Exhibit 2.1
Akzo Nobel Chemicals S.p.A.
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(of the first part)
and
Balchem B.V.
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(of the second part)
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SALE AND PURCHASE AGREEMENT
relating to
the sale and purchase of a Going Concern organized and managed by
Akzo Nobel Chemicals S.p.A in Xxxxxx Ticino
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Dated as of March 30, 2007
TABLE OF CONTENTS
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ARTICLE I - DEFINITIONS 1
1.1 Certain Defined Terms 1
1.2 Additional Definitions 5
1.3 Terms Generally 6
ARTICLE II - CLOSING; PURCHASE PRICE AND ADJUSTMENT 7
2.1 Sale and Transfer of the Going Concern 7
2.2 Description of the Going Concern 7
2.3 Closing; Purchase Price 10
2.4 Post-Closing Adjustments 11
2.5 Transfer Taxes and Notarial Fees 13
ARTICLE III - CONDITIONS TO CLOSING 13
3.1 The Clearance 13
3.2 The Union Consultation Procedure 13
ARTICLE IV - REPRESENTATIONS AND WARRANTIS OF SELLER 13
4.1 Authority; No Conflicts; Governmental Consents; Title;
Corporate Matters 13
4.2 Taxes 14
4.3 Tangible Personal Property 14
4.4 Owned Property 14
4.5 Intellectual Property 15
4.6 Assigned Contracts 15
4.7 Litigation; Decrees 16
4.8 Permits; Compliance 16
4.9 Environmental Matters 16
4.10 Labor, Employee and Agent Relations 17
4.11 Brokers 18
4.12 Reference Financial Sheet 18
4.13 Related party Contracts 19
4.14 Product Liability 19
4.15 Absence of Changes 19
4.16 Undisclosed Liabilities 20
4.17 Inventory 20
4.18 Product Warranty 20
4.19 Exclusivity of Representations 20
4.20 Representations at Closing 20
ARTICLE V - REPRESENTATIONS AND WARRANTIES OF PURCHASER 21
5.1 Authority; No Conflicts; Governmental Consents 21
5.2 Brokers 21
5.3 Litigation 21
5.4 Purchaser's Diligence 21
5.5 Representations at Closing 22
ARTICLE VI - COVENANTS OF SELLER 22
6.1 Access to Information 22
6.2 Ordinary Conduct 22
6.3 Confidential Information 23
6.4 Non-Competition; Non-Solicitation 24
6.5 Intercompany Agreements 24
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6.6 Interest in Ecolombardia 24
6.7 Interest in San Giulio 25
6.8 Tax Matters 25
ARTICLE VII - COVENANTS OF PURCHASER 26
7.1 Confidentiality 26
7.2 Use of Seller Name 26
7.3 Non-Business Receivables 26
7.4 Non-Solicitation 26
7.5 Insurance 27
ARTICLE VIII - MUTUAL COVENANTS 27
8.1 Required Filings; Permits; Novations and Consents 27
8.2 Reasonable Best Efforts 27
8.3 Publicity 28
8.4 Cooperation and collection of accounts receivable 28
8.5 Records 28
8.6 Foreign Employees 29
8.7 Foreign Agents/Distributors; Assignment to Purchaser 30
ARTICLE IX - EMPLOYEE MATTERS 30
9.1 Purchaser's Obligations from and after the Closing 30
9.2 TFR and Other Payables relating to Employees 30
9.3 Notification of Transfer 31
ARTICLE X - INDEMNIFICATION 31
10.1 Survival 31
10.2 Indemnification by Seller 31
10.3 Limits on Indemnification 32
10.4 Procedures Relating to Indemnification 32
10.5 Exclusive Remedies 33
10.6 Purchaser Acknowledgment 33
10.7 Indemnification by Purchaser 34
ARTICLE XI - GENERAL PROVISIONS 34
11.1 Assignment 34
11.2 No Third-party Beneficiaries 35
11.3 Expenses 35
11.4 Amendments 35
11.5 Notices 35
11.6 Interpretation; Exhibits and Schedules 36
11.7 Counterparts 36
11.8 Severability 36
11.9 Waiver of Compliance; Consents 36
11.10 Entire Agreement, No Novation 37
11.11 Dispute Resolution 37
11.12 Governing law; Venue 38
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EXHIBITS
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Specific Accounting Principles Exhibit A
Deed of Transfer Exhibit B
List of Products Exhibit C
Reference Financial Sheet Exhibit D
Transition Services Agreement Exhibit E
Closing Statement Format Exhibit F
Registered IP Master Assignment Agreements Exhibit G
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SCHEDULES
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Schedule 1.1.A Employees
Schedule 1.1.B Foreign Agents and Distributors
Schedule 1.1.C Foreign Employees
Schedule 1.1.E Knowledge of Seller - List of Relevant Persons
Schedule 2.2.A(b) Tangible personal property
Schedule 2.4(d) Engagement Letter of Accounting Expert
Schedule 3.1(a) Clearance
Schedule 4.1(b) Consents and Filings
Schedule 4.2 Taxes
Schedule 4.3(a) Liens
Schedule 4.4(a) Owned Property
Schedule 4.5(a) Registered IP
Schedule 4.6(a) List of Material Assigned Contracts
Schedule 4.6(b) Defaults
Schedule 4.6(c) Required Consents
Schedule 4.7 Litigation
Schedule 4.8(a) Permits
Schedule 4.8(b) Exception to Compliance with Laws
Schedule 4.9 Environmental Matters
Schedule 4.9(iii) Environmental Permits
Schedule 4.10.1 Collective Bargaining Agreements
Schedule 4.10.2 Agent
Schedule 4.15 Material Adverse Effect
Schedule 6.2 Conduct of Business
Schedule 6.4(b) List of Customers
Schedule 6.5 Inter-company Agreements
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SALE AND PURCHASE AGREEMENT
This SALE AND PURCHASE AGREEMENT (this "Agreement"), dated as of March
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30, 2007, is made by and between Akzo Nobel Chemicals S.p.A, a company organized
under the laws of Italy, with registered office at 0, Xxx Xxxxxxxx, Xxxxx,
Xxxxx, share capital of (euro) 8,580,000.00, registered with the Register of
Enterprises of Milan, fiscal code and VAT no. 00210680120 ("Seller"), of the
first part, and Balchem B.V., a company organized under the laws of The
Netherlands, with registered office in Amsterdam, The Netherlands, and place of
business at 000, Xxxxxx xxx Xxxxxxxxxxxxxx (P.O. Xxx 000, 0000 XX), Xxxxxxx, Xxx
Xxxxxxxxxxx, share capital of (euro) 18,000.00 ("Purchaser"), of the second
part.
WHEREAS, Seller is engaged in, among other activities, the business of
designing, developing, manufacturing, and selling certain chemical products,
namely Choline products (Choline Chloride and Choline salts), Methylamines and
Metam sodium, and of providing ancillary services related thereto, all as better
specified below;
WHEREAS, Seller carries out the business referred to above through
certain assets, liabilities, properties and rights collectively and jointly
managed and organized as a going concern ("ramo d'azienda");
WHEREAS, Seller has approached several potential purchasers, including
Purchaser, with a view to disposing of the Going Concern, as defined in Art. 1
below;
WHEREAS, Purchaser, through professional advisers of its choosing, has
carried out due diligence investigations on the financial, accounting, tax, and
legal status of the Business, as defined in Art. 1 below; in particular,
Purchaser has reviewed certain documents and records made available to it and
its Affiliates by or on behalf of Seller and has had discussions with certain
members of the management of the Business, and the opportunity to ask them
questions relating to the Business or the Going Concern; and
WHEREAS, Purchaser intends to purchase from Seller, and Seller intends
to sell to Purchaser, title to the Going Concern.
NOW THEREFORE, in consideration of the premises and the mutual
representations, warranties, covenants and agreements hereinafter set forth, the
parties hereto hereby agree as follows:
ARTICLE I
DEFINITIONS
1.1 Certain Defined Terms.
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In addition to the terms defined elsewhere in this Agreement, as used herein,
the following terms shall have the following meanings:
"Accounting Principles" means, with respect to any accounting or
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finance procedure, principle or methodology, that the following shall apply: (a)
first, if such procedure, principle or methodology is set forth in the Specific
Accounting Principles, attached hereto as Exhibit A, then such procedure,
principle or methodology shall apply (b) second, if such procedure, principle or
methodology is not set forth in Exhibit A, then the consistently applied
accounting
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policies, principles, practices, evaluation rules and procedures,
methods, bases and assumptions adopted in compliance with the Financial Economic
Manual by the Business for the preparation of the prescribed Akzo Nobel
reporting forms used for preparing management and financial accounts
("A-forms"), shall apply, and (c) third, to the extent not covered by (b), then
IFRS in force as at 31 December 2006 shall apply.
"Action" means any claim, action, suit, arbitration, inquiry,
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proceeding or investigation by or before any Governmental Authority.
"Affiliate" of any Person shall mean any other Person, which, directly
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or indirectly, controls or is controlled by or is under common control with such
Person (it being understood that for purposes of this definition, control shall
be determined in accordance with Article 2359, First Paragraph, Numbers 1 and 2,
of the Code).
"Assigned Contracts" means all Contracts, including the Employment
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Contracts, contracts concerning peroxide and ammonia, to which Seller is a
party, and which relate exclusively or predominantly to the Business and which
are now in place and are needed for the ordinary functioning of the Going
Concern and the ordinary management of the Business.
"Business" means Seller's business of designing, developing,
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manufacturing, marketing, distributing and selling the Products as such
activities are presently conducted by the same in its facilities in Xxxxxx
Ticino, Italy, and in the facilities of one of Seller's Affiliates in
Amersfoort, The Netherlands.
"Business Day" means any day that is not a Saturday, a Sunday or other
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day on which banks are required or authorized by Law or executive order to be
closed in The Hague, The Netherlands and/or Milan, Italy.
"Closing Statement" means the statement showing the value of Inventory,
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Trade Payables, Customer Bonuses, TFR and other payables relating to Employees
included in the Going Concern as of the Closing Date, to be computed in
accordance with the Accounting Principles and conforming to the format attached
hereto as Exhibit F.
"Code" means the Italian Civil Code as currently in force.
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"Contract" means any contract, agreement, license, lease, sales or
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purchase order or other legally binding commitment, whether written or oral.
"Customer Bonuses" means any amounts payable to customers of the
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Business in respect of customer bonuses or special bonuses accrued or payable as
of the Closing Date.
"Deed of Transfer" means the notarial deed of transfer, complying with
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the terms hereof ("atto di cessione d'azienda"), which shall be (i) legally
sufficient, in form and substance, to transfer to Purchaser good, full and
marketable title to the Going Concern pursuant to applicable Italian law; (ii)
suitable to be registered with the competent registration tax offices pursuant
to applicable Italian law; (iii) substantially in the form of Exhibit B attached
hereto and (iv) in all respects consistent and compliant with all the provisions
hereof, any novation ("novazione") of which is hereby expressly excluded.
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"Employees" means all individuals who at the Closing Date are employed
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by Seller in connection with the Business, and who are listed on Schedule 1.1.A
attached hereto, which contains all the relevant information (including personal
data, job title, date of commencement of employment, level, monthly salary,
incentive plan and fringe benefits, concerning each of the Employees).
"Employment Contracts" means the employment contracts between Seller
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and the Employees.
"Environment" means any or all of the following media (alone or in
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combination): air; water (including water under or within land); soil and land
and any ecological systems and living organisms supported by these media.
"Environmental Claim" means any oral or written claim, demand and
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action, whether actual or threatened, made by any Governmental Authority
(including enforcement notices or proceedings) or third party in connection with
any Environmental Condition.
"Environmental Condition" means any contamination by Hazardous
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Substances of, or the condition of, ground, soil, ground water, surface water,
air or other natural resources in breach of or giving rise to liability under
Environmental Laws in the relevant jurisdiction on, at, under or above (i) a
Owned Property and caused by Hazardous Substances at, in, under or above the
soil, air or water and (ii) any other property and caused directly by the
migration of such Hazardous Substances from a Owned Property.
"Environmental Laws" means all laws, regulations and other requirements
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of any Governmental Authority with the force of law, relating to pollution, or
to the protection, of the environment and safety and health in that regard,
which are applicable to the Business and/or the Going Concern, as in effect and
applied as at the Closing Date.
"Financial Economic Manual" means the financial economic manual of
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Seller, the current version of which has been provided to Purchaser by Seller.
"Foreign Agents and Distributors" means those agents and distributors
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providing their services to the Business, indicated in Schedule 1.1.B, which at
the date hereof have an agreement with Seller's Affiliates.
