1
EXHIBIT 2.1
To:
Oxford Automotive France x.x.
Xxx du Marechal de Lattre de Tassigny
Parc d'activite la Cle Saint Pierre
00000 Xxxxxxxxx
Xxxxxx
Turin, 5th February 2000
Re.: YOUR OFFER TO ENTER INTO A PRELIMINARY AGREEMENT.
Dear Sirs,
We have received your proposal dated February 4th, 2000, containing the terms
and conditions for entering into an agreement for the purchase of the Gessaroli
Group (as below defined). As per your request, we are hereinbelow re-drafting
all the terms and conditions set forth under your proposal and sending the
present document to you, executed by all of us, as an acceptance to your
proposal.
[LOGO]
CONTENTS
WHEREAS.....................................................................4
1. DEFINITIONS.........................................................4
2. THE SALE OF THE GESSAROLI GROUP: THE AGGREGATE CONSIDERATION,
INDEBTEDNESS............................................................9
3. PRICE ADJUSTMENTS..................................................10
4. THE RE-SUBSCRIPTION AND PAYMENT OF THE NL CAPITAL STOCK............13
5. THE XXXX.XXX BUSINESS..............................................14
6. THE OMG BUSINESS...................................................16
7. APPORTIONMENTS RELATING TO THE OMG BUSINESS AND TO THE XXXX.XXX
BUSINESS...............................................................19
8. TRANSFER OF THE NL QUOTAS..........................................20
9. THE PRICE FOR THE NL QUOTAS........................................21
10. RIGHT OF WITHDRAWAL................................................21
11. DAMAGE TO ASSETS BEFORE CLOSING....................................23
12. COVENANTS UP TO CLOSING............................................23
13. SPECIAL COMMITMENTS................................................24
14. CONDITIONS PRECEDENT TO CLOSING....................................26
15. CLOSING............................................................29
16. CONFIRMATION OF THE TARGET NET ASSET VALUE. THE FINAL PRICE........30
17. INDEPENDENT ACCOUNTANT.............................................32
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18. NON COMPETITION....................................................32
19. REPRESENTATIONS AND WARRANTIES.....................................34
20. SPECIAL COVENANTS..................................................35
21. CONFIDENTIALITY....................................................36
22. INTERPRETATION.....................................................37
23. MISCELLANEOUS......................................................37
24. SELLERS'REPRESENTATIVE. NOTICE.....................................38
25. LANGUAGE...........................................................39
26. GOVERNING LAW AND ARBITRATION......................................39
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For the purposes of this letter (the "Agreement"):
- Agostino Gessaroli, born in Venaria (TO), on 29th June 1935, resident in
Moncalieri Testona (TO), Xxxxxx xxx Xxxxxxxx x. 00 - Xxxxx, C.F.
XXXXXX00X00X000X, (hereinafter referred to as "Mr. Gessaroli")
- Xxxxx Salezzi in Gessaroli, born in Torino, on 21st August 1936, resident in
Moncalieri Testona (TO), Xxxxxx xxx Xxxxxxxx x. 00, X.X. SLZRNI36M61L219K,
(hereinafter referred to as "Mrs. Gessaroli")
- Xxxxx Xxxxxxxxx, born in Torino, on 24th August 1964, resident in Pecetto
(TO), Xxxxxx Xxxxxxx x. 00, X.X. XXXXXX00X00X000X, (hereinafter referred to
as "Xx. Xxxxx Xxxxxxxxx")
- Xxxxx Xxxxxxxxx, born in Torino, on 22nd February 1960, resident in Torino,
Xxx Xxxxxx x. 0 , X.X. GSSLNU60B62L219E, (hereinafter referred to as "Xx.
Xxxxx Xxxxxxxxx")
- Officine Meccaniche Gessaroli S.p.A., a company duly incorporated under the
law of Italy, with registered offices at Via Giolitti n. 45 , registered
with the Registrar of Company of Turin at Xx. 0000/00 (Xxxxxxxxx xx Xxxxxx)
XXXXX 000000, C.F./ P.IVA 02303430017, represented by its sole director Xx.
Xxxxxxxx Gessaroli, duly empowered to execute this Agreement in force of his
statutory powers (hereinafter referred to as "OMG")
- Xxxx.xxx di Gessaroli Agostino & C. S.a.s., a partnership formed under
Italian law, registered with the Registrar of Company of Turin at No.
609206/82, C.F. / P.IVA 02790660019 represented by its socio accomandatario
and legal representative Xx. Xxxxxxxx Gessaroli (hereinafter referred to as
"Xxxx.xxx")
Mr. Gessaroli, Mrs. Gessaroli, Xx. Xxxxx Xxxxxxxxx and Xx. Xxxxx Xxxxxxxxx
hereinafter jointly and severally referred to as the "Gessaroli Family". The
Gessaroli Family, OMG and Xxxx.xxx hereinafter jointly and severally referred to
as the "Sellers".
It is hereby acknowledged and agreed that, for the purposes of this Agreement,
the Sellers altogether shall be deemed to be as a single party hereto.
- on the one side -
and
- OXFORD AUTOMOTIVE FRANCE Societe par actions simplifiee, a company
incorporated under the laws of France , whose registered office is at Rue
du marechal de Lattre de Tassigny, Parc d'activite la Xxx Xxxxx Xxxxxx,
00000 Xxxxxxxxx, Xxxxxx, Registration No. Versailles 98B18695,
represented by Xx. Xxx Xxxxxxxxxxx, Power of Attorney, duly authorised
and empowered to execute this Agreement (hereinafter referred to as
"Oxford")
- on the other side -
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The Sellers and Oxford hereinafter jointly referred to as the "Parties" and
severally as the "Party".
WHEREAS
A. Xxxx.xxx is an Italian partnership (`societa in accomandita semplice')
wholly owned by the Gessaroli Family, and it is carrying out the activity
of engineering and tooling in order to provide products and process
design services, as well as the activity of manufacture and construction
of dies and molds (the "Xxxx.xxx Activity");
B. OMG is an Italian company, wholly owned by Mr. Gessaroli and Mrs.
Gessaroli, and it is carrying on the activity of manufacturing stampings
and assembly in the factor K or functional class 1 metal products, such
as spring support, engine mounting brackets, tank brackets, upper
brackets and brake guards, as well as the assembly of latches and locking
mechanisms (the "OMG Activity");
C. In addition, the Gessaroli Family has full title to and directly own, as
further detailed hereinafter in this Agreement, all the quotas
representing 100% of the authorised and issued capital of Nuova
Lanzaplast S.r.l., an Italian corporation with registered offices at Via
Giolitti n. 45, registered with the Registrar of Company of Turin at no
1358/92 - CCIAA 774597, C.F. 06260890014 (hereinafter referred to as
"NL"). NL is carrying out the activity of developing, manufacturing and
marketing plastic injection molding in order to provide plastic parts
which are assembled with the metal parts (the "NL Activity") ;
D. Oxford is a French company whose ultimate shareholder is Oxford
Automotive, Inc., a US Company with registered office at 0000 Xxxxx
Xxxxxxxx Xxxxxx, Xxx. 000, Xxxxxxxxxx Xxxxx, Xxxxxxxx, 00000;
E. Subject to the terms and conditions set out in this Agreement, the
Sellers, pursuant to their respective ownership, wish to sell to Oxford,
which wishes to purchase, the NL Quotas (as below defined), the OMG
Business and the Xxxx.xxx Business and, therefore, the Gessaroli Group
(as below defined).
NOW, THEREFORE, in consideration of the premises, as an integral part of this
Agreement, the Parties hereto hereby agree as follows:
1. DEFINITIONS.
Unless differently provided for in this Agreement, the following terms and
expressions, whether used in their singular or plural form, shall have the
meaning hereinafter specified:
1.1. "ACCOUNTING PRINCIPLES" shall mean the accounting principles generally
accepted in Italy established by the "Ordine Nazionale dei Dottori
Commercialisti" and by the "Collegio dei Ragionieri", as supplemented by
the accounting principles established by the International Accounting
Standards Committee.;
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1.2. "AGREEMENT" shall mean the present letter, together with all its relevant
Exhibits;
1.3. "BUSINESSES" shall mean, jointly, the Xxxx.xxx Business (as below
defined) and the OMG Business (as below defined);
1.4. "BUSINESSES FINANCIAL STATEMENTS" or "BUSINESS FINANCIAL STATEMENT" shall
mean the financial statements of each of the Businesses, as at 31st
December, 1999, which include exclusively the Transferred Assets and the
Transferred Liabilities (both terms as below defined), respectively
attached hereto under EXHIBIT 1 AND EXHIBIT 2;
1.5. "CLOSING" shall mean completion of the sale and purchase of the NL
Quotas, of the OMG Business and of the Xxxx.xxx Business in accordance
with Article 0;
1.6. "CLOSING DATE" shall mean the date of Closing as defined under Article
CLOSING.;
1.7. "ENCUMBRANCES" shall mean any claims, interest, option or pre-emption
right or other rights of any parties, charges, pledges, mortgages,
special or general privileges, security, actions, liens, or encumbrances
and the like of whatever nature;
1.8. "EXCLUDED LIABILITIES" shall mean all of the liabilities which are not
expressly transferred and assigned to Newco (as below defined) as a part
of the OMG Business and/or of the Xxxx.xxx Business (as the case may be),
pursuant to Articles 5.4 and 6.4, as the case may be, despite any rules
regulation or laws. With reference to NL and to the purchase of the NL
Quotas, it shall also mean the Indebtedness relating to NL;
1.9. "FINANCIAL STATEMENTS" shall mean all of the financial statements of any
year of TA-CA di Salezzi Xxxxx & C. s.a.s., (an Italian partnership with
with registered office at Xxx Xxxxxxxx x. 00, Xxxxxx, Xxxx Xxxxxx
000/00), XXX, XX and Xxxx.xxx and the Businesses (to include the
Businesses Financial Statements);
1.10. "XXXX.XXX BUSINESS" shall mean the business and activity described under
Whereas A.;
1.11. "GESSAROLI GROUP" shall mean jointly NL, the OMG Business and the
Xxxx.xxx Business;
1.12. "XXXX.XXX 1998 FINANCIAL STATEMENT" shall mean the financial statement of
Xxxx.xxx as at 31st December 1998, validly approved by the competent
partners' meeting on 30th April 1999, attached hereto under EXHIBIT 3;
1.13. "XXXX.XXX 1999 FINANCIAL STATEMENT" shall mean the financial statement of
Xxxx.xxx as at 31st December 1999, to be validly resolved by the
competent partners' meeting prior to Closing;
1.14. "XXXX.XXX SHORT FORM" shall mean the document, whose text shall be agreed
upon by the Parties prior to the relevant transfer, to be executed before
the Notary Public by and between Newco and Xxxx.xxx, with the aim of
implementing the transfer to Newco of the Xxxx.xxx Business; this
document
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shall contain an item by item list of all the assets and all the
liabilities transferred, with the indication of their relevant prices
and/or values;
1.15. "INDEBTEDNESS" shall mean any and all short and long term financial debts
(including principle, interest, fees and expenses), including overdrafts,
of NL, Xxxx.xxx and OMG other than: (i) the FEI facility in favour of NL
entered into on 16th December 1999 (but only up to a maximum amount of
ITL 430 million) ; (ii) the payment obligations under the leases listed
under EXHIBIT 4; (iii) the payment obligations under the Xxxxxxxx
facilities (as described under the mentioned EXHIBIT 4), all the above
net of cash (whether in hand or at banks), it being agreed that machinery
leases (i.e. locazioni finanziarie) not appearing on the schedule in
EXHIBIT 4 attached hereto or not approved in writing by Oxford shall be
considered Indebtedness and calculated as the net present value of the
principal obligation portion of the remaining unpaid lease payments as of
the Closing Date, using a 3% discount rate;
1.16. "INDEPENDENT ACCOUNTANT" shall mean the independent accountant as
appointed pursuant to Article 17;
1.17. "INFORMATION" shall mean all information relating to the Gessaroli Group,
including (but without limitation) industrial and commercial information
and techniques (including - but not limited to - drawings, formulae,
test, reports, operating and testing procedures, shop practices,
instruction manuals and tables of operating conditions) and including all
information relating to the manufacture, supply and service of any
materials of the Gessaroli Group and to the manufacture, marketing and
service of any products or services supplied by the Gessaroli Group,
including customer names and lists, sales targets, sales statistics,
market share statistics, marketing survey and reports, marketing research
and any advertising or other promotional materials and any other material
information;
1.18. "INTELLECTUAL PROPERTY RIGHTS" shall mean any trade marks, service marks,
trade and business names (including internet domain names), rights in
designs, patents, copyrights, moral rights and rights in know-how,
software and database rights and other intellectual property rights, as
related to the Gessaroli Group, in each case whether registered or
unregistered and including applications for the grant of any of the
foregoing and all rights or forms of protection having equivalent or
similar effects to any of the foregoing which may subsist anywhere in the
world, all the above as used or owned by the Gessaroli Group in the
conduct of their respective businesses. Without limiting the generality
of the above, EXHIBIT 4 BIS contains the patent application which has to
be filed with by OMG;
1.19. "ITL" shall mean Italian Lire, and all numerical expressions thereof
follow the continental European convention, whereby the point (.)
