ASSET PURCHASE AND SALE AGREEMENT
This agreement (hereinafter the "Agreement"), entered in Milan, on 15 March
2002.
BY AND BETWEEN
- XX. XXXXXXX XXXXXXX who declares to act herein as attorney in fact of
SOCIETA' IMBALLAGGI PLASTICI S.r.l., a company duly incorporated under the
laws of Italy, fiscal code 00661920702, having its registered office at
Campochiaro (CB), Zona Industriale, corporate capital of Euro 1,068,080.00, as
per resolution of the Board of Directors of 11 March 2002 and power of
attorney by Xxxx Xxxxxxxx dated 13 March 2002 (hereinafter "the Seller")
- on one part-
AND
- XX. XXXXX XXXXXXXXX who declares to acts herein as Sole Director of
SERIOPLAST S.p.A., a company duly incorporated under the laws of Italy, fiscal
code 00429040165, having its registered office at Dalmine (BG), Xxx Xxxx 0,
Xxxxxxxx Sabbio, corporate capital of Euro 1,000,000.00, (hereinafter "the
Buyer")
- on the other part -
(the Seller and the Buyer hereinafter collectively referred to
as "the Parties")
WITNESSETH
WHEREAS the Seller is engaged in the design, manufacture and sale of
customized blow-molded plastic containers for household, food and personal
care markets;
WHEREAS, said activity is carried out by the Seller through the
organization of assets and production factors forming the branch of business
better described below (hereinafter the "Business");
WHEREAS, the Buyer is interested in purchasing the Business, it being
complementary to its own business activity, and the Seller desires to sell and
transfer said Business to the Buyer;
WHEREAS, the parties carried out negotiations regarding the
envisaged transaction aimed at defining the terms and conditions thereof;
NOW, THEREFORE, in consideration of the above mutual premises the Buyer and
the Seller (hereinafter collectively referred to as the "Parties") convene and
agree as follows:
Section 1
Premises and Exhibits
The premises and the Exhibits hereto form an integral and substantial part of
this Agreement.
Section 2
Object of the Agreement
2.1 The Seller sells and transfers to the Buyer, who accepts, the title and
the ownership of certain of the Seller's assets of the business, as a
going concern, and each of its elements, as described in Section 3
hereunder, at the terms and conditions set forth in the present
Agreement.
2.2 Following the execution of the present Agreement the Parties shall
cooperate with each other to give full performance thereto and shall
carry out all formalities necessary for the enforcement of the complete
and definitive transfer of the Business from the Seller to the Buyer; in
particular the Seller and the Buyer shall perform all formalities set
forth in Section 6.3 hereunder.
Section 3
Business
3.1 As per Section 2 above and notwithstanding the provisions of Section 4,
the Seller agrees to grant, sell, convey, assign, transfer and deliver
into the Buyer, and the Buyer agrees to purchase and take delivery of
the assets of the Seller composing and relating to the Business existing
as of 31 December 2001 and specifically described hereunder. Title to
the assets pertaining to the Business as of 31 December 2001 and
described under this Section 3 shall be transferred from the
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Seller to the Buyer, under the terms and conditions of this Agreement,
as of the closing date as defined in Section 6 (hereinafter the "Closing
Date").
3.2 Real Property. The industrial real estate owned by the Seller, inclusive
of land and buildings, located in Xxxxxxxxxxx, Xxxx Industriale, as per
Exhibit A (the "Real Property") and as it shall be better described in
the deed to be drafted by the Notary Public as of the Closing Date;
3.3 Equipment, Hardware. The equipment and furniture, the computer hardware
(including software loaded on such hardware and the related licenses)
and the related licenses and related tangible personal property located,
as of the Closing Date, at the Real Property, as described in Exhibit B
hereto (hereinafter the "Fixed Assets");
3.4 Machinery Equipment. The machinery equipment located, as of the Closing
Date, at the Real Property and those located in Sovico, as described in
Exhibit C hereto (hereinafter the "Machinery Equipment");
3.5 Commercial Contracts. All sales orders and contracts, purchase orders
and contracts, leasing agreements, rental agreements, maintenance
agreements, utilities agreements, service agreements and insurance
agreements, to the extent they relate to the Business. Exhibit D
contains a complete list of the commercial contracts being transferred
and assigned to the Buyer hereunder (hereinafter the "Commercial
Contracts");
3.6 Labour contracts. All employment agreements relating to the employees
pertaining to the Business. Exhibit E hereto contains a complete list of
the employees pertaining to the Business whose labour contracts
(hereinafter the "Labour Contracts") are being transferred and assigned
to the Buyer hereunder (hereinafter the employees being transferred
hereunder shall be collectively referred to as "The Transferred
Personnel");
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3.7 Liabilities. The only liabilities relating to the Business as of the
Closing Date which the Buyer shall take over hereunder are the severance
indemnities (T.F.R.) due to the Transferred Personnel on the Closing
Date, which as of 31 January 2002 amounts to Euro 644,084.85. However,
with reference to the employees Xxxxxx Xxxxxxxx, Xxxxx Xxxx, Xxxxxxxxx
Libero, the Seller agrees to pay in full the T.F.R. due to same, in case
they cease to be, for any cause, employees of the Buyer within a period
of time of 6 (six) months from the Closing Date.
3.8 Inventory. All finished products forming the inventory of the Seller as
of the Closing Date and all work in progress, basic materials, packing
goods, components, spare parts including pending orders thereof also for
goods scheduled to be delivered after the Closing Date (hereinafter the
"Inventory"), wherever located at Closing Date within the Real Property
or in outside warehouses, whose economic value as of 31 December 2001
was equal to Euro 283,000.00 and whose economic value as of the Closing
Date shall not be less than Euro 295,000.00. Exhibit F hereto is a
complete and accurate list describing each category of, and specifying
the location of, the Inventory pertaining to the Business as of 31
December 2001.
