Exhibit 2.1
AGREEMENT
FOR THE SALE AND PURCHASE
OF 41,873,851 SHARES REPRESENTING 100%
OF THE CORPORATE CAPITAL OF ANSALDO SISTEMI INDUSTRIALI S.p.A.
BY AND BETWEEN:
HIGH VOLTAGE ENGINEERING CORPORATION
AS PURCHASER
AND
ANSALDO INVEST S.p.A.
AS SELLER
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SHARE PURCHASE AGREEMENT
This share purchase agreement (the "Agreement") is entered into on October 7,
1999 in Rome
by and between
1. High Voltage Engineering Corporation, a company organised and existing
under the laws of the Commonwealth of Massachusetts, with registered
office at 000 Xxxxxxxxx Xxxxx -- Xxxxx 000, Xxxxxxxxx, XX 00000-0000,
Xxxxxx Xxxxxx of America, represented by Xx Xxxxxxx X. Xxxxx, Xx., in his
capacity as Chief Executive Officer (the "Purchaser") duly authorized by
the Board of Directors resolution dated October 7, 1999;
and
2. Ansaldo Invest S.p.A., a company organised and existing under the laws of
Italy, with registered offices in Genova, Xxxxxx Xxxxxxxxx x. 0, Xxxxx,
subscribed and paid-in capital ITL 27,675,450,000 enrolled with the
Companies' Register of the Court of Genova no. 51724, represented by Xx.
Xxxxxx Xxxxx in his capacity as Chairman (the "Seller") duly authorized by
the Shareholders Meeting resolution dated October 4, 1999;
(Seller and Purchaser are collectively referred to as the "Parties").
WHEREAS
A. Seller is the owner of no. 41,873,851 shares having a par value of ITL
1,000 each, representing 100 % of the corporate capital of Ansaldo Sistemi
Industriali S.p.A. (the "Shares"), a joint stock company organised and
existing under the laws of Italy, with registered offices at Genova, Xxx
Xxxxxxxxxxxx, xx. 00, subscribed and paid-in capital ITL 41,873,851,000
Tax Code number 00167500248, VAT no. 03626780104 enrolled with the
Register of the Companies of Genova at no. 47006/97 ("ASI").
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B. ASI is engaged - directly and through its Subsidiaries (as such term is
defined hereafter) - in the manufacturing, marketing and distribution of
AC and DC electric motors, drives, converters and industrial automation
systems.
C. Purchaser is a U.S. diversified company.
D. The Seller - through its advisor Rothschild Italia S.p.A. with office in
Milan, Corso Magenta, n. 12 - has solicited various potential buyers to
submit offers for the purchase of the Shares of ASI.
E. Prior to entering into this Agreement, from 8th to 12th March, 1999, the
Purchaser has conducted an investigation of ASI and its Subsidiaries by
means of a first Due Diligence review.
F. On April 19, 1999, the Purchaser following the first Due Diligence
investigation and on the basis of its own assumptions, projections and
estimates, has submitted a firm and irrevocable offer to purchase the
Shares.
G. After examination of said Purchaser's offer, the Seller has decided to
enter into negotiations with the Purchaser and upon request of the latter,
from May 17th to 21st 1999, as well as during the week of May 31st, 1999,
on June 10th and 11th 1999 and from August 4th to August 6th the Seller
has allowed the Purchaser to carry out a further Due Diligence
investigation.
H. The Seller and the Purchaser have started negotiations on the basis of the
aforementioned binding offer and have found an agreement on the terms and
conditions set out hereinbelow.
NOW, THEREFORE, on the basis of the foregoing recitals, which - together with
the Schedules hereto - form an integral and essential part of this Agreement,
and the mutual covenants, representations, warranties, obligations and
conditions set forth hereinafter, the Parties agree as follows.
1. DEFINITIONS
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In addition to the terms defined above and other terms defined in other
Sections hereof or in the Schedules hereto, the following terms shall have
the meanings set forth below for the purposes of this Agreement:
1.1. Accounting Principles shall mean the accounting principles applied
consistently with the Company's past practices, as identified in Schedule
1.1. hereto, which are in line: (a) as to ASI, with the principles
established by the Italian Xxxxxxxxx Nazionale dei Dottori Commercialisti
e Xxxxxxxxx Nazionale dei Ragionieri, and (b) as for the Subsidiaries
listed in Schedule 1.23. Part A (as hereinafter defined), with the local
generally accepted accounting principles.
1.2. Affiliate(s) shall mean any company in which Finmeccanica, directly or
indirectly, owns an equity interest.
1.3. Annual Accounts shall mean the balance sheet, the profit and loss account,
the integrative note and the directors' and statutory auditors' reports
for the financial year ended 31st December 1998, approved by ASI's
shareholders' meeting and audited by ASI's external auditors as well as
the balance sheets and the profit and loss accounts of the Subsidiaries
listed in Schedule 1.23 Part A (as hereinafter defined) as of the same
date, all attached hereto as Schedule 1.3.
1.4. Business Day(s) shall mean any calendar day (other than a Saturday or a
Sunday) on which banks are open for business in Italy and the Commonwealth
of Massachusetts (U.S.A.).
1.5. Closing shall mean the purchase and sale of the Shares, the payment of the
Purchase Price and the repayment of the Financial Debt(s) Towards
Finmeccanica And The Seller (as hereinafter defined) pursuant to Section 2
hereafter and, in general, the execution and exchange of all documents and
the performance and consummation of all obligations respectively required
to be executed and consummated on the day on which the Closing is to take
place pursuant to this Agreement. Unless otherwise agreed by the Parties
in writing, for sake of clarity, all actions and transactions constituting
the Closing shall be regarded as a single transaction so that, at the
option of the Party having interest in the carrying out of an action or
transaction, no action or transaction shall be deemed to have taken place
if and unless all other actions and transactions shall have taken place as
provided for in this Agreement.
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1.6. Closing Date shall mean a date not later than the 30th Business Day (not
exceeding December 31, 1999) following the date on which the Seller has
given written notice (which notice the Seller shall give promptly) to the
Purchaser that all the conditions precedent contemplated in Section 3 have
been satisfied or such date as the Parties may agree in writing, on the
understanding that the Closing Date shall coincide with the last Business
Day of any month, or, in any case, with a Business Day not exceeding five
(5) Days after the last Day of any month.
1.7. Closing Date Financial Statements shall mean the financial statements to
be prepared by the Purchaser and dated as of the same date as the Closing
Date or as of the last Business Day of the month preceding the Closing
Date if the Closing Date does not coincide with the last Business Day of
the month. The General Financial Debt, the Financial Debt(s) Towards
Finmeccanica And The Seller, the Financial Debt(s) Towards Third Parties
and the Working Capital shall be calculated for adjustments, pursuant to
Sections 2.4., 2.5. and 2.6. hereinafter, based on the Closing Date
Financial Statements.
1.8. Company shall mean Ansaldo Sistemi Industriali S.p.A. and its
Subsidiaries.
1.9. Day(s) or day(s) shall mean any calendar day(s).
1.10. Due Diligence shall mean the Due Diligence investigation and review,
organised by the Seller for the benefit of the Purchaser, as set forth in
Section 8.2, conducted by the Purchaser through its representatives, legal
counsels, auditors, financial advisors and environment and safety
consultants on information and matters requested by the Purchaser and made
available to it by the Seller in relation to the Company.
1.11. Encumbrances shall mean, in relation to the Shares, any pledges, rights of
first refusal, rights of possession, restrictions, sequestrations,
privileges, liens, usufruct, burdens and rights or claims of third
parties.