separates the thousands and the comma (,) separates the decimals;
1.20. "LIABILITY" or "LIABILITIES" shall mean the amount of any loss, damages,
sanctions, demands, claims, liabilities, costs, penalties, expenses
(including reasonable attorney's fee), or any other kind of damages,
whether accrued,
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contingent or otherwise, as a direct or indirect result of any breach of
the Representations and Warranties (as below defined);
1.21. "NET WORTH" shall mean the net worth of NL, OMG Business or OMG
Business (as the case may be), as per art. 2424 of the Italian Civil
Code;
1.22. "NEWCO" shall mean either Oxford Automotive Italia -
Divisione Gessaroli S.r.l., or Oxford Automotive Italia - Divisione
Plastica S.r.l., as the case may be, the Italian Companies to be
incorporated by Oxford prior to Closing for the purposes of acquiring the
OMG Business, the Xxxx.xxx Business and the NL Quotas;
1.23. "NL 1998 FINANCIAL STATEMENT" shall mean the financial statement of NL as
at 31st December 1998, validly resolved by the competent shareholders'
meeting on 30th April 1999, attached hereto under EXHIBIT 5;
1.24. "NL 1999 FINANCIAL STATEMENT" shall mean the financial statement of NL as
at 31st December 1999, to be validly resolved by the competent
quotaholders' meeting prior to Closing;
1.25. "NL QUOTAS" shall mean jointly and/or severally all the quotas
representing 100% of the present NL issued and authorised stock capital
of ITL 50 million;
1.26. "NL SHORT FORM" shall mean the documents, whose text shall be agreed upon
by the Parties prior to Closing, to be executed before the Notary Public
at Closing with the limited aim to implement the transfer of the NL
Quotas;
1.27. "OMG LEASE PROPERTY" shall mean the real property and improvement
described under EXHIBIT 6;
1.28. "OMG 1998 FINANCIAL STATEMENT" shall mean the financial statement of OMG
as at 31st December 1998, validly resolved by the competent shareholders'
meeting on 30th April 1999, attached hereto under EXHIBIT 7;
1.29. "OMG 1999 FINANCIAL STATEMENT" shall mean the financial statement of OMG
as at 31st December 1999, to be validly resolved by OMG shareholders'
meeting prior to Closing;
1.30. "OMG BUSINESS" shall mean the business and activity described under
Whereas B.;
1.31. "OMG SHORT FORM" shall mean the document, whose text shall be agreed upon
by the Parties prior to the relevant transfer, to be executed before the
Notary Public by and between Newco and OMG with the aim of implementing
the transfer to Newco of the OMG Business; this document shall contain an
item by item list of all the assets and all the liabilities transferred,
with the indication of their relevant prices and/or values;
1.32. "PWC" shall mean PricewaterhouseCoopers, Turin Office and/or Milan
Office;
1.33. "REPRESENTATIONS AND WARRANTIES" shall mean all the representations and
warranties as set forth under this Agreement and/or described in EXHIBIT
8;
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1.34. "SHORT FORMS" shall mean jointly the NL Short Form, the OMG Short Form
and the Xxxx.xxx Short Form;
1.35. "SPECIAL PURPOSES ACCOUNTING RULES" shall mean the special purpose
accounting rules set out under EXHIBIT 9;
1.36. "TARGET NET ASSET VALUE" shall mean the amount of at least ITL 15,8
billion;
1.37. "TAXES" shall mean any and all liabilities or obligations for or in
respect of any income, sale, franchise, use, personal property, real
property, payroll (whether imposed directly on the employer or imposed on
the employees and required to be withheld from wages paid by the employer
and including, for the purposes hereof, social contributions and other
amount to be paid to INPS, INAIL, INPDAI and other similar bodies or
authorities, as required by the law, by the collective national
bargaining agreements or otherwise due), value added ("IVA"), leasing,
transfer, stamp or other taxes, levies, duties, charges or withholdings,
together with any penalties, fines or interest thereon;
1.38. "TFR" shall mean the severance fund due to the employees upon termination
of their employment (i.e. "trattamento di fine rapporto");
1.39. "TRADE ACCOUNTS PAYABLE" shall mean all amounts owing to trade creditors
of NL, or in connection with the OMG Business and Xxxx.xxx Business
incurred in the ordinary course of business consistent with past practice
(as the case may be) and in accordance with the general accepted
accounting principles in Italy, as assigned to Newco, pursuant to this
Agreement, with the exclusion of all the relevant Indebtedness, as at the
Closing Date;
1.40. "TRADE ACCOUNTS RECEIVABLE" shall mean all credits (also if discounted
with banks or otherwise factored) notes and accounts receivable, and in
accordance with the general accepted accounting principles in Italy, of
NL, OMG Business and Xxxx.xxx Business (as the case may be), also to
include "ricevute bancarie", drafts and bills (i.e. "cambiali"), net of
any bad debt allowance, as at the Closing Date;
1.41. "TRANSFERRED ASSETS" shall mean: (i) all of the tangible and intangible
assets related to or used in the OMG Business (with the exclusion of the
OMG Lease Property) and/or Xxxx.xxx Business (as the case may be),
including cash and cash equivalents, (ii) the Transferred Contracts (as
defined below), to be sold by Xxxx.xxx and OMG (as the case may be) under
this Agreement or under those other transactions described under this
Agreement; (iii) any capital grant or other benefit and facility, whether
actually paid or assigned to, or cashed by, or in the process of being
paid to, or cashed by, (in any cases, even if temporarily), the Gessaroli
Group or relating to requests still under evaluation by the competent
authorities and entities; Articles 5.3 and 6.3 describe the major
Transferred Assets respectively relating to the OMG Business and the
Xxxx.xxx Business;
1.42. "TRANSFERRED CONTRACTS" shall mean all contracts and engagements
unperformed (wholly or partially) and related to the OMG Business and/or
the Xxxx.xxx Business (as the case may be), as listed under EXHIBITS 10
and 11, which shall be assigned to Newco as a part of the Businesses and
all contracts, purchase orders or similar agreements with customers,
whether listed or not
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under EXHIBIT 10 and 11, with the exclusion of any other contract not
listed thereunder;
1.43. "TRANSFERRED EMPLOYEES" shall mean the employees of the relevant
Businesses, as respectively listed in EXHIBIT 12 and 13, which includes
all terms and conditions of employment contracts thereof, who will be
transferred to Newco with the Businesses;
1.44. "TRANSFERRED LIABILITIES" shall mean the liabilities and obligations as
related to the relevant Businesses and to be transferred to Newco, as
described Articles 5.4 and 6.4 and no others.
2. THE SALE OF THE GESSAROLI GROUP: THE AGGREGATE CONSIDERATION.
INDEBTEDNESS.
2.1. The Sellers, with reference to their respective ownership and as further
detailed under this Agreement, hereby undertake to sell, transfer and
assign, free of any Encumbrances, at Closing to Oxford, who, subject to
the conditions precedent set out under Article 14 being fulfilled, hereby
undertakes to acquire at Closing from the relevant Seller, or to cause
its designee so to do:
(a) the Xxxx.xxx Business, pursuant to Article 5;
(b) the OMG Business, pursuant to Article 6;
(c) the NL Quotas, pursuant to Articles 8 and 9.
2.2. Subject to Articles 3 and 16, the aggregate consideration for the
transfer of the Gessaroli Group is determined, as of the date hereof, in
the amount of ITL 24 billion (the "Aggregate Preliminary Consideration")
and on the assumption that:
(a) Closing Date Net Asset Value (as below defined) is not lower than
the Target Net Asset Value;
(b) Except as set forth under EXHIBIT 14, from January 1st, 1999, no
cash, earnings, dividends or other profits, as accrued or
available as from the said date, in any manner generated, loans,
accrued liabilities relating or pertaining to OMG, Xxxx.xxx, NL
or Xx.Xx, have been in any manner paid or distributed, whether to
the Sellers or otherwise, it being agreed that all the said cash,
earnings, dividends or other profits shall remain for the benefit
of the Gessaroli Group as transferred to Oxford, pursuant to this
Agreement.
2.3. Therefore, the Aggregate Preliminary Consideration is apportioned with
reference to the NL Quotas, the OMG Business and the Xxxx.xxx Business
for the sole purpose of implementing the relevant transfers of title and
to accomplish with any relevant duties and obligations. Notwithstanding
this apportionment: (i) the Preliminary Aggregate Consideration, as
adjusted in accordance with Articles 3 and 16, and (ii) the NL Quotas,
the OMG Business and the Xxxx.xxx Business shall be respectively deemed
to be as the sole,
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entire and non severable price and object of the present transaction and,
therefore, of this Agreement.
The Aggregate Preliminary Consideration shall be paid:
(i) as to 90% thereof, subject to the provisions of Article
2.4 and to the provisions set forth by Articles 5.8, 6.8
and 9.3, at Closing;
(ii) the remainder thereof (i.e. the Final Price as below
defined and as adjusted pursuant to Articles 3 and 16),
according to the provisions of Articles 16 and 17.
2.4. The Gessaroli Group is and shall be sold free of any Indebtedness.
Therefore, the Sellers, with reference to their respective ownership and
prior to Closing, shall reimburse all of the Indebtedness, so that no
Indebtedness will be in the accounts of OMG, Xxxx.xxx or NL, at the
Closing Date. Should the Sellers have failed to reimburse the
Indebtedness prior to Closing, Oxford shall directly repay the relevant
outstanding sums and shall reduce the Aggregate Preliminary Price (and,
therefore, the Final Price) by the same amount.
2.5. Should each of the OMG Provisional Price, the NL Provisional Price or the
Xxxx.xxx Provisional Price (all these terms as below defined), once
adjusted in accordance with Articles 3 and 16 or otherwise in this
Agreement, result to be negative, the other prices shall be
proportionally reduced so that the aggregate amount to be paid by Oxford
shall be equal to the Final Price, as defined under Article 16.
3. PRICE ADJUSTMENTS.
Price adjustment relating to Indebtedness
3.1. It is acknowledged and agreed that the Gessaroli Group shall be
transferred to Oxford free of any Indebtedness. For the purposes of
calculating the Indebtedness, the Parties acknowledge and agree that no
financial leases (i.e. `locazioni finanziarie'), other than those listed
under EXHIBIT 4, must have been entered into by any of OMG, Xxxx.xxx or
NL prior to the date hereof, nor shall be entered into prior to the
Closing Date without having been approved in writing by Oxford.
3.2. The Parties agree that the Final Price, once determined pursuant to
Article 16 below, shall be adjusted as follows:
(a) Absence of price increase: If the aggregate Indebtedness of the
Gessaroli Group as of the Closing Date ("ICD") is less than, or
equal to, ITL 1,1 billion, no adjustment will be made;
(b) Price increase: Where ICD exceeds ITL 1,1 billion, but is less or
equal to ITL 1,6 billion, the Final Price shall be increased by
an amount equal to ICD less ITL 1,1 billion, provided that the
amount of such price increase shall not exceed ITL 500 million in
any event.
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(c) Further price increase: Where ICD is greater than ITL 1,6
billion, but less then ITL 3 billion, any further price increase
shall be conditioned upon the following :
a) If Trade Accounts Receivables ("AR") as of the
Closing Date minus Trade Accounts Payable ("AP") as
of the Closing Date ("AR/AP") is greater than ITL
8,3 billion; and if:
b) the Closing Date Net Asset Value (as defined under
Article 16.2) exceeds the Target Net Asset Value by
an amount by which the AR/AP exceeds ITL 8.3
billion;
then the Final Price shall be increased by the amount by which
ICD is in excess of ITL 1.6 billion (but less that ITL 3.0
billion), but in no event by an amount greater than the amount
by which AR/AP exceeds ITL 8.3 billion. In no event shall the
further price increase under this sub-paragraph (c) be more than
ITL 1.4 billion.
Price adjustments relating to taxes of OMG and Xxxx.xxx.
3.3. Without prejudice to a possible price adjustment relating to
Indebtedness, the Final Price may be further adjusted, as below set
forth, in relation to the aggregate income tax burden (i.e. IRPEG and
IRAP) on OMG and Xxxx.xxx with reference either (i) to their respective
1999 earnings from operations (i.e. utile operativo) and to the portion
of their respective 2000 earnings from operations relating to January
2000 up to the Closing Date, or (ii) to their respective taxable income
for the same period, whichever is lower. In no event shall the effects of
the sale of the OMG Business and the Xxxx.xxx Business, as well the
amounts payable under this article 3.3, be considered as a part of the
above mentioned 1999 and 2000 earnings from operations.
It is acknowledged and agreed by and between the Parties that,
notwithstanding the provisions of this Article 3.3 or any other
provisions under this Agreement, Oxford shall not be deemed to be in any
manner involved in, or liable for, any tax liability or obligation of any
of the Sellers. Therefore, the responsibility for any choice whatsoever
made by the Sellers in relation to documents to be prepared or delivered
by them, even if in relation to any obligation or provision set forth
under this Agreement, shall remain solely for the Sellers, whether or not
these documents have to be submitted, verified or approved by Oxford
pursuant to this Agreement.
The Sellers represent and warrant that they have duly and timely made any
and all payments due in relation to the first and second advanced
instalment with reference to 1999 IRAP and IRPEG. In no event a price
adjustment will be due in relation to any possible tax assessment
relating to the years 1999 and 2000. On the basis of the above, the
Parties agree that, as additional adjustments of the Final Price, Oxford
shall pay to OMG and to Xxxx.xxx, as hereinafter provided, a sum equal to
the payment which will be made by OMG and Xxxx.xxx as balance for their
respective 1999 taxes (IRPEG and IRAP) either on earnings from
operations, or on taxable income, whichever is lower. In addition, Oxford
shall pay to OMG and to Xxxx.xxx an additional sum equal to the portion
of
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IRPEG and IRAP which will be paid by them either with reference to 2000
earnings from operations relating to January 2000 up to the Closing Date,
or with reference to taxable income for the same period, whichever is
lower.
In no event shall the amount of the price increase relating to this
Article 3.3 exceed, in aggregate, the amount of ITL 1.680.000.000.
For the purposes of this Article 3.3, the Sellers shall deliver to
Oxford, 20 days prior to the relevant terms of filing and, in any event,
20 days prior to the relevant payment date, the tax returns of OMG and
Xxxx.xxx relating to the relevant years 1999 and 2000, together with all
the documents and information which are necessary to verify the
correctness of the said tax returns and of the payment made, and also
with all additional information and documentation that Oxford may
reasonably require for the purposes of assessing and verifying the
amounts due by it.
Subject to the provisions of the immediately preceding paragraph and to
the provisions of the last sub-paragraph of this Article 3.3, the sums
relating to the price adjustment described under this Article 3.3 shall
be paid by Oxford to OMG and Xxxx.xxx as follows, provided that and only
if - the relevant payments have been duly and timely made by both OMG and
Xxxx.xxx:
- as to the adjustment relating to the balance concerning 1999 IRAP
and IRPEG, either on the same date as the date of the actual payment
made by both OMG and Xxxx.xxx in connection with the filing of the
relevant 1999 tax returns, or 5 days after the Closing Date,
whichever is later;
- as to the adjustment relating to taxes on OMG and Xxxx.xxx in
relation to their January 2000 up to the Closing Date earnings from
operations or their taxable income: (i) a first provisional payment
equal to ITL 300 million on the same date as the date of the actual
payment by both OMG and Xxxx.xxx. of the relevant first advanced
instalment; (ii) a second provisional payment equal to ITL 300
million on the same date as the date of the actual payment by both
OMG and Xxxx.xxx. of the relevant second advanced instalment, (iii)
the balance on the same date as the date of the relevant actual
payment by both OMG and Xxxx.xxx, it being agreed that in case the
provisional payments made by Oxford is higher than the amount
actually due by OMG and Xxxx.xxx, the balance shall be reimbursed to
Oxford.
The Sellers hereby undertake not to adopt any measure of any nature
whatsoever, nor to prepare the relevant tax returns in a manner, which
may lead to an increase of the sums to be paid by Oxford as an adjustment
on the Final Price pursuant to this Article 3.3.
No price adjustment shall be paid by Oxford should OMG and Xxxx.xxx fail
to pay, within the due dates (also in relation to any due advanced
payments and instalments), the amounts due by them in relation to their
respective taxable incomes, nor any payment, even if within the
thresholds set out under this Article 3.3, shall be made by Oxford in
relation to interests, fines and the like in connection with payments
already made or in any event due by OMG and/or Xxxx.xxx also prior to the
date hereof.
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Page 13 of 53 pages
Should Oxford disagree on the amounts to be paid by it pursuant to this
Article 3.3 as resulting either from the relevant tax returns or
otherwise, Oxford shall be entitled to refer the matter to the
Independent Accountant in accordance with Article 17 below, within 15
days of the actual delivery to Oxford of: (i) the 1999 and 2000 OMG and
Xxxx.xxx tax returns, and of (ii) all the relevant documentation and
information. Should Oxford fail to refer the matter to the Independent
Accountant within the aforementioned 15 day term, the sums resulting out
of the said tax returns shall be deemed to be accepted by it.
3.4. In case a price adjustment becomes due either by Oxford or by the Sellers
pursuant to this Agreement, the relevant sum, failing an agreement prior
to the date of the actual payment, shall be deemed to be an adjustment
relating to each of the prices allowed for the sale of the NL Quotas, the
Xxxx.xxx Business and the OMG Business and, therefore, apportioned in
proportion to the sums paid by Oxford at Closing in connection therewith.
In addition, the Parties hereby undertake to co-operate and execute all
the relevant documents, also in front of a Notary Public, should this be
due to comply with any applicable law and regulation.
