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EXHIBIT 2.7
CONFORMED COPY
11 FEBRUARY, 1998
AGREEMENT
FOR THE SALE AND PURCHASE OF
ALL THE ISSUED SHARE CAPITAL OF
ZINCOCELERE SPA
Weil, Gotshal & Xxxxxx
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CONTENTS
SECTION PAGE
SECTION 1 INTERPRETATION......................................................1
SECTION 2 SALE AND PURCHASE OF THE SHARES AND ASSIGNMENT OF THE LOANS.........7
SECTION 3 CONDITION PRECEDENT.................................................8
SECTION 4 CONSIDERATION.......................................................9
SECTION 5 PURCHASER AND SELLER TITLE WARRANTIES AND LIMITATIONS..............10
SECTION 6 WARRANTIES AND LIMITATIONS.........................................12
SECTION 7 INSTITUTIONAL COVENANTS AND LIMITATIONS AND VGL GUARANTEE..........18
SECTION 8 PRE-COMPLETION UNDERTAKINGS AND DELIVERIES.........................19
SECTION 9 TERMINATION, RESCISSION AND EXCLUSIVE REMEDY.......................21
SECTION 10 COMPLETION........................................................22
SECTION 11 WARRANTORS TAX INDEMNITY..........................................24
SECTION 12 PROTECTIVE COVENANTS..............................................27
SECTION 13 ENTIRE AGREEMENT..................................................28
SECTION 14 VARIATION.........................................................28
SECTION 15 ASSIGNMENT........................................................28
SECTION 16 ANNOUNCEMENTS.....................................................29
SECTION 17 COSTS.............................................................29
SECTION 18 PARTIAL INVALIDITY................................................30
SECTION 19 REMEDIES AND WAIVERS..............................................30
SECTION 20 FURTHER ASSURANCE.................................................30
SECTION 21 NOTICES...........................................................30
SECTION 22 GOVERNING LAW.....................................................32
SECTION 23 ARBITRATION.......................................................32
SECTION 24 COUNTERPARTS......................................................32
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SCHEDULE 1 - THE SELLERS.....................................................31
SCHEDULE 2 - THE COMPANY AND THE SUBSIDIARIES................................32
SCHEDULE 3 - THE COMMERCIAL WARRANTIES.......................................35
SCHEDULE 4 - PROPERTY DETAILS................................................53
SCHEDULE 5 - LOAN WARRANTIES.................................................54
Agreed form documents:
"A" Escrow Agreement
"B" Resignation Letters
"C" Legal Opinion relating to ECSA
"D" Pro-Forma Estimated Net Debt
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THIS AGREEMENT is made on 11 February, 1998 among:
(1) the persons listed in Schedule 1 hereto (the "SELLERS");
(2) Viasystems S.r.l., a company incorporated in Italy (the "PURCHASER");
(3) Viasystems Group Limited, a company incorporated in England and Wales
with registered number 3327056 ("VGL");
(4) NatWest Ventures (Nominees) Limited ("NWV NOMINEES"), a company
incorporated in England and Wales;
(5) Citicorp Capital Investors Europe Limited, a company incorporated in
Delaware ("CCIEL");
(6) CVC European Equity Partners, L.P., a Delaware limited partnership
("CVCEEP");
(7) CVC European Equity Partners (Jersey), L.P. a limited partnership
organized in Jersey ("CVCEEP JERSEY"); and
(8) NatWest Ventures Investments Limited, a company incorporated in England
and Wales ("NWV INVESTMENTS").
WHEREAS:
(A) The Sellers are the legal and beneficial owners of all of the issued
and outstanding share capital of the Company;
(B) The Lenders are the legal and beneficial owners of the Loans;
(C) Without prejudice to its right to rely upon the Warranties and upon the
undertakings of the Sellers and the Institutions set out in this
Agreement, the Purchaser acknowledges it has conducted, together with
advisers of its own choice, a due diligence exercise in respect of the
Group;
(D) The Sellers wish to sell and, in reliance upon (inter alia) the
Warranties and upon the undertakings of the Sellers and the
Institutions set out in this Agreement, the Purchaser wishes to
purchase all of the issued share capital of the Company for the
consideration and upon the terms set out in this Agreement; and
(E) The Lenders wish to assign and, in reliance upon (inter alia) the
Warranties and undertakings of the Lenders set out in this Agreement,
VGL wishes to accept an assignment of the Loans for the consideration
and upon the terms set out in this Agreement.
IT IS AGREED as follows:
SECTION 1 INTERPRETATION
CLAUSE 1.1 In this Agreement:
"ACCOUNTANTS" bears the meaning ascribed to it in Clause 4.2(a);
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"ACCOUNTS" means the audited consolidated accounts of the Group for each of the
years ended at 31 December, 1995 and at the Last Accounts Date, and in relation
to each such financial year of the Group means:
(a) the audited consolidated balance sheet of the Company and its
Subsidiaries as at the Accounts Date in respect of that financial year;
(b) the audited consolidated profit and loss account of the Company and its
Subsidiaries in respect of that financial year; and
(c) the audited consolidated statements of cash flow of the Company and its
Subsidiaries in respect of that financial year,
together with any notes, directors' and auditors' reports or statements
included in them;
"ACCOUNTS DATE" means, in relation to any financial year of any Group Company,
the last day of that financial year;
"1997 ACCOUNTS" means the audited consolidated accounts (i.e., consolidated
balance sheet, profit and loss account, statement of cash flows, together with
notes, director's and auditor's reports and statements) of the Group for the
financial year ended at 31 December, 1997;
"AFFILIATE" means with respect to any person, an individual, corporation,
partnership, firm, association, unincorporated organisation or other entity
directly or indirectly controlling, controlled by, or under common control with,
such person;
"APPLICABLE SHARE" bears the meaning ascribed to it in Clause 4.4;
"APPLICABLE INSTITUTIONAL PERCENTAGE" bears the meaning ascribed to it in Clause
5.4;
"COMMERCIAL WARRANTY CLAIM" means a claim for a breach of a Commercial Warranty;
"COMMERCIAL WARRANTIES" means the warranties set out in Schedule 3 made by the
Warrantors in accordance with Clause 6.1.1(a), each a "COMMERCIAL WARRANTY";
"COMPANY" means Zincocelere SpA, a company incorporated in Italy, whose details
appear in Part A of Schedule 2 to this Agreement;
"COMPETITION CONDITION" means the Condition Precedent specified in Clause
3.1(a);
"COMPLETION" means completion of the sale and purchase of the Shares and the
assignment of the Loans pursuant to Section 10 of this Agreement;
"COMPLETION AND POST-COMPLETION COVENANTS" means the covenants of the parties
set forth in Sections 2, 4 , 10, 12, 17 and 20 and Clauses 6.12 and 6.13;
"COMPLETION DATE" means 12.01a.m. (Milan, Italy local time) on the date
specified for Completion in Clause 10.1;
"CONDITION PRECEDENT" means the condition precedent set forth in Section 3;
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"CONTROL, CONTROLLING AND CONTROLLED" has the meaning indicated in article 2359,
paragraphs 1 and 2, of the Italian Civil Code;
"COSTS" means liabilities, losses, damages, reasonably incurred costs (including
legal costs) and reasonably incurred expenses, in each case of any nature
whatsoever;
"COVENANTS" means any of the covenants of the parties set forth in this
Agreement, including without limitation the Institutional Warranty Covenant, the
Pre-Completion Commercial Covenants and the Fundamental Covenants;
"COVENANT CLAIM" means any claim for breach of the Covenants;
"CVC ENTITIES" means CCIEL, CVCEEP and CVCEEP Jersey;
"CVC LENDERS" means jointly and severally CCIEL, CVCEEP and CVCEEP Jersey;
"DISCLOSURE LETTER" means the letter from the Warrantors to the Purchaser
executed and delivered on the date of this Agreement making certain disclosures
against the Commercial Warranties and the Tax Indemnity;
"DISCLOSURE LETTER AS UPDATED" bears the meaning ascribed to it in Clause 6.1.2;
"ECSA" means European Circuits SA, a company incorporated in Luxembourg;
"ESCROW AGENT" means National Westminster Bank plc Princes Street London branch;
"ESCROW AGREEMENT" means the escrow agreement to be entered into at Completion
in the agreed form marked "A";
"ESCROW SUM" means 2,000,000,000 Lire or such sum as remains at any time
standing to the credit of the Escrow Account;
"ESTIMATED NET DEBT" bears the meaning ascribed to it in Clause 4.2(a);
"FUNDAMENTAL COVENANTS" means collectively the Pre-Completion Primary Covenants,
Completion and Post-Completion Covenants and the Institutional Seller Covenants;
"FUNDAMENTAL COVENANT CLAIM" means any claim for breach of any of the
Fundamental Covenants;
"XXXXXX XXXXXXX" means Gianni, Origoni & Partners of City Tower, 00 Xxxxxxxxxx
Xxxxxx Xxxxxx XX0X 0XX;
"GROUP" means the Company and the Subsidiaries;
"GROUP COMPANY" means the Company or any other member of the Group at the date
hereof;
"ITALIAN GAAP" means the accounting principles set forth or contained at the
date hereof in the Italian Civil Code in any applicable Italian law as
interpreted by the Italia Accounting Profession ("Principi Contabili Predisposti
xxx Xxxxxxxxx Nazionale dei Dottori Commercialisti e dei Ragionieri");
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"INDEBTEDNESS" shall mean, with respect to each Group Company, (i) all
obligations for borrowed money, (ii) all obligations evidenced by bonds,
debentures, notes or other similar instruments, (iii) all obligations in respect
of letters of credit, other than trade letters of credit, or bankers' acceptance
or similar instruments (or reimbursement obligations with respect thereto), (iv)
all obligations to pay the deferred purchase price of property or services,
except trade credit incurred in the ordinary course of business consistent with
past practices (which for the avoidance of doubt may include the payment of
trade creditors past their due date) and except ordinary course obligations
requiring payment (without interest) not more than twelve months from the date
of purchase, (v) all obligations as lessee under any capital lease, (vi) all
indebtedness of others secured by a security interest (other than a lien arising
by operation of law or a retention of title claim, in each case arising in the
ordinary course of business with respect to items covered by paragraph (iv)) on
any asset of any Group Company, whether or not such indebtedness is assumed,
provided that, for the purpose of determining the amount of any such
indebtedness, if recourse with respect to such indebtedness is limited to the
fair market value of such asset, the amount of such indebtedness shall be
limited to the fair market value of such asset, (vii) all indebtedness of others
guaranteed by such person or entity, (viii) to the extent not otherwise
included, aggregate net obligations under any interest rate swap agreements,
currency swap agreements (other than those entered into with the object of
hedging the Group's exposure to movements in foreign currency arising from the
Group's expected or contracted purchases of raw materials and the sale of
finished goods in another currency) and other similar agreements or arrangements
designed to protect such person or entity against fluctuations in interest rates
or currency values (other than those entered into with the aforementioned
object) or the price of any commodity used in the business of such person or
entity and (ix) an amount equal to the provision of LIT 270 million made in
respect of the tax liability arising on the disposal of APL Italia S.r.l. by the
Company; and all penalties and fees accruing in respect of any of (i) to (viii)
above;
"INSTITUTIONS" means together the NWV Entities and the CVC Entities;
"INSTITUTIONAL SELLER COVENANTS" bears the meaning ascribed to it in Clause 7.1;
"INSTITUTIONAL COVENANT CLAIMS" means any claim for breach of an Institutional
Seller Covenant;
"INSTITUTIONAL SELLER" means ECSA;
"INSTITUTIONAL TITLE CLAIM" means any claim for breach of the Title Warranties
given by each of the Institutions on behalf of the Institutional Seller;
"INSTITUTIONAL WARRANTY COVENANT" bears the meaning ascribed to it in Clause
7.2;
"INTELLECTUAL PROPERTY RIGHTS" means patents, trade marks, service marks, trade
names, design rights, copyright (including rights in computer software), rights
in know-how and other intellectual property rights, in each case whether
registered or unregistered and including applications for the grant of any such
rights and all rights or forms of protection having equivalent or similar effect
anywhere in the world;
"LAST ACCOUNTS" means, in relation to any Group Company, the Accounts of that
company in respect of its financial year ended on the Last Accounts Date;
"LAST ACCOUNTS DATE" means 31 December 1996;
"LENDER PRE-COMPLETION PRIMARY COVENANT CLAIM" means any claim for a breach of
the Covenants of the Lenders set forth in Clause 8.4;
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"LENDERS" means NWV Nominees and the CVC Lenders;
"LIRE" means the lawful currency of the Republic of Italy;
"LOANS" means the subordinated loan agreement between the Company and the
Lenders dated 27 February 1996 and including for the avoidance of doubt the
loans (and interest accrued but unpaid on the Completion Date thereon) due from
the Company to the Lenders thereunder;
"LOAN PURCHASE PRICE" bears the meaning ascribed to it in Clause 4.3;
"LOAN WARRANTIES" means the Warranties set out in Schedule 5 made by the Lenders
in accordance with Clause 6.1(b);
"LOAN WARRANTY CLAIM" means any claim for breach of the Loan Warranties;
"MANAGEMENT ACCOUNTS" means the unaudited consolidated management accounts of
the Group for the period commencing on 1 January 1997 and ending on the
Management Accounts Date;
"MANAGEMENT ACCOUNTS DATE" means November 30, 1997;
"MANAGEMENT AGREEMENT" means the Interim Management Agreement dated 27 February
1996 between Olivetti and the Institutional Seller;
"MANAGEMENT OPTIONS" means options over issued shares in the Company owned by
the Institutional Seller granted to the Warrantors;
"NWV ENTITIES" means NWV Nominees and NWV Investments;
"NET DEBT" means the aggregate amount of the Indebtedness of the Group (other
than the Loans), together with the accrued and unpaid Net Interest thereon, as
of the Completion Date, less the available book cash or cash equivalent balances
of the Group as of the Completion Date;
"NET INTEREST" means accrued and unpaid interest on Indebtedness of the Group
(other than the Loans) as of the Completion Date less any amount in respect of
such accrued and unpaid interest which any Group Company is contractually
entitled to receive reimbursement from a government entity upon the Group's
payment of such interest, but only to the extent of the entitled reimbursement;
"PRE-COMPLETION COMMERCIAL COVENANTS" means the covenants of the Warrantors set
forth in Clauses 8.1 and 8.2;
"PRE-COMPLETION PRIMARY COVENANTS" means the covenants of the Sellers set forth
in Clause 8.3;
"PROPERTIES" means the freehold and leasehold properties of the Group, brief
details of which are set out in Schedule 4;
"PURCHASER'S GROUP" means VGL and its Affiliates;
"PURCHASER'S SOLICITORS" means Weil, Gotshal & Xxxxxx of Xxx Xxxxx Xxxxx, Xxxxxx
XX0X 0XX;
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"RELEVANT CLAIM" any claim for breach of any of the terms and conditions of this
Agreement and except a Title Claim or a Fundamental Covenant Claim;
"RESERVED CLAIM AMOUNT" bears the meaning ascribed to it in Clause 6.4(a);
"SCHEDULES" means Schedules 1-5 to this Agreement and Schedule shall be
construed accordingly;
"SECURITY INTEREST" means any security interest of any nature whatsoever
including, without limitation, any mortgage, charge, pledge, lien, assignment by
way of security or other encumbrance;
"SELLERS' SOLICITORS" means Macfarlanes of 00 Xxxxxxx Xxxxxx, Xxxxxx XX0X 0XX;
"SEVERAL FUNDAMENTAL COVENANT" bears the meaning ascribed thereto in Clause
6.8(b);
"SHARES" means all the issued and fully paid ordinary shares, par value 1,000
Lire each in the capital of the Company;
"SHARE PURCHASE PRICE" bears the meaning ascribed to it in Clause 4.1;
"SUBSIDIARIES" means the subsidiaries of the Company, details of which are set
out in Part B of Schedule 2;
"SUBSIDIARY" of a company or corporation means any company or corporation:
(a) which is controlled, directly or indirectly, by the first-mentioned
company or corporation for the purposes of Article 2359, paragraphs 1
and 2, of the Italian Civil Code; or
(b) which is a subsidiary of another subsidiary of the first-mentioned
company or corporation;
and, for these purposes, a company or corporation shall be treated as being
controlled by another if that other company or corporation is able to direct its
affairs and/or to control the composition of its board of directors or
equivalent body.
