Exhibit 2.2
SHARES PURCHASE AGREEMENT
This SHARES PURCHASE AGREEMENT is dated as of April 14, 2000 (the
"Agreement")
BETWEEN
XXXXXXX S.P.A. a company organized under the laws of Italy, having its
registered office in Bastia Umbria, Perugia (Italy), at Xxx XX Xxxxxxxx
0/X, represented herein by Mr. Xxxxx Xxxxxxx (hereinafter, "Xxxxxxx" or the
"Purchaser");
AND
STARFOOD ITALIA S.R.L., a company organized under the laws of Italy, having
its registered office in Mondovi, Xxxxx (Italy), at Xxx Xxxxx 00,
represented herein by its sole director Xx. Xxxx Xxxxxxx (hereinafter
"Starfood Italia" or the "Seller");
AND
XXXX XXXXXXX, an Italian citizen, born in Mondovi on April 3, 1959 and
domiciled for the purpose of this Agreement in Xxxxx, Xxxxx Xxxxxxxxx 0,
(hereinafter "Xxxx Xxxxxxx" or the "Guarantor")
(hereinafter collectively referred to as the "Parties" and, each, a
"Party").
WHEREAS
- Pastificio Xxxxxxx S.p.A. (hereinafter "Pastificio Xxxxxxx") is a company
engaged in the Pasta business, incorporated and existing under the laws of
Italy, with its registered office at Xxx Xxxxx, 00, Xxxxxxx, Xxxxx (Xxxxx),
registered at the Enterprise Register of Xxxxx under No. 851/130, Fiscal
Code No. 00184490043 and having a corporate capital equal to ITL.
12,350,000,000;
- Pastificio Xxxxxxx is a company with a strong presence in the European
Pasta business;
- Starfood Italia owns no. 110,335 shares of Pastificio Xxxxxxx, representing
the 65.993% of the total issued and outstanding capital of Pastificio
Xxxxxxx and will own at Closing (as hereinafter defined) the 90.914% of the
total issued and outstanding shares of Pastificio Xxxxxxx (hereinafter the
"Shares");
- Pastificio Xxxxxxx owns, in turn, no. 2,495 shares representing the 99.8%
of the
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total issued and outstanding shares ("parts") of Xxxxxxx France Sarl, a
company organized under the laws of France, with registered offices in
Paris, Boulevard Voltaire 242 ("Xxxxxxx France");
- Xxxxxxx is a company active in the Pasta & Animal Feed business sectors and
it is controlled by Spigadoro Inc., a U.S. listed company;
- Xxxxxxx wishes to purchase from Starfood Italia the 90.914% of the issued
and outstanding shares of Pastificio Xxxxxxx;
- Starfood Italia wishes to sell to Xxxxxxx the 90.914% of the issued and
outstanding shares of Pastificio Xxxxxxx;
- Xxxxxxx has conducted a due-diligence exercise on the records of Pastificio
Xxxxxxx and Xxxxxxx France made available to it by Starfood Italia and the
Guarantor;
- The Guarantor is willing to guarantee the obligations, representations,
warranties and covenants of the Seller under this Agreement.
NOW, THEREFORE, in consideration of the mutual promises, covenants,
representations, warranties and indemnities herein contained, the Parties
hereto agree as follows.
ARTICLE 1
RECITALS; DEFINITIONS; INTERPRETATIONS
1.1 Definitions. As used in this Agreement, the following terms shall have
the respective meanings set forth below (and grammatical variations of such
terms shall have corresponding meanings):
1.1.1 Italian Accounting Principles. "Italian Accounting Principles": means
the accounting principles set forth in the Italian Civil Code and those
established by the Italian Accounting Profession (Principi Contabili
Predisposti xxx Xxxxxxxx Nazionali dei Dottori Commercialisti e dei
Ragionieri) or, in the absence thereof, those issued by the International
Accounting Standards Committee (I.A.S.C.). For any accounting issue related
to specific cases, the general criterion that should settle any dispute not
specifically addressed by the aforementioned accounting principles is
consistency. Consistency in applying the Italian Accounting Principles is
to be intended as a general rule of guidance to determine whether a
specific criterion is acceptable or not in the preparation of financial
statements and any other financial document mentioned within this
Agreement.
1.1.2 Agreement. "Agreement": means this Shares Purchase Agreement and all
enclosures and instruments in amendment or confirmation of it; "hereof",
"hereto", and "hereunder" and similar expressions mean and refer to this
Agreement and
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not to any particular Article, Section, Subsection or other subdivision;
"Article", "Section", "Subsection" or other subdivision of this Agreement
followed by a number mean and refer to the specified Article, Section,
Subsection or other subdivision of this Agreement.
1.1.3 Authorization. "Authorization": means any governmental license,
permit, concession, application, filing, registration and other
authorization necessary for Pastificio Xxxxxxx and/or Xxxxxxx France to
carry on the Business as presently or previously conducted or for the
ownership or use of its property and assets.
1.1.4 Books and Records. "Books and Records": means all technical, business
and financial records, (including those which are relevant from a tax
viewpoint) financial books and records of account, books, data, reports,
files, drawings, plans, briefs, customer and supplier lists, deeds,
certificates, contracts, surveys, or any other documentation and
information in any form whatsoever (including written, printed, electronic
or computer printout form) relating to Pastificio Xxxxxxx and Xxxxxxx
France.
1.1.5 Buildings and Fixtures. "Buildings and Fixtures": means all plant,
buildings, structures, erections, improvements, appurtenances and fixtures
(including fixed machinery and fixed equipment) situated on the Owned
Properties or the Leased Properties or any of them as the context requires.
1.1. 6 Business. "Business": means, collectively, the businesses presently
and heretofore carried on by Pastificio Xxxxxxx and Xxxxxxx France and in
particular the activities in the food market related to the pasta
production and distribution.
1.1. 7. Business Day. "Business Day": means any day other than Saturday,
Sunday, legal holiday or a day on which banking institutions in Milan and
Rome, Italy, are authorized to be closed.
1.1.8. Closing. "Closing": means the consummation of the transactions
contemplated in Article 3 hereof.
1.1.9 Consent. "Consent": means any consent required to be obtained from a
contracting party to the Material Contracts to the change in control of
Pastificio Xxxxxxx and/or Xxxxxxx France contemplated by this Agreement.
1.1.10 Corporate Records. "Corporate Records": means the minutes books and
corporate records of FPastificio Xxxxxxx and Xxxxxxx France including,
without limitation, the share certificate books, register of transfers and
register of directors.
1.1.11 Enclosures. "Enclosures": means the enclosures indicated in Annex 1
hereof and attached to the Agreement.
1.1.12 Financial Statements. "Financial Statements": means the draft of the
financial statements of Pastificio Xxxxxxx and Xxxxxxx France as of
December 31,
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1999 attached hereto under Section 6.31 of the Seller's Disclosure
Schedule.
1.1.13 Governmental Authority. "Governmental Authority": means any Italian
or foreign court or governmental or quasi-governmental agency, commission,
authority or instrumentality.
1.1.14 Interim Period. "Interim Period": means the period between the date
hereof and the date of the Closing.
1.1.15 ITL. "ITL": means the currency into force in Italy as of the date
hereof.
1.1.16 Laws. "Laws": means all statutes, codes, ordinances, decrees, rules,
regulations, municipal by-laws, judicial or arbitral or administrative or
ministerial or departmental or regulatory judgments, orders, decisions,
rulings or awards, or any provisions of such laws, binding on or affecting
the Person referred to in the context in which such word is used; and "Law"
means any one of them.
1.1.17 Leased Properties. "Leased Properties": means, collectively, the
real properties forming the subject matter of the Real Property Leases, as
described (municipal addresses and legal descriptions) in Section 6.24 bis
of the Seller's Disclosure Schedule.
1.1.18 Lien. "Lien": means any security interest, mortgage, lien, usufruct,
charge, pledge, encumbrance, claim, defects of title or restriction of any
kind, including, without limitation, any restriction on the use, voting,
transfer or receipt of income or other attributes of ownership or rights of
set-off, and other encumbrances of any kind.
1.1.19 Loans. "Loans": means those agreements (written or oral) of
Pastificio Xxxxxxx and Xxxxxxx France for the borrowing of funds or the
granting of credit, including, without limitation, letters of credit and
guarantees as listed and described in Section 6.32 of the Seller's
Disclosure Schedule.
1.1.20 Loss. "Loss": means any loss whatsoever, including, without
limitation, all claims, liabilities, obligations, actions, expenses, costs,
damages, penalties, fines, interest charges and loss of value of the
Shares.
1.1.21 Material Contracts. "Material Contracts": means those contracts and
agreements of Pastificio Xxxxxxx and Xxxxxxx France listed and described in
Section 6.16 of the Seller's Disclosure Schedule having the characteristics
described under Section 6.16 hereof.
1.1.22 Owned Properties. "Owned Properties": means, collectively, the real
properties owned by Pastificio Xxxxxxx and Xxxxxxx France as described
(municipal addresses and legal descriptions) in Section 6.24 of Seller's
Disclosure Schedule.
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1.1.23 Person. "Person": means any natural person, firm, partnership,
association, corporation, trust, public body or government.