3.9 Permits. The permits (including permits, certificates, authorizations,
approvals, registrations, concessions, grants, certificates, orders,
waivers, clearances or other approvals and licenses or registrations
with, or issued by any Authorities) relating to the operation of the
Business (hereinafter the "Permits"), as listed in Exhibit G hereof.
3.10 Intellectual Property. All right, title and interest of the Seller in
and to the Intellectual Property which is listed in Exhibit H hereto,
owned by the Seller and required for, or used in connection with, the
operations of the Business, other than the Intellectual Property set
forth in Section 14 hereof (the "Intellectual Property");
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3.11 Intangible Assets. All right, title and interest of the Seller in and to
all other intangible assets of the Seller used in or held for use in the
conduct of the Business (the "Intangible Assets");
3.12 Accounting records ("schede contabili"). Copies of the accounting
records ("schede contabili") relating to the assets of the Business
being transferred in accordance with Section 3 hereof, and in particular
the "schede cespiti" and "schede magazzino".
Section 4
Excluded Assets
4.1 Notwithstanding anything, express or implied, to the contrary contained
in this Agreement, the following assets of the Seller are excluded from
the transaction described herein and shall not constitute a portion of
the Business transferred hereunder (hereinafter the "Excluded Assets"):
4.2 Prepaid taxes - tax withholdings. All prepaid taxes and all taxes
withheld as to the Closing Date by the Seller from the salaries and
wages of the Transferred Personnel and other taxes incurred by the
Seller as an employer, which the Seller is obliged to pay, including
claims for refunds of taxes, whether relating to the Business or not;
4.3 Excluded liabilities. Any and all liabilities relating to the Business
as of the Closing Date different from the ones set forth in Section 3.7.
Within the limits of Section 3.7 the Buyer shall therefore not assume
the liabilities and obligations (whether known or unknown) of the Seller
arising out of or relating to the Seller's ownership, use or operation
of the Business accruing prior to or on the Closing Date (hereinafter
the "Excluded Liabilities"). The Excluded Liabilities include, without
limitation, the following:
(a) accounts payable and liabilities accrued or arising prior to or on
the Closing Date;
(b) debts;
(c) wages, salaries and whatever sums earned by the Transferred
Personnel prior to the Closing Date, except for the liability for
the payment of the severance
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indemnities set forth in Section 3.7 which shall be borne solely
and entirely by the Buyer;
(d) any and all taxes of the Seller or related to the Business on the
Closing Date;
(e) liabilities and obligations relating to or arising out of the
Excluded Assets;
(f) the balance on the price of the Kosme labeling machine (included
in the Machinery Equipment) purchased by the Seller on 15 October
2001 and due to Kosme S.r.l.).
4.4 Cash. Cash and cash equivalent relating to the Business as of the
Closing Date;
4.5 Receivables. Any and all receivables relating to the Business as of the
Closing Date, whether due or still not due on said date.
Section 5
Price
5.1 As a consideration for the purchase of the Business the Buyer shall pay
to the Seller an amount of Euro 330,000.00 (three hundred thirty
thousand) (hereinafter "the Price"). However, the Parties acknowledge
that to the purpose of payment of the registration tax, to which the
transaction contemplated herein is subject, at the Closing Date they
shall have calculated the value of the Business.
5.2 The Parties mutually agree that half of Price (hereinafter the "First
Consideration"), which amounts to Euro 165,000.00 (one hundred
sixty-five thousand), shall be paid by the Buyer to the Seller on
Closing Date, by means of check to be delivered at Closing Date. The
remaining half of the Price (hereinafter the "Second Consideration"),
which amounts to Euro 165,000.00 (one hundred sixty-five thousand),
shall be paid in full and at once by the Buyer at the first anniversary
of the Closing Date, by means of wire transfer of funds on the bank
account which shall be indicated by the Seller at least 3 (three)
working days prior to the payment of the Second Consideration.
5.3 Right to offset. (a) The Buyer may exercise a right to offset against
the Second Consideration, by deducting from the amount of the Second
Consideration owed to the Seller under this Agreement the amount of any
indemnity obligation due by the Seller to the Buyer pursuant to Section
11 hereof and
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ascertained in accordance with the procedure described in Section
11.3(a), for any infringement or untruthfulness of the representations
and warranties referred to in Section 7 hereunder other than the
warranties concerning taxes, social securities, labour and
environmental.
(b) In the event that the Second Consideration becomes due and payable
to the Seller pursuant to Section 5.2 hereof at a time when there is an
unresolved dispute as to any amounts owed by the Seller to the Buyer
pursuant to Section 11 hereof (the "Seller Payment Amounts"), then the
Buyer may hold such Second Consideration as security for the payment by
the Seller of the Seller Payment Amounts until the final definition of
such dispute in accordance with Sections 11 and 13 hereof.
(c) The right to offset shall be exercised by the Buyer exclusively for
the amount corresponding to the Seller Payment Amounts ascertained.
Therefore the Buyer shall timely pay, within the term provided under
Section 5.2 hereof, the difference in amount, if any, between the Second
Consideration and the Seller Payment Amounts.
5.4 Guarantee. As security of the obligation to pay the Second
Consideration, the Buyer shall deliver to the Seller at Closing Date an
irrevocable bank guarantee issued by a primary bank, for an amount equal
to Euro 165,000.00 (one hundred sixty-five thousand), valid for a period
of at least 13 (thirteen) months as of the Closing Date and having a
content substantially consistent with the content of the draft attached
hereto as Exhibit I. It is understood that, should the Buyer exercise
the off-set right in accordance with what provided under Section 5.3
above, (i) the amount of the bank guarantee shall be automatically
reduced according to the provisions of the bank guarantee of a sum
corresponding to the amount which has been off-set; (ii) the Seller
shall not request payment under the bank guarantee in case the Second
Consideration is held as security for the payment by the Seller of the
Seller Payment Amounts in accordance with Section 5.3 (b) above.
