;
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“Agreement”:
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shall
mean this stock purchase agreement and the Schedules and the Exhibits
attached to the same;
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“Amendments
to the Existing
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Product
Agreements”:
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shall
mean the amendments to the Existing Product Agreements to be executed
within the Closing Date and attached herewith as Exhibit
1.03(I);
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“Cash Purchase
Price”:
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shall
have the meaning ascribed to such term in Section
3.01(a);
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“Closing”:
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shall
mean the completion of the sale to, and purchase by, the Buyer of the
Quota (as hereinafter defined) and the completion of the Transaction
contemplated by this Agreement which are to occur simultaneously as
described in Article II herein
below;
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7
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“Closing Balance
Sheet”:
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shall
have the meaning ascribed to such term in Section 4.02(a)
below;
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“Closing Cash
Payment”:
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shall
mean US$17,055,000;
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“Closing
Date”:
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shall
have the meaning ascribed to such term in Section 2.02 herein
below;
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“Closing Net Working
Capital”:
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shall
have the meaning ascribed to such term in Section 4.02(a)
below;
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“Commercial
Agreements”:
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means
the following agreements:
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CA-1:
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Raw
Material Manufacture and Supply Agreement of Hyaluronic
Acid;
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CA-3:
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Services
Agreement;
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CA-5:
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Patent
License Agreement;
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CA-6:
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Trademark
License Agreement;
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CA-7:
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Marketing
Services Agreement;
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CA-8:
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Receivables
Management Agreement;
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final
drafts of which are attached herewith as Exhibit
1.03(II);
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“Company’s
Receivables”:
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shall
mean the accounts receivable of the Company as at the Closing Date in an
aggregate amount of Euro 2,000,000 as attached hereto as Exhibit
1.03(III) and to be reflected as such in the Closing Balance Sheet
and in the Closing Net Working
Capital;
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“Control”:
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shall
mean (i) the possession, directly or indirectly, of the power to direct
the management or policies of a person or to veto any material decision
relating to the management or policies of a person or a majority of the
composition of the board of directors (or similar governing body), in each
case, whether through the ownership of voting securities or a Subsidiary,
by contract or otherwise, or (ii) the beneficial ownership, directly or
indirectly, of at least 50% of the voting securities of a
person;
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“Cronofil &
Gellofil”:
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shall
mean the Cronofil and Gellofil products of the Company in respect of which
the Seller holds the right to obtain an own label brand CE registration
under the CE registration for such products held by the
Company;
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“Dispute
Notice”:
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shall
have the meaning ascribed to such term in Section 4.02(c)
below;
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“Employee”:
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shall
mean any employee who is on the payroll of the Company as at the date
hereof;
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8
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“Encumbrance”:
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shall
mean any mortgage, charge, pledge, lien, security interest or attachment
of any nature whatsoever, options, title retention, third party’s rights
or other security agreement or
arrangement;
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“Environment”:
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shall
mean any of the following media namely the air (including, without
limitation, the atmosphere as well as the air within buildings and other
natural or manmade structures whether above or below ground), water
(including, without limitation, surface and ground water and water within
pipes, drains or sewers) and land (including, without limitation, the
soil, sub-soil, sediment or other terrestrial material) and any organism
(including, without limitation, man) or ecological system supported by any
such media;
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“Environmental
Authorizations”:
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shall
mean any
permit, licence, authorization, approval or consent, agreements or
undertakings required under or in relation to Environmental Laws relating
to either the carrying on of the business of the Company, or the use of,
or any activities or operations carried out at, any site owned, occupied
or used by the Company;
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“Environmental
Authority”:
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shall
mean any governmental or regulatory agency or body with administrative
powers or jurisdiction in relation to Environmental Laws (as defined
below);
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“Environmental
Laws”:
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shall
mean all or any applicable law which have been adopted or given and/or are
in force at or prior to the date hereof including (i) any supranational
and national, federal, state or regional legislation, regulations or
directives, regional, state, provincial or local statutes or other laws or
legislation (including any rules, regulations or orders made thereunder);
(ii)any legally enforceable ordinances, notices, directives, circulars
permits, licences, permissions or consents made or issued under (i) above;
(iii) any civil code or case law; (iv) any judgments, notices, orders,
directions, instructions or awards of any Environmental Authority under
(i) to (iii) above, which have as a purpose or effect the protection of,
and/or prevention of harm or damage to the Environment and/or the
provision of remedies or compensation for harm or damage to the
Environment or which relate to emissions, discharges, releases or escapes
of Hazardous Materials (as defined below) into the Environment or to the
presence, production, processing, distribution, management, use, control,
treatment, storage, burial, disposal, transport or handling of Hazardous
Materials (as defined below) but excluding matters relating to health and
safety or to town and country
planning;
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“Environmental
Matters”:
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shall
mean, in relation to the business or acts or omissions of the Company or
to the real property rights or leases, all matters related to pollution or
protection of the Environment including, without limitation, emissions,
discharges and releases of any substances into the Environment or the
manufacture, processing, treatment, storage, presence, disposal, transport
or handling of any materials or substances which, whether alone or in
combination, are capable of causing material harm to the
Environment;
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9
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“Escrow
Agent”:
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shall
mean American Stock Transfer and Trust
Company;
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“Escrow
Agreement”:
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shall
mean the executed agreement among the Seller, the Buyer and the Escrow
Agent attached hereto as Exhibit
1.03(IV);
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“Escrow
Shares”:
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shall
mean initially no. 800,000 of the Shares to be decreased to 500,000 of the
Shares starting January 1, 2011 pursuant to the terms of the Escrow
Agreement;
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Balance
Sheet”:
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shall
have the meaning ascribed to such term in Section 4.01
below;
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Working
Capital”:
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shall
have the meaning ascribed to such term in Section 4.01
below;
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“Existing Product
Agreements”:
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shall
mean the Own Brand Label Products Agreement, the Italian Distributed
Products Agreement, the IAL-System ACP Agreement and the Woundcare
Agreement to be amended within the Closing Date pursuant to the Amendments
to the Existing Product Agreements;
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“Final Closing Balance
Sheet”:
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shall
have the meaning ascribed to such term in Section 4.02(b)
below;
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“Final Net Working
Capital”:
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shall
have the meaning ascribed to such term in Section 4.02(b)
below;
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“Financial
Statements”:
|
shall
mean the duly audited balance sheets, the profit and loss accounts, the
statements of stockholders’ equity, the statements of cash flows, the
explanatory notes and yearly board of directors reports of the Company for
the years ended on December 31, 2007 and December 31,
2008, attached to this Agreement as Exhibit 1.03(V)
as well as the Interim Financial Statements, prepared according to the
Accounting Principles on a basis consistent with the audited Financial
Statements;
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“Former
Sites”:
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shall
mean any
real estate property or leases which are currently not anymore owned,
occupied or used by the Company, but which were formerly so owned,
occupied or
used by Company;
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“Hazardous
Materials”:
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shall
mean all
natural or artificial substances or materials whether in a solid,
semi-solid, liquid, gaseous or vaporous form – including energy
(including, but not limited to, sound, vibration, heat and ionising and
non-ionising radiation) - which alone or in combination with other
substances are capable of causing harm to man or the environment or damage
to property, including but not limited to (i) any petroleum or petroleum
products, flammable, explosive or radioactive material, ozone depleting
substances, asbestos or polychlorinated biphenyls (PCBs) and (ii) any
substance, material or waste, which may be defined as, or is included in
the definition of, or deemed by any Environmental Law or any Environmental
Authority or agency to be, “hazardous”, “toxic”, a “contaminant”, “waste”,
a “pollutant”, a “hazardous substance”, “hazardous waste”, “restricted
hazardous waste”, “hazardous material”, “extremely hazardous waste”, a
“toxic substance”, a “toxic pollutant” or any other words with similar
meaning;
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10
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“IAL System
ACP”:
|
shall
mean the IAL System ACP product of the Company in respect of which the
Seller holds an own brand label CE registration under the CE registration
for such product held by the
Company;
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“IAL-System ACP
Agreement”:
|
shall
mean the agreement dated January 10, 2005 between the Seller and the
Company in respect of IAL-System ACP pursuant to which the Company sold
the rights related to the IAL-System ACP product CE registration and
undertook not to register such product for certain uses, subject to
certain limited exceptions, and to sell the product only as a vehicle for
cells or cell component under trademarks owned by the
Company;
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“Indemnified
Party”:
|
shall
have the meaning ascribed to such term in Section 8.04(b) herein
below;
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“Indemnifying
Party”:
|
shall
have the meaning ascribed to such term in Section 8.04(b) herein
below;
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Financial
Statements”:
|
shall
mean the balance sheets and profit and loss accounts of the Company for
the period starting from January 1, 2009 up to September 30, 2009 and for
the corresponding period in 2008 attached to this Agreement as Exhibit
1.03(VI);
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“Italian Distributed
Products”:
|
shall
mean the products Hyalofil, Hyalgran and Jaloskin in respect of which the
Company holds a CE registration;
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|
Products
Agreement”:
|
shall
mean the exclusive distribution agreement dated January 3, 2008 between
the Seller and the Company in respect of the Italian Distributed Products
pursuant to which the Seller was nominated exclusive distributor of the
Italian Distributed Products until 2023 in Italy, San Marino and the
Vatican State and to be amended within the Closing Date pursuant to the
Amendments to the Existing Product
Agreements;
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“Knowledge of the
Seller”:
|
shall
mean the actual knowledge of any of the Seller’s directors or executives
and/or the Company’s directors or
executives;
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11
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“Material Adverse
Effect”:
|
shall
mean with respect to the Seller, the Company or the Buyer as applicable
any fact, event, change, development or effect that is or would be
reasonably likely to be, individually or when taken in the aggregate,
materially adverse to (a) the business, assets, liabilities,
financial condition or results of operations of the Seller, the Company or
the Buyer as applicable (b) the ability of the Seller, the Company or
the Buyer as applicable to perform their or its obligations under this
Agreement or other Transaction Documents or to consummate the Transaction;
provided,
however,
that none of the following shall be deemed in itself, or in any
combination, to constitute, and none of the following shall be taken into
account in determining whether there has been or shall be, or would
reasonably be expected to be, a Material Adverse Effect: any fact, event,
change, development or effect resulting from or arising out of (i) the
economy or financial markets in general, provided that
such conditions do not have a substantially disproportionate effect on the
Seller, the Company or the Buyer as applicable as compared to similarly
situated companies, (ii) conditions generally affecting the pharmaceutical
or medical device industry, provided that
such conditions do not have a substantially disproportionate effect on the
Seller, the Company or the Buyer as applicable as compared to similarly
situated companies, (iii) the Transactions contemplated by this Agreement,
(iv) actions required to be taken under any changes to applicable laws,
provided
that such event does not have a substantially disproportionate effect on
the Seller, the Company or the Buyer as applicable as compared to
similarly situated companies, (v) acts of terrorism or war (whether or not
threatened, pending or declared), provided that
such event does not have a substantially disproportionate effect on the
Seller, the Company or the Buyer as applicable as compared to similarly
situated companies, (vi) the public announcement of this Agreement or the
Transactions contemplated hereby;
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“Material
Agreements”:
|
shall
have the meaning set forth in Section
6.01.23(a);
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“Net Working
Capital”:
|
shall
mean the net sum of total current assets of the Company minus total
current liabilities of the Company determined in accordance with the
Accounting Principles consistently applied with the accounting policies
and procedures used in the Financial Statements as specified in Exhibit
4.02;
|
|
“Notice of
Claim”:
|
shall
have the meaning ascribed to such term in Section 8.04(b) herein
below;
|
|
“Own Brand Label
Products”:
|
shall
mean Wet, Hyalofemme-Hyalogyn and Genaid products of the Company in
respect of which the Seller holds the right to obtain an own brand label
CE registration under the CE registration for such products held by the
Company;
|
|
Products
Agreements”:
|
shall
mean three worldwide exclusive licence and distribution agreements dated
December 17, 2001 between the Seller and the Company related to the Own
Brand Label Products scheduled to have an initial expiry date in 2017, but
renewable automatically for successive five year periods unless terminated
with one year prior notice and to be amended within the Closing Date
pursuant to the Amendments to the Existing Product
Agreements;
|
12
|
“Purchase
Price”:
|
shall
have the meaning ascribed to such term in Section 3.01
below;
|
|
“Quota”:
|
shall
mean the quota, equaling to 100% of the outstanding capital stock of the
Company and owned by the Seller;
|
|
“Registration Rights
Agreement”:
|
shall
mean the agreement a final draft of which is attached herewith as Exhibit
1.03(VII);
|
|
“Seller’s
Receivables”:
|
shall
mean the accounts receivable of the Seller towards the Company as at the
Closing Date in an aggregate amount of Euro 2,000,000 attached hereto as
Exhibit
1.03(VIII) as will be reflected in the Closing Balance Sheet and in
the Closing Net Working Capital;
|
|
“Shares”:
|
shall mean 1,981,192 shares of Buyer’s
common stock, par value US$ 0.01 per
share;
|
|
“Shares Purchase
Price”:
|
shall
have the meaning ascribed to that term in Section
3.01(b);
|
|
“Tax”:
|
shall
mean any and all, state, local, regional, tax or withholding tax of any
nature, including, but not limited to, all taxes, on income (e.g. the
corporate income tax, “IRES”), on operating profit (e.g. the local
operating profit tax, “IRAP”), on gross receipts, sales, use, value added,
importation and exportation of goods and services, registration of acts or
documents, license, payroll, employment, severance, stamp, occupation,
environment, franchise, profits, social security (or similar),
unemployment disability, real estate property, personal property or assets
together with all penalties, charges and interests relating to any of
them;
|
|
“Transaction”:
|
shall
mean, collectively, all the transactions described in Article II
below;
|
|
“Transaction
Documents”:
|
means
this Agreement, the schedules and exhibits attached hereto, the Commercial
Agreements, Escrow Agreement, the Registration Right Agreement, the
Amendments to the Existing Product Agreements and any other
documents or agreements explicitly contemplated
hereunder;
|
|
“Trademark
Family”:
|
shall
mean the Hyal™-IAL HIAL family of
trademarks;
|
|
“Working Capital
Adjustment”:
|
shall
have the meaning ascribed to such term in Section 4.03
below;
|
|
Agreements”:
|
shall
mean the integration agreement dated January 3, 2008 in respect of
Cronofil & Gellofil and the agreement dated January 10, 2005 pursuant
to which the Seller acquired the right to obtain an own brand label CE
registration for Hyalofill-F, Hyalofill-R, Hyalogran, Jaloskin,
Hyalomatrix, Hyalomatrix P.A. and exclusive royalty-free distribution
rights for Italy, San Marino and the Vatican State as such agreements will
be amended within the Closing Date pursuant to the Amendments to the
Existing Product Agreements.
|
13
ARTICLE
II
The
Transaction
2.01 The Sale and Purchase
of the Quota.