"TAX" means with respect to each Group Company, as applicable, any and all
state, local or foreign tax and duties including, but not limited to, those
relating to income, gross receipts, value added, importation and exportation of
goods and services, registration of acts or documents, license, payroll,
employment, severance, stamp, occupation, environment, capital stock, franchise,
profits, social security (or similar), unemployment disability, real property,
personal property or assets;
"TAXATION AUTHORITY" has the meaning given to it in the Tax Indemnity;
"TAX INDEMNITY" means the indemnity as to Tax matters contained in Section 11;
"TAX INDEMNITY CLAIM" means any claim for breach of the Tax Indemnity;
"TAX WARRANTIES" means those of the Commercial Warranties set out in part D of
Schedule 3;
"THIRD PARTY CLAIM" bears the meaning ascribed to it in Clause 6.12;
"TITLE CLAIM" means any claim for breach of any of the Title Warranties;
"TITLE WARRANTY OR WARRANTIES" means each of the Loan Warranties and the
warranties set out in Clause 5.2.1, Clause 5.2.2 and Clause 5.3;
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"WARRANTIES" means all of the Title Warranties and the Commercial Warranties;
"WARRANTORS" means the all of the Sellers other than the Institutional Seller;
"WARRANTOR TITLE CLAIM" means any claim for breach of any of the Title
Warranties given by each of the Warrantors.
CLAUSE 1.2 In this Agreement, unless the context otherwise requires:
(a) references to "PERSONS" shall include individuals, bodies corporate
(wherever incorporated), unincorporated associations and partnerships;
(b) the headings are inserted for convenience only and do not affect the
interpretation of this Agreement;
(c) any reference to an "ENACTMENT" is a reference to it as from time to
time, but on or prior to the date hereof, amended, consolidated or
re-enacted (with or without modification) and includes all instruments
or orders on or prior to the date hereof made under such enactment;
(d) for the purposes of any statement qualified by the expression "TO THE
BEST KNOWLEDGE OF THE WARRANTORS" or "SO FAR AS THE WARRANTORS ARE
AWARE" or any similar expression the Warrantors shall only be deemed to
have such knowledge or awareness if (i) any of the Warrantors have
actual knowledge or awareness of the relevant matter or (ii) any Group
Company has received or generated written documentation relating to the
relevant matter;
(e) unless otherwise specifically provided herein as to a particular
matter, any matter or set of circumstances (including the absence of
such matter or set of circumstances) qualified as having or not having,
as the case may be, a "MATERIAL ADVERSE EFFECT" means any of the
foregoing whose presence or absence causes a loss to or diminution in
the value of the Group in an amount of at least 5,000,000,000 Lire;
(f) reference to any act being "THREATENED" shall be construed as a
reference to an act which is threatened in writing or otherwise in
circumstances where the Warrantors reasonably believe that the
threatened act will be carried out;
(g) any reference to a document "IN THE AGREED FORM" is to the form of the
relevant document agreed between the parties and for the purpose of
identification initialled by each of them or on their behalf (in each
case with such amendments as may be agreed by or on behalf of the
Sellers and the Purchaser); and
(h) any reference to the plural noun shall import the singular and vice
versa.
SECTION 2. SALE AND PURCHASE OF THE SHARES AND ASSIGNMENT OF THE LOANS
CLAUSE 2.1 Subject to the terms of this Agreement and in particular subject
to the fulfilment of the Condition Precedent, the Sellers hereby sell, and the
Purchaser hereby purchases, the Shares, together with all rights attaching to
the Shares, free from all security interests, options, equities, claims or other
third party rights (including rights of pre-emption) of any nature whatsoever.
CLAUSE 2.2 Subject to the terms of this Agreement and in particular subject to
the fulfilment of the Condition Precedent, the Lenders hereby assign and
transfer to VGL, and VGL hereby accepts
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the assignment and transfer of, the Loans, together with all rights attaching to
the Loans, free from all security interests, options, equities, claims or other
third party rights (including rights of pre-emption) of any nature whatsoever.
For the avoidance of doubt, without prejudice to the Loan Warranties, the
assignment and transfer of the Loans shall be without recourse to the Lenders.
1.1 SECTION 3 CONDITION PRECEDENT
CLAUSE 3.1 The obligations of the Purchaser and VGL under Clauses 2.1 and 2.2
and Section 10 are conditional upon:
(a) the Purchaser having received the clearance of the Italian Anti-Trust
Authority under Article 16 of Law 287/90 of the Italian Civil Code or all
applicable waiting periods thereunder having expired so as to permit the sale of
the Shares on the terms and conditions set forth under this Agreement; and
(b) as at the date of satisfaction of the condition referred to in (a) above
and on the Completion Date;
(i) the Commercial Warranties as qualified by the Disclosure Letter being true
in all material respects as of the date of this Agreement;
(ii) the Commercial Warranties as qualified by the Disclosure Letter as Updated
being true in all material respects at Completion as if made on and as of that
date;
(iii) the Disclosure Letter as Updated containing no material disclosure which
was not disclosed in the Disclosure Letter;
(iv) all Title Warranties being true in all respects as of the date of this
Agreement and (except as otherwise specifically limited as of a prior date in
the Title Warranties) on and as of the Completion Date, as if made on and as of
that date;
(v) the Sellers, the Lenders and the Institutions, as applicable, together
having performed or complied in all material respects with those of their
respective Covenants required to be performed or complied with by the Sellers,
the Lenders and the Institutions, as applicable, on and as of the Completion
Date; and
(vi) there not having occurred since the date of this Agreement any event or
circumstance that has had, or could reasonably be expected to result in, a
material adverse effect on the operations, liabilities, assets, results of
operations or financial condition of the Group. For the purposes of this clause
an event or circumstance shall not include the following occurrences:
(aa) any change in the business climate in Italy, including, but not limited to,
any political, economic or financial changes; or
(bb) any change in the printed circuit board industry in general, including, but
not limited to, those changes affecting selling prices for the Group's products
and the Group's raw material availability or costs; or
(cc) any change in stock or debt market conditions, whether in Italy or
elsewhere, or in the level of exchange or interest rates; or
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(dd) any losses of customers arising solely from the proposed acquisition of the
Group by a member of the Purchaser Group; or
(ee) any losses of customers (net of any gains of customers) of the Group which
are normal in the context of the Group's trading.
CLAUSE 3.2 The obligation of the Sellers under Clause 2.1 and the obligations of
the Lenders under Clause 2.2 will be conditional on the satisfaction of the
Competition Condition.
CLAUSE 3.3 Each of the parties undertakes to use all reasonable endeavours to
ensure that the Competition Condition is fulfilled as soon as reasonably
practicable after the date of this Agreement and in any event by 13 March 1998.
SECTION 4 CONSIDERATION
CLAUSE 4.1 The total consideration for the sale of the Shares (the "SHARE
PURCHASE PRICE") to be paid by the Purchaser to the Sellers pursuant to Clauses
10.5.1(a) and (b) shall be 180,000,000,000 Lire less the aggregate of:
(a) Net Debt; and
(b) the Loan Purchase Price.
CLAUSE 4.2
(a) On or prior to the third business day after satisfaction of the
Competition Condition, the Sellers shall deliver to the Purchaser a
good faith computation of the Net Debt (the "ESTIMATED NET DEBT")
prepared by the Sellers in conjunction with the Milan office of Xxxxxx
Xxxxxxxx S.p.A. (the "ACCOUNTANTS").
(b) The Sellers and the Purchaser shall proceed to Completion using the
Estimated Net Debt as Net Debt for the purposes of calculating the
amount of the Share Purchase Price to be paid on Completion. If, within
30 days of Completion, the Purchaser disputes the Estimated Net Debt,
and the parties are unable to resolve such dispute within 35 days of
Completion, the determination of the Net Debt shall be referred by any
party for resolution to the Accountants prior to the 36th day following
Completion. The Accountants will act in accordance with Article 1349 of
the Italian Civil Code and make a determination of the amounts in
dispute respecting the Net Debt, which determination will be (i) in
writing, (ii) furnished to each of the parties hereto as promptly as
practicable after the items in dispute have been referred to the
Accountants and, in any event, within 60 days of Completion, (iii) made
neither on a discretional nor on an equitable basis but rather in
accordance with this Agreement, and (iv) conclusive and binding on the
parties hereto. The Accountants, in their sole discretion, will
determine (A) the nature, format, and limitations of the evidence that
the Purchaser and the Sellers may submit to the Accountants for
consideration in connection with the resolution of any disagreement
with the calculation of the amounts in dispute respecting the Net Debt,
(B) the rules and procedures for submitting such evidence, and (C) the
personnel of the Accountants who will review such evidence and resolve
such disagreement. The fees and expenses of the Accountants will be
borne as the Accountants shall direct and otherwise as to one-half by
the Purchaser and one-half by the Sellers. The Purchaser and each
Seller will use commercially reasonable efforts to cause the
Accountants to render their decision as soon as reasonably practicable,
including without limitation by promptly complying with all reasonable
requests by the Accountants for
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information, books, records, and similar items and so as to comply with
the timetable established by this Clause.
(c) If it is determined by the Accountants pursuant to Clause 4.2(b) that
the Net Debt is greater than the Estimated Net Debt the Warrantors and
the Institutions (to the extent of their respective Applicable Shares
and as between the Institutions, to the extent of their respective
Applicable Institutional Percentage) hereby agree upon demand
immediately to reimburse the Purchaser on a Lire for Lire basis in
respect of the amount by which the Estimated Net Debt was less than the
actual amount of Net Debt. Similarly, in the event it is determined by
the Accountants pursuant to Clause 4.2(b) that the Net Debt is less
than the amount of the Estimated Net Debt the Purchaser hereby agrees
to pay on demand immediately to the Sellers (in accordance with their
Applicable Shares) on a Lire for Lire basis an amount in respect of the
amount by which the Estimated Net Debt was greater than the actual
amount of Net Debt.
CLAUSE 4.3 The total consideration (the "LOAN PURCHASE PRICE") for the
assignment and transfer of the Loans to be paid by VGL to the Lenders pursuant
to Clause 10.5.2 shall be the aggregate unpaid principal of, and all accrued and
unpaid interest on, the Loans as of the Completion Date as certified to VGL by
the Lenders and the Group on the Completion Date.
CLAUSE 4.4 The amount of the Share Purchase Price payable to each Seller shall
be the percentage (the "APPLICABLE SHARE") specified opposite that Seller's name
in Column 4 of Schedule 1 multiplied by the Share Purchase Price; provided
however, in the case of a Seller who is also a Warrantor, such amount shall be
determined after deducting the portion of the Escrow Sum paid by the Purchaser
to the Escrow Agent with respect to such Seller. The Escrow Sum shall be paid by
the Purchaser on behalf of the Warrantors (in the proportion, as to each such
Warrantor, that the Applicable Share of each Warrantor bears to the Applicable
Share of all the Warrantors) to the Escrow Agent at Completion and shall be held
by the Escrow Agent in accordance with the terms of the Escrow Agreement.
CLAUSE 4.5 If any payment is made to the Purchaser by any of the Warrantors or
the Institutions under or in respect of any breach of this Agreement (including,
without limitation, any payment pursuant to any Commercial Warranty Claim, Tax
Indemnity Claim or Title Claim, or Fundamental Covenant Claim), the payment
shall so far as possible be treated as a reduction in the Share Purchase Price.
CLAUSE 4.6 Not less than three business days prior to Completion, the Sellers
shall deliver to the Purchaser and the Accountants a written statement
confirming the amount of Indebtedness in respect of borrowed money of each of
the Group's lenders of borrowed money at Completion. Such statement shall be
accompanied by a statement from each such lender confirming the amount of
Indebtedness in respect of borrowed money payable to each such bank lender.
SECTION 5 PURCHASER AND SELLER TITLE WARRANTIES AND LIMITATIONS
CLAUSE 5.1 The Purchaser and VGL hereby jointly and severally warrant and
confirm to the Sellers as of the date of this Agreement and (except as
specifically limited to a prior date below) as of the Completion Date, as
follows:
(a) in the case of the Purchaser, it is a corporation validly existing,
duly incorporated and in good standing under the laws of Italy;
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(b) in the case of VGL, it is a company validly existing, duly incorporated
and in good standing under the laws of England and Wales;
(c) in the case of each of the Purchaser and VGL, it has all necessary
corporate powers to enter into this Agreement and to perform any and
all of its obligations under this Agreement, and the person who has
executed this Agreement on behalf of each of the Purchaser and VGL,
respectively, is a duly authorised director or officer of the Purchaser
and VGL, respectively, vested with full powers to bind the Purchaser
and VGL, respectively, in relation to any and all of such obligations;
(d) as of the date of this Agreement, there are no pending or threatened
judicial or administrative proceedings which would have a materially
adverse effect on the Purchaser's or VGL's performance of its
obligations arising under this Agreement;
(e) the execution of this Agreement and of the transactions contemplated
hereby will not result in the breach of any legal provision affecting
the Purchaser or VGL which would affect the validity or enforceability
of this Agreement as against the Purchaser or VGL.
CLAUSE 5.2.1 Each of the Warrantors (as to himself only) and the Institutions
(as to the Institutional Seller only) severally warrants and confirms (subject
to Clause 5.4) to the Purchaser and VGL as of the date of this Agreement and
(except as specifically limited to a prior date below) as of the Completion Date
that:
(a) as of the date of this Agreement, there are no pending or threatened
judicial or administrative proceedings which would have a materially
adverse effect on such Seller's performance of its obligations arising
under this Agreement;
(b) the execution of this Agreement and of the transactions contemplated
hereby will not result in the breach of any legal provision affecting
such Seller which would affect the validity or enforceability of this
Agreement as against such Seller;
(c) there is no pledge, lien or other encumbrances on, over, or affecting
the Shares of such Seller and there is no agreement or arrangement to
give or create any such encumbrance and no claim has been or will be
made by any person to be entitled to any of the foregoing;
(d) this Agreement constitutes and imposes valid, legal and binding
obligations on such Seller, fully enforceable in accordance with its
terms;
(e) Schedule 1 sets forth the names of each such Seller and respective
number of Shares which will, following exercise of the Management
Options, be owned by each Seller, which Shares collectively constitute
all of the share capital of the Company; and
(f) such Seller is, or will be following the exercise of the Management
Options, the sole legal owner of the Shares recorded on Schedule 1,
free from all security interests, options, equities, claims and other
third party rights (including rights of pre-emption and spouse's rights
deriving from "COMUNIONE LEGALE") of any nature whatsoever.
CLAUSE 5.2.2 The Institutions severally warrant and confirm to the Purchaser
as of the date of this Agreement and as of the Completion Date that the
Institutional Seller and the Institutions are entities validly existing and in
good standing under the laws of their respective jurisdictions of organization,
have all necessary partnership or corporate power to enter into this Agreement
and to perform any and all of their respective obligations under this Agreement
and the persons who have
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executed this Agreement on behalf of the Institutional Seller and the
Institutions (or such Institutions' corporate general partner), respectively,
are duly authorised attorneys, officers or directors of the Institutional Seller
and the Institutions, respectively, vested with full power to bind the
Institutional Seller and the Institutions, respectively, in relation to any and
all of such obligations.
CLAUSE 5.3 Each of the Warrantors and the Institutions severally warrants
(subject to Clause 5.4) to the Purchaser and VGL as of the date of this
Agreement and as of the Completion Date, that the authorised share capital of
the Company consists solely of 8,750,000 ordinary shares of which 8,750,000
shares are issued and outstanding. No other share capital of the Company is
issued and outstanding. The Shares constitute all of the issued and outstanding
shares in the share capital of the Company. There are no securities, options,
warrants, rights, calls, commitments, plans, contracts or other agreements of
any character granted or issued by the Company which provide for the purchase,
issuance of any shares in the capital of the Company, nor are any outstanding
securities granted or issued by the Company that are convertible into or
exchangeable (or are exercisable for any shares of the share capital of the
Company) and none are authorised. The Management Options will have been
exercised in full at Completion.
CLAUSE 5.4 Each of the Warrantor's and the Institutions' several liability for
Costs arising from a breach of any Title Warranty shall be limited to each such
Warrantor's and, in the case of the Institutions, the Institutional Seller's
Applicable Share of the Share Purchase Price. The liability of each of the
Institutions for any such Costs arising from a breach of any such Title Warranty
shall be shared in the following proportions (the "APPLICABLE INSTITUTIONAL
PERCENTAGE"): as to 49.32% by the CVC Entities and as to 50.68% by the NWV
Entities; and the Purchaser shall limit its claim as to each Institution to the
Applicable Institutional Percentage of the Institutional Seller's Applicable
Share of any such Costs and for the purposes of this Clause 5.4 and Clause
7.2(a) "INSTITUTION" shall mean either the CVC Entities taken as whole or the
NWV Entities taken as a whole, as appropriate.
SECTION 6 WARRANTIES AND LIMITATIONS
CLAUSE 6.1.1
(a) Subject in each case to the limitations set forth in this Section 6,
the Warrantors jointly and severally warrant to the Purchaser in the
terms of the Commercial Warranties as of the date of this Agreement
(subject in each case to the matters fairly disclosed in the Disclosure
Letter and in the Disclosure as Updated) and as of the Completion Date
(subject in each case to the matters fairly disclosed in the Disclosure
Letter as Updated).