Section 6
Closing Date
6.1 Condition precedent to Closing. Before Closing Date (as defined
hereunder), the Seller shall file all applications and take any
necessary actions to cancel all real-
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estate mortgages existing on the Real Property and at the Closing Date
shall provide the Buyer with evidence of the authorization to the
cancellation of the relevant mortgages.
6.2 Subject to the fulfillment of the condition precedent under Section 6.1,
the closing of the purchase and sale contemplated herein shall take
place on March 27, 2002 or on the different date which may be agreed
upon by the Parties, at a time and place to be mutually agreed upon by
the Parties (herein the "Closing Date") and shall be effective as from
the same date;
6.3 On the Closing Date, the Seller shall execute and deliver assignments,
notices, consents, assurances and such other instruments of conveyance
and transfer as shall be necessary to vest the Buyer with good and
marketable title to the Business and shall take all steps necessary to
put the Buyer in actual possession and control of the Business. In
particular, on Closing Date:
(a) the Seller and the Buyer shall execute a public deed of transfer
by virtue of which the Business shall be transferred by the Seller
to the Buyer pursuant to Article 2556, Second Paragraph, of the
Italian Civil Code, it being understood that, notwithstanding the
content of the deed of transfer, the provisions of this Agreement
(including, but not limited to, those referring to the warranties)
shall continue to be valid and enforceable between the Parties and
shall prevail on the provisions contained in the deed of transfer.
(b) the Seller shall deliver to the Buyer the bank guarantee mentioned
in sub-section 11.5 and the Buyer shall deliver to the Seller the
bank guarantee mentioned in sub-section 5.4;
(c) the Seller shall deliver the Business to the Buyer;
(d) the Seller shall delivery to the Buyer the original documents, or
equivalent, giving evidence of the signatory powers of the
Guarantor.
(e) the Buyer shall pay, or cause to be paid to the appropriate
authority the registration tax levied by the register office on
the transfer of the Business.
(f) the Parties shall sign the Italian version of this Agreement which
shall have the same content hereof.
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Section 7
Seller's warranties
The Seller warrants that the transferred assets specified under Section 3 are
in existence and that they shall be transferred on an "as is" basis -
equipment and machinery shall be in a functioning state - free from any
pledges, privileges, seizures or other third party rights or encumbrances
which may prejudice or limit the Buyer's right or title to them, including any
factoring, lease, financial lease or conditional assignment agreements. Except
as provided with reference to the Permits in the Disclosure Letter signed by
the Parties on the date hereof and attached as Exhibit J hereto, the Seller
hereby further represents, warrants and guarantees that as of the Closing Date
hereof:
7.1 Organization; Good Standing. The Seller is a corporation duly organized,
validly existing and in good standing under the laws of Italy and has
corporate power to carry on the Business as now being conducted;
7.2 No conflict with other instruments or agreements. Neither the execution,
delivery or performance of this Agreement by the Seller, nor the
consummation of the transaction contemplated hereunder:
(i) violate any provision of the Deed of Incorporation, Bylaws or
similar constitutional documents of the Seller, or any law,
regulation, order, judgment or decree by which the Seller, or any
of the assets pertaining to the Business may be bound; or
(ii) conflict with, result in breach of the terms and conditions of, or
result in the imposition of any lien or other encumbrance on or with
respect to any of the assets pertaining to the Business or
constitute a default under any agreement to which the Seller is a
party or by which it or any of the above assets may be bound.
7.3 Corporate powers; Binding Effect. The Seller has the corporate power,
including all necessary authorization, to execute, deliver and fulfill
the provisions of this Agreement. This Agreement constitutes a legal,
valid and binding agreement of the Seller enforceable against the same
in accordance with its terms, except as
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enforcement may be limited by bankruptcy, insolvency, reorganization or
similar laws affecting the enforcement of creditors' rights generally.
7.4 Conduct of Business since October 1, 2001.
Since October 1, 2001 until the Closing Date the Seller has not and
shall have not:
(i) mortgaged, pledged or subjected to any lien, charge, encumbrance,
restriction or any other interest or imperfection of title, any of
the assets pertaining to the Business and on the Closing Date none
of said assets will be subject to any lien, charge, encumbrance,
security interest, mortgage, restriction or any other interest or
imperfection of title;
(ii) sold, scrapped or otherwise disposed of any of the assets
pertaining to the Business except in the ordinary course of
business;
(iii) the Seller has neither given nor granted nor promised to the
employees, either verbally or in writing, benefits, bonuses,
premiums, advantages or promotions, nor has the Seller behaved in
a manner so as to induce the employees to expect advantages,
bonuses, premiums, benefits or promotions.
(iv) entered into any compromise or settlement of any litigation,
proceeding or governmental investigation relating to the Business
involving an actual or potential economic impact on the Seller;
(v) entered into any transaction in connection with or with respect to
the conduct of the Business except in the ordinary course of
business;
(vi) terminated any of the Commercial Contracts or Labour Contracts or
implemented any early retirement, collective dismissal or similar
programs or announced or planned any such action or program in the
future;
(vii) failed to pay any creditor - including employees, social security
institutions, suppliers - the amounts owed to such creditor when
due.
7.5 Real Property. The Real Property pertaining to the Business is
exclusively the one listed in Section 3.2. The Seller has good and
marketable ownership interest on the Real Property, which at the Closing
Date shall be free from any mortgages, pledges, attachments, seizures or
third parties' rights of any kind whatsoever. The Buyer has inspected
the Real Property and agrees to purchase as is.
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7.6 Fixed Assets. Exhibit B lists all Fixed Assets being transferred
hereunder to the Buyer. The Seller is the legitimate owner and licensee,
as the case may be, of and has full title on any and all of said assets
which are free from pledges, attachments, seizures or third parties'
rights of any kind whatsoever. The Buyer has inspected said Fixed Assets
and agrees to purchase them as is.