4. THE RE-SUBSCRIPTION AND PAYMENT OF THE NL CAPITAL STOCK.
4.1. It is acknowledged that an extraordinary quotaholders' meeting in NL has
been held on 24th January 2000 for the purposes of approving the
reduction of the capital stock of NL from the formal present amount of
ITL 50 million and the subsequent coverage of 1994 losses and the
re-increase thereof, by means of immediate subscription and payment, up
to the amount of ITL 50 million.
4.2. Upon consummation of the procedure mentioned above, the capital stock of
NL shall be owned as follows:
(a) Mr. Gessaroli 35% of the NL capital stock;
(b) Mrs. Gessaroli: 30% of the NL capital stock;
(c) Xx. Xxxxx Xxxxxxxxx: 17,50% of the NL capital stock;
(d) Xx. Xxxxx Xxxxxxxxx: 17,50% of the NL capital stock.
4.3. Prior to Closing, the Sellers shall have obtained the relevant approval
(i.e. 'omologa') by the competent Court.
5. THE XXXX.XXX BUSINESS.
5.1. Xxxx.xxx hereby undertakes to sell, transfer and assign, free of any
Encumbrances, at Closing to Oxford and/or Newco, who, subject to the
conditions precedent set out under Article 14 being fulfilled, hereby
undertake to acquire at Closing from Xxxx.xxx the Xxxx.xxx Business.
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Page 14 of 53 pages
5.2. The transfer of the Xxxx.xxx Business shall be performed in full
compliance with all applicable rules and regulations, including (without
limitation) the procedure set out under Article 2112 of the Italian Civil
Code and of Article 47, L. 428/90. In addition, prior to the relevant
transfer of the Xxxx.xxx Business, Xxxx.xxx shall procure (and the
Sellers hereby undertake to cause Xxxx.xxx so to do) the certificate
provided for by Article 14 of D.Lgs. 472 of 18th December 1997 with
reference to the Xxxx.xxx Business, which certificate shall certify the
absence of any tax liabilities pending or threatened with reference to
the said Xxxx.xxx Business in relation to the matters mentioned by the
said D.Lgs 472/1997.
5.3. The Transferred Assets, wherever located, to be assigned and transferred,
by executing the Xxxx.xxx Short Form, as a part of the Xxxx.xxx Business
shall be all of the assets owned or in any manner used by Xxxx.xxx to
carry out its activity, as at the date hereof and at the date of the
relevant transfer, to include:
(a) Transferred Assets;
(b) machinery and equipment related to, or used in the business
carried out by Xxxx.xxx;
(c) Intellectual Property Rights;
(d) Stock;
(e) Leases and leasehold improvements, related to or used in the
business carried out by Xxxx.xxx;
(f) Goodwill;
(g) All grants, contributions, interest subsidies, tax credits and
other facilities of any nature (EXHIBIT 15 contains a list of the
most significant of them), whether finally or temporary cashed by
Xxxx.xxx, or filed with, approved or resolved by, the competent
bodies and authorities in favour of Xxxx.xxx;
(h) employment contracts relating to the Transferred Employees;
(i) benefit of the Transferred Contracts, together with all relevant
prepaid expenses, deposits and retention held by third parties;
(j) Trade Accounts Receivable;
(k) Information, together with all records and documents relating to
the Xxxx.xxx Business;
(l) tax credit for advanced payment of any tax duties related to TFR
and receivables vis-a-vis INPS (i.e. "Istituto Nazionale
Previdenza Sociale") for "contratti di solidarieta" relating to
TFR, as described in EXHIBIT 16;
(m) credits and receivables vis-a-vis INAIL (i.e. "Istituto Nazionale
delle Assicurazioni ed Infortuni sul Lavoro"), if any;
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Page 15 of 53 pages
(n) any and all other assets relating to or used in the business
carried out by Xxxx.xxx;
(o) telephone numbers;
(p) customer numbers assigned to Xxxx.xxx by Fiat or other customers
with which Xxxx.xxx does business;
(q) bank accounts;
(r) subject to Article 13.4, insurance policies;
(s) pre-paid assets.
5.4. The Transferred Liabilities shall be only those liabilities (and no
others) of Xxxx.xxx which are expressly shown in the relevant Business
Financial Statement (which will be used for the purposes of the Xxxx.xxx
Short Form), as they will consistently result as of the Closing Date from
the Closing Balance Sheets, provided that: (i) they exclusively and
directly relate to the Xxxx.xxx Business, and (ii) the contracts they
source from have been duly and irrevocably assigned and transferred; and
(iii) they relate to business and activities carried out in good faith
and in compliance with the rules of the best professional due diligence.
Without limiting the generality of the above, the Transferred Liabilities
shall not include any Indebtedness and shall consist exclusively of the
following:
(a) Transferred Employees' severance funds and other funds and
reserves: the severance fund (i.e. TFR) and the accruals for
holidays, overtime and the like, all of the above as relating to
the Transferred Employees only;
(b) Transferred Contracts. The performance of the obligations
(including the obligations of making payment and of delivering
goods) which become due on or after the Closing Date to the
extent they relate to the Xxxx.xxx Business under the Transferred
Contracts, provided such liabilities and obligations are fully
disclosed in the books and records of Xxxx.xxx, and further
provided that such liabilities, undertakings and obligations were
entered into in the ordinary course of business consistent with
past practices with regard to the Xxxx.xxx Business;
(c) Trade Accounts Payable.
(d) Other Payables and Accruals. Other payables and accruals relating
to the Xxxx.xxx Business of the type and nature contemplated by
the form set forth in the Business Financial Statement (EXHIBIT
1) incurred in the ordinary course of business consistent with
the past practice.
5.5. Excluded Liabilities. Except as set forth in the above Article 5.4, no
other liabilities of any nature shall be assigned and transferred to
Newco as a part of the Xxxx.xxx Business and therefore Newco shall not
assume or otherwise be liable for any liabilities, undertakings or
obligations of Xxxx.xxx or the Xxxx.xxx Business, whether accrued,
absolute, contingent or otherwise, and also in
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Page 16 of 53 pages
respect of Taxes, which will remain the exclusive liability of Xxxx.xxx
and which shall not be a part of the Xxxx.xxx Business as transferred.
5.6. Subject to Articles 16 and 17, the price payable by Newco to Xxxx.xxx for
the Xxxx.xxx Business shall be a sum equal to the Net Asset Value of
Xxxx.xxx, plus a sum as value of the Goodwill, and shall amount in
aggregate to ITL 1.500.000.000 (one billion five hundred million) (the
"Xxxx.xxx Price").
5.7. Subject to Article 2.3 and 5.8, the Xxxx.xxx Price shall be paid by Newco
to Xxxx.xxx as follows:
(a) ITL 1.350.000.000 at Closing (the "Xxxx.xxx Provisional Price");
(b) the remainder portion of the Xxxx.xxx Price, after completion of
the procedure set out under Article 16 and pursuant to the terms
set out thereunder.
5.8. Newco may deduct from the Xxxx.xxx Price or from the Xxxx.xxx Provisional
Price, any sum due by the Gessaroli Family in respect of any breach on
the part of the Gessaroli Family of the obligations, undertakings,
duties, Representations and Warranties, as set out under this Agreement.
5.9. As a part of the agreement between Newco and Xxxx.xxx and, therefore, by
means of an express provision of the Xxxx.xxx Short Form, Xxxx.cas shall
enter into the same non competition obligation as set out under Article
17 below.
5.10. No later than 15 days after the Closing Date, the competent meeting of
Xxxx.xxx shall validly and irrevocably resolve:
(a) the amendment of the corporate name of Xxxx.xxx from the present
one to MEC S.a.s. di Agostino Gessaroli & C.;
(b) the winding up of Xxxx.xxx;
(c) the appointment of Xx. Xxxxxxxx Gessaroli as the liquidator of
Xxxx.xxx.
it being also agreed that this winding up shall not be revoked, nor the
Xxxx.xxx capital shall be in any manner assigned or transferred.
5.11. The Sellers hereby undertake that Xxxx.xxx, notwithstanding its winding
up, shall be kept in good financial conditions and shall not be insolvent
in respect of any possible liability. The Bank Guarantee (as defined
under Article 19.5 below) shall therefore cover any possible liability or
responsibility of Newco in respect to any party in connection with any
failure on the part of the Sellers to comply with this obligation.
6. THE OMG BUSINESS.
6.1. OMG hereby undertakes to sell, transfer and assign, free of any
Encumbrances, at Closing to Oxford or Newco, who, subject to the
conditions precedent set out
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under Article 14 being fulfilled, hereby undertake to acquire at Closing
from OMG the OMG Business, free from any Encumbrances.
6.2. The transfer of the OMG Business shall be performed in full compliance
with all applicable rules and regulations, including (without limitation)
the procedure set out under Article 2112 of the Italian Civil Code and of
Article 47, L. 428/90. In addition, prior to the relevant transfer of the
OMG Business, OMG shall procure (and the Sellers hereby undertake to
cause OMG so to do) the certificate provided for by Article 14 of D.Lgs.
472 of 18th December 1997 with reference to the OMG Business, which
certificate shall certify the absence of any tax liabilities pending or
threatened with reference to the said OMG Business in relation to the
matters mentioned by the said D.Lgs 472/1997.
6.3. The Transferred Assets, wherever located, to be assigned and transferred,
by executing the OMG Short Form, as a part of the OMG Business shall be
all of the assets owned or in any manner used by OMG to carry out its
activity, as at the date hereof and at the Closing Date, to include:
(a) Transferred Assets;
(b) machinery and equipment related to, or used in the business
carried out by OMG;
(c) Intellectual Property Rights;
(d) Stock;
(e) Leases and leasehold improvements, related to or used in the
business carried out by OMG (including the free lease of the
premises in Sgorgola-FR);
(f) Goodwill;
(g) All grants, contributions, interest subsidies, tax credits and
other facilities of any nature (EXHIBIT 15 contains a list of
the most significant of them), whether finally or temporary
cashed by OMG, or filed with, approved or resolved by, the
competent bodies and authorities in favour of OMG;
(h) employment contracts relating to the Transferred Employees;
(i) benefit of the Transferred Contracts, together with all relevant
prepaid expenses, deposits and retention held by third parties;
(j) Trade Accounts Receivable;
(k) Information, together with all records and documents relating to
the Business;
(l) tax credit for advanced payment of any tax duties related to TFR
and receivables vis-a-vis INPS (i.e. "Istituto Nazionale
Previdenza Sociale") for "contratti di solidarieta" relating to
TFR, as described in EXHIBIT 17;
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Page 18 of 53 pages
(m) credits and receivables vis-a-vis INAIL (i.e. "Istituto
Nazionale delle Assicurazioni ed Infortuni sul Lavoro"), if any;
(n) any and all other assets relating to or used in the business
carried out by OMG;
(o) telephone numbers;
(p) customer numbers assigned to OMG by Fiat or other customers with
which OMG does business;
(q) bank accounts;
(r) Subject to Article 13.4, the insurance policies;
(s) pre-paid assets.
6.4. The Transferred Liabilities shall be only those liabilities (and no
others) of OMG which are expressly shown in the relevant Business
Financial Statement (which will be used for the purposes of the OMG Short
Form), as they will consistently result as of the Closing Date from the
Closing Balance Sheets, provided that: (i) they exclusively and directly
relate to the OMG Business, and (ii) the contracts they source from have
been duly and irrevocably assigned and transferred; and (iii) they relate
to business and activities carried out in good faith and in compliance
with the rules of the best professional due diligence. Without limiting
the generality of the above, the Transferred Liabilities shall not
include any Indebtedness and shall consist exclusively of the following:
(a) Transferred Employees' severance funds and other funds and
reserves: the severance fund (i.e. TFR) and the accruals for
holidays, overtime and the like, all of the above as relating to
the Transferred Employees only;
(b) Transferred Contracts. The performance of the obligations
(including the obligations of making payment and of delivering
goods) which become due on or after the Closing Date to the
extent they relate to the OMG Business under the Transferred
Contracts, provided such liabilities and obligations are fully
disclosed in the books and records of OMG, and further provided
that such liabilities, undertakings and obligations were entered
into in the ordinary course of business consistent with past
practices with regard to the OMG Business;
(c) Trade Accounts Payable.
(d) Other Payables and Accruals. Other payables and accruals
relating to the OMG Business of the type and nature contemplated
by the form set forth in the Business Financial Statement
(EXHIBIT 2) incurred in the ordinary course of business
consistent with the past practice).
6.5. Excluded Liabilities. Except as set forth in the above Article 6.4, no
other liabilities shall be assigned and transferred to Newco as a part of
the OMG Business and therefore Newco shall not assume or otherwise be
liable for any
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liabilities, undertakings or obligations of OMG or the OMG Business,
whether accrued, absolute, contingent or otherwise, and also in respect
of Taxes, which will remain the exclusive liability of OMG and which
shall not be a part of the OMG Business as transferred.
6.6. Subject to Articles 16 and 17, the price payable by Newco to OMG for the
OMG Business shall be a sum equal to the Net Asset Value of OMG , plus a
sum as value of the Goodwill, and shall amount in aggregate to ITL
00.000.000.000 (eighteen billion seven hundred million) (the "OMG
Price").
6.7. Subject to Article 2.3 and 6.8, the OMG Price shall be paid by Newco to
OMG as follows:
(a) ITL 00.000.000.000 at Closing (the "OMG Provisional Price");
(b) the remainder portion of the OMG Price, after completion of the
procedure set out under Article 16 and pursuant to the terms set
out thereunder.
6.8. Newco may deduct from the OMG Price or from the OMG Provisional Price,
any sum due by the Gessaroli Family in respect of any breach on the part
of the Gessaroli Family of the obligations, undertakings, duties,
Representations and Warranties, as set out under this Agreement.
6.9. As a part of the agreement between Newco and OMG and, therefore, by means
of an express provision of the OMG Short Form, OMG shall enter into the
same non competition obligation as set out under Article 17 below.
6.10. No later than 15 days after Closing, the competent extraordinary
shareholders' meeting of OMG shall validly and irrevocably resolve:
(a) the amendment of the corporate name of OMG from the present one
to Immobiliare A.G.
(b) the amendment of the company scope of OMG from an industrial
company to a company for the management of real estate
properties.
6.11. The Sellers hereby undertake that OMG shall be kept in good financial
conditions and shall not be insolvent in respect of any possible
liability. The Bank Guarantee (as defined under Article 19.5 below) shall
therefore cover any possible liability or responsibility of Newco in
respect of any third party in connection with any failure on the part of
the Sellers to comply with this obligation.
7. APPORTIONMENTS RELATING TO THE OMG BUSINESS AND TO THE XXXX.XXX BUSINESS.
7.1. With reference to the liabilities of the OMG Business and the Xxxx.xxx
Business indicated under the following Articles 7.1(a), 7.1(b) and
7.1(c), unless accrued on the Closing Balance Sheet as accruals or unless
such liabilities are of the same kind and nature as contemplated by the
Businesses Financial Statements,
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provided that they have been entered into in the ordinary course of
business consistently with the past practice, the following rules shall
apply:-
(a) All rents, rent charges, rates, insurance premiums, gas, water,
electricity and telephone charges, royalties and other outgoings
relating to or payable or accruing in respect of each of the
Businesses down to the Closing Date shall be respectively borne
by OMG and Xxxx.xxx and, as from the Closing Date, shall be
borne by Newco and all the said rents, royalties, etc., and
other periodical payments receivable or accruing in respect of
each of the Businesses down to and including the Closing Date
shall respectively belong to OMG and Xxxx.xxx and as from the
Closing Date shall belong to Newco. Those outgoings and amounts
receivable shall if necessary be apportioned accordingly,
provided that all outgoings specifically referable to the extent
of the use of any property or rights shall be apportioned
according to the extent of such user.