1.12. Euro shall mean the European currency conversion activities implemented by
ASI as detailed in Schedule 1.12.
1.13. Excluded Intellectual Property shall mean the words, trademarks and
tradenames "Ansaldo" and "Finmeccanica" and the signs and logos however
associated with them.
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1.14. Financial Debt(s) Towards Finmeccanica And The Seller shall mean: i) the
net financial indebtedness of the Company (excluding the net financial
indebtedness of the Subsidiaries listed in Schedule 1.23. Part B) towards
Finmeccanica and/or the Affiliate(s) and/or the Seller as of the Closing
Date as identified in Schedule 1.14 which shall include all loans
outstanding, notes, financial leases, financial liabilities arising from
sale-lease back transactions and any other transaction having a financial
nature, due to Finmeccanica and/or the Affiliate(s) and/or the Seller, net
of any financial credit and of any existing cash, irrespective of whether
or how such indebtedness is secured, and (ii) the amount of ITL
9,000,000,000 (nine billion) representing the selling price of the real
estate in Monfalcone, as provided for in Section 4.5. of this Agreement,
which the Purchaser shall cause ASI to repay to Finmeccanica and/or the
Affiliate(s) and/or the Seller pursuant to the provisions under Section
2.3. by providing the necessary financial means as per same Schedule 1.14.
It is clarified that the above exclusion of the financial indebtedness of
said Subsidiaries listed on Schedule 1.23. Part B shall not affect the
fulfilment by said Subsidiaries of their own payment obligations at their
natural expiration date(s).
1.15. Financial Debt(s) Towards Third Parties shall mean the net financial
indebtedness of the Company towards third parties as of the Closing Date,
(excluding the net financial indebtedness of the Subsidiaries listed in
Schedule 1.23. Part B) as identified in Schedule 1.15., which shall
include all loans outstanding, notes, financial leases, financial
liabilities arising from sale-lease back transactions and any other
transaction having a financial nature, due to banks, financial
institutions and third parties, other than Finmeccanica Group and the
Seller, net of any financial credit and of any existing cash, irrespective
of whether or how such indebtedness is secured. It is clarified that the
above exclusion of the financial indebtedness of said Subsidiaries listed
in Schedule 1.23. Part B shall not affect the fulfilment by said
Subsidiaries of their own payment obligation at their natural expiration
date(s).
1.16. Finmeccanica shall mean Finmeccanica - Societa per Azioni with registered
office in Rome, Xxxxxx Xxxxx Grappa, n. 4, having control on the Seller.
1.17. Finmeccanica Group shall mean Finmeccanica and any or all the Affiliates.
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1.18. General Financial Debt(s) shall mean the Financial Debt(s) Towards
Finmeccanica And The Seller plus the Financial Debt(s) Towards Third
Parties.
1.19. Guarantees shall mean all guarantees, counter-guarantees, letters of
credit, letters of patronage, comfort letters, insurance policies or
securities of any kind whatsoever issued by, or in any way binding,
directly or indirectly, on the Seller, Finmeccanica or any Affiliate in
relation to any obligation of the Company, related to the business,
activities and contractual relationships of the Company including those
given by Finmeccanica and the Seller in connection with the Financial
Debt(s) Towards Third Parties (as presently listed in Schedule 1.19. part
A and part B subject to updating as of the Closing Date).
1.20. HSR shall mean Xxxx-Xxxxx Xxxxxx Antitrust Improvements Act.
1.21. June Accounts shall mean the Company's accounts as of June 30, 1999,
attached hereto as Schedule 1.21 prepared in accordance with the
respective Accounting Principles of ASI and of the Subsidiaries listed in
Schedule 1.23. Part A and structured in the form of an aggregate statement
of accounts according to the principles, methods and criteria set forth in
said Schedule 1.21.
1.22. Purchase Price shall mean the amount of Italian Lira to be determined
pursuant to the provisions under Section 2.2.1. hereinafter, which the
Parties have agreed as the price due by the Purchaser to the Seller for
the sale of the Shares.
1.23. Subsidiaries shall mean the Subsidiaries of ASI which are listed in
Schedule 1.23 Part A and Part B.
1.24. Working Capital shall have the meaning set forth in Section 2.5.
1.25. Year 2000 shall mean the 2000 occurrence implementation activities
performed by ASI as detailed in Schedule 1.25.
2. SALE AND PURCHASE OF THE SHARES
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2.1. Sale and purchase of the Shares. The Seller hereby agrees to sell the
Shares to the Purchaser for the Purchase Price and the Purchaser hereby
agrees to purchase the Shares for the Purchase Price, under the terms and
subject to the conditions set out herein. Subject to the conditions
precedent referred to in Section 3 hereafter, transfer of the Shares to
the Purchaser and payment of the Purchase Price by the Purchaser shall be
made simultaneously on Closing Date as provided in Section 5 hereafter.
2.2. Amount of the Purchase Price and payment of the same.
2.2.1. The Purchase Price has been agreed by the Parties in the amount of
ITL 1,000,000,000 (one billion); however, should the amount of the General
Financial Debt(s) at the Closing Date be lower than ITL 92,000,000,000
(ninety two billion) the above Purchase Price of ITL. 1,000,000,000 (one
billion) shall be increased by an amount equal to the difference between
ITL 92,000,000,000 (ninety two billion) and the amount of the General
Financial Debt(s) at the Closing Date.
2.2.2. At least 3 (three) Business Days prior to the Closing Date, the
Seller shall give written notice to the Purchaser of its best estimate of
the amount of the Purchase Price, calculated by the Seller as per Section
2.2.1.. Without prejudice to the provisions under Section 2.4.2.
hereinafter, payment of the Purchase Price shall be made by the Purchaser
on the Closing Date in immediately available funds by wire transfer to the
bank account to be communicated with reasonable advanced written notice by
the Seller to the Purchaser.
2.3. Payment of the Financial Debt(s) Towards Finmeccanica And The Seller.
Together with the notice under Section 2.2.2. above, the Seller shall
communicate to the Purchaser its best estimate of the split between the
Financial Debt(s) Towards Finmeccanica And The Seller and the Financial
Debt(s) Towards Third Parties. Without prejudice to the provisions under
Section 2.4.2. hereinafter, on the Closing Date the Purchaser shall cause
ASI to repay to Finmeccanica and/or to the Affiliate(s) and/or to the
Seller, whichever shall result the relevant creditor, said estimated
amount of the Financial Debt(s) Towards Finmeccanica And The Seller,
pursuant to the provisions under said Schedule 1.14. by procuring to ASI
the necessary financial means, as provided for in same Schedule 1.14.
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2.4. General Financial Debt(s) at the Closing Date.
2.4.1. - Amount of the General Financial Debt(s) at the Closing Date
Taking into due account the provisions under Section 2.4.2 hereinbelow, at
the Closing Date, the Seller shall have procured and obtained, to the best
of its possibilities, that the General Financial Debt(s) of the Company,
excluding the Subsidiaries listed in Schedule 1.23. Part B, does not
exceed ITL 92,000,000,000 (ninety two billion), so reduced from the agreed
amount of ITL 97,000,000,000 (ninety seven billion) in consideration of
the provisions under Section 8.4 hereinafter.