1.1.24 Proprietary Information. "Proprietary Information": means the
know-how, trademarks, patents and trade secrets owned, licensed, or
utilized by Pastificio Xxxxxxx and Xxxxxxx France, as described in Section
6.21 of the Seller's Disclosure Schedule.
1.1.25 Real Properties Leases. "Real Property Leases": means the leases and
subleases contracts of real properties to which Pastificio Xxxxxxx and
Xxxxxxx France are a party, as described in Section 6.24 bis of the
Seller's Disclosure Schedule.
1.1.25 bis Reference Date. "Reference Date": means December 31, 1999.
1.1.26 Securities. "Securities": means shares of any class, option,
warrant, right, call, commitment, conversion right, right of exchange or
other agreement (written or oral) or any right or privilege (whether by
law, pre-emptive or contractual) capable of becoming any of the above.
1.1.27 Seller's Disclosure Schedule. "Seller's Disclosure Schedule": means
the disclosure schedule delivered by the Seller to the Purchaser on the
date hereof. Section numbers in the Seller's Disclosure Schedule refer to
the corresponding section numbers in this Agreement.
1.1. 28 Shares "Shares" means the 90.914% of the issued and outstanding
shares of Pastificio Xxxxxxx.
1.1.29 Tax. "Tax": means all state, local or foreign taxes, social security
contributions, fees, imposts, levies or other assessments, including,
without limitation, all net income, gross receipts, sales, use, ad valorem,
value added, transfer, recording, franchise, profits, inventory, capital
stock, license, withholding, payroll, stamp, occupation and property taxes,
customs duties or other similar fees, assessments and charges however
denominated, together with all interest, penalties, additions to tax or
additional amounts imposed by any taxing (Italian or foreign) authority,
and any transferee liability in respect of any of the foregoing taxes.
1.2 Recitals. All the foregoing recitals represent an integral and material
part of this Agreement.
1.3 Gender and Number. Any reference in this Agreement to gender shall
include all genders, and words importing the singular number only shall
include the plural and vice versa, unless differently specified.
1.4 Headings, Etc. The provision of a table of contents, the division of
this
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Agreement into Articles, Sections, Subsections and other subdivisions and
the insertion of headings are for convenience of reference only and shall
not affect or be utilized in the construction or interpretation of this
Agreement.
1.5 Currency. All references in this Agreement to currency, unless
otherwise specifically indicated, shall be to ITL. Whenever a conversion
ITL/US becomes necessary, the exchange rate to be used shall be that
offered by Citybank New York two Business Days before date of the Closing,
as hereinafter defined. All the amounts will be automatically adjusted
according to the ISTAT index starting from the date they became due.
1.6 Severability. Any Article, Section, Subsection or other subdivision of
this Agreement or any other provision of this Agreement which is, or
becomes, illegal, invalid or unenforceable shall be severed from this
Agreement and be ineffective only to the extent of such illegality,
invalidity or unenforceability and shall not affect or impair the remaining
provisions hereof.
1.7 Adverse Construction. The language throughout this Agreement shall in
all cases be construed as a whole according to its fair meaning and without
implying a presumption that the terms hereof shall be more strictly
construed against one Party as opposed to another by reason of the rule
that a document is to be construed more strictly against the Party who has
prepared the same, it being acknowledged that the representatives of each
Party have participated in the shaping and negotiation of this Agreement.
ARTICLE 2
SALE AND PURCHASE
2.1 Sale and Purchase of the Shares. Subject to the terms and conditions of
this Agreement, at the Closing the Seller shall sell to the Purchaser and
the Purchaser shall purchase from the Seller, with the modalities below
specified and subject to the satisfaction and fulfillment of the conditions
precedent under Article 4 below, the Shares free and clear of any Liens.
2.2 Purchase Price. The purchase price for the Shares shall be the
aggregate amount of ITL 25,000,000,000 and US$ 1,750,000 (the "Purchase
Price"). The Purchase Price could be increased according to the provisions
of paragraph (e) below. The Purchase Price shall be paid by the Purchaser
to the Seller at the following terms and conditions:
(a) ITL 5,000,000,000 as down payment upon the execution of this Agreement
by means of bank transfer at the bank account no. 00000000, Xxxxxxxxxx
Xxxx, Xxxxxxx xxxxxx, XXX 00000, CAB 46480, and upon the delivery by
the Seller to the Purchaser of the original of an irrevocable and
first demand bank guarantee of ITL 5,000,000,000 issued by a primary
Italian bank, in the form attached hereto as Enclosure 1, securing the
re-
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payment by the Seller of said down payment of ITL 5,000,000,000 in the
events provided by Article 11 hereof.
(b) ITL 15,000,000,000 at the Closing to be made by bank transfer at the
following bank account: bank account no. 00000000, Cariverona Bank,
Mondovi branch, ABI 06355, CAB 46480.
(c) US$ 1,750,000 at the Closing to be made according to the modalities
set forth in Section 3.1 hereof.
(d) ITL 5,000,000,000 at the second anniversary of the Closing, provided
that Xxxx Xxxxxxx will not voluntarily resign from the office of
Managing Director of Pastificio Xxxxxxx up to the second anniversary
of the Closing date. Therefore, it is understood that the Seller shall
be entitled to receive the above amount in any other case in which he
shall cease to be Managing Director of Pastificio Xxxxxxx (the
"Event"), including but not limited to, death, permanent disability
and also in case he is revoked from the office as Managing Director of
Pastificio Xxxxxxx even with just cause ("giusta causa"). It is also
understood that should Xx. Xxxx Xxxxxxx be revoked from the office as
Managing Director of Pastificio Xxxxxxx before the expiration of the
second anniversary of the Closing, the above payment shall be due
within 7 days from the Event.
(e) The Purchase Price could be increased of an amount of ITL
5,000,000,000 to be paid by the Purchaser to the Seller at the second
anniversary of the Closing provided that (i) the Margine Operativo
Xxxxx of Pastificio Xxxxxxx (earnings pre-taxes, plus interest,
amortization and depreciation) will be at least ITL 12,600,000,000 in
the year 2000 and at least ITL 13,070,000,000 in the year 2001 and
(ii) Xxxx Xxxxxxx will not voluntarily resign from the office of
Managing Director of Pastificio Xxxxxxx up to the second anniversary
of the Closing date. However, if Xxxx Xxxxxxx will not voluntarily
resign from the office of Managing Director of Pastificio Xxxxxxx up
to the second anniversary of the Closing and the Margine Operativo
Xxxxx of Pastificio Xxxxxxx (earnings pre-taxes, plus interest,
amortization and depreciation) will be lower than ITL 12,600,000,000
in year 2000 and/or lower than ITL 13,070,000,000 in year 2001, the
amount of ITL 5,000,000,000 will be reduced by ITL 500,000,000 for
every ITL 100,000,000 of shortfall in either year. It is understood
that such reduction shall in no case exceed the amount of ITL.
5,000,000,000 provided for in this paragraph (e) and therefore it
shall in no case reduce the portions of the Purchase Price set forth
in the preceding paragraphs (a), (b), (c) and (d).
(f) The payment of the two portions of the Purchase Price under paragraph
d) and e) above will be secured by the Purchaser by depositing in
escrow an amount of shares of Spigadoro Inc. free and clear fron any
Lien for a value equal to ITL 10,000,000,000 and the Purchaser will
ensure that the
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value of the shares will in no event be lower than ITL 10,000,000,000.
The number of the shares of Spigadoro Inc. will be determined on the
basis of the average share price of the 5 days preceding the Closing.
Enclosure 2 constitutes the form of Escrow Agreement that the Parties
will execute at Closing.
ARTICLE 3
CLOSING
3.1 Closing. Subject to the satisfaction and fulfillment of all the
conditions precedent set forth in Article 4 hereof, the Closing shall take
place at the offices of Pastificio Xxxxxxx, located in Mondovi, at 12.00
Italian time on May 3, 2000 or at such other date, time and place as the
Parties may agree in writing.
At the Closing:
(a) There will be the transfer and endorsement of the Shares free and
clear of any Lien in favor of the Purchaser.
(b) The Purchaser shall pay to the Seller the portion of ITL
15,000,000,000 of the Purchase Price as provided by Section 2.2
hereof.
(c) The Seller, after having received from the Purchaser the payment
indicated in paragraph (c) of Section 2.2 above, shall subscribe and
pay in cash to Spigadoro Inc., no. 583,334 shares of Spigadoro Inc.
for a value of US $1,750,000. In this respect, the Seller hereby
irrevocably authorizes and instructs the Purchaser to pay the portion
of the Purchase Price indicated in paragraph (c) of Section 2.2 above
equal to US$ 1,750,000 to Spigadoro Inc. at the bank account which
will be indicated in writing by Spigadoro Inc., by subscribing on
behalf of the Seller no. 583,334 shares of Spigadoro Inc. at a
purchase price of USD 3 each. Such shares, duly registered in the name
of the Seller, shall be delivered to an agent of the Seller in the
U.S. at the Closing Date according to the written instructions which
the Seller shall give to the Purchaser within 10 Business Days from
the date hereof.