7.7 Employees.
The employees pertaining to the Business are exclusively those listed in
Exhibit E and they are entitled to the levels, salaries and seniorities
specified therein. All Transferred Personnel are regularly recorded in
the appropriate books and records of the Seller together with the
aggregate compensation payable to each of them, all in accordance with
applicable laws. No employees in addition to those listed in the above
Exhibit E are entitled to be transferred to the Buyer in accordance with
Article 2112 of the Italian Civil Code.
The Seller has duly complied with the national collective labour
contracts applicable to the specific field of activity of the Business
as well as with any other current regulations. Exhibit K sets forth a
complete and accurate list of all of the collective rules applicable to
the Transferred Personnel as of the date hereof (the "Collective
Rules").
As of the Closing Date the Seller will have duly and fully paid to the
Transferred Personnel all salaries, inclusive of all items and amounts
due, and will file all declarations and make all payments and
allocations and other payments in general provided for by the laws, the
Collective Rules and Labour Contracts including, by way of example but
not limited to, all payments due to social security, pension, insurance
and other labour charges (exception made for the severance indemnity
i.e. the "trattamento di fine rapporto", which has been duly allocated)
due under such laws, Collective Rules or Labour Contracts.
All Collective Rules and Labour Contracts have been managed and
implemented by the Seller in accordance with their respective terms.
No proceeding with any of the Transferred Personnel in connection with,
or under, any of the Collective Rules, laws or any Labour Contract or
otherwise is pending and, to the best knowledge of the Seller, no such
proceeding is threatened and no claim therefore exists. Since October 1,
2001 there have been no
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proceedings against (or threatened against) the Seller by any of the
Transferred Personnel.
As at the date hereof, is not pending or, to the best knowledge of the
Seller, threatened, any labour dispute between the Seller and any labour
organization, or any strike, slowdown, jurisdictional dispute, work
stoppage or other similar organized labour activity involving any of the
Transferred Personnel which may affect the Business.
7.8 Commercial Contracts. The Commercial Contracts have been duly executed
by the parties thereto, are valid, binding and enforceable in accordance
with applicable laws. The Seller has so far duly discharged its
obligations thereunder and is not in breach of any of the Commercial
Contracts. No party to any Commercial Contract has notified the Seller
that it considers the Seller to be in breach thereof and the Seller has
no knowledge or belief that any party to any Commercial Contract is
contemplating the breach thereof.
The Seller warrants the assignability of the Commercial Contracts,
except for those contracts listed in Exhibit L. With reference to the
latter contracts:
(a) the Seller is not aware of any reason why all the consents,
approvals and authorizations necessary for the assignment thereof
will not be given by the relevant counterparties;
(b) it shall be the Buyer's liability, at its costs and expense, to
obtain the necessary consent to succeed to the Seller's rights and
duties thereunder;
(c) the Seller shall provide its best effort in order to cooperate
with the Buyer in the Buyer's efforts to obtain the consent under
(a) above.
7.9 Intellectual property. Except for the software being part of the Fixed
Assets, the Seller has not executed any license or similar agreements
relating to the exploitation of inventions, trademarks, know-how patents
or other patent rights to be used in the conduct of the Business.
The know-how used by the Seller for the carrying out of the Business
activity does not infringe third parties' patent rights.
7.10 Compliance with laws and regulations; Permits. Except as provided in
Exhibit J
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(a) The Business has always been and it is currently conducted in
material compliance with all applicable laws. The Seller has never
been and will not be on the Closing Date, in violation of any
applicable laws or judgments.
(b) The Seller possesses, and upon consummation of the transactions
contemplated hereby, the Buyer will have title to possess, all
Permits and all such Permits are in full force and effect. The
Seller is in compliance with the terms and requirements of such
Permits. No proceeding to modify, suspend, terminate or otherwise
limit any such Permit is pending or, to the best knowledge of the
Seller, after due inquiry, threatened.
(c) The Seller has not received any written notice (including any
notices of violations, complaints, orders or inspection reports)
which would indicate that it was not at the time of such notice or
is not currently in compliance with all such applicable laws,
judgments and Permits or otherwise regarding (i) any revocation,
withdrawal, suspension, termination or modification of, or the
imposition of any conditions with respect to, any Permits, or (ii)
any other limitations on the conduct of the Business.
7.11 Taxes and duties. The Seller has duly entered in the registers and
accounting books regarding the Business all the operations made by the
same and has filed said operations as required by fiscal regulations,
for direct and indirect taxes; the Seller has filed all returns,
statements and information required by the competent public Authorities
for fiscal purposes and paid the relevant amounts.
Furthermore, the Seller has duly paid all Business taxes and charges due
by the Seller as withholding agent.
The Business is neither involved in pending judicial actions or
proceedings, nor such judicial actions or proceedings are threatened
against it by the tax authorities in relation to any tax assessment or
collection, default interest, penalty, or short payment, exception made
for what provided in Exhibit M hereto (it being understood that the
content of Exhibit M cannot be construed as an exception to the warranty
given by the Seller under this Section 7.11 nor does it limit in any way
the liability of the Seller in relation to tax matters).
7.12 Inventory. The economic value of the Inventory, as determined according
to accounting principles of the Business, applied on a consistent basis,
at the Closing Date shall not be less than Euro 295,000.00.
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7.13 Liabilities. The only liabilities regarding the Business, which are
transferred to the Buyer hereunder, are the ones set forth in Section
3.7;
7.14 Litigation. The Business is not a party, and there is no reason to
believe that it may be a party in future disputes and controversies
before Judicial or Arbitration Courts, in administrative, civil,
commercial, criminal, labour or social security procedures likely to
adversely affect its financial/economic status and future expectations.
7.15 Financial Statements. The Seller warrants that the Financial Statements
as of 31 December 2000 and the pro forma financial statements as of 2
December 2001 attached as Exhibit N hereto and all the accounting
documents regarding the Business already disclosed to the Buyer have
been properly prepared in a manner consistent with the law, the
accounting principles and the accounting practice applied on a
consistent basis in the preparation of the balance sheets for all prior
periods and give a true and correct view of the assets, liabilities,
financial position, and results of operations of the Seller and the
Business as for the dates or for the period indicated therein.