2.4.2. - Verification of the General Financial Debt(s) and adjustments
(i) As soon as practicable after the Closing Date - but in any case not
later than 60 (sixty) Days thereafter -- the Purchaser shall prepare
and deliver to the Seller the Closing Date Financial Statements;
(ii) as soon as practicable after the delivery to the Seller of the
Closing Date Financial Statements - but in any case not later than
30 (thirty) Days thereafter - either Party shall have the right to
request in writing that the Seller and the Purchaser or the
representatives of their respective auditing firms meet in order to
jointly verify the actual amount of the General Financial Debt(s),
as well as of the Financial Debt(s) Towards Finmeccanica And The
Seller and of the Financial Debt(s) Towards Third Parties, at the
Closing Date;
(iii) said verification shall be conducted on the basis of the Closing
Date Financial Statements delivered to the Seller as above and shall
be completed not later than 105 (one hundred and five) Days after
the Closing Date;
(iv) on the basis of and in accordance with the results of such joint
verification, the Parties shall proceed without undue delay to the
possible adjustments in respect of the General Financial Debt(s) as
follows:
a) should the Parties ascertain that the actual amount of the
General Financial Debt(s) at the Closing Date was higher than
ITL 92,000,000,000 (ninety two billion), the Seller shall at
its option - to be
10
communicated in writing to the Purchaser in due time - either:
(i) pay to the Purchaser an amount equal to the difference
between ITL 92,000,000,000 (ninety two billion) and said
actual amount so ascertained, increased by any amount of the
Purchase Price possibly paid by the Purchaser to the Seller in
excess of ITL 1,000,000,000 (one billion) in compliance with
the provisions of Section 2.2, or (ii) procure that any said
amount in excess of ITL 92,000,000,000 (ninety two billion)
(i.e. said actual amount so ascertained, increased by any
amount of the Purchase Price possibly paid by the Purchaser to
the Seller in excess of ITL 1,000,000,000 (one billion) in
compliance with the provisions of Section 2.2) be waived fully
and unconditionally in writing by the respective creditor(s);
b) should the Parties ascertain that the actual amount of the
General Financial Debt(s) at the Closing Date was lower than
the amount calculated by the Seller and communicated to the
Purchaser in compliance with Section 2.3, the Purchaser shall
pay to the Seller an amount equal to the difference between
ITL 92,000,000,000 (ninety two billion) and said actual amount
so ascertained, reduced by any amount of the Purchase Price
paid by the Purchaser to the Seller in excess of ITL
1,000,000,000 (one billion) in compliance with the provisions
of Section 2.2.
The payments so due by either Party to the other or the waiver as
per Section 2.4.2(iv) a) (ii) above shall be made without delay and,
in any event, not later than thirty (30) Days after the date of
ascertainment of the amount(s) to be paid;
(v) should the Purchaser not comply with its obligations under Section
2.4.2.(i) and/or should the Parties be unable to meet pursuant to Section
2.4.2.(ii) and/or to complete the verification pursuant to Section
2.4.2.(iii) on or before the respective terms therein indicated, the
provisions under Section 11.11 shall apply on the understanding, however,
that a possible recourse to arbitration shall be made by and not later
than 120 (one hundred and twenty) days from the Closing Date.
Should a dispute arise in respect of the determination of the actual
amount of the General Financial Debt(s) the Parties shall appoint an
expert of common trust, selected from a primary
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international auditing firm, in order to make an attempt to solve the
dispute amicably. The cost of the above expert, if appointed, shall be
shared equally between the Parties. Should the Parties not be able to
agree on the appointment of said expert or should the conclusions of this
latter be unacceptable for any of the Parties, the provisions under
Section 11.11 shall apply on the understanding, however, that a possible
recourse to arbitration shall be made by and not later than 120 (one
hundred and twenty) days from the Closing Date.
It is understood that the rights of either Party connected to the terms
under Sections 2.4.2 (ii) and (v) above shall be forfeited if not
exercised on or before the expiry dates of the relevant terms and,
therefore, said rights under this Section 2.4.2. or otherwise with respect
to the Company's actual General Financial Debt(s) as of the Closing Date
shall cease and become null and void at the expiry dates of said relevant
terms. It is also understood that notification in writing to the other
Party shall be sufficient evidence of notice of one Party to the other of
a request for verification of the General Financial Debt(s) and its
adjustment, and therefore of that Party's exercise of its right connected
to the term under Section 2.4.2. (ii) above, and that such notification
shall therefore prevent any forfeiture of said Party's right.
2.5. Working Capital. The Parties agree that the Company's net working capital,
excluding the net working capital of the Subsidiaries listed on Schedule
1.23. Part B and as better identified under Schedule 2.5., at the Closing
Date will be equal to ITL 98,000,000,000 ( ninety eight billion) with a
tolerance of ITL 500,000,000 (five hundred million) (the "Working
Capital"); therefore, any short fall with respect to the ITL
98,000,000,000 (ninety eight billion) exceeding said ITL 500,000,000 (five
hundred million) tolerance shall be at charge of the Seller and, likewise,
any amount exceeding said ITL 98,000,000,000 (ninety eight billion) by
more than ITL 500,000,000 (five hundred million) tolerance shall be for
the benefit of the same. Possible adjustments between the Parties with
respect to the Working Capital will be made pursuant to Section 2.6.
hereinafter.
In this respect it is clarified that the Purchaser: (i) has reviewed to
its satisfaction the June Accounts and has discussed the same in detail
with the management of ASI; (ii) accepts, among others, the accounting
methods and criteria as well as the evaluations and projections, applied
by the Company on a consistent basis and in accordance with the past
practices, adopted by the Seller in respect of the work in progress
("rimanenze" items "Lavori in corso lordi",
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"Magazzino prodotti finiti" and "Fondo Svalutazione Rimanenze" of the
June Accounts); and (iii) acknowledges that Seller does not guarantee the
collection ("buon fine") of the commercial credits being part of the
Working Capital as of the Closing Date (items "Crediti verso clienti" and
"Fondo svalutazione crediti" of the June Accounts), provided that both the
work in progress and the commercial credits as well as the Working Capital
as of the Closing Date are calculated in accordance with the Accounting
Principles applied on a consistent basis and in accordance with the
Company's past practices.
2.6. Verification of the Working Capital and adjustments.
(i) As soon as practicable after the Seller will have received the
Closing Date Financial Statements as per Section 2.4.2.(i) - but in
any case not later than 30 (thirty) days thereafter - either Party
shall have the right to request in writing that the Seller and the
Purchaser or the representatives of their respective auditing firms
meet in order to jointly verify the actual amount of the Working
Capital at the Closing Date;
(ii) said verification shall be conducted on the basis of the Closing
Date Financial Statements, utilising the Accounting Principles,
evaluations methods and criteria applied by the Company on a
consistent basis in accordance with past practices - and shall be
completed not later than 105 (one hundred five) days after the
Closing Date;
(iii) on the basis of and in accordance with the results of such joint
verification, the Parties shall proceed without undue delay to the
possible adjustments in respect of the Working Capital. The balance
due, if any, to be calculated in accordance with the provisions of
Section 2.5. above, shall be paid by the Seller to the Purchaser, or
by the Purchaser to the Seller, as the case may be, without delay
and in any event not later than 30 (thirty) days after the date of
determination of the balance above mentioned;
(iv) should the Purchaser not comply with its obligations under Section
2.4.2.(i) and/or should the Parties be unable to meet pursuant to
Section 2.6.(i) and/or to complete the verification pursuant to
Section 2.6.(ii) on or before the respective terms therein
indicated, the provisions under Section 11.11 shall apply on the
understanding, however, that a possible recourse to arbitration
shall be made by and not later than 120 (one hundred and twenty)
days from the Closing Date.
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Should a dispute arise in respect of the determination of the actual
amount of the Working Capital the Parties shall appoint an expert of
common trust, selected from a primary international auditing firm,
in order to make an attempt to solve the dispute amicably. The cost
of the above expert, if appointed, shall be shared equally between
the Parties. Should the Parties not be able to agree on the
appointment of said expert or should the conclusions of this latter
be unacceptable for any of the Parties, the provisions under Section
11.11 shall apply on the understanding, however, that a possible
recourse to arbitration shall be made by and not later than 120 (one
hundred and twenty) days from the Closing Date.