The Seller
hereby agrees to sell and transfer to the Buyer, and the Buyer hereby agrees to
buy and be transferred from the Seller, on the Closing Date, the Quota,
including any rights ancillary thereto, for the Purchase Price as per Article
III below.
2.02
Closing Date.
The
Closing shall be on December 30, 2009 (the “Closing Date”) in the offices
of Notary Xxxxxx Xxxxxxx (the “Notary”) in
Milan
2.03 Closing
Obligations.
(a) On
the Closing Date:
|
|
(i)
|
the
Seller shall deliver to Buyer an executed copy signed in original of the
Amendments to the Existing Product
Agreements;
|
|
|
(ii)
|
the
Seller shall deliver to Buyer an executed copy signed in original of the
transfer of product registration agreement and the trademark transfer
agreements attached hereto as Exhibit
2.03(a)(ii);
|
|
|
(iii)
|
the
Seller shall provide written evidence that before the Closing Date all
loans from Seller or any Affiliate of the Seller to the Company and any
other amounts owned by the Company to the Seller or any Affiliate of the
Seller other than the Seller’s Receivables have been
forgiven;
|
|
|
(iv)
|
the
Seller shall provide written evidence that at the Closing Date (a) the
Seller’s Receivables and the Company’s Receivables are both equal to Euro
2,000,000 and (b) that the Company’s available cash is equal to at least
Euro 500,000;
|
|
|
(v)
|
the
Seller and the Buyer shall execute before the Notary, which shall be
appointed by the Buyer or such other notary public as may be agreed by the
Parties, a notarial deed of transfer relating to the sale of the Quota
pursuant to Article 2470 of the Italian Civil Code substantially in the
form attached as Exhibit
2.03(a)(v); (the “Deed of
Transfer”);
|
|
|
(vi)
|
the
Seller, the Buyer and the Escrow Agent shall execute the Escrow
Agreement;
|
|
|
(vii)
|
the
Buyer shall issue the Shares to the
Seller;
|
|
|
(viii)
|
the
Buyer shall pay to the Seller the Purchase Price, all in accordance with
the provisions of Section 3.02 herein
below;
|
14
|
|
(ix)
|
the
Seller and the Buyer shall execute the Registration Rights
Agreement;
|
|
|
(x)
|
the
Seller and the Buyer shall jointly instruct the Notary to effect the
formalities of the file of the Deed of Transfer with the Company Register
pursuant to Article 2470, second paragraph, of the Italian Civil
Code;
|
|
|
(xi)
|
the
Parties shall execute the Commercial Agreements which shall become
effective; and
|
|
|
(xii)
|
the
Buyer shall provide written evidence that a waiver has been given under
its principal financing agreement in respect of the
Transaction.
|
(b) The
Transaction and, therefore, all the activities indicated in Section 2.03(a)
above and in Section 2.04 below are deemed to be essential and shall occur
simultaneously. The Parties hereby expressly agree that the sale, purchase,
transfer and assignment of the Quota under this Agreement shall be effective
from the Closing Date only upon completion of all formalities above
described.
(c) The
Parties hereby expressly agree that the execution of the Deed of Transfer
pursuant to Section 2.04(a)(v) above of this shall not be construed as
constituting a novation (novazione) of this Agreement,
but as constituting mere execution of the obligations of the Parties hereunder,
it being understood that to such purpose Articles 1230 and following of the
Italian Civil Code shall not apply.
2.04 Board of directors
resignations and quotaholders meeting.
On the
Closing Date:
(a) the
Seller shall deliver to Buyer the letters evidencing the irrevocable
resignations, effective date as of the Closing Date, of all the directors of the
Company, confirming that they do not have against the Company any claim of any
nature whatsoever arising from their office, and that any accrued directors’
fees has been entirely paid before Closing;
(b) the
Seller shall hold an ordinary quotaholder meeting that shall appoint the new
board of directors of the Company as specified in Exhibit
2.04(b).
2.05
Receivables of the Company.
The
Parties acknowledge that certain receivables of the Company have been assigned
to the Seller prior to Closing. The Buyer covenants to procure that the Company
will cooperate in good faith with the Seller in fully informing the relevant
customers so that payments are made to the Seller and to the extent following
the Closing Date that any payments are received by the Company in respect of
such receivables, such amounts will be promptly forwarded by the Company to the
Seller.
ARTICLE
III
The Purchase
Price
3.01 The Purchase
Price.
The
Parties hereby represent and acknowledge that the purchase price which is
payable as described below to be paid by the Buyer to the Seller for the Quota
(the “Purchase Price”)
shall be equal to:
15
(a) the
Closing Cash Payment subject to the adjustments referred to in Article IV (the
“Cash Purchase Price”);
plus
(b) the
Shares of Buyer’s common stock (the “Shares Purchase
Price”).
3.02 Payment of the Purchase
Price.
(a)
At the Closing, the Closing Cash Payment shall be paid by the Buyer to the
Seller in immediately available funds by wire transfer to the account of the
Seller indicated in Exhibit 3.02, subject to adjustments as provided in Article
IV.
(b)
At the Closing, the Buyer will deliver or cause to be delivered to the Seller
no. 1,181,192 of the Shares under Seller’s name which shall consist of the
balance of the Shares minus the Escrow Shares.
(c)
At the Closing, and subject to and in accordance with the provisions hereof and
the Escrow Agreement, the Buyer will deposit or cause to be deposited the Escrow
Shares into an escrow account with the Escrow Agent.
3.03
Dividends.
Starting
from the Closing Date, the payment of all the dividends pertaining to: (a) the
Quota, if any, will
be entirely for the benefit of the Buyer; and (b) the Shares, if any, will be
entirely for the benefit of the Seller.
3.04 Seller’s
Undertakings
|
(a)
|
The
Seller undertakes to duly and promptly instruct the Escrow Agent to
release the Escrow Shares if no Notice of Claim is made by the date
falling 18 months after the Closing
Date.
|
|
(b)
|
The
Seller undertakes not to delay in the issue of shares certificates, as
provided for in Section 3(c) of the Escrow
Agreement.
|
ARTICLE
IV
Purchase Price
Adjustment
4.01 Estimated Closing
Balance Sheet - Estimated Net Working Capital.
The Seller
has prepared (A) an estimated closing balance sheet, reflecting thereon the
Seller’s best estimate of all balance sheet items of the Company (the “Estimated Closing Balance
Sheet”) as at December 30, 2009 and (B) the Net Working Capital of the
Company as at December 30, 2009 based on the Estimated Closing Balance Sheet
(the “Estimated Net Working
Capital”) plus all supporting details. The Estimated Closing
Balance Sheet and the Estimated Net Working Capital are attached herewith as
Exhibit 4.01
and have been prepared in accordance with the Accounting Principles,
consistently applied with the Financial Statements.
4.02 Preparation of the
Final Closing Balance Sheet.
(a) As
promptly as practicable, but no later than Febraury 9, 2010, the Seller shall
prepare and deliver to the Buyer (A) a balance sheet of the Company as of
December 30, 2009 (the “Closing
Balance Sheet”) plus all supporting details and (B) the Net Working
Capital of the Company based on the Closing Balance Sheet and to be calculated
on the basis of Exhibit 4.02 (the
“Closing Net Working
Capital”). The Closing Balance Sheet and the Closing Net Working Capital
shall be prepared in accordance with the Accounting Principles consistently
applied with the Financial Statements.
16
(b) Unless
the Buyer delivers the Dispute Notice (as defined below) within 10 days after
receipt of the Closing Balance Sheet, such Closing Balance Sheet shall be deemed
the “Final Closing Balance
Sheet” and the related Closing Net Working Capital shall be deemed the
“Final Net Working
Capital” and both shall be
binding upon the Parties and shall not be subject to dispute or review for
purposes of this Section only.
(c) If
the Buyer disagrees with the Closing Balance Sheet and/or the Closing Net
Working Capital, the Buyer may, within 10 days after receipt thereof, notify the
Seller in writing (hereinafter the “Dispute Notice”), which
Dispute Notice shall provide reasonable detail of the nature of each disputed
item on the Closing Balance Sheet and/or the Closing Net Working Capital,
including all supporting documentation thereto, and the Buyer shall be deemed to
have agreed with all other items and amounts contained in the Closing Balance
Sheet and/or the Closing Net Working Capital delivered pursuant to this Section
4.02. The Parties shall first use commercially reasonable efforts to
resolve such dispute between themselves and, if they are able to resolve such
dispute, the Closing Balance Sheet shall be revised to the extent necessary to
reflect such resolution, shall be deemed the Final Closing Balance Sheet (as
defined below) and the Closing Net Working Capital shall be revised to the
extent necessary to reflect such resolution and shall be deemed the Final Net
Working Capital (as defined below) and, for purposes of this Section only, shall
be conclusive and binding upon the Parties and shall not be subject to dispute
or review.
(d) If
the Parties are unable to resolve the dispute within 10 days after receipt by
Seller of the Dispute Notice, the Parties shall submit the dispute to Deloitte,
Milan Office (the “Accountants”). The
Accountants shall act as experts and not arbiters and shall determine only those
items in dispute on the Closing Balance Sheet and/or the Closing Net Working
Capital. Promptly, but no later than 15 days after engagement, the
Accountants shall deliver a written report to the Parties as to the resolution
of the disputed items, the resulting Closing Balance Sheet and the resulting
calculation of Closing Net Working Capital to be calculated on the basis of
Exhibit
4.02. The Closing Balance Sheet and the Closing Net Working
Capital as determined by the Accountants shall be deemed the “Final Closing
Balance Sheet” and the “Final Net Working Capital” respectively, shall be
conclusive and binding, for purposes of this Section only, upon the Parties and
shall not be subject to dispute or review, for purposes of this Section
only. The fees and expenses of the Accountants in connection with the
resolution of disputes pursuant to this Section 4.02 shall be paid by (A) the
Seller, if Buyer’s calculation of the portion of the Closing Net Working
Capital in dispute is closer to the Accountants’ determination than
the Seller’s calculation thereof, (B) Buyer, if the reverse is true or (C)
except as provided in clauses (A) or (B) above, equally by the
Parties. The Parties will, and agree to cause their respective
representatives and independent accountants to cooperate and assist in the
preparation of the Closing Balance Sheet and/or the Closing Net Working Capital
and in the conduct of the audits and reviews referred to in this Section 4.02,
including, without limitation, the making available to the extent necessary of
books, records, work papers and personnel.
4.03 Working Capital
Adjustment.
The
Closing Cash Payment shall be adjusted, Euro for Euro, up or down, as
appropriate, to the extent that the Final Net Working Capital is greater than or
less than the Estimated Net Working Capital, as applicable (the “Working Capital Adjustment”).
Within three Business Days following determination and acceptance of the Final
Closing Balance Sheet, (A) if the Final Net Working Capital is less than the
Estimated Net Working Capital, Seller shall pay to Buyer an amount equal to the
difference between such amounts (B) if the Final Net Working Capital is greater
than the Estimated Net Working Capital, Buyer shall pay to the Seller the
difference between the Final Net Working Capital and the Estimated Net Working
Capital.
17
4.04 Cash
Availability.