(b) All salaries, wages and other emoluments and all contributions
for which OMG and/or Xxxx.xxx are liable as employers in respect
of any employee or consultant under any contractual or statutory
obligation shall be borne by OMG and/or Xxxx.xxx down to the
Closing Date and shall, if necessary, be apportioned
accordingly.
(c) Sums payable periodically shall be apportioned by charging or
allowing:
(i) for any payment period entirely attributable to one
Party, the whole of the instalment payable for that
period;
(ii) for any part of a payment period, a proportion on an
annual basis.
(d) The net amount (if any) payable by or to OMG and/or Xxxx.xxx
under this article shall be calculated in accordance with, and
as a part of, the procedure set under Article 16. Any possible
balance of these amounts as resulting of this calculation will
be paid or deducted together with the Final Price.
8. TRANSFER OF THE NL QUOTAS.
8.1. The Gessaroli Family hereby undertakes to sell, transfer and assign, free
of any Encumbrances, at Closing to Oxford or Newco, which hereby
undertake, subject to the conditions precedent set out under Article 14
being fulfilled, to acquire, full title to the NL Quotas, in accordance
with the following percentages:
(a) Mr. Gessaroli hereby undertakes to sell all of his part of the
NL Quotas, equal to 35% thereof;
(b) Mrs. Gessaroli hereby undertakes to sell all of his part of the
NL Quotas, equal to 30% thereof;
(c) Xx. Xxxxx Xxxxxxxxx hereby undertakes to sell all of his part of
the NL Quotas, equal to 17,50% thereof;
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Page 21 of 53 pages
(d) Xx. Xxxxx Xxxxxxxxx hereby undertakes to sell all of his part of
the NL Quotas, equal to 17,50% thereof.
8.2. Upon the sale mentioned under this Article 9, Newco shall have title to
all of the NL Quotas and, therefore, to 100% of the NL capital stock.
9. THE PRICE FOR THE NL QUOTAS.
9.1. Subject to Article 2.3 and 9.3 below, the aggregate price for the
transfer of the NL Quotas which shall be transferred at the Closing shall
be equal to ITL 3.800.000.000 (three billion eight hundred million)
(hereinafter referred to as the "NL Price").
9.2. The NL Price to be paid by Newco to each of the members of the Gessaroli
Family, proportionally to the percentage of NL Quotas transferred by each
of them in accordance with Article 8.1 hereinabove, shall be allowed as
follow:
(a) ITL 3.420.000.000 at Closing (the "NL Provisional Price");
(b) the remainder portion of the NL Price, after completion of the
procedure set out under Article 16 and pursuant to the terms set
out thereunder.
9.3. Oxford and Newco may deduct from the NL Provisional Price or the NL
Price, any sum due by the Gessaroli Family in respect of any breach on
the part of the Gessaroli Family of the obligations, undertakings,
duties, Representations and Warranties, as set out under this Agreement.
10. RIGHT OF WITHDRAWAL.
10.1. If before Closing:
(a) The due diligence investigation on the Gessaroli Group (also in
respect of the `environmental phase one') which shall be
continued and/or carried out by Oxford and its consultants up
until the Closing Date, evidence any material facts or
circumstances which constitutes a breach of the Representations
and Warranties; or
(b) Any of the certificates provided for by Article 14 of D.Lgs. 472
of 18th December 1997 with reference to: (i) the business
assigned by TaCa. S.a.s. to OMG effective as from November 1st,
1999 (ii) the OMG Business, or (iii) the Xxxx.xxx Business,
reveal that there are tax liabilities pending or threatened with
reference to the Businesses in relation to the matters mentioned
by the said D.Lgs 472/1997;
(c) the increase in capital described under Article 3 above is not
fully complied with by the Sellers or the relevant approval
(i.e. `omologa') of the competent Court is not issued;
(d) any breach of the Representations and Warranties comes in any
event to the notice of Oxford, or if, in any event: (i) the
Sellers are in material
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Page 22 of 53 pages
breach of any obligation on their part under this Agreement and
it has not been remedied prior to Closing to Oxford's
satisfaction; or if (ii) anything occurs which, had it occurred
on or before the date of this Agreement, would have constituted
a breach of the Representations and Warranties; or
(e) the meetings with Fiat which will be arranged by the Seller to
announce to Fiat the transfer to Oxford of the Gessaroli Group
have not been satisfactory in all respect to Oxford in its sole
and absolute discretion; or
(f) anything occurs (except something arising from an act or
omission of Oxford) which has, or would be likely to have after
Closing, a material adverse effect on the Gessaroli Group and
its operations or the businesses carried out by or prospects
with respect to each of OMG, NL and Xxxx.xxx, or on Oxford's
ability to carry the Gessaroli Group on in substantially the
same manner or prospects, including but not limited to any of
the following:
(i) a local strike, lock-out or other significant
industrial dispute arising or being threatened;
(ii) any judicial or administrational or arbitration
proceedings being instituted or threatened by or
against the Gessaroli Group;
(iii) any significant assets of the Gessaroli Group being
destroyed or damaged;
(g) The Sellers fail to comply with the conditions precedent set
forth under Article 14 required on their part;
then, but without prejudice to any other rights or remedies available to
Oxford, Oxford, should the Sellers be unable or unwilling to forthwith
offer a full remedy (e.g.: a reduction of the Aggregate Preliminary
Price, special warranties and representations, special indemnification
obligations and relevant security) fully satisfactory to Oxford in its
sole discretion, may elect to withdraw (`recesso ad nutum' for the
purposes of Italian law) from this Agreement, by giving notice in writing
to that effect to the Sellers, without any obligations to pay damages or
indemnities of any kind and nature in favour of the Sellers. The
provision of the preceding paragraph shall not apply in case one of the
events, other than that described under letter g.(i), has been
exclusively caused by Oxford.
10.2. With the sole exceptions of the events described under letters (e) and
(f).(i) of Article 10.1, if Oxford elects not to complete the purchase of
the Gessaroli Group in any of the circumstances mentioned above under
Article 10.1, or if Oxford withdraws this Agreement under the general
law, then (but without prejudice to any other rights or remedies
available to Oxford), the Sellers shall indemnify Oxford against all
costs, fees, charges and expenses incurred by it in connection with the
negotiation, preparation and withdrawal from this Agreement.
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11. DAMAGE TO ASSETS BEFORE CLOSING.
11.1. Without prejudice to the provisions of Article 10, if any of the assets
of the Gessaroli Group is destroyed or damaged or breaks down before
Closing, than at Oxford's option either:
(a) that asset shall be excluded from the sale and retained by the
Sellers at Closing, in which case the Aggregate Preliminary
Consideration shall be reduced by an amount equal to the price
of a new asset able to substitute that asset; or
(b) that asset shall be purchased at Closing, in which case Oxford
may require the Sellers to repair or substitute the relevant
asset at the Sellers' expense and, in default of the Sellers
doing so before Closing, Oxford may itself repair or substitute
the asset after Closing at the Sellers' expense, in which case
Oxford may deduct from the Final Price the cost of repair or
substitution of the asset.
11.2. If the Parties are unable to agree the amount of the reduction, the
matter shall be referred to the Independent Accountant in accordance with
Article 17.
12. COVENANTS UP TO CLOSING.
12.1. As from the date of execution of this Agreement and until Closing:
(a) the activity relating to the Gessaroli Group shall be conducted
only in the ordinary course of business and in accordance with
practices in accordance with law, reasonable and customary in
the circumstances by using the due professional diligence;
(b) the organisation relating to the Gessaroli Group shall not be
adversely affected, and no material loss or damage to the
Gessaroli Group, whether or not insured, shall occur;
(c) no transactions, disposals or operations of any kind, shall be
made or conducted regarding the NL Quotas, the OMG shares or the
Xxxx.xxx partnership, or regarding any of the assets of NL, the
OMG Business or the Xxxx.xxx Business, except in the ordinary
course of business;
(d) the hiring and dismissal employees and consultants shall be
conducted within the boundaries of the ordinary course of
business and in any event in compliance with applicable law and
national collective agreements; there shall be no any increase
in the rate or terms of compensation or benefits payable or to
become payable to any of the employees of the Gessaroli Group,
other than for what mandatorily provided by law;
(e) no indebtedness, contract or commitment shall be entered into,
except commitments which are normal in the ordinary course of
the business for the purchase from suppliers and orders from or
contracts with customers; there are no accrued liabilities, of
whatever nature, except as incurred in
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Page 24 of 53 pages
the ordinary course of business; in addition no change in the
level of the inter-company transactions;
(f) Trade Accounts Receivable and Trade Accounts Payable shall be
maintained in accordance with their respective terms and
conditions and vary only in the ordinary course of business and
consistent with historical and legitimate practice;
(g) No receivables (including Trade Accounts receivable) will be
factored or discounted.
12.2. In the event that any situation, as above described under Article 12.1,
occurs, the Sellers have to notify in advance - before any decision is
made - their intention to Oxford. With specific reference to the events
described under sub-clause (d) of Article 12.1, the Sellers (directly, or
by causing OMG or NL, as the case may be, so to do), in cases or
circumstances Oxford deems to be potentially able to create a material
effect on the relevant portion of the Gessaroli Group and/or its
activity, shall have to comply with the relevant instruction of Oxford.
However, under no circumstances the notification to Oxford (or the right
of Oxford set out under this paragraph) can be considered as a managing
activity of Oxford with regard to the Gessaroli Group and the decision
will be only matter of the Sellers.
12.3. In addition, the Sellers shall give, as from the date hereof and up until
the Closing Date, their, and shall ensure the Gessaroli Group personnel's
full co-operation and shall ensure full access to all documents and sites
and shall satisfy any reasonable request of Oxford or its consultants, so
that Oxford and its consultants are able to carry out, or to continue to
carry out, in a manner satisfactory to them, the due diligence
investigation (also in respect of the `environmental phase one') on the
Gessaroli Group.
12.4. Finally, prior to Closing:
(a) the Sellers shall obtain from each of the creditors of OMG and
Xxxx.xxx, a waiver to act against the transferee of the OMG
Business and of the Xxxx.xxx Business, pursuant to Article 2560
(2) of the Italian Civil Code; and
(b) shall procure that all grants, contributions, subsidised loans
and other facilities of any nature, whether finally or temporary
cashed by OMG, Xxxx.xxx or NL (including Xx.Xx. s.a.s., if
applicable), or filed with, approved or resolved by, the
competent bodies and authorities in favour of OMG, Xxxx.xxx of
NL (including Xx.Xx. S.a.s., in applicable) shall be duly
assigned and transferred to Oxford or Newco.
13. SPECIAL COMMITMENTS.
Special commitments concerning Mr. Gessaroli, Mrs. Gessaroli and Xx. Xxxxx
Xxxxxxxxx.
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13.1. It is the wish of the Parties that, after Closing, Xx. Xxxxxxxx
Gessaroli, Xxx. Xxxxx Xxxxxxxxx and Xx. Xxxxx Xxxxxxxxx continue to
render their services in favour of the Gessaroli Group, so as to let
Oxford take advantage of their respective professional reputation and
skill.
13.2. In the light of the above, the Parties agree as follows:
(a) At Closing, or as soon as practicable thereafter, Oxford shall
cause that Mr. Gessaroli is appointed as a director of Newco and
NL for a minimum period of two years. As soon as practicable,
Mr. Gessaroli shall be also entrusted by the competent Board of
Directors with particular offices and activities relating to
sales, marketing and engineering. The gross aggregate
remuneration to be paid to Mr. Gessaroli for his special
activities shall be equal to ITL 195 million per year, plus a
company car and supplementary medical/life insurance of the same
kind as at present; in addition, as long as Mr. Gessaroli is a
member of the said board(s), the annual membership to the
Pecetto Golf Club "I Ciliegi" shall be paid by Oxford or Newco
as an additional part of the mentioned remuneration.
(b) at Closing, or as soon as practicable thereafter, Oxford shall
cause that Xx. Xxxxx Xxxxxxxxx is appointed as a director in
Newco and NL for a minimum period of three years. As soon as
practicable, Xx. Xxxxx Xxxxxxxxx shall be then entrusted by the
competent Board of Directors with the offices of Chairman and
Managing Director. The gross aggregate remuneration to be paid
to Xx. Xxxxx Xxxxxxxxx for his activities shall be equal to ITL
290 million per year, plus a company car and supplementary
medical/life insurance of the same kind as at present; in
addition, Xx. Xxxxx Xxxxxxxxx shall be eligible to receive an
annual bonus, up to 30% of his annual compensation, in case the
Gessaroli Group achieves the performance objectives determined
by Oxford. In addition, as long as Xx. Xxxxx Xxxxxxxxx is a
member of the said board(s), the annual membership to the
Pecetto Golf Club "I Ciliegi" shall be paid by Oxford or Newco
as an additional part of the mentioned remuneration.
(c) Closing, Oxford shall cause Newco and NLto enter with Mrs.
Gessaroli into a two year consultancy agreement in the form
attached as EXHIBIT 18 and be entrusted with a consultancy
activity in respect of treasury, banks and collection functions.
The gross aggregate remuneration to be paid to Mrs. Gessaroli
for her consultancy activity shall be equal to ITL 120 million
per year, plus the use of a company car as at present.
13.3. The Sellers hereby represent and warrant that Mr. Gessaroli, Mrs.
Gessaroli and Xx. Xxxxx Xxxxxxxxx shall not be entitled to receive any
sums or remuneration other that those mentioned above, nor have they or
will they be entitled to make any claim or request in respect of their
past positions and activities within the Gessaroli Group. Therefore, the
Sellers shall jointly and severally indemnify, defend and hold Oxford, NL
or Newco harmless from any and all costs, losses, liabilities, expenses,
damages (including judiciary and legal fees), whether actual or
potential, which may arise from, or in connection with, any claim
relating to the position of Mr. Gessaroli, Mrs. Gessaroli and Xx. Xxxxx
Xxxxxxxxx before, on
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and after the Closing Date. The obligations set out under this Article
13.3 shall survive the expiration of the terms set out under Article 19.6
below.
The insurance policies of OMG, Xxxx.xxx and NL.
13.4. EXHIBIT 19 contains a full and up-dated list of all the insurance
policies at present in force in relation to OMG, Xxxx.xxx and NL.
With the sole exception of the policy No 505308 effective as from 20
December 1999, which will be retained by OMG as owner of the OMG Lease
Property, the Parties agree that, promptly after this Agreement has been
entered into, Mr. Gessaroli shall act and use his best effort so as to
have the duration of all said policies reduced to no more than one year
after the Closing Date. For the purposes of this provision, Oxford shall
have the possibility to appoint his insurance consultant who will work
together with Mr. Gessaroli. It is in any event agreed that the said
policies, should Mr. Gessaroli fail - notwithstanding his best effort -
to have all or part of their relevant terms shortened down to one year,
shall be transferred as a part of the OMG Business and of the Xxxx.xxx
Business, or kept by NL; as the case may be.