7.16 Environmental Matters. As relating to the Business: (a) Seller in
respect of the Business is and has been in material compliance with any
applicable state or local laws, statutes, regulations, codes,
ordinances, permits, decrees, orders or common law relating to, or
imposing standards regarding, the protection, health or safety (in
either case as relating to the environment) or the protection of the
environment (the "Environmental Laws"); (b) there has not been any
release of any hazardous or toxic substance or any material or waste
defined, listed, or classified as such or otherwise regulated under any
Environmental Law, including friable asbestos, lead, petroleum, and
polychlorinated biphenyls (the "Hazardous Materials") at or from any of
the properties of the Business in violation of Environmental Laws or in
a manner that would reasonably be expected to give rise to liability
under any Environmental Laws; (c) Seller has not received any written
claim, proceeding, suit, complaint, or notice of
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violation alleging violation of, or liability under, any Environmental
Laws (the "Environmental Claim"); (d) the Business is not subject to any
order, decree, injunction or other similar act of any governmental
authority or any indemnity due to any third party relating to liability
or obligations under any Environmental Law; (e) Seller has, to its
knowledge, delivered to the Buyer, or has otherwise made available to
Buyer, copies of all material environmental reports, studies,
assessments, audits, sampling data, correspondence alleging any
violation of Environmental Laws and other Environmental Claims in their
possession relating to the Business.
7.17 Intellectual Property. The Seller has the lawful, sole and exclusive
right to use all the Intellectual Property. Such Intellectual Property
is fully usable by the Seller, and, upon Closing Date, shall be usable
by the Buyer, without the payment of any license fee, royalty or similar
charge. There is no proceeding presently pending or, to the best
knowledge of the Seller, threatened, that (i) the operations of the
Business violate, infringe upon or conflict with asserted rights of any
other person with respect of any Intellectual Property; or (ii) any
Intellectual Property is invalid or unenforceable.
7.18 Product Warranty and Product Liability. Exhibit O hereto contains a
true, correct and complete copy of the Seller's standard warranty or
warranties for sales of Products (as defined below) and, except as
stated therein and subject to any applicable statutory warranty, there
are no warranties, commitments or obligations with respect to the
return, repair or replacement of Products. Exhibit 1 to Exhibit J
contains a description of all product liability claims and similar
proceedings relating to Products sold, or services rendered, which are
presently pending or threatened, or which have been asserted or
commenced against the Seller within the last five (5) years (whether or
not covered by insurance). There are no defects in design, construction
or manufacture of Products. None of the Products has been sold or
modified for any use other than the use intended by the manufacturer of
that Product. None of the Products has been the subject of any campaign
for replacement, modification or recall and no facts or conditions exist
which could reasonably be expected to result in such a recall campaign.
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The Products comply with all applicable laws in any jurisdiction in
which they are manufactured, distributed or sold and each of the
Products has received the permits necessary to allow its manufacture,
sale and use. For the purpose of this Section 7.18, the term "Products"
means any and all products currently or at any time previously
manufactured or sold by the Seller.
Section 8
Buyer's warranties
The Buyer hereby represents, warrants and guarantees that as of the Closing
Date hereof:
8.1 Organization; Good Standing. The Buyer is a corporation duly organized,
validly existing and in good standing under the laws of Italy;
8.2 No conflict with other instruments or agreements. Neither the execution,
delivery or performance of this Agreement by the Buyer, nor the
consummation of the transaction contemplated hereunder:
(i) violate any provision of the Deed of Incorporation, Bylaws or
similar constitutional documents of the Buyer, or any law, regulation,
order, judgment or decree by which the Buyer may be bound; or
(ii) conflict with, result in breach of the terms and conditions of, or
constitute a default under any agreement to which the Buyer is a party
or by which it may be bound.
8.3 Corporate powers; Binding Effect. The Buyer has the corporate power,
including all necessary authorization, to execute, deliver and fulfill
the provisions of this Agreement. This Agreement constitutes a legal,
valid and binding agreement of the Buyer enforceable against the same in
accordance with its terms, except as enforcement may be limited by
bankruptcy, insolvency, reorganization or similar laws affecting the
enforcement of creditors' rights generally.
Section 9
Term of Warranties and Representations
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9.1 The warranties referred to in the preceding Sections 7 and 8 (other than
the warranties concerning taxes, social securities, labour and
environmental matters) shall be valid for a period of 6 (six) months
from the Closing Date hereof. The warranties and representations (other
than the warranties concerning taxes, social securities, labour and
environmental matters) regarding matters in relation to which third
parties (public authorities or private entities) may avail themselves of
or attach the assets of the Business or raise claims vis-a-vis the Buyer
shall remain in effect for the same period of time.
9.2 The representations or warranties concerning taxes, social securities,
labour and environmental matters, shall be valid until the thirtieth
(30th) day following the expiration of the applicable statute of
limitations with respect to any action that may be brought relating to
the matters described in such representation and warranty.
9.3 The above term of warranties shall be interrupted in case of dispute
between the Parties as to the fairness and truthfulness of the
warranties and shall become effective again at the end of the
arbitration or judicial or extra-judicial procedure defining the dispute
in a conclusive and final way.
9.4 Anything herein to the contrary notwithstanding, the Seller's liability
for breach of warranties shall survive the expiration of the time limits
provided in Section 9.1 and 9.2 preceding in respect of any request for
payment submitted by the Buyer pursuant to this Agreement prior to the
date of such expiration.
Section 10
Additional Covenants
10.1 Trade Unions Communications. The Seller and the Buyer acknowledge that
they have complied with the duties of communication to the trade unions
provided for by Article 47 of Law no. 428 of December 29, 1990.