"Foreign Employees" means those persons providing their services to the
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Business, indicated in Schedule 1.1.C, which at the date hereof are employed by
one of Seller's Affiliates.
"Going Concern" means the going concern ("ramo di azienda"), owned,
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organized and managed by Seller in connection with the Business, as defined
under Article 2.2.
"Governmental Authority" means any nation or government, any state,
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local, municipal, foreign or other political subdivision thereof, any
governmental or quasi-governmental entity of any nature, and any entity
exercising executive, legislative, judicial, regulatory or administrative
functions of or pertaining to government, including, for the avoidance of doubt,
any antitrust authority of whatever jurisdiction, the European Commission, the
European Union and related or similar entities.
"Governmental Order" means any order, writ, judgment, injunction,
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decree, settlement agreement, stipulation, determination or award entered by or
with any Governmental Authority.
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"Hazardous Substances" means, to the extent regulated by the applicable
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Governmental Authority, any wastes, pollutants, contaminants and any other
natural or artificial substance (whether in the form of a solid, liquid, gas or
vapour) defined as hazardous by any applicable Environmental Laws in the
relevant jurisdiction and is capable of causing harm or damage to the
Environment or the health of any person.
"IFRS" means International Financial Reporting Standards as adopted by
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the European Union as incorporated in the Financial Economic Manual of the
Seller.
"Inventory" means all raw materials, consumables, technical materials,
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work-in process, part-processed stock, finished goods and goods for resale
including prepayments for inventory and stock in any mode of transit, wherever
located, physically allocated or separated for use exclusively in any part of
the Business at Closing, which conforms with Seller's applicable specifications,
is saleable and useable in the normal course of business.
"Knowledge of Seller" with reference to any of the representations and
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warranties of Seller means the best knowledge, after reasonable inquiry, of the
individuals listed on Schedule 1.1.E.
"Law" means any international, European Union, foreign, state or local
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statute, law, directive, ordinance, regulation, rule, code, order, requirement
or rule of common law issued, entered or promulgated by any Governmental
Authority.
"Liabilities" means any and all debts, liabilities and obligations,
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whether accrued or fixed, absolute or contingent, matured or unmatured or
determined or determinable, including, without limitation, those arising,
reported or claimed under any Law (including, without limitation, any
Environmental Law), Action or Governmental Order.
"Lien" means any mortgage, pledge, hypothecation, charge, assignment,
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encumbrance, lien (statutory or other) or other security agreement of any kind
or nature whatsoever.
"Material Adverse Effect" means any circumstance, change or effect that
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is materially adverse to the Assets, properties or financial condition of the
Going Concern taken as a whole, but excluding the effects of: (i) changes that
are generally applicable to the industries and markets in which the Business
operates; (ii) changes in foreign exchange rates; (iii) changes in general
applicable to prices of energy or raw materials.
"Owned Property" means the real property (including all buildings,
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improvements and structures located thereon and all rights, privileges,
easements and appurtenances thereto) described on Schedule 4.4(a) hereto.
"Person" means an individual, partnership, corporation, limited
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liability company, business trust, joint stock company, trust, unincorporated
association, joint venture, or other entity of whatever nature.
"Products" means Choline products (Choline Chloride liquid, Choline
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Chloride dry and Choline salts), Methylamines and Metam sodium listed on Exhibit
C which Seller manufactures at its facilities in Xxxxxx Ticino.
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"Reference Financial Sheet" means the pro-forma overview of the assets
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and liabilities of the Going Concern as of the Reference Date ("Situazione
Patrimoniale") attached hereto as Exhibit D.
"Reference Date" means February 28, 2007.
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"Seller Group" means Seller and its Affiliates.
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"Site" means the site of the operations of the Business in Xxxxxx
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Ticino, Italy.
"Subsidiary" means, any Person, 50% or more of the voting securities of
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which are owned, directly or indirectly, by another Person.
"Tax" or "Taxes" means any state, regional, local or foreign income,
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gross receipts, trade, net worth, equity, sales, use, turnover, ad valorem, net
production value, value-added, franchise, profits, license, withholding,
substitute, payroll, employment, excise, severance, stamp, transfer,
registration, real estate transfer, cadastral, mortgage, occupation, premium or
property tax, customs duty or other tax, governmental fee or other like
assessment or charge of any kind whatsoever, together with any interest or
penalty, addition to tax or additional amount imposed with respect thereto.
"Tax Return" means any return, statement, report or form required to be
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filed with or submitted to any Governmental Authority in connection with the
determination, assessment, collection or payment of any Tax or in connection
with the administration, implementation or enforcement of or compliance with any
Law relating to any Tax.
"Trade Payables" means all trade payables arising in the ordinary
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course of business to providers of services, equipment, goods and supplies to
Seller, including invoices to be received and any amounts receivable in respect
of supplier rebates or special bonuses arising prior to the Closing Date, in
relation to the Business.
"Transaction Documents" means (a) this Agreement; (b) the Deed of
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Transfer; (c) the Transition Services Agreement, (d) the Registered IP Master
Assignment Agreements.
"Transition Services Agreement" means the Transition Services Agreement
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to be executed by Seller and Purchaser in substantially the form attached hereto
as Exhibit E.
"Union Consultation Procedure" means the trade union consultation
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procedure provided for under Article 47 of Law Act no. 428/1990 and under
Article 57 of the national collective bargaining agreement for the "Industria
Chimica".
1.2 Additional Definitions.
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The following additional terms have the meaning ascribed thereto in the Section
indicated below next to such term:
Defined Term Section
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Agents 4.10.2
Agreement Preamble
Accounting Expert 2.4(d)
Antitrust Laws 8.1
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Defined Term Section
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Assets 2.2A
Assumed Liabilities 2.2C
Clearance 3.1(a)
Closing 2.3(a)
Closing Date 2.3(a)
Competing Service 6.4(a)
Confidentiality Agreement 7.1
De Minimis Amount 10.3(a)
Designated Representative 6.2
Direct Claim 10.4(a)
Dispute 11.11(a)(i)
Draft Price Adjustment 2.4(a)
Draft Closing Statement 2.4(a)
Ecolombardia 6.6(a)
Environmental Permits 4.9(iii)
Excluded Assets 2.2B
Excluded Liabilities 2.2D
Excluded Intellectual Property 2.2B(d)
Final Price Adjustment 2.4(e)
Final Closing Statement 2.4(e)
Final Purchase Price 2.3(c)
Indemnification Deductible 10.3(a)
Indemnification Event 10.4(a)
Intellectual Property 2.2A(d)
Interim Period 6.2
Loss 10.2
Material Assigned Contract 4.6(a)
Non-Transferred Employee 9.3
Permit 4.8(a)
Provisional Purchase Price 2.3(c)
Purchaser Preamble
Purchaser's Assumed Liabilities 10.7
Records 2.2A(g)
Representatives 6.3
Restricted Period 6.4(a)
Retained Names and Marks 7.2
Rules 11.11(iv)
San Giulio 6.7(a)
Secondment Period 8.7.2(a)
Seller Preamble
Tax Certificate 6.8(a)
Territory 6.4(a)
TFR 2.2C(a)
Third-party Claim 10.4(a)
1.3 Terms Generally.
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The definitions set forth or referenced in Sections 1.1 and 1.2 shall apply
equally to both the singular and plural forms of the terms defined. The words
"include", "includes" and "including" shall be deemed to be followed by the
phrase "without limitation". The words "herein",
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"hereof" and "hereunder" and words of similar import refer to this Agreement
(including the Exhibits and Schedules) in its entirety and not to any part
hereof unless the context shall otherwise require. All references herein to
Articles, Sections, Exhibits and Schedules shall be deemed references to
Articles and Sections of, and Exhibits and Schedules to, this Agreement unless
the context shall otherwise require. Unless the context shall otherwise require,
any references to any agreement or other instrument or statute or regulation are
to it as amended and supplemented from time to time (and, in the case of a
statute or regulation, to any successor provisions). Any reference in this
Agreement to a "day" or number of "days" (without the explicit qualification of
Business Day) shall be interpreted as a reference to a calendar day or number of
calendar days. If any action or notice is to be taken or given on or by a
particular calendar day, and such calendar day is not a Business Day, then such
action or notice shall be deferred until, or may be taken or given on, the next
Business Day.
ARTICLE II
CLOSING; PURCHASE PRICE AND ADJUSTMENT
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2.1 Sale and Transfer of the Going Concern.
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(a) Upon the terms and conditions of this Agreement on the Closing
Date, Seller hereby agrees to sell to Purchaser, and Purchaser hereby agrees to
purchase from Seller, the Going Concern, by executing, delivering and exchanging
the Deed of Transfer.
(b) Transfer of title to the Going Concern and transfer of title to the
assets as well as assumption of liabilities, shall take place and be effective
on the Closing Date. Upon such date Purchaser shall also take full possession of
the Going Concern.
(c) Revenues and actual costs relating to the Going Concern shall
belong exclusively to Seller up to the Closing Date (exclusive) and to Purchaser
from such date.
(d) Any risk relating to the Going Concern and its management and
operations shall remain with Seller until the Closing Date (exclusive) and shall
be transferred to Purchaser from such date and the same shall apply to Assets
and Liabilities comprised in the Going Concern pursuant to Section 2.2 below.
2.2 Description of the Going Concern
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The Going Concern shall be comprised of the following Assets and
Assumed Liabilities as existing as of the Closing Date and shall not include the
following Excluded Assets and Excluded Liabilities:
A. Assets
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The assets and contracts included in the Going Concern (collectively
the "Assets") which shall be transferred to Purchaser are the following:
(a) the Owned Property;
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(b) the tangible personal property owned by Seller located upon or
affixed to or normally located in, at or upon, the Owned Property, exclusively
used in the Business, out of which the items having a book value exceeding
(euro)4,000.00 are listed on Schedule 2.2.A(b);
(c) the Inventory;
(d) the know-how, trade secrets, confidential business information,
processes, domain names, inventions and formulae used exclusively in the
Business and the trademarks, trademark applications, trade names, trade name
rights, patents, patent applications, service marks, copyrights and pending
applications for the foregoing, owned either by Seller or any of Seller's
Affiliates (collectively, the "Intellectual Property"). All Registered IP as
defined in Section 4.5.(a) are listed on Schedule 4.5.(a);
(e) all Assigned Contracts;
(f) all relevant documentation concerning the Permits used exclusively
in or relating exclusively to the Assets or the Business, it being understood
that when said documentation does not relate exclusively to the Assets or the
Business, then Seller shall keep the originals and provide Purchaser with copies
or abstracts thereof;
(g) the books and records (other than Tax records), relating
exclusively to the Assets or the Business, including sales literature, product
information, employment records and files and other information and/or data
related to or used by Seller exclusively in the operation of the Business (the
"Records"), it being understood that when said books and records do not relate
exclusively to the Business, then Seller shall keep the originals and provide
Purchaser with copies or abstracts thereof;
(h) except as provided in Section 2.2B(f), all causes of action,
claims and rights against third parties that relate exclusively to the Assets or
the Business, including all warranties and guaranties received from vendors,
suppliers or manufacturers with respect to the Assets or the Business;
(i) all goodwill appurtenant to the Going Concern, and the right to
represent to third parties that Purchaser shall be the successor to the
Business;
(j) 1114 ordinary shares of Ecolombardia, representing 0.214% of its
stated capital.
B. Excluded Assets.
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Notwithstanding anything herein to the contrary, the following assets
are not included in the Assets and shall be retained by Seller (the "Excluded
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Assets"):
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(a) all cash and cash equivalent items, including checking accounts,
bank accounts, lock box numbers, certificates of deposit, time deposits,
securities, and the proceeds of accounts receivable, including uncashed checks
in payment thereof, received by Seller prior to the Closing Date;
(b) rights to or claims for refunds or rebates of Taxes, and other
governmental charges for periods ending prior to the Closing Date and the
benefit of net operating loss carryforwards, carrybacks or other credits of
Seller, whether or not attributable to the Business;
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(c) proprietary or confidential business or technical information,
records and policies that relate generally to Seller or its Affiliates and are
not used or are not relevant to the Business, including organization manuals,
strategic plans and Tax records and related information;
(d) all the registered intellectual property not listed on Schedule
4.5.(a) and proprietary computer programs or other software and databases (the
"Excluded Intellectual Property");
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(e) all notes, drafts and accounts receivable or other obligations for
the payment of money made or owed by any member of Seller Group;
(f) all causes of action, claims, demands, rights and privileges
against third parties that arise out of the ownership of the Assets, the
operation of the Business, or the acts or omissions of Seller that relate to any
of the Excluded Assets or Excluded Liabilities, including causes of actions,
claims and rights under insurance policies relating thereto;
(g) all other assets used primarily in connection with Seller's and its
Affiliates' corporate functions (including the corporate charter, taxpayer and
other identification numbers, corporate books, seals, minute books and stock
transfer books), whether or not used for the benefit of the Business; and
(h) accounts receivable (including trade receivables) in relation to
the Business up to the Closing Date.