(d) The transfer of the Shares in favour of the Purchaser shall be entered
in the the shareholders' ledger of Pastificio Xxxxxxx.
(e) The directors of Pastificio Xxxxxxx and Xxxxxxx France shall resign
and shall be replaced by the directors nominated by the Purchaser at
an ordinary shareholders' meeting of Pastificio Xxxxxxx and Xxxxxxx
France duly called by the Seller for the date of the Closing.
(f) The shareholders' meeting of Pastificio Xxxxxxx shall release its
directors and statutory auditors from any liability which they may
have incurred and shall waive any future claim against them connected
with their office. The Purchaser undertakes not to cause Pastificio
Xxxxxxx to ever resolve upon
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any action against the directors and/or statutory auditors of
Pastificio Xxxxxxx, and/or against Xxx. Xxxxxx Xxxxxxx as special
attorney-in-fact of Pastificio Xxxxxxx.
(g) The Parties shall execute the Escrow Agreement in the form attached
hereto as Enclosure 2.
(h) The Seller and the Purchaser shall execute and deliver all other
documents and instruments required to be executed or delivered under
this Agreement by the Seller before or at the Closing.
ARTICLE 4
CONDITIONS PRECEDENT TO CLOSING
4.1 Conditions Precedent to Closing. The respective obligations of the
Parties to consummate the transactions contemplated in this Agreement are
subject to the satisfaction and fulfillment at or prior to the Closing of
the following conditions.
(a) The Seller shall have acquired full property, title and interest on
the Shares, free and clear of any Lien. In respect thereof the Seller
has duly represented to the Purchaser that the pledges registered on
the Shares in favour of Cariverona Banca S.p.A. and of Inversiones
Trasandinas S.A. shall be released at the Closing by the above
mentioned pledgees; and
(b) The Seller shall deliver to the Purchaser audited financial statements
of Pastificio Xxxxxxx as of December 31, 1999, which shall conform in
all material respect to the draft of the financial statements of
Pastificio Xxxxxxx as of December 31, 1999 attached hereto under
Section 6.31 of the Seller's Disclosure Schedule. It is understood
that the audit certification of Reconta Ernst & Young shall contain a
specific indication regarding receivables deriving from insurance's
indemnification in line with the indication contained in the audit
certification issued with reference to the 1998 financial statements.
4.2 Representations and Warranties. The representations and warranties made
by the Seller in this Agreement shall be true and correct in all material
respects when made and as of the Closing as if such representations and
warranties were made at the Closing.
4.3 Material Adverse Change. There will have been no material adverse
change in the condition (financial or otherwise), assets, liabilities,
operations, earnings, prospects or business of Pastificio Xxxxxxx and
Xxxxxxx France since the Reference Date.
4.4 Conduct of Business. The Business of Pastificio Xxxxxxx and Xxxxxxx
France shall have been conducted in the Interim Period in the ordinary
course and consistently with past practice.
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ARTICLE 5
FURTHER AGREEMENTS BETWEEN THE PARTIES
5.1 Employment agreement of Xx. Xxxx Xxxxxxx. The Parties agree that Xx.
Xxxx Xxxxxxx shall remain in the position of Managing Director of
Pastificio Xxxxxxx for a period of two years after the Closing with
adequate powers to run the operation of the business and in line with the
corporate policy for managers of equal ranking employed by the Purchaser
and its controlling or affiliated entities and with the necessary reporting
duties to the Chief Executive Officer and the Chief Operating Officer of
Spigadoro Inc.. The Purchaser shall procure that the current compensation
to Xx. Xxxx Xxxxxxx as Managing Director of Pastificio Xxxxxxx shall be
increased of a yearly amount of ITL. 57,000,000 for a period of two years
after the Closing date.
5.2 Stock Option Plan of Spigadoro Inc. The Purchaser undertakes to procure
that Xx. Xxxx Xxxxxxx will participate to the Executives Stock Option Plan
of Spigadoro Inc.
ARTICLE 6
REPRESENTATIONS AND WARRANTIES OF THE SELLER
The Seller makes the following representations and warranties and
acknowledge that the Purchaser is relying upon such representations and
warranties in connection with the purchase by it of the Shares. The Seller
certifies that the following representations and warranties are true and
complete as of the date of this Agreement, and that they shall
substantially be true at Closing in all material respect.
A) MATTERS RELATING TO THE SELLER
6.1 Legal power of the Seller. The Seller has the legal power to own the
Shares and to enter into this Agreement and any other document indicated
herein, to perform its obligations hereunder and to consummate the
transactions contemplated hereby. This Agreement constitutes the valid and
legally binding obligation of the Seller, enforceable against the Seller,
in accordance with its terms. This Agreement has been approved through all
requisite corporate actions and has been executed by a duly authorized
representative of such Seller.
6.2 Consents and Approvals. No consent or approval, or registration,
declaration or filing with, any Governmental Authority is required to be
obtained or made on the part of the Seller in connection with the execution
and delivery of this Agreement by the Seller or the consummation of the
transactions contemplated hereunder.
B) MATTERS RELATING TO PASTIFICIO XXXXXXX AND XXXXXXX FRANCE
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6.3 Due Incorporation
6.3.1 Pastificio Xxxxxxx is a corporation duly incorporated, validly
existing and in good standing under the laws of Italy and has full
corporate power and authority to own its property and to carry on the
Business as now conducted. The copies of the deed of incorporation and of
the current by-laws of Pastificio Xxxxxxx previously made available for
review to the Purchaser are correct and complete copies of such documents
as presently in force and are attached hereto in Section 6.3.1 of the
Seller's Disclosure Schedule.
6.3.2 Xxxxxxx France is a corporation duly incorporated, validly existing
and in good standing under the laws of France and has full corporate power
and authority to own its property and to carry on the Business as now
conducted. The copies of the deed of incorporation and of the current
by-laws of Xxxxxxx France previously made available for review to the
Purchaser are correct and complete copies of such documents as presently in
force and are attached hereto in Section 6.3.2 of the Seller's Disclosure
Schedule.
6.4 Authorized Capital
6.4.1 The outstanding capital of Pastificio Xxxxxxx is constituted by no.
123,500 issued shares par value ITL 100,000 each equal to ITL.
12,350,000,000 and 90.914% of such capital will be owned by the Seller at
Closing. All the shares of Pastificio Xxxxxxx have been fully paid and have
been duly and validly registered in the Shareholder's ledger of Pastificio
Xxxxxxx, together with the indication of the Seller as owner of said
shares.
6.4.2 The outstanding capital of Xxxxxxx France is constituted by no. 2,500
issued shares ("parts"), par value FF. 100 each, equal to FF. 250,000, and
such capital is 98% owned by Pastificio Xxxxxxx. All the shares of Xxxxxxx
France have been fully paid and have been duly and validly registered in
the Shareholder's ledger of Xxxxxxx France, together with the indication of
Pastificio Xxxxxxx as owner of said shares.
6.5 No Options, etc.. No Person has any option, warrant, right, call,
commitment, conversion right, right of exchange or other agreement (written
or oral) or any right or privilege (whether by law, pre-emptive or
contractual) capable of becoming an option, warrant, right, call,
commitment, conversion right, right of exchange or other agreement for the
purchase from the Seller of any of the Shares of Pastificio Xxxxxxx or of
the shares of Xxxxxxx France.
6.6 Title to Shares. The Seller is the beneficial owner of and has good and
valid title to the Shares. The Shares of Pastificio Xxxxxxx and the shares
of Xxxxxxx France are free and clear of any Liens (except as set forth in
Section 6.6 of the Seller Disclosure Schedules), including, without
limitation, any voting trust, shareholder's agreement or voting agreement.
There is no restriction on the
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transferability and on other acts of disposition of the Shares of
Pastificio Xxxxxxx and Xxxxxxx France, other than the pre-emptive rights
provided for in Article 8 of the By-laws of Xxxxxxx France.
6.7 Conflicting Agreements, etc.. The execution and delivery of this
Agreement by the Seller and the consummation of the transactions
contemplated hereby will not result in:
(a) the breach or violation of any of the provisions of, or constitute a
default under, or conflict with or cause the acceleration of, any
obligation of Pastificio Xxxxxxx or Xxxxxxx France under: (i) any Material
Contract; (ii) any Authorization; (iii) any provision of the incorporating
documents or by-laws or resolutions of (a) the shareholders of Pastificio
Xxxxxxx and/or Xxxxxxx France (b) the board of directors of Pastificio
Xxxxxxx and/or Xxxxxxx France or corporate governing provisions binding the
Seller, Pastificio Xxxxxxx or Xxxxxxx France; (iv) any judgment,
injunction, decree, order or award of any court, governmental body or
arbitrator having jurisdiction over Pastificio Xxxxxxx and/or Xxxxxxx
France, having a material effect on the transactions contemplated herein;
(v) any license, permit, approval, consent or authorization necessary to
the ownership of the Shares of Pastificio Xxxxxxx or Xxxxxxx France, or to
the operation of the Business; or (vi) any applicable Law; or
(b) the creation or imposition of any Lien on any of the Shares of
Pastificio Xxxxxxx or of Xxxxxxx France (or parts thereof), or on any of
the property or assets of Pastificio Xxxxxxx and/or Xxxxxxx France; or
(c) the discontinuance or impairment of the operation of the Business after
the date hereof, on substantially the same basis as such Business have
heretofore been operated.