10.2 Notification of Certain Matters. The Seller shall give prompt notice to
the Buyer and the Buyer shall give prompt notice to the Seller of the
occurrence, or non-
17
occurrence, of any event the occurrence or non-occurrence of which would
be reasonably likely to cause (i) any representation or warranty of the
Seller or the Buyer, as the case may be, contained in this Agreement to
be untrue or inaccurate at or prior to the Closing Date; or (ii) the
Seller or the Buyer, as the case may be, to fail to comply with or
satisfy any covenant, condition or agreement to be complied with or
satisfied by any of them hereunder; provided, however, that the delivery
of any notice pursuant to this Section 10.2 shall not limit or otherwise
affect the remedies available hereunder to the Party receiving such
notice.
10.3 The Seller and the Buyer agree that after the Closing Date hereof:
(i) Receivables: in the event a payment is made to the Buyer of any
receivables related to the Business arising out of any transaction
occurring on or before the Closing Date, the Buyer shall promptly
forward to the Seller within 5 (five) working days the amount of
said receivables. Moreover, in the event a payment is made to the
Seller of any receivables related to the Business arising out of
any transaction occurring after the Closing Date, the Seller shall
forward to the Buyer the amount of said receivables within 5
(five) working days.
(ii) Cooperation in litigation: after the Closing Date each Party shall
reasonably cooperate with the other Party and the other Party's
attorneys in the defense or prosecution of any litigation or
proceedings instituted against or by the other Party regarding the
Business, excluding, however, any litigation between the Parties
themselves. Such cooperation shall include, but not be limited to,
conferring with the other Party's attorneys or experts at their
offices during normal business hours at mutually convenient times
and making available to the other Party's attorneys documents or
copies of documents specific to the Business and such cooperation
shall include giving testimony voluntarily. Such cooperation shall
not require the cooperating Party to be joined as a Party in any
such litigation to the extent permitted by applicable law. Each
Party shall bear the costs related to such cooperation.
10.4 Access to information. During the period from the date of this Agreement
through the Closing Date, the Seller shall, and shall cause its
representatives to, (i) grant to the Buyer and its representatives
access, during regular business
18
hours and upon reasonable notice, with minimum disruption to the
Seller's business, to the Seller's properties, officers, employees,
facilities, books, records, financial, tax and operating data, contracts
and other documents; (ii) make available to the Buyer and its
representatives all of the books, records, financial, tax and operating
data, contracts and other documents of the Seller, and permit the Buyer
and its representatives to examine, make extracts from and, at the
Buyer's expense, copy such books, records, financial, tax and operating
data, contracts and other documents as the Buyer shall from time to time
reasonably request.
During the 90 (ninety) calendar days following the Closing Date, the
Buyer shall, and shall cause its representatives to, grant to the Seller
free access, during regular business hours and upon reasonable notice,
to all books, records and other documentation pertaining to the
Business, wherever located, which the Seller shall be allowed to examine
end retrieve to the extent necessary to fulfil all its legal
obligations.
10.5 Conduct of Business prior to Closing Date. Except as expressly permitted
by this Agreement or with the prior written consent of the Buyer (as set
forth in the following Section 10.6), and in addition to the covenants
provided for by Section 7.4, from the date of this Agreement through the
Closing Date, the Seller shall: (i) conduct the Business in a diligent
and prudent manner and only in the ordinary course, continuing to be
fully responsible for the operating of the Business and bear every risk
and economic benefit, (ii) diligently perform all of its obligations as
party of the Commercial Contracts (iii) preserve intact the present
organization, operations and relationships with third parties of the
Business and not change the terms of any of the Commercial Contracts;
(iv) maintain all transferred assets in functioning state; (v) maintain
books of account and records relating to the Business in the usual,
regular and ordinary manner; (vi) not make or institute any methods of
management, accounting or operation relating to the Business that will
vary from those methods used by it as of the date of this Agreement; and
(vii) maintain and keep the Business and the facilities in as good
condition and working order as at present; and (viii) keep the Buyer
informed on the economic and operational situation of the
19
Business, providing information and details if requested.
10.6 Right of co-management of Business prior to Closing Date. The Parties
agree that from the date of this Agreement through the Closing Date the
Buyer shall have the right to (i) be informed by, and directly request
information to, the Seller on the conduct of the Business and on its
economic situation; and (ii) request in writing to the Seller that the
Seller takes the actions (the "Actions") which the Buyer reasonably
deems profitable or necessary for the Business in light of the
acquisition of the Business by the Buyer, provided that a) the Seller
consent to the implementation of the Actions; b) such Actions do not
have any negative impact on the obligations of the Seller under the
Agreement; c) the Buyer shall be liable for the consequences which the
Actions may have on the Business.
Section 11
Indemnification
11.1 Each Party shall indemnify and hold the other Party, as the case may be,
harmless against and in respect to any damage, cost, charge, expense,
payment, loss, difference in value, (hereinafter referred to as
"Losses") which may arise as a consequence of infringement or
untruthfulness of any of the warranties referred to, if to the Seller,
in the preceding Section 7 or, if to the Buyer, in the preceding Section
8 provided that said Losses exceed the amount of Euro 5,000.00 (five
thousand) each. The Parties agree that, in relation to the Losses which
may arise as a consequence of infringement or untruthfulness of any of
the warranties concerning taxes, social securities, labour,
environmental and health and safety matters, should the Buyer fail to
obtain indemnification against the Seller, it may seek indemnification
against the ultimate parent company of the Seller, XXXXXX PACKAGING
COMPANY LP, a company organised and existing under the laws of United
States, with registered office at York, Pennsylvania, (the "Guarantor")
who shall be jointly liable with the Seller for any such Losses.