C. Assumed Liabilities.
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Without prejudice to the Representations and Warranties given by Seller
to Purchaser pursuant to Article IV herein, Purchaser shall assume the
Liabilities relating to the Business which arose before the Closing Date (the
"Assumed Liabilities"), which are hereinafter described:
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(a) all obligations arising under the Assigned Contracts transferred to
Purchaser pursuant to Article 2.2, including, without prejudice to Section 9.2
below, the severance treatment, i.e. deferred salary ("TFR") to the extent not
satisfied by Seller prior to Closing and other payables relating to Employees
still outstanding at Closing; and
(b) all Trade Payables; and
(c) all Customer Bonuses.
D. Excluded Liabilities.
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Notwithstanding anything herein to the contrary, the Assumed
Liabilities shall not include, and Purchaser shall not otherwise assume, any
liabilities, other than Assumed Liabilities; without limiting the generality of
the foregoing, Purchaser is not assuming the following Liabilities (the
"Excluded Liabilities"):
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(a) any Liability for Taxes, other than the Taxes that are the
responsibility of Purchaser pursuant to Section 2.5;
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(b) all bank indebtedness or other forms of indebtedness for borrowed
money of Seller;
(c) any Liabilities arising out of any claim or demand of any employee
of Seller who is not an Employee;
(d) any Liabilities arising out of environmental claims, inter-company
transactions or governmental claims existing or occurring prior to Closing.
E. Employees.
All Employees shall transfer by operation of law as per the date of
Closing from Seller to Purchaser.
2.3 Closing; Purchase Price.
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(a) The closing (the "Closing") of the purchase and sale of the Going
Concern shall be held at the offices of Studio Legale Xxxxxxxxx Brescia e
Associati at 10:00 a.m. on the first month end following the date on which the
condition to Closing set forth in Article III hereof shall have been satisfied
or on such other date agreed upon in writing by the Parties with a view to
having the Closing held on April 30, 2007. The date on which the Closing shall
occur, effective as of 11.59 p.m., is hereinafter referred to as the "Closing
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Date". It is understood that any and all actions and transactions constituting
----
the Closing (including all the deeds and documents to be executed at the Closing
and deliveries to be carried out at Closing pursuant to this Agreement) shall be
regarded for the purpose of the Closing as a single transaction so that such
actions and transactions shall be deemed to occur simultaneously, and no such
action or transaction shall be deemed to have been consummated until all such
actions and transactions have been consummated.
(b) At the Closing, each of Seller and Purchaser shall execute and
deliver the Deed of Transfer, which Purchaser shall cause to be filed as
prescribed by applicable Law, and shall execute or cause to execute and deliver
such other instruments as may be necessary, under applicable law, to vest in
Purchaser good and marketable title to the Going Concern, including the
Intellectual Property owned by Seller's Affiliates pursuant to Exhibit G, and to
otherwise properly effect the purposes of this Agreement.
(c) The parties have agreed that the purchase price for the Going
Concern is provisionally agreed to in the amount of (euro) 5,540,000 plus the
amount in Euro of Inventory minus Trade Payables and Customer Bonuses as
indicated in the Reference Financial Sheet, which is equal to (euro) 4,599,000
(the "Provisional Purchase Price"), a part of which shall be allocated to
----------------------------
goodwill as agreed at Closing. The Provisional Purchase Price shall be subject
to adjustment pursuant to Section 2.4 below (the Purchase Price, so adjusted,
the "Final Purchase Price").
--------------------
(d) Purchaser shall pay to Seller an amount equal to the Provisional
Purchase Price on the Closing Date by wire transfer in immediately available
funds to the account or accounts designated by Seller and communicated to
Purchaser upon at least 3 Business Days prior notice.
(e) At the Closing, Seller and Purchaser shall execute or cause to be
executed and delivered to each other the Transition Services Agreement.
10
(f) At the Closing, Seller shall carry out a physical stock-take of the
Inventory in the presence of (representatives of ) Purchaser.
2.4 Post-Closing Adjustments.
------------------------
(a) Within thirty (30) Business Days after the Closing Date, Seller
shall (i) prepare and deliver to Purchaser a draft Closing Statement (to be
computed in accordance with Accounting Principles consistently with the Closing
Statement Format) with attached details of TFR and other payables to Employees
accrued at Closing and settled at Closing and of TFR and other payables to
Employees accrued at Closing but not settled at Closing (the "Draft Closing
--------------
Statement"), (ii) calculate the difference between the amount in Euro of
---------
Inventory minus Trade Payables, Customer Bonuses, as indicated in the Reference
Financial Sheet and the amount in Euro of Inventory minus Trade Payables,
Customer Bonuses, TFR and other payables relating to Employees - to the extent
not settled at Closing pursuant to Section 9.2 below - as indicated in the Draft
Closing Statement (the "Draft Price Adjustment"). Purchaser shall cooperate with
----------------------
Seller in connection with, and shall furnish to Seller all such information as
Seller may reasonably require, in the preparation of the Draft Closing
Statement.
(b) The parties hereto agree that the Accounting Principles, applied on
a good faith basis, will be the sole methodology used to determine (i) the Draft
Closing Statement (which shall be drafted consistently with both the Closing
Statement Format and the Reference Financial Sheet, provided the latter complies
with the Accounting Principles) and (ii) the Draft Price Adjustment provided
herein, and no other accounting methods, policies, practices, procedures,
classifications or methodologies will be used for such purposes. Purchaser shall
provide Seller and its representatives with reasonable access to books and
records and relevant personnel during the preparation of the Draft Closing
Statement and the resolution of any disputes that may arise under this Section
2.4.
(c) If Purchaser disagrees with the amounts shown on the Draft Closing
Statement and/or with the Draft Price Adjustment, Purchaser shall notify Seller
in writing of such disagreement within thirty (30) Business Days after delivery
of the Draft Closing Statement, which notice shall describe the nature of any
such disagreement, shall provide explanations in reasonable detail, shall
identify the specific items involved and shall specify the Euro amount of each
such disagreement also specifically indicating to what individual line item of
the Closing Statement the disagreement relates. After the end of such thirty
(30) Business Day period, Purchaser may not introduce additional disagreements
or increase the amount of any disagreement with respect to any item in the Draft
Closing Statement and/or the Draft Price Adjustment, and any item not so
identified shall be deemed to be agreed to by Purchaser and will be final and
binding upon the parties.
As the Draft Closing Statement shall include certain estimates and
judgments which may change over time after the Closing Date, Seller and
Purchaser agree that any market or business developments after the Closing date
shall not be taken into consideration and that the status of the Going Concern's
affairs and market circumstances at the time of the Closing shall prevail. Any
facts or events arising after Closing shall not be taken into consideration in
the final determination of the Closing Statement. Purchaser and Seller agree
that appropriate adjustments to the Draft Closing Statement will only be made
if: (i) per individual line item of the Draft Closing Statement the adjustment
amounts to more than (euro) 10,000 (ten thousand euro); and (ii) in the
aggregate, these adjustments amounts to more than (euro) 25,000 (twenty-five
thousand euro), in which event the adjustments shall be made for the full amount
of such adjustments.
11
(d) Purchaser and Seller agree to negotiate in good faith to resolve
any such disagreement. If Purchaser and Seller are unable to resolve all
disagreements properly identified by Purchaser pursuant to Section 2.4(c) within
thirty (30) Business Days after delivery to Seller of written notice of such
disagreement, then such disagreements shall be submitted for final and binding
resolution to Ernst & Young, Milan, Italy, or if unavailable, another
independent internationally recognized accounting firm mutually acceptable to
Seller and Purchaser (the "Accounting Expert"). If Seller and Purchaser are
------------------
unable to agree on the Accounting Expert within ten (10) Business Days after
good faith negotiations then the Accounting Expert shall be appointed by the
President of the Court of Milan at the request of either party. The Accounting
Expert shall act as an expert (and not as an arbitrator) pursuant to an
engagement agreement to be executed substantially in the form of Schedule 2.4(d)
and will only consider those items and amounts set forth in the Draft Closing
Statement as to which Purchaser and Seller have disagreed within the time
periods and on the terms specified above and must resolve the matter in
accordance with the terms and provisions of this Agreement (including Section
2.4(b) above). The Accounting Expert shall deliver to Purchaser and Seller, as
promptly as practicable after its appointment (but in no event later than forty
five (45) Business Days), a written report setting forth the resolution of any
such disagreement determined in accordance with the terms of this Agreement and
the reasons for such determination. The Accounting Expert shall consider in
making its determination also presentations and supporting material provided by
the parties. The parties agree that Seller shall supply Purchaser, and Purchaser
shall supply Seller, with any written representations that are made to the
Accounting Expert and that each party and its representatives, accountants and
other advisors may be present while oral presentations are made to the
Accounting Expert. The determination of the Accounting Expert shall be final and
binding upon Purchaser and Seller. The fees, expenses and costs (including VAT)
of the Accounting Expert shall be borne one-half by Purchaser and one-half by
Seller irrespective of the decision of the Accounting Expert.
(e) The Draft Closing Statement and the Draft Price Adjustment shall be
deemed to be the "Final Closing Statement" and the "Final Price Adjustment" for
------------------------ ----------------------
the purposes of this Agreement upon the earliest of (A) the failure of Purchaser
to notify Seller of a dispute with respect to the Draft Closing Statement and
the Draft Price Adjustment within thirty (30) Business Days of Seller's delivery
of the Draft Closing Statement to Purchaser, (B) the resolution of all disputes
with respect to the Draft Closing Statement and the Draft Price Adjustment
pursuant to Section 2.4(d), by Seller and Purchaser, and (C) the resolution of
all disputes with respect to the Draft Closing Statement and the Draft Price
Adjustment pursuant to Section 2.4(d), by the Accounting Expert.
(f) The Final Price Adjustment shall be algebraically added to the
Provisional Purchase Price in order to determine the Final Purchase Price.
(g) The Final Price Adjustment shall be paid in accordance with the
following provisions:
(i) if the Provisional Purchase Price results in an amount
higher than the Final Purchase Price, so that the Final Price
Adjustment is negative, the difference shall be paid by Seller to
Purchaser;
(ii) if the Provisional Purchase Price results in an amount
lower than the Final Purchase Price, so that the Final Price Adjustment
is positive, the difference shall be paid by Purchaser to Seller;
12
provided that, in both cases, payment shall occur, by wire transfer of
immediately available funds to an account designated by the party
receiving payment within five (5) Business Days after the final
determination of the Final Price Adjustment pursuant to Subsection
2.4(e), plus interest on the amount of such downward adjustment or
upward adjustment from and including the Closing Date through the date
of such payment thereof at the per annum rate equal to five percent
(5%), and
(iii) if the Provisional Purchase Price results in an amount
equal to the Final Purchase Price, then the Final Purchase Price shall
be deemed as fully paid to Seller by Purchaser.
2.5 Transfer Taxes and Notarial Fees.
--------------------------------
Transfer tax, registry tax and any stamp taxes and charges levied by any
Governmental Authority on the transfer of the Going Concern, also following
adjustment of the Provisional Purchase Price pursuant to Section 2.4 shall be
borne by Purchaser up to the sum of (euro)250,000 and by Seller for any amount
in excess thereof. Purchaser shall also bear the notarial fees relating to the
Deed of Transfer.
ARTICLE III
CONDITIONS TO CLOSING
---------------------
3.1 The Clearance.
-------------
Intentionally omitted (based upon Section 5.1(c)).
3.2 The Union Consultation Procedure.
--------------------------------
The obligation of Seller and Purchaser to effect the Closing pursuant to this
Agreement is subject to the condition that, on or prior to the expiration of the
Closing Date, the prescribed Union Consultation Procedure has been completed.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF SELLER
----------------------------------------
Seller hereby represents and warrants to Purchaser as follows:
4.1 Authority; No Conflicts; Governmental Consents; Title;
--------------------------------------------------------------
Corporate Matters.
-----------------
(a) Seller is a joint stock company duly organized, validly existing
and in good standing under the laws of Italy. Seller has all necessary power and
authority to enter into the Transaction Documents to which it is a party and to
carry out its obligations thereunder. This Agreement has been duly authorized
and executed by Seller, and (assuming due authorization, execution and delivery
by the other parties thereto) constitute a legal, valid and binding obligations
of Seller, enforceable against Seller in accordance with their respective terms,
except
13
as enforceability may be limited by bankruptcy, insolvency, reorganization,
moratorium and other similar Laws relating to or affecting creditors' rights
generally.