It is understood that the rights of either Party connected to the terms
under Sections 2.6.(i), and (iv) above shall be forfeited if not exercised
on or before the expiry dates of the relevant terms and, therefore, said
rights under this Section 2.6. or otherwise with respect to the Company's
actual Working Capital as of the Closing Date shall cease and become null
and void at the expiry dates of said relevant terms. It is also understood
that notification in writing to the other Party shall be sufficient
evidence of notice of one Party to the other of a request for verification
of the Working Capital and its adjustment, and therefore of that Party's
exercise of its right connected to the term under Section 2.6.(i) above,
and that such notification shall therefore prevent any forfeiture of said
Party's right.
2.7. Escrow. To guarantee the Seller for the punctual and complete fulfilment
by the Purchaser of its obligations under this Agreement up to the
implementation of all the transactions contemplated for the Closing,
concurrently with the signature of this Agreement the Purchaser and the
Seller shall sign with Banca Popolare di Lodi the escrow agreement under
Schedule 2.7.; upon the signature of the escrow agreement under said
Schedule 2.7. the Purchaser shall deposit with Banca Popolare di Lodi ITL.
5,000,000,000 (five billion) for the purposes of the escrow agreement.
Said escrow shall be governed by the terms and conditions set forth in the
escrow agreement.
2.8. Interest. Should the Closing take place after more than 60 (sixty) days
from the signing of this Agreement, interest to be calculated according to
the "prime rate ABI" shall accrue on the Purchase Price and on the General
Financial Debt(s) from such date until the Closing Date and such interest
amount shall have to be paid by the Purchaser to the Seller at the
Closing.
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2.9. Subsequent transfer of the Shares. Should the Purchaser transfer, in whole
or in part in any manner whatsoever, to a third party the Shares, within 2
(two) years as of the Closing Date, at a selling price (the "Resale
Price") exceeding the Purchase Price, the Purchaser shall pay to the
Seller, within 30 (thirty) days of receipt of the payment of such Resale
Price, an amount equal to 50% of the balance resulting from the difference
between the Resale Price and the Purchase Price (the "Balance"). For the
purposes of determination of the Balance due to the Seller, in the event
the Shares are sold in part, the Purchase Price amount shall be reduced in
proportion to the percentage of Shares sold. For the sake of clarity, the
Parties agree that the above shall not apply to the transfer of the Shares
to third parties in the context of mergers, demergers, joint ventures and
public offerings of newly issued shares.
2.10. Upon the written request of the Purchaser, to be received by the Seller
not later than 21 Business Days prior to the Closing Date, the Seller
undertakes to procure the repayment, before the Closing, of an amount
equal to ITL 20,000,000,000 (twenty billion) of the Financial Debt(s)
Towards Finmeccanica And The Seller through utilization of an equal amount
of account receivables and consequent reduction of the Working Capital by
a corresponding amount of ITL 20,000,000,000 (twenty billion). In the
event of such written request the figures of:
a) ITL 92,000,000,000 (ninety two billion) as amount of the General
Financial Debt(s) under this Agreement; and
b) ITL 98,000,000,000 (ninety eight billion) as amount of the Working
Capital under this Agreement,
shall be changed respectively into ITL 72,000,000,000 (seventy two
billion) with respect to the General Financial Debt(s) and into ITL
78,000,000,000 (seventy eight billion) with respect to the Working
Capital; said reduced amounts shall, therefore, be applied for all the
purposes of this Agreement. Should the Seller not be able to comply, in
whole or in part, with the above repayment of ITL 20,000,000,000 (twenty
billion) before the Closing, the above indicated reduced amounts of ITL
72,000,000,000 (seventy two billion) and ITL 78.000,000,000 (seventy eight
billion), respectively, shall nonetheless be applied as stated above for
all the purposes under this Agreement. In such event, the Seller shall
remain creditor vis-a-vis the
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Purchaser and ASI for an amount equal to that part of said 20,000,000,000
(twenty billion) of the Financial Debt(s) Towards Finmeccanica And The
Seller not repaid before the Closing as above said; in such instance, at
the Closing the Purchaser and the Seller shall agree on the terms and
conditions for the payment by ASI, of said Seller's credit.
3. CONDITIONS PRECEDENT
3.1. The sale and purchase of the Shares shall be conditional upon the
following:
a) no objection to the proposed transactions shall be made by the Italian
Authority for Competition and Market (Autorita Garante della Concorrenza e
del Mercato, hereinafter the "Authority") in accordance with and within
the terms set forth by Law no. 287 of 10th October 1990 ("Law 287"). For
such purposes the Parties hereto agree to fully cooperate in the
preparation of the requisite notice ("Notice").
The Parties furthermore agree to fully co-operate in the prompt submission
to the Authority of any further information or documentation that might be
requested by the same. The Parties shall act in mutual consultation with
respect thereto, and shall co-operate in order to comply with all measures
and requests of the authorities for the purpose of completing the
transactions contemplated by this Agreement. Should such measures and
requests not be in conformity with this Agreement, the Seller and the
Purchaser shall negotiate in good faith to amend or replace this Agreement
with other valid and effective arrangements having, as far as legally
permissible, substantially the same effect, having regard to the subject
matter and purposes of this Agreement and the respective interests of the
Parties.
(i) In the event no formal inquiry has been commenced by the Authority
the clearance shall be deemed to have occurred upon receipt of a
written communication from the Authority stating that the proposed
transactions will not be subject to any inquiry.
16
(ii) In the event a formal inquiry has been commenced by the Authority,
the clearance shall be deemed to have occurred upon receipt of a
written communication from the Authority stating that, following its
inquiry, it has no objection to the proposed operation at the end of
the term of 45 days of the commencement of the inquiry, or at the
end of the term of 75 days should the Authority have taken advantage
of the provision of paragraph 8 of Article 16 of Law 287;
b) all filings, consents, approvals or clearances which is necessary to
make or obtain from the Federal Trade Commission shall have been made or
obtained.
More specifically, the Purchaser shall, with the Seller's co-operation:
(i) as promptly and practicable after the date hereof, and, in no event,
unless otherwise agreed in writing, later than 15 (fifteen) days after the
date of signature of this Agreement, make such filings as may be required
by the HSR with respect to the transactions contemplated herein, (ii)
respond promptly to inquiries from the Department of Justice and the
Federal Trade Commission in connection with such filings, (iii) file or
cause to be filed as promptly as practicable with the Department of
Justice and the Federal Trade Commission any supplemental information that
may be requested pursuant to HSR, and (iv) seek the earliest possible
termination or waiver of the waiting period under HSR's statute;
c) the Seller shall have informed the relevant Trade Unions of this
Agreement; the Purchaser shall have the option to participate in any
possible subsequent meeting with the Trade Unions and, to this effect,
written notice will be given by the Seller;
d) no placed order by or existing contract with Finmeccanica or its
Affiliates, as the case may be, being withdrawn or earlier terminated
except as provided for therein;
e) the Purchaser shall have procured the guarantees indicated in Section
5.3.B.(v) hereinafter;
f) all representations and warranties by the Seller contained in Section
7.2. shall be true and correct in all material respects on and as of the
Closing Date as though such representations and warranties were made at
and as of such date, but taking into due account the possible effects of
the implementation of the provisions under Section 4 hereinafter; on the
understanding, however, that possible breach(es) of said representations
and warranties apt to justify refusal of
17
the Closing by the Purchaser shall be so substantial as to materially
affect the interest of the Purchaser in the transaction under this
Agreement.
g) the Purchaser shall have concluded financing arrangements with banks
and credit institutions to enable it to comply with the provisions of
Sections 2.3. and 5.3.B)(ii) of this Agreement, on the understanding that,
upon simple demand, the Seller shall have the right, but not the
obligation, at any time: (i) to be fully informed in writing of such
arrangements with banks and credit institutions; (ii) to obtain copy of
documents related to such arrangements; (iii) to contact for information
the officers of said banks and credit institutions and to be in
attendance, subject to previous written notice to the Purchaser, at any
meeting which may be held with such banks and credit institutions for the
purposes hereto; and (iv) to intervene to ease the conclusion of said
arrangements.