6.8 Subsidiaries. Xxxxxxx France is the only subsidiary of Pastificio
Xxxxxxx.
6.9 Corporate Records. The Corporate Records of Pastificio Xxxxxxx and
Xxxxxxx France have been kept in compliance with the applicable Laws and
with the pertinent documents of incorporation and, in particular, all
corporate acts necessary to give evidence to those substantial
circumstances guaranteed by the Seller pursuant to this Section and have
been regularly and duly recorded therein.
C) GENERAL MATTERS RELATING TO THE BUSINESS
6.10 Operation of the Business
6.10.1 Pastificio Xxxxxxx and Xxxxxxx France do not conduct any business
other than the Business.
6.10.2 All the tangible assets subject to depreciation of Pastificio
Xxxxxxx and
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Xxxxxxx Xxxxxx are described in Section 6.10.2 of the Seller's Disclosure
Schedule. All intangible assets are listed in Section 6.10.2 bis of the
Seller's Disclosure Schedule.
6.11 Conduct of Business in Ordinary Course. Since the Reference Date the
Business has been conducted in the ordinary course consistent with past
practice and will continue to be conducted in the ordinary course
consistent with past practice up to the Closing. No facts out of the
ordinary administration have occurred, including without limitation:
(i) any participation to the formation of a company or acquisition of any
capital stock or other interest in any Person, or any other investment in
any Person by Pastificio Xxxxxxx and/or Xxxxxxx France;
(ii) any capital expenditure individually involving a cost in excess of
ITL. 100,000,000 (one-hundred million) other than those set forth in
Section 6.11 (ii) of the Seller' Disclosure Schedule;
(iii) any conveyance of assets, except in the ordinary course of business;
(iv) any creation of a Lien on any asset;
(v) the entering into or modification of any contract providing for an
obligation, outside the ordinary course of business, involving payments or
liabilities individually having a present value in excess of ITL.
50,000,000 (fifty millions);
(vi) any payment outside the ordinary course of business, or any discharge,
settlement, waiver or write-down of any account receivable, write-down of
inventory, damages or losses of non-insured goods, or other events
resulting in Pastificio Xxxxxxx'x or Xxxxxxx France's liability, debt or
obligation (whether fixed or contingent) which individually has a present
value in excess of ITL. 50,000,000 (fifty millions) or which in the
aggregate have a present value in excess of ITL.300,000,000 (three hundred
millions) except as set forth in Section 6.11 (vi) of the Seller's
Disclosure Schedule;
(vii) any non-performance by Pastificio Xxxxxxx and/or Xxxxxxx France of
any obligation under any contract or of any obligation legally binding each
of them; or
(viii) increases of Employee remuneration, and increases of remuneration of
agents, except for compulsory increases provided for in national collective
bargaining agreements or in the applicable Laws except as set forth in
Section 6.11 (viii) of the Seller's Disclosure Schedule.
6.12 No Material Adverse Change. Since the Reference Date there has been no
change in the affairs, assets, liabilities, business, transactions or
conditions of Pastificio Xxxxxxx and/or Xxxxxxx France, or of the Business,
whether arising as
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a result of any legislative or regulatory change, revocation of any
Authorization, license or right to do business, third parties' claims,
fire, explosion, accident, casualty, labor trouble, public force, any other
act of God or any other circumstance which has materially adversely
affected or which will materially adversely affect Pastificio Xxxxxxx,
Xxxxxxx France and/or the Business.
6.13 Compliance with Laws. Pastificio Xxxxxxx and Xxxxxxx France are
conducting, respectively, the Business in compliance with all applicable
Laws of each jurisdiction in which the Business is carried on.
6.14 Authorizations. Pastificio Xxxxxxx and Xxxxxxx France are not in
default, nor have they received any notice of any claim in default, with
respect to any Authorization they respectively own. No threat of revocation
exists and there is no reason to revoke any of the Authorizations. All such
Authorizations are renewable by their terms or in the ordinary course of
business without the need for Pastificio Xxxxxxx and/or Xxxxxxx France to
comply with any special qualification or procedure or to pay any amounts
other than routine filing fees. The execution of this Agreement, the
transfer of the Shares of Pastificio Xxxxxxx and the performance of other
transactions provided in this Agreement shall not constitute reason for
termination or non-renewal of any such Authorizations, nor, as of today, do
there exist other facts or circumstances which, pursuant to the Laws
presently in force, could (a) constitute a reason for termination or
non-renewal or (b) necessitate large investments to maintain or renew such
Authorizations. The Authorizations are sufficient to continue the conduct
of the Business as it shall be conducted until the date of the Closing and
Pastificio Xxxxxxx and/or Xxxxxxx France do not require other
Authorizations to conduct the Business.
6.15 Ownership of Other Interest. Pastificio Xxxxxxx and/or Xxxxxxx France
do not own nor have any agreement of any nature to acquire, directly or
indirectly, quotas, shares, other equity or proprietary interests in any
Person, or to acquire or lease any other business operations, in any way
whatsoever and whether as lessor or lessee, including, without limitation,
the lease or transfer of ongoing businesses.
6.16 Material Contracts. The contracts listed and described in Section 6.16
of the Seller's Disclosure Schedule constitute all the contracts,
agreements or commitments of Pastificio Xxxxxxx and/or Xxxxxxx France,
which involve continuing obligation and have a contractual value per annum
higher than ITL 100,000,000, and which cannot be terminated without
penalties, unless with a notice of one year or more.
6.16 bis Notices and Consents. No notice must be sent to any contracting
party to the Material Contracts relating to the change in control of
Pastificio Xxxxxxx and/or Xxxxxxx France contemplated by this Agreement
except for the Material Contracts listed in Section 6.16 bis (a) of the
Seller's Disclosure Schedule. No written consent is required to be obtained
from a contracting party to the Material Contracts to the change in control
of Pastificio Xxxxxxx and/or Xxxxxxx France
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contemplated by this Agreement except for the Material Contracts listed in
Section 6.16 bis (b) of the Seller's Disclosure Schedule. Section 6.16 bis
(c) of the Seller's Disclosure Schedule also encloses a copy of the written
consents obtained by the Seller with respect to the Material Contracts
listed in Section 6.16 (b) of the Seller's Disclosure Schedule.
6.17 No Breach of Contracts. Each contract which Pastificio Xxxxxxx and/or
Xxxxxxx France are party to, is in full force and effect and, at the date
hereof, there exists no default thereunder except as set forth in Section
6.17 of the Seller's Disclosure Schedule. Pastificio Xxxxxxx and/or Xxxxxxx
France have not violated or breached any of the terms or conditions of any
Material Contract each of them is a party to, and all the covenants to be
performed by any other party thereto have been fully performed.
6.18 Insurance. Pastificio Xxxxxxx and Xxxxxxx France carry insurance of
the kind and in the amounts usual for companies in businesses similar to
the Business. Such insurances have been executed in compliance with the
applicable laws and regulations. Pastificio Xxxxxxx and Xxxxxxx France are
not in default with respect to the payment of any premiums under any such
insurance policies and have not failed to give any notice or to present any
claim under any such insurance policy in a due and timely fashion. No event
has occurred which could result in an upward adjustment in the applicable
premiums. Seller, Pastificio Xxxxxxx and/or Xxxxxxx France have not acted
or failed to act in such a manner, and no event has occurred, which could
result in (i) a change in the terms and conditions provided for by the
respective insurance policies, (ii) the respective insurance companies'
right to terminate or cancel the insurance policies, or (iii) an adverse
effect on the exercise of rights under the insurance policies. Such
insurance policies are in full force and effect and Section 6.18 of the
Seller's Disclosure Schedule contains a correct and complete list of the
insurance policies maintained by Pastificio Xxxxxxx and Xxxxxxx France.
6.19 Litigation and Controversies.
6.19.1 Except as set forth in Section 6.19.1 of the Seller's Disclosure
Schedule, Pastificio Xxxxxxx and Xxxxxxx France are not a party to any
pending litigation, whether before the ordinary courts or before
administrative or other courts or arbitrators, and no judicial litigation
is threatened by or against Pastificio Xxxxxxx and/or Xxxxxxx France.
Pastificio Xxxxxxx and/or Xxxxxxx France are not presently subject to any
judgment, order or decree entered in any lawsuit or proceeding.
6.19.2 Pastificio Xxxxxxx and/or Xxxxxxx France are not a party to any
controversies or disputes, whether pending or merely threatened, which
could affect the thorough and complete performance of any transaction
contemplated in this Agreement.
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6.20 Customers and Suppliers. Section 6.20 of the Seller's Disclosure
Schedule is a true and correct list setting forth the twenty largest
customers and suppliers of the Business by value as of December 31, 1999.