(b) Assuming all consents, approvals, authorizations and other actions
described in Schedule 4.1(b) have been obtained and all filings and
notifications listed therein have been made, except as may result from any facts
or circumstances relating solely to Purchaser, the execution, delivery and
performance by Seller of this Agreement does not, and of the other Transaction
Documents to which it is a party will not, (i) violate or conflict with the
organizational or governing documents of Seller, (ii) except as would not,
individually or in the aggregate, reasonably be expected to result in a Material
Adverse Effect, in any material respect, conflict with or violate any Law or
Governmental Order applicable to Seller, or by which any of the Assets of the
Going Concern is bound or affected.
(c) No consent, approval, license, permit, order or authorization of,
or registration, declaration or filing with, or notification to, any
Governmental Authority is required to be obtained or made by or with respect to
Seller in connection with the execution and delivery of the Transaction
Documents or the consummation of the transactions contemplated hereby, except
(i) as described in Schedule 4.1(b), (ii) for compliance with and filings, if
any, with Antitrust Laws, (iii) as may be required solely by reason of
Purchaser's participation in the transactions contemplated hereby and (iv) where
failure to obtain such consent, approval, authorization, license, permit or
order, or to make such filing, declaration, registration or notification, would
not prevent Seller from performing any of its material obligations under this
Agreement and would not, individually or in the aggregate, reasonably be
expected to result in a Material Adverse Effect.
4.2 Taxes.
-----
Except as disclosed in Schedule 4.2, (i) Seller has filed or caused to be filed
all Tax Returns of or with respect to the Business which have become due (taking
into account valid extensions of time to file) prior to the date hereof, or
which shall become due up to the Closing Date, (ii) Seller has paid or caused to
be paid all material Taxes due thereunder with respect to the Business.
4.3 Tangible Personal Property.
--------------------------
(a) Except as disclosed on Schedule 4.3(a), Seller has good and
marketable title to all tangible personal property, except those sold or
otherwise disposed of in the ordinary course of business consistent with past
practice, in each case free and clear of all Liens.
(b) The equipment owned or used in the Business has been regularly
maintained and is in good operating condition and repair, except for ordinary
wear and tear and except as would not, individually or in the aggregate,
reasonably be expected to be affected by a Material Adverse Effect and is fit
for operation in the ordinary course of business.
4.4 Owned Property.
--------------
(a) Schedule 4.4(a) contains a complete and correct description of the
Owned Property. Except as described in Schedule 4.4(a), Seller has, as at the
Closing Date, good, valid and marketable title to the Owned Property free and
clear of all Liens.
(b) Except as disclosed on Schedule 4.4(a), there is no real property
leased by Seller and used in the Business.
14
4.5 Intellectual Property.
---------------------
Schedule 4.5(a) sets forth a true and complete list of all registered
and applied for items of Intellectual Property specifying whether they are owned
by Seller or any of Seller's Affiliates ("Registered IP") and sets forth a list
-------------
of all jurisdictions in which such Registered IP is registered or registrations
have been applied for and all registration and application numbers,
respectively. Except as set forth on Schedule 4.5(a),
(i) all of the Registered IP has been duly registered, filed
in or issued by the appropriate Governmental Authority;
(ii) Seller and/or its Affiliates are the sole and exclusive
owners of the Registered IP;
(iii) the Registered IP constitutes all of the material
trademarks, trademark rights, trade names, trade name rights, patents,
patent rights, service marks, copyrights, domain names, and pending
applications for the foregoing used by Seller in the Business; and
(iv) to the Knowledge of Seller, a) the Intellectual Property
does not infringe any third party intellectual property rights; b)
there are no claims raised or threatened by third parties against the
Intellectual Property.
4.6 Assigned Contracts.
------------------
(a) Schedule 4.6(a) contains a comprehensive list of the following
Assigned Contracts (each a "Material Assigned Contract", and collectively the
---------------------------
"Material Assigned Contracts") in effect as of the date of this Agreement to
-----------------------------
which Seller is a party:
(i) any Assigned Contract involving amounts in excess of
(euro) 10,000 per year;
(ii) any Assigned Contract that is not cancelable without
penalty or further payment upon ninety (90) days' or less notice;
(iii) any Assigned Contract relating predominately to the
Business between Seller and an Affiliate;
(iv) any Assigned Contract establishing any joint venture,
strategic alliance or other collaboration relating to the Business;
(v) all Assigned Contracts containing a covenant not to
compete.
(b) Except as set forth on Schedule 4.6(b), to the Knowledge of Seller
all Material Assigned Contracts are valid, binding and in full force and effect
and are enforceable by Seller in accordance with their terms. Seller has not,
except as disclosed on Schedule 4.6(b), received written notice prior to the
date hereof of breach or default or the intention of any party to terminate any
Material Assigned Contract.
(c) Except as set forth on Schedule 4.6(c), to the Knowledge of Seller
no consent by notice or approval from any third party is required for the
assignment of the Material Assigned
15
Contracts under this Agreement. To the Knowledge of Seller, Seller is not in
breach and no other party is in breach of any Material Assigned Contracts.
4.7 Litigation; Decrees.
-------------------
Schedule 4.7 sets forth a list as of the date of this Agreement of all
pending lawsuits or claims or Actions with respect to which Seller has received
notification, against or affecting the Business or any of the Assets, and that
(i) relate to or involve more than (euro) 50,000, (ii) seek any material
injunctive relief or (iii) may give rise to any legal restraint on or
prohibition against the transactions contemplated hereby.
4.8 Permits; Compliance.
-------------------
(a) Schedule 4.8(a) sets forth all Governmental Orders, certificates,
licenses, permits, authorizations and approvals (each a "Permit") issued or
granted to Seller pursuant to any Law with respect to the Business or the Going
Concern, which Permits are all the relevant Permits that are required and used
for the conduct of the Business as currently conducted. Except as set forth on
Schedule 4.8(a), during the past 2 (two) years Seller has not received notice of
any Action by or before any Governmental Authority relating to the revocation,
suspension, or modification of any such Permits.
(b) Except as disclosed in Schedule 4.8(b), to the Knowledge of Seller
the operation of the Business is being conducted by Seller in compliance in all
material respects with the requirements set forth in the Permits or in the Laws
under which they were granted.
4.9 Environmental Matters.
---------------------
Except as disclosed in Schedule 4.9 as of the Closing Date:
(i) The Owned Property is in material compliance with, and
Seller is conducting the operations of the Business in material
compliance with, all Environmental Laws;
(ii) during the past 5 (five) years, Seller has not received
any written notice of (x) non-compliance with or liability under any
Environmental Law in respect of the Business or the Owned Property or
(y) the presence of Hazardous Substances at the Owned Property, other
than the Hazardous Substances described in Schedule 4.9;
(iii) (A) Seller has obtained and is in compliance with all
Permits pursuant to Environmental Law (collectively, "Environmental
-------------
Permits") necessary for operation of the Business, (B) all
-------
Environmental Permits are valid, (C) Seller has not been advised by any
Government Authority of any actual change in the status or terms and
conditions of any Environmental Permit, and (D) a complete list of
Environmental Permits held by the Business or by Seller on behalf of
the Business is set forth on Schedule 4.9(iii);
(iv) there are no Environmental Claims pending or, to the
Knowledge of Seller, threatened against the Business or the Owned
Property;
(v) other than for the Hazardous Substances described in
Schedule 4.9, there have been no releases of Hazardous Substances at
the Site that could reasonably be expected to result in an
Environmental Claim;
16
(vi) Seller has delivered to Purchaser prior to the date
hereof true and correct copies of material environmental
investigations, studies, audits, tests, reviews, or other analyses
conducted by or which are in the possession of Seller relating to the
Business since January 1, 2000;
(vii) to the Knowledge of Seller, Seller has not presently
incurred, and the Owned Property is not presently subject to, any
unresolved liabilities (fixed or contingent) relating to any claim
asserted or arising under any Environmental Law.
4.10 Labor, Employee and Agent Relations.
-----------------------------------
4.10.1 Labor and Employee Relations
----------------------------
(a) There are no employees employed by the Business other than the
Employees, as listed on Schedule 1.1.A. All the Employees are regularly recorded
in the relevant books. The employment of the Employees is governed, as to
managers, by the provisions of the collective bargaining agreement for managers
of "Dirigenti Industria" in force as of the date hereof and, as to the other
Employees, by the collective bargaining agreement for "Industria Chimica" in
force as of the date hereof and by collective agreements with internal trade
unions in force as of the date hereof, as specified in Schedule 4.10.1.
(b) With reference to the Employees, Seller represents the following:
(i) Schedule 1.1.A is complete, true and accurate and
correctly reflects the data therein disclosed. The Employees presently
employed by the Business at the date hereof are solely and exclusively
those indicated in Schedule 1.1.A. attached hereto, who are also those
indicated in the payrolls and records of the Business. At the Closing
Date, the Employees shall be under the employment of the Business and
no employees other than the Employees will have been employed by the
Business, except as indicated in Schedule 1.1.A. There are no offers of
employment to any person awaiting acceptance at the date hereof, and
there will be no such offers at the Closing Date, except as indicated
in Schedule 1.1.A;
(ii) the Employees have been at the date hereof, and will be
at the Closing Date, fully and duly remunerated for all the services
performed in the course of their working relationship with the Business
and/or with Seller and other companies of Seller Group, in compliance
with the provisions of all applicable laws and contracts (including any
collective labour agreements). Since the date hereof, and until the
Closing Date, the Business has not made and will not make any changes
to the remuneration or benefits or any bonus of the Employees, without
prejudice to Section 6.2 below;
(iii) TFR and other payables to Employees shall be calculated
and apportioned properly and accurately with respect to each Employee
as at the Closing date;
(iv) with respect to the remuneration paid to the Employees,
all contributions have been made, and will be made up to the Closing
Date, relating to compulsory health insurance, and social security
withholdings have been made and the relevant amounts have been duly
paid, as provided under the applicable provisions of law;
17
(v) none of the Employees at the date hereof has given notice
to cease employment with the Business, except as disclosed in Schedule
1.1.A;
(vi) except as indicated in Schedule 1.1.A., at the date
hereof there is no, and at the Closing Date there will be no
consultancy agreement with the Business or any agreement for management
services and the Business at the date hereof has not entered into, and
at the Closing Date will have not entered into any employment
relationship pursuant to Legislative Decree no. 276 of September 10,
2003 (the so-called "Xxxxx Xxxxx");
(vii) the particulars in Schedule 1.1.A attached hereto show
all remuneration and other benefits actually provided for the Employees
and which the Business is bound to provide (whether now or in the
future) to each Employee of the Business; no other bonuses, fringe
benefits, incentive plans, stock option plans, stock purchase plans are
in place, except as indicated in Schedule 1.1A;
(viii) no disputes or claims whatsoever and for any reason
whatsoever by the Employees or any of them, and/or by the relevant
trade unions, and/or by any employees and/or former employees of Seller
or of its Affiliates are pending against Seller related to the Business
and, to the Knowledge of Seller, no situation exists which may give
rise to any such disputes or claims in the future due to the
consummation of the transaction contemplated herein and for any reason
whatsoever. No verification notice relating to social security or
social assistance contributions has been served;
(ix) the duties currently and actually performed by each of
the Employees correspond, and will correspond up to the Closing Date,
to the relevant right and formal category specified in any relevant
individual employment agreement;
(x) Seller has properly and timely complied with the
obligations provided for by the Law, by the Legislative Decree no.
252/2005 and by any applicable regulations with respect to the
information to be rendered to the Employees on the destination of the
TFR accrued as of January 1, 2007.
4.10.2 Agent Relations
---------------
There are no agents having relations with the Business other than the
agent listed in Schedule 4.10.2 (the "Agent"). The agreement with the Agent is
valid and currently in force and has been regularly performed by Seller and, to
the Knowledge of Seller, by the Agent and, subject to the Agent's consent, is
fully transferable to Purchaser.
4.11. Brokers.
-------
No broker, finder or investment banker is entitled to any brokerage,
finder's or other fee or commission in connection with this Agreement based upon
arrangements made by or on behalf of Seller, that is or will become an Assumed
Liability or will otherwise be payable by Purchaser.
4.12 Reference Financial Sheet.
-------------------------
The Reference Financial Sheet has been prepared on a pro-forma basis
for the purposes of illustrating the assets and liabilities comprised in the
Going Concern on a carve out basis. The
18
Reference Financial Sheet has been prepared applying the Accounting Principles
on a consistent and good faith basis, and fairly and accurately presents the
assets and liabilities and the financial position of the Going Concern as at the
Reference Date.
4.13 Related party Contracts
-----------------------
None of the directors, executive officers, or employees of Seller, or
any of its Affiliates is a party to an Assigned Contract by which any Asset is
bound.