The lease agreement (i.e. locazione) between Newco and OMG.
At Closing, OMG and Newco shall enter into a lease agreement (i.e.
locazione) in relation to the OMG Lease Property.
The relevant agreement shall conform in all respect to law 392/78 and, in
addition, shall conform to the terms and conditions set forth under
EXHIBIT 20. This agreement shall also set forth, in the event the OMG
Lease Property is to be transferred in any manner, a pre-emption right of
Newco for the purchase of the OMG Lease Property at a price equal to ITL
4.500.000.000.
14. CONDITIONS PRECEDENT TO CLOSING.
14.1. The obligation of Oxford to effect the transaction contemplated herein to
be consummated at Closing shall be subject to the fulfilment, on or prior
to the Closing Date, of the following conditions, any one or more of
which may be waived by Oxford; in case one or more of the said conditions
have been neither fulfilled by the relevant Sellers, nor waived by
Oxford, Oxford may forthwith terminate this Agreement by giving the
Sellers notice in writing to such effect and no Party shall have any
claim against any of the others except insofar as any of such conditions
shall not have been satisfied due to the negligence or default of one
Party:
(a) the Sellers shall in all material respect have performed and
complied with their respective obligations contained in this
Agreement required to be performed and complied with by them at
or prior to the Closing Date;
(b) Oxford shall have completed, to its satisfaction, a due
diligence investigation (also in respect of the `Environmental
Phase One') on the Gessaroli Group;
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(c) with reference to the Businesses, the procedures set out by
Article 2112 of the Italian Civil Code and under law 428/1990
have been complied with;
(d) the Sellers, Xxxx.xxx and OMG shall have procured and delivered
to Oxford the statement provided for by Article 14 of D.Lgs. 472
of 18th December 1997 with reference to their respective
Businesses and to the business of Xx.Xx. s.a.s., which shall
certify the absence of any tax liabilities pending or threatened
with reference to the Businesses and to the business of Xx.Xx.
s.a.s. in relation to the matters mentioned by the said D.Lgs
472/1997;
(e) the Sellers shall have procured and delivered the Bank Guarantee
(in the form of EXHIBIT 20) duly authorised and executed;
(f) the Sellers shall have delivered to Oxford assignments or,
whether necessary, novation agreements in respect of the
Transferred Contracts;
(g) the filing with the Autorita Garante della Concorrenza e del
Mercato shall have been duly carried out and filed with the said
Autorita with the full co-operation between the Parties; in
addition, no negative evaluation of the transaction shall have
been made also in an informal manner;
(h) the NL 1999 Financial Statement shall have been validly approved
by the competent quotaholders' meeting;
(i) the OMG 1999 Financial Statement shall have been validly
approved by the competent shareholders' meeting;
(j) the Xxxx.xxx 1999 Financial Statement shall have been validly
approved by all the partners;
(k) the meetings with Fiat arranged by the Seller to announce to
Fiat the transfer to Oxford of the Gessaroli Group have not been
satisfactory in all respect to Oxford in its sole and absolute
discretion. In addition, Fiat shall have agreed in writing not
to make any use, after Closing and even after Mr. Gessaroli has
ceased any activity within the Gessaroli Group, of the
termination clauses set out under the agreements where such
clauses are set forth;
(l) The Sellers shall procure, in a form satisfactory in all respect
to Oxford, official statements of all creditors of the amounts
due with respect to all Indebtedness as of the day immediately
before Closing Date;
(m) The Sellers shall have officially request and make their best
effort so as to obtain from each of the creditors of the OMG and
Xxxx.xxx, a waiver to act against the transferee of the OMG
Business and of the Xxxx.xxx Business pursuant to Article 2560
(2) of the Italian Civil Code;
(n) The Sellers: (i) shall have procured that all grants,
contributions, subsidised loans and other facilities of any
nature, whether finally or temporary cashed by OMG, Xxxx.xxx, NL
or Xx.xx s.a.s., or filed with,
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approved or resolved by, the competent bodies and authorities in
favour of OMG, Xxxx.xxx, NL or Xx.xx. s.a.s are assigned and
transferred to Oxford or Newco, or (ii) whether this were not
possible due to a specific provision under the relevant laws,
regulations and conditions for reasons other than a relevant
breach on the part of the Sellers, shall have taken and complied
with all necessary steps required to obtain the above mentioned
assignment and transfer in favour of Oxford or Newco, it being
agreed that the Sellers, also after Closing, shall use their
best efforts so as to procure that the said grants,
contributions, subsidised loans and other facilities are
actually assigned and transferred to Oxford or Newco;
(o) None of the said grants, contributions, subsidised loans and
other facilities whether finally or temporary cashed by OMG,
Xxxx.xxx, NL or Xx.xx s.a.s., or filed with, approved or
resolved by, the competent bodies and authorities in favour of
OMG, Xxxx.xxx, NL or Xx.xx. s.a.s, shall have been in any event
cancelled, modified or revoked, nor shall any intent be
evidenced to do so;
(p) Mr. Gessaroli shall have resigned from his position of Sole
Director of Nuova Lanzaplast;
(q) All the existing powers of attorney (whether relating to banks
or otherwise, including all powers of attorneys granted to Ms.
Gessaroli) shall have been terminated and revoked;
(r) the quotaholders' meeting of NL shall have validly resolved to
appoint as directors and Statutory Auditors of NL, those
individuals who will be indicated by Oxford;
(s) the agreement with Mrs. Gessaroli as per the text attached under
EXHIBIT 18 shall be entered into.
(t) Either by means of new agreements, or by means of addenda to the
existing ones, the expiration terms (but no other terms and
conditions thereof, with the sole exception of (i) the rental,
which shall remain in aggregate equal to ITL 16 million, (ii)
the utilities shall be paid by the lessee, and (iii) all those
other terms and conditions which do not conform to the
provisions of law 392/78) of the following lease agreements
(i.e. locazioni) shall be postponed up until January 2nd, 2005,
with the right for the lessee to freely terminate either of them
with a 6 month written notice:
(i) Parties: OMG and Immobiliare Xxxxx S.r.l.; date: 2nd
January, 1999; object: manufacturing facility with
offices and land of 3.000 square meters in Xxxxxx
Xxxxxxxx, 00, Xxxxxxxxxx (TO) (EXHIBIT 22);
(ii) Parties: OMG and Immobiliare Xxxxx S.r.l.; date: 2nd
November, 1999; object: manufacturing facility with
offices and land of 2.460 square meters in Xxxxxx
Xxxxxxxx, 00, Xxxxxxxxxx (TO) (EXHIBIT 23);
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(u) Femar s.n.c. di Mandosso Giancarlo shall have issued a statement
by means of which it shall renounce of its right to terminate
the following agreements with NL at the first expiration date:
- agreement entered into on 5th June, 1995, in relation
to manufacturing facility with offices and land of Xxx
Xxxxx 00, Xxxxxxxxxx (XX) (EXHIBIT 24);
- agreement entered into on 1st November, 1996, in
relation to manufacturing facility with offices and
land of Xxx Xxxxx 00, Xxxxxxxxxx (XX) (EXHIBIT 25).
15. CLOSING.
15.1. Upon fulfilment of the conditions precedent set forth under Article 13
hereof, Closing shall take place in Turin (Italy), before the Notary
Public to be appointed by Oxford, on 3rd April , 2000, or on that other
date to be agreed upon between the Parties (the "CLOSING DATE"). At
Closing:-
(a) OMG shall sell, transfer and assign free of any Encumbrances to
Newco, who shall acquire, the OMG Business by executing the OMG
Short Form;
(b) Xxxx.xxx shall sell, transfer and assign free of any
Encumbrances to Newco, who shall acquire, the Xxxx.xxx Business
by executing the Xxxx.xxx Short Form;
(c) the Gessaroli Family shall transfer title, free of any
Encumbrances, to the NL Quotas in favour of Oxford or Newco by
executing the NL Short Form;
(d) the Sellers shall deliver to Oxford the Bank Guarantee;
(e) the lease agreement with OMG mentioned under Article 13.3 shall
be entered into;
(f) subject to the performance of the obligations under paragraphs
(a) to (e) above, Oxford shall:
(i) pay, subject to Articles 2.2, 5.8, 6.8 and 9.3, the
Aggregate Provisional Price, to the Sellers;
(g) all further documents, guarantees, ancillary contracts and
certificates, as provided for in this Agreement or, in any
event, as necessary or appropriate for the contemplated
transaction, shall be duly executed, prepared, filed, issued and
delivered by each of the Parties;
(h) the agreements with Mrs. Gessaroli as per the text attached
under EXHIBIT 18 shall be entered into;
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15.2. If for any reason the provisions of sub-clauses 15.1 (a) - (e) are not
fully complied with, Oxford may elect (in addition to and without
prejudice to all other rights or remedies available to it) to withdraw
from this Agreement or to fix a new Closing Date.
15.3. On or as soon as practicable after Closing, the Sellers shall if so
requested by Oxford and jointly with Oxford arrange for the despatch to
all or any past and present customers of the Gessaroli Group by Oxford of
a circular in a form to be approved by Oxford announcing the sale by the
Sellers of the Gessaroli Group and introducing Oxford as their successor.
The Sellers shall take all such other steps as Oxford may reasonably
require in order that Oxford may obtain the full benefit of the Gessaroli
Group.
16. CONFIRMATION OF THE TARGET NET ASSET VALUE. THE FINAL PRICE.
16.1. It is acknowledged and agreed that the Aggregate Preliminary
Consideration has been determined by the Parties also on the basis of the
Target Net Asset Value of the Gessaroli Group.
16.2. For the purposes of calculating the net asset value of the transferred
assets over the transferred liabilities of the Gessaroli Group as at the
Closing Date (the "Closing Date Net Asset Value"), Oxford shall instruct
PWC to prepare, in accordance with the Special Purpose Accounting Rules ,
special purpose balance sheets with respect to the OMG Business and the
Xxxx.xxx Business, on the one hand, and NL, on the other (the "Closing
Balance Sheets"). The Closing Balance Sheets will show the Closing Date
Net Asset Value for each transaction and on a combined basis, net of any
inter-company transactions (it being agreed that for purposes of this
Article 16, inter-company shall refer to the Gessaroli Group which will
be treated as if under a common ownership), and will be compared with the
Target Net Asset Value. Therefore, should the Closing Date Net Asset
Value on a combined basis be lower than the Target Net Asset Value, the
Final Price (as below defined) shall be reduced on a "lira per lira"
basis. The Final Price shall be also reduced in case of breach by the
Sellers of the representation and warranty set out under Article 2.2(b).
No adjustment will be made in the event that the Closing Date Net Asset
Value is higher than the Target Net Asset Value.
16.3. The Closing Balance Sheets shall be delivered by PWC to Oxford and to the
Sellers within 60 calendar days of the Closing Date.
16.4. In the event the
Sellers do not agree, in whole or in part, on the outcomes of the Closing
Balance Sheets, they shall notify, within 10 calendar days of their
receiving the Closing Balance Sheet, their disagreement (in writing and
by means of registered mail with return receipt) to Oxford, specifying,
for each matter of the Closing Balance Sheets in detail and on a
item-by-item basis, the reasons for their disagreement.
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16.5. Within 15 calendar days of the receipt by Oxford of the relevant
communication of the Sellers' disagreement, the Parties and their
respective consultants (including PWC) shall try to amicably resolve any
issue.
16.6. In the event that, within 15 calendar days from Oxford's receipt of the
communication of the Sellers' disagreement, Oxford and the Sellers are
not able to resolve, in whole or in part, their disagreements as to the
Closing Balance Sheets, either Party may, within the following 15
calendar days, refer the matters in dispute to the Independent Accountant
for their resolution, in accordance with the terms and conditions set
forth under Article 17. It is in any event agreed that, in case the
disagreement between the Parties refers to only a part of the Closing
Balance Sheets and, therefore, to only a part of the Final Price, one
Party shall pay to the other, within 5 working days of the date of
referral of the matter in dispute to the Independent Accountant, that
part of the Final Price which is not under dispute.
16.7. For the purposes of this Article 16, each of the Parties shall:
(a) disclose to PWC, the other Parties and to the other Parties'
consultants and to the Independent Accountant all relevant facts and
information in its possession (whether or not requested by them); and
(b) promptly give to PWC. the other Parties and to the other Parties'
consultants and to the Independent Accountant, all information,
assistance and access to books of account, documents, files and
papers which any of them may reasonably require.
16.8. Should no objection be made by the Sellers within the term set out under
Article 16.4, the Closing Balance Sheets shall be deemed to be final and
irrevocably accepted by all the Parties.
16.9. Within 5 working days after the said Closing Balance Sheets becoming
irrevocable and final, Oxford shall pay to the Sellers the unpaid part of
the Aggregate Preliminary Consideration, minus: (i) the difference
between the Target Net Asset Value and the Closing Date Net Asset Value
(pursuant to 16.2); (ii) any Indebtedness not paid by the Sellers, as
contemplated by Articles 2.4 and 3.2; (iii) the portion of the Final
Price already paid pursuant to Article 16.6; minus or plus, to the extent
not already considered (iv) the sums, at that time due, relating to the
adjustments contemplated by Articles 2.4and 3, (the "Final Price"), it
being agreed that, should the Final Price be lower than the Aggregate
Preliminary Consideration, the Sellers, within the same term, shall pay
the balance to Oxford.
16.10. Oxford may deduct from the Final Price any sum (including any sum
relating to Indebtedness not reimbursed by the Sellers prior to Closing)
due to it or to the Gessaroli Group in respect of any breach on the part
of the Sellers and up until the date of actual payment of the
obligations, undertakings, duties, Representations and Warranties, as set
out under this Agreement.
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17. INDEPENDENT ACCOUNTANT.
17.1. If the Parties do not agree any matter referred to in Articles 3, 7, 11.2
and 16, the relevant matter shall be referred, at the request of either
Oxford or the Sellers, for decision to an independent chartered
accountant (the "INDEPENDENT ACCOUNTANT"). The Parties hereby agree that
the Independent Accountant shall be the most senior partner (it being
agreed that the seniority will be calculated in relation to the period in
which a partner has been appointed as a partner of the Firm) of Ernst and
Young, Turin Office, or that other partner of the same Firm to be
designated by him. In default of acceptance by, or in case of
impossibility, or other impediment of the said senior partner or his
nominee (including the case in which the said senior partner fails to
appoint or substitute a nominee), the Independent Accountant (or any
substitute) shall be appointed by the President of the Ordine dei Dottori
Commercialisti di Torino , on the application of either Oxford or the
Sellers.
17.2. The Independent Accountant shall act as an expert and not as an
arbitrator and his decision shall be final and binding on the Parties.
The Parties agree that any decision of the Independent Accountant may
also be based either on his "equo apprezzamento", or on his "mero
arbitrio", as set out under Article 1349 of the Italian Civil Code. The
Independent Accountant shall afford all the Parties the opportunity of
making written representations to him.
17.3. The fees and expenses of the Independent Accountant shall be borne by the
Parties in equal shares.
17.4. Any amount payable as a result of the Independent Accountant's decision
shall be paid within 10 days of his decision being notified in writing to
Oxford and the Sellers.