3.2. Each of the Parties undertakes to use its best efforts in order to ensure
that the conditions precedent referred to in this Section 3 are fulfilled
as soon as practicable.
3.3. As soon as practicable, the Purchaser shall communicate in writing to the
Seller that the conditions precedent under Section 3.1.a), 3.1. b), 3.1.e)
and 3.1. g) have been met in order to enable the Seller to comply with the
provisions under Section 5.1. hereafter.
3.4. Unless otherwise agreed in writing between the Parties, should any of the
conditions precedent set forth in Sections 3.1.a), 3.1.b), 3.1.c), 3.x.x)
and 3.1.f) not occur on or before December 31, 1999 for causes beyond the
control of the Parties and without any fault or responsibility on either
of them, either Party shall have the right to consider this Agreement null
and void and to terminate it forthwith, without any claim whatsoever
against the other.
3.5. Should any of the conditions precedent not occur on or before 31 December
1999, for reasons attributable to one of the Parties, then: (i) if the
condition not occurred is among those indicated in Section 3.1.a) and/or
3.l.b) not consenting to proceed with the Closing, the sale and purchase
transaction contemplated in this Agreement shall not be executed and the
Party at fault shall be under the obligation to indemnify the other for
the damages suffered by the same; and (ii) if the condition(s) not
occurred is among those indicated in Section 3.1.c), d), e) and f) the
Party not at fault shall be entitled to decide for the implementation or
the termination of this Agreement, being entitled in either case to be
indemnified by the Party at fault for the damages
18
suffered; (iii) if the condition(s) not occurred, for any reason
whatsoever, is that under Section 3.1. (g), the Seller shall have, in any
case, the right to call, cash and retain as liquidated damages the amount
of ITL 5,000,000,000 (five billion) deposited in escrow pursuant to
Section 2.7..
4. INTERIM MANAGEMENT
4.1. The Seller, except as expressly contemplated by this Agreement or
otherwise consented by the Purchaser, which consent shall not be
unreasonably withheld, or disclosed to the Purchaser under Schedule 4.1.,
represents, warrants and agrees that:
(a) during the period between June 30, 1999, and the Closing Date, the
business of the Company has been and shall be conducted only in the
ordinary course and in accordance with past practises, prudent and
customary under the circumstances as well as in accordance with the law;
(b) during the period between the signing of this Agreement and the
Closing Date, without the prior written consent of Purchaser:
(i) no "dirigenti" will be hired, appointed, promoted or dismissed by the
Company;
(ii) no employees, consultants, commercial agents or representatives of
the Company shall be hired or dismissed, and none of the respective rights
and obligations thereof have been or shall be modified, except in the
ordinary course of business in accordance with past practices or as
mandated by law or applicable national collective bargaining agreements.
No shop-level collective labor agreement ("accordo integrativo aziendale")
shall be entered into by the Company;
(iii) no leases, real estate conveyances, licensing contracts or
distribution agreements, mortgages, pledges, joint venture agreements,
loans or credit agreements of the Company shall be made, amended or
terminated. This provision applies to agreements having a value exceeding
ITL 1,000,000,000 (one billion) for each agreement;
19
(iv) no contracts or commitments shall be entered into by or on behalf of
the Company that extend beyond the Closing Date for the period of six
months thereafter and involve the purchase, sale, or encumbrance of fixed
assets having an aggregate value of more than ITL 2,000,000,000 (two
billion);
(v) the Company shall not commence any litigation, except for those which
are necessary to preserve the business or the rights of the Company,
provided that the Purchaser shall be immediately informed thereof and kept
fully informed of any development, as well as of any litigation brought by
third parties against the Company; in addition, the Company shall not
settle any threatened or pending litigation;
(vi) no transaction shall take place between the Company, Finmeccanica or
any of the Affiliates or any of the companies belonging to the IRI
(Istituto per la Ricostruzione Industriale S.p.A.) Group, except
transactions at arm's length or transactions which shall not be
detrimental to the Company.
4.2. Notwithstanding any provision under Section 4.1., during the interim
management period the Seller shall have the right to: (i) procure that any
outstanding receivables and payables respectively due from and to
Finmeccanica and/or any of the Affiliates be paid to the Company and paid
by the Company, as the case may be; (ii) take any appropriate action
necessary to implement the provisions under Sections 2.4., 2.5. and 2.10.;
(iii) take any appropriate action to reduce the General Financial Debt(s)
in excess of ITL 92,000,000,000 (ninety two billion); and (iv) take any
appropriate action in order to cause ASI to purchase from Finmeccanica the
real estate in Monfalcone as per Section 4.5.; (v) take any appropriate
action in order to change the name of Ansaldo Deutschland GmbH into
Ansaldo Industrial Systems GmbH.
4.3. The Parties agree that after the signing of the Agreement and until the
Closing Date they shall conduct meetings to be held in principle on a
weekly basis. Such meetings shall be attended by senior executives on
behalf of either Party and are intended to inform the Purchaser of the
activity conducted by the Company after the signing of the Agreement.
4.4. The Seller shall procure that all receivables and payables as identified
in Schedule 4.4., respectively due from or to Finmeccanica and/or any of
the Affiliates - which fall due on or
20
before the Closing Date - be paid to the Company or paid by the Company,
as the case may be, not later than the Closing Date and/or be set off, in
whole or in part.
The Seller shall also procure that those receivables, among those
identified in Schedule 4.4., due from Finmeccanica and/or any of the
Affiliates, which will remain outstanding after the Closing Date, be paid
to the Company when due according to their original terms.
The Purchaser shall procure that those payables among those identified in
Schedule 4.4., due from the Company to Finmeccanica and/or any of the
Affiliates, which will remain outstanding after the Closing Date, be paid
by the Company to Finmeccanica and/or the Affiliates when due according to
their original terms.
4.5. The Seller shall procure that, on or before the Closing Date, ASI
purchases from Finmeccanica the real estate in Monfalcone, as described in
Schedule 4.5. hereto, free and clear from any mortgages, liens and
encumbrances ("trascrizioni pregiudizievoli") which may be prejudicial to
the inscription of mortgages by the Purchaser at a purchase price of ITL
9,000,000,000 (nine billion), plus VAT, to be paid by ASI at the Closing,
as per Section 2.3., on the understanding that said amount of ITL
9,000,000,000 (nine billion) shall be included in the aggregate amount of
the Financial Debt(s) Towards Finmeccanica and The Seller, as per Section
1.14..
5. CLOSING
5.1. Promptly after having: (i) received from the Purchaser the communications
foreseen in Section 3.3. and (ii) verified that all other conditions
precedent under Section 3 have occurred, the Seller shall send to the
Purchaser written notice thereof, requesting the Purchaser to proceed with
the Closing and indicating the Closing Date.