4.14 Product Liability
-----------------
There are not presently pending or to the Knowledge of Seller
threatened in writing, any civil, criminal or administrative actions, claims,
notices of violation, investigations or demand letters alleging that any Product
manufactured distributed or sold by Seller is in any material respect dangerous
or injurious to the customers' health or is illegal to supply or distribute.
4.15 Absence of Changes
------------------
Except as set forth in Schedule 4.15, since the Reference Date, there
has not been any Material Adverse Effect affecting the Going Concern, nor to the
Knowledge of the Seller has there occurred any event or development which could
reasonably be foreseen to result in such a Material Adverse Effect in the
future. Since the Reference Date, the Seller has operated the Business solely in
the ordinary course of business, and (b) the Seller has not, other than in the
ordinary course of business, taken any of the following actions:
(a) acquired, sold, leased, encumbered or disposed of any assets;
(b) created, incurred or assumed any debt for borrowed money or
debt in respect of capital leases;
(c) entered into, adopted or amended, other than as may have been
necessary to comply with applicable Law or maintain any plan's
qualified status, any employee benefit plan or any employment
or severance agreement or arrangement or increased in any
manner the compensation or fringe benefits of, or modified the
employment terms of, its officers or employees, generally or
individually, or paid any benefit not required by the terms of
any existing employee benefit plan as in effect on the date
hereof;
(d) changed its accounting methods, principles or practices, or
made any new elections with respect to taxes affecting the
Business or the Going Concern;
(e) sold, assigned, transferred, licensed or sublicensed any
Intellectual Property;
(f) entered into, amended, terminated, taken or omitted to take
any action that would constitute a violation of or default
under, or waived any rights under, any Assigned Contract;
(g) entered into any written arrangement or contract that creates
a Liability for in excess of (euro)10,000; or
(h) agreed in writing or otherwise to take any of the foregoing
actions.
19
4.16 Undisclosed Liabilities.
-----------------------
To the Seller's Knowledge there is no basis for any present or future
action, suit, proceeding, hearing, investigation, charge, complaint, claim, or
demand in relation to the Going Concern which may give rise to any Liabilities
for the Purchaser over and above the Assumed Liabilities.
4.17 Inventory.
---------
Since the Reference Date, no Inventory has been sold or disposed of
other than sales effected in the ordinary course of business.
4.18 Product Warranty.
----------------
To the Knowledge of Seller, each of the Products developed,
manufactured, produced, licensed, sold, leased, or otherwise distributed or
delivered by the Going Concern has been in conformity with all applicable
contractual commitments and all statutory warranties, and Seller has not
received any notice of any action, suit, proceeding, hearing, investigation,
charge, complaint, claim, or demand against it giving rise to any Liabilities
for replacement or repair thereof or other damages in connection therewith. None
of the Products developed, manufactured, produced, licensed, sold, leased, or
otherwise distributed or delivered by the Going Concern is subject to any
guaranty, warranty, or other indemnity beyond the applicable standard terms and
conditions of sale or lease used by Seller in the ordinary course of business
and/or any applicable statutory warranty.
4.19 Exclusivity of Representations.
------------------------------
(a) The representations and warranties made by Seller in this Agreement
are in lieu of and are exclusive of all other representations and warranties,
including without limitation any implied warranties regarding the Going Concern.
Seller hereby disclaims - and expressly waives any right to enforce - any such
other or implied representations or warranties, notwithstanding the delivery or
disclosure to Purchaser or its respective officers, directors, employees, agents
or representatives of any documentation or other information (including any
financial projections or other supplemental data).
(b) Purchaser acknowledges that the representations and warranties
contained in Sections 4.2, 4.4, 4.5, 4.9 and 4.10 are the only representations
and warranties being made with respect to (A) Taxes, (B) the Owned Property, (C)
Intellectual Property, (D) compliance with or liability under Environmental Laws
and (E) Labor, Employee and Agent Relations, respectively, or with respect to
any environmental, health or safety, Intellectual Property, Employee, or Tax
matter related in any way to the Business, the Going Concern or to this
Agreement or its subject matter.
4.20 Representations at Closing.
--------------------------
All the foregoing representations and warranties are deemed to be fully
confirmed at Closing with reference to Closing Date.
20
ARTICLE V
REPRESENTATIONS AND WARRANTIES OF PURCHASER
-------------------------------------------
Purchaser hereby represents and warrants to Seller as follows:
5.1 Authority; No Conflicts; Governmental Consents.
----------------------------------------------
(a) Purchaser is a limited liability company duly organized, validly
existing and in good standing under the laws of The Netherlands. Purchaser has
all necessary power and authority to enter into the Transaction Documents to
which Purchaser is a party, to carry out its respective obligations thereunder
and to consummate the transactions contemplated hereby. This Agreement has been
duly authorized and executed by Purchaser, and (assuming due authorization,
execution and delivery by the other parties thereto) constitute legal, valid and
binding obligations of Purchaser, enforceable against Purchaser in accordance
with their respective terms except as enforceability may be limited by
bankruptcy, insolvency, reorganization, moratorium and other similar laws
relating to or affecting creditors' rights generally.
(b) Assuming all consents, approvals, authorizations and other actions
described in Schedule 4.1(b) have been obtained and all filings and
notifications listed in therein have been made, the execution, delivery and
performance of this Agreement does not, and of the other Transaction Documents
will not, and the consummation of the transactions contemplated hereby and
compliance with the terms of the Transaction Documents will not, (i) violate or
conflict with the organizational or governing documents of Purchaser, (ii)
conflict with or violate any Law or Governmental Order applicable to Purchaser.
(c) No consent, approval, license, permit, order or authorization of,
or registration, declaration or filing with, or notification to, any
Governmental Authority is required to be obtained or made by or with respect to
Purchaser in connection with the execution and delivery of the Transaction
Documents or the consummation of same.
5.2 Brokers.
-------
No broker, finder or investment banker is entitled to any brokerage, finder's or
other fee or commission in connection with this Agreement based upon
arrangements made by or on behalf of Purchaser that is or will be payable by
Seller.
5.3 Litigation.
----------
There are no (a) claims, actions, proceedings or investigations pending against
Purchaser before any Governmental Authority or (b) Governmental Orders to which
Purchaser is subject that, individually or in the aggregate, could prevent
Purchaser from performing its material obligations under the Transaction
Documents or prevent or materially delay the consummation of same.
5.4 Purchaser's Diligence.
---------------------
In connection with its investigation of the Business or the Going
Concern, Purchaser has received from Seller certain estimates, projections and
other forecasts for the Business, and certain plan and budget information.
Purchaser acknowledges that there are uncertainties inherent in attempting to
make such estimates, projections, forecasts, plans and budgets, that it is
familiar with such uncertainties, that except as expressly set forth in this
Agreement, it is taking
21
full responsibility for making its own evaluation of the adequacy and accuracy
of all estimates, projections, forecasts, plans and budgets so furnished to it,
and that with respect to any such estimates, projections forecasts plans and
budgets that is not the subject of representation or warranty expressly set
forth in this Agreement, will not assert any claim against Seller or any of its
Affiliates or any of their respective directors, officers, employees, agents,
stockholders, consultants, investment bankers, accountants or representatives,
or hold Seller or any such persons liable with respect thereto. Accordingly,
Purchaser expressly acknowledges that Seller makes no representation or warranty
with respect to any estimates, projections, forecasts, plans or budgets referred
to in this Section 5.4 and/or any similar document or information.
5.5 Representations at Closing.
--------------------------
All the foregoing representations and warranties are deemed to be fully
confirmed at Closing with reference to Closing Date and are deemed to be given
also by the Person designated by Purchaser to purchase the Going Concern
pursuant to Section 11.1 below.
ARTICLE VI
COVENANTS OF SELLER
-------------------
Seller covenants and agrees as follows:
6.1 Access to Information
---------------------
Subject to the provisions of Section 7.1, from the date hereof until
the Closing Date, upon reasonable notice, Seller shall, and shall cause each of
its officers, directors, employees, agents, accountants and counsel to afford
the officers, employees and authorized agents, accountants, counsel, and
representatives of Purchaser reasonable access, during normal business hours and
upon reasonable notice, to the offices, properties, plants, other facilities,
books and records of the Going Concern; provided, however, that (i) such access
-------- -------
does not disrupt the normal operations of the Business, (ii) Seller is under no
obligation to disclose to Purchaser any information, the disclosure of which is
restricted by Contract or Law, except in strict compliance with the applicable
Contract or applicable Law and (iii) Seller is under no obligation to disclose
to Purchaser any information as to which the attorney-client privilege may be
available; and provided, further, that Seller shall not be required to furnish
-------- -------
any information which requires Seller to incur any unreasonable out-of-pocket
cost or expense unless or until Purchaser enters into arrangements reasonably
satisfactory to Seller pursuant to which Purchaser will bear such cost or
expense.
6.2 Ordinary Conduct
----------------
Except as expressly contemplated by this Agreement or as expressly set
forth on Schedule 6.2, or except as specifically required by the terms of any
Contract referenced on any Schedule hereto, from the date hereof to the Closing
(the "Interim Period"), Seller covenants and agrees, unless Purchaser shall
otherwise agree in writing (such agreement not to be unreasonably withheld or
delayed):
(a) to cause the operations of the Business to be conducted in all
material respects in the ordinary course and consistent with past practice; and
22
(b) that it will not take any of the following actions, except as
expressly contemplated by this Agreement:
(i) sell, assign, transfer, lease or otherwise dispose of or
agree to sell, assign, transfer, lease or otherwise dispose of any of
the real properties of the Going Concern;
(ii) make any change in the Accounting Principles or in any
other method of accounting or accounting practice or policy used by the
Business other than changes that are required by IFRS;
(iii) except in the ordinary course of business consistent
with past practice, enter into any agreement, arrangement or
transaction with any Affiliate of Seller with respect to the Business
or the Going Concern other than as expressly contemplated by the
Transaction Documents;
(iv) grant to any Employee any increase in compensation or
benefits, with the exception of the increases already granted as of
April 1, 2007, as indicated in Schedule 1.1.A and/or as required under
compulsory provisions of Law and/or of applicable collective bargaining
agreements;
(v) hire the employment of any Employee except if necessary to
replace a resigning Employee or in the ordinary course of business and
consistent with past practice;
(vi) assume any commitment that, in the aggregate, are in
excess of (euro) 250,000.
Notwithstanding anything herein to the contrary, if, during the Interim
Period, Seller intends to take, in respect of the Going Concern, any of the
actions referred to in Paragraphs (a) and/or (b) preceding, Seller shall notify
in writing Purchaser's designated representative, Mr. Xxxxx Xxxxxxxxxxx (the
"Designated Representative") at the address of Purchaser indicated in Section
11.05 below. The Designated Representative so notified shall convey to Seller
Purchaser's decision to approve or not to approve of Seller's intention to take
any of such actions within five (5) Business Days of receipt of such
notification, it being understood that, should the Designated Representative so
notified fail to reply in writing within such deadlines, the proposed action
shall be considered as approved by Purchaser.
6.3 Confidential Information.
------------------------
For a period of 4 (four) years after the Closing, Seller will hold, and will use
its reasonable efforts to cause its officers, directors, employees, accountants,
counsel, consultants, advisors and agents ("Representatives") to hold, in
---------------
confidence, unless compelled to disclose by any applicable Law or Governmental
Order, all confidential documents and information concerning the Business or the
Going Concern (and will not use such confidential information for its own
benefit or for the benefit of any other person), except to the extent that such
information is (a) in the public domain through no fault of Seller or any of its
Representatives or (b) later lawfully acquired by Seller on a non-confidential
basis. The obligation of Seller to hold any such information in confidence shall
be satisfied if it exercises the same care with respect to such information as
Seller would take to preserve the confidentiality of its own similar
information.
23
6.4 Non-Competition; Non-Solicitation.
---------------------------------
(a) For a period of 2 (two) years after the Closing (the "Restricted
----------
Period"), Seller shall not, and will cause all members of Seller Group not to,
engage, directly or indirectly, in any business that develops, manufactures or
markets the Products (the "Competing Service") in any country or territory in
------------------
the world (the "Territory"); provided that, the foregoing shall not prohibit
--------- -------- ----
Seller or members of Seller Group from (i) acquiring, directly or indirectly,
securities listed on any securities exchange or market system or traded actively
in any recognized over-the-counter market of any Person that provides the
Competing Service in the Territory, provided that Seller and its Affiliates do
not, in the aggregate, own directly or indirectly more than 5% of the
outstanding voting power or capital stock of such Person; (ii) undertaking a
Competing Service with respect to any of the Products after such time as
Purchaser no longer carries on the Competing Service with respect to such
Product; (iii) acquiring a company or a business having not more than five per
cent (5%) of its gross turnover in its last fiscal year attributable to the
Competing Service; or (iv) performing any Contract whose obligations are not
assumed by Purchaser in connection with the purchase of the Going Concern; and
further provided that, the foregoing shall not prohibit the sale and purchase of
---------------------
the Products within Seller Group during the Restricted Period. Notwithstanding
any of the foregoing, this Section 6.4 shall not prohibit any Person (or its
Affiliates) that acquires Seller or any member of Seller Group from providing
the Competing Service.