11.2 In order to obtain indemnification, the Party seeking indemnification
(hereinafter the "Claimant") shall inform the other Party in writing, by
registered mail, about the events referred to in paragraph 11.1 above
(hereinafter the "Events") within 10 (ten) working days of the date on
which the Claimant becomes aware of said
20
events (hereinafter the "Indemnification Request"). Said Indemnification
Request shall contain a detail of the Events alleged as well as a
quantification of all Losses that the Claimant alleges deriving from
said Events.
11.3 The following procedures shall apply depending on the nature of the
Events to which the Indemnification Request refers:
(a) direct infringement of the warranties
if the Indemnification Request regards the infringement of warranties
which do not derive from third parties' claims but are directly
attributable to wrong representations of either one of the Parties, the
Party receiving the Indemnification Request shall be entitled to
challenge its contents in writing, by registered letter with return
receipt, within 10 (ten) working days of receipt of the Indemnification
Request. Should the Parties fail to reach an amicably agreement within
15 (fifteen) calendar days of receipt by the Claimant of the other
Party's objections, the dispute shall be submitted to the Board of
Arbitrators as referred to in Section 13 below. It is hereby understood
that if no objections to the Indemnification Request are raised by the
Party receiving the Indemnification Request within the above mentioned
term, the indemnification shall be paid by said Party upon expire of
said term;
(b) third parties' claims
if the Indemnification Request regards claims raised by third parties
against the Claimant regarding circumstances covered by the warranties
of the Seller as referred to in Section 7, or of the Buyer as referred
to in Section 8, the other Party shall be entitled to be a party in or
to take over, at its own expense, the defense against any such claims,
by written notice to be sent to the Claimant within 10 (ten) working
days of receipt of the Indemnification Request.
Should the Party receiving the Indemnification Request take over the
defense against any such claims, the same shall adopt all necessary
measures in respect thereof and shall indemnify and hold the Claimant
harmless from any and all Losses, which may be incurred by the Claimant
in relation to the settlement of said claims whether under judicial or
extra-judicial procedures.
If, on the contrary, the Party receiving the Indemnification Request
does not take over the defense against such claims, the Claimant shall
be entitled to settle said claims at the terms and conditions it may
deem appropriate and the other Party shall indemnify the Claimant from
any and all Losses (including legal expenses),
21
incurred by the Claimant in relation to said claims.
11.4 The Parties agree that the aggregate amount of the indemnification shall
not, in any case, exceed the amount of Euro 175,000 (one hundred
seventy-five thousand). Such limitation of indemnification shall not
apply to the indemnifications related to Losses which may arise as a
consequence of infringement or untruthfulness of any of the warranties
concerning taxes, social securities, labour and environmental matters.
11.5 The Parties agree that, in relation to Losses which may arise as a
consequence of infringements or untruthfulness of any of the warranties
concerning exclusively taxes matters and any amounts due as "contributo
CONAI", at the Closing Date the Seller shall deliver to the Buyer a bank
guarantee, having a content substantially consistent with the content of
the draft attached hereto as Exhibit P hereto, for an amount of Euro
400,000.00 (it being understood that the amount of the bank guarantee
does not represent the maximum amount of the liability of the Seller for
the Losses which may arise as a consequence of infringement or
untruthfulness of any of the warranties concerning taxes, social
securities, labour and environmental and that therefore the Seller may
be liable also in excess of such amount).
11.6 The Parties acknowledge that the representations and warranties set
forth in above Sections 7 and 8 are given from each Party, as a company,
for the benefit of the other Party. Therefore, in case of infringement
or untruthfulness of any of the representations and warranties, the
Party seeking indemnification shall proceed solely against the other
Party (or the Guarantor, when applicable), hereby waiving any claim,
request, demand, action against any and all the Directors and/or
Managers who have served for the Seller or the Buyer, as the case may
be, until the Closing Date.
Section 12
Non competition
For a period of six months following the Closing Date hereof the Seller shall
not (i) engage in any new activity, the direct or indirect purpose or effect
of which is to enter into competition with the activity carried out by the
Business; (ii) solicit any customer or supplier of the Business; (iii) induce
or attempt to influence any Transferred Personnel to terminate such employee's
employment or to become an employee of the
22
Seller; and (iv) disclose or furnish to any other person the manner of
conducting the Business as it is now being conducted. No consideration is
given for this non-competition covenant as the Parties have taken it into
account in the determination of the Price.
Section 13
Governing Law - Disputes
13.1 This Agreement shall be governed and construed in accordance with the
laws of the Republic of Italy.
13.2 Any controversy of any type regarding the interpretation, validity,
applicability, execution and fulfillment of the provisions of this
Agreement shall be resolved by a Board of Arbitration consisting of 3
(three) Arbitrators, one of which shall be appointed by the Seller,
another by the Buyer and the third, who shall act as Chairman of the
Board, by agreement of the other two.
In case these two Arbitrators fail to reach an agreement as to the
choice of the third Arbitrator within 20 (twenty) calendar days from the
appointment of the second, the third shall be appointed by the President
of the Tribunal of Milan (Italy) who shall also be responsible for
appointing one of the other two Arbitrators where one of the Party has
failed to appoint its Arbitrator within 20 (twenty) calendar days of the
communication from the other Party of the appointment of its Arbitrator.
The Board of Arbitrators shall decide in compliance with the law in
force, also by majority, within 90 (ninety) days from the date on which
the third Arbitrator has accepted in writing its mandate and their
decision shall be considered definitive and binding on all parties.
The arbitration shall be held in Milan (Italy), conducted in the Italian
language and regulated by articles 810 and ff. of the Italian Code of
Civil Procedure.
Section 14
Use of Xxxxxx'x name
14.1 The Seller and the Buyer acknowledge that Societa Imballaggi Plastici
S.r.l. is a company belonging to the Xxxxxx Packaging group of
companies.
14.2 The Buyer acknowledges that no provision of this Agreement may be
construed
23
as giving the Buyer a license or other title to use the name "Xxxxxx"
and/or "Xxxxxx Packaging" or any related Xxxxxx trademark or brand name.