5.2. Closing shall take place on the Closing Date, at the offices of Studio
Carnelutti located in Rome, Via Parigi, n. 11, or in such other place as
the Parties may agree upon in writing.
5.3. On the Closing Date, the Parties shall perform the following actions,
which, regardless of their time sequence, shall be deemed to occur
simultaneously and to constitute one single transaction:
21
A) The Seller shall:
(i) unless otherwise indicated by the Purchaser, deliver and/or cause
to be delivered to the Purchaser the share certificates
representing the Shares, free and clear of any Encumbrances, duly
endorsed in favour of the Purchaser;
(ii) deliver to the Purchaser letters of resignation from the members
of the board of directors of the Company as indicated in Schedule
5.3.A(ii) and use its best efforts to procure that letters of
resignation from the members of the panel of the statutory
auditors of the Company, with effect from the Closing Date, are
obtained and delivered to the Purchaser;
(iii) procure that shareholders meetings of ASI and of the Subsidiaries
are held at the same time on such date to resolve on the
appointment as directors and statutory auditors of ASI and of the
Subsidiaries of those persons designated by the Purchaser in
writing prior to Closing;
(iv) sign and deliver to Banca Popolare di Lodi the letter of
instructions attached hereto as Schedule 5.3.A)(iv), concerning
the escrow under Section 2.7.;
(v) procure that Finmeccanica and ASI sign the license agreement in
the form set out in Schedule 5.3.A)(v);
(vi) procure that Finmeccanica and ASI sign a lease agreement in the
form set forth in Schedule 5.3.A)(vi) covering the offices of
Genoa;
(vii) deliver to the Purchaser the original document of the executed
sale and purchase agreement ("contratto definitivo") between ASI
and Finmeccanica related to the real estate in Monfalcone;
(viii) have delivered to the Purchaser the notice pursuant to Section
2.2.2. and 2.3.;
(viii) have delivered to the Purchaser a list of all the Company's
employees as of the Closing Date;
22
(ix) deliver to the Purchaser written confirmation that Ansaldo
Industrial Automation GmbH is no longer owned by ASI, with no
remaining obligations or liabilities for the same.
B) The Purchaser shall:
(i) pay the Purchase Price to the Seller as per Section 2.2. above;
(ii) cause ASI to repay to Finmeccanica and/or the Affiliate(s) and/or
the Seller the Financial Debt(s) Towards Finmeccanica And The
Seller in accordance with the provisions of Section 2.3. and of
Schedule 1.14. above;
(iii) pay or cause to be paid to the competent authorities and in the
appropriate manner, any stamp, transfer or similar taxes or
charges however levied by any governmental authority on the
transfer of the Shares;
(iv) give to all the past and present directors and statutory auditors
of ASI and of the Subsidiaries a written disclaimer and
undertaking, as per Schedule 5.3.B.(iv), to be delivered to the
Seller, to hold them harmless and indemnified against any
liability arising from their acting as directors and as statutory
auditors of ASI or the Subsidiaries up to the Closing Date,
provided that such liability arises as a result of an action
started by ASI and /or the Subsidiaries, as the case may be,
and/or their shareholders and not by third parties, including
authorities and receivers, and that it does not arise as a result
of criminal acts, wilful default or gross negligence;
(v) deliver to the Seller the guarantees provided for in Section
10.1.;
(vi) sign and deliver to Banca Popolare di Lodi the letter of
instructions attached hereto as Schedule 5.3.A)(iv), concerning
the escrow under Section 2.7.;
(vii) deliver to the Seller a letter as per the text set-forth in
Schedule 5.3.B)(vii);
(viii) deliver to Seller the disclaimer letters concerning environment,
health and safety pursuant to Section 8.4., as per the text
set-forth in Schedule 5.3.B)(viii);
23
(ix) procure that ASI signs with Finmeccanica a license agreement in the
form set forth in Schedule 5.3.A)(v);
(x) procure that ASI signs with Finmeccanica a lease agreement in the
form set forth in Schedule 5.3A)(vi) covering the offices of Genoa.
5.4. Each Party agrees to take in consultation and, where necessary, in
co-operation with the other Party all additional actions whether before,
at, or after the Closing Date, including but not limited to all filings
requested by governmental or regulatory entities reasonably necessary to
complete the transactions contemplated in this Agreement.
6. POST CLOSING COVENANTS
6.1. The Purchaser agrees not to use, nor to permit that the Company makes use
of the Excluded Intellectual Property or of any other word, tradename or
trademark which may induce any third party to believe that ASI or any of
the Subsidiaries continue to belong to the Finmeccanica or IRI Group of
companies, other than as permitted under the license agreement mentioned
under Section 5.3.A)(v) above. The Purchaser agrees to ensure and procure
that the Company discontinue any use of the Excluded Intellectual Property
and delete any reference thereto from any notepaper, official publication,
advertising, brochure or presentation material of any kind whatsoever, as
from the Closing Date, other than as permitted under the license agreement
mentioned under Section 5.3.A(v) above.
6.2. The Purchaser agrees to cause the Company to continue its activities in
order to meet the reasonable expectations of clients, with respect to all
obligations in force at the Closing Date and to follow any guidelines in
that connection which may be issued by the competent regulatory
authorities.
Further the Purchaser shall procure that the Company punctually complies
with its obligations under the contracts/supply orders presently in force
with the Affiliates and assumes any liability in compliance with the
contractual and/or law provisions applicable in respect of possible
unfulfillments and/or products defects attributable to it.
24
6.3. Without prejudice to any termination, lay-off or any other arrangement
concerning employees agreed upon with the relevant Trade Unions, the
Purchaser undertakes, during 36 (thirty six) months following the Closing
Date, to cause ASI to refrain from proceeding - in relation to employees
of ASI employed under indefinite term contracts in force in Italy on the
Closing Date, as resulting from the registers of employees - with
individual or multiple dismissals except for subjective justified reasons,
for "giusta causa" or collective dismissals and to refrain from having
recourse to mobility and lay-off procedures under Law no. 223/91 and
subsequent amendments, with the exception of workers who express their
consent to be placed in mobility in accordance with the provisions of the
same Law 223/91 and subsequent amendments.
It remains understood: (i) that the exit of employees may be incentivated;
and (ii) that there is no commitment on the part of the Purchaser to hire
new employees so as to maintain unchanged the occupational level (head
count) in force at the Closing Date.
Should the Purchaser and/or ASI not comply fully with the provisions under
this Section 6.3, the license agreement under Section 5.3.A)(v) may be
terminated as provided therein, in addition to any other remedy available
to the Seller.
6.4. The Purchaser agrees to allow Seller or its advisors at Seller's expense
to have access for a period of 6 (six) years from the Closing Date to the
accounting and tax records of the Company relating to the period prior to
Closing, subject to reasonable notice.
6.5. For the period of not less than 3 (three) years after the Closing Date the
Purchaser undertakes to cause the Company to maintain in force "all-risks"
insurance coverages (including but not limited to product performance and
contract compliance coverages), as indicated in Schedule 6.5., at terms
and conditions not less favourable than those in force at the Company on
the Closing Date, on the understanding that, should the Purchaser not
comply with such obligation, it shall hold the Seller, Finmeccanica and
any of the Affiliates, possibly involved in any risk not so insured,
harmless and indemnified from any loss or damage in connection thereto.
6.6. The Seller shall obtain the continuation, for a transition period of up to
18 months from the Closing Date, of all the existing arrangements listed
in Schedule 6.6. between ASI and Finmeccanica and/or any of the
Affiliates, as the case may be, for the provision to or by ASI of
25
the corporate services or for cost-sharing in respect to the shared
services and facilities listed in said Schedule 6.6..