(b) Purchaser expressly acknowledges to be fully aware of the fact that
one of Seller's Affiliates carries out in Yixing, China, activities comparable
to the Business; in connection with the foregoing, the Parties expressly
acknowledge and agree that (i) the non-competition obligations under letter (a)
above do not apply with respect to the aforementioned activities and (ii) for
the Restricted Period, Seller shall not, and will cause all members of Seller
Group not to solicit any customer of the Business listed on Schedule 6.4(b).
(c) During the Restricted Period, no member of Seller Group shall
solicit for employment or hire any Employee. This restriction shall not apply to
any solicitation directed to the public in general.
6.5 Intercompany Agreements
-----------------------
Seller covenants and agrees that, except as provided for in Schedule 6.5, or
otherwise agreed to by the parties, all agreements and arrangements relating to
the Business or the Going Concern conducted prior to the Closing Date between
Seller and any of its Affiliates, shall be cancelled and terminated prior to or
on the Closing Date to the extent related to the Business conducted prior to the
Closing Date, without any further action on the part of any party to such
agreement or arrangement, and Purchaser shall have no liability or obligation
with respect thereto.
6.6 Interest in Ecolombardia
------------------------
(a) Seller undertakes to carry out, as promptly as practicable after
the date hereof, any and all actions reasonably necessary for transferring to
Purchaser an interest in the share capital of Ecolombardia 4 S.p.A.
("Ecolombardia") in order for Purchaser to be able to avail itself of the
------------
services provided by same company to its shareholders and, for this purpose, for
obtaining the prior consent of the majority of the shareholders which is
necessary, pursuant to Section 6 of the by-laws of Ecolombardia, for said
transfer to be effective.
24
(b) The percentage interest in the capital of Ecolombardia to be
transferred to Purchaser shall be equal to 0.214% of the total capital of
Ecolombardia.
(c) If the required consent to transfer the interest in Ecolombardia
referred to in Section 6.6(b) is not obtained on or prior to the Closing Date,
the parties shall proceed with the Closing, provided however that, to the
maximum extent permitted by law and by Ecolombardia's by-laws and corporate
resolutions and as part of the Transitional Services Agreement, Seller shall
assign to Purchaser the right to utilize Ecolombardia's services, as currently
provided, with respect to the Business, it being understood and agreed that
Purchaser shall be solely responsible for compliance with all technical
parameters and other requirements provided for by Law and Ecolombardia's by-laws
and corporate resolutions or, in any event, requested by Ecolombardia, for
utilizing Ecolombardia's services with respect to the Business, and shall
indemnify Seller and hold same harmless, from and against any and all losses,
costs, damages, claims and liabilities connected with, or deriving from, failure
by Purchaser to meet said parameters and/or requirements.
6.7 Interest in San Giulio
----------------------
(a) Seller undertakes to use its best efforts to see to it that, as
promptly as practicable after the date hereof, Purchaser may become a member of
the consortium San Giulio S.C.r.l. ("San Giulio") in order for Purchaser to be
----------
able to avail itself of the utilities provided by AEM to the members of the
consortium at favourable conditions.
(b) If Purchaser does not become member of San Giulio on or prior to
the Closing Date, the parties shall proceed with the Closing, provided however
that, to the maximum extent permitted by law and contractual arrangements in
force and as part of the Transitional Services Agreement, Seller shall assign to
Purchaser the right to avail itself of the utilities as currently provided by
AEM with respect to the Business, it being understood and agreed that Purchaser
shall be solely responsible for compliance with all technical parameters and
other requirements provided for by Law and contractual arrangements in force or,
in any event, requested by San Giulio and/or AEM, for utilizing the utilities
provided by AEM with respect to the Business, and shall indemnify Seller and
hold same harmless, from and against any and all losses, costs, damages, claims
and liabilities connected with, or deriving from, failure by Purchaser to meet
said parameters and/or requirements.
6.8 Tax Matters.
-----------
(a) Seller shall request as soon as practicable after, and in any case
not later than thirty (30) Business Days from Closing at its own cost from the
relevant Tax office the certificate provided for by Article 14 of Legislative
Decree no. 472 of December 17, 1997 in respect of any liability for Tax (whether
direct or indirect) on the Going Concern or with respect to the Business (the
"Tax Certificate").
---------------
(b) Seller shall be liable for and shall indemnify, defend and hold
harmless Purchaser from any and all liabilities for Taxes which may be indicated
in the Tax Certificate in relation to the Going Concern or with respect to the
Business.
25
ARTICLE VII
COVENANTS OF PURCHASER
----------------------
Purchaser covenants and agrees as follows:
7.1 Confidentiality.
---------------
Purchaser acknowledges that the information being provided to it by Seller is
subject to the terms of an existing confidentiality agreement dated February 8,
2006, as amended (the "Confidentiality Agreement"), the terms of which are
--------------------------
incorporated herein by reference, and the parties hereto agree to honor such
terms as though they were a party thereto. Effective upon, and only upon, the
Closing, the Confidentiality Agreement will terminate; provided, however, that
-------- -------
Purchaser acknowledges that the Confidentiality Agreement will terminate only
with respect to information relating solely to the Business or the Going
Concern; and provided, further, however, that Purchaser acknowledges that any
-------- ------- -------
and all other information provided to it by Seller or Seller's representatives
concerning Seller shall remain subject to the terms and conditions of the
Confidentiality Agreement after the date of the Closing.
7.2 Use of Seller Name.
------------------
Notwithstanding any other provision of this Agreement to the contrary, no
interest in or right to use the name "Akzo" and/or "Nobel" and/or any
combination or abbreviation thereof or any name or lettering which is
confusingly similar thereto or any other corporate name of Seller or its
Affiliates or any domain name, logo, trademark, service xxxx or trade name or
any derivation thereof of Seller or its Affiliates with respect to, or
associated with, the foregoing or their businesses (collectively, the "Retained
--------
Names and Marks") is being transferred to Purchaser pursuant to the Transactions
---------------
Documents, and the use of any Retained Names and Marks in connection with the
Business or the Going Concern shall cease as of the Closing Date. Purchaser, on
or promptly following the Closing Date - and in no event later than ninety (90)
days from Closing - will remove or obliterate all the Retained Names and Marks
from its signs, purchase orders, invoices, sales orders, labels, letterheads,
shipping documents, and other items and materials of the Going Concern and
otherwise, and not put into use after the Closing Date any such items and
materials not in existence on the Closing Date that bear any Retained Name or
Xxxx or any name, xxxx or logo similar thereto.
7.3 Non-Business Receivables.
------------------------
After the Closing Date, promptly following receipt of proceeds from any right,
interest, claim or other asset of Seller or any of its Affiliates that is not
included in the Assets, Purchaser agrees to promptly forward to Seller or
Seller's Affiliate, as applicable, any and all such proceeds that are received
by Purchaser after the Closing Date.
7.4 Non-Solicitation.
----------------
During the Restricted Period, neither Purchaser nor any of its Affiliates shall
hire for employment any person employed by Seller or any of its Affiliates with
whom Purchaser or any of its Affiliates has had contact with, or with whom such
Persons become aware of, in connection with this Agreement, including their
investigation of the Business or the Going Concern; provided, that this covenant
--------
shall not be deemed breached if any such employee is
26
hired after responding to a general employment solicitation by Purchaser or any
of its Affiliates or due to the employment of any Employee by Purchaser or its
Subsidiaries.
7.5 Insurance.
---------
(a) As of the Closing Date, all coverage with respect to the Business
and/or the Going Concern under the insurance policies for all claims made after
the Closing Date and regardless if they arise from an event, occurrence or
accident before or after the Closing Date shall be cancelled and terminated.
(b) Purchaser himself is responsible to arrange and maintain, effective
as of the Closing Date, all insurance in respect of risks which are normally
insured against by companies carrying on similar businesses or owning assets of
a similar nature.
(c) For all claims made after the Closing Date and regardless if they
are arising from an event, occurrence or accident occurring before or after the
Closing Date in reliance upon any of the insurance policies, there shall be no
right to recover any amounts in respect thereof from any of Seller Group's
insurers.
ARTICLE VIII
MUTUAL COVENANTS
----------------
Each of Seller and Purchaser covenant and agree as follows:
8.1 Required Filings; Permits; Novations and Consents.
-------------------------------------------------
As promptly as practicable after the date hereof, Purchaser and Seller shall
make all required filings with any Governmental Authority and other regulatory
authorities, including, without limitation, under the antitrust laws of any
applicable jurisdiction (the "Antitrust Laws"), and use their reasonable best
---------------
efforts to (i) obtain all permits, approvals, authorizations and consents of all
Persons, required to consummate the transactions contemplated hereby, and (ii)
to effect, to the extent possible, the transfer of all Environmental Permits or,
where appropriate, to obtain new Environmental Permits containing substantially
the same terms and conditions as are currently in effect in the existing
Environmental Permits. Purchaser and Seller shall furnish promptly to each other
all information that is not otherwise available to the other party and that such
party may reasonably request in connection with any such filings or notices.
Seller and Purchaser shall promptly furnish the other with copies of notices or
other communications received by them from any Governmental Authority with
respect to the transactions contemplated hereby.
8.2 Reasonable Best Efforts.
-----------------------
Subject to the terms and conditions of this Agreement, each party hereto will
use its reasonable best efforts to take, or cause to be taken, all appropriate
actions, and to do, or cause to be done, all things necessary, proper or
advisable under applicable Laws, and execute and deliver such documents and
other papers, as may be required to carry out the provisions of this Agreement.
Seller and Purchaser will promptly notify the other after learning of the
occurrence of any event or circumstance that would reasonably be expected to
cause any condition to Closing not to be satisfied or be delayed.
27
8.3 Publicity.
---------
Seller and Purchaser agree that, from the date hereof through the Closing Date,
no public release or announcement concerning this Agreement shall be issued
without the prior consent of each party (which consent shall not be unreasonably
withheld or delayed), except as such release or announcement may be required by
any Law, in which case the party required to make the release or announcement
shall allow the other party reasonable time to comment on such release or
announcement in advance of such issuance.
8.4 Cooperation and collection of accounts receivable.
--------------------------------------------------
Purchaser and Seller shall cooperate with each other and shall cause their
officers, employees, agents, auditors and representatives to cooperate with each
other after the Closing to ensure the orderly transition of the Going Concern to
Purchaser and to minimize any disruption to the same. Purchaser and Seller shall
cooperate with each other and shall cause their officers, employees, agents,
auditors and representatives to cooperate with each other after the Closing to
ensure the collection of the excluded accounts receivable by Seller and to
minimize any disruption to the same. Neither party shall be required by this
Section 8.4 to take any action that would unreasonably interfere with the
conduct of its business.
8.5 Records.
-------
(a) Purchaser and Seller shall use their respective best efforts to
complete any and all assignments of the trademarks, domain names and patents
assigned under the Registered IP Master Assignment Agreements of Exhibit G
within 6 months after Closing. As of Closing Purchaser shall prepare and shall
take on its own responsibility and on its own costs all such further steps and
all such further documents as Purchaser may reasonably require for the purpose
of vesting in the full legal ownership of said trademarks and domain names and
for the purpose of effecting the recording thereof (where appropriate), at
trademark and similar registries around the world. At the request and at the
expense of Purchaser, Seller shall arrange for appropriate signatures on such
documents and, if so needed, legalization thereof.
(b) Seller shall maintain and prosecute patents, trademarks or domain
names used in relation to the Business or the Going Concern until such are
assigned to Purchaser. Seller shall for a period of 12 months following Closing
promptly supply Purchaser with all notices received by Seller that concern the
intellectual property transferred to Purchaser in compliance herewith.
(c) Seller shall pay all maintenance or other fees which are due on or
prior to Closing and are required to be paid in any country in connection with
the Intellectual Property in order to retain the same in force and effect.
Purchaser shall have the right to legally pursue any infringements of
Intellectual Property rights that have occurred prior to Closing and still have
an impact on the Going Concern after the Closing, it being understood that
Seller shall provide Purchaser with any information, document or statement
reasonably required by Purchaser to enforce said right.