(b) NWV Nominees on the one hand and the CVC Lenders on the other hand
severally warrant to VGL in the terms of the Loan Warranties as of the
date of this Agreement and as of the Completion Date in each case in
respect of that element of the Loans held by them.
CLAUSE 6.1.2 The Warrantors shall have the right to make further disclosures
to the Purchaser at any time prior to Completion and to deliver to the
Purchaser, immediately prior to Completion, a document (the "DISCLOSURE
LETTER AS UPDATED") which shall comprise the Disclosure Letter together
with such further disclosures.
CLAUSE 6.2.1
(a) Each of the Commercial Warranties and Tax Indemnities is separate and
independent and
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shall not be limited or restricted by:
(i) reference to any other Commercial Warranty or the Tax
Indemnity; or
(ii) except as set forth in the Disclosure Letter or the Disclosure
Letter as Updated, any actual or constructive knowledge on the
part of the Purchaser, VGL or any of their respective agents
or Affiliates, whether obtained through any investigation by
or on behalf of the Purchaser, VGL, their respective agents or
Affiliates or otherwise.
(b) Each Title Warranty is separate and independent and shall not be
limited or restricted by:
(i) any disclosure in the Disclosure Letter or the Disclosure
Letter as Updated; it being acknowledged that the Title
Warranties are not subject to disclosure; or
(ii) any actual or constructive knowledge on the part of the
Purchaser, VGL or any of their respective agents or
Affiliates, whether obtained through any investigation by or
on behalf of the Purchaser, VGL, their respective agents or
Affiliates or otherwise.
CLAUSE 6.2.2 Subject to the provisions of Clause 9.2, the rights and remedies
of the Purchaser and VGL as specifically set forth in this Agreement in respect
of the Warranties, the Covenants and the Tax Indemnity shall not be affected by
Completion.
CLAUSE 6.3 The Sellers and the Institutions hereby waive the benefit of all
rights (if any) which the Sellers or the Institutions may have against any Group
Company, or (absent fraud) any present officer or employee of any such company,
on whom the Sellers or the Institutions may have relied in agreeing to any term
of this Agreement or any statement set out in the Disclosure Letter or the
Disclosure Letter as Updated.
CLAUSE 6.4
(a) Neither the Warrantors nor the Institutions shall be liable for any
Relevant Claim unless they receive from the Purchaser written notice,
served in good faith on or before 31 March, 1999, containing reasonable
details of the Relevant Claim including, if reasonably practicable at
the time, the Purchaser's reasonable estimate (on a without prejudice
basis) of the amount of such Relevant Claim. To the extent the
Purchaser does provide such notice prior to 31 March 1999, an amount
determined in accordance with the Escrow Agreement (the "RESERVED CLAIM
AMOUNT") shall be reserved in escrow subject to the terms of the Escrow
Agreement. Any portion of the Escrow Sum remaining in escrow as of 31
March, 1999 that is in excess of the Reserved Claim Amount shall be
released to the Warrantors on 31 March, 1999.
(b) Neither the Warrantors nor the Institutions shall be liable for any
Fundamental Covenant Claim unless they receive from the Purchaser
written notice, served in good faith on or before the second
anniversary of Completion, containing reasonable details of the
Fundamental Covenant Claim including, if reasonably practicable at the
time, the Purchaser's reasonable estimate (on a without prejudice
basis) of the amount of such Fundamental Covenant Claim.
CLAUSE 6.5 The Purchaser shall not be entitled to recover any amount pursuant
to a Relevant Claim unless the amount recoverable, when aggregated with all
other amounts recoverable for
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Relevant Claims exceeds 700,000,000 Lire, in which event, the Purchaser shall
only be entitled to recover any amount in respect of Relevant Claims in excess
of 700,000,000 Lire.
CLAUSE 6.6
(a) The aggregate amount of the liability of the Warrantors to the
Purchaser for Costs related to all Relevant Claims shall not exceed the
Escrow Sum (except, in the case of any individual Warrantor, to the
extent of the amount, if any, of Costs paid from the Escrow Sum to
satisfy a Warrantor Title Claim or a Several Fundamental Covenant Claim
made against that Warrantor pursuant to Clause 6.6(b) in which event,
the Purchaser shall be entitled to recover from the Warrantor breaching
the Title Warranty or Several Fundamental Covenant giving rise to such
Warrantor Title Claim or Several Fundamental Covenant Claim, an amount
equal to the amount paid from the Escrow Sum to satisfy such Warrantor
Title Claim or Several Fundamental Covenant Claim) and the Purchaser
shall have no right to recover against the Warrantors any Costs in
respect of any Relevant Claims to the extent that any such Costs in
respect of such Relevant Claims exceed the Escrow Sum (except as
aforesaid).
(b) The Purchaser shall only be entitled to recover, from the Escrow Sum,
monies due to the Purchaser pursuant to a Title Claim or a Several
Fundamental Covenant Claim made against a Warrantor to the extent of
the portion of the Escrow Sum paid into the Escrow Account by the
Purchaser with respect to such Warrantor (pursuant to Clause 4.4).
CLAUSE 6.7 For the avoidance of doubt, none of the limitations contained in
Clauses 6.4 (a), 6.5 and 6.6(a) shall apply to any Title Claim or Fundamental
Covenant Claim.
CLAUSE 6.8
(a) From and after Completion, the aggregate amount of the liability of
each Warrantor for all Costs in respect of any Title Claims and
Fundamental Covenant Claims shall not exceed such Warrantor's
Applicable Share of the Share Purchase Price. Similarly, from and after
Completion, (i) the aggregate liability of the Institutions for any
Costs in respect of any Title Claims or Fundamental Covenant Claims
made against the Institutions shall not exceed the Institutional
Seller's Applicable Share of the Share Purchase Price; and (ii) the
aggregate liability of each Institution for any Costs related to any
Title Claim or Fundamental Covenant Claims made against the
Institutions shall not exceed the Applicable Institutional Percentage
of the Institutional Seller's Applicable Share of the Share Purchase
Price.
(b) The Purchaser acknowledges, for the avoidance of doubt, that the
Fundamental Covenants comprised within Clauses 6.12, 6.13, 10.2, 12 and
20 ("SEVERAL FUNDAMENTAL COVENANTS") are given on a several rather than
a joint basis and that only that party in breach of the relevant
covenant shall have any liability in respect of such breach.
CLAUSE 6.9 The aggregate liability of the Lenders for all Costs in respect of
any claim under this Agreement shall be limited to the Loan Purchase Price; and
the respective Lender's liability as between them shall be shared 50.68% by NWV
Nominees and 49.32% by the CVC Entities.
CLAUSE 6.10 The Purchaser, the Institutions and the Warrantors expressly agree
that if Costs recoverable under this Agreement as a result of a Commercial
Warranty Claim give rise to a Relief (as defined in Section 11) which reduces or
eliminates an actual liability to Tax of the Purchaser or a member of the
Purchaser's Group prior to 31 March 1999, the Costs shall be reduced by the
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amount of the actual liability to Tax which is eliminated or the amount by which
it is reduced, save that where the Purchaser has to pay income tax on the Costs
received, to the extent that such income tax has not already been taken into
account in calculating the Costs payable, the amount by which the Costs payable
are reduced pursuant to this Clause 6.10(b) shall be reduced by the amount of
income tax so payable.
CLAUSE 6.11 The Warrantors and the Institutions shall have no liability in
respect of any Commercial Warranty Claim or Tax Indemnity Claim:
(a) to the extent that provision or reserve (and only to the extent of the
numerical provision or reserve), in respect of the liability or other
matter giving rise to the Commercial Warranty Claim or Tax Indemnity
Claim in question, was made in the Management Accounts as of the
Management Accounts Date;
(b) to the extent that the Commercial Warranty Claim or Tax Indemnity Claim
in question arises, or the amount of such Commercial Warranty Claim or
Tax Indemnity Claim is increased, as a result of any increase in rates
of taxation or any change in the law or published practice of a revenue
authority made after the date of this Agreement with retrospective
effect;
(c) to the extent that the Commercial Warranty Claim or Tax Indemnity Claim
in question would not have arisen but for a voluntary act or
transaction carried out by the Purchaser or any member of the
Purchaser's Group (including the Company or any of the Subsidiaries)
after the Completion Date otherwise than in the ordinary course of
business (unless required by law or regulation) and which the Purchaser
or such member was aware might give rise to that Commercial Warranty
Claim or Tax Indemnity Claim;
(d) if any member of the Group is insured against any loss or damage
forming the basis of the Commercial Warranty Claim in question under
the terms of any insurance policy for the time being in force, to the
extent that the Company or any such Subsidiary receives payment under
any such policy, and only to that extent; provided that the
Institutions and Warrantors (to the extent of their respective
Applicable Share) shall indemnify the Purchaser and each of its Group
Companies in respect of the reasonable out of pocket Costs of making
such insurance claim and any additional out of pocket Costs arising
from such Commercial Warranty Claim (which would not have arisen but
for such Commercial Warranty Claim) including any increased insurance
premium arising therefrom and; provided that, if any of the Warrantors
and the Institutions, having received notice of the Commercial Warranty
Claim in question under Clause 6.4 shall have requested that a claim be
made under the relevant insurance policy, the Purchaser shall provide
such (non-binding) estimate in good faith as it can of the amount of
any such Costs; and any direct Costs associated with the replacement of
insurance policies which terminate as a result of such claim and
further provided that this paragraph (d) shall not apply if the
Warrantors and the Institutions shall (before any Commercial Warranty
Claim is met under a relevant insurance policy) request that no claim
is made under an insurance policy;
(e) where the matter giving rise to the Commercial Warranty Claim or Tax
Indemnity Claim has been fairly disclosed in the Disclosure Letter or
the Disclosure Letter as Updated or (but without prejudice to the
requirement that disclosure be fair) any document referred to therein;
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(f) in relation to Tax Indemnity Claims or Claims under the Tax Warranties,
to the extent that such claim arises directly or indirectly as a result
of a transaction or other matter in the ordinary course of business of
any Group Company after the Management Accounts Date which would have
given rise to a provision or reserve in the Management Accounts had it
arisen prior to the Management Accounts Date.
CLAUSE 6.12
(a) Without prejudice and subject to the Purchaser's obligations under
Clauses 6.13 and 6.15(a), if a Commercial Warranty Claim, Title Claim
or Tax Indemnity Claim arises as the result of the assertion or
commencement of any action against any Group Company by a third party
or, in the case of a Tax Indemnity Claim, a Taxation Authority (a
"THIRD PARTY CLAIM"), the defence of such Commercial Warranty Claim,
Title Claim or Tax Indemnity Claim shall be totally within the control
and at the direction of the Purchaser and the relevant Group Company.
(b) The Warrantors and the Institutions agree to co-operate and provide all
relevant information necessary to assist the Purchaser and the relevant
Group Company in the defence of any Third Party Claim. Neither the
Warrantors nor the Institutions shall make any admission of liability,
agreement or compromise with any person respecting a Third Party Claim
without the prior written consent of the Purchaser.
CLAUSE 6.13
(a) If the Purchaser and/or any Group Company is or may be entitled to
recover from some other person any sum in respect of any matter giving
rise to a Commercial Warranty Claim, the Purchaser shall procure that
all reasonable steps are taken to enforce recovery and, if any sum is
so recovered, then the amount payable by the Warrantors or the
Institutions (as to their respective Applicable Shares and, as between
the Institutions as to their respective Applicable Institutional
Percentage) in respect of that Commercial Warranty Claim shall be
reduced by an amount equal to the sum recovered or (if any amount shall
already have been paid by the Warrantors or the Institutions (as to
their Applicable Shares and as between the Institutions, as to their
respective Applicable Institutional Percentage) in respect of that
Commercial Warranty Claim) there shall be repaid to the Warrantors or
the Institutions (as to their Applicable Shares and, as between the
Institutions, as to their respective Applicable Institutional
Percentage) an amount equal to the amount recovered or (if less) the
amount of such payment (in either case with any interest paid by such
other person but less both any tax chargeable on any member of the
Purchaser and/or any Group Company in respect of the sums so recovered
and all reasonable costs, charges and expenses of recovery). Neither
Warrantors nor the Institutions shall have rights in respect of any
amount so recovered, or capable of recovery, other than to reduce or
extinguish or effect repayment of (pursuant to this Clause 6.13(a))
amounts otherwise payable or paid by the Warrantors or the
Institutions. Where any such recovery is made by the Purchaser, nothing
in this Clause 6.13(a) shall prevent the Purchaser from making further
recoveries in respect of the same shortfall, damage, deficiency, breach
or other set of circumstances. The Purchaser shall procure that the
Warrantors and the Institutions are kept fully informed of all matters
relating to a Third Party Claim (including being provided with copies
of any relevant documentation relating to such Third Party Claim)
provided that the Purchaser shall not be obliged to provide such
information in breach of any client attorney privilege or any
confidentiality obligation. The Warrantors and the Institutions shall
be entitled to make representations in respect of the conduct of any
negotiations or proceedings relating to such
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Third Party Claim and the Purchaser shall take reasonable note of such
representations in the conduct of such negotiations or proceedings.
(b) Where the Company continues to have the benefit of warranties and
indemnities given by Olivetti S.p.A. ("OLIVETTI") and Olteco-Fin S.p.A.
("OLTECO") (collectively the "O WARRANTIES") pursuant to a supplemental
agreement dated 6 January 1996 and made between Olivetti (1), Olteco
(2) and Xxxxx S.R.L. (3) (as amended on February 27, 1997 by an
Addendum to the Supplemental Agreement, an Agreement and
Acknowledgement and a Funding Agreement), the Purchaser will procure
that, to the extent that matters giving rise to a Commercial Warranty
Claim also give rise to a breach of the O Warranties, the Company shall
enforce recovery from Olivetti and/or Olteco of any loss suffered as a
result of a breach of the O Warranties before seeking recovery under
and in respect of such Commercial Warranty Claim. Where the
Institutional Seller continues to have the benefit of warranties and
indemnities given by Olivetti and Olteco pursuant to the Management
Agreement in respect of matters giving rise to a Commercial Warranty
Claim or a Tax Indemnity Claim the Purchaser shall procure that the
Group Companies make available to the Institutional Seller and the
Institutions all documents and information or copies thereof in the
possession or under the control of each Group Company which are
reasonably required for the enforcement of recovery against Olivetti
and/or Olteco pursuant to such warranties and/or indemnities provided
that the Purchaser shall not be obliged to provide any such information
in breach of any client attorney privilege or any confidentiality
obligation.
CLAUSE 6.14 A failure to give timely notice or to include any specified
information in any notice pursuant to this Sections 6 will not affect the rights
or obligations of any party hereunder, except that the failure to give the
notice required by Section 6.4(a) prior to 31 March, 1999 with respect to the
preservation of Relevant Claims shall be a bar to any assertion of any Relevant
Claims after such date to the extent not included in the notice pursuant to
Clause 6.4(a).
CLAUSE 6.15 For the avoidance of doubt:
(a) nothing in this Agreement shall limit the Purchaser's obligation to
mitigate its loss in respect of any Relevant Claim;
(b) neither the Purchaser nor any Group Company shall be entitled to
recover damages in respect of any one shortfall, damage, deficiency,
breach or other set of circumstances giving rise to one or more
Relevant Claims to the extent that it has previously made recovery in
respect of the same shortfall, damage, deficiency, breach or other set
of circumstances pursuant to another Relevant Claim;
(c) no settlement or compromise of a Third Party Claim without the consent
of the Institutions and the Warrantors shall have the effect of
automatically creating liability for the Institutions and the
Warrantors for Costs arising out of a Commercial Warranty Claim or Tax
Indemnity Claim based upon such Third Party Claim. Similarly no such
settlement or compromise shall relieve the Institutions or the
Warrantors for liability for a Commercial Warranty Claim, Tax Indemnity
Claim or Title Claim arising out of such Third Party Claim to the
extent the Group Company or the Purchaser thereafter successfully
asserts that the existence of such Third Party Claim breached a
Commercial Warranty, or Title Warranty. Notwithstanding anything to the
contrary herein contained, however, reasonable Costs of defence of any
Third Party Claim shall always be recoverable regardless of the merits
of such Third Party Claim if such Third Party Claim would give rise to
a Title Claim; and
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(d) except where the Commercial Warranties specifically refer to the
Disclosure Letter as containing true and complete information
respecting a matter, the Disclosure Letter is a limitation of the
Commercial Warranties and the Tax Indemnity only, and nothing set forth
in the Disclosure Letter shall expand the Commercial Warranties and the
Tax Indemnity beyond the specific Commercial Warranties set out in
Schedule 3 and the specific provisions of Section 11.