6.21 Intellectual Property and Proprietary Information. Section 6.21 of the
Seller's Disclosure Schedule is a true and correct list (including, where
applicable, registration numbers and dates of filing renewal and
termination) of all the patents, patent applications, registered designs
and models, trademarks, trademarks registrations and applications therefor,
service marks, service xxxx registrations and applications therefor, trade
names (whether or not registered or registrable), copyrights, registered
copyrights and applications therefor, respectively used or held for use by
Pastificio Xxxxxxx and/or Xxxxxxx France in the conduct of the Business as
currently, and as proposed to be, conducted (collectively, "Intellectual
Property Rights"). Pastificio Xxxxxxx and/or Xxxxxxx France, respectively,
are the true, lawful and exclusive owners of all right, title and interest
in and to the Intellectual Property Rights and the Proprietary Information,
free and clear of any Liens, and the Intellectual Property Rights and
Proprietary Information are valid and enforceable. There are no
intellectual property rights or proprietary information of Persons utilized
by Pastificio Xxxxxxx and/or Xxxxxxx France. Neither Pastificio Xxxxxxx nor
Xxxxxxx France has conveyed, assigned, licensed or encumbered any of the
Intellectual Property Rights and Proprietary Information, except as set
forth in Section 6.21 of the Seller's Disclosure Schedule. Pastificio
Xxxxxxx and/or Xxxxxxx France have the exclusive right to use such
Intellectual Property Rights and/or Proprietary Information. The conduct of
the Business does not infringe upon the intellectual property rights or
proprietary information of any Person. No Person has infringed Pastificio
Xxxxxxx'x or Xxxxxxx France's rights relating to Intellectual Property
Rights or Proprietary Information, and to the Seller's knowledge, there are
no events that could give rise to such infringements.
D) MATTERS RELATING TO PROPERTY AND ASSETS
6.22 Title to the Property and Assets. Pastificio Xxxxxxx and/or Xxxxxxx
France have good and marketable title to and legal and beneficial ownership
of all their respective property and assets, free and clear of any Liens,
except as set forth in this Agreement and in the Seller's Disclosure
Schedule.
6.23 No Options, Etc.. No Person has any written or oral agreement, option,
understanding or commitment, or any right or privilege capable of becoming
such for the purchase from Pastificio Xxxxxxx and/or Xxxxxxx France of any
of their respective property or assets having a value in excess of ITL. ten
million (10,000,000) or, regardless of their value, that are necessary for
the Business.
6.24 Real Property.
(a) Pastificio Xxxxxxx and Xxxxxxx France have good and marketable title
to their interest in the Owned Real Properties, free and clear of any
Liens,
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except as set forth in this Agreement and in Section 6.24 of the
Seller's Disclosure Schedule.
(b) All of the Buildings and Fixtures on the Owned Real Properties were
built in accordance with all applicable laws and with all required
authorizations validly issued pursuant thereto, except as disclosed in
Section 6.24 of the Seller's Disclosure Schedule.
(c) None of the Owned Real Properties or the Buildings and Fixtures
thereon, nor the use, operation or maintenance thereof for the purpose
of carrying on the Business, infringes any restrictive covenant or any
provision of any Law or encroaches on any property owned by any other
Person. Except as disclosed in Section 6.24 of the Seller's Disclosure
Schedule, no condemnation or expropriation proceeding is pending or,
to the best of Seller's knowledge, threatened with respect to the
Owned Real Properties which would preclude or impair the use of any
such real property or any part thereof for the purposes for which it
is currently used. All Owned Real Properties are in compliance with
applicable zoning and construction regulations and any other
applicable Law, and benefits from all required Authorizations.
(d) There are no outstanding work orders, for restoration or removal, with
respect to any of the Owned Real Properties or the Buildings or
Fixtures thereon, from or required by any municipality, police
department, fire department, sanitation, health or safety authorities
or from any other Person and there are no communications and/or
notifications of acts of any Authority which may trigger the issue of
such orders. Pastificio Xxxxxxx and Xxxxxxx France are not party to
any lease agreement of any real property except as disclosed in
Section 6.24 bis of the Seller's Disclosure Schedule.
(e) All of the Buildings and Fixtures on the Owned Properties and the
Leased Properties: (i) are in good operating condition and in a state
of good maintenance and repair, except for normal wear and tear; and
(ii) are adequate and suitable for the purposes for which they are
presently being used; and (iii) with respect to each of them
Pastificio Xxxxxxx and Xxxxxxx France have adequate rights of ingress
and egress for the operation of their business in the ordinary course.
(f) Section 6.24 of Shareholder's Disclosure Schedule contains a true,
complete, and correct list of the building amnesties duly filed by
Pastificio Xxxxxxx or by Xxxxxxx France, in compliance with the
relevant Laws, with respect to Buildings, Fixtures and Owned
Properties. All the amounts due in connection with such amnesties have
been fully paid and no further obligations are pending towards the
relevant Governmental Authority and no claims have been filed or are
expected to be filed by such Governmental Authority.
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6.24 bis Real Property Leases. Section 6.24 bis of Shareholder's Disclosure
Schedule lists all of the Real Property Leases, together with a brief
description of each of the leased premises, the term of each Real Property
Lease, the rental payments thereunder, any rights of renewal and the term
thereof and any restrictions on assignment concerning Pastificio Xxxxxxx
and Xxxxxxx France. Neither Pastificio Xxxxxxx nor Xxxxxxx France are a
party to, or under any agreement or option to become a party to, any lease
with respect to real property used or to be used in the Business, other
than the Real Property Leases. Each Real Property Lease is in good
standing, creates a good and valid leasehold estate in the Leased Property
and is in full force and effect without amendment thereto, except as
otherwise disclosed in Section 6.24 bis of the Shareholder's Disclosure
Schedule. With respect to each Real Property Lease (i) all rents and
additional rents due thereunder have been paid; (ii) neither the lessor nor
the lessee is in material default thereunder; (iii) no waiver, indulgence
or postponement of the lessee's obligations thereunder has been granted by
the lessor; (iv) there exists no event of default or event, occurrence,
condition or act (including, without limitation, the purchase of the
Shares) which, with the giving of notice, the lapse of time or the
happening of any other event or condition, would become a default under any
such Real Property Leases; (v) neither Pastificio Xxxxxxx nor Xxxxxxx
France have violated any of the terms or conditions under any such Real
Property Leases in any material respect; and (vi) all of the covenants to
be performed by any other party under any such Real Property Leases have
been fully performed.
6.25 Condition of Assets - General. All the property and assets owned or
used by Pastificio Xxxxxxx and/or Xxxxxxx France are in good operating
condition and are in a state of good repair and maintenance, having regard
to the age and use thereof, reasonable wear and tear excepted. All the
necessary maintenance, repairs and inspections, as well as those provided
for by the assistance service agreements, has been made, in order to keep
in effect the pertinent warranties released by third parties in connection
with such property and assets.
6.26 Personal Property. Pastificio Xxxxxxx and Xxxxxxx France have good and
marketable title to all tangible assets owned by it (the "Personal
Property"). The Personal Property is in good condition, except for ordinary
wear and tear, free of any Liens except as set forth in this Agreement and
in the Seller's Disclosure Schedules. Pastificio Xxxxxxx and/or Xxxxxxx
France do not lease any Personal Property in the conduct of the Business
except as set forth in Section 6.24bis of the Seller's Disclosure
Schedules.
6.27 Inventories. All respective inventories (finished and unfinished
goods) of Pastificio Xxxxxxx and Xxxxxxx France are merchantable and are at
levels sufficient for the continuation, respectively, of the Business in
the ordinary course in the manner carried on up to date and, in any event,
saleable in the normal course of business.
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6.28 Working capital, Accounts Receivables. The current working capital of
Pastificio Xxxxxxx and Xxxxxxx France is sufficient for the purposes of the
Business as heretofore conducted. All accounts receivables as shown in the
Financial Statements and arising thereafter until the Closing are bona fide
and, of the best knowledge of the Seller, are collectible without set off
or counterclaim at the pertinent expiry date.
E) FINANCIAL MATTERS
6.29 Bank Accounts and Powers of Attorney. Section 6.29 of the Seller's
Disclosure Schedule contains a correct and complete list showing (i) the
name of each bank in which Pastificio Xxxxxxx and Xxxxxxx France have an
account or safe deposit box and (ii) the names of all persons authorized to
draw thereon or to have access thereto on behalf of, respectively,
Pastificio Xxxxxxx and Xxxxxxx France; and (iii) the names of any persons
holding powers of attorney from Pastificio Xxxxxxx and Xxxxxxx France, and
a list thereof is contained in Section 6.29 of the Seller's Disclosure
Schedule.
6.30 Books and Records. All Books and Records have been fully, properly and
accurately kept and completed in accordance with the applicable rules of
the Civil Code and of other applicable legislation and there are no
material inaccuracies or discrepancies of any kind contained or reflected
therein. All the systems and procedures, including the computer systems and
procedures, controls, data or information of Pastificio Xxxxxxx and/or
Xxxxxxx France are under the exclusive ownership and the direct control of
Pastificio Xxxxxxx and/or Xxxxxxx France, or have been licensed to
Pastificio Xxxxxxx and/or Xxxxxxx France.