(d) On the Closing Date, Seller, at Seller's cost, shall deliver or
cause to be delivered to Purchaser all Records that are material to and relate
exclusively to the Business or the Going Concern (to the extent not then in the
possession of Purchaser), except any Records relating to Excluded Assets or
Excluded Liabilities (including, without limitation, to Seller's Tax liability
or to any litigation or claim not assumed by Purchaser hereunder).
28
(e) For a period of ten (10) years after the Closing, Purchaser shall
(i) retain the Records relating to periods prior to the Closing in a manner
reasonably consistent with the prior practices of the Business, (ii) upon
reasonable notice, afford the officers, employees, authorized agents,
accountants, counsel and representatives of Seller reasonable access (including
the right to make, at such party's expense, photocopies), during normal business
hours, to such books and records, (iii) upon reasonable notice, furnish to the
officers, employees, authorized agents, accountants, counsel and representatives
of Seller, such additional financial and other information regarding the
Business or the Going Concern as such party may from time to time reasonably
request and (iv) upon reasonable notice, make available to Seller the employees
of the Business and any successors whose assistance, testimony or presence is
necessary to assist such party in evaluating any such claims and in defending
such claims, including the presence of such persons as witnesses in hearings or
trials for such purposes.
8.6 Foreign Employees
-----------------
8.6.1 Employment with Purchaser
-------------------------
(a) Promptly after the date hereof, Purchaser agrees to offer to each
of the Foreign Employees employment as of the Closing Date on substantially the
same terms and conditions which the Foreign Employees are employed with Seller's
Affiliates, including recognition of continuing service.
(b) Seller will use its reasonable efforts to encourage the Foreign
Employees to accept reasonable offers of Purchaser for employment, it being
understood and agreed that Seller shall have no obligation to cause the Foreign
Employee to accept Purchaser's offer under subsection (a) above or to otherwise
transfer the Foreign Employee to Purchaser.
8.6.2 Secondment to Purchaser
-----------------------
(a) If a Foreign Employee gives written notification to either Seller
or Purchaser that he or she is declining Purchaser's offer under Section
8.7.1(a) for employment with Purchaser following Closing or if no agreement for
employment is reached between Purchaser and a Foreign Employee prior to the
Closing Date, upon Purchaser's written request to Seller, Seller agrees to offer
to continue such Foreign Employee's employment with the Affiliate then employing
such Foreign Employee for a period of up to the first anniversary of the Closing
Date (the "Secondment Period"). The Foreign Employee would then be seconded for
-----------------
the Secondment Period to Purchaser upon such terms and conditions as shall be
agreed to by the Foreign Employee, Seller and Purchaser. If no agreement is
reached between the Foreign Employee, Seller and Purchaser or if the Foreign
Employee otherwise refuses to accept Seller's offer under this subsection (a),
Seller shall have no further obligation pursuant to this Section 8 with respect
to the Foreign Employee.
(b) Purchaser agrees to reimburse or cause to be reimbursed (or pay
directly at Seller's option) the full value of the seconded Foreign Employee
costs for the Secondment Period, which shall include, without limitation,
salary, bonus, benefits (and overhead costs as determined by Seller, if any).
29
8.7 Foreign Agents/Distributors; assignment to Purchaser
----------------------------------------------------
(a) Promptly after the date hereof, Purchaser agrees to consider to
offer to the Foreign Agents/Distributors of its choice to replace, as principal,
Seller's Affiliate in the relevant agency/distribution agreement effectively as
of the Closing Date.
(b) Seller will use its reasonable best efforts to encourage the
Foreign Agents/Distributors to accept Purchaser's offer under (a) above, if any.
ARTICLE IX
EMPLOYEE MATTERS
----------------
9.1 Purchaser's Obligations from and after the Closing
--------------------------------------------------
The Parties acknowledge to each other that, under Italian law, Purchaser shall
be responsible for and shall fully indemnify and keep indemnified Seller, its
Affiliates and their respective employees, directors, independent contractors
and agents from and against any and all amounts due to the Employees from and
after the Closing Date. In addition, Purchaser shall be responsible for and
shall fully indemnify and keep harmless Seller, its Affiliates and their
respective employees, directors, independent contractors and other agents from
and against any and all Liabilities arising out of or in connection with:
(a) any change in the working conditions of any Employee occurring from
and after the Closing Date;
(b) the change of employer occurring by virtue of this Agreement and
applicable Law; and
(c) any act or omission of Purchaser or their respective employees,
directors, independent contractors and other agents in relation to any
Employee from and after the Closing Date.
9.2 TFR and Other payables relating to Employees.
--------------------------------------------
The Parties expressly acknowledge and agree that, to the extent permitted by law
and within the frame of the Union Consultation Procedure, Seller will do its
best effort to pay out the TFR and any other payables relating to Employees as
at the Closing Date and will deliver to Purchaser appropriate receipts thereof
signed for acknowledgement by the relevant Employee. Notwithstanding the above,
the Parties expressly agree that Purchaser is solely responsible for the TFR and
the other payables relating to Employees up to the Closing Date which could not
be paid out by Seller and are, therefore, to be included among the Assumed
Liabilities and shall fully indemnify and keep harmless Seller from and against
any and all claims arising out of or in connection therewith. In the event that
an Employee is discharged by Purchaser or any of its Affiliates on or after the
Closing Date, Purchaser shall be responsible for severance costs for such
Employee. Purchaser shall be responsible and assume all liability for all
notices or payments due to any Employee, and all notices, payments, fines or
assessments due to any Governmental Authority, under any applicable Law, in each
case with respect to the employment, discharge or layoff of Employees by
Purchaser on or after the Closing Date.
30
9.3 Notification of Transfer.
------------------------
Without prejudice to the representations and warranties contained in Article
4.10 herein, Purchaser shall notify Seller within thirty days after becoming
aware of any claim of any employee of Seller who is not an Employee (a
"Non-Transferred Employee") that his/her contract of employment has been
-------------------------
transferred from Seller to Purchaser pursuant to the European Directive on
Transfer of Undertakings or its equivalent under Italian law. Seller shall
immediately inform this Non-Transferred Employee that he or she is still
employed by Seller.
ARTICLE X
INDEMNIFICATION
---------------
10.1 Survival.
--------
(a) The representations and warranties of Seller contained in this
Agreement shall survive the Closing and (i) in respect of the representations
and warranties made by Seller in Section 4.2 (Taxes), shall terminate, in
respect of a Tax, 30 (thirty) days after the statute of limitations period for
an assessment or reassessment of such Tax under applicable Law expires; (ii) in
respect of Sections 4.1(a) (Authority), 4.3(a) (Title), and 4.11 (Brokers),
shall survive indefinitely; (iii) in respect of Section 4.9 (Environmental
Matters), shall survive until the fourth anniversary of the Closing Date unless
Purchaser, directly or indirectly, also through a share deal, transfers, sells,
assigns, contributes or otherwise disposes of, in whole or in part, the Business
or the Going Concern prior to the fourth anniversary of the Closing Date, in
which case shall survive until the day on which said transfer, sale,
contribution or disposal first becomes effective (but, in any event, shall be
subject to the applicable limitation set forth in Section 10.3(b)); (iv) in
respect of all other representations and warranties made by Seller, shall
terminate on the date which is eighteen (18) months from the Closing Date.
(b) The representations and warranties of Purchaser contained in this
Agreement (i) in respect of Sections 5.1(a) (Authority), 5.2 (Brokers) and 5.4
(Purchaser's Diligence) shall survive indefinitely and (ii) all other
representations and warranties made by Purchaser shall survive the Closing for a
period of twenty-four (24) months from the Closing Date.
(c) The covenants and agreements of each party contained in this
Agreement (including this Article X) shall survive for the period specified
therein, and if not specified, indefinitely.
10.2 Indemnification by Seller.
-------------------------
Seller agrees from and after the Closing, subject to the other terms and
conditions of this Agreement, to indemnify and defend Purchaser and hold it
harmless from and against any and all losses, damages, costs and expenses
(including reasonable attorneys' fees and expenses) (hereinafter a "Loss")
----
actually suffered or incurred by them, arising out of or resulting from:
(a) the breach of any representation or warranty made by Seller herein
(including the Tax Certificate delivered pursuant to Section 6.8 hereto), or
31
(b) any Excluded Liability (including the failure by Seller to pay,
perform or otherwise discharge any Excluded Liability in accordance with its
terms).
10.3 Limits on Indemnification.
-------------------------
(a) Notwithstanding anything to the contrary contained in this
Agreement, Seller shall be required to indemnify, defend or hold Purchaser
harmless against or reimburse Purchaser for any Loss pursuant to Section 10.2
only if (i) Purchaser shall have notified Seller in writing in accordance with
-------
Section 10.5 within the applicable survival period, if any, set forth in Section
10.1, (ii) such Loss exceeds (euro) 10,000 (the "De Minimis Amount") (nor shall
------------------
losses below (euro) 10,000 be considered for purposes of calculating the (euro)
150,000 basket provided for in point (iii) below for determining the aggregate
amount of Purchaser's Losses under Section 10.2), and (iii) the aggregate of all
of Purchaser's Losses under Section 10.2 exceeds (euro) 150,000 (the
"Indemnification Deductible") (in which event Seller shall be liable only for
---------------------------
the amount of the Losses exceeding the Indemnification Deductible); provided
--------
however, that in no event shall the aggregate liability of Seller exceed an
-------
amount equal to (euro) 1,000,000.
(b) Notwithstanding anything to the contrary contained in this
Agreement, Seller shall not be required to indemnify, defend or hold Purchaser
harmless against or reimburse Purchaser for any Losses pursuant to Section 10.2
to the extent that compensation for such Losses was made through the purchase
price adjustment procedures set forth in Section 2.4.
(c) The amount of any Loss for which indemnification is provided under
this Article X shall be reduced by any amounts that Purchaser has recovered
under any insurance policies or by any third party, it being agreed and
understood that Purchaser has the duty to timely take and efficiently and
diligently carry on any and all actions necessary or opportune in order to
minimize Seller's liability under this Article X.
(d) Each party agrees that it will not seek indirect, or consequential
damages (including loss of profits) as to any matter under, relating to or
arising out of this Agreement.
10.4 Procedures Relating to Indemnification
--------------------------------------
(a) Whenever Purchaser becomes aware of the occurrence of any event
which could give rise to the liability of Seller pursuant to Section 10.2 or
otherwise under this Agreement (an "Indemnification Event"), Purchaser shall
----------------------
give written notice to Seller within and no later than forty-five (45) Business
Days from the date of awareness of such Indemnification Event providing
information thereon, including whether the Indemnification Event arises as a
result of a claim by a third person against Purchaser (a "Third party Claim"),
-----------------
or a claim by Purchaser against Seller under Section 10.2 hereof (a "Direct
------
Claim") and specifying, if known, to Seller, the amounts the payment of which is
-----
requested in connection therewith; it being understood that failure to give such
------------------------
notification within the above deadline will result in the indemnification right
to be forfeited. Thereafter, Purchaser shall deliver to Seller, within five (5)
Business Days after Purchaser's receipt thereof, copies of all notices and
documents (including court papers) received by Purchaser relating to the
Third-party Claim.
(b) If a Third-party Claim is made against Purchaser, Seller will be
entitled to participate, and, to the maximum extent permitted by law, join, at
its cost, by counsel or counsels of its choosing and reasonably satisfactory to
Purchaser, in the defense of any Third-party Claim.
32
Purchaser shall properly and diligently defend against any Third-party
Claim in order to reduce and mitigate the indemnity obligations of Seller and
shall refrain from taking any action which could prejudice the defense of
Seller's interest hereunder.
Purchaser shall not make or accept any settlement of any Third-party
Claim, nor shall make acquiescence thereto, without the prior written consent of
Seller, which consent shall not be withheld without reasonable justification.
If any firm offer is made by the claimant of a Third-party Claim to
Purchaser to settle any matter giving rise to Seller's liability under this
Article X which Seller, but not Purchaser, is willing to accept, Purchaser shall
be free not to enter into such settlement and to commence or continue
litigation, at its own expense, but Seller's responsibility under this Article X
shall be limited to the amount of the proposed settlement.
(c) With respect to any Direct Claim, following receipt of a notice
from Purchaser of the Indemnification Event within the term specified in clause
(a) of this Section 10.4, Seller shall have twenty (20) Business Days to make
investigations of the Indemnification Event. On or prior to the expiration of
such twenty (20) Business Day term, if the parties agree in writing upon the
validity and amount of such Direct Claim, Seller shall pay to Purchaser the
amount agreed for the Indemnification Event by wire transfer of immediately
available funds to Purchaser's bank account specified in writing to Seller to be
delivered within the 10 (ten) Business Days thereafter, provided that, in the
event the parties are unable to reach an agreement on such Direct Claim, such
matter may be submitted to arbitration pursuant to Section 11.11 hereof at the
request of any party.