In the
event Final Closing Balance Sheet reports an available amount of cash of the
Company lower than Euro 500,000, the Seller shall pay to the Buyer, Euro per
Euro, within three Business Days following determination and acceptance of the
Final Closing Balance Sheet, an amount equal to the difference between Euro
500,000 and the available amount of cash of the Company resulting from the Final
Closing Balance Sheet.
In the
event the Seller is required to make a cash payment to the Buyer under this
Section 4.04, any such payment, to the extent actually made by the Seller to the
Buyer, shall be taken into account in the determination of the Final Closing
Balance Sheet and the Final Net Working Capital.
ARTICLE
V
Representations and
Warranties of the Buyer
5.01 Representations and
Warranties of the Buyer.
Except as
disclosed in the SEC Reports or as set forth in the Schedules delivered herewith
which shall be deemed a part hereof and shall qualify any representation made
herein to the extent of the disclosure contained in the corresponding section of
the Schedules, the Buyer hereby makes to the Seller the representations and
warranties as of the date hereof (except for the representations and warranties
that speak as of a specific date, which shall be made as of such date) as listed
and specified in this Article V.
5.01.1 Good Standing –
Authority.
The Buyer
is a corporation validly existing, duly incorporated and in good standing under
the laws of the Commonwealth of Massachusetts; the Buyer has all necessary
corporate powers to enter into this Agreement and to perform any and all of its
obligations under this Agreement and the other Transaction Documents to which it
is a party, and the person who has executed this Agreement on behalf of the
Buyer is a duly authorised representative of the same vested with full powers to
bind it in relation to any and all of such obligations and each of the other
Transaction documents to which it is a party.
5.01.2 No Bankruptcy
Proceedings.
The Buyer
is validly existing and no liquidator, administrative receiver, administrator or
similar officer has been appointed in respect of it and no action is currently
being taken with a view to appoint any such liquidator, receiver, administrative
receiver, administrator or similar officer; the Buyer has not agreed to the
assignment of its assets (or any part of them) for the benefit of its creditors.
There is no action or proceeding now pending or threatened in writing to
dissolve the Buyer or to declare its respective corporate rights and powers, or
any of them, to be null and void or to declare that it or its board of directors
or any of its directors, officers, agents or employees has or have exceeded or
violated any of its corporate rights or powers.
5.01.3 No Third Party
Consent.
Except as
disclosed in Schedule
5.01.3, no consent, license, permit, certificate, registration, approval,
or authorization is necessary on the part of any governmental agency, third
parties or of any creditors of the Buyer for the execution of this Agreement or
of the Transaction contemplated hereby except as would not individually or in
the aggregate, have or reasonably be expected to result in a Material Adverse
Effect.
5.01.4 No
Breach.
Except as
disclosed in Schedule
5.01.4, the execution of this Agreement by the Buyer and the Transaction
contemplated by this Agreement will not result in breach or violation of any of
the provisions of, or constitute a default under, or conflict with, violate, or
cause the acceleration or the revocation, termination, modification of, any
obligation or right of the Buyer under: (i) the articles of organization of the
Buyer; (ii) any governmental order applicable to the Buyer or any of its assets,
properties or businesses; (iii) any Material Contract executed by the Buyer;
(iv) any judgment, injunction, decree, order or award of any court, governmental
body or arbitrator having jurisdiction over the Buyer; or (iii) any applicable
law, except in each case as would not, individually or in the aggregate, have or
reasonably be expected to result in a Material Adverse Effect.
18
5.01.5 Knowledge of
Misrepresentations or Omissions
The Buyer
does not have any actual knowledge that any of the warranties of the Seller made
in Article VI of this Agreement are not true and correct.
5.01.6 Public
Information.
Since
January 1, 2008 the Buyer has filed all reports, schedules, forms, statements
and other documents required to be filed by it under the Exchange Act, including
pursuant to Section 13(a) or 15(d) thereof (the foregoing materials, including
the exhibits thereto and documents incorporated by reference therein, being
collectively referred to herein as the “SEC Reports”, and the SEC
Reports, together with the disclosure schedules, being collectively referred to
as the “Disclosure
Materials”). As of their respective filing dates, or to the
extent corrected by a subsequent restatement, the SEC Reports complied in all
material respects with the requirements of the Securities Act and the Exchange
Act and the rules and regulations of the Commission promulgated thereunder, and
none of the SEC Reports, when filed, contained any untrue statement of a
material fact or omitted to state a material fact required to be stated therein
or necessary in order to make the statements therein, in light of the
circumstances under which they were made, not misleading.
5.01.7 Financial
Statements.
The
financial statements of the Buyer included in the SEC Reports complied in all
material respects with applicable accounting requirements and the rules and
regulations of the Commission with respect thereto as in effect at the time of
filing (or to the extent corrected by a subsequent restatement). Such
financial statements have been prepared in accordance with US GAAP applied on a
consistent basis during the periods involved, except as may be otherwise
specified in such financial statements or the notes thereto or otherwise
permitted by SEC disclosure requirements, and fairly present in all material
respects the financial position of the Buyer and its consolidated subsidiaries
taken as a whole as of and for the dates thereof and the results of operations
and cash flows for the periods then ended, subject, in the case of unaudited
statements, to normal, immaterial year-end audit adjustments.
5.01.8
Taxes.
The Buyer
(i) has accurately and timely prepared and filed all foreign, federal and state
income and all other tax returns, reports and declarations required by any
jurisdiction to which it is subject, (ii) has paid all taxes and other
governmental assessments and charges that are material in amount, shown or
determined to be due on such returns, reports and declarations, except those
being contested in good faith, with respect to which adequate reserves have been
set aside on the books of the Buyer and (iii) has set aside on its books
provisions reasonably adequate for the payment of all taxes for periods
subsequent to the periods to which such returns, reports or declarations apply,
except, in the case of each of the clauses above, where the failure to so pay or
file any such tax, assessment, charge or return would not have or reasonably be
expected to result in a Material Adverse Effect.
5.01.9
Litigation.
Other than
those listed in Schedule 5.01.9,
there are no claims, actions, suits, proceedings or investigations pending or
threatened in writing and received in writing or otherwise before any court or
governmental or regulatory or administrative authority, domestic or foreign, or
before any arbitrator of any nature to which the Buyer is a party which would
have a Material Adverse Effect.
19
5. 01.10 The
Shares.
All
consents required to be obtained by the Buyer necessary for the issuance of the
Shares to the Seller have been obtained or will be obtained by the Closing
Date.
At the
Closing, the Shares will have been duly authorized and, when issued in
accordance with the terms of this Agreement and the Transaction Documents, will
be duly and validly issued, fully paid and non assessable and free and clear of
all Encumbrances other than as provided for in the Transaction Documents or
imposed by applicable securities laws, and are not subject to rights of first
refusal or preemptive or similar rights. The issuance of the Shares in
accordance with the terms of this Agreement and the Transaction Documents,
assuming the accuracy of the Seller’s representations contained in Section
6.01.35, will be in compliance with all applicable U.S. federal and state
securities laws. Upon delivery of the Shares to the Seller on the Closing Date,
good and valid title to the Shares will pass to the Seller. The
Shares shall have the benefit of all rights associated with the Buyer’s common
stock under the Buyer’s organizational documents and applicable law, including,
for the avoidance of doubt, the right to dividends, if any, that are declared or
paid by the Buyer in respect thereof after the date of this
Agreement.
5.01.11 Investment
Company.
The Buyer
as a result of the offer and sale of the Shares, will not become, an “investment
company” under, and as such term is defined in, the U.S. Investment Company Act
of 1940 (the “Investment
Company Act”).
5.01.12 No Public Offering
in Italy.
No action
has been taken or will be taken in any jurisdiction by the Buyer or by any of
its affiliates (as defined in Rule 405 under the Securities Act) that would
permit or require a public offering of the Shares in the Republic of
Italy.
5.01.13 Employment
Matters.
No
material labor dispute exists or, to the actual Buyer’s knowledge, is imminent
with respect to any of the employees of the Buyer which would have or reasonably
be expected to result in a Material Adverse Effect. None of the
Buyer’s employees is a member of a union that relates to such employee’s
relationship with the Buyer, the Buyer is not a party to a collective bargaining
agreement.
5.01.14 Permits.
Except as
disclosed in Schedule
5.01.14, the Buyer possess all certificates, authorizations and permits
issued by the appropriate federal, state, local or foreign regulatory
authorities necessary to conduct its respective business as currently conducted
and as described in the SEC Reports, except where the failure to possess such
permits, individually or in the aggregate, has not and would not have or
reasonably be expected to result in a Material Adverse Effect (“Material Permits”), and the
Buyer has not received any written notice of action or proceeding relating to
the revocation or modification of any such Material Permits.
20
5.01.15 Internal Accounting
Controls.
The Buyer
maintains a system of internal accounting controls with respect to its business
sufficient to provide reasonable assurance that (1) transactions are executed in
accordance with management’s general or specific authorisations; (2)
transactions are recorded as necessary to permit preparation of financial
statements in conformity with generally accepted accounting principles and to
maintain asset accountability; (3) access to assets is permitted only in
accordance with management’s general or specific authorisation; and (4) the
recorded accountability for assets is compared with the existing assets at
reasonable intervals and appropriate action is taken with respect to any
differences, all in compliance with the guidelines set out by the SEC and other
relevant authorities in the United States.
5.01.16 No
Material Adverse Change.
Except as
disclosed in Schedule
5.01.16, since the date of the latest audited financial statements
included within the SEC Reports of the Buyer, except as specifically disclosed
in a subsequent SEC Report filed prior to the date hereof, there have been no
events, occurrences or developments that have had or would reasonably be
expected to have, either individually or in the aggregate, a Material Adverse
Effect.
5.01.17
Brokers.
Except as
disclosed in Schedule
5.01.17, the Buyer has not entered into any contract, arrangement or
understanding with any person or firm that may result in the obligation of the
Buyer to pay any finder’s fees, brokerage or agent’s commissions or other like
payments in connection with the Transaction and any Transaction Documents
contemplated in this Agreement.
5.01.18 Private
Placement.
Assuming
the accuracy of the Seller’s representations and warranties set forth in this
Agreement, no registration under the Securities Act is required for the offer
and sale of the Shares by the Buyer to the Seller under this Agreement and the
Transaction Documents.
5.01.19 Restrictions on
Dividend Payment.
Except as
set forth in the Buyer’s SEC Reports and in the agreements listed thereto, the
Buyer is not currently prohibited, directly or indirectly, from paying any
dividends to its shareholders, or from making any other distribution on its
capital stock.
5.01.20
Capitalization.
The number
of shares and type of all authorized, issued and outstanding capital stock,
options and other securities of the Buyer as of December 28, 2009 is
12,581,787. The Buyer has not issued any capital stock since the date of
its most recently filed SEC Report other than to reflect stock
option exercises and vesting of restricted stock.
5.01.21 Compliance with
Law.
(a) The
operations of the Buyer are conducted and since January 1, 2008 have been
conducted in compliance with all applicable laws, regulations, orders and other
requirements of all courts and other governmental or regulatory authorities
having jurisdiction over the Buyer save to the extent that would not have a
Material Adverse Effect.
(b) Since
January 1, 2008 up to the date hereof, the Buyer has not received a written
notification of any material violation of any such law, regulation, order or
requirement except for such violations or defaults listed in Schedule 5.01.21 or
as disclosed in the SEC Reports.
21
5.02 Certain
definitions.
For
purposes of this Article V only the following terms shall have the following
meaning:
“Commission” means the United
States Securities and Exchange Commission.
“Securities Act” means the
Securities Act of 1933, as amended, or any successor statute, and the rules and
regulations promulgated thereunder.
“Exchange Act” means the
Securities Exchange Act of 1934, as amended, or any successor statute, and the
rules and regulations promulgated thereunder.
“Material Contract” means any
contract of the Company that has been filed or was required to have been filed
as an exhibit to the SEC Reports pursuant to Item 601(b)(4) or Item 601(b)(10)
of Regulation S-K.
ARTICLE
VI
Representations and
Warranties of the Seller
6.01 Representations and
Warranties of the Seller.
The Seller
makes to the Buyer the representations and warranties as listed and specified in
this Article VI.
6.01.1 Good standing –
Authority.
The Seller
is a corporation validly existing and duly incorporated under the laws of Italy;
the Seller has all necessary corporate powers to enter into this Agreement and
to perform any and all of its obligations under this Agreement, and the person
who has executed this Agreement on behalf of the Seller is a duly authorised
representative of the same vested with full powers to bind it in relation to any
and all of such obligations and each of the other transaction documents to which
it is a party.
6.01.2 No Bankruptcy
Proceedings.
No
liquidator, administrative receiver, administrator or similar officer has been
appointed in respect of Seller and/or the Company to the Knowledge of the Seller
and no action is currently being taken with a view to appoint any such
liquidator, receiver, administrative receiver, administrator or similar officer;
the Seller has not agreed to the assignment of its assets (or any part of them)
for the benefit of its creditors. There is no action or proceeding now pending
or threatened in writing that has been received, to dissolve the Seller and/or
the Company or to declare that it or its board of directors or officers has
exceeded or violated any of its corporate powers.