18. NON COMPETITION.
18.1. The Sellers covenants with Oxford that, for a period of five years after
the Closing Date, none of the Sellers shall, whether directly or
indirectly, in Italy:
(a) be concerned in any research, development, manufacture, marketing,
sale, servicing or business carrying on a business which is
competitive or likely to be competitive with any of the businesses
carried out by any of OMG, NL or Xxxx.xxx or, more in general, with
any of the activities or business described under Whereas A, Whereas
B or any activity previously carried out by Xx.Xx and consisting of
the assembly of locking mechanisms, latches, plastic, metal and other
components, including weld assemblies; or
(b) for their or for anybody else's account, or as or consultant of
someone else, participate in (as director, shareholder, holder of
certificates, partner, financier, or in any other capacity), be
employed by, give advice to or render services to any person,
company, legal entity or organisation, which is involved in
activities competing with any of the businesses carried out by any of
OMG, NL or Xxxx.xxx as described
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under Whereas A, Whereas B or any activity previously carried out by
Xx.Xx and consisting of the assembly of locking mechanisms, latches,
plastic, metal and other components, including weld assemblies ; or
(c) canvass or solicit orders for goods of similar type to those being
manufactured or dealt in or for services similar to those being
provided in connection with any of the businesses carried out by any
of OMG, NL or Xxxx.xxx from any person who is at Closing or has been
at any time within the year prior to Closing a customer of the
Gessaroli Group; or
(d) induce or attempt to induce any supplier of the Gessaroli Group to
cease to supply, or to restrict or vary the terms of supply, to the
said Gessaroli Group; or
(e) induce or attempt to induce any client of the Gessaroli Group to
cease to buy or carry on any commercial activity, or to restrict or
vary the terms of buy or carry on any commercial activity, to the
Gessaroli Group; or
(f) induce or attempt to induce any employee engaged in the Gessaroli
Group to leave the employment of the Gessaroli Group; or
(g) make use of or (except as required by law or any competent regulatory
body) disclose or divulge to any third party any information of a
secret or confidential nature relating to the Gessaroli Group or its
customers or suppliers.
18.2. Each of the restrictions in each paragraph or sub-clause above shall be
enforceable by Oxford and its validity shall not be affected if any of
the others is invalid; if any of those restrictions is void but would be
valid if some part of the restrictions were deleted the restriction in
question shall apply with such modification as may be necessary to make
it valid.
18.3. The parties hereby agree and acknowledge that the Aggregate Preliminary
Consideration, as well as the Final Price, are allowed also as a
consideration of the non competition obligations set out hereunder.
18.4. For the purposes of Article 1382 of the Italian Civil Code, it is hereby
agreed that the Sellers shall pay to Oxford as a penalty for each act of
infringement of the non competition obligations set out under this
Article 17, a sum equal to ITL 200 million, without prejudice to the
right of Oxford to take any action so as to recover any further damages.
18.5. Sellers recognise the crucial and essential importance to Oxford of the
non-competition and confidentiality obligations of Sellers set forth
under this Article. It is then acknowledged and agreed that the amount of
the penalty set out under Article 18.3 has been fairly determined and
agreed with specific reference to Oxford's interest in the fulfilment of
the non competition obligation of each of the Sellers.
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19. REPRESENTATIONS AND WARRANTIES.
19.1. The Sellers jointly and severally represent and warrant to Oxford, in
connection to each and all of the portions of the Gessaroli Group, that:
(a) each of the Representations and Warranties set out in EXHIBIT 8 is
true and accurate;
(b) all information relating to the Gessaroli Group which would be
material to a purchaser is contained in this Agreement; and
(c) more in general all information provided is true and accurate and
fairly represented and nothing has been omitted which renders any of
that information incomplete or misleading;
(d) the Sellers have performed and complied with each of the covenants
and agreements undertaken in this Agreement;
(e) the Sellers shall pay the Excluded Liabilities when and as due and
shall indemnify and hold Oxford harmless from any claims, damages
and/or liabilities with respect thereto .
19.2. Each of the Representations and Warranties set out in the several
paragraphs of EXHIBIT 8 is separate and independent and except as
expressly provided to the contrary in this Agreement is not limited:
(a) by reference to any other paragraphs of EXHIBIT 8; or
(b) by anything in this Agreement;
and none of the Representations and Warranties shall be treated as
qualified by any actual or constructive knowledge on the part of Oxford
or any of its representatives.
19.3. The Parties agree and acknowledge that any direct or indirect breach of
Clause 19.1 will produce and result in a Liability directly for Oxford or
Newco simply by way of the occurrence of such breach, irrespective of the
entity directly suffering the Liability. Therefore, and without prejudice
to any other rights or claims of Oxford or Newco in connection with the
same breach or otherwise, the Sellers hereby undertake to protect,
indemnify and hold Oxford, Newco, or any of their respective assignees or
successors, harmless from and against any Liability by paying the
relevant company an amount equal to 100% (one hundred per cent) of such
Liability, including any tax impact deriving from such indemnification
payment.
19.4. The Sellers shall indemnify Oxford and/or Newco or any of their assignees
or successors by paying Oxford, Newco of their assignees or successors or
that other subject to be specified by Oxford at the moment of the
relevant request, according to the terms provided for hereunder, an
amount equal to 100% (one hundred per cent) of the Liabilities.
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19.5. As a security for the payment of any of the Liabilities or for any other
payment under this Agreement, the Sellers shall cause to be issued to
Oxford an irrevocable first demand bank guarantee, issued by a bank
acceptable to Oxford, in the form provided for under EXHIBIT 21 (the
"Bank Guarantee").
19.6. The liability of the Sellers in respect of the Representations and
Warranties:
(a) shall not arise unless the amount of all claims made in respect of
the Representations and Warranties exceeds in aggregate ITL 100
million; and
(b) shall terminate on the 5th anniversary of the Closing Date except:
(i) in respect of any claim of which notice in writing is given to
the Sellers before that date; or (ii) to claims in respect of Taxes,
Social Security, Labour Matters and Environmental Matters (these
terms as indicated under EXHIBIT 8), where the relevant termination
of the indemnification obligation of the Sellers shall expire only
after the expiration of each of the applicable statutes of
limitations (including the period of any extensions or waivers
thereof).
For the avoidance of doubt, it is acknowledged and agreed that all
liabilities in respect of: (i) all of the representations and warranties
in clauses from (a) to (e) of EXHIBIT 8, and (ii) the obligations of the
Sellers to pay the Excluded Liabilities, shall not be subject to any
expiration period.
19.7. If Oxford claims, in connection with any applicable event, to the
Sellers an indemnification payment according to Article 19.2, or to make
a payment in its favour under this Agreement prior to the expiration of
the terms set out under Article 19.6, the Sellers (without prejudice for
their right to refer the matter to the Arbitration Panel in accordance
with the provisions of Article 25) shall pay the requested amount within
15 days from the receipt of relevant request.
19.8. In any event, should the Sellers not refer the matter to the Arbitration
Panel within 15 days of the receipt of the relevant notice, the
liability of the Sellers shall be deemed to have been accepted by them
to any effects.
19.9. In case of possibility to accept after Closing a tax amnesty (i.e.
"condono fiscale", "concordato fiscale" or similar), the Sellers may ask
Oxford to take advantage thereof should Newco be entitled to file the
relevant application; should Oxford accept (such acceptance not
unreasonably refused), the Sellers shall pay in advance to Oxford or
Newco all of the costs and the fees for applying to such tax amnesty.
20. SPECIAL COVENANTS.
20.1. Promptly after the execution hereof and, in any event, prior to Closing,
the Parties shall file with the competent Autorita Garante della
Concorrenza e del Mercato (the "Autorita"), the notice provided for by
Article 16 of the Law October 10, 1990, No 287, hereby undertaking to
give full support to their counsels for the best accomplishment thereof.
Should the Autorita decide to commence an investigation, the Parties
shall co-operate for the best resolution thereof with the
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view of having the authorisation of the said Autorita issued within the
shortest possible time. Furthermore, the Parties shall take any
necessary step for the amendments of a possible negative decision of the
Autorita, being agreed that, should the negative decision of the
Autorita become final and/or enforceable, each Party shall have the
right to terminate this Agreement by giving notice in writing to the
other Parties. Notwithstanding the above, the Parties will in any event
evaluate in good faith the possibility to comply with any decision of
the Autorita issued in conformity with article 19, section 1, of the
said Law October 10, 1990, No 287.
20.2. The Parties acknowledge to each other that, apart from Seppilli &
Partners S.r.l., there is no firm, corporation, or other person that is
entitled to a finder's fee or any type of brokerage commission in
relation to, or in connection with, the transactions contemplated in
this Agreement as a result of any agreement or understanding with the
Sellers or Oxford, or for any other reason, nor have the Sellers or
Oxford had any dealings relating to this transaction with any firm,
corporation, agency or other person that may claim a brokerage or other
commission. It is in any event agreed that all costs, commissions and
other fees relating to Seppilli & Partners shall be entirely borne by
the Sellers: prior to Closing, the Sellers shall procure from Seppilli &
Partners a statement to this effect.
20.3. The conduction by Oxford, their representatives and consultants of : (i)
a due diligence investigation (also with reference to environmental
phase one investigation) started prior to the execution hereof and to be
completed before the Closing Date; and (ii) the procedure set out under
Article 16, shall not relieve the Sellers from any of their obligations
arising from the Representations and Warranties or otherwise in this
Agreement. The Sellers may not, under any circumstances, hold the said
due diligence as a disclaimer, nor the said Representations and
Warranties shall be deemed waived or otherwise affected by the said
investigations.
21. CONFIDENTIALITY.
21.1. Either Party hereby undertakes to keep strictly confidential and not to
disclose to any third party in any manner whatsoever, without the prior
written consent of the other Party, any information, documents or data
of whatsoever nature contained or deriving from this Agreement.
Either Party undertakes that it shall not make any announcement or issue
any circular or other publicity relating to the existence or subject
matter of this Agreement without it being approved in writing by the
other Party as to its content, form and manner of publication (such
approval not to be unreasonably withheld or delayed), save that any
announcement or circular required to be made or issued by any Party by
any applicable law. The Parties shall consult together upon the form of
any such announcement or circular in relation to the subject matter of
this Agreement and either Party shall promptly provide such information
and comment as the Party making the announcement or sending out the
circular may from time to time reasonably request.
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22. INTERPRETATION.
22.1. This Agreement shall be interpreted as a "contratto preliminare" for the
purposes of the Italian law. Therefore, it shall be considered as a
binding agreement upon the Parties, to be implemented at Closing, unless
earlier terminated or withdrawn in accordance with this Agreement.
22.2. The Short Forms shall be executed for the sole purposes of effecting the
transfer and assignment of the Gessaroli Group, in accordance with the
provisions of this Agreement, and complying with the relevant
registration and stamp duty tax requirements and such further
requirements as provided for by applicable legislation. Therefore,
notwithstanding this execution and notwithstanding any possible
conflicting provisions contained in the said Short Forms, the transfer
of the NL Quotas, the OMG Business and the Xxxx.xxx Business is and
shall only be governed by the provisions of this Agreement, which shall
not be subject to novation (i.e. "novazione") by reason of, or as a
consequence of, the Short Forms and their execution by the Parties.
Therefore, the contractual terms and warranties relating to the transfer
of the NL Quotas, the OMG Business and the Xxxx.xxx Business are and
shall be governed by the provisions of this Agreement, which shall
remain in full force and effect also after the said transfer and
execution of the Short Forms.
23. MISCELLANEOUS.
23.1. No waiver of any right, breach or default hereunder shall be considered
valid unless in writing and executed by the Party giving such waiver,
and no waiver shall be deemed a waiver of a subsequent breach or
default, whether or not of the same or of similar nature. The failure to
exercise or delay in exercising a right or remedy provided by this
Agreement or by law does not constitute a waiver of any rights or
remedies. No single or partial exercise of a right or remedy provided by
this Agreement or by law prevents further exercise of the right or
remedy or the exercise of another right or remedy.
23.2. The buyer's rights and remedies contained in this Agreement are
cumulative and not exclusive of rights or remedies provided by law.
23.3. This Agreement, including its Exhibits, constitutes the entire agreement
between the Parties with respect to the transactions contemplated hereby
and supersedes any prior understanding, written or oral, with respect to
such transactions. No amendment of or supplement to this Agreement shall
be valid or effective unless in writing and executed by the Parties
hereto or their successors or assignees.
23.4. Article headings contained herein are for the purpose of convenience
only and do not constitute part of this Agreement.
23.5. In the event of invalidity or ineffectiveness or no enforceability of
any Article of this Agreement, or portions thereof, the remaining
portion of this Agreement shall not be effected.
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23.6. Except where this Agreement provides otherwise, each Party shall pay its
own costs and fees relating to the negotiation, preparation, execution
and implementation by it of this Agreement and of each document referred
to in it. All costs relating to the transfer of title to the Gessaroli
Group (to include any taxation of any nature, whether referred to the
OMG Business, the NL Quotas and the Xxxx.xxx Business) shall be borne by
the Sellers and by Oxford in equal shares. All Notarial fees shall be
borne by Oxford.
23.7. Oxford may assign or transfer in whole or in part any of its rights or
obligations under this Agreement to any of its direct or indirect
subsidiaries, without restriction by the person or entity for the time
being entitled that right, and the assignees or successors of Oxford
shall have the same rights or obligations in relation to the assigned
rights or obligations according to this Agreement.
24. SELLERS' REPRESENTATIVE. NOTICE.
24.1. The Sellers, with the execution of this Agreement, appoint and delegate
expressly and irrevocably Xx. Xxxxxxxx Gessaroli, or in his absence or
impediment, Xx. Xxxxx Xxxxxxxxx (hereinafter, the "Sellers'
Representative"), to discuss and negotiate with Oxford with reference to
any issue whatsoever regarding this Agreement, acknowledging the
validity, enforceability and effectiveness both of all communications
which shall be made to or by the Sellers' Representative, and of any
possible agreements and/or commitments which should be entered into by
Oxford and the Sellers' Representative as to the matters relating to
this Agreement.
24.2. Notices or communications required or permitted to be given under any
provisions of this Agreement shall be in writing and shall be deemed to
have been given the day of dispatch thereof, if sent by telex or by fax
(to be confirmed by registered mail with return receipt), or upon actual
receipt if sent by registered mail, return receipt requested, addressed
as follows:
(i) If to the Sellers:
to the Sellers' Representative
Strada dei Mughetti, 10 Testona (TO)
(ITALY)
(ii) If to Oxford:
Rue du Marechal de Lattre de Tassigny
Parc d'activite la Cle Xxxxx Xxxxxx
00000 Xxxxxxxxx
XXXXXX
Fax: x00 0 000.00.000
To the attention of the President
and to:
Oxford Automotive, Inc.
0000 Xxxxx Xxxxxxxx Xxxxxx, Xxx. 000
Xxxxxxxxxx Xxxxx, Xxxxxxxx, 0000
XXX
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Fax: 000 000 000 0000
To the attention of the Chairman
24.3. Either Party may from time to time change its address (provided that in
the U.S.A. or in the E.U.) by giving previous communication to the other
Party in the manner aforesaid.
25. LANGUAGE.
25.1. This Agreement (except for certain Exhibits thereto) is drafted and
signed both in the English and in the Italian language. In any event, in
case of any discrepancies or inconsistencies of any nature whatsoever of
the two versions, the English version shall prevail to all effects. The
Parties acknowledge that they have so agreed and have duly and fully
agreed and understood any and all the previsions in the English
language.