10.5 Exclusive Remedies.
------------------
Anything herein to the contrary notwithstanding, no breach of any
representation, warranty, covenant or agreement contained herein shall give rise
to any right on the part of any party, after the Closing, to rescind this
Agreement, including any Transaction Documents, except for fraud or willful
breach. Each party acknowledges and agrees that its sole and exclusive remedy
following the Closing Date with respect to any and all claims relating to this
Agreement, shall be pursuant to the indemnification provisions set forth in this
Article X. In furtherance of the foregoing, each party waives, from and after
the Closing Date, to the fullest extent permitted by applicable Law, any and all
rights, claims and causes of action (other than claims of, or causes of action
arising from fraud, willful breach, and other than actions for specific
performance of this Agreement), it or any of its Affiliates (including, from and
after the Closing, Seller) may have against the other (and its Affiliates)
arising under any Law (except pursuant to the indemnification provisions set
forth in this Article X).
10.6 Purchaser Acknowledgment.
------------------------
Purchaser acknowledges and agrees that, (a) other than the representations and
warranties of Seller specifically contained in this Agreement, there are no
representations or warranties of Seller either expressed or implied with respect
to Seller, the Business or the transactions contemplated hereby; (b) it is
reasonable for Purchaser to rely solely on the representations or warranties of
Seller specifically contained in this Agreement; (c) none of Purchaser or any of
its Affiliates are affiliated with, related to, or have a fiduciary relationship
with, Seller or any of its Affiliates; (d) it shall have a right to
indemnification solely as provided in Article X hereof; and (e) (except as set
forth in Section 11.1) no third party is entitled to rely on or is otherwise
intended to be a beneficiary of any representation made on or behalf of Seller
in or pursuant to
33
this Agreement, or any of the statements or information contained herein or in
any Exhibit or Schedule hereto or otherwise furnished or made available to
Purchaser or any of its directors, officers, employees, agents, stockholders,
affiliates, consultants, legal counsel, accountants, investment bankers or
potential or actual sources of financing; and (f) in no way Purchaser may seek
indemnification for one and the same event by claiming the breach of more than
one representation or warranty contained in Article IV.
10.7 Indemnification by Purchaser.
----------------------------
Purchaser shall assume, duly and punctually pay, satisfy, discharge, perform or
fulfill all obligations and liabilities in connection with the Going Concern (i)
included in the Going Concern in conformity with Section 2.2 or (ii) arising or
accruing after the Closing Date in respect of any act, fact or occurrence
subsequent thereto in relation to the Business transferred with the Going
Concern (altogether the "Purchaser's Assumed Liabilities"). Purchaser shall
---------------------------------
indemnify Seller or any Affiliate of Seller against all Losses suffered or
incurred by Seller or any Affiliate of Seller from time to time by reason of or
in connection with (i) Purchaser's Assumed Liabilities; (ii) any inaccuracy of
any representation given or any warranty made by Purchaser in this Agreement;
(iii) any breach by Purchaser of any covenant or obligation of Purchaser in this
Agreement. To Purchaser's indemnification obligations set forth in this Section
10.7 the provisions of Section 10.4 above shall apply, to the maximum possible
extent, mutatis mutandis.
ARTICLE XI
GENERAL PROVISIONS
11.1 Assignment
----------
Purchaser shall have the right to designate one or more Person(s) to purchase,
acquire and accept from Purchaser the Going Concern, and pay to Purchaser the
Final Purchase Price, provided that such designation is made in accordance with
the following provisions:
(i) anything in Article 1403 of the Italian Civil Code to the contrary
notwithstanding, each designation will be sufficiently made if notified in
writing to Seller together with the written acceptance of the Person(s) so
designated;
(ii) any designation pursuant hereto shall be notified to Seller (under
penalty of forfeiture) not later than the Closing Date;
(iii) each designee will be an Affiliate of Purchaser;
(iv) Purchaser will remain jointly and severally liable with any
Person(s) designated pursuant to this Section 11.1 in respect of the punctual
and exact performance by such Person(s) of the duties and obligations arising
under or in connection with this Agreement.
11.2 No Third-party Beneficiaries.
----------------------------
This Agreement is for the sole benefit of the parties hereto and their permitted
assigns and nothing herein expressed or implied shall give or be construed to
give to any person or entity, other than the parties hereto and such assigns,
any legal or equitable rights hereunder.
34
11.3 Expenses.
--------
Whether or not this Agreement is consummated, and except as otherwise provided
in Sections 2.5, 3.1 and 3.2, or elsewhere in this Agreement, all fees, costs
and expenses incurred in connection with this Agreement and the transactions
contemplated hereby shall be paid by the party incurring such fees, costs or
expenses.
11.4 Amendments.
----------
No amendment to this Agreement shall be effective unless it shall be in writing
and signed by the parties hereto.
11.5 Notices.
-------
All notices or other communications required or permitted to be given hereunder
shall be in writing and shall be delivered by hand or telecopy (which is
confirmed), or sent, postage prepaid, by registered, certified (return receipt
requested) or express mail, or reputable overnight courier service (providing
proof of delivery) and shall be deemed given when so delivered by hand, or
telecopied, or if mailed, three days after mailing (one Business Day in the case
of express mail or overnight courier service), to the parties at the following
addresses (or at such other address for a party specified by like notice,
provided that notice of a change of address shall be effective only upon receipt
thereof) as follows:
(i) if to Purchaser, to:
-------------------
Balchem BV
x/x Xxxxxxx Xxxxxxxxxxx
00 Xxxxxxx Xxxx Road X.X. Xxx 000
Xxx Xxxxxxx, Xxx Xxxx 00000 (XXX)
Attention: General Counsel
Telephone: 001. 0000000000
Facsimile: 001. 8453265702
with a copy to (which shall not constitute notice):
Xxx. Xxxxxxxxx Xxxxxxx-Xxxxxx
Xxxx Xxxxxxxxxx, 00
00000 Milan
Facsimile: x00 000000000
(ii) if to Seller, to:
----------------
Akzo Nobel Chemicals X.x.X
x/x Xxxx Xxxxx X.X.
Xxxxxxxxx 00, PO Box 9300
6800 SB Arnhem
The Netherlands
Attention: General Counsel
Telephone: x00 000000000
Facsimile: x00 000000000
35
with a copy to (which shall not constitute notice):
Avv. Xxxxx X. Xxxxxxx/Avv. Xxxxxxxxx Xxxxxxx
Studio Legale Xxxxxxxxx Brescia e Associati
Xxx Xxxxxxxx, 0 - 00000 Xxxxx
Xxxxxxxxx: x00 0000000000.
11.6 Interpretation; Exhibits and Schedules.
--------------------------------------
The headings contained in this Agreement, in any Exhibit or Schedule hereto and
in the table of contents to this Agreement, are for reference purposes only and
shall not affect in any way the meaning or interpretation of this Agreement. All
Exhibits and Schedules annexed hereto or referred to herein are hereby
incorporated in and made a part of this Agreement as if set forth in full
herein. Any item disclosed in connection with any specific provisions of this
Agreement shall be deemed to have been disclosed also in response to any other
provisions in respect of which such disclosure may be relevant or appropriate.
Any capitalized terms used in any Schedule or Exhibit, but not otherwise defined
therein, shall have the meaning as defined in this Agreement.
11.7 Counterparts.
------------
This Agreement may be executed in counterparts, all of which shall be considered
one and the same agreement, and shall become effective when such counterparts
have been signed by each of the parties and delivered to the other party.
11.8 Severability.
------------
If any term or other provision of this Agreement is invalid, illegal or
incapable of being enforced by any Law or public policy, all other terms and
provisions of this Agreement shall nevertheless remain in full force and effect
so long as the economic or legal substance of provisions herein contained is not
affected in any manner materially adverse to any party. Upon such determination
that any term or other provision is invalid, illegal or incapable of being
enforced, the parties hereto shall negotiate in good faith to modify this
Agreement so as to effect the original intent of the parties as closely as
possible in an acceptable manner in order that the transactions contemplated
hereby are consummated as originally contemplated to the greatest extent
possible.
11.9 Waiver of Compliance; Consents.
------------------------------
Except as otherwise provided in this Agreement, any failure of the parties to
comply with any obligation, covenant, agreement or condition herein may be
waived by the party entitled to the benefits thereof only by a written
instrument signed by the party granting such waiver, but such waiver or failure
to insist upon strict compliance with such obligation, covenant, agreement or
condition shall not operate as a waiver of, or estoppel with respect to, any
subsequent or other failure. Whenever this Agreement requires or permits consent
by or on behalf of a party, such consent shall be given in writing in a manner
consistent with the requirements for a waiver of compliance as set forth in this
Section 11.9.
36
11.10 Entire Agreement, No Novation.
-----------------------------
(a) Entire Agreement.
This Agreement, including the exhibits hereto and the documents, schedules,
certificates and instruments referred to herein, the other Transaction Documents
and the Confidentiality Agreement embodies the entire agreement and
understanding of the parties hereto in respect of the transactions contemplated
hereby. There are no restrictions, promises, representations, warranties,
covenants or undertakings, other than those expressly set forth or referred to
herein or therein. This Agreement supersedes all prior agreements and
understandings between the parties with respect to transactions contemplated
hereby.
(b) No Novation.
-----------
The Deed of Transfer shall not constitute a novation of this Agreement and of
any of the terms and conditions herein contained including, without limitation,
the representations and warranties and the indemnification obligations assumed
by Seller.
11.11 Dispute Resolution.
------------------
(i) Seller and Purchaser shall, and shall cause their
respective Affiliates to, resolve any dispute, controversy or claim
whatsoever arising out of or in connection with this Agreement, (a
"Dispute") (other than disputes with respect to the determination of
-------
the Final Closing Statement - to the extent that such determination is
not manifestly unfair and erroneous pursuant to Article 1349 of the
Code - which shall solely be governed by the procedure set forth in
Section 2.4) in accordance with the following procedure:
(ii) Within thirty (30) Business Days after Seller or
Purchaser has served written notice on the other pursuant to Section
11.5 setting forth the nature of the Dispute, Seller and Purchaser
shall attempt to resolve the Dispute through good faith negotiations at
a meeting which shall be attended by a representative of Seller and a
representative of Purchaser having decision-making authority as well as
by management-level personnel of Seller and Purchaser who have not
previously been directly engaged in directing or responding to the
Dispute.
(iii) If the Dispute is not resolved after requirements of
Section 11.11(ii) have been complied with, the Dispute shall be
submitted to mediation upon written notice by either Seller or
Purchaser in accordance with the ADR Rules of the International Chamber
of Commerce. The mediation proceedings shall take place in Milan, Italy
and shall be conducted in the English language.
(iv) Any dispute that is not amicably settled as provided
above, shall be finally settled under the Rules of Arbitration of the
International Chamber of Commerce (the "Rules") by three arbitrators
-----
appointed in accordance with the Rules.
(v) One arbitrator shall be appointed by the claiming party
and the second by the party against which the arbitration is requested
or, failing such appointment, in accordance with the Rules. The third
arbitrator, who will act as Chairman of the Board of Arbitrators, shall
be appointed by agreement by the first two arbitrators within thirty
(30) days from the notification to the claiming party of the
appointment of the second
37
arbitrator. Failing an agreement within such term, the appointment
shall be made in accordance with the Rules.
(vi) The arbitration proceedings shall take place in Milan,
Italy and shall be conducted in the English language. The arbitration
award shall be final and binding upon the parties and subject to no
appeal.
(vii) Seller and Purchaser hereby designate their respective
addresses for the giving of notice, as set forth in Section 11.5, as
they respective domiciles at which service of process may be made in
any legal action or proceedings arising hereunder.
11.12 Governing law; Venue
--------------------
(a) This Agreement shall be governed by, and construed in accordance
with, the internal Laws of the Republic of Italy applicable to agreements made
and to be performed entirely therein, without regard to the conflicts of law
principles of Italy.
(b) Notwithstanding the provision as set forth under Section 11.12(a),
each party hereby elects the exclusive jurisdiction of the Court of Milan with
respect to any Dispute which, under applicable law, may not be submitted to
arbitrators.
IN WITNESS WHEREOF, the parties have caused this Agreement to be duly executed
as of the date first written above.
SELLER:
AZKO NOBEL CHEMICALS S.p.A.
By:
--------------------- ------------------------------------
Name: Xxxxxx Xxxxx Name: Bastiaan van der Xxxxxx
Title: Deputy Director Title: Project Manager
Corporate Strategy Corporate Strategy
PURCHASER:
BALCHEM B.V.
By:
---------------------
Name: Xxxx Xxxxx
Title: Managing Director
38