14.3 Therefore the Buyer agrees not to use the name "Xxxxxx" or "Xxxxxx
Packaging" or any related Xxxxxx trademark, brand name or any
confusingly similar trademark or name.
14.4 Notwithstanding the foregoing, the Buyer shall have the right to sell
and distribute the Products included in the Inventory until the complete
depletion of the stock, regardless of the trademark or brand name
applied on the relevant labelling of the Products.
Section 15
Miscellaneous
15.1 Confidentiality. Except as it is necessary to the purpose of the
performance of this Agreement, except for the communications and other
accomplishments provided for by the law and with no prejudice to what is
provided in the Confidentiality Agreement signed by the Buyer on
December 11, 2001, the Buyer and the Seller shall not release any
communication to any third party or to the public in connection with the
transaction contemplated herein, unless jointly and upon terms
previously agreed upon between them and shall keep confidential any
information relating to the Business and/or to the transaction
contemplated herein exchanged between them before or after the Closing
Date.
15.2 Expenses. The Parties shall pay their own expenses, including attorney's
fees, incident to the preparation and performance of this Agreement,
except for the expenses related to this Agreement (notarial fees and
registration tax), which shall be borne by the Buyer. It being
understood that the Buyer shall keep the Seller harmless and fully
indemnified of any and all amount, which might be due to the Tax
Authorities or other competent authorities in relation to the
registration tax concerning the transfer of the Business.
15.3 Compensation. The Parties acknowledge that Ernst & Young Corporate
Finance Inc. is entitled to claim compensation from Xxxxxx Packaging
Europe with respect to the transactions contemplated by this Agreement,
pursuant to the
24
Assignment Letter dated May 23, 2001, signed by Mr. Ashok Sudan, Vice
President of Xxxxxx Packaging Europe.
Except for Ernst & Young Corporate Finance Inc., there is no person or
legal entity entitled to claim any brokerage commission or finder's fee
payable with respect to the transactions contemplated by this Agreement.
15.4 Successors. This Agreement shall be binding upon and inure to the
benefit of the Parties hereto and their respective successors and
assignees, provided neither Party shall assign this Agreement or any
rights herein without the other Party's prior consent.
15.5 Language. The Parties hereby acknowledge that this Agreement shall be
drawn up in the Italian and English language. In the event of any
conflict, the Italian text shall prevail.
15.6 Entire agreement. This Agreement contains the entire agreement of the
Parties with respect to its subject matter and supersedes any and
earlier agreements and understandings, either verbally or in writing,
between the Parties.
15.7 Changes. Changes to this Agreement can only be validly made and shall
come into force only when agreed upon in writing and when duly signed by
the Parties.
15.8 Severability of the provisions. In the event that any of the provisions
contained herein shall be deemed invalid or unenforceable, then the
remaining provisions shall be construed as if such invalid or
unenforceable provisions were not contained herein provided that the
remaining provisions do not fundamentally alter the relations among the
Parties, and the Parties shall negotiate and agree a fair revision of
this Agreement so as to replace the invalid, illegal or unenforceable
provisions with provisions as similar in terms to such invalid, illegal
or unenforceable provision as may be possible and be valid, legal and
enforceable.
15.9 Headings. The descriptive headings of this Agreement are for the sake of
convenience only and shall not control or affect the meaning,
construction or interpretation of any provision of this Agreement.
15.10 No Waiver of claims. No failure of either Party to take any action in
the event of a breach of any of the provisions of this Agreement by the
other party shall be considered to constitute a waiver.
15.11 Notices. All notices, consents, requests and approvals, any notice of
change in
25
address for the purposes herein and other communications provided for or
required herein, shall be deemed validly given, made or served, if in
writing and delivered (a) on the date of delivery, if delivered
personally or sent via fax on the number hereunder; (b) on the attested
day of receipt, if sent via registered mail with acknowledgment of
receipt, at the following addresses:
if to the Seller:
Xxxxxx Packaging Company LP
0000 Xxxxxxxx Xxxxxx Xxxx
Xxxx, Xxxxxxxxxxxx
00000
X.X.X.
c/o Mr. Ashok Sudan
Fax. 000 0000000
if to the Buyer:
Serioplast S.p.A.
Xxx Xxxx 0
Xxxxxxxx Xxxxxx, Xxxxxxx (XX)
c/o The Sale Director
Fax 000 000000
if to the Guarantor:
Xxxxxx Packaging Company LP
0000 Xxxxxxxx Xxxxxx Xxxx
Xxxx, Xxxxxxxxxxxx
00000
X.X.X.
c/o Mr. Ashok Sudan
Fax. 000 0000000
List of Exhibits:
------------------
A) Real Property;
B) List of Fixed Assets;
C) List of Machinery Equipment;
D) List of Commercial Contracts;
E) List of Transferred Personnel;
F) Inventory;
26
G) Permits;
H) Intellectual Property;
I) Form of bank guarantee;
J) Disclosure Letter;
K) Collective Rules;
L) Commercial contracts not assignable without the prior consent
of the other party;
M) List of tax litigation;
N) Financial Statements;
O) List of Standard Products Warrantries;
P) Form of bank guarantee.
IN WITNESS WHEREOF, the Parties have caused this Agreement to be executed the
day and year first above written.
SOCIETA IMBALLAGGI PLASTICI S.R.L
By:
---------------------------------
Name: XXXXXXX XXXXXXX
Title: ATTORNEY IN FACT
SERIOPLAST S.P.A.
By:
---------------------------------
Name: XXXXX XXXXXXXXX
Title: SOLE DIRECTOR
XXXXXX PACKAGING COMPANY LP (The Guarantor)
By:
---------------------------------
Name:
-------------------------------
Title:
------------------------------
Note: The exhibits to this Agreement listed above are omitted from the filing
of this Quarterly Report on Form 10-Q. The Registrant agrees to furnish
supplementally a copy of any such omitted exhibit to the Securities and
Exchange Commission upon request.
27