Il presente contratto (con l'eccezione di alcuni allegati) e redatto e
firmato in lingua xxxxxxx xx in lingua italiana. In ogni xxxx,
xxxx'ipotesi in cui vi xxxxx discrepanze o contraddizioni di qualsiasi
genere tra le due versioni, la versione inglese xxxx xx xxxx prevalente
ad ogni effetto. Le Parti dichiarano di essersi accordate in tale senso
fine e di avere interamente e pienamente compreso tutte le disposizioni
redatte in lingua inglese del presente contratto.
26. GOVERNING LAW AND ARBITRATION.
26.1. This Agreement shall be governed by, construed and enforced in
accordance with, Italian Law.
26.2. Any dispute arising out of, or relating to, the validity,
interpretation, termination or the operation of this Agreement shall be
decided only by way of arbitration, according to the provisions below.
The Arbitration panel shall be composed of three arbitrators.
The first arbitrator shall be appointed by the party initiating the
arbitration proceedings. Such appointment shall be included in the
notice that the party initiating the proceedings notifies to the other
party. The second arbitrator shall be appointed by the other party
within 30 days from the date of receipt of the notice of the first
party. The third arbitrator shall act as the Chairman of the panel and
shall be appointed by agreement between the first two arbitrators within
30 days from the appointment of the second arbitrator or, failing such
agreement, by the President of the Tribunale di Torino, at the request
of the most diligent party. In the event that the second party fails to
appoint the second arbitrator within the period of time indicated above,
the President of the Tribunale di Torino, upon request of the most
diligent party, shall designate the second arbitrator as well.
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The notice to be sent by either party to the other party, containing the
appointment of the arbitrators, shall be carried out by formally
notifying it to the other party through the Ufficiale Giudiziario, as
provided by Italian Law.
In the event that more than two parties legitimately are party to the
arbitration proceedings, the dispute shall be resolved by an Arbitration
panel composed of three arbitrators appointed by agreement of the
various parties to the procedure or, failing such an agreement, by the
President of the Tribunale di Torino, upon request of the most diligent
party.
The Arbitration Panel shall render its decision within 120 from their
acceptance of their offices.
The arbitrators shall decide pursuant to the Italian Code of Civil
Procedure, in accordance with equitable principles ("arbitrato rituale
secondo equita").
The final award shall also fix the costs of the arbitration and decide
which of the parties shall bear them or in what proportion they shall be
borne by the parties.
The Parties agree that any award of the arbitrators shall be final and
binding and shall not be subject to any appeal.
The arbitration proceedings shall take place in Torino and both the
English or the Italian language may be used.
* * *
LIST OF EXHIBITS:
Exhibit 1 : Business Financial Statement relating to the Xxxx.xx Business
Exhibit 2 : Business Financial Statement relating to the OMG Business;
Exhibit 3 : Xxxx.xxx 1998 Financial Statement;
Exhibit 4 : Locazioni Finanziarie del Gessaroli Group;
Exhibit 4 bis: Patent application for OMG;
Exhibit 5 : NL 1998 Financial Statement;
Exhibit 6: OMG Lease Property;
Exhibit 7 : OMG 1998 Financial Statement;
Exhibit 8 : Representations and Warranties;
Exhibit 9: Special Purpose Accounting Rules;
Exhibit 10: Transferred Contracts relating to the Xxxx.xxx Business;
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Exhibit 11: Transferred Contracts relating to the OMG Business;
Exhibit 12: Transferred Employees relating to the Xxxx.xxx Business;
Exhibit 13: Transferred Employees relating to the OMG Business;
Exhibit 13 bis: NL personnel;
Exhibit 14: Prelievi
Exhibit 15: Grants, contribution and other facilities to Xxxx.xxx, OMG and NL;
Exhibit 16: Tax credit for advanced payments of tax duties relating to TFR and
receivables vis-a-vis INPS for contratti di solidarieta, relating to
Xxxx.xxx;
Exhibit 17: Tax credit for advanced payments of tax duties relating to TFR and
receivables vis-a-vis INPS for contratti di solidarieta, relating to
OMG;
Exhibit 18: Consultancy Agreement with Mrs. Gessaroli;
Exhibit 19: List of transferred insurance policies;
Exhibit 20: terms and conditions of the lease agreement concerning the OMG Lease
Property;
Exhibit 21: Bank Guarantee;
Exhibit 22: Locazione between OMG and Immobiliare Xxxxx S.r.l. on January 2nd,
1999;
Exhibit 23: Locazione between OMG and Immobiliare Xxxxx S.r.l. on November 2nd,
1999;
Exhibit 24: Locazione between NL and Femar s.n.c. di Mandosso Giancarlo on June
5th, 1995;
Exhibit 25: Locazione between NL and Femar s.n.c. di Mandosso Giancarlo on
November 1st, 1996;
Exhibit 26: Banks and powers of attorneys.
* * *
Attached to the present acceptance, please find one set of the exhibits
mentioned above, duly signed as an integral part hereof.
Please, be informed that all Exhibits have been executed on our name and behalf
by Xx. Xxxxx Xxxxxxxxx, whom we hereby entrust with full powers to such effect.
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Date and Place: Turin 5th February 2000
/s/
-------------------------
Agostino Gessaroli (on the preceding pages signing also on behalf of all the
various companies and partnerships)
/s/
-------------------------
Xxxxx Xxxxxxxxx
/s/
-------------------------
Xxxxx Xxxxxxxxx
/s/
-------------------------
Xxxxx Xxxxxxxxx
/s/
-------------------------
OFFICINE MECCANICHE GESSAROLI S.p.A.
/s/
-------------------------
Xxxx.xxx S.a.s. di Gessaroli Agostino
/s/
------------------------
Immobiliare Xxxxx s.r.l., with specific reference to Art. 14.1.(t)
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EXHIBIT 8
REPRESENTATIONS AND WARRANTIES
The Sellers represent and warrant to Oxford, Newco and their respective
assignees and successors as follows, as of the date of this Agreement, and as of
the Closing Date, as though made at and as of such time, and in relation to any
and all the entities and portions of the Gessaroli Group:
(a) Due incorporation of OMG, NL and Xxxx.xxx. OMG, Xxxx.xxx and NL
are corporations duly incorporated and validly existing under
the laws of Italy and have the requisite corporate powers and
other capacities to own and lease their properties and to
conduct their businesses as now conducted and to assign them.
OMG, NL and Xxxx.xxx are not insolvent, or in a situation
considered by Articles 2446, 2447 or 2448 of the Italian Civil
Code, nor have been declared bankrupt, and no action or request
is or shall be pending to declare them bankrupt or to make them
subject to any insolvency, winding up or liquidation procedure
or any other proceedings which prevent them from the regularly
carrying out their corporate object as set out in its current
by-laws or which constitute or entail a limitation or a
restriction of any kind on the rights of all or any of their
creditors.
(b) Title. The Sellers have direct, full and undisputed title to the
OMG Business, the NL Quotas and to the Xxxx.xxx Business, and of
all the assets transferred by Xx.Xx. s.a.s. to OMG, free and
clear of any Encumbrances and may freely dispose thereof; no
person, firm or corporate or unincorporated entity has any
option or right to purchase or to be offered to purchase or
otherwise acquire, in whole or in part, the OMG Business, the NL
Quotas or the Xxxx.xxx Business, or any interest, or right
thereon, of any nature whatsoever.
There is no requirement applicable to the Sellers to make any
filing with, or to obtain any permit, authorisation, consent,
approval, or exemption of, any governmental, regulatory of
financial authority, whether national or international, private
or public, as a condition precedent to the lawful consummation
of the transactions contemplated by this Agreement.
(c) Shares. The NL Quotas constitute the whole issued stock capital
of NL. There is no option, right to acquire, Encumbrances on,
over or affecting any of the NL Quotas and there is no agreement
or obligation to give or create any of the foregoing.
(d) Assets. The Gessaroli Group own and/or legitimately use all of
its assets, free and clear of any Encumbrances, and may freely
dispose thereof; no person, firm or corporate or unincorporated
entity has any option or right to purchase or to be offered to
purchase or otherwise acquire, in whole
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or in part, the assets owned or used by the Gessaroli Group, or
any interest, or right thereon, of any nature whatsoever.
All the assets are free of any fault or defect of any whatsoever
nature, including any "vizi", "mancanza di qualita", and the
like.
In respect of any of the assets of the Gessaroli Group which are
held under any agreement for lease, hire, hire purchase or sale
on conditional or deferred terms, and the like, there has been
no default in the performance or observance of any of the
provisions of such agreements, which are validly in force and
freely transferable to Oxford and to Newco.
(e) Powers and Authorities. The Sellers have the corporate power
and/or authority, and have taken all the necessary corporate and
other action, to enter into and to perform the obligations
arising under this Agreement and any other documents related to
and referred to herein.
The execution of this Agreement and any other documents related
hereto and referred to herein by the Sellers does not violate
any provisions of any deed of incorporation or by-laws or any
resolution of the respective corporate bodies, or any applicable
law or regulation.
(f) Security. The Sellers have not granted any security, charge,
privilege, lien or other encumbrance, nor does any security,
charge, privilege, lien or other encumbrance exist, on any
present or future asset of the Gessaroli Group or on the OMG
Business, the NL Quotas and the Xxxx.xxx Business and any
privileges or liens arising by operation of law or any charges
or encumbrances disclosed to Oxford prior to the date hereof and
approved in writing by Oxford.
(g) Undertakings. The obligations undertaken by the Sellers under
this Agreement and any other documents related to and referred
to herein are legal, valid, binding and enforceable against it
in accordance with their terms.
(h) Grants, interest subsidies and other facilities. All grants,
contributions, interest subsidies and other facilities of any
nature, whether or not listed under EXHIBIT 15, which have
already been cashed by OMG (including Xx.xx), Xxxx.xxx or NL
prior to 1999, were duly applied for and obtained pursuant to
all applicable laws and regulations and relevant conditions and
shall not be cancelled, revoked for any reason whatsoever,
including the sale of the Gessaroli Group to Oxford.
All grants, contributions, interest subsidies and other
facilities of any nature, whether or not listed under EXHIBIT
15, which have not finally and irrevocably been assigned to or
cashed by OMG (including Xx.xx), Xxxx.xxx of NL have been
validly applied for and filed with the competent bodies and
authorities, pursuant to all applicable laws and regulations and
relevant conditions. The Sellers represent and warrant that all
these grants, contributions, subsidised loans and other
facilities of any nature are finally and irrevocably assigned
and transferred to Oxford, subject to the following sentence.
The Sellers shall not be responsible in respect of
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the assignment and transfer of these grants, contributions,
subsidised loans and other facilities of any nature, only
provided that: (i) a specific provision under the relevant laws,
regulations and conditions prohibits them from being transferred
and assigned to Oxford and/or Newco for reasons other than a
breach of any nature on the part of the Sellers; and that (ii)
the Sellers have taken and complied with all necessary steps
required to obtain the above mentioned assignment and transfer
in favour of Oxford and or Newco, it being agreed that the
Sellers, also after Closing, shall use their best efforts so as
to procure that the said grants, contributions, subsidised loans
and other facilities are finally, actually and irrevocably
assigned and transferred to Oxford;
(i) Properties. All properties and assets relating to the Gessaroli
Group are fully owned by the Gessaroli Group, are free and clear
from any Encumbrances. They are, also with respect to their
economic obsolescence, in good operating condition, maintenance
and repair sufficient for use in the ordinary course of the
business, and conform in all material respects to all applicable
statutes, ordinances and regulations relating to their
construction, use and operation, including inter alia the
obligations and requirements set forth under D.lgs. 19th
September, 1994, No 626, and relevant regulations.
Without prejudice to the above, as of the date of signature of
this Agreement, the Gessaroli Group is in compliance with all
the relevant applicable legislation and regulation, such as
zoning, building permits, environmental law, health and safety
regulation, etc.
(j) Systems Compliance. All hardware, software and relevant
applications transferred by the Sellers in connection with, and
as a part of, the Gessaroli Group and all procedures, whether
automated or not, are Y2K compliant and Euro compliant.
In addition, any factors in any manner connected with certain
relevant dates (e.g. 9th September 1999, 31st December 1999, 1st
January 2000, 29th February 2000 and so on) will in any manner
affect the ability for systems, and/or of the relevant hardware
and software, before, on or after Closing, to carry out inter
alia the following:
(i) the performance of all functions currently performed or
capable of being performed by any systems correctly and
consistently without interruption or adverse change to
efficiency or user operation and without incurring
additional costs; and:
(ii) recognise, store, process and display any reference to any
year or to any particular date in a year in a manner that
does not create any ambiguity as to the year or date in
question.
(k) No Violation. Neither the execution and delivery of this
Agreement by the Sellers, nor the performance of its obligations
pursuant thereto will conflict with or result in any breach of
any agreements or commitments both of the Sellers and of the
Gessaroli Group with any third parties.
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Without limiting the generality of the above, the execution of
this Agreement and the performance by Xxxx.xxx and OMG of the
obligation relating to the transfer of the OMG Business and the
Xxxx.xxx Business is within Xxxx.xxx's and OMG's corporate
object.
(l) Financial Statements. All Financial Statements are prepared in
accordance with the Accounting Principles and present fairly and
with accuracy the related conditions of the Gessaroli Group.
(m) Accounts. Books and Ledgers. The accounts and accounting books
and ledgers give a true and fair view of the affairs of the
Gessaroli Group. All books and ledgers relating to the Gessaroli
Group are in possession of the relevant portion thereof and have
been maintained in accordance with all applicable rules and
legitimate practice.
(n) Indebtedness and Borrowings. The total amount borrowed by the
Gessaroli Group from its bankers does not exceed their
respective overdraft and other facilities. In any event, all
Indebtedness has been or will be duly repaid by the Sellers
prior to Closing, otherwise a portion of the Aggregate
Preliminary Consideration will be used to pay such Indebtedness
as contemplated by article 2.4. The Gessaroli Group have not
lent (not even to the Sellers) any money which is due to be
repaid. No leases (i.e. locazioni finanziarie) shall be entered
into by OMG, NL or Xxxx.xxx other than those listed under
EXHIBIT 4. Should OMG, Xxxx.xxx or NL, as the case may be, enter
into other leases agreement, these shall be deemed to be as a
part of Indebtedness.
(o) Net Business Value. The net value of the Businesses is fairly
and with accuracy represented in the Businesses Financial
Statements. This value shall not modify up until the Closing
Date for reasons other than the ordinary course of business and
shall not be, at the Closing Date, lower than the net business
value as resulting from the Businesses Financial Statements.
(p) Stock. All inventories owned and/or used by the Gessaroli Group
in connection with their respective businesses (the "Stock") are
owned by it and consist of inventories of the kind, quality,
condition and quantity usable and saleable at current prices in
the ordinary course of business, regardless of its physical
location. The Stock is free of any fault or defect of any
whatsoever nature, including any "vizi", "mancanza di qualita",
and the like. All inventories are merchandable at current prices
in the ordinary course of the business within 6 (six) months of
Closing. The value of Inventory has been reduced in value in a
percentage respectively equal to 15% after 6 months up to one
year from insertion in stock, 50% from one year to 18 months
from insertion in stock, and 100% after 18 months from insertion
in stock. The product mix of the inventories and the raw
materials and work in progress necessary to convert to finished
goods as well as spare parts is not materially out of balance in
relation to the Gessaroli Group's sales experience during the
past 5 (five) years and is consistent with its expectations of
the demands of customers. The Stock is not excessive in kind or
amount, in the light of
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the business of the Gessaroli Group done or expected to be done,
nor has its book value been overvalued in the Financial
Statements. Since 1st July 1999, there has not been any material
change in the level of the Stock.