7. REPRESENTATIONS AND WARRANTIES OF THE SELLER
7.1. The Seller does not make other representations, give other warranties or
undertake other commitments with reference to ASI and the Subsidiaries,
their assets, business, the Shares and more in general to the transactions
contemplated under this Agreement, than those expressly given in this
Section 7 or elsewhere in this Agreement. The representations and
warranties of the Seller contained herein shall be true and correct at and
as of the Closing Date, even if not expressly repeated, with reference to
the situation existing at and as of the Closing Date, taking into due
account the effects of the implementation of the provisions under Section
4.
7.2. Seller represents and warrants to Purchaser as follows:
(i) Seller is a corporation duly organised and validly existing under
the laws of Italy and has all requisite power and authority to
dispose of the Shares;
(ii) ASI is a corporation duly organised and validly existing under the
laws of Italy; the Subsidiaries listed in Schedule 1.23. Part A and
B are corporations duly authorised and validly existing under the
laws of the respective countries of incorporation;
(iii) There does not exist any shareholders agreement or similar
agreement, undertaking, covenant, nor obligation, between ASI and
the shareholders or holders of interest in any of the Subsidiaries;
(iv) the Shares are duly authorised, validly issued and fully paid. There
are no Encumbrances with regard to the Shares;
(v) the Seller has good, marketable, full and exclusive title to the
Shares, representing 100% of the authorised, issued and outstanding
stock of ASI; with respect to the Subsidiaries ASI has good,
marketable, full and exclusive title, free of Encumbrances, to the
respective shares as per Schedule 7.2.(v);
26
(vi) the June Accounts fairly represent the financial position and the
results of the Company at June 30, 1999 and have been prepared in
accordance with the Accounting Principles and with the criteria
set forth in Schedule 1.21.; the Annual Accounts have been
prepared in accordance with the Accounting Principles and with the
criteria set forth in Schedule 1.1, they are true and accurate and
fairly represent the financial position and the results of the
Company at December 31, 1998;
(vii) save as indicated in Schedule 7.2 (vii), the Company is not
engaged, as plaintiff or defendant or otherwise, in any civil or
arbitration proceeding (except for debt collection by Suppliers
and/or the Company in the ordinary course of business and for
proceedings brought by third parties against the Company);
(viii) the Company has, and shall have on the Closing Date, full title,
exclusive possession and use of all the material assets listed in
Schedule 7.2.(viii) utilized in its activity, free from any and
all mortgages, pledges, encumbrances, privileges, registrations,
and rights of third parties, except as indicated in said Schedule
and except that certain items may have been replaced with items of
like nature, as customary in the ordinary course of business, and
that these are all the assets utilized by the Company up to the
Closing in its activities;
(ix) the Company has and shall have on the Closing Date the
applications, authorizations, licenses, governmental
authorizations, permits, certifications and registrations listed
in Schedule 7.2.(ix) utilized in the carrying out of its
activities;
(x) since December 31, 1996 the Company has not received from the
relevant competent authorities notices of alleged material
violations by the Company of the authorizations, licenses, permits
and approvals utilized by the Company to conduct its business,
except as indicated in Schedule 7.2 (x), on the understanding that
this provision does not apply to possible notices of violations
already fully settled;
(xi) the Company holds title for the use of the patents, trademarks and
commercial trade names listed in Schedule 7.2.(xi) (the
"Intellectual Property"). The Intellectual Property is valid,
effective and in existence under the applicable laws. Except as
disclosed to the Purchaser, there does not exist any agreement,
contract, nor obligation which grants,
27
reserves, or guarantees to any third parties the license or right
to use the Intellectual Property; in the same manner, the Company
has no obligation with respect to third parties for royalties or
any other obligation in relation to the utilization of the
Intellectual Property. To the Seller's best knowledge, neither the
Seller, the Company or Finmeccanica have received any notice of
any claim of third parties in respect of the Intellectual
Property;
(xii) in labor matters:
(a) the employees of the Company shall be as per Schedule
7.2.(xii)(a) and the terms and conditions of their
employment have been communicated to the Purchaser;
(b) the agents and consultants of the Company, as well as the
terms and conditions of their relationship with the Company,
have been communicated to the Purchaser;
(xiii) action on Euro implemented by ASI is described in Schedule 1.12;
(xiv) action on Year 2000 implemented by ASI is described in Schedule
1.25;
(xv) To the Seller's best knowledge, the information supplied to the
Purchaser during the Due Diligence, as per Schedule 8.2, is true
and correct;
(xvi) since December 31, 1998 the Company has conducted its business in
the ordinary and usual course and no material damages or harm have
occurred to the assets listed in Schedule 7.2.(viii).
8. REPRESENTATIONS, WARRANTIES AND INDEMNITY OF THE PURCHASER/DISCLAIMERS
8.1. Representations and warranties. As of the Closing Date, Purchaser
represents and warrants to Seller as follows:
(i) Purchaser is a company duly organised and validly existing under
the laws of the Commonwealth of Massachusetts and has all
necessary power and authority to enter into this Agreement and to
carry out the activities contemplated herein;
28
(ii) the entering into this Agreement, and the performance of the
obligations contemplated herein by the Purchaser, shall not: (i)
violate any law or regulation applicable to the Purchaser or any
provision contained in the by-laws of the Purchaser; nor (ii)
violate any undertaking or contractual provision by which the
Purchaser is bound;
(iii) the Purchaser has taken all resolutions and other corporate or
requisite actions necessary to grant the signatories of this
Agreement the appropriate powers to execute, deliver and perform all
the obligations of the Purchaser provided in this Agreement, and to
make such provisions binding and enforceable on the Purchaser;
(iv) with the exception of the Italian antitrust and HSR filings the
consummation of this purchase by the Purchaser does not require any
filings with, or approval or other authorisation by any public or
governmental authority, national or supranational, other than as
provided in this Agreement;
(v) the Purchaser has no knowledge of any circumstance which may
constitute a breach by the Seller of any of the representations and
warranties set out in Section 7 above;
(vi) the Purchaser has adequate resources, including financial resources,
to perform all of the obligations assumed by it under this
Agreement.
8.2. Due Diligence. The Purchaser acknowledges and declares that it has carried
out a Due Diligence investigation relating to the Company including,
without limitation, corporate, industrial, real property, commercial,
environmental, legal, financial, tax and accounting aspects. The Purchaser
is, therefore, fully aware of the economic, financial and legal status of
the Company and has been given the opportunity to make full inquiry of the
Seller, the Company and its relevant activities. A summary of the
investigations carried out by the Purchaser during the Due Diligence is
reported in Schedule 8.2. attached. The Purchaser, therefore, acknowledges
to have received all information requested, to have reviewed in details
the Annual Accounts and the June Accounts and to have discussed with the
management of ASI the accounting approaches and evaluations utilised by
the Seller for their preparation and the goodwill as evaluated therein.
The Seller acknowledges that the disclosures made during the
29
Due Diligence do not affect or reduce any of the Seller's representations
and warranties under Section 7.
Access to books and records of the Company, other than those indicated in
Schedule 8.2, and to its sites in Milano, Genova, Montebello, Brendola,
Trieste, Monfalcone, Houston, Chesterfield and High Wicombe has been
obtained through the managers identified in Schedule 8.2..
8.3. Indemnification by Purchaser. The Purchaser hereby agrees to hold the
Seller fully harmless and indemnified against any loss, liability, damage
or cost deriving from any breach of the Purchaser's representations and
warranties set out in this Section 8.