6.01.3 No breach – No Third
Party Consent.
The
execution of this Agreement and the Transaction contemplated by this Agreement
will not result in breach or violation of any of the provisions of, or
constitute a default under, or conflict with, violate, or cause the acceleration
or the revocation, termination, modification of, any obligation or right of the
Seller and/or the Company under: (i) the corporate documents of the Seller
and/or the Company; (ii) any law or governmental order applicable to the Seller
and/or the Company or any of their respective assets, properties or businesses;
(iii) any judgment, injunction, decree, order or award of any court,
governmental body or arbitrator having jurisdiction over the Seller and/or the
Company; (iv) any license, permit, certificate, registration, approval, consent
or authorisation necessary to the ownership of the Quota or to the conduct of
the business of the Seller and/or the Company of this Section and/or (v) save as
disclosed in the Material Agreements or as listed in Schedule 6.01.3, any
contract, agreement or other arrangement executed by the Seller and/or the
Company; to an extent that would have, in the cases under (ii), (iii), (iv) and
(v), a Material Adverse Effect.
22
By way of
exception to the above, in case of termination of the Project Disc Regeneration
agreements as a consequence of the Transaction, the Seller acknowledges and
accepts to keep the Buyer indemnified from any cost, expense, penalty or amount
that the Buyer and/or the Company is required to pay or return as a consequence
of such termination.
6.01.4 Title to
Quota.
The Seller
is, and on Closing Date will be, the sole registered and beneficial owner of the
Quota, with full legal title to the Quota. On Closing Date, Seller will be
entitled to sell or cause the transfer of the full legal ownership of the Quota
to Buyer.
The Quota
is, and on Closing Date will be, free from any Encumbrances and on the Closing
Date there will be no outstanding options, warrants, agreements, conversion
rights, pre-emption rights or other rights to subscribe for purchase or
otherwise acquire the Quota or part of the Quota, including shareholders’
agreements and/or voting syndicates and/or block syndicates.
Upon
consummation of the Transaction in accordance with the terms of this Agreement,
the Buyer will hold good and marketable title to all of the Quota purchased from
the Seller herein, free and clear of any Encumbrances whatsoever.
6.01.5 Title to
dividend.
The Seller
has no continuing right to cash a dividend declared or distributed by the
Company in relation to the Quota and concerning the current corporate year or
prior corporate years.
6.01.6
Subsidiaries.
Other than
the participations to consortium listed in a Schedule 6.01.6, the
Company does not, and on Closing Date will not, own any participation and/or
interest in any company and/or subsidiary.
6.01.7 Corporate
capital.
The issued
and outstanding corporate capital of the Company is equal to Euro 1,848,915.00
and is represented by the Quota. All such issued and outstanding corporate
capital has been duly authorised and is fully paid and owned as indicated in the
first WHEREAS.
There is
no other authorised or pending corporate capital nor any securities of the
Company convertible with or exchangeable for any of its quota nor other
securities of the Company or subscriptions, options, warrants or other rights
entitling any person to acquire from the Company or the Seller the Quota or part
of it or other securities of the Company.
6.01.8 Good
Standing.
(a) The
Company is a corporation validly existing and duly incorporated under
the Italian law.
(b) The
Company is not, nor has been since January 1, 2008, engaged in other business or
activities other than those recalled in the second WHEREAS.
(c) The
Company has all necessary powers and authority to own, operate or lease the
properties and assets now owned, operated or leased by the Company and to carry
on the business as it is currently conducted.
23
Since
January 1, 2008, all material corporate actions taken by the Company have been
duly authorised and the Company has not taken any action that, in any material
respect, conflicts, constitutes a default under or results in any violation of,
any provision of its by-laws. The Company is duly licensed and/or qualified to
do its business in Italy and no material licenses and/or qualification are
needed in any other jurisdictions where the Company conducts its
business.
6.01.9 Financial
Statements.
The
Financial Statements: (i) have been prepared in accordance with the Accounting
Principles consistently applied; (ii) are true and correct; (iii) fairly
represent the assets, liabilities (“situazione patrimoniale”),
financial position and results of the Company as at the date and for the period
covered thereby.
6.01.10
Inventory.
On Closing
Date, the Company will have quantities of saleable inventory that are reasonable
for the ordinary conduct of the business in a manner consistent with the past
practice. The inventory comprised of such materials, works in process and
finished goods as are necessary for the present conduct of the business of the
Company has been purchased in accordance with past practice and the volumes of
purchases and orders therefore have not been reduced or increased in
anticipation of the transactions contemplated by this
Agreement.
6.01.11 Books and
records.
Since
January 1, 2008, all books and records of the Company have been fully, properly
and accurately kept and completed in accordance with any applicable
law.
6.01.12 Conduct of
business.
Other than
those listed in Section 2.03(a), since December 31, 2008, the Company’s business
has been carried on in the ordinary course and in a manner consistent with past
practice. Particularly, until the date hereof there has not been:
(a) any
(i) material adverse change in the Company’s financial conditions, results of
operation, assets, properties, liabilities or business activities and (ii) event
or circumstance with respect to the Company’s assets, business and properties
that threaten to disrupt, prevent, impair or otherwise materially and adversely
affect the conduct and operations of the Company;
(b) except
as reserved for or reflected in the Interim Financial Statements as of September
30, 2009, any direct or indirect redemption or other acquisition by the Company
of any share or quota of any company, or any declaration, setting aside or
payment of any dividend or other distribution in respect of its capital
stock;
(c) any
issuance of quota of capital by the Company;
(d) any
grant of any option to purchase, or other right to acquire, a quota of the
Company, granted to any person (other than the rights granted under the
Agreement);
(e) any
increase in the compensation payable or to become payable by the Company to any
of its directors, officers, employees or agents, other than the increases
granted in the ordinary course of business (which consist of normal periodic
performance reviews and related compensation and benefit
increases);
24
(f) any
new employment, bonus or deferred compensation agreement entered by and amongst
the Company and any of their directors, officers, agents or other employees or
consultants or any payment of bonuses or commissions of any nature whatsoever by
the Company;
(g) any
amendment of the by-laws of the Company;
(h) the
imposition of any Encumbrance with respect to the assets, tangible or
intangible, of the Company, other than those arising in the ordinary course of
business;
(i) any
commitment of Seller and/or Seller’s Affiliates and/or the Company to buy/sell
fixed assets owned by the Company;
(j) any
acquisition or disposition of, or commitment to acquire or dispose of, any
property or asset other than those arising in the ordinary course of business or
any entry into or commitment to enter into any such contract, agreement or
commitment, by the Company, individually in excess of Euro
20,000.00;
(k) any
change in the accounting methods, principles or practices of the Company, other
than those agreed in writing with Buyer;
(l) any
merger or corporate reorganization of any kind;
(m) any
transfer or sale of the inventory of the Company other than any sale which is in
the ordinary course of business;
(n) any
release of, or compromise with reference to, any accounts receivable of the
Company other than those carried out in the ordinary course of business
consistent with past practice;
(o) any
amendment or termination of agreements of the Company, or any waiver of any
other rights of substantial value to the Company;
(p) any
material indebtedness;
(q) any
assignment of any credit, either pro soluto or pro solvendo;
(r) any
agreement, whether in writing or otherwise, to take any of the actions specified
in this Section 6.01.12 or any grant of any options to purchase, rights of first
refusal, rights of first offer or any other similar rights with respect to any
of the actions specified in this Section 6.01.12.
6.01.13
Guarantees.
Save as
set out in Schedule
6.01.13 or as specifically referred to in the Financial Statements, as of
the date hereof, (i) the Company has no outstanding issued guarantees and/or
patronage letters in favor of any third party including the Seller and (ii) the
Seller or its subsidiaries have not issued or granted any guarantees,
performance bonds, patronage letters or any other security with respect to any
obligation or liability of the Company.
6.01.14
Litigation.
Other than
those listed in Schedule 6.01.14,
there are no claims, actions, suits, proceedings or investigations pending or
threatened in writing and received or otherwise before any court or governmental
or regulatory or administrative authority, domestic or foreign, or before any
arbitrator of any nature to which the Company is a party which would have a
Material Adverse Effect.
25
6.01.15 Labour
matters.
(a) Schedule 6.01.15(a)
lists by name all Employees of the Company and evidences who holds as of the
date hereof any power of attorney to represent the Company before any relevant
authority including any pharmaceutical authority.
(b) As
regards to labour matters:
(i) the
Company is in compliance with all applicable laws and collective bargaining
agreements governing labour, employment and employment practices, terms and
conditions of employment, wages, hours and benefits and health and safety laws
and/or any other applicable contractual provisions;
(ii) the
Company is not delinquent in payments to any such Employees for any wages,
salaries, commissions, bonuses, benefits or other direct or indirect
compensation for any services performed to the date hereof or amount required to
be reimbursed to such Employees agents or consultants;
(iii) up
to the date hereof no Employee has performed or currently performs tasks which
are not substantially corresponding to those prescribed by the relevant
provisions of the collective bargaining agreements and of its individual
employment agreement;
(iv) there
is no labour strike actually pending or, at the Knowledge of the Seller and the
Company, threatened in writing, against or involving the Company;
(v) other
than as required by the law or by any applicable individual or collective
bargaining agreement, there is no Employee bonus, stock option, incentive,
deferred compensation, retiree medical or life insurance, supplemental
retirement, pension or severance plans to which the Company is party or which
are maintained, contributed to or sponsored by the Company for the benefit of
the Employees;
(vi) the
Company has: (1) paid with to the competent authorities all compulsory social
welfare and social security funds and provided to such authorities any requested
document concerning the same (also in relation to their agents); (2) totally
paid or, as the case may be, allocated in the Financial Statements the TFR
(trattamento di fine
rapporto); and (3) withheld and paid to the competent authorities the
total contributions and taxes to be withheld from the paid wages and (4) duly
calculated and accrued in compliance with any applicable laws or contractual
provision the termination indemnity funds (“fondo indennità e preavviso e
cessazione dei rapporti di agenzia e di indennità suppletiva di
clientele”);
(vii) no
Employee and/or manager is entitled to receive any payment of any nature
whatsoever in consequence of the execution of the Agreement and/or of the
transactions contemplated by the Agreement;
(c) The
Company is a party to the supply of workmanship agreements listed in Schedule 6.01.15(c)
with certain labor agencies according to which certain workers employed by such
agencies (hereinafter the “Workers”) are presently
working or have in the past 2 years worked at the Company’s premises. None of
the Workers have accrued any right to be employed by the Company.
(d) The
collective bargaining agreements applicable by the Company (including any
applicable specific company agreements) are set forth in Schedule 6.01.15(d).
There are no other material applicable regulations or contractual provisions
which go beyond legal requirements.
26
6.01.16. Intellectual
property.
(a) Schedule 6.01.16(a)
contains a list of all (i) Patents owned by the Company (hereinafter the “Company Patents”), registered
and material unregistered Marks owned by the Company (hereinafter the “Company Marks”) , and
registered Copyrights owned by the Company (hereinafter the “Company Copyrights”) (ii)
licenses, sublicenses or other agreements under which the Company is granted
rights by others in Company Intellectual Property Assets (hereinafter the “Licenses In”) (other than
commercial off the shelf software which is made available for a total cost of
less than Euro 2,000.00), and (iii) licenses, sublicenses or other agreements
under which the Company has granted rights to others in Company Intellectual
Property Assets (hereinafter the “Licenses Out”).
(b) Except
as set forth on Schedule 6.1.16(b):
(i) the
Company owns or has a right or license to use the all Intellectual Property
Assets used in the Business, as at the date hereof.
With
respect to the Company Intellectual Property Assets (A) purported to be owned by
the Company, the Company exclusively owns such Company Intellectual Property
Assets and (B) licensed to the Company by a third party (other than commercial
off the shelf software which is made available for a total cost of less than
Euro 2,000.00), such Company Intellectual Property is the subject of a written
license or other agreement; in the case of the foregoing clauses (A) and (B)
above, free and clear of all Encumbrances;
(ii) all
Company Intellectual Property Assets owned by the Company are currently in
compliance with all applicable formal legal requirements necessary to maintain
registration, where applicable;
(iii) no
Company Patent owned by the Company is now involved in any
interference, reissue, reexamination or opposition proceeding;
(iv) to
the Knowledge of the Seller, none of the Company
Intellectual Property Assets nor the operation of the Business, infringes the intellectual
property rights of any third
party;
(v) to
the Knowledge of the Seller, there is no infringement or violation by
any person or entity of any of the Company Intellectual Property
Assets;
(vi) the
Company has taken all reasonable security measures to protect the secrecy,
confidentiality and value of all Trade Secrets owned by the Company or used by
the Company in the Business (hereinafter the “Company Trade
Secrets”);
(vii) as
per with art. 64.3 of the Italian Industrial Property Code, the Company has duly
exercised its option to purchase or obtain a (exclusive or non-exclusive)
license on any Patent resulting from occasional inventions, improvements or
discoveries by any former or current employees, contractants and consultors
relating to the business of the Company or to any of the products sold by the
Company.