6.31 Financial Statements.
(a) The Financial Statements have been prepared in accordance with the
Accounting Principles applied on a basis consistent with those of
previous fiscal periods and present fairly, respectively: (a) the
property, assets, all liabilities (whether accrued, absolute,
contingent or otherwise) and the financial condition of Pastificio
Xxxxxxx and Xxxxxxx France, as of December 31, 1999, and (b) the sales
and earnings of Pastificio Xxxxxxx and Xxxxxxx France, during the
period covered by the Financial Statements. There are no other
liabilities except for those reflected in the Financial Statements.
(b) Section 6.31 of the Seller's Disclosure Schedule contains the
financial statements and the profit and loss account of Pastificio
Xxxxxxx and Xxxxxxx France as of December 31, 1999 (the Financial
Statements), included a warehouse inventory for quantity.
6.32 Loans and Guarantees. Section 6.32 of the Seller's Disclosure Schedule
lists and describes all mortgage loan agreements, loan agreements, lines of
credit, overdrafts, discounted notes, guarantees, bank guarantees and
similar
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credit facilities to which Pastificio Xxxxxxx and/or Xxxxxxx France are
parties, including, without limitation, off-balance sheet loans or similar
financing arrangements. All such loan agreements and other credit
facilities are in full force and effect and there has been, on the part of
Pastificio Xxxxxxx and/or Xxxxxxx France, no material default or delay of
payments of principal or interest in respect thereof. All such loan
agreements and credit facilities shall remain in force with the same terms
and conditions as the ones presently effective, even after the change in
the ownership of Pastificio Xxxxxxx and/or Xxxxxxx France as a result of
this transaction.
6.33 Taxes and Mandatory Social Security and Health Care Contributions.
(a) Pastificio Xxxxxxx and Xxxxxxx France have filed or caused to be
filed, within the due times and in accordance to the Laws, all tax
returns, tax reports and mandatory social security and health care
employer's contributions (Contributions) which are required to be
filed by either of it. Such returns and reports are correct and
complete in all material respects and reflect accurately all liability
for Taxes and Contributions of Pastificio Xxxxxxx and/or Xxxxxxx
France for the periods covered thereby. All Taxes and Contributions
(including interest and penalties) payable by or due from each of
Pastificio Xxxxxxx and/or Xxxxxxx France (as a result of a fiscal
assessment or otherwise), have been fully paid or adequately disclosed
and fully provided for in the pertinent Books and Records and the
Reference Financial Statements. Pastificio Xxxxxxx and Xxxxxxx France
have made all withholdings required by the Laws, and have paid over to
the appropriate Governmental Authorities the amounts due within the
time periods provided for by the Laws.
(b) Except as disclosed in Section 6.33 of the Seller's Disclosure
Schedule, there is no pending or threatened litigation, nor have
assessments been issued, nor are there any audits or other actions
being conducted by Tax Authorities or by any other Governmental
Authority regarding asserted violations of Laws by Pastificio Xxxxxxx
or Xxxxxxx France, which, in the event of an adverse result, could
lead to the application of sanctions, any financial liability or other
adverse consequences for the Purchaser, Pastificio Xxxxxxx and/or
Xxxxxxx France.
F) EMPLOYEE MATTERS
6.34 Employees.
(a) Section 6.34 of the Seller's Disclosure Schedule sets forth a complete
list of employees of Pastificio Xxxxxxx and Xxxxxxx France as of the
date of this Agreement, the applicable collective labor agreement,
such employees' position and length of service with Pastificio Xxxxxxx
and/or Xxxxxxx France, their salary, bonuses and any other employee
benefits other than those provided by law, and whether any written
employment
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agreements exist relating to any such employees other than customary
hiring letters.
(b) Pastificio Xxxxxxx and/or Xxxxxxx France do not have any employee
other than the employees listed in Section 6.34 of the Seller's
Disclosure Schedule. Also, the Seller represents that Pastificio
Xxxxxxx and/or Xxxxxxx France has not entered into services contracts
with co-operative companies, which supply employees for porterage,
cleaning-up and aid to the production.
(c) Pastificio Xxxxxxx and/or Xxxxxxx France are in compliance with all
Laws and the applicable collective labor agreements respecting
employment and employment practices, terms and conditions of
employment and all rules applicable thereto, and laws and regulations
concerning health and safety in the workplace. Pastificio Xxxxxxx
and/or Xxxxxxx France have not engaged in anti-union practices.
(d) There is no labor strike, dispute with the generality of the
employees, slowdown or stoppage actually pending or involving or
threatened against Pastificio Xxxxxxx or Xxxxxxx France with respect
to the Business or any part thereof. No employment related complaint
or grievance exists which might have a material adverse effect upon
Pastificio Xxxxxxx or Xxxxxxx France or the conduct of the Business or
any part thereof.
(e) Save as disclosed in Section 6.34 of the Seller's Disclosure Schedule,
Pastificio Xxxxxxx and Xxxxxxx France is not bound by any collective
bargaining or similar agreement nor any of such agreements is
currently being negotiated.
(f) No employee of Pastificio Xxxxxxx and Xxxxxxx France has any agreement
with a notice required to terminate his/her employment other than such
as results by the Law.
(g) All vacation pay (including all banked vacation pay), bonuses,
commissions and other employee benefit payments are reflected and have
been accrued in the Books and Records.
(h) The employees of Pastificio Xxxxxxx and Xxxxxxx France are not
entitled to any integrative pension and health care plans in addition
to the mandatory ones provided for by the applicable Laws, except as
set forth in Section 6.34 of the Seller's Disclosure Schedules.
G) ENVIRONMENTAL MATTERS
6.35 Environmental Matters.
(a) Each of Pastificio Xxxxxxx and/or Xxxxxxx France has been and is in
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material compliance with all applicable State, municipal and local
laws, statutes, ordinances and regulations and orders, directives and
decisions rendered by any ministry, department or administrative or
regulatory agency ("Environmental Laws") relating to the protection of
the environment, occupational health and safety or the manufacture,
processing, distribution, use, treatment, storage, disposal,
discharge, transport or handling of any pollutants, contaminants,
chemicals or industrial, toxic or hazardous wastes or substances
("Polluting Substances").
(b) Pastificio Xxxxxxx and/or Xxxxxxx France, respectively, have obtained
all Authorizations, certificates and registrations under Environmental
Laws (the "Environmental Permits") required for the operation of the
Business and each part thereof and are listed in Section 6.35 of the
Seller's Disclosure Schedule. Each Environmental Permit is valid,
effective and in good standing and shall not be adversely affected by
the entering into of this Agreement and the consummation of the
transactions contemplated in this Agreement; neither Pastificio
Xxxxxxx nor Xxxxxxx France is in default or breach of any
Environmental Permit and no proceeding is pending or threatened, to
revoke or limit any Environmental Permit.
(c) Neither Pastificio Xxxxxxx nor Xxxxxxx France has used or permitted to
be used, except in compliance with all Environmental Laws, any of its
respective property (including the leased properties) or facilities or
any property or facility that it previously owned or leased, to
generate, manufacture, process, distribute, use, treat, store, dispose
of, transport or handle any Polluting Substance.
(d) Neither Pastificio Xxxxxxx nor Xxxxxxx France has received any notice
of, nor have they been prosecuted for, an offense alleging
non-compliance with any Environmental Laws. There are no orders or
directions relating to environmental matters requiring any work,
repairs, construction, capital expenditures or other corrective
actions or to pay any amount of settlement, compensation or indemnity
for damages to the environment with respect to the Business or any
part thereof or any property of Pastificio Xxxxxxx or Xxxxxxx France,
nor has Pastificio Xxxxxxx, Xxxxxxx France or the Seller received
notice of any of the same.
(e) Neither Pastificio Xxxxxxx nor Xxxxxxx France has caused or permitted
the release, in any manner whatsoever, of any Polluting Substance on
or from, respectively, any of the properties of Pastificio Xxxxxxx
and/or Xxxxxxx France (including any of the leased properties) or
assets or any property or facility that were previously owned or
leased by Pastificio Xxxxxxx and/or Xxxxxxx France or any such release
on or from a facility owned or operated by other Persons for which
Pastificio Xxxxxxx and/or Xxxxxxx France are or may reasonably be
alleged to be liable. All Polluting Substances and all other wastes
and other materials and
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substances used in whole or in part by Pastificio Xxxxxxx or Xxxxxxx
France or resulting from the Business have been disposed of, treated
and stored in compliance with all Environmental Laws.
(f) Neither Pastificio Xxxxxxx nor Xxxxxxx France has carried out any
activity which may cause drainage or restoration in pristino
activities, on public or private areas, ordered by the competent
Authorities on the basis of the Environmental Laws, and provided for
as an obligation of the responsible of pollution.
(g) There are no environmental audits, evaluations, assessments or studies
relating to Pastificio Xxxxxxx, Xxxxxxx France or the Business (or any
part thereof) in the possession of or known to Pastificio Xxxxxxx,
Xxxxxxx France or the Seller which have not been delivered or fully
disclosed to the Purchaser in writing as of the date of this
Agreement.
H) PRODUCT LIABILITY
6.36 Product Liability.
(a) The Seller undertakes to assume any and all liabilities for damages to
third parties for which the Purchaser, Pastificio Xxxxxxx and/or
Xxxxxxx France may become liable pursuant to the Presidential Decree
n. 224, of May 24, 1988, with respect to the products manufactured,
sold or purchased prior to the Closing.