Tooling and prototype parts are sold to or reimbursed by the
customers upon completion and/or written approval of production
capable/parts.
Except for inventory at subcontractors' (but without any
limitation as to possible liabilities relating to Taxes and,
therefore, to any possible indemnification obligations of the
Sellers in respect thereto), the Stock has been duly accounted
for in the books and records of the Gessaroli Group and,
therefore, in the Financial Statements.
The Stock are free from any Encumbrances.
(q) Taxes. All Taxes have been, as of the Closing Date, duly paid
and all reports and returns of Taxes required to be filed by the
applicable legislation have been duly filed within the times and
in the manner prescribed by law. Furthermore, at and as of the
Closing Date, all Taxes shall have been duly paid or specific
provision or accruals have been made for payment of all Taxes
then due or properly allocable up to the Closing Date. There are
no tax liens upon the Gessaroli Group or the Businesses and
their assets.
(r) Insurance. The Gessaroli Group and the relevant assets of any
insurable nature have at all relevant times been and are covered
by insurance in adequate amounts against fire, accidents, third
party and other risks (including but not limited to product
liability) customarily covered by insurance by other companies
engaged in similar businesses as those carried out by NL, OMG
and Xxxx.xxx, and nothing has been or will be done or omitted
to be done which would make any policy of insurance void or
avoidable. A true and complete list of all policies of insurance
in force as of the date hereof covering the Gessaroli Group is
set forth on EXHIBIT 19, also with the ----------- indication of
the maximum covered amounts and of any deductible (i.e.
'franchigie') applicable thereto.
(s) Financial Leasing and Other Rental Agreements. All leases (both
financial or rental agreements - "locazioni") pursuant to which
the Gessaroli Group leases estate, real or personal property
relating to their respective business are, and shall be as at
the Closing Date, in good standing, valid, freely transferable
to Oxford or Newco, effective in accordance with their
respective terms, and are listed under EXHIBIT 4.There shall be
no change in any of the terms and conditions of the listed
leases.
(t) Intellectual Property Rights and Information. The Sellers and
the Gessaroli Group (i) own and legitimately use all the
Intellectual Property Rights, any other technology or other
intellectual property and Information, which are valid and
opposable to any third party; (ii) have not received any written
notice or claim that the conduct of the
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businesses of the Gessaroli Group infringes any patent,
know-how, secrecy, copyright or trademark and like of any third
party, and the Sellers, any of the representatives or officers
of the Gessaroli Group, are aware of any basis for any such
claim. In any event, the Intellectual Property Rights and their
use do not infringe any third parties' rights of any nature.
Neither the Sellers, nor any directors, employees or consultants
employed on or before the Closing Date at the Gessaroli Group,
nor any other person has any right or claim in connection with
any Intellectual Property Rights or Information.
The Gessaroli Group owns and/or is a legitimate user, pursuant
to license agreements, of the Intellectual Property Rights, of
the software and of any other technology or other intellectual
property. All the above mentioned licenses are, and shall be as
of the Closing Date, valid, effective and freely transferable to
Oxford or Newco.
(u) Buildings and Real Estates. OMG has full and undisputed title to
the OMG Lease Property, free of any Encumbrances, and shall
maintain such title on the OMG Lease Property free of any
Encumbrances of any nature also after the Closing Date, also in
order to avoid any prejudice to the pre-emption right described
under Article 13.3 of the Agreement and irrespective of the
terms set out under Article 19.6 of the Agreement, which shall
not apply in this respect. In addition, the Gessaroli Group has
full title property of, or legitimately uses, all real estates,
buildings and improvements, free from any Encumbrances and from
any right ("diritto"), or possession ("possesso" or
"detenzione") of third parties, limiting its full title or its
full utilisation, and may freely dispose thereof.
All the mentioned building, real estate and improvements, as
well as all the assets of the Gessaroli Group and the equipment
owned or used by it, have been constructed and maintained in
compliance with all the applicable zoning and construction law,
as well as with all the environmental laws and with any
applicable provisions on safety, earth-quake and fire
prevention, and with any regional laws and local regulations, or
any binding provisions coming from any national or local
authority. They are free from any "vizi", "mancanza di qualita",
"oneri o diritti di godimento xx xxxxx" and from any risk of
"evizione", to be intended according to Articles 1482, 1483,
1484 and 1490 of the Italian Civil Code; the current situation
and property of all the real estate, building and improvements
has been duly filed with the competent Conservatoria dei
Registri Immobiliari, NCEU and NCT; all the mentioned building,
real estate and improvements, as well as all the assets of the
Gessaroli Group and the equipment owned or used it do not need
any extraordinary maintenance or repair.
(v) Receivables. All Trade Accounts Receivable of the Gessaroli
Group have, and as of the Closing Date will have, arisen from
bona fide transactions in the ordinary course of business and
are hereby guaranteed to be valid, current and collectible in
accordance with their
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relevant terms of expire and none of them is or shall be subject
to any counterclaim or set-off.
Promptly after the first anniversary of Closing, the Sellers
shall reimburse to Oxford or Newco the balance between the
aggregate of the mentioned above Trade Accounts Receivable then
outstanding, and the amount of the bad debts allowance as shown
in the Closing Balance Sheets, and Oxford or Newco shall assign
and transfer to the Sellers such Trade Accounts Receivable.
(w) Warranty Obligations. The Financial Statements duly reflect and
shall duly reflect appropriate provisions for warranty
obligations and product liability for products sold or
manufactured prior to the Closing Date.
(x) Banks. A true and complete list of all the banks and other
financial institutions with which the Gessaroli Group has an
account, safe deposit box, outstanding loans or credit
facilities, and of the names of all persons who have access
thereto or hold a power of attorney is set forth on
EXHIBIT 26.
(y) Certain Contracts and Arrangements. Within the Gessaroli Group
there are no:
(i) employment agreements - even if regarding personnel
seconded from other undertakings - which grants rights
with respect to termination or penalties, in the event
of termination, in addition to the rights provided by
applicable laws and labour collective bargaining
agreements;
(ii) contracts, plans or arrangements, including but not
limited to plans relating to [stock-options] [TO BE
VERIFIED], pension, retirement, deferred compensation or
incentive compensation, to which any of the employees of
the Gessaroli Group is a party or in which any of such
employee participates - even if regarding employees
seconded from other undertakings;
(iii) patent, technology or software license agreements;
(iv) agreements relating to partnerships or other
unincorporated associations, joint venture or
consortium;
(v) commercial agreements for the purchase or sale of goods
or services or any other agreements which (A) are not
terminable on 90 or fewer days notice at any time
without penalty and (B) have a remaining term, as of the
Closing Date, of more than one year in length of
obligation on the part of the Gessaroli Group;
(vi) agreements, contracts, leases, purchase or sale orders,
open bids or other commitments for the sale of products
or services the quoted price and other terms and
conditions of which might be prejudicial or detrimental
to the conduct of the Gessaroli Group or
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where it could be required the payment or granting of
any discounts, rebates or credits;
(vii) agreements, contracts, leases or other commitments
binding which restrict the sale of products under the
Gessaroli Group in any territory;
(viii) agreements with townships, municipalities and the public
administration in general;
(ix) agreements whatsoever which may be terminated by the
other party upon the transfer and assignment of the
Gessaroli Group.
Without limiting the generality of the above, all the
agreements, contracts, leases, purchase or sale orders, open
bids and other commitments concerning the Gessaroli Group are
valid and in full force and effect, and there is not, under any
of such agreements, contracts, leases, purchase or sale orders,
open bids or other commitments, any breach by the Sellers or the
Gessaroli Group or by the other party or parties thereto nor any
event has occurred which might give rise to a default.
All purchase commitments from suppliers in favour of the
Gessaroli Group, and all goods or services sales or supply
commitments of the Gessaroli Group to its customers, are
completely and accurately reflected in the books and records of
Gessaroli Group and in the Financial Statements, and, except as
otherwise contemplated herein, the Sellers have no reason to
believe that Gessaroli Group's present suppliers or customers
have or shall have, as of the Closing Date, any intention to
terminate or in any way adversely modify its supply or purchase
arrangements.
(z) Liabilities. There is no liability relating to the Gessaroli
Group other than those expressly reflected in the Financial
Statements and as to the extent these are expressly reflected or
reserved for on the books and records of the Gessaroli Group and
in the Businesses Financial Statements. In addition, all the
liabilities of the Gessaroli Group are incurred in the ordinary
course of business and relate solely to the Gessaroli Group.
Despite any rules, regulations or laws of any different
provisions, no liabilities shall be assigned and transferred to
Oxford or Newco as a part of the Businesses but the Transferred
Liabilities.
Without limiting the generality of the above, the Gessaroli
Group has no liabilities of any nature (not even potential
liabilities), including labour, tax, health and safety, social
security, environmental or third party liabilities, product
liability, whether accrued, absolute, contingent or otherwise,
which were incurred by, on or prior to the Closing Date, or
arose or shall arise out of transactions entered into, or facts,
acts or omissions occurring, on or prior to the Closing Date.
The Gessaroli Group is not subject to anti-trust proceedings or
investigations by the EC Commission or the Autorita Garante
della
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Concorrenza e del Mercato, nor of anti-dumping or anti-subsidies
proceedings or investigations by authorities of countries where
their products are exported.
(aa) Labour Matters.
(i) The Gessaroli Group is in compliance with all applicable
laws respecting employment and employment practices, and
terms and conditions of employment, including but not
limited to provisions thereof relating to wages,
bonuses, hours of work and social security
contributions, workers' safety regulations, medical care
and safety insurance (INPS, INAIL INPDAI and other
similar bodies or authorities) and therefore with Taxes;
(ii) There is no personnel of any of the portion of the
Gessaroli Group who has been seconded to another portion
thereof;
(iii) there is no labour strike, dispute, slowdown,
representation campaign or work stoppage pending or
threatened also in connection with the transfer of the
Gessaroli Group;
(iv) no grievance or arbitration proceedings arising out of
or under any collective bargaining agreement is pending
and no claim therefor has been asserted;
(v) all pension plans and severance funds (TFR included)
required to be funded are adequately funded or reserved
for in accordance with applicable laws, regulations or
statutes;
(vi) except for the applicable national collective bargaining
agreement and similar acts, there are no agreements or
understanding with the unions or shop committees;
(vii) there are no employees on temporary lay-off plans (such
as "CIG") or under the so called "mobility procedure"
(i.e. "in mobilita") or similar procedures (including so
called "contratti di solidarieta") nor are there any
payments due, outstanding or that will become due prior
to or after the Closing Date in connection with these
procedures;
(viii) Mr. Gessaroli, Mrs Gessaroli and Xx. Xxxxx Xxxxxxxxx,
respectively sole director, attorney and officer of the
Gessaroli Group, as of the date hereof, hereby
acknowledge and declare that they have never rendered
activities in favour of the Gessaroli Group other than
the ones mentioned above; they have no title and right
to receive any payments of any nature whatsoever other
than those perceived under their respective activities
mentioned above up to the Closing Date, which payments,
as to 2000 financial year, shall be due in proportion to
the period from January 1, 2000, through the Closing
Date; they have never carried out and/or rendered in
favour of any of the Gessaroli Group, de iure or de
facto, activities other than ones relating to
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their respective positions of sole director, attorney
and officer of the Gessaroli Group and, in any event,
they hereby acknowledge and declare that, with the
execution hereof, they unconditionally and without
limitation waive to any possible rights vis-a-vis the
Gessaroli Group directly or indirectly pertaining to
their activities in any manner rendered in favour of
each of the portion of the Gessaroli Group.
(bb) Environmental Matters. As to all operations relating to the
Gessaroli Group: (i) all buildings (including the Buildings),
properties and assets (whether owned, rent or otherwise used)
are in compliance, in all material respects, with all respective
applicable national and EU laws, regulations and rulings
relating to the environmental conditions, as in force at the
relevant time; and (ii) the Gessaroli Group is not party to, nor
has received notice of or is aware of, and none of the said
buildings, properties and assets is object of, any actual or
threatened litigation or administrative proceedings concerning
environmental claims or liabilities.
There is no actual or potential liability on the Gessaroli Group
arising out of any activities or operations or the state or
condition of any properties now or formerly owned or occupied,
or facilities now or formerly used, and in particular (but
without limitation) any such liability in respect of: injury to
persons, including impairment of health or interference with
amenity; damage to land or personal property; interference with
riparian or other proprietary or possessory rights; public or
private nuisance; liability for waste or other substances; and
damage to or impairment of the environment including living
organisms.
All structures, machinery, plant and equipment, whether movable
or fixed, operations and premises used in connection with the
activity carried out by the Gessaroli Group for the protection
of human safety, health and amenity, property and the
environment, including (without limitation) for the abatement,
arresting or treatment of polluting substances or emissions, the
containment of substances and the prevention of spillage and
contamination:
(i) are in good repair and condition and satisfactory
working order;
(ii) conform to all statutory and other legal requirements.
(cc) Product Liability. With reference to NL, no liabilities or
obligations in the nature of, relating to or arising out of
product liability claims or other claims of any nature
whatsoever (including any "vizi", "mancanza di qualita", and the
like) relating to product sold or manufactured prior to the
Closing Date, even if of criminal nature, however denominated,
shall occur with respect to any products manufactured, assembled
or otherwise produced, and/or sold, or services performed, on or
before the Closing Date. With reference to the OMG Business and
to the Xxxx.xxx Business, all the said liabilities shall not be
a part of the relevant Transferred Liabilities and therefore,
despite any rules, regulations or laws, shall not be transferred
to Oxford or Newco.
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(dd) Litigation. There is no claim, action, proceeding or
investigation pending or threatened or reasonably probable of
assertion against or relating to the Gessaroli Group, before any
court, arbitration panel, administrative or governmental or
regulatory authority or body, also in relation, but not limited
to, Taxes and environmental matters.
(ee) Compliance with Laws. The Gessaroli Group has always complied in
all material respects with all applicable laws and regulations
(including but not limited to laws and regulations relating to
environmental standards and controls, real property and any
material improvement thereon, zoning legislation, and the
maintenance of books and records) in connection with its
businesses and has obtained all governmental approvals,
authorisations, permits or licenses which are required in
connection with its businesses. No orders, decrees, notices or
claims of any violation of any laws, regulations, rules, orders,
judgements, decrees or other requirements imposed by any
authority in connection with the businesses have been threatened
or received.
(ff) Restructuring of the Gessaroli Group. Any past change of control
of the Gessaroli Group, or transfer of assets and/or employees,
change of name, type, capital, participation, or restructuring
of the group to which the Gessaroli Group belongs, has always
been executed in compliance with the applicable laws and cannot
cause any future damage, invalidity or claim (also relating to
Taxes) against the Gessaroli Group.
(gg) Other material adverse effects on the Gessaroli Group. Without
limitation to the above representations and warranties, there
has been no material fact or circumstance in the last [three]
years (other than currency exchange fluctuations) that can
materially and adversely affect the current and future
businesses of the Gessaroli Group, its market and trading
position and the value of its assets.
(hh) Miscellaneous. All the data and information received by Oxford
or their representatives and consultants prior to the Closing
Date were, and shall be, submitted in bona fide, true, fair,
exhaustive and correct.