(c) For
purposes of this Agreement Section 6.01.16,
(i) “Business” means the business
of the Company as currently conducted by the Company;
(ii) “Company
Intellectual Property Assets” means the Intellectual Property Assets
owned by the Company or used in the Business, including the Company Patents,
Company Marks, Company Copyrights and Company Trade Secrets;
27
(iii) “Intellectual Property Assets”
means any and all of the following, as they exist throughout the world: (A)
patents, patent applications (collectively, “Patents”); (B)
rights in registered and unregistered trademarks and registrations and
applications and rights therein for registration of any of the foregoing
(collectively, “Marks”);
(C) copyrights in both published and unpublished works, including without
limitation all compilations, databases and computer programs, manuals and other
documentation and all copyright registrations and applications, and all rights
in, and derivatives, translations, adaptations and combinations of the above
(collectively, “Copyrights”); (D) rights in
know-how, trade secrets, confidential or proprietary information, research in
progress, algorithms, data, designs, processes, formulae, drawings, schematics,
blueprints, flow charts, models, strategies, prototypes, techniques, source
code, source code documentation, Beta testing procedures and Beta testing
results (collectively, “Trade
Secrets”).
6.01.17 Insurances.
(a) The
insurance policies entered into by the Company and currently in force are those
listed in Schedule
6.01.17.
(b) All
premiums concerning the insurance policies indicated in Schedule 6.01.17 have
been paid at the due date.
(c) To
the Knowledge of the Seller no event relating to the Company has occurred which
could reasonably be expected to result in upward adjustments in premiums under
any new insurance policy arrangement in which the Company shall enter after
Closing.
(d) To
the Knowledge of the Seller no material event has occurred,
including, without limitation, the failure by the Company to give any notice or
information or giving any inaccurate or erroneous notice or information, which
limits or impairs the rights of the Company to make a claim under any such
insurance policies.
6.01.18
Environment.
(a) Environmental
Laws.
(i) The
Company is in compliance with all Environmental Laws and Environmental
Authorizations;
(ii) The
Company has not used, generated, treated, stored, transported, released,
deposited or disposed of Hazardous Materials generated by the Company on any
plant, factory, shed, machinery, store, warehouse, office facility or land such
as to give rise to a violation of Environmental Laws and/or Environmental
Authorizations;
(iii) There
are no Former Sites.
(b) Other.
There are
no reports, audits, assessments, reviews or investigations (including any
testing, sampling or monitoring results) carried out on behalf of the Company
or, to the Knowledge of the Seller, by any competent body or authority within
the last 2 years relating to Environmental Matters and Environmental
Authorizations directly or indirectly affecting the Company that have evidenced
any actual or potential violation of Environmental Laws and Environmental
Authorizations.
6.01.19
Permits.
(a) Except
for those referred to in the Commercial Agreements, or in the Existing Product
Agreements or as necessary to the occupancy of the leased premises occupied by
the Company, neither the Seller nor any Affiliate to the Seller has any claim or
right in any permit, license, authorisation, approval, franchise, invention,
patent, proprietary right, trademark, or any industrial or commercial property
right which the Company is using at present or the use of which is necessary for
the proper conduct of the Company’s business, including the manufacturing and
distribution of all products of the Company.
28
(b) The
Company owns all licenses, permits, certificates, registrations, authorisations
and approvals, including but not limited to all those related to each specific
product manufacturing and distribution (hereinafter collectively the “Permits”) that are necessary
to own, operate and carry out its business as it is presently operated and
carried out. All Permits are in full force and effect and are sufficient for the
ownership and conduct of the business of the Company.
Since
January 1, 2008 up to the date hereof, the Company has not received written
notification of a violation in respect of any Permit. As of the date hereof, no
proceeding to vary, suspend, revoke or limit any Permit is pending or, since
January 1, 2008, has been notified in writing to the Company.
(c) The
Company manufactures and sells in the EU, amongst others, Tissue Engineering
products, as defined by Regulation (EC) N. 1394/2007, which were legally on the
Community market in accordance with national or Community legislation on
December 30, 2008. The Company has fulfilled all duties and obligations relevant
to the Marketing Authorization of the Tissue Engineering products and has
already started the necessary activities to comply with the relevant legislation
and to obtain, within the term provided by EU Law (30.12.2012) the relevant
marketing authorization.
6.01.20 Compliance with
Law.
(a) The
operations of the Company are conducted and since January 1, 2008 have been
conducted in compliance with all applicable laws, regulations, orders and other
requirements of all courts and other governmental or regulatory authorities
having jurisdiction over the Company save to the extent that would not have a
Material Adverse Effect.
(b) Since
January 1, 2008 up to the date hereof, the Company has not received a written
notification of any material violation of any such law, regulation, order or
requirement.
6.01.21 Regulatory
matters.
(a) There
are no actions, proceedings or complaints by or submitted and/or lodged before
any competent authorities, including but not limited to national xxx/xx XXX
(Xxxxxxxx Xxxxxxxx Xxxx) competent authority or bodies, which would prohibit,
impede or merely hinder the production or sale of any product currently
manufactured or sold by the Company into any market now pending or threatened in
writing or, to the Knowledge of the Seller, threatened in writing. No agreement,
practice or arrangement carried on by the Company or to which the Company is a
party with respect to its business breaches any competition, anti-restrictive
trade practice, antitrust or consumer protection in any relevant
jurisdiction.
There are
no actions, proceedings or complaints by the competent authorities which may
suspend or interrupt the manufacture or cause the recall of the Products or that
concern the production plant of the Company.
(b) No
stay of legal action or proceedings before the EC Commission and/or any other
relevant authority or concerning matters related to EC and/or any other relevant
authority regulations is pending against the Company and there is no threat in
writing received by the Company of any such action or proceeding against the
Company.
29
6.01.22 Bank account and
powers of attorney.
Schedule 6.01.22
contains a list showing: (i) the name of each bank with which the Company has an
account or safe deposit box; and (ii) the names of any person holding powers of
attorney from the Company in relation to such bank accounts.
6.01.23
Contracts.
(a) Other
than those listed in Schedule 6.01.23, the
Company is not a party to any written or oral:
(i) agreement,
contract or commitment for the future purchase of, or payment for, supplies or
products, or for the performance of services by a third party whose supplies,
products or services involve in any one case Euro 20,000 or more;
(ii)
agreement,
contract or commitment exceeding Euro 20,000 in value;
(iii) agreement,
contract or commitment which cannot be terminated with less than 30 days prior
notice and which has a consideration greater than Euro 20,000;
(iv) distribution,
dealer, representative or sales agency agreement, contract, renewal or
commitment which would involve a commitment in excess of Euro
20,000;
(v) lease
under which the Company is either lessor or lessee which would involve a
commitment in excess of Euro 20,000;
(vi) note,
debenture, bond, equipment trust agreement, hedging agreement, letter of credit
agreement, loan agreement or other contract or commitment for the borrowing or
lending of money or agreement or arrangement for a line of credit or guarantee,
pledge or undertaking of the indebtedness of any other person;
(vii) agreement,
contract or commitment for any charitable or political
contribution;
(viii) commitment
or agreement for any capital expenditure or leasehold improvement in excess of
Euro 20,000;
(ix) agreement,
contract or commitment limiting or restraining the Company or any successor
thereto from engaging or competing in any manner in the Business;
(x) agreement,
contract or commitment relating to research and development which would involve
a commitment in excess of Euro 20,000;
(xi) agreement,
contract or commitment not made in the ordinary course of business;
and/or
(xii) distribution,
dealer, representative or sales agency agreement, contract, renewal or
commitment entered or received on or after July 9, 2009;
together,
referred to as “Material
Agreements”.
(b) The
Company is in compliance of all Material Agreements except for immaterial
breaches which do not give rise to the right to terminate any relevant Material
Agreement by the other party and, to the Knowledge of the Seller, no other party
to any of the Material Agreement is in material default in the performance,
observance or fulfillment of any obligation, covenant or condition contained
therein except for immaterial breaches which do not give rise to the right to
terminate any relevant Material Agreement.
30
6.01.24 Title to property
and assets.
Save to
the extent in the ordinary course of business and that in any event are not
material in aggregate, the Company has good title to and legal and beneficial
ownership of all of its properties which are all free and clear of
Encumbrances.
6.01.25 Real property
leases.
As of the
Closing Date, (i) the Company is not a party to any real property lease
agreement other than the lease agreement included in the Commercial Agreements
and (ii) save as provided for in the Estimated Closing Balance Sheet, all rents
as well as any other payment due to previous agreements with the Seller in
respect of the lease of its premises have been paid.
6.01.26 Condition of
assets.
(a) All
the Company’s principal operating assets which are necessary to operate the
business as currently operated are in good operating condition and repair,
subject to normal wear and maintenance and usable in the regular and ordinary
course of business.
(b) Save
for title retention provisions or Encumbrances arising in the ordinary course of
business, no person other than the Company owns any equipment or other tangible
assets or properties situated on the premises of the Company which is necessary
for the operation of the Business of the Company.
6.01.27 Customers -
Suppliers.
Schedule 6.01.27
contains a list showing the top twenty costumers for revenues in the year 2009.
Since January 1, 2009, no current customer accounting for more than 10% of all
sales of any particular product of, or supplier accounting for more than 10% of
supplies of any particular material or component to the Company has notified in
writing to the Company an intention to terminate or materially adversely modify
its business relationship with the Company.
6.01.28 Product liability
and recall.
(a) All
products currently manufactured and/or sold by the Company since January 1, 2007
complied in all material respects with any applicable Italian laws, rules and
regulations and their technical specifications.
(b) Since
January 1, 2004 none of the products manufactured and/or sold by the Company has
caused any product liability claim and required any recall activity and, to the
Knowledge of the Seller, there are no facts or circumstances that may give rise
or are likely to cause any such product liability claims or recall
activity.
6.01.29
Taxes.
With
respect to Taxes:
(a) all
tax returns, reports or other filings that are required to be filed by the
Company on or before the date hereof with any tax or social authorities in the
Republic of Italy and/or any relevant country, have been timely filed. Such tax
returns, reports or other filings, adequately reflect the tax and social
liabilities of the Company, at the time of the filing, for the relevant period
covered thereby in all material respects;
31
(b) all
Taxes of the Company: (I) that are payable on or before the date hereof; or (II)
that are attributable to any relevant period up to the date hereof, but are not
yet due and payable as of the date hereof, in each case have been timely and
duly paid or appropriate provisions have been made therefore in the Financial
Statements or the Interim Financial Statements or otherwise in the books and
records of the Company; an
(c) since
January 1, 2003 no claim for assessment or collection of Taxes has been asserted
against the Company and, there are no such claims threatened in writing against
the Company.
6.01.30 Loan to or by the
Seller.
Save as
set out in the Estimated Closing Balance Sheet, there is no outstanding
indebtedness or other financial liability owed by the Company towards Seller or
any Seller’s Affiliate or to any director or executive of the Company or any
person connected with a director or executive of the Company, nor is there any
indebtedness owed by any such companies towards the Company.
6.01.31 Intercompany
transactions.
(a) All
transactions currently outstanding between Seller and the Company and between
the Company and any Seller’s Affiliate and between Seller and its subsidiaries
with any director or executive (dirigente) of the Company or
between any of the companies above referred with their directors, executives
(dirigenti) have been
approved, if necessary, under all applicable laws and were and are on full arm’s
length terms and were not conducted outside of the ordinary course of
business.
(b) There
are no circumstances as of Closing Date which could cause any tax authority to
make any adjustment for tax purposes to the terms on which any such transaction
is treated as taking place and no such adjustment has been made or attempted in
fact.
6.01.32 Certain business
practices and regulations – Potential conflicts of interest.
In
carrying out the business since January 1, 2007, none of the Company or any
director, or Employee of the Company has: (i) used any corporate funds of the
Company for unlawful contributions, gifts, entertainment or other unlawful
expenses relating to political activity; (ii) made any unlawful payment to
government officials or to political parties or campaigns from corporate funds
of the Company.
6.01.33 No Restrictions on Business
Activities.
Except as
otherwise disclosed in any Schedule attached hereto, there is no agreement
(non-competition or otherwise), commitment, judgment, injunction, order or
decree to which the Company is a party or otherwise binding upon the Company
which has had or could be reasonably expected to have the effect of prohibiting
or impairing any business practice of the Company, any acquisition of property
(tangible or intangible) by the Company or the conduct of business by the
Company, or otherwise limiting the freedom of the Company to engage in any line
of business or to compete with any person. Other than those listed in
any Schedule hereto, the Company has not (a) entered into any agreement under
which the Company is restricted from selling, licensing, manufacturing or
otherwise distributing its technology or products or from providing services to
customers, potential customers or any class of customers, in any geographic
area, during any period of time or in any segment of the market or (b) granted
any person exclusive rights to sell, license, manufacture or otherwise
distribute any of its technology or products in any geographic area or with
respect to any customers or potential customers or any class of customers during
any period of time or in any segment of the market.