(b) All Products satisfied, and are in compliance with, the requirements
of the current Italian and EU regulations applicable to their
manufacture, packaging, labeling, marketing and use.
(c) Except for (i) warranties that are mandatory or implied under Law, and
(ii) written warranties made in contracts with customers, all of which
are identified in Section 6.36 of the Seller's Disclosure Schedule,
Pastificio Xxxxxxx and/or Xxxxxxx France have never given any
additional warranties for its Products.
I) MISCELLANEOUS MATTERS
6.37 Full Disclosure. Neither this Agreement nor any document to be
delivered pursuant to this Agreement by the Seller, or any certificate,
report, statement or other document furnished by the Seller, Pastificio
Xxxxxxx and/or Xxxxxxx France in connection with the negotiation of this
Agreement contains or will contain any untrue statement of a material fact
or omits or will omit to state a material fact necessary to make the
statements contained herein or therein not misleading. There has been no
event, transaction or information that has come to the attention of the
Seller, Pastificio Xxxxxxx and/or Xxxxxxx France that has not been
disclosed to the Purchaser in writing that could reasonably be expected to
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have a material adverse effect on the assets, business, earnings,
properties or conditions (financial or otherwise) of Pastificio Xxxxxxx
and/or Xxxxxxx France.
6.38 No Brokers. All negotiations relating to this Agreement and the
transactions contemplated hereby have been carried on without the
intervention of any person acting on behalf of the Seller or on behalf of
the Purchaser in such a manner as to give rise to any valid claim against
the Purchaser or the Seller, as case may be, for any brokerage or finder's
commission, fee or similar compensation.
6.39 Survival of Representations and Warranties. The representations and
warranties made in this Agreement its Enclosures, attachments and Exhibits
shall survive the Closing until the expiration of the terms set forth in
Section 10.3 below and shall be true and correct as of the Closing.
ARTICLE 7
REPRESENTATIONS AND WARRANTIES OF THE PURCHASER
The Purchaser makes the following representations and warranties and
acknowledges that the Seller is relying upon such representations and
warranties in connection with the sale of the Shares.
7.1 Due Incorporation; Authorization.
(a) The Purchaser is a corporation duly incorporated, validly existing and
in good standing under the laws of Italy and has full corporate power
and authority to conduct its business as it is actually conducted, to
enter into this Agreement and to carry out the transactions
contemplated herein.
(b) The entering into this Agreement and the performance of the
obligations contemplated herein shall not violate (i) any law or
regulation applicable to the Purchaser or any provision contained in
the By-laws of the Purchaser; or (ii) any undertaking or contractual
provision to which the Purchaser is a party or by which the Purchaser
is bound.
(c) The Purchaser has taken all the resolutions and other corporate or
other requisite actions necessary to grant the signatories of this
Agreement the appropriate powers to execute, deliver and perform all
the obligations of the Purchaser provided in this Agreement and to
make such provisions binding and enforceable on the Purchaser.
ARTICLE 8
NATURE OF REPRESENTATIONS AND WARRANTIES
8.1 Independent Obligations. The Seller and the Purchaser acknowledge and
agree that (i) the representations and warranties of the Seller contained
in this Agreement are autonomous and independent obligations and (ii) any
right or
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remedy of the Purchaser, however arising under this Agreement in connection
with any misrepresentation of facts or breach of any warranty, shall not be
subject to the statute of limitation periods and restrictions provided
under Article 1495 of the Civil Code, since such representations and
warranties are not a mere extension of the seller's guarantees set forth by
the Civil Code, being, as specified under (i) above, autonomous and
independent obligations.
ARTICLE 9
OTHER COVENANTS
9.1 Dividends. The Parties hereby agree that any dividend that the
shareholders' meeting of Pastificio Xxxxxxx and Xxxxxxx France might decide
to pay to the shareholders of Pastificio Xxxxxxx and Xxxxxxx France
following the date of this Agreement shall be exclusively for the benefit
of the Purchaser, even if the dividends to be distributed relate to
previous fiscal years.
9.2 Public Announcements. The Parties hereby agree that after the execution
of the Agreement Spigadoro Inc. will make a public announcement relating to
the terms and conditions of this Agreement.
ARTICLE 10
INDEMNIFICATION
10.1 Indemnification by the Seller.
10.1.1 General. From and after the Closing, the Seller agrees to indemnify
and hold harmless the Purchaser from all Losses or other events directly or
indirectly having a negative economic or financial impact to the detriment
of the Purchaser, Pastificio Xxxxxxx and Xxxxxxx France, as a result of, or
arising directly or indirectly out of, or in connection with: a) any
default to or breach of any obligation or covenant assumed by the Seller
pursuant to this Agreement or to any other document related hereto, b) any
breach or inaccuracy of any of the representations and warranties contained
in this Agreement or in any other document related hereto or c) all debts,
liabilities, supervening liabilities and other liabilities of any nature
(whether accrued, absolute, contingent or otherwise) of Pastificio Xxxxxxx
and/or Xxxxxxx France, arising out of circumstances occurred prior to the
Closing, even if not accounted for in the Financial Statements or, if
accounted for, limitedly to the amount exceeding the amount which was
accounted for, and even if the Loss emerged after the Closing; d) any
amount payable by Pastificio Xxxxxxx and Xxxxxxx France as a result of a
negative outcome of any of the pending or threatened litigation disclosed
in Section 6.19.1.
It is agreed that no payment shall be made by the Seller to the Purchaser
unless and until the indemnification amount due under the preceding
paragraph exceeds ITL. 500,000,000 and in such case only for the amount
exceeding ITL. 500,000,000.
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Furthermore it is agreed that the Seller shall not be obliged to pay any
indemnity under this Article 10 for any liabilities against the Indemnified
Party (as defined below) or Pastificio Xxxxxxx or Xxxxxxx France arising
from any fact or act which has been disclosed in the Seller's Disclosure
Schedules except for any amount payable by Pastificio Xxxxxxx and Xxxxxxx
France as a result of a negative outcome of any of the pending or
threatened litigation disclosed in Section 6.19.1.
It is agreed that the payment of the amount, if any, due from the Seller in
connection with the fulfillment of the indemnification obligation above
described, shall be made by same to the Purchaser or, on indication in
writing of the Purchaser, to Pastificio Xxxxxxx and/or Xxxxxxx France (with
the same satisfactory effect for the Seller).
10.1.2 Indemnification cap. It is agreed that the maximum potential
liability of the Seller and the Guarantor as indemnification is in the
aggregate ITL. 5,000,000,000 except for Taxes, Social Security and Health
Contributions for which no cap will be applied.
10.2 Indemnification by the Purchaser. The Purchaser agrees to indemnify
and hold harmless the Seller from all Losses suffered or incurred by the
Seller as a result of, or arising directly or indirectly out of, or in
connection with:
(a) any breach by the Purchaser or any inaccuracy of any Purchaser's
representation or warranty contained in this Agreement or in any other
document related hereto;
(b) any breach or non-performance by the Purchaser of any covenant or
obligation to be performed by it that is contained in this Agreement
or in any other document related hereto.
10.3 Duration of the indemnification obligations of the Seller. The
indemnification obligations hereto shall apply only to Claims of Indemnity,
as defined below, of which the Seller, has received written notice prior to
the expiration of the second anniversary of the Closing except for Claims
of Indemnity relating to Section 6.33 of this Agreement for which written
notice must be received by the Seller prior to the expiration of applicable
statute of limitation and for any Claims of Indemnity arising from letter
(d) of the first paragraph of Section 10.1.1 (pending or threatened
litigation) for which the Claims of Indemnity shall be received by the
Seller within one year from the day on which said amounts became finally
due.
10.4 Procedure for Indemnification
10.4.1 Claim of Indemnity. In the event that a Party (hereinafter, the
"Indemnified Party") shall become aware of any claim, proceeding or other
matter
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(hereinafter, a "Claim of Indemnity") in respect of which another Party
(hereinafter, the "Indemnifying Party") agreed to indemnify the Indemnified
Party pursuant to this Agreement, the Indemnified Party shall promptly give
written notice thereof to the Indemnifying Party. Such notice shall specify
whether the Claim of Indemnity arises as a result of a third party claim
against the Indemnified Party or Pastificio Xxxxxxx or Xxxxxxx France
(hereinafter, a "Third Party Claim") or whether the Claim of Indemnity does
not so arise (hereinafter, a "Direct Claim"), and shall also specify with
reasonable particularity (to the extent that the information is available)
the factual basis for the Claim of Indemnity and the amount of the Claim of
Indemnity, if known, together with copy of any relevant documents to the
extent available.
10.4.2 Direct Claims. With respect to any Direct Claim, following receipt
of notice from the Indemnified Party by the Indemnifying Party, of a Claim
of Indemnity, if both Parties agree at or prior to the expiration of a 20
day period after receipt by the Indemnifying Party of a Claim of Indemnity
(or any mutually agreed upon extension thereof) to the validity and amount
of such Claim of Indemnity, the Indemnifying Party shall immediately pay to
the Indemnified Party the full agreed amount of the Claim of Indemnity,
failing which the Indemnified Party may litigate the dispute in arbitration
under Article 12 hereof.