CLAUSE 6.16 Subject to the provisions of Clause 6.6(b) the Purchaser shall be
entitled to make any of the Commercial Warranty Claims, Tax Indemnity Claims,
Fundamental Covenant Claims against Warrantors and Warrantor Title Claims (but
not Institutional Title Claims, Institutional Covenant Claims, Loan Warranty
Claims, Lender Pre-Completion Primary Covenant Claims or Fundamental Covenant
Claims against Institutions or the Institutional Seller) against the Escrow Sum
in accordance with the Escrow Agreement. For the avoidance of doubt, the
Warrantors' liabilities in respect of Warrantor Title Claims and Fundamental
Covenant Claims are not limited to the Escrow Sum.
CLAUSE 6.17 For the purposes of Schedule 3 and Clause 6.15(d), references to
the Disclosure Letter shall include a reference to the Disclosure Letter as
Updated.
CLAUSE 6.18 Where a Relevant Claim or a Fundamental Covenant Claim has been
made against any of the Warrantors in circumstances in which such claims have
given rise or may give rise to a Relevant Claim or a Fundamental Covenant Claim
against any of the Institutions or the Institutional Seller, the relevant
Warrantor(s) shall not settle or compromise the claim(s) made against him or
them without the prior written consent of the Institutions or the Institutional
Seller as appropriate, such consent not to be unreasonably withheld.
SECTION 7 INSTITUTIONAL COVENANTS AND LIMITATIONS AND VGL GUARANTEE
CLAUSE 7.1 In consideration of the Purchaser entering into and acting in
accordance with this Agreement, the Institutions (as principal obligors and not
merely as sureties) jointly and severally, unconditionally and irrevocably
guarantee (the "INSTITUTIONAL SELLER COVENANTS") as a continuing obligation the
proper and punctual performance by the Institutional Seller of its Covenants
under this Agreement.
CLAUSE 7.2
(a) In consideration of the Purchaser entering into and acting in
accordance with this Agreement, the Institutions severally undertake
and covenant with the Purchaser (the "INSTITUTIONAL WARRANTY COVENANT")
that, to the extent and only to the extent that any valid Relevant
Claims exist the aggregate amount of which (the "RELEVANT AMOUNT")
would, or would but for the operation of Clause 6.6, exceed the Escrow
Sum, they will each pay to the Purchaser, at the time liability
therefor is determined in accordance with the arbitration provisions of
this Agreement, an amount equal to their respective Applicable
Institutional Percentage of such Relevant Claims, provided that neither
Institution shall be obliged to pay an amount pursuant to this Clause
7.2 which, when aggregated with all amounts paid by the Institutions in
respect of any Relevant Claims, exceeds an amount equal to its
respective Applicable Institutional Percentage of 13,000,000,000 Lire.
(b) The Institutions shall have no liability to the Purchaser in respect of
any Relevant Claim following 31 March 1999, or Fundamental Covenant
Claim following the second
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anniversary of this Agreement, unless and then only to the extent that
notice of such claim has been properly given pursuant to Clause 6.4.
(c) For the avoidance of doubt but without prejudice to the limitations
contained in this Clause 7.2, the Purchaser shall only be entitled to
recover from the Institutions pursuant to this Clause 7.2 that portion
of the aggregate Costs in respect of all Relevant Claims that is in
excess of the Escrow Sum.
(d) The Institutions' liability under the Institutional Warranty Covenant
shall be subject to the same limitations as those in favour the
Warrantors, provided that the Institutions' particular liability shall
not be limited as provided in Clause 6.6. For the avoidance of doubt
therefore, in an action by the Purchaser pursuant to the Institutional
Warranty Covenant, the Institutions shall be entitled to raise the same
defences against and exceptions to liability (other than Clause 6.6) in
respect of any Relevant Claims as the Warrantors would have been
entitled to raise.
CLAUSE 7.3 For the avoidance of doubt, the Institutional Warranty Covenant
shall terminate and the Institutions shall have no further liability thereunder
in respect of a Relevant Claim on 31 March 1999, save to the extent provided in
Clause 6.4(a) or otherwise on the date on which an aggregate of 13,000,000,000
Lire has been recovered from the Institutions pursuant to Clause 7.2 in respect
of any Relevant Claims.
CLAUSE 7.4 The Institutions' liability under this Section 7 shall not be
discharged or impaired by any amendment to or variation of this Agreement, any
release of, or granting of time or other indulgence to, the Institutional
Seller, the Warrantors or any third party, any liquidation, administration,
receivership or winding-up of the Institutional Seller, the Warrantors or by any
other act or omission or any other events or circumstances whatsoever (whether
or not known to any party) which would or might (but for this Clause) operate to
impair or discharge the Institutions' liability under this Section 7.
CLAUSE 7.5.1 VGL (as principal obligor and not merely as surety) unconditionally
and irrevocably guarantees as a continuing obligation the proper and punctual
performance by the Purchaser of all its Covenants under or pursuant to this
Agreement.
CLAUSE 7.5.2 VGL's liability under Clause 7.5.1 shall not be discharged or
impaired by any amendment to or variation of this Agreement, any release of, or
granting of time or other indulgence to, the Purchaser or any third party, any
liquidation, administration, receivership or winding-up of the Purchaser or by
any other act or omission or any other events or circumstances whatsoever
(whether or not known to any party) which would or might (but for this Clause)
operate to impair or discharge VGL's liability under Clause 7.5.1.
SECTION 8 PRE-COMPLETION UNDERTAKINGS AND DELIVERIES
CLAUSE 8.1 Pending Completion, the Warrantors shall ensure that:
(a) each Group Company shall carry on its business in all material respects
in the ordinary and usual course consistent with past practices and
shall not make (or agree to make) any payment other than routine
payments in the ordinary and usual course of trading consistent with
past practices;
(b) each Group Company shall take all reasonable steps to preserve,
maintain and protect its assets;
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(c) the Purchaser's representatives shall be allowed, upon reasonable
notice and during normal business hours, access to the books and
records of each Group Company (including, without limitation, all
statutory books, minute books, leases, contracts, supplier lists and
customer lists), together with the right to take copies subject to
keeping all such matters strictly confidential and on the basis that if
Completion does not occur, all such copies shall be returned forthwith
to the relevant Group Company; and
(d) as soon as the same are available, the 1997 Accounts shall be delivered
to the Purchaser and as soon as available the Management Accounts for
each calendar month ending prior to the Completion Date shall be
delivered to the Purchaser.
CLAUSE 8.2 Pending Completion, the Warrantors shall ensure that the Company
consults fully with the Purchaser in relation to any matters which may have a
material effect upon the Group and that, without the prior written consent of
the Purchaser, no Group Company shall:
(a) enter into any contract, commitment, arrangement or transaction (or
make a bid or offer which may lead to a contract or commitment) out of
the ordinary course of business or which is of a duration of more than
one year or is of an unusual nature or which could involve an
obligation of a material nature or which may result in any material
change in the nature or scope of the operations of the Group;
(b) agree to any variation, amendment, modification or cancellation of any
existing contract to which that Group Company is a party and which,
individually or in the aggregate, may have a material effect upon the
business, condition (financial or otherwise), or results of operations
of the Group;
(c) acquire or dispose of, or agree to acquire or dispose of, or grant, or
agree to grant in one transaction or any series of related transactions
any charge, mortgage, lien, assignment, encumbrance or other security
interest over, any business or any material asset, other than sales of
inventory in the ordinary course of business and other than the sales
of accounts receivable pursuant to factoring arrangements in existence
on the date hereof;
(d) make any extension of credit or any loans to, guarantee the obligations
of, or make any additional investments in any other person, in each
case other than in the ordinary course of business;
(e) change the terms of employment, including pension fund commitments, of
any Group Company (other than those required by law);
(f) cancel or allow any of the existing insurance policies of the Company
or any of its Subsidiaries to lapse;
(g) write off as uncollectible any accounts receivable or cancel, waive, or
release any debts of or claims against any person, except in the
ordinary course of business and consistent with past practice;
(h) defer any planned capital expenditure intended to be made prior to
Completion until after Completion;
(i) fail to pay payables in a timely manner based on past practices,
accelerate the collection of receivables (in any manner outside of the
Group's customary practices) or fail to maintain
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adequate inventory, in any case in such manner that available book cash
of the Group on the Completion Date is increased;
(j) dispose of any interest in the Shares or any of them or grant any
option or right of pre-emption over, or mortgage, charge, security
interest or otherwise encumber the Shares or any of them;
(k) take any action which would result (or be likely to result) in a breach
of any of the Commercial Warranties or Title Warranties if the
Commercial Warranties and Title Warranties were repeated at Completion;
(l) fail to promptly disclose to the Purchaser all relevant information
which comes to the notice of the Warrantors or the Group in relation to
any fact or matter (whether existing on or before the date of this
Agreement or arising afterwards) which may constitute a breach of any
Commercial Warranty or Title Warranty if the Commercial Warranties and
Title Warranties were to be repeated on or at any time before
Completion; or
(m) take any action or permit any member of the Group to take any action
which is inconsistent with the provisions of this Agreement or the
consummation of the transactions contemplated by this Agreement.
CLAUSE 8.3 None of the Warrantors or the Institutions will before Completion
save as provided for in this Agreement or with the consent of the Purchaser:
(a) permit any Group Company to declare, pay or make any dividend or other
distribution;
(b) permit any Group Company to amend its constitutional documents
or pass any resolution in general meeting;
(c) permit any Group Company to issue, allot or agree to be issued or
allotted any share or loan capital, securities, options or warrants;
(d) permit a Group Company to enter into any transaction, contract or
agreement with any Seller or any Affiliate of a Seller or of any Group
Company; or
(e) liquidate, dissolve, or reorganize any Group Company in any manner.
CLAUSE 8.4 NONE OF THE LENDERS WILL BEFORE COMPLETION:
(a) sell, transfer or otherwise dispose of any interest in the Loans;
(b) modify, amend, terminate, discharge or otherwise change the terms of
the Loans or any documents related thereto; or
(c) take any action which would result (or be likely to result) in a
breaching of any Loan Warranty.
SECTION 9 TERMINATION, RESCISSION AND EXCLUSIVE REMEDY
CLAUSE 9.1 This Agreement may be terminated prior to Completion as follows:
(a) By the mutual consent of the parties; or
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(b) By the Sellers or the Purchaser if Completion shall not have occurred
by 31 March 1998.
Upon termination of this Agreement pursuant to this Clause 9.1, no party shall
have any liability or continuing obligation to another party arising out of this
Agreement, or out of the actions taken in connection with this Agreement, except
that Sections 13 to 24 (inclusive) shall survive termination of this Agreement.
Notwithstanding the foregoing, termination of this Agreement shall not relieve
any party from its liability for a wilful breach, prior to termination, of its
Title Warranties or Fundamental Covenants (subject, however, to the limitations
respecting such Covenants and Warranties set forth in Sections 5, 6 and 7)
CLAUSE 9.2 The Purchaser shall not be entitled to rescind, withdraw from or
otherwise terminate this Agreement at any time after Completion otherwise than
as a result of the fraudulent conduct of the Sellers.
CLAUSE 9.3 From and after the Completion Date, no party to this Agreement
shall be liable or responsible in any manner whatsoever to the other party for
the breach of any Warranties or Covenants, whether for indemnification or
otherwise, except as expressly provided in this Agreement, which provides the
exclusive remedy and cause of action of the parties hereto with respect to
breach of Warranties or Covenants (other than as a result of fraud) arising out
of, or in connection with, this Agreement or any Schedule hereto, or in any
document attached hereto or in any other part of this Agreement or any
certificate delivered in connection herewith.
CLAUSE 9.4 Without prejudice and subject to its rights under this Agreement,
the Purchaser hereby renounces to, and waives, and shall cause all Group
Companies to renounce to and waive, any and all claims, actions and/or
proceedings against Xx Xxxxxxxxxx, Xx Xxxxx, Xx Xxxxxxx and all other directors
of Zincocelere in respect of the activities carried on by them solely in their
capacity as directors of any Group Company when acting solely within the scope
of their authority as a director (and without obtaining personal benefit) of the
relevant Group Company in favour of such Group Company.
SECTION 10 COMPLETION
CLAUSE 10.1 The sale and purchase of the Shares shall be completed (the
"COMPLETION date") at the offices of Xxxxxx Xxxxxxx in Milan at Xxxxxx
Xxxxxxxxxx 0, 00000 Xxxxxx, Xxxxx or such other place as the parties agree on
the fifth business day after satisfaction of the Competition Condition, provided
that the other elements of the Condition Precedent are satisfied or waived by
the Purchaser on or prior to such day, or such other date or place as the
parties may agree. The events referred to in the following provisions of this
Section 10 shall take place on the Completion Date.
CLAUSE 10.2 The Sellers shall severally procure the delivery or make available
to the Purchaser of:
(a) a duly executed endorsement of the Shares effecting the transfer into
the name of the Purchaser or such other person as the Purchaser may, in
accordance with 15.1, direct in respect of all of the Shares, which
endorsement shall have been notarised by an Italian notary public,
together with an extract from the Shareholders' Book of the Company
showing the registration of such transfer duly executed by a director
of the Company;
(b) the Certificates of Incorporation, Shareholder Book (with any unissued
share certificates) and all minute books and other statutory books
(which shall be written up to but not including Completion) of the
Company and of each Group Company;
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(c) letters of resignation in the agreed form marked "B" duly executed as a
deed by such of the directors as the Purchaser shall designate in
writing at least five (5) days prior to Completion;
(d) an original copy of the Escrow Agreement duly executed by the Sellers;
(e) a legal opinion relating to ECSA in the agreed form marked "C" duly
executed by Bonn & Xxxxxxx;
(f) a certified copy of the corporate resolution adopted by ECSA approving
the sale of the Company;
(g) an extract from the registry of Commerce and Companies and a
Certificate of non-bankruptcy in respect of ECSA; and
(i) a termination of the Shareholders Agreement dated 27 February 1996 and
relating to the Company.
CLAUSE 10.3 The Sellers shall procure that resolutions of the boards of
directors of the Company are passed by which business is transacted as follows:
(a) the resignation as a director of the Company of such
individuals as have been designated by the Purchaser is
accepted;
(b) the individuals designated by the Purchaser at least five (5)
days prior to Completion are appointed as directors of the
Company; and
(c) the registered office of the Company is changed to such place
as the Purchaser notifies prior to Completion.
CLAUSE 10.4 The Lenders and VGL shall execute such deed of transfer as may be
necessary to assign and transfer to VGL the Loans and all documents pertaining
thereto and the Lenders shall procure that the Company consents to such transfer
and assignment.
CLAUSE 10.5.1 The Purchaser shall:
(a) in satisfaction of its obligations under Clause 4.1, pay the Share
Purchase Price less the Escrow Sum by electronic funds transfer for
value on the Completion Date to such bank account(s) as shall be
notified by the Sellers to the Purchaser prior to Completion;
(b) pay the Escrow Sum to the Escrow Agent by electronic funds transfer to
the Escrow Agent's bank account";
(c) deliver to the Sellers a copy of the Escrow Agreement duly executed by
the Purchaser;
(d) deliver to the Sellers certified copy minutes of the VGL board meeting
approving the transaction contemplated by this Agreement;
(e) deliver to the Sellers a certified copy of the corporate resolution
adopted by the Purchaser approving the purchase of the Company; and
(f) deliver to the Sellers a certificate of status, compliance and good
standing of the Purchaser.
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CLAUSE 10.5.2 VGL shall in satisfaction of its obligations under Clause 4.3,
pay the Loan Purchase Price to the Lenders by electronic funds transfer for
value on the Completion Date to such account as shall be notified to the
Purchaser by the Lenders prior to Completion.
CLAUSE 10.5.3 Any payment made in accordance with Clause 10.5.1(a), 10.5.1(b)
and 10.5.2 shall constitute a good discharge for the Purchaser of those of its
obligations under Clauses 4.1 and 4.2 required to be performed at Completion and
the Purchaser shall not be concerned to see that the funds are applied in
payment to the Sellers or Lenders.
CLAUSE 10.6 If either party fails or is unable to perform any material
obligation required to be performed pursuant to Clause 10 on the Completion
Date, the other party shall not be obliged to complete the sale and purchase of
the Shares.