32
6.01.34 No
brokers.
Neither
the Company nor the Seller has entered into any contract, arrangement or
understanding with any person or firm that may result in the obligation of the
Company or Buyer to pay any finder’s fees, brokerage or agent’s commissions or
other like payments in connection with the Transaction and any Transaction
Documents contemplated in this Agreement.
6.01.35 Investment
Representations.
(a) Accredited
Investor. Seller is an “accredited investor” within the
meaning of Securities and Exchange Commission Rule 501 of Regulation D
promulgated under the Securities Act. Seller is able to fend for itself, can
bear the economic risk of its investment and has such knowledge and experience
in financial or business matters that it is capable of evaluating the merits and
risks of the investment in the Shares. Seller has not been organized for the
purpose of acquiring the Shares. Seller understands that the Shares will be
characterized as “restricted securities” within the meaning of Rule 144
promulgated under the Securities Act to the extent they are being acquired from
Buyer in a transaction not involving a public offering, and that under the
Securities Act and applicable regulations such securities may be resold without
registration only in certain limited circumstances. Seller understands and
agrees that the certificate issued to it representing the Shares shall bear the
restrictive legends set out on Schedule
6.01.35.
(b) Adequate
Information. Seller: (a) is a sophisticated purchaser
with respect to the Shares; (b) has had an opportunity to discuss Buyer’s
business, management, financial affairs and the terms and conditions of the
offering of the Shares with Buyer’s management; (c) has had an opportunity to
review Buyer’s facilities; (d) has reviewed Buyer’s public filings submitted to
the Securities and Exchange Commission; (e) has conducted, to the extent it
deemed necessary, an independent investigation of such matters as, in its
judgment, is necessary for it to make an informed investment decision with
respect to the Shares, Buyer and this Agreement; and (f) save as set out in
Article V has not relied upon Buyer for any investigation into, assessment of,
or evaluation with respect to the Shares, Buyer or this Agreement. Seller
acknowledges that Buyer may have possession of confidential or material,
non-public information concerning the Shares (collectively, the “Excluded
Information”), which, if publicly disclosed, could affect the trading price of
the Shares, including information that may be indicative that the value of the
Shares is substantially different than the consideration Seller is paying for
the Shares in the Transaction contemplated by this Agreement. Notwithstanding
any possession of Excluded Information by Buyer and the absence of disclosure
thereof to Seller, Seller desires to acquire the Shares pursuant to the
transactions contemplated by this Agreement for its own business
purposes. For the avoidance of doubt, nothing in this Paragraph (b)
shall alter the representations and warranties of the Buyer set forth in Article
V.
(c) Foreign
Investor. The Seller hereby represents that it has satisfied
itself as to the full observance of the laws of its jurisdiction in connection
with its purchase of the Shares, including (i) the legal requirements
within its jurisdiction for the purchase of the Shares, (ii) any foreign
exchange restrictions applicable to such purchase, (iii) any governmental
or other consents that may need to be obtained, and (iv) the income tax and
other tax consequences, if any, that may be relevant to the purchase, holding,
redemption, sale, or transfer of the Shares. Seller’s subscription
and payment for and continued beneficial ownership of the Shares will not
violate any applicable securities or other laws of Seller’s
jurisdictions.
ARTICLE
VII
Survival of Representations
and Warranties
7.01 Survival of
Representations and Warranties of the Seller.
(a) All
the representations and warranties of the Seller as set forth in Article VI
shall survive the Closing Date and shall be effective and enforceable until the
following expiration dates:
33
(i) 18
months after the Closing Date, for all matters other than those indicated in
Paragraph (a)(ii) below;
(ii) the
expiration of the respective statutes of limitation periods with respect to any
liability arising from a breach of the representation and warranties under
Section 6.01.04 (Title to
Quota), Section 6.01.15 (Labour), Section 6.01.18
(Environment) and
Section 6.01.29 (Tax).
(b) In
the event that a Notice of Claim concerning any of the matters above is notified
by Buyer to the Seller according to Article VIII below within the terms above,
the right to be indemnified claimed by such Notice of Claim shall survive until
such time as the relevant claim is finally resolved.
7.02 Survival of
Representations and Warranties of the Buyer.
All the
representations and warranties of Buyer as set forth in this Agreement shall
survive the Closing Date and be effective until the following expiration
dates:
(i) 18
months after the Closing Date, for all matters other than those indicated in
Paragraph (ii) below;
(ii) the
expiration of the respective statutes of limitation periods with respect to any
liability arising from a breach of the representation and warranties under
Section 5.01.08 (Taxes), Section 5.01.10
(Shares), Section
5.01.13 (Labour).
ARTICLE
VIII
Indemnification
8.01 Seller’s
Indemnification.
(a) Subject
to Article VII above, during the period specified in Section 7.01 above and
subject to the terms, conditions, exceptions and limitations set forth below,
the Seller hereby agrees to indemnify Buyer for and against any loss and/or
damage incurred or suffered by Buyer and/or the Company, resulting or deriving
from:
(i) any
breach or failure to perform any and/or all covenants of the Seller contained in
this Agreement;
(ii) any
error, inaccuracy, or breach of any and/or all representations and warranties
given by the Seller pursuant to Article VI of this Agreement;
(iii) any
and all actions, suits, proceedings, claims, assessments, judgments, costs and
expenses (including reasonable attorney’s fees and disbursements) incident to
any of the foregoing Paragraphs (a)(i) and (a)(ii) of this Section 8.01;
and
(iv) all
costs and expenses (including reasonable attorneys’ fees and disbursements)
incurred by the Buyer in enforcing their rights of indemnification in respect of
a claim under this Agreement.
8.02 Seller’s
Indemnification – Limitation.
(a) The
Parties hereto expressly agree that:
(i) the
aggregate obligation of indemnification of the Seller for breaches of
Representations and Warranties under Article VI of this Agreement shall not
exceed an amount equal to Euro 7,000,000 (seven million) it being understood
that such limitation does not apply to any breach of Section 6.01.04 (Title to Quota), Section
6.01.15 (Labour),
Section 6.01.18 (Environment) and Section
6.01.29 (Tax).
34
(ii) the
obligation of the Seller under this Article VIII to indemnify Buyer for breaches
of Representations and Warranties under Article VI of shall not have effect
until the aggregate amount claimed by Buyer, together with any amount already
claimed by Buyer, exceeds Euro 200,000 (two hundred thousand), it being
understood that once the losses exceed such amount the Buyer is entitled to
recover the entire loss Euro for Euro it being understood that such limitation
does not apply to any breach of Section 6.01.04 (Title to Quota), Section
6.01.18 (Environment)
and Section 6.01.29 (Tax);
(iii) no
individual claim shall be counted for the purposes of making a claim unless it
exceeds Euro 7,500 it being understood that individual claims of the same nature
and that arises from the same set of facts shall be deemed as a single claim for
purposes of this Section 8.02(a)(iii).
(iv) if
any payment is made by the Seller to the Buyer in respect of any claim for any
breach of this Agreement or pursuant to this Article VIII, the payment, to the
fullest extent possible, shall be treated as an adjustment to the consideration
paid by the Buyer for the Quota and the consideration shall be deemed to have
been reduced by the amount of such payment;
(v) the
Buyer on or after Closing shall not be entitled to recover damages or otherwise
obtain reimbursement or restitution more than once in respect of any event that
breaches more than one Representation and Warranty or to the extent taken into
account in the Working Capital Adjustment under Article 4.03 of this
Agreement;
(vi) the
Seller shall not be liable to the Buyer under this Agreement to the extent the
Company has actually been reimbursed under any policy of insurance in force (net
of any increase in insurance premium);
(b) No
claim shall be brought against the Seller under this Agreement:
(i) in
respect of any matter to the extent that it occurs as a result of, or is
attributable to a change in, the accounting policies or practices of the Buyer
or the Company introduced or having effect after Closing unless such change is
necessary to implement a correction to address a breach of any Representation
and Warranty under Article VI of this Agreement;
(ii) in
respect of any matter to the extent that such claim arises, or the amount
thereof is increased as a result of any legislation, decision, regulation or
administrative practice not in force as at the date hereof or any change in any
such legislation, decision, regulation or administrative practice not in force
as at the date hereof.
(c) Buyer
hereby acknowledges and agrees that, from and after Closing, its sole remedy
with respect to any and all claims and losses for any matter that would be a
breach of Article VI of this Agreement shall be pursuant to the indemnification
provisions set forth in this Article VIII. Apart from any interim measure (misura cautelare), Buyer
hereby waives, from and after Closing, to the fullest extent permitted by law,
any and all other rights, it may have against Seller relating to any matter that
would be a breach of Article VI of this Agreement.
(d) Notwithstanding
anything to the contrary, if the Seller has paid an amount in discharge of any
claim under this Agreement and the Buyer or Company subsequently recovers
(whether by payment, discount, credit, relief or otherwise) from any person a
sum which indemnifies or compensates the Buyer or the Company (in whole or in
part) in respect of the loss or liability which is the subject matter of the
claim, the Buyer shall procure that the Company shall pay to the Seller as soon
as practicable after receipt an amount equal to the lesser of (i) the sum
recovered from the person less any costs and expenses incurred in obtaining
recovery, less any Taxation attributable to the recovery after taking into
account any relief available in respect of any matter giving rise to the claim,
or (ii) the amount previously paid by the Seller or the Buyer less any Taxation
attributable to it.
35
(e) For
purposes of determining indemnification, in any Representation and Warranty
modified by “Material Adverse Effect”, “materiality” or words of similar
effect such language shall have no effects whatsoever, such that the
only limitations to the indemnifications are those expressly listed in this
Section 8.02.
(f) The
limitations under this Section shall not apply in cases of fraud or willful
misconduct by the Seller.
8.03 Buyer’s
Indemnification.
(a) Subject
to Article VII above, during the period specified in Section 7.02 above and
subject to the terms, conditions, exceptions and limitations within the limits
set forth in this Section 8.03, Buyer shall indemnify for and against
any loss and/or damage incurred or suffered by the Seller resulting or deriving
from any error, inaccuracy or breach of, or failure to perform, any and all
covenants, representations and warranties given by Buyer contained in this
Agreement, including any and all actions, suits, proceedings, claims,
assessments, judgments, costs and expenses (including reasonable attorneys’ fees
and disbursements) incident to any of the foregoing and all costs and expenses
(including reasonable attorneys’ fees and disbursements) incurred by the Seller
in enforcing its rights of indemnification in respect of any claim under this
Agreement.
(b) The Parties acknowledge that all limitations to
indemnity under Section 8.02 shall apply in all applicable respects to the
Buyer’s indemnification.
8.04 Indemnification
Procedure.
(a) Provided
that written notice of a claim has been given prior to the expiration of the
applicable period of time set forth in Article VII above with respect to
indemnification obligations by any Indemnified Party (as hereinafter defined) to
any Indemnifying Party (as hereinafter defined), then the applicable
indemnification obligations shall survive as to such claims, until the claim has
been finally resolved.
(b) Whenever
any claim or any fact arises for which any Party may seek indemnification under
Article VIII hereof, the Party seeking indemnification (hereinafter the “Indemnified Party”) shall
notify the Party from whom indemnification is sought (hereinafter the “Indemnifying Party”) in
writing, as soon as reasonably practicable after such Indemnified Party has
actual and full knowledge of such claim or of the facts constituting the basis
for such claim (hereinafter the “Notice of Claim”). The Notice
of Claim shall specify all facts known to such Indemnified Party giving rise to
such indemnification claim, the amount or an estimate of the amount of the
liability arising therefrom, and the basis of the Indemnified Party’s request
for indemnification under this Agreement, and shall have attached copy of any
papers served with respect to such claim.
(c) The
Parties hereby agree that the Buyer shall be entitled to request for
indemnification under this Article VIII in respect to any indemnifiable loss on
behalf of itself or the Company, in relation to any Seller’s breach of
representations, warranties or covenants under this Agreement.
36
(d) If
the facts giving rise to any indemnification claim under this Article VIII shall
involve any actual claim or demand by any third party against the Indemnified
Party, without prejudice to the right of the Indemnified Party to participate to
the defence at its expense through counsel of its own choice, the Indemnifying
Party shall be entitled to contest or defend such claim at its expense and
through counsel of its own choice if it gives written notice of its intention to
do so. In the event that the Indemnifying Party does not so elect to contest or
defend any such claim the Indemnified Party may assume such defence. In the
event that the Indemnifying Party so elects to contest or defend any such claim,
the Indemnified Party shall co-operate fully with the Indemnifying Party in
connection with such contest or defence and shall not interfere in any way with
the defence or handling of the matter by the Indemnifying Party, provided that
the Indemnified Party shall have the opportunity to consult with the
Indemnifying Party at such times as it may reasonably request.
(e) An
Indemnified Party shall take all steps required by the ordinary diligence as
referred to under Artcle 1227 paragraph 2 of the Italian Civil Code to mitigate
all indemnifiable losses upon and after becoming aware of any event that could
reasonably be expected to give rise to any losses that are indemnifiable
hereunder.