10.4.3 Third Party Claim. With respect to any Third Party Claim, the
following procedure shall apply. Promptly after receipt by an Indemnified
Party of notice of an action arising from a Third Party Claim such
Indemnified Party shall, if a claim in respect thereof is to be made
against Indemnifying Party give notice to the Indemnifying Party of such
action, but the failure so to notify the Indemnifying Party shall not
relieve it of any liability that it may have to any Indemnified Party
except to the extent the Indemnifying Party demonstrates that the defense
of such action is prejudiced thereby. In case any such action shall be
brought against an Indemnified Party and it shall give notice to the
Indemnifying Party of the commencement thereof, the Indemnifying Party
shall be entitled to participate therein and, to the extent that it shall
elect, to assume the defense thereof with its counsel and, after notice
from the Indemnifying Party to such Indemnified Party, of its election so
to assume the defense thereof, the Indemnifying Party shall not be liable
to such Indemnified Party for any fees of other counsel or any other
expenses, in each case subsequently incurred by such Indemnified Party in
connection with the defense thereof. If Indemnifying Party assumes the
defense of such an action, (a) no compromise or settlement thereof may be
effected by the Indemnifying Party without the Indemnifying Party's consent
(which shall not be unreasonably withheld) unless (i) there is no finding
or admission or any violation of law or any violation of the rights of any
person and no effect on any other claims that may be made against the
Indemnified Party or (ii) the sole relief provided is monetary damages that
are paid in full by the Indemnifying Party and (b) the
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Indemnifying Party shall have no liability with respect to any compromise
or settlement thereof effected without its consent (which shall not be
unreasonably withheld).
10.5 Method to calculate the Indemnification. For the purposes of this
Section 10 the liability of the Indemnifying Party shall be net of any tax
benefit effectively realized by the Indemnified Party in connection with
the Indemnified Loss.
10.6 Payment of Amounts. Payments of all amounts owed by the Indemnifying
Party pursuant to this Article 10 shall be timely made, when they become
due.
10.7 No Waiver. No investigations or due diligence made by or on behalf of the
Purchaser, pursuant to this Agreement or otherwise, will have the effect of
waiving, diminishing the scope of, or otherwise affecting any representations,
warranties, covenants or indemnities made in this Agreement, nor will such
investigations impair any remedy available to the Purchaser pursuant to the
applicable Law.
ARTICLE 11
TERMINATION OF THIS AGREEMENT AND PENALTY
11.1 Termination of this Agreement and Penalty. (a) If any of the two
conditions precedent provided by Section 4.1 hereof or any
obligation or covenant of the Seller to be performed at or prior to
Closing as provided by Article 3, shall not have been occurred or
performed or fulfilled in any material respect by such time by the
Seller, the Purchaser may terminate this Agreement by notice in
writing to the Seller, and the Seller shall immediately return to
the Purchaser the down payment of ITL. 5,000,000,000 provided by
Article 2.2 and shall immediately pay to the Purchaser an additional
amount of ITL. 5,000,000,000 as penalty. The re-payment of the down
payment is secured with the first demand bank guarantee provided by
Section 2.2 hereof and attached hereto as Enclosure 1; (b) if any of
the conditions precedent provided by Sections 4.2, 4.3 and 4.4
hereof shall not have been occurred or performed or fulfilled in any
material respect by such time by the Seller, the Purchaser may
terminate this Agreement by notice in writing to the Seller and the
Seller shall immediately return to the Purchaser the down payment of
ITL. 5,000,000,000 provided by Section 2.2 , without the payment of
any penalty. The re-payment of the down payment is secured with the
first demand bank guarantee provided by Section 2.2 hereof and
attached hereto as Enclosure 1; (c) if any obligation or covenant of
the Purchaser to be performed at or prior to Closing as provided by
Article 3 shall not have been performed or fulfilled in any material
respect by such time by the Purchaser, the Seller will be entitled
to definitively hold the down payment of ITL. 5,000,000,000 as
penalty and the Seller may terminate this Agreement by notice in
writing to the Purchaser.
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ARTICLE 12
GUARANTEE
The Guarantor hereby jointly and severally with the Seller guarantees all
the obligations, representations, warranties and covenants of the Seller
prior to, from and after the Closing under this Agreement. The
indemnification clause provided for in Article 10 and in particular,
Section 10.1.2 of this Agreement shall apply to the guarantee of the
Guarantor.
ARTICLE 13
ARBITRATION
13.1 Resolution of disputes. Any and all disputes arising out of or in
connection with this Agreement shall be finally settled by three
arbitrators under the Rules of National Arbitration of the Italian
Arbitration Association - Associazione Italiana per l'Arbitrato ("AIA
Rules"), in force at the time the dispute has arisen.
13.2 Selection of Arbitrators. Each Party shall appoint one arbitrator and
the third arbitrator, which will act as President of the Arbitration Panel,
will be appointed by mutual consent by the two arbitrators appointed by the
Parties. If the two arbitrators appointed by the Parties will not appoint
the third arbitrator within 30 days from the date of appointment of the
last of the arbitrators, the President shall be directly appointed by the
AIA Court. If the appointment of an arbitrator is not effected within the
terms provided for by the AIA Rules, the arbitrator shall be appointed by
the AIA Court. The Seller and the Guarantor shall be deemed as one party
for the purpose of this clause and accordingly they shall be entitled to
appoint only one of the three arbitrators.
13.3 Place of Arbitration and Language. The arbitration will take place in
Milan, in the English language.
13.4 Costs of Arbitration. The cost of the arbitration will be assessed by
the arbitrators who will be required to make such cost allocation with
respect to any award issued.
13.5 Formal Arbitration (Arbitrato Rituale). The arbitrators shall decide
the dispute according to Italian substantive and procedural law (articles
806 and following of Italian Code of Civil Procedure) and the arbitral
award will be binding upon the Parties.
ARTICLE 14
MISCELLANEOUS
14.1 Notices. (1) Any notice or other communication to be given hereunder
shall be in writing and shall be delivered in person, transmitted by fax,
or sent by
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xxxxxxxxxxxxx xxxxxxx service or registered mail, to the following
addresses:
If to the Seller:
Starfood Italia S.r.l.
Xxx Xxxxx 00
Xxxxxxx (Xxxxx)
Fax: 0000.000000
With copy to:
Avv. Xxxx Xxxxxxx
Xxx Xxxxx 0
00000 Xxxxxx
Fax: 00.00000000
If to the Purchaser:
Xxxxxxx S.p.A.
Xxx XX Xxxxxxxx 0/X
Xxxxxx Xxxxxx (Xxxxxxx)
Fax: 000.0000000
With copy to:
Avv. Xxxxx Xxxxxxx
Xxx xxxxx Xxxxxxx Xxxxxxx 00
00000 Xxxx
Fax: 00.0000000
If to the Guarantor:
Xxxx Xxxxxxx
Xxxxx Xxxxxxxxx 0
Xxxxx
Fax: 0000.000000
(2) Any such notice or other communication shall be deemed to have been
given upon its actual receipt by the addressee.
(3) Any Party may at any time change its address for notices by giving
notice to the other Party in accordance with this Section 13.1.
14.2 Expenses. All the costs sustained by each Party in connection with the
preparation and execution of this Agreement (including the consultants)
shall be exclusively borne by such Party. Any cost and expense (including
the notarial fees) to be borne in connection with the transfer of the
Shares and the Remaining Participation shall be borne by the Purchaser.
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14.3 Assignment, No Third Party Beneficiaries. This Agreement and all of
the provisions hereof shall be binding upon and inure to the benefit of
each of the Parties hereto and their respective successors and assigns, and
such successors and permitted assigns shall have the benefit of the
Indemnifications set forth in Section 10 hereof.
14.4 Governing Law. This Agreement shall be governed by, construed and
enforced in accordance with the laws of Italy.
14.5 Integration. This Agreement, together with the Schedules hereto and
the other documents contemplated herein, constitutes the entire agreement
of the Parties and supersedes all prior agreements and understandings, both
written and oral, of the Parties with respect to the subject matter hereof.
14.6 Further Actions. Each party shall sign any further document and
fulfill any further obligation and do all such other acts and things as the
other Party may reasonably request, in order to give full effect and
implementation to this Agreement.
14.7 Amendments and Waivers. No amendment or waiver of any provision of
this Agreement shall be binding on the Party against which such amendment
or waiver is claimed, unless consented to in writing by same. The waiver of
any provision of this Agreement shall not constitute a waiver of any other
provision, failing an express statement to such effect.
14.8 Language. This Agreement shall be executed in the English language.
14.9 Counterparts. This Agreement may be executed in counterparts, each of
which shall constitute an original and all of which taken together shall
constitute one and the same instrument.
IN WITNESS WHEREOF, the Parties have executed this Agreement as of the date
first above written.
/s/ Xxxxx Xxxxxxx /s/ Xxxx Xxxxxxx /s/ Xxxx Xxxxxxx
----------------- ---------------------- ----------------
Xxxxxxx S.p.A. Starfood Italia S.r.l. Xxxx Xxxxxxx
By: Xxxxx Xxxxxxx By: Xxxx Xxxxxxx
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