SECTION 11 WARRANTORS TAX INDEMNITY
CLAUSE 11.1 For the purposes of this Section 11:
"COMPANIES" means the Company and the Subsidiaries and a "COMPANY" means any of
them;
"DEFERRED RELIEF" means any Relief (other than a right to a repayment of Tax)
which:
(a) is taken into account in computing any provision for deferred tax which
appears in the Last Accounts or in eliminating such provision; or
(b) is taken into account in the Last Accounts as an asset;
"PRE-COMPLETION RELIEF" means a Relief which arose to a Company in respect of a
period ended on or before the Last Accounts Date and is neither:
(a) a Deferred Relief; nor
(b) a repayment of Tax which is taken into account in the Last Accounts
as an asset;
"RELIEF" means loss, allowance, credit, relief, deduction or set-off or
any right to a repayment of Tax available for set-off;
"TAX CLAIM" means any notice, demand, assessment, letter or other document
issued by a Taxation Authority indicating that a Company may be required to make
an actual or suffer a deemed payment of Tax or to suffer the non-availability,
loss, cancellation or reduction of a right to a repayment of Tax which may give
rise to a claim against the Warrantors under this Section 11;
"TAXATION AUTHORITY" means any local, municipal, governmental, state, federal or
other fiscal or revenue authority, body or official competent to impose Tax;
"TRANSACTION" means any transaction, act, event or omission of whatever nature;
references to "PROFITS" include income, profits or gains (including capital
gains) of any description and from any source and references to "PROFITS EARNED"
include profits earned, accrued or received and profits deemed to have been
treated as earned, accrued or received for Tax purposes;
references to a "REPAYMENT OF TAX" include any repayment supplement or interest
in respect of it;
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references to a "RESULT OF A TRANSACTION OCCURRING ON OR BEFORE COMPLETION"
include a result of a series of or combined result of two or more Transactions,
where (i) the first of which was a Transaction occurring on or before Completion
or which commenced on or before Completion other than in the ordinary course of
business of the Company and (ii) the Transaction or Transactions occurring after
Completion or which commenced after Completion were in the ordinary business of
the Company;
references to "TAX" include, in a case where Tax for which a Company is liable
is discharged by another person, the amount corresponding to that TAX for which
the Company is, after that discharge, liable to that person; and
references to any "TRANSACTION OCCURRING ON OR BEFORE COMPLETION" include the
entering into and performance of the Agreement.
11.2 For the purposes of this Section 11 a payment of Tax shall be deemed
to be made by a Company if a payment of Tax would have been due to be made by
that Company but for the utilisation of any Relief other than a Pre-Completion
Relief and the Purchaser would have been entitled to make a claim against the
Warrantors under this Section 11 in which case the amount of payment of Tax
deemed to be made shall be the amount of such claim, or where the relevant
Relief is a right to repayment, the amount of the repayment.
11.3 For the purposes of this Section 11, a payment of Tax deemed to be
made in accordance with Clause 11.2 shall be deemed to be due on the date on
which that Tax would have been due (assuming that an assessment or other
notification of that Tax had been made at the earliest permissible time and no
appeal had been made against the assessment or notification) but for the
availability of a Relief concerned.
11.4 The Warrantors shall, subject to the limitation set forth in Section
6 and the following provisions of this Section 11, pay to the Purchaser or to a
Company, as directed by the Purchaser, whether or not a Company is or may be
entitled to claim reimbursement of the payment from any person, an amount equal
to:
(a) any payment of Tax made or to be made by a Company (or, in the case of
T.D.S. Circuits PLC, a percentage of the payment of Tax equal to the
proportion of the Company's equity shareholding in T.D.S. Circuits PLC
in relation to the entire issued equity share capital at Completion) as
a result of any Transaction occurring on or before Completion or by
reference to any profits earned on or before Completion;
(b) any repayment of Tax to the extent that the repayment has been taken
into account in the Last Accounts but is not available or is lost,
reduced or cancelled;
(c) any payment of Tax to the extent that such payment would not have been
made but for a Deferred Relief not being available or being lost,
reduced or cancelled; and
(d) any reasonable costs or expenses properly incurred by the Purchaser or
a Company in connection with any payment of Tax or the
non-availability, loss, reduction or cancellation of a repayment of Tax
or of a Deferred Relief as is referred to in the preceding paragraphs
in respect of which the Purchaser is entitled to receive a payment
under this Section 11 or in connection with any reasonable action taken
in avoiding, resisting or settling any payment of Tax or the
non-availability, loss, reduction or cancellation of a repayment of Tax
or of a Deferred Relief.
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11.5.1 If the Purchaser or a Company incurs a liability to Tax which results
from, or is calculated by reference to, any sum paid to it under this
Section 11, the amount so payable shall be increased by such an amount
as will ensure that, after payment of the liability to Tax, the
Purchaser or the Company (as the case may be) is left with a net sum
equal to the sum which it would have received had no such liability to
Tax arisen.
11.5.2 Clause 11.5.1 above shall not apply to the extent that the liability to
Tax referred to in that Sub-Clause arises as a result of any sum
payable under this Section 11 being paid to a Company and which would
not have arisen had the payment been made to the Purchaser.
11.6 A payment to be made by the Warrantors under Clause 11.4 above (as
increased by Clause 11.5 above) shall be made on the following dates:
(a) as regards any payment of Tax within paragraphs (a) or (c) of Clause
11.4, the later of (i) two business days before the date on which the
payment of Tax is finally due and (ii) ten days after a demand in
writing is served on the Warrantors by the Purchaser or the relevant
Company;
(b) as regards any non-availability, loss, reduction or cancellation of a
repayment of Tax within paragraph (b) of Clause 11.4, the date on which
Tax would have been due in respect of the period to which the right of
repayment related or, if later or if there is no such date, seven days
after the service of notice on the Warrantors by the Purchaser or the
relevant Company that the auditors for the time being of the relevant
Company have certified, at the request and expense of the Purchaser or
the relevant Company, the extent of such non-availability, loss,
reduction or cancellation, such notice to be accompanied by a copy of
the certificate;
(c) as regards costs and expenses within paragraph (d) of Clause 11.4, the
date on which the payment under Clause 11.4 to which they relate is
made in accordance with this Clause 11.6.
11.7 No payment shall be treated as made by the Warrantors under Clause 11.4
until and to the extent that cleared funds are available in respect of it to a
Company or to the Purchaser.
11.8 If the Warrantors fail to pay any sum due from them under this Section
11 on the due date for payment in accordance with Clause 11.6 they shall pay
interest on that sum from the due date until actual payment at the rate of 2 per
cent. per annum above the base rate for the time being of Credito Italiano.
11.9 The procedure for the conduct of claims contained in Clause 6.4, the
limitations contained in Clauses 6.5 and 6.6 and the exclusions contained in
Clause 6.11 shall apply to this Section 11 mutatis mutandis.
11.10 (a) A Relevant Amount shall be defined for the purposes of this
Clause 11.10 as follows:
(i) if a provision for Tax in the Last Accounts or the Management
Accounts (excluding any provision for deferred Tax) is an
over-provision (except to the extent that such over-provision
results from the utilisation of a Relief other than a
Pre-Completion Relief), the amount of such over-provision
shall be a Relevant Amount;
(ii) if any payment of Tax, lost, reduced or cancelled repayment of
Tax or costs and expenses referred to in Clause 11.4 gives
rise to a Relief which reduces or
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eliminates an actual liability to Tax of the Company whenever
arising (other than one in respect of which the Purchaser is
entitled to a payment under this Section 11), the amount of
the actual liability to Tax which is eliminated or the amount
by which it is reduced shall be a Relevant Amount).
(b) If the auditors for the time being of the Company (at the expense and
request of the Warrantors) certify that a Relevant Amount exists for
the purposes of this Clause 11.10 (subject to sub-Clause 11.10 (c)):
(i) the Relevant Amount shall first be set off against any payment
then due from the Warrantors under this Section 11;
(ii) to the extent that there is an excess, a refund shall be made
to the Warrantors of any previous payment or payments made by
them under this Section 11 and not previously refunded under
this sub-Clause 11.10 (b) up to the amount of such excess; and
(iii) to the extent that the excess referred to in sub-Clause 11.10
(b) (ii) is not exhausted under that sub-Clause, the remainder
of that excess shall be carried forth and set off against any
future payments which become due from the Warrantors under
this Section 11.
(c) A Relevant Amount shall not be so treated in accordance with sub-Clause
11.10 (b) if the payment due from the Warrantors under this Section 11
relates to a loss of a Deferred Relief which is a credit in respect of
xxxxx tremonti by a Company (apart from T.D.S Circuits PLC).
11.11 For the avoidance of doubt, the Warrantors shall remain liable in
accordance with the terms of this Section 11 notwithstanding that any Tax giving
rise to a liability to make a payment under Clause 11.4 of this Clause 11 is or
has been discharged or suffered by the relevant Company, whether before or after
the date of this Agreement and whether by payment or by the loss or utilisation
of any Relief or right to repayment of Tax.
SECTION 12 PROTECTIVE COVENANTS
CLAUSE 12.1 Each of the Warrantors severally agrees that he shall not (whether
alone or jointly with another and whether directly or indirectly) carry on or be
engaged or (except as the owner for investment of securities dealt in on a stock
exchange and not exceeding 5 per cent. in nominal value of the securities of
that class) interested in any Competing Business in Europe, Asia, Africa, North
or South America or Oceania during a period of three years after Completion. For
this purpose, "COMPETING BUSINESS" means any business which is engaged in the
type of business which is carried on by any Group Company at Completion or any
business which manufactures and markets printed circuit boards, hybrids or
backplanes. Provided that this clause shall cease to apply to any Warrantor on
his ceasing to be an employee of the Company or any subsidiary of the Company
following the termination by the relevant company of his employment with that
Company if such termination is made without "CAUSE" ("cause" for the purpose of
this Clause 12.1 means the conviction of a crime or a material breach of
employment duties or the breach of the provisions of Clauses 12.2 and 12.3 by
such employee).
CLAUSE 12.2 Each of the Warrantors severally agrees that he shall not within a
period of three years after Completion, directly or indirectly, solicit or
endeavour to entice away from any Group
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Company, offer employment to or employ, or offer or conclude any contract for
services with, any person who was employed by any Group Company in skilled or
managerial work at any time during the 12 months prior to Completion. Provided
that this Clause shall not operate to prevent the Warrantors from employing any
person whose contract of employment with any member of the Group is terminated
otherwise than as result of the voluntary resignation of such person.
CLAUSE 12.3 Each of the Warrantors severally agrees that he shall not at any
time or except so far as may be required by law or regulation and then only
(other than in relation to any disclosure required to be made to the relevant
taxation authority) after prior consultation with the Purchaser, use to the
detriment of any Group Company or disclose to any person to the detriment of any
Group Company, any trade secret or other confidential information of a technical
character which it holds in relation to any Group Company or its affairs.
CLAUSE 12.4 Each of the Warrantors severally acknowledges and agrees, as far as
such clauses are applicable to them, that each of Clauses 12.1, 12.2 and 12.3
constitutes an entirely separate and independent restriction and that the
duration, extent and application of each restriction are no greater than is
reasonable and necessary for the protection of the interests of the Purchaser
but that, if any such restriction shall be adjudged by any court or authority of
competent jurisdiction to be void or unenforceable but would be valid if part of
the wording thereof were to be deleted and/or the period thereof were to be
reduced and/or the area dealt with thereby were to be reduced, the said
restriction shall apply within the jurisdiction of that court or competent
authority with the least amount of modifications as are necessary to make it
valid and effective.
SECTION 13 ENTIRE AGREEMENT
CLAUSE 13.1 This Agreement including the Schedules and the documents to be
executed under it, including the Escrow Agreement and the Disclosure Letter all
of which are incorporated herein and form an integral and substantive part of
this Agreement, together constitute the entire agreement and understanding
between the parties in connection with the sale and purchase of the Shares and
there are no other agreements between any of the parties in relation thereto.
This Agreement shall, with effect from Completion, supersede all prior
agreements between the parties, whether written or oral, in relation thereto. It
is agreed that:
(a) neither party has entered into this Agreement in reliance upon any
representation, warranty or undertaking which is not set out or
referred to in this Agreement.
(b) this Clause shall not exclude any liability for fraudulent
misrepresentation.
SECTION 14 VARIATION
CLAUSE 14.1 No variation of this Agreement (or of any of the documents referred
to herein) shall be valid unless it is in writing and signed by or on behalf of
each of the parties hereto. The expression "VARIATION" shall include any
variation, supplement, deletion or replacement however effected.
SECTION 15 ASSIGNMENT
CLAUSE 15.1.1 It is agreed and acknowledged by the Sellers, the Lenders and the
Institutions that this Agreement enures to the benefit of any successor of the
Purchaser (including the surviving entity following any merger of the Purchaser
and any Group Company) and that the Purchaser may at any time assign its rights
to acquire the Shares and/or the Loans hereunder to any Affiliate of Purchaser
or the Purchaser may at any time after Completion, sell all of the Shares and/or
the Loans
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to any person; provided however, that the benefit of the Commercial Warranties,
the Tax Indemnities and the Covenants shall terminate upon any direct sale or
transfer of the Shares after Completion to any person that is not either an
Affiliate of the Purchaser or an assignee pursuant to Clause 15.3; provided
further however, that the Title Warranties shall inure to the benefit of any
owner of the Loans or Shares, whether Affiliated with the Purchaser or
otherwise. The terms of any assignment permitted by this Clause 15.1 shall
stipulate that the assignee shall agree to be bound by the terms of this
Agreement as if it were the Purchaser under this Agreement (such that it will be
bound by the limitations set out in Section 6).
CLAUSE 15.1.2 No permitted assignment of its rights shall relieve the
Purchaser of any of its obligations or covenants hereunder. It is acknowledged
that the Sellers shall be entitled to exercise any rights (including, for the
avoidance of doubt, any rights of set-off) against any assignee which they would
have had against the Purchaser.
CLAUSE 15.2 Subject to Clauses 15.1, 15.3 and 15.4, no party shall be entitled
to assign the benefit of any provision of this Agreement without the prior
written approval of the other parties.
CLAUSE 15.3 Subject to the provisions of Clause 15.1.2 the Purchaser may (if
required) assign its rights under this Agreement by way of security to any
bank(s) and/or financial institution(s) lending money or making other banking
facilities available to the Purchaser or any other member of the Purchaser's
Group for the acquisition of the Shares and/or Loans, provided that the
liability of the Sellers shall not be any greater as a result of such transfer
or assignment.
CLAUSE 15.4 Notwithstanding any other provision of this Clause 15 and without
prejudice to the guarantee contained in Clause 7.1, the Institutional Seller
shall be entitled, at any time following Completion, to assign, transfer or
distribute as part of a liquidation process its rights and/or obligations under
this Agreement to one or more of the Institutions or any Affiliate of any
Institution.
SECTION 16 ANNOUNCEMENTS
CLAUSE 16.1 No announcement or circular in connection with the existence or the
subject matter of this Agreement shall be made or issued by or on behalf of the
Sellers, VGL or the Purchaser without the prior written approval of the others
(for the period after Completion only, such approval not to be unreasonably
withheld or delayed). This shall not affect any announcement or circular
required by law or regulation or the rules of any stock exchange.
SECTION 17 COSTS
CLAUSE 17.1 Each of the parties shall pay its own costs incurred in connection
with the negotiation, preparation and implementation of this Agreement. The
fissato bollato stamp duty payable in connection with the transfer of the Shares
from the Sellers to the Purchaser shall be exclusively met by the Purchaser. The
Warrantors and Institutions agree that any expenses, including any legal costs
and advisors' fees incurred by the Sellers or any Group Company in connection
with the sale of the Company and the execution and performance of this Agreement
("TRANSFER COSTS") shall be for the account of the Warrantors and Institutions
and accordingly jointly and severally agree to pay the Purchaser on demand an
amount equal to any Transfer Costs born by any such Group Company.
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SECTION 18 PARTIAL INVALIDITY
CLAUSE 18.1 If, at any time, any provision hereof is or becomes illegal,
invalid or unenforceable in any respect under the law of any jurisdiction,
neither the legality, validity or enforceability of the remaining provisions
hereof nor the legality, validity or enforceability of such provision under the
law of any other jurisdiction shall in any way be affected or impaired thereby.
SECTION 19 REMEDIES AND WAIVERS
CLAUSE 19.1 No failure by any party to exercise, nor any delay by any party in
exercising any right or remedy hereunder shall operate as a waiver thereof, nor
shall any single or partial exercise of any right or remedy prevent any further
or other exercise thereof or the exercise of any other right or remedy.
SECTION 20 FURTHER ASSURANCE
CLAUSE 20.1 Each party shall do, or procure to be done, all such further acts
and things, and execute or procure the execution of all such other documents, as
the other may from time to time reasonably require, and at the cost and expense
of the party requiring the same, whether on or after Completion, for the purpose
of giving to the other the full benefit of all of the provisions of this
Agreement.
SECTION 21 NOTICES
CLAUSE 21.1 COMMUNICATIONS IN WRITING Each communication to be made hereunder
shall be made in writing and, unless otherwise stated, shall be made by fax or
letter delivered by hand.
CLAUSE 21.2 DELIVERY Any communication or document to be made or delivered by
one person to another pursuant to this Agreement shall (unless that other person
has by 15 days' written notice to the other specified another address) be made
or delivered to that other person by facsimile or by hand at the address
identified below and shall be deemed to have been made or delivered (in the case
of any communication made by fax) when despatched (subject to confirmation of
receipt of all transmitted pages) or (in the case of any communication made by
letter delivered by hand) when left at the address specified.