8.05 Escrow
Shares.
The Buyer
shall be entitled to recover any amount due to the same under this Article VIII
also by enforcing the Escrow Agreement.
8.06 Other
Remedies
Subject to
any mandatory provisions of Italian law, no breach or inaccuracy of any
representation, warranty or obligation of any Parties set forth herein shall
give rise to any right on the other Party to rescind or terminate this
Agreement.
ARTICLE
IX
Miscellaneous
9.01 Lock
Up.
Save in
respect of granting the Escrow Shares pursuant to Section 3.02(c), the Seller
hereby agrees that it will not for the period from the Closing Date through the
first anniversary of the Closing Date, (i) lend; offer; pledge; sell; contract
to sell; sell any option or contract to purchase; purchase any option or
contract to sell; grant any option, right, or warrant to purchase; or otherwise
transfer or dispose of, directly or indirectly, any of the Shares or
(ii) enter into any swap or other arrangement that transfers to another, in
whole or in part, any of the economic consequences of ownership of the Shares,
whether any such transaction described in clause (i) or (ii) above is to be
settled by delivery of securities, in cash, or otherwise. Notwithstanding this
Section 9.01, in the event there is a tender offer to acquire all of Buyer’s
securities and such tender offer is recommended by the board of directors of the
Buyer, the Seller shall be permitted to tender its Shares with the proceeds in
respect of any Shares that are then subject to the Escrow Agreement to be placed
under the Escrow Agreement.
9.02 Anika’s Board of
Directors
(a) Following
the Closing Date, Seller may request that Buyer appoint a Board Designee (as
defined below) to Buyer’s Board of Directors. If Seller so requests,
Buyer and Seller shall work together in good faith to identify and select a
mutually acceptable candidate to serve on the Buyer’s Board of Directors, it
being understood that if Seller proposes a candidate that is a qualified
independent director, Buyer will not unreasonably withhold its agreement to such
candidate. Such candidate shall not be an Affiliate of Seller or any
of Seller’s Affiliates, and shall be an independent third party and must
generally be qualified and vetted by the Buyer’s Board of Directors under it
existing policies and procedures. A candidate identified and selected
as provided above shall be referred to as a “Board Designee”.Once
identified and selected, the Board Designee shall be appointed to Buyer’s Board
of Directors (whether by replacement of an existing director or by expansion of
the Board). From the point in time a mutually acceptable candidate is
identified, the qualification and vetting process will take no longer than 90
days. Once appointed to the Board, the Board Designee will be treated
the same as any of the Buyer’s independent, non-executive, non-employee
Directors (an “Independent
Director”), for all purposes, including without limitation, provision of
materials, compensation and expense reimbursement.
37
(b) Upon,
joining the Board of Directors, the Board Designee shall be subject to the
Buyer’s xxxxxxx xxxxxxx policy and statement and all other policies applicable
to members of the Buyer’s Board of Directors. The Buyer shall,
subject to the same process as for all of its Independent Directors, nominate
the Board Designee for re-election as a director at the end of each term of such
Board Designee as part of the slate proposed by the Buyer’s Board of Directors
that is included in the proxy statement of the Buyer relating to the election of
directors, and shall provide the same level of support for the Board Designee as
it provides to any other person standing for election as a director of the Buyer
as part of such slate proposed by the Buyer’s Board of Directors.
(c) The
right to a Board Designee as set forth in this Section 9.02 shall terminate
automatically at such time as the Seller ceases to hold, directly or indirectly,
at least 1,400,000 Shares (as adjusted for stock splits, stock dividends,
recapitalizations or the like). In the event that a vacancy is
created on the Buyer’s Board of Directors at any time by the resignation, death
or disability of the Board Designee, so long as the Seller holds, directly or
indirectly, at least 1,400,000 Shares (as adjusted for stock splits, stock
dividends, recapitalizations or the like), another Board Designee may be
selected as provided above to fill the vacancy created thereby, and the Buyer
agrees to take at any time and from time to time, all actions necessary to
accomplish the same. In addition, the Buyer reserves the right to
request the resignation of the Board Designee at such time as the Seller ceases
to hold, directly or indirectly, less than 1,400,000 Shares (as adjusted for
stock split, stock dividends, recapitalizations or the like).
9.03 US GAAP
Account.
The Seller
acknowledges that the Buyer will be required by applicable SEC regulations to
report on a balance sheet of the Company as at the Closing Dateunder US GAAP. To
this end the Seller agrees to use all reasonable endeavors to
cooperate with, and provide back-up documentation to the Buyer and the, auditors
to be appointed by the Buyer for the purposes of re-stating the financial
statements of the Company as at the Closing Date under US GAAP, at Buyer’s
costs.
9.04 GAAP Accounts and SEC
Requirements.
The Seller
acknowledges that the Buyer will be required by applicable SEC regulations to
report certain financial information of the Company after the Closing Date under
US GAAP. For the purpose of allowing the Buyer to comply with such
applicable SEC regulations, the Seller shall provide by no later than January
31, 2010, the following:
(i) audited
financial statements of the Company as of December 31, 2008 and December 31,
2007, performed in accordance with U.S. Generally Accepted Auditing Standards,
including the related balance sheets, statements of operations, cash flows and
stockholders’ equity (deficit) for each of the years then ended, certified by
the Company’s independent public accountants and accompanied by a copy of such
auditor’s report;
(ii) unaudited
financial statements of the Company as of September 30, 2009 and September 30,
2008 prepared in similar format and detail as in (i) above;
38
(iii) such
financial statements in (i) and (ii) above to be prepared in accordance with
Italian GAAP and to include a footnote reconciliation of Italian GAAP net loss
and quota holders’ equity to U.S. GAAP. Buyer agrees to assist Seller
and it’s auditors in this process; and
(iv) all
back-up documentation to the Buyer, its auditors and advisors.
All costs
of producing the above materials under Italian GAAP shall be borne by Seller.
All costs of re-statement under US GAAP shall be borne by Buyer.
9.05 Release of the
Guarantees.
(a) The
Buyer shall decide in its own discretion, and shall communicate to the Seller
such decision within 60 days of the day hereof whether or not to continue with
the project and related financing to which the Assumed Obbligations (as defined
below) are related.
If the
Buyer decides to continue the project, the Buyer shall use all reasonable
endeavors (including providing covenants of its own) to procure the release of
Seller from all guarantees listed in Exhibit 9.05 (the
“Assumed Obligations”)
and shall indemnify and keep indemnified the Seller and all its Affiliates from
all claims, liabilities, costs and expenses or by reason of any failure or
breach by Buyer from and after the Closing Date that may trigger any third party
rights under the Assumed Obligations without prejudice to any indemnification
right that the Buyer may have against the Seller under this Agreement. The Buyer
shall indemnify the Seller from all claims against the Seller arising from any
action taken by the Buyer up to the date in which the relevant decision is
communicated to the Seller.
(b) The
Seller represents and warrants that as of the Closing Date the Seller is not in
breach of any agreement that may trigger any payment under the Assumed
Obligations. Any indemnification obligations of the Seller under this Section
9.05 shall be subject to the limitations under Article VIII.
9.06 Seller’s
Receivables
(a) During
the term of the Receivables Management Agreement all amounts recovered by the
Company in respect of the Company’s Receivables shall be managed by the Seller
pursuant to the Receivables Management Agreement and shall be used by the
Company to pay the Seller’s Receivables as provided in the Receivables
Management Agreement. At the end of the two year term of the Receivables
Management Agreement, all outstanding Seller’s Receivables are hereby forgiven
by the Seller.
(b) The
Seller undertakes, with respect to any Company’s receivables that is transferred
to the Seller before Closing, not to commence any legal action to collect such
receivables unless the intention to commence such action is previously
communicated in writing to the Buyer.
9.07 Non
competition.
(a) The
Seller, for itself and for its Affiliates hereby undertakes, for a period of 5
years after the Closing Date and within the Territory (as hereinafter
defined):
(i) not
to, either on its own account or in conjunction with or on behalf of any person,
carry on, engage, be concerned or interested, directly or indirectly, in the
manufacture, sale, development or servicing of products competing with the
products currently manufactured and/or sold and/or developed by the Company
and/or with future products within the current Company’s areas of focus
that the Company will be completing, manufacturing or selling within
the five years following the Closing Date;
39
(ii) without
prior written consent of Anika, not to, either on its own account or in
conjunction with or on behalf of any third party, hire, solicit or endeavour to
entice away from the Company any person who at the Closing Date is an officer,
manager, employee, consultant or servant of the Company, whether or not such
person would commit a breach of contract by reason of leaving service or
office.
(b) The
Seller and Buyer hereby represent to each other and acknowledge that the
provisions contained in Paragraph (a) above of this Section 9.07 are necessary
for the protection of Buyer’s interests. The compensation for all the
obligations contained in this Section 9.07 has been taken into account in
determining the Purchase Price.
(c) For
the purposes of Section 9.07(a) “Territory” shall mean all the
countries in the world.
(d) By
way of exception to the undertakings of the Seller in Section 9.07(a), the Buyer
acknowledges and accepts the existence and validity going forward of each of the
Existing Product Agreements to be amended on the Closing Date and the Marketing
Services Agreement, the Tolling Agreement and the Patent Licence
Agreement.
(e) The
Buyer covenants at the Company’s election that the Company will (i) maintain CE
product registrations for Wet products, Hyalogin – Hyalofemme products and Gen
Aid products, each as provided in the relevant Existing Product Agreement or,
(ii) make available to the Seller all relevant documentation to allow the Seller
to obtain its own CE product registration for such Wet products, Hyalogin –
Hyalofemme products and Gen Aid products.
9.08 Further
Assurances.
From time
to time, as and when requested by any Party and subject to the limitations set
forth herein, the other Party will execute and deliver, or cause to be executed
and delivered, all such documents and instruments as may be reasonably necessary
to consummate the Transaction contemplated in this Agreement.
9.09 Use of
Names.
The Buyer
covenants to procure that the Company shall change its name to a name not
including the words “Fidia Advanced Biopolymers™” within a period of 12 months
after Closing, or such longer term that may be reasonably required also, without
limitation, by any needed authorization procedure to be taken before any
competent authority, and shall procure that all references to such name and to
the trademark FAB™, to the extent allowed by any relevant laws, regulation and
competent authority, are removed from all letterhead, signage, products
publicity materials, commercial documents and materials owned or used by the
Company within a period of 12 months after the Closing Date or such longer term
that may be reasonably required also, without limitation, by any needed
authorization procedure to be taken before any competent authority.
9.10 Records
Retention.
(a) The
Buyer agrees, from and after the Closing, to retain all records relating to the
Company and the development and manufacture of products thereby prior to the
Closing Date, for as long as such records may be called upon for production by
regulators or authorities or in court proceedings under applicable law. So long
as such records are required to be retained by the Company or the Seller, the
Seller shall have the right, upon reasonable prior notice during normal business
hours, to inspect and obtained copies of any such records to comply to any
request from regulators or authorities or courts decisions or requests and in
respect of any matter related to this Agreement and the Transactions
contemplated herein provided however that the Seller shall not be permitted to
have access to financial and other business related information of the Company
or the Buyer regarding the period after the Closing.
40
(b) The
Parties agree that (A) the Seller may retain for as long as may be required
under law after the Closing Date a copy of (1) all financial records of the
Company, (2) any other books and records to the extent necessary for tax,
accounting, litigation or other valid business purposes (B) any attorney work
product, attorney-client communications and other items protected by privilege
and any documents that were received from third parties in connection with the
Transactions or that were prepared by the Seller or its Affiliates or the
Company in connection therewith shall be excluded; and (C) both the Seller and
the Buyer have a requirement to maintain records which are deemed to be active
at the Closing Date. Consequently, the Seller may, upon request by regulators or
authorities or in courts, obtain copies primarily in the format of digital
images of these records and leave the Company with the original records. The
Buyer will grant the Seller the right to process records which are deemed to be
active just before and on the Closing Date as well as the operating space for
processing records and adequate space for storing boxes, provided however this
will cause no disruption to the Company.
9.11 Waiver of
Action
The Buyer
and the Seller waive (in the absence of fraud or willful misconduct) any right
to bring a claim against any employee, director, advisor or officer of the
Seller or the Buyer and any of their respective Affiliates that may
arise from any of the representations and warranties under Article V and Article
VI or any other representation and warranties made in connection with the
Transaction.
9.12 Employee
Stability.
(a) The
Buyer warrants that for a period of 1 (one) year (the "Stability Period") starting
from the Closing Date:
(i) the
economic and general treatment of each Employee ("trattamento economico e
normativo") in any way paid, as well as the relevant "inquadramento", included any
rights, benefits, welfare programs, exit bonuses, any super minimo and pension
funds schemes, shall be guaranteed by the Company in the same way as it is
provided for by regulations and all applicable individual and collective
bargaining agreements in force in the Company on the Closing Date;
(ii) any
dismissal of Employees by the Company shall be solely for just cause (giusta causa) or justified
objective or subjective reasons (giustificato motivo oggettivo o
soggettivo) or collective dismissal (licenziamento collettivo);
and in any case in accordance with all applicable regulations under Italian law
and collective or individual bargaining agreements.