CLAUSE 21.3 COMMUNICATION DETAILS The address of the parties for the purpose of
Clauses 21.1 and 21.2 are as follows:
ECSA:
Address: c/o Macfarlanes
00 Xxxxxxx Xxxxxx
Xxxxxx XX0X 0XX
For the attention of: X.X. Xxxx
Fax: 0171 831 9607
WARRANTORS
To the address shown on Schedule 1 for the attention of the relevant Warrantor
with a copy to the firm mentioned below which each of the Warrantors hereby
irrevocably appoints as their respective agent for service of process:
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Xxxxxx & Associati
Corso di Porta Romana
Milan
Facsimile No: 00 392 864 51498
Attention: Xxxxxxxx Xxxxxxx
PURCHASER:
c/o the person mentioned below whom the Purchaser hereby irrevocably
appoints as its agent for service of process.
c/o Viasystems Group Limited
0xx Xxxxx
0 Xxxxxxxxxx
Xxxxxxxxxxx
Xxxxxx X0
with copies to:
Viasystems Group, Inc.
000 Xxxxx Xxxxxx Xxxx, Xxxxx 000
Xx Xxxxx
Xxxxxxxx 00000
Facsimile No.: 001 314 746 2299
Attention: Xxxxx X. Xxxxxxxx
Hicks, Muse, Xxxx & Xxxxx Incorporated
000 Xxxxxxxx Xxxxx, Xxxxx 0000
Xxxxxx, Xxxxx 00000
Facsimile No.: (000) 000-0000
Attention: Xxxxxxxx X. Xxxxxx, Xx., Esq.
ANY OF THE CVC ENTITIES:
x/x XXX Xxxxxxx Xxxxxxxx
0-00 Xxxxxxxxx Xx.
Xxxxxx XX0X 0XX
Facsimile No.: 0171 420 4232
Attention: Hardy McLain
ANY OF THE NATWEST ENTITIES:
c/o NatWest Equity Partners Limited
Fenchurch Exchange
0 Xxxxxxxxx
Xxxxxx XX0X 0XX
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Facsimile No.: 0171 374 2580
Attention: Xxxxxxxx Xxxxxxx
SECTION 22 GOVERNING LAW
CLAUSE 22.1 This Agreement shall be governed by, and shall be construed in
accordance with, Italian law.
SECTION 23 ARBITRATION
CLAUSE 23.1 Unless settled by mutual agreement, any dispute or difference
whatsoever that might arise from the performance or as to the meaning of this
Agreement or as to any matter or items of whatsoever nature howsoever arising
out of or in connection with this Agreement, shall be submitted to arbitration
in accordance with and subject to the Rules of Arbitration and Conciliation of
the Chamber of Commerce of Milan and finally settled by three arbitrators
appointed in accordance with such rules then in force. For the purposes solely
of selecting arbitrators pursuant to this Clause 23.1, it is understood that the
Sellers and the Institutions shall be deemed to act as one party.
The panel of arbitrators will be appointed as follows: each party will appoint
an arbitrator; the two arbitrators appointed by the parties will appoint a third
arbitrator who shall act as chairman of the panel. In case the third arbitrator
is not appointed within 30 days from the appointment of the two arbitrators
appointed by the parties or one of the parties has not appointed its arbitrator
within 15 days from the notice of the appointment of the arbitrator by the other
party the third arbitrator and/or the arbitrator not appointed by the relevant
party will be appointed by the President of the Tribunal of Milan upon request
of any of each of the parties.
CLAUSE 23.2 Arbitration: Unless otherwise agreed in writing to by the Parties,
the arbitration will take place in Milan, Italy in the English language, and the
arbitrators shall be experienced in the arbitration of cross-border
transactions, qualified to arbitrate in respect of an agreement governed by
Italian law and fluent in the English language to the extent necessary to
consider and elucidate any issues arising under this Agreement.
CLAUSE 23.3 Costs of Arbitration: The cost of any arbitration will be assessed
against the unsuccessful party, with respect to any claim unsuccessfully
disputed by the relevant Party, and the arbitrators will be required to make
such cost part of any ruling issued by them.
CLAUSE 23.5 Italian Law: The arbitrators shall decide the dispute according to
Italian substantive law and pursuant to the rules of procedure applied by the
Rules of Arbitration and Conciliation of the Chamber of Commerce of Milan with
respect to international arbitration rules.
SECTION 24 COUNTERPARTS
CLAUSE 24.1 COUNTERPARTS This Agreement may be executed in any number of
counterparts and all of such counterparts taken together shall be deemed to
constitute one and the same instrument.
AS WITNESS this Agreement has been signed on behalf of the parties the day and
year first before written.
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SCHEDULE 1
THE SELLERS
(1) (2) (3) (4)
NAME ADDRESS # OF SHARES %
PART A
European Circuits SA 50 route X'Xxxx 7,686,875 87.85
PART B
Xxxxxx Xxxxxxxxxx Xxx Xxxxx Xxxxxxx Xxxxx Xxxxxx, 0 437,500 5.0
10010 Salerano Canavese (To)
Italy
Xxxxxx Xxxxxxx Xxx Xxxxxx, 00 284,375 3.25
00000 Xxxxxxxxxx X'Xxxxx (To)
Italy
Claudio Pastoris Xxx Xxxxxx, 0 000,000 0.0
00000 Xxxxxxx (Xx)
Xxxxx
Xxxxxxxxx Xxxxx Xxx Xxxxxx, 00 113,750 1.3
10012 Bollengo (To)
Italy
Carlo Xxxxxxx Xxxxxxxx Xxx X.Xxxxxxxx, 00 000,000 0.0
00000 Xxxxxx
Xxxxx
The above figures assume that all Management Options have been exercised in
full.
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SCHEDULE 2
THE COMPANY AND THE SUBSIDIARIES
PART A
DETAILS OF THE COMPANY
1. NAME: Zincocelere S.p.A.
2. DATE OF INCORPORATION: 19 December 1995
3. PLACE OF INCORPORATION: Salerano Canavese (To)
4. CLASS OF COMPANY: S.p.A.
5. REGISTERED NUMBER: Registro Imprese di Torino N.
7011
6. REGISTERED OFFICE: C.C.I.A.A. TO N. 829521
7. DIRECTORS: Xxxxxx Xxxxxxxxxx
Xxxxx Xxxxxx
Xxxxxx Xxxxxxx
Xxxxxxxx Xxxxxxx
Xxxxxxxxx Xxxxx
8. SECRETARY: None
9. AUTHORISED CAPITAL: 8,750,000 issued and fully paid
ordinary shares, par value Lire
1,000 each
10. ISSUED CAPITAL: 8,750,000 issued and fully paid
ordinary shares, par value Lire
1,000 each
11. REGISTERED SHAREHOLDERS: European Circuits S.A., Xxxxxx
Xxxxxxxxxx, Xxxxxx Xxxxxxx,
Claudio Pastoris, Carlo Xxxxxxx
Xxxxxxxx, Xxxxxxxxx Xxxxx.
12. ACCOUNTING REFERENCE DATE: 31 December
13. EXTERNAL AUDITORS: Xxxxxx Xxxxxxxx S.p.A.
14. TAX RESIDENCE: Italy
15. MORTGAGES AND CHARGES: Cash collateral of approximately
4.6 billion lire lodged with
Credito Italiano as security for
counter indemnity obligations of
the Company under a guarantee
granted by Credito Italiano to
IMI.
16. STATUTORY AUDITORS Xxxxx Xxxxx
Diego Sabolo
Xxxxxxxx Xxxxx
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PART B
DETAILS OF SUBSIDIARIES
1. NAME: T.D.S. Circuits PLC - (formerly
known as T.D.S. Circuits
(Blackburn) P.L.C.)
2. DATE OF INCORPORATION: 29 May 1974
3. PLACE OF INCORPORATION: England
4. CLASS OF COMPANY: Public
5. REGISTERED NUMBER: 1171921
6. REGISTERED OFFICE: Xxxxxxxxx Xxxxxx
Xxxxxxxxx
Xxxxxxxxxx XX0 0XX
7. DIRECTORS: Xxxx Xxxxxxx Xxxxxxxx Xxxxxxx
Xxxxxx Xxxxxxxxxx
Xxxxxxx Xxxxxxx Xxxx
Xxxxx Dallora
Xxxxxx Xxxxxxx
Xxxxxx Xxxxx Xxxxxxxxx
Xxxxxxx Pastoris
Xxxxxxxxx Xxxxx
8. SECRETARY: Xxxxxx Xxxxx Xxxxxxxxx
9. AUTHORISED CAPITAL: 25,000,000 ordinary shares of 5p
and 3,790,000 cumulative
redeemable voting preferred
shares 1992/95 of (pound)1 each.
10. ISSUED CAPITAL: (pound)4,845,000 divided in
21,100,000 ordinary shares of 5p
each and 3,790,000 cumulative
redeemable voting preferred
shares 1992/95 of (pound)1 each.
11. ACCOUNTING REFERENCE DATE: 31 December
12. EXTERNAL AUDITORS: Xxxxxx Xxxxxxxx
13. TAX RESIDENCE: UK
14. SUBSIDIARIES: None
15. MORTGAGES AND CHARGES: 1. Debenture dated 12 August 1997
in favour of Banca Commerciale
Italiana.
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1. NAME: Nord Elettronica S.r.L.
2. DATE OF INCORPORATION: 4 October 1991
3. PLACE OF INCORPORATION: Savona
4. CLASS OF COMPANY: S.r.l.
5. REGISTERED NUMBER: Registro Impress Aosta N.
60872/1996
6. REGISTERED OFFICE: C.C.I.A.A Aosta N. 53761
7. DIRECTORS: Xxxxxx Xxxxxxxxxx
Carlo Xxxxxxx Xxxxxxxx
Claudio Pastoris
8. SECRETARY: None
9. AUTHORISED CAPITAL: 63,000,000 issued and fully paid,
par value Lire 1,000 each
10. ISSUED CAPITAL: 63,000,000 issued and fully
paid, par value Lire 1,000 each
11. REGISTERED SHAREHOLDER: Zincocelere
12. ACCOUNTING REFERENCE DATE: 31 December
13. EXTERNAL AUDITORS: Xxxxxx Xxxxxxxx S.p.A.
14. TAX RESIDENCE: Italy
15. SUBSIDIARIES: None
16. MORTGAGES AND CHARGES: None
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SCHEDULE 3
THE COMMERCIAL WARRANTIES
PART A : GENERAL
CAPITAL EXPENDITURES
1.1 The Group has made all capital expenditures projected to be made in
1997 pursuant to the 1997 capital expenditure plan previously provided
to the Purchaser.
THE GROUP
THE COMPANY AND THE SHARES
2.1(a) All of the Shares are fully-paid or properly credited as fully-paid.
(b) The information in respect of the Company set out in Part A of Schedule
2 is true and accurate.
THE SUBSIDIARIES
2.2(a) The Company is (or a Subsidiary is) the sole legal and beneficial owner
of the whole of the issued share capital of each of the Subsidiaries
free from all security interests, options, equities, claims or other
third party rights (including, without limitation, rights of
pre-emption) of any nature whatsoever.
(b) The information in respect of each of the Subsidiaries set out in Part
B of Schedule 2 is true and accurate.
OTHER INTERESTS
2.3 No Group Company owns or has any interest of any nature whatsoever in
any shares, debentures or other securities issued by any undertaking
other than the Subsidiaries.
1 FINANCIAL MATTERS
ACCOUNTS
3.1(a) The Accounts (i) have been prepared in accordance with the Italian GAAP
on a consistent basis; (ii) are true and complete; (iii) fairly present
the financial position and results of each Group Company for the
relevant period(s) and as at the relevant date(s) and (iv) are in
accordance with the books and records of each Group Company as at the
date for the period stated.
3.1(b) The Management Accounts have been prepared on a basis consistent with
the books and records of the Company and prior management accounts. The
Management Accounts fairly present in all material respects the
financial position of the Group at the dates as indicated and the
results of operations and changes in all material respects in cash flow
for the periods indicated and except as set forth in the Disclosure
Letter do not present a materially
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different financial position of the Group and its results than that
which would be presented if the Management Accounts were prepared in
accordance with Italian GAAP.
3.1(c) The Company has no liabilities or obligations, either direct or
indirect, matured or unmatured or absolute, contingent or otherwise,
but in each case only of a kind which would be required to be reported
in accounts prepared in accordance with Italian GAAP (or the notes
thereto) except (i) those liabilities or obligations set forth in the
Accounts or the Management Accounts as of the Management Accounts Date
and not heretofore paid or discharged or (ii) those liabilities or
obligations incurred in the ordinary course of the business consistent
with past practice since the Management Accounts Date.
3.1(d) The accounts receivable which are reflected in the Management Accounts
have arisen out of transactions in the ordinary course of business
consistent with past practice and, except as provided in the Management
Accounts as of the Management Accounts Date, are not subject to valid
defences, set-offs or counterclaims other than those arising in the
ordinary course of business; and
3.1(e) All stock of the Company used in the conduct of its business, including
without limitation raw materials, work-in-progress and finished goods,
reflected in the Management Accounts as of the Management Accounts Date
or acquired since the date thereof (A) was acquired and has been
maintained in the ordinary course of business and (B) is valued at the
lower of cost or market value in accordance with Italian GAAP.
POSITION SINCE MANAGEMENT ACCOUNTS DATE
3.2(a) Since the Management Accounts Date, there has been no material adverse
change in the operations, liabilities, assets, Properties, financial
condition or results of operations of the Group (save to the extent
that the same affect to a similar extent generally all companies
carrying on similar businesses in Italy).
(b) Save as disclosed in the Disclosure Letter, since the Management
Accounts Date:
(i) the business of each Group Company has been carried on in the
ordinary and usual course, consistent with past practices;
(ii) no dividend or other distribution redemption of capital or
repayment has been declared, paid or made by any Group Company
(except for any dividends (A) provided for in the Management
Accounts of that Group Company or (B) paid to another Group
Company);
(iii) no share or loan capital, options, warrants or other
securities has been allotted or issued or agreed to be
allotted or issued by any Group Company (other than to another
Group Company);
(iv) there have been no transactions between any Group Company on
the one hand and any Seller or any officer or director of any
Group Company on the other hand;
(v) no Group Company has made commitments or agreements for
capital expenditures which are inconsistent with the Company's
written capital expenditure projections provided to Purchaser;
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(vi) no Group Company has other than in the ordinary and usual
course of business acquired or disposed of, or agreed to
acquire or dispose of, any business or any asset or Properties
(excluding disposition of inventory and capital expenditure in
each case in the ordinary course of business) having a value
in excess of 250,000,000 Lire;
(vii) no change has been made in terms of employment, including
pension fund commitments, by any Group Company (other than
those required by law) which could increase the total employee
or director costs of the Group by more than 500,000,000 Lire
per annum or the remuneration of any one director or employee
by more than 50,000,000 Lire per annum;
(viii) no Group Company has repaid any borrowing or indebtedness in
advance of its stated maturity; and
(ix) no resolution of the members of any Group Company has been
passed whether in general meeting or otherwise (other than
resolutions relating to the routine business of annual general
meetings).
ACCOUNTING AND OTHER RECORDS
3.3(a) The statutory books, books of account and other records of each Group
Company:
(i) have been maintained in accordance with applicable laws; and
(ii) are in its possession or under its control.
(b) All accounts, documents and returns required by law to be delivered or
made by any Group Company to the Registrar of Companies or any other
authority have been duly and correctly delivered or made.
TDS CIRCUITS PLC
3.4 The Company is currently entitled to redeem all the cumulative
redeemable voting preferred shares of (pound)1 each issued by TDS
Circuits PLC and has not agreed to waive or forebear its right to
redeem the same.
REGULATORY MATTERS
LICENCES
4.1(a) Each Group Company has obtained all material licences, permissions,
authorisations and consents required for carrying on its business in
the places and in the manner in which such business is now carried on.
(b) The licences, permissions, authorisations and consents referred to in
paragraph (a) are so far as the Warrantors are aware in full force and
effect and have been complied with in all material respects.
(c) To the best knowledge of the Warrantors, there are no circumstances
which indicate that any of the licences, permissions, authorisations or
consents referred to in paragraph (a), the revocation or non-renewal of
which would have a material adverse effect on any Group
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Company, will be revoked or not renewed, in whole or in part, in the
ordinary course of events (whether as a result of the acquisition of
the Shares by the Purchaser or otherwise).
COMPLIANCE WITH LAWS
4.2(a) Each Group Company has conducted its business and corporate affairs in
accordance with its constitutional documents and in all material
respects with all applicable laws and regulations (whether of the
United Kingdom, in respect of TDS Circuits PLC, Italy or so far as
Warrantors are aware, any other jurisdiction) including, without
prejudice to the generality of the foregoing, Law no. 675 of December
31, 1996.