The
Parties acknowledge that the previous Paragraph of this Section 9.12 shall in no
event be interpreted as posing any limitation to the ability of the Buyer and/or
the Company to carry out any individual or collective dismissal.
(b) The
Buyer shall indemnify and keep indemnified the Seller against any direct loss
suffered by it as a result of any breach of the obligations of the Buyer under
this Section provided that:
(i) such
indemnification shall be due only if any Employees involved obtain from a
competent court a final judgment confirming the occurance of such breach;
and
(ii) the
indemnification obligations of the Buyer shall be subject to the limitations
under Article VIII.
9.13 Administrative
Requirements.
(a) Subject
to the Seller meeting all costs and expenses incurred by the Buyer or the
Company in connection therewith, the Buyer shall provide (and shall procure that
the Company shall provide) the Seller with all such information and assistance
as the Seller may reasonably require for the purposes of enabling the Seller to
comply with any legal or regulatory requirements (and in particular, without
limitation, for the purposes of preparing accounts or tax computations, or
dealing with tax issues) and in particular, without limitation, the Buyer shall
procure that the Buyer and the Company shall deliver to the Seller, in a timely
manner, such data in connection with the fiscal year 2009 as the Seller may
reasonably require.
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(b) The
Seller acknowledges that the confidentiality obligations arising under Section
9.16 shall also cover all the information disclosed to Seller under this Section
9.13.
9.14 Integration
Services.
For one
(1) year following the Closing Date, the Seller covenants to nominate a team
leader and to cause such team leader to assist the Buyer in the
transition and integration of the Company from the Seller to the Buyer and
agrees that all salary, wages, expenses and any benefits under any Seller
benefit plans to which such employee is entitled shall be paid at Seller's sole
expense.
Nothing
contained in this Agreement shall create any third party beneficiary rights in
such employee, any beneficiary or dependent thereof, with respect to the
benefits that may be provided to such employee by the Seller or with respect to
any entitlement of such employee to employment or continued employment with the
Buyer or any Affiliate for any specified period after the Closing Date. In
addition, nothing in this Section 9.14 shall be construed as creating any
employment agreement or right to future employment.
9.15
Insurances.
The Seller
represents that the insurance policies referred to in Exhibit 9.15 shall
remain in full force and effect after the Closing Date according to their
expiration term as indicated therein.
9.16 Confidentiality -
public announcement.
(a) No
announcement or disclosure to any entity other than the Parties concerning the
sale of the Quota (or any ancillary matter) and this Agreement shall be made by
either Party without the prior written approval of the other (such approval not
to be unreasonably withheld or delayed). This Paragraph (a) does not apply in
the circumstances described in Paragraph (b) below.
(b) Either
Party may, after consultation with the other Party, make an announcement
concerning the purchase and sale of the Quota and this Agreement if (but to no
greater extent than):
(i) required
by law; and
(ii) necessary
or advisable pursuant to any securities exchange or regulatory or governmental
body to which that Party is subject, wherever situated, whether or not the
requirement has the force of law or in connection with Buyer’s status as a
public company;
in which
cases the Party concerned shall take all such steps as may be reasonable and
practicable in the circumstances to agree on the contents of such announcement
with the other Party before making such announcement. Notwithstanding Paragraphs
(a) and (b) above, the Buyer shall make such press release announcements or
filings in connection with the Closing of the Transaction contemplated in this
Agreement, which press release or filing shall include such disclosure as the
Buyer’s counsel deems necessary or advisable in order to satisfy the Buyer’s
securities law disclosure obligations.
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(c) Each
Party shall treat as Confidential Information all information received or
obtained as a result of or in connection with the diligence, negotiations,
signing and execution of this Agreement (including, without limitation, the
execution of Section 9.10 below) which relates, among the others,
to:
(i) the
content of this Agreement;
(ii) the
negotiations relating to this Agreement; and/or
(iii) the
other Party.
Each Party
shall not use such Confidential Information for any purpose other than those
permitted by, or needed for the execution of, this Agreement. For
purposes of this Agreement, “Confidential Information” includes, without
limitation, all information, notes, analyses, compilations, Excel spread sheets,
data, reports, studies, interpretations or other documents furnished to a Party
or such Party’s Representatives (as defined below) or prepared by a Party or
such Party’s Representatives to the extent such materials reflect or are based
upon, in whole or in part, the Confidential Information. For purposes
of this Agreement the term “Representatives” shall include each Party and its
Affiliates (as such term is defined in Rule 12b-2 of the Securities Exchange Act
of 1934, as amended), directors, officers, employees, attorneys, accountants,
financial advisors and other professional representatives and shall also include
any of such Party’s sources of senior and/or subordinated debt
financing.
(d) Notwithstanding
the other provisions of this Section 9.16, either Party may disclose
Confidential Information:
(i) to
its employees, its Affiliates and any employees of its Affiliates who need to
know such information if such persons are bound by confidentiality restrictions
under the responsibility of the disclosing Party;
(ii) to
its professional advisors, auditors assisting in respect of the Transaction, if
such professional advisors and auditors have agreed to appropriate
confidentiality obligations under the responsibility of the disclosing
Party;
(iii) if
and to the extent the information has already become public information through
no fault or breach of any confidentiality obligation of that Party;
and
(iv) if
and to the extent the other Party has given prior written consent to the
disclosure.
(e) In
addition to any other confidentiality obligation pursuant to this Section 9.16,
the Seller undertakes not to disclose to any third party any information,
including Confidential Information, it may have on the Company and its business
and not to use any such information for any purpose other than those permitted
by, or needed for the execution of, this Agreement. Seller hereby
acknowledge that Seller, its Affiliates and its Representatives are aware that
the United States securities laws prohibit any person who has material,
non-public information concerning a company from purchasing or selling
securities of such company or from communicating such information to any other
person under circumstances in which it is reasonably foreseeable that such
person is likely to purchase or sell such securities and you hereby acknowledge
that Seller, its Affiliates and its Representatives are aware of the sanctions
attaching to misuse or improper disclosure of any such material, non-public
information relating to the Company.
(f) The
confidentiality provisions of this Section 9.16 shall replace those of any other
confidentiality agreement effective between the Parties up to the Closing
Date.
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(g) The
restrictions contained in Section 9.16(a) and Section 9.16(b) shall expire on
the second anniversary of the Closing Date and the restriction with respect to
the reminder of the Confidential Information in this Section 9.16
shall expire on the fourth anniversary of the Closing Date; provided, however,
that nothing in this Section 9.16 shall be deemed to prohibit the Buyer or the
Company from making any disclosure to the extent which its respective counsel
deems necessary or advisable in order to satisfy such party’s disclosure
obligations imposed by law or in order to fulfill any covenant or obligation
pursuant to this Agreement.
9.17 Changes in
Writing.
This
Agreement:
(a) supersedes
all prior agreements relating to the same matter including without limitation
any previous letter of letter of intent;
(b) may
only be waived, changed, modified or discharged by an agreement in writing
signed by all the Parties hereto, which shall also apply to this Section
9.17(b); and
(c) contains,
jointly with the Transaction Documents, the entire understanding between the
Parties with respect to the subject matter thereof.
9.18 Successors. Assignment
Prohibited.
The rights
and obligations provided for in this Agreement may not be assigned, delegated or
transferred by either Party without the prior written consent of the other Party
(which consent shall not be unreasonably withheld, conditioned or delayed),
except that this Agreement may be assigned or transferred in full to an
affiliate or to a successor in ownership of all or substantially all of the
business or assets of the assigning Party (whether by merger, consolidation,
sale or otherwise) without the prior consent of the other party; provided that such
assigning party provides written notice to the other party of such assignment
and the assignee of this Agreement agrees in writing to be bound as such party
hereunder and, in the case of assignment to an Affiliate, the Assigning Party
remains jointly liable with such Affiliate and the agreement is automatically
re-assigned if the Affiliate ceases to be an Affiliate of the Assigning Party,
and provided
further that
this Agreement must be assigned to a successor in ownership of all or
substantially all of the business or assets of the assigning
party. Notwithstanding anything to the contrary in this Agreement,
any assignment, delegation or transfer, or any such assignment or transfer, in
violation of this Section 9.18 shall be void. This Agreement shall
inure to the benefit of, and be binding upon, the successors and permitted
assigns of each of the parties.
9.19
Notices.
Any
communication or notice required or permitted to be given under this Agreement
shall be made in writing and in the English language and shall be deemed to have
been duly and validly given (i) in the case of notice sent by letter, upon
receipt of same, and (ii) in the case of notice sent by telefax, upon
acknowledgement of successful and complete transmission by the fax machine of
the sending Party, addressed, in each case, at the addresses indicated in the
preamble or to such other address as each Party may hereafter furnish to the
others by written notice, as herein provided.
9.20
Domicile.
Each Party
for any purpose under this Agreement (including that of any judicial service)
elects its domicile at the addresses referred to under Section 9.19
above.
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9.21
Severability.
If any
provision of this Agreement is held to be illegal, invalid, or unenforceable
under present or future laws effective during the term of this Agreement, such
provision shall be fully severable; this Agreement shall be construed and
enforced as if such illegal, invalid, or unenforceable provision had never
comprised a part of this Agreement; and the remaining provisions of this
Agreement shall remain in full force and effect and shall not be affected by the
illegal, invalid or unenforceable provision or by its severance from this
Agreement. Furthermore, in lieu of each such illegal, invalid, or unenforceable
provision there shall be added automatically as a part of this Agreement a
provision as similar in terms to such illegal, invalid or unenforceable
provision as may be possible and be legal, valid and enforceable.
9.22 Fees and
Expenses.
(a) Each
of Buyer and Seller shall bear its own costs and expenses incurred in connection
with this Agreement (including but not limited to advisors' and attorneys' fees)
regardless of whether the Transaction or Closing is consummated or not and none
of such costs and expenses shall be borne by or be for the account of the
Company.
(b) All
stamp duties, registration taxes and notary fees relating to the sale of the
Quota and the issue of the Shares to the Seller shall be borne by the
Buyer.
ARTICLE
X
Law -
Jurisdiction
10.01 Applicable
Law.
This
Agreement shall be governed, in all respects, including validity, interpretation
and effect by the laws of the Republic of Italy.
10.02 Arbitration.
(a) The
Parties shall use their best endeavours to settle any dispute arising out or in
connection with the performance of any obligation undertaken hereunder. To this
effect, the Parties shall consult and negotiate with each other in good faith in
order to reach a just and equitable solution satisfactory to both Parties. If
the Parties do not reach such amicable solution within sixty (60) days from the
Notice sent by one Party expressly stating that such Notice triggers the
starting of the negotiation period hereunder, then the dispute shall be finally
settled by arbitration in London in accordance with the then applicable London
Court of Arbitration Rules (“LCA Rules”).
(b) There
shall be one arbitrator that is mutually agreeable to the Parties, appointed in
accordance with the LCA Rules. If the appointment of the arbitrator is not
effected within the terms provided for by the LCA Rules, the arbitrator shall be
appointed by the LCA Court. The arbitrator must be fluent in Italian and
English.
(c) Unless
otherwise agreed in writing by the Parties, the arbitration will take place in
London, England, in the English language. It is understood, however, that no
translations shall be made of documents in the Italian or in the English
language.
(d) The
cost of the arbitration, including attorneys fees, will be assessed by the
arbitrators who will be required to make such cost allocation with respect to
any award issued, provided, however, that the arbitrator shall not have the
ability to assess damages against either Party which are expressly disclaimed in
this Agreement.
(e) The
arbitrator shall decide the dispute according to Italian substantive and
procedural law (“arbitrato
rituale secondo diritto”) and the arbitral award may appealed for reasons
of law according to Article 829 Paragraph 3 of the Italian Civil Procedure
Code.
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(f) Notwithstanding
the dispute resolution process set forth in this Section 10.02, in the event of
an actual or threatened breach hereunder, the aggrieved Party may seek equitable
relief (including restraining orders, specific performance or other injunctive
relief) in a court of competent jurisdiction without submitting to such dispute
resolution process if there is a reasonable likelihood of the occurrence of
irreparable harm during the period of the dispute resolution
process.
10.03 Enforceability.
Each Party
represents and warrants to the other Party that any award rendered against such
Party in accordance with Section 10.02 above shall be enforceable in its country
and jurisdiction according to applicable laws and that the other Parties shall
be entitled to institute proceedings to this effect including proceedings for
attachment against such Party’s properties before any court of competent
jurisdiction and venue.
---§---
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/s/ Xxxxxxx Xxxxxxx
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/s/ Xxxxxxx X. Xxxxxxxx
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Fidia Farmaceutici S.p.A.
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Anika Therapeutics Inc.
|
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(Xx. Xxxxxxx Xxxxxxx)
|
|
(Xx. Xxxxxxx Xxxxxxxx)
|
46