(b) No Group Company has been served with written notice by any
governmental or regulatory authority of any breach of any order, decree
or judgment of any court or any governmental or regulatory authority.
COMPETITION AND FAIR TRADING LAWS
4.3(a) No Group Company has been advised or notified in writing that it is or
may be a party to (or is concerned in) any agreement, arrangement,
concerted practice or course of conduct which (i) in respect of TDS
Circuits PLC is registrable under the provisions of the Restrictive
Trade Practices Act 1976 (as amended), (ii) in respect of TDS Circuits
PLC contravenes the provisions of the Resale Prices Xxx 0000, (iii)
falls within Article 85 and/or Article 86 of the Treaty of Rome
Articles 2 and 3 of the Italian Antitrust Statute Law 287/1990 or (iv)
falls within Article 53 and/or Article 54 of the Agreement on the
European Economic Area.
(b) No Group Company has received any process, notice or other written
communication (formal or informal) by or on behalf of the Office of
Fair Trading (whether under the Fair Trading Xxx 0000, the Competition
Xxx 0000 or otherwise), the Monopolies and Mergers Commission, the
Secretary of State for Trade and Industry, the Commission of the
European Communities or the EFTA Surveillance Authority in competition
matters in relation to any aspect of the business of any Group Company
or any agreement, arrangement, concerted practice or course of conduct
to which any Group Company is, or is alleged to be, a party which in
any such case indicates that a Group Company is or is likely to be the
subject of prosecution or investigation.
(c) No Group Company is, insofar as the Warrantors are aware, subject to
any order or judgment given by any court or governmental or regulatory
authority or party to any undertaking or assurance given to any such
court or authority, in relation to competition matters which is still
in force.
US SALES AND ASSETS
4.4 The Group does not make any sales directly into the US in an amount
exceeding $25,000,000 per annum and does not have any assets or
properties in the US whose value exceeds $15,000,000.
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44
THE GROUP'S ASSETS
OWNERSHIP
5.1(a) For the purpose of this Schedule 3, "ASSETS" shall not include the
Properties, to which the provisions of Part B of this Schedule shall
apply.
(b) Each of the assets included in the Last Accounts of each Group Company
or acquired by it since the Last Accounts Date (other than assets sold
in the ordinary course of business) is legally and beneficially owned
by that Group Company. Those assets are not the subject of any security
interest or any assignment, equity, option, right of pre-emption, right
of first refusal, royalty, factoring arrangement, leasing or hiring
agreement, hire purchase agreement, conditional sale or credit sale
agreement, agreement for payment on deferred terms or any similar
agreement or arrangement (or any agreement or obligation, including a
conditional obligation, to create or enter into any of the foregoing)
except for:
(i) any hire or lease agreement in the ordinary course of business
involving an expenditure of less than 400,000,000 Lire in
aggregate per annum;
(ii) title retention provisions in respect of goods and materials
supplied to the Group in the ordinary course of business; and
(iii) the security interests, if any, reflected in the Management
Accounts as of the Management Accounts Date and liens arising
in the ordinary course of business by operation of law.
POSSESSION AND THIRD PARTY FACILITIES
5.2(a) All of the assets owned by each Group Company, or in respect of which
any Group Company has a right of use, are in the possession or under
the control of that Group Company.
(b) Where any facilities or services are provided to any Group Company by
any third party, there has not in so far as the Warrantors are aware
occurred any event of default or any other event or circumstance which
may entitle any third party to terminate any agreement or licence in
respect of the provision of such facilities or services and which would
have a material adverse effect on any Group Company.
ADEQUACY OF ASSETS
5.3(a) The assets of each Group Company and the facilities and services to
which each Group Company has a contractual right include all rights,
properties, assets, facilities and services currently used in the
business of that Group Company in the manner in which it is currently
carried on.
(b) No Group Company depends upon the use of assets owned by, or facilities
or services provided by, the Sellers or any entity (other than any
Group Company) controlled by the Sellers.
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CONDITION
5.4 All the plant, machinery, equipment and vehicles used by each Group
Company are in a good state of repair, ordinary wear and tear excepted.
PLANT REGISTERS
5.5 The plant registers of each Group Company comprise in all material
respects a complete and accurate record of all the plant, machinery and
equipment owned or possessed by that Group Company.
INSURANCES
5.6(a) There is set out in the Disclosure Letter a summary of the insurances
maintained by or covering members of the Group. Such insurances are in
full force.
4 INTELLECTUAL PROPERTY RIGHTS
REGISTERED RIGHTS
6.1(a) The Disclosure Letter contains true, complete and accurate lists of all
Intellectual Property Rights registered or sought by the relevant Group
Company to be registered in any jurisdiction which are held or
beneficially owned by each Group Company.
(b) In so far as the Warrantors are aware, no act has been done or omitted
to be done by any Group Company and no event has occurred which may
render any of such Intellectual Property Rights which are material
subject to revocation, compulsory licence, cancellation or amendment or
may prevent the grant or registration of a valid Intellectual Property
Right pursuant to a pending application.
INFRINGEMENT
6.2(a) So far as the Warrantors are aware, none of the operations of the Group
infringe any Intellectual Party Rights held by any third party or
involve the unauthorised use of confidential information disclosed to
any Group Company in circumstances which render such Group Company
liable to a third party claim.
(b) No claim has been made by any third party, notice of which has been
received by the relevant Group Company in writing, which alleges any
infringing act or process or which otherwise disputes the right of any
Group Company to use any Intellectual Property Rights relating to its
business and the Warrantors are not aware of any circumstances
(including any act or omission to act) reasonably likely to give rise
to such a claim.
(c) There exists no actual or, so far as the Warrantors are aware,
threatened infringement by any third party of any Intellectual Property
Rights held or used by a Group Company (including misuse of
confidential information) or any event reasonably likely to constitute
such an infringement where such infringement would reasonably be
expected to have a material adverse effect on such Group Company.
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46
EMPLOYEE CLAIMS
6.3 No claims have been made or, so far as the Warrantors are aware,
threatened by employees or ex-employees of a Group Company to be compensated in
respect of any Intellectual Property Rights used by any Group Company.
INTELLECTUAL PROPERTY LICENCES
6.4(a) Details of all licences granted to or by any Group Company in respect
of Intellectual Property Rights are set out in the Disclosure Letter
including details of any limit as to time or right of termination
affecting the use of the Intellectual Property Right.
(b) No Group Company is in material default under any licence, sub-licence
or assignment granted to it in respect of any Intellectual Property
Rights used by any Group Company.
CONFIDENTIAL INFORMATION
6.5 Where information of a confidential nature has been developed or
acquired by any Group Company for the purposes of its business in the two (2)
year period prior to the date of this Agreement, such information (except
insofar as not significant to the business of the Company or insofar as it has
fallen into the public domain through no fault of a Group Company) has been kept
strictly confidential and has not been disclosed otherwise than subject to an
obligation of confidentiality being imposed on the person to whom the
information was disclosed or as required by law.
RECORDS AND SOFTWARE
6.6 All the accounting records and systems (including but not limited to
computerised accounting systems) of the Group are recorded, stored, maintained
or operated or otherwise held by a Group Company and are not wholly or partly
dependent on any facilities or systems which are not under the exclusive
ownership or control of a Group Company.
CONTRACTUAL MATTERS
SIGNIFICANT CONTRACTS
7.1 Except as specified in the Disclosure Letter, there is not outstanding
any agreement or arrangement to which any Group Company is a party:
(a) under which the execution, delivery and performance of this Agreement
will:
(i) cause any Group Company to be in conflict, violation, or
default (with or without notice or lapse of time or both) of
any provision thereof where the same would be material to the
business of the Group; or
(ii) give rise to any right of termination, cancellation or
acceleration of any obligation or loss of benefit affecting
any Group Company;
(b) which will result in any Group Company becoming liable for any finder's
fee, brokerage or other commission in connection with the acquisition
of the Shares by the Purchaser;
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47
(c) which were entered into outside the ordinary course of business of the
Company and otherwise than by way of a bargain at arm's length;
(d) (without prejudice to sub-paragraph (c) above) which is a substantial
property transaction and/or a loan entered into between a Group Company
and any director of that Company;
(e) which requires (or confers any right to require) the allotment or issue
of any shares, debentures or other securities (including options or
warrants) of any Group Company now or at any time in the future;
(f) which establishes any guarantee, indemnity or suretyship given by any
Group Company in respect of the obligations or solvency of any third
party;
(g) pursuant to which any Group Company has sold or otherwise disposed of
any company, business or assets in circumstances such that it remains
subject to any liability (whether contingent or otherwise) which is not
fully provided for in its Management Accounts as of the Management
Accounts Date, excluding sales of inventory made by the Company in the
ordinary course of its business;
(h) which, upon completion by a Group Company of its work or the
performance of its other obligations under it, is so far as the
Warrantors are aware likely to result in a loss for that Group Company
which is not fully provided for in its Management Accounts as of the
Management Accounts Date;
(i) which establishes any joint venture, consortium, partnership or profit
(or loss) sharing agreement or arrangement to which any Group Company
is a party;
(j) which involves (i) expenditure by any Group Company in excess of
600,000,000 Lire individually or 3,000,000,000 Lire in the aggregate or
(ii) obligations or restrictions of any Group Company of an unusual or
exceptional nature or magnitude;
(k) which establishes any material agency, distributorship, marketing,
consulting, purchasing, sales, manufacturing or licensing agreement or
arrangement to which any Group Company is a party, for these purposes,
material means having a value in excess of 100,000,000 Lire;
(l) which restrains any Group Company from carrying on its business in any
part of the world;
(m) which is a currency and/or interest rate swap agreement, asset swap,
future rate or forward rate agreement, interest cap, collar and/or
floor agreement or other exchange or rate protection transaction or
combination thereof or any option with respect to any such transaction
or any other similar transaction to which any Group Company is a party;
(n) which is a recognition, procedural or other agreement between any Group
Company and any recognised independent trade union;
(o) which is entered into between any Group Company and any of the Sellers
or any Affiliate of any Group Company and the Seller;
(p) which is a note, debenture, bond, letter of credit agreement, loan
agreement or the agreement relating to the borrowing or lending of
money or any guarantee of the indebtedness of another;
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48
(q) which is an employment, consultancy, severance or similar agreement
with any present or former employee or director of any Group Company;
(r) which is a lease under which any Group Company is either lessee or
lessor relating to any asset or Property of a Group Company;
(s) under which any Group Company becomes bound to pay to a third party an
amount which, but for the completion of the sale of the shares to the
Purchaser, would not otherwise have been required to be paid by such
Group Company provided that this paragraph (s) shall not apply to any
amount merely required to be paid at an earlier date as a result of the
sale of the Shares; or
(t) which is a written bid, tender, proposal or offer which, if accepted,
would result in any Group Company becoming a party to any agreement or
arrangement of a kind described in sub-paragraphs (a) to (r) above.
DEFAULTS AND DISCLOSURE
7.2(a) No Group Company is in default under any significant agreement to which
it is a party (contracts falling within paragraph 7.1 are deemed to be
significant for this purpose) and which default is material to its
business and, to the best of the knowledge of the Warrantors, there are
no circumstances likely to give rise to any such default.
(b) To the best knowledge of the Warrantors, no party with whom any Group
Company has entered into any agreement or arrangement and which is
significant (contracts falling within paragraph 7.1 being deemed to be
significant for this purpose) to its business is in material default
under such agreement or arrangement and there are no circumstances
likely to give rise to any such default.
(c) The Warrantors have made available to the Purchaser true and correct
copies of all significant agreements of the Group required to be
disclosed in the Disclosure Letter pursuant to paragraph 7.1, along
with all amendments, modifications and supplements thereto.
TRADING RELATIONSHIPS
7.3 Except as disclosed in the Disclosure Letter during the twelve months
preceding the date of this Agreement no significant customer or group of
customers of or supplier or group of suppliers to any Group Company has ceased
to deal or has, so far as the Warrantors are aware, threatened that it will
cease to deal with that Group Company. For these purposes, a customer is
regarded as "significant" if sales to that customer in any year represent five
percent or more of the sales of that Group Company in any such year and a
supplier is regarded as "significant" if sales by that supplier in any year
represent five percent or more of purchases of that Group Company in any such
year.
PRINCIPAL SUPPLIERS AND CUSTOMERS
7.4 Except as disclosed in the Disclosure Letter, no supplier or customer
(including any person known by the Warrantors to be connected in any way with
any such supplier or customer), accounted either for more than five per cent. of
the aggregate value of all purchases or for more than five per cent. of the
aggregate value of all sales of any Group Company for the period beginning on
January 1, 1997 and ended on December 31, 1997.
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GRANTS
7.5 In relation to any investment or other grant or allowance paid or
payable to any Group Company ("GRANTS"), the relevant Group Company:
(a) has complied with its obligations to make expenditures under such
Grants as such obligations fall due;
(b) has achieved the performance targets set out in such Grants including
as to the employment of certain numbers of employees; and
(c) has not been notified that any repayment of any such Grant is required
and is not aware that any circumstances exist as a result of which in
the Warrantor's opinion it is likely that it will receive such
notification.
LITIGATION AND INVESTIGATIONS
LITIGATION
8.1(a) Save as disclosed in the Disclosure Letter, except as plaintiff in the
collection of debts arising in the ordinary course of business (which
do not exceed 200,000,000 Lire in aggregate), no Group Company is a
plaintiff or defendant in or, insofar as the Warrantors are aware,
otherwise a party to any litigation, arbitration or administrative
proceedings which are in progress and insofar as the Warrantors are
aware no such litigation is threatened or pending by or against or
concerning any Group Company or any of its assets.
(b) Insofar as the Warrantors are aware no governmental or official
investigation or inquiry concerning any Group Company is in progress or
pending.
DIRECTORS AND EMPLOYEES
EMPLOYEES
9.1 Each Group Company is in material compliance with all laws and
applicable labour collective agreements respecting employment and employment
practices, terms and conditions of employment, pay equity, wages and hours, and
laws and regulations concerning social security contributions (including,
without limitation, contributions to be made under integrative pension schemes)
and health and safety at work.
9.2 The Disclosure Letter sets out accurate details of the current basic
salary, length of notice and significant other financial benefits of those
employees of any Group Company earning a current basic salary in excess of
180,000,000 Lire per annum (or equivalent).
AGREEMENTS
9.3 Except as specified in the Disclosure Letter, no Group Company is
bound by any collective bargaining or similar agreement nor are any such
agreements currently being negotiated.
9.4 Any and all consulting agreements entered into between any of the Group
Company and any of its consultants, advisors, accountants, etc. comply with all
applicable laws.
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9.5 Except as specified in the Disclosure Letter, there is not in
existence any written or unwritten contract of employment with a director or
an employee of any Group Company (or any contract for services with any person)
which cannot be terminated by twelve (12) months' notice or less without giving
rise to a claim for damages or compensation (other than a statutory redundancy
payment or statutory compensation for unfair dismissal).
DISPUTES
9.6 Insofar as the Warrantors are aware there are no present circumstances
which are likely to give rise to any such specific dispute between any Group
Company and a material number or category of its employees (or any trade union
or other body representing all or any of such employees) .
INCENTIVE SCHEMES
9.7 Except as specified in the Disclosure Letter, no Group Company has in
existence (or is proposing to introduce) any share incentive scheme, share
option scheme or profit sharing, bonus, commission or other incentive scheme for
all or any of its directors or employees.
PAYMENTS ON TERMINATION
9.8 Save as disclosed in the Disclosure Letter, except to the extent (if
any) to which provision or allowance has been made in the Management Accounts as
of the Management Accounts Date of each Group Company:
(a) no liability has been incurred by any Group Company which has not been
satisfied in full for breach of any contract of employment or for
services or redundancy payments, protective awards, compensation for
wrongful dismissal or unfair dismissal or for failure to comply with
any order for the reinstatement or re-engagement of any employee or for
any other liability accruing from the termination of any contract of
employment or for services; and
(b) no gratuitous payment of a material amount has been made or material
benefit given (or promised to be made or given) by any Group Company in
connection with the actual or proposed termination or suspension of
employment, or variation of any contract of employment, of any present
or former director or employee of any Group Company. For these
purposes, "material" means an amount or benefit in excess of 50,000,000
Lire.
REDUNDANCIES
9.9 No UK Group Company has within the period of one (1) year preceding
the date of this Agreement given notice of any redundancies to the relevant
Secretary of State or started consultations with any independent trade union
under the provisions of the Employment Xxx 0000 or failed to comply with any
such obligation under the said Part IV. No Italian Group Company has within the
period of one (1) year preceding the date of this Agreement given notice and/or
started consultations with any trade unions under the provisions of the Law no.
223 of July 23, 1991.
INSOLVENCY ETC.
10.1 No order has been made, or, so far as the Warrantors are aware,
petition presented or meeting convened for the purpose of considering a
resolution for the winding up of any Group Company or for the appointment of any
provisional liquidator. So far as the Warrantors are aware,
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no petition has been presented for an administration order to be made in
relation to any Group Company, and insofar as the Warrantors are aware no
receiver (including any administrative receiver) has been appointed in respect
of the whole or any part of any of the property, assets and/or undertaking of
any Group Company. So far as the Warrantors are aware, there are no
circumstances applying to a Group Company which would trigger the commencement
of any of the procedures governed by Decree no. 267 of March 16, 1942, or Law
no. 95 of April 3, 1979.
10.2 No scheme of arrangement or reorganisation (or analogous event) has
been proposed, sanctioned or approved in relation to any Group Company.
10.3 Within the period of one year preceding the date of this Agreement, no
distress, distraint, charging order, garnishee order, execution or other process
has been levied for in respect of the whole or any part of any of the property,
assets and/or undertaking of any Group Company.
10.4 No person who now is, or who at any time within the last three years
was, a director or officer of TDS is, or at any material time was, subject to
any disqualification order under any applicable laws.
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PART B: PROPERTY WARRANTIES
1. GENERAL
The Properties comprise all the land and buildings owned, occupied or used by
any Group Company or in which any Group Company has any rights or interest and
the information concerning the Properties set out in Schedule 4 is true,
complete and accurate.
2. POSSESSION
(a) Save as mentioned in the Disclosure Letter, there are no leases,
underleases, tenancies or licences granting rights of occupation
affecting any of the Properties nor is there any agreement to grant the
same.
(b) A Group Company is in possession of the whole of the Properties, none
of which is vacant.
3. TITLE
(a) The Group has a good and indefeasible title to each of the Properties
and all relevant deeds and documents are in its possession or under its
control (except for those Properties subject to the mortgages or
charges referred to in the Disclosure Letter, in which case they are
held by the first mortgagees or chargees therein mentioned).
(b) Where title to the UK Properties is registered at H. M. Land Registry,
it is registered with title absolute, free from any caution, inhibition
or notice and no unregistered title should have been registered.
4. ADVERSE INTERESTS
Except as specified in the Disclosure Letter, the Properties are so far as the
Warrantors are aware free from any:
(a) security interest, option or right of pre-emption;
(b) (in the case of the UK Properties only) over-riding interest (as
defined in Section 70 of the Land Registration Act 1925); or
(c) right of occupation or enjoyment by any third party or the public, nor
is any such right being acquired and there is no agreement to create
any of the foregoing.
5. EASEMENTS ETC.
The Properties have the benefit of all rights of way and for drainage and the
supply of services reasonably required for their present use.
6. OUTGOINGS
The Properties are not subject to the payment of any outgoings other than the
usual rates and taxes and, in the case of leaseholds, the rent and other
outgoings (if any) disclosed by the Disclosure Letter.
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7. DISPUTES
To the best knowledge of the Warrantors there are no current or anticipated
notices, actions, disputes or complaints, relating to or in respect of the
Properties or their use, nor, so far as the Warrantors are aware, are there any
circumstances rendering any of the foregoing reasonably likely.
8. PLANNING MATTERS
(a) Except to the extent that non-compliance would not have a material
adverse effect on the relevant Group Company, the current use of the
Properties, and developments already carried out on the Properties,
comply in all material respects with any relevant planning legislation,
any legislation which controls or regulates the use of land or
buildings or legislation which preserves or protects the national
heritage and any orders, regulations, consents or permissions made or
granted under any of the same as at the date hereof ("PLANNING
LEGISLATION").
(b) In respect of TDS Circuits PLC only, there is no agreement affecting
any of the UK Properties under Section 106 of the Town and Country
Planning Xxx 0000, Section 33 of the Local Government (Miscellaneous
Provisions) Xxx 0000 or any legislation of a similar nature.
9. COMPULSORY ACQUISITION
So far as the Warrantors are aware, there is no resolution or proposal for the
compulsory acquisition of the Properties or any means of access thereto or
egress therefrom.
10. BREACH OF COVENANT
No Group Company is in material subsisting breach of any covenant, restriction,
stipulation or other obligation affecting any of the Properties.
11.
[Intentionally blank]
12. STATE OF PROPERTIES
Except as disclosed in the Disclosure Letter, the buildings and other structures
on the Properties are in all material respects in repair, having regard to their
age, use and construction and so far as the Warrantors are aware, do not as at
the date hereof require exceptional expenditure to remedy any disrepair. For
these purposes, any defect requiring expenditure by way of repair of 200,000,000
Lire or more in aggregate shall be regarded as material.
13. LEASEHOLD PROPERTIES
In relation to such of the Properties as are leasehold:
(a) all material covenants, conditions and agreements contained in
the relevant leases, on the part of the landlord and the
tenant, have been complied with;
(b) there is no current complaint to the Company or Group Company
alleging any breach or any refusal to accept rent;
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(c) there are no current notices given by the landlord or the
tenant or proceedings pursuant to Law no. 392 of July 24, 1978
or the Landlord and Xxxxxx Xxx 0000 or otherwise;
(d) in respect of TDS Circuits PLC only, the security of tenure
provisions of Part II of the Landlord and Xxxxxx Xxx 0000 are
not excluded;
(e) none of the leases, other than leases at a full rack rent,
contains any provision for forfeiture on insolvency or
liquidation;
(f) none of the leases require the tenant to offer to surrender
the same before, or as a pre-condition of an assignment or
under-letting or contains requirements to be satisfied on, a
change of ownership of the share capital or control of the
tenant;
(g) so far as the Warrantors are aware, there are no matters in
the superior titles of any leasehold Property which have an
adverse effect on the use and enjoyment of the Properties for
their current use;
(h) no rent reviews are outstanding in relation to UK Properties.
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PART C: ENVIRONMENTAL WARRANTIES
1. INTERPRETATION
In this Part:
(a) ENVIRONMENTAL LAWS shall mean the following, each as in existence at
the Completion Date:
(i) all European Community, national or local statutes, codes, or
other laws or legislation concerning Environmental Matters
which are applicable in Italy, or so far as TDS Circuits PLC
is concerned, in England and which are applicable to any Group
Company Activity or to the Properties and all rules,
regulations, ordinances, orders, notices and directives made
thereunder; and
(ii) judicial and administrative interpretation of each of the
foregoing.
(b) ENVIRONMENTAL APPROVALS shall mean the permits, consents, licences and
other authorisations and approvals required under the Environmental
Laws to be obtained in connection with the use of the Properties or in
connection with any Group Company Activity.
(c) ENVIRONMENTAL MATTERS shall mean in relation to any Group Company
Activity and the Properties all matters related to pollution or
protection of the environment other than matters related to Town and
Country Planning but including noise, emissions, discharges and
releases of Hazardous Substances into air, water, sewage systems and
land and the manufacture, processing, distribution, use, treatment,
storage, disposal, transport and handling of Hazardous Substances.
(d) GROUP COMPANY ACTIVITY shall mean any business or other activity of any
nature whatsoever which so far as the Warrantors are aware is being
carried on by a Group Company at the Completion Date.
(e) HAZARDOUS SUBSTANCES shall mean and include pollutants, contaminants
and hazardous, flammable and toxic substances materials and waste
whether solid, liquid or gaseous which are referred to in or regulated
by any of the Environmental Laws.
2. EXISTENCE OF ENVIRONMENTAL APPROVALS
The Disclosure Letter includes a list of all the Environmental Approvals held by
each Group Company true and complete copies of which have been or, prior to the
Completion Date will be delivered to the Purchaser.
Except as set out in the Disclosure Letter:
(a) such Environmental Approvals constitute all the Environmental Approvals
currently required under the Environmental Laws to be obtained in
connection with the use of the Properties or any Group Company
Activity;
(b) each such Environmental Approval is in full force and effect;
(c) no proceeding or other action of whatever nature is pending, or is
threatened, seeking the suspension, revocation or variation or
limitation of any such Environmental Approval or seeking to impose any
penalty applicable under such Environmental Approval;
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(d) There are no facts or circumstances arising from any Group Company
Activity which will, or are reasonably likely to result in, any such
Environmental Approval being suspended, revoked, varied or limited
(other than variations or limitations in the ordinary course of
business) or which may prejudice their renewal; and
(e) no appeals are pending or being contemplated in respect of the refusal
of, or conditions contained in any Environmental Approval or any action
taken in respect of, any Environmental Approval.
3. COMPLIANCE WITH ENVIRONMENTAL APPROVALS AND ENVIRONMENTAL LAWS
(a) All environmental Approvals or Environmental Laws have been complied
with in all material respects and the use of the Properties in the
conduct of any Group Company Activity has been and is in all material
respects in accordance with the Environmental Approvals and
Environmental Laws.
(b) Neither the Warrantors nor any Group Company has received any notice,
order, judgment or demand letter requiring the taking of remedial or
other action in relation to Environmental Matters (excluding any where
such action has been taken).
(c) There have been and are, in relation to any Group Company Activity at
the Properties (and so far as the Warrantors are aware any activities
of any Group Company off-site of the Properties) no past or present
events, conditions, circumstances, activities, practices, incidents,
actions or plans which have arisen directly or indirectly from the acts
of any Group Company or are otherwise caused directly or indirectly by
a Group Company and which will give rise to legal liability or
otherwise form the basis of any Claim, action, suit, proceeding,
hearing or investigation related to Environmental Matters where the
same is reasonably likely to result in a material liability for a Group
Company. For these purposes, a material liability is a liability in
excess of 300,000,000 Lire in aggregate.
(d) There is not currently, and there has not been either on the Properties
or otherwise, arising from any Group Company Activity, any spill,
leakage, discharge, release or deposit (whether to water, land, sewage
systems or air or a combination of these) of any Hazardous Substance
which is reasonably likely to cause harm to humans, flora or fauna in a
manner which is reasonably likely to result in a material liability for
a Group Company. For these purposes, a material liability is a
liability in excess of 300,000,000 Lire in aggregate.
4. ENVIRONMENTAL AUDIT
Neither the Properties nor any Group Company Activity has been the subject of
any Environmental Audit, defined as any evaluation, assessment, study or test
other than such as has been carried out by the Purchaser.
5. There is attached to the Disclosure Letter copies of all environmental
studies carried out by or on behalf of each Group Company relating to the
business of such Group Company.
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PART D: TAX WARRANTIES
1.
1.1 All Tax returns (including those as withholding agent), reports or
other filings in respect of Tax that are required to be filed on or
before the date hereof, have been timely filed by each Group Company.
Such Tax returns, reports or other filings in respect of Tax adequately
reflect the Tax liabilities of each Group Company, at the time of the
filings, for the taxable period covered thereby.
1.2.1 All Taxes of each Group Company, that are payable on or before the date
hereof have been timely and duly paid.
1.2.2 All Taxes of each Group Company (apart from T.D.S. Circuits PLC) that
are attributable to any period ending on or before the Management
Accounts Date which are not yet due and payable as of the date hereof
are the subject of appropriate provision in the Last Accounts or the
Management Accounts.
1.2.3 All Taxes of T.D.S. Circuits PLC that are attributable to any
accounting period of the Company ending on or before the Last Accounts
Date which are not yet due and payable as of the date hereof are the
subject of appropriate provision in the Last Accounts.
1.3 No claim for assessment or collection of Taxes has been asserted in
writing against each Group Company (apart from T.D.S. Circuits PLC).
1.4 No Group Company has received any notice of a proposed Tax inspection
or any other administrative proceeding or court proceedings nor are any
of the foregoing pending or threatened in writing with regard to any
Taxes or Tax returns.
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SCHEDULE 4
PROPERTY DETAILS
1. Real property in Cavaglia (Biella), Xxx Xxxxx Xxxxxxx xx. 00, owned by
Zincocelere S.p.A.
2. Plant a Xxxxx d'Aosta occupied by Nord Elettronica.
3. TDS Circuits Plc Properties:
DESCRIPTION TITLE NUMBER INTEREST PROPRIETOR
Land on the north west LA488020 Leasehold 125 years from TDS Circuits Plc
side of Xxxxxxxx Xxxx, 0 Xxx 0000
Xxxxxxxxx
Land on the south east LA401965 Freehold TDS Circuits Plc
side of Cunliffe Road,
Whitebirk
Land on the south east LA408118 Freehold TDS Circuits Plc
side of Cunliffe Road,
Whitebirk
Land on the north west LA419082 Freehold TDS (Circuits) Plc
side of Cunliffe Road, (Company Registration
Blackburn Number: 1171921)
Land and buildings on the LA402828 Freehold TDS Circuits Plc
south east side of
Cunliffe Road, Whitebirk
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SCHEDULE 5
OWNERSHIP AND VALIDITY OF LOANS
1.1 The Loans are owed legally and beneficially by the Lenders, free and
clear from all security interests, rights or claims of any third parties.
1.2 This Agreement constitutes and imposes valid and legal obligations on
each Lender fully enforceable in accordance with its terms.
1.3 The Lenders severally warrant and confirm to the Purchaser as of the
date of this Agreement and as of the Completion date that the Lenders are
entities validly existing and in good standing in the jurisdiction of their
organization and have all necessary corporate power to enter into this
Agreement and to perform any and all of their respective obligations under this
Agreement and the persons who have executed this Agreement on behalf of the
Lenders respectively, are duly authorised officer or directors of the Lenders
respectively, vested with full power to bind the Lenders respectively, in
relation to any and all of such obligations.
1.4 As of the date of this Agreement, there are no pending or threatened
judicial or administrative proceedings which could have a material adverse
effect on the Lender's performance of its obligations arising under this
Agreement;
1.5 The execution of this Agreement and of the transactions contemplated
hereby will not result in the breach of any legal provision affecting the
Lenders which may affect the validity or enforceability of this Agreement as
against the Lenders.
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SIGNED by XXXXXX XXXXXXXXXX ) XXXXXX XXXXXXXXXX
in the presence of: )
Xxxxxx Xxxxxxx, Solicitor
One Xxxxx Xxxxx, Xxxxxx XX0X 0XX
SIGNED by XXXXXX XXXXXXX by his attorney ) XXXXXX XXXXXXXXXX
Xxxxxx Xxxxxxxxxx in the presence of: )
Xxxxxx Xxxxxxx, Solicitor
One Xxxxx Xxxxx, Xxxxxx XX0X 0XX
SIGNED by CLAUDIO PASTORIS by his attorney ) XXXXXX XXXXXXXXXX
Xxxxxx Xxxxxxxxxx in the presence of: )
Xxxxxx Xxxxxxx, Solicitor
One Xxxxx Xxxxx, Xxxxxx XX0X 0XX
SIGNED by XXXXXXXXX XXXXX by his attorney ) XXXXXX XXXXXXXXXX
Xxxxxx Xxxxxxxxxx in the presence of: )
Xxxxxx Xxxxxxx, Solicitor
One Xxxxx Xxxxx, Xxxxxx XX0X 0XX
SIGNED by CARLO XXXXXXX XXXXXXXX by his ) XXXXXX XXXXXXXXXX
attorney Xxxxxx Xxxxxxxxxx in the presence of: )
Xxxxxx Xxxxxxx, Solicitor
One Xxxxx Xxxxx, Xxxxxx XX0X 0XX
SIGNED by XXXXXXXX XXXXXXX as a duly ) XXXXXXXX XXXXXXX
authorised attorney for and on behalf of )
NATWEST VENTURES NOMINEES LIMITED )
SIGNED by XXXXXXXX XXXXXXX as a duly ) XXXXXXXX XXXXXXX
authorised attorney for and on behalf of )
NATWEST VENTURES INVESTMENTS LIMITED )
SIGNED by HARDY MCLAIN as a duly ) HARDY MCLAIN
authorised attorney for and on behalf of )
CVC EUROPEAN EQUITY LIMITED acting )
as General Partner of CVC EUROPEAN )
EQUITY PARTNERS L.P. )
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SIGNED by HARDY MCLAIN as a duly ) HARDY MCLAIN
authorised attorney for and on behalf of )
CVC EUROPEAN EQUITY LIMITED acting )
as General Partner of CVC EUROPEAN )
EQUITY PARTNERS (JERSEY) L.P. )
SIGNED by HARDY MCLAIN as a duly ) HARDY MCLAIN
authorised attorney for and on behalf of )
CITICORP INVESTORS EUROPE LIMITED )
SIGNED by XXXXXXXX XXXXXXX as duly ) XXXXXXXX XXXXXXX
authorised attorney for and on behalf of )
EUROPEAN CIRCUITS S.A. )
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SIGNED by XXXXX XXXXXXX ) XXXXX XXXXXXX
duly authorised )
for and on behalf of )
VIASYSTEMS S.r.l. )
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SIGNED by XXXXX XXXXXXX ) XXXXX XXXXXXX
duly authorised )
for and on behalf of )
VIASYSTEMS GROUP LIMITED )
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