8.4. Disclaimer and indemnification by the Purchaser in respect to environment,
health and safety. The Purchaser acknowledges to have been able to make,
through its specialist consultants, an investigation of the environment,
health and safety aspects and matters concerning the Company, thus being
fully satisfied of the information acquired and of the evaluations made by
its experts in connection thereto; the Purchaser, therefore, for the
consideration specifically received in connection with the General
Financial Debt(s), declares to accept, take upon itself and bear, without
limitation whatsoever, any liability, loss(es), damage(s), cost(s) and
expense(s) howsoever connected with or deriving from the environment,
health and safety situation of the Company at present and at the Closing
Date. The Purchaser, therefore, shall hold harmless and indemnify, in
compliance with the disclaimer under Schedule 5.3.B)(viii) the Seller,
Finmeccanica and the Affiliates, as well as their officers and directors,
which/who could be involved in said environment, health and safety
matters, from any claim, liability, loss(es), damage(s), cost(s) and
expense(s), including reasonable legal costs and expenses, in any way
deriving from or connected with said environment health and safety
situation and matters, and possible violations of the applicable law
provisions, related to and/or affecting the real estates, plants, lands,
buildings, offices, etc. owned and/or used by the Company, with respect to
both present and future applicable laws and regulations.
8.5. Milano's land. plant and buildings. The Purchaser is fully aware of the
situation concerning the ownership of the land, plant and buildings in
Milan (Viale Sarca) and of the use thereof by ASI and shall have no claim
or right whatsoever vis-a-vis the Seller and/or Finmeccanica in
30
connection with the position which the landlord will take with respect to
such land, plant and buildings located thereon. The Seller has delivered
to the Purchaser a copy of the letters which are attached hereto as
Schedule 8.5.
9. SELLER'S OBLIGATIONS FOR INDEMNIFICATION
9.1. Seller's responsibility
9.1.1. The Seller agrees to hold the Purchaser harmless and indemnified,
subject to the conditions and within the limits set forth below,
from damages, costs, losses or liabilities (for all purposes of
this Agreement, the "Loss" and/or the "Losses") which are a
consequence of the breach by the Seller of any of the
representations and warranties specified in Section 4 and 7 above
and/or of other provisions of this Agreement, provided that the
Seller's obligation for indemnification hereunder shall not exist
in relation to a Loss deriving from facts or circumstances which
were known by the Purchaser or are the subject of an exception to
the representations and warranties under this Agreement
9.2. Exclusions and Restrictions
9.2.1. The Seller shall not be liable for indemnification under this
Section 9 unless the individual Loss claimed by the Purchaser
hereunder is for more than ITL 50,000,000 (fifty million), on the
understanding that said exemption of liability of the Seller shall
also apply to claims exceeding the above limit whose final
ascertained Loss is less than ITL 50,000,000 (fifty million).
9.2.2. The Seller's indemnification obligation hereunder shall become
effective only when the cumulative amount of individual Losses
indemnifiable (i.e. exceeding ITL 50 million) by the Seller
pursuant to Section 9.2.1 exceeds ITL 1,000,000,000 (one billion),
on the understanding that, if said threshold is exceeded, the
Seller shall be liable to pay only the exceeding amount.
31
9.2.3. Without prejudice to the provisions under Section 9.2.1. and
9.2.2., the indemnification obligations of the Seller herein
provided for shall:
(i) be limited to and not extend beyond the reimbursement of the
sum(s) paid by the Purchaser or the Company to third parties
pursuant to the relevant enforceable judgement rendered by
the competent court or deciding authority or the damage
finally actually suffered, as the case may be; payment
thereof shall be made by the Seller to the Purchaser or the
Company within 60 (sixty) days thereafter; and
(ii) not comprise any indirect loss of profit and loss of business
(howsoever characterized), having been suffered or sustained
by the Purchaser or by the Company; and
(iii) be set-off against or reduced by an amount equal to the tax
benefit actually enjoyed by the Company as a consequence of
its suffering the Loss which is the subject of the
Purchaser's claim for indemnification; and
(iv) be set-off against or reduced by the amount that the Company
has received or is entitled to receive from any third party
with reference to the specific matter which is the subject of
the request for indemnification, net of the Company's costs
and expenses incurred in obtaining such payment.
9.2.4. The Seller shall have the right to set-off any indemnifiable Loss
which is the subject of a claim by the Purchaser against any
amounts due from the Purchaser to the Seller in connection with
this Agreement.
9.2.5. Should the Seller be responsible for any breach under Section
9.1.1., in no event the cumulative amount payable by it to the
Purchaser and/or to the Company by way of indemnification pursuant
to this Section 9 or otherwise under this Agreement shall exceed a
sum equal to ITL 8,400,000,000 (eight billion four hundred
million).
9.2.6. Any right of the Purchaser to be indemnified by the Seller pursuant
to this Section 9 or otherwise under this Agreement shall expire
and become null and void on the last calendar day of the second
anniversary of the Closing Date or on the date when the Seller's
indemnification obligation ceiling has been reached, whichever
occurs first,
32
except for the right of the Purchaser to be indemnified in respect
of possible breach(es) of the representations and warranties under
Section 7.2. (i), (ii), (iv) and (v) which shall expire and become
null and void at the end of the relevant statute of limitation
period(s).
9.3. No duplication of the means for protection
9.3.1. It is understood that the right of the Purchaser to be held
harmless and to obtain indemnification pursuant to this Section 9
shall rule out and make null and void, and therefore waived, any
other right, remedy, claim or means of protection available to the
Purchaser pursuant to the Agreement and/or any applicable law
provisions in relation to the Seller's responsibility for
breach(es) covered in Section 9.1.1..
9.3.2. In addition, the Purchaser shall not be entitled to indemnification
for Losses for which the Company has made reserves in the June
Accounts as per Schedule 9.3.2. to the extent of said reserves.
9.4. Procedure for indemnification
9.4.1. Subject to the provisions of Sections 9.1., 9.2. and 9.3 above, the
procedure to be followed by the Purchaser to obtain indemnification
shall be as set forth in the following paragraphs of this Section
9.4.
9.4.2. The Purchaser shall provide the Seller with written notice of any
fact, act or omission which may result in the Company or the
Purchaser suffering a Loss for which the Seller is liable, promptly
after knowledge thereof and in any event by and not later than 15
(fifteen) Business Days from such knowledge.
In any event, the above notice shall contain: (i) sufficient
details on the Loss; (ii) identification of the provision(s) of the
Agreement invoked as basis for the claim; (iii) the amount claimed;
(iv) any other available information and documentation for a better
appraisal of the claim by the Seller.
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Failure of the Purchaser to serve the above notice together with
said details and within the above time limit, shall constitute a
waiver by the Purchaser of its relevant rights of indemnification,
which shall, therefore, cease to exist and become null and void.
For the purposes of this Section 9.4.2., knowledge by the Company
shall be deemed to be knowledge by the Purchaser.
9.4.3. The Seller shall have the right, and not the obligation, to
participate in the Purchaser's and the Company's actions in respect
of the circumstances which gave rise to the claim made by the
Purchaser and the Purchaser agrees to and to cause the Company to:
(a) keep the Seller duly and promptly informed of any notice,
communication or other information however received by the Company
in relation to such claim; (b) co-operate with the Seller in
respect of the relevant remedies and actions, by giving the Seller
full access to all records, files and data relating thereto and by
providing the necessary support from its employees; and (c) abide
by any reasonable instructions of the Seller in the conduct of the
legal proceedings and/or settlement negotiations and/or other
initiatives in relation thereto, which are not in conflict with the
Company's interest.
9.4.4. Without prejudice to the foregoing, the Purchaser shall take all
reasonable actions, including resisting the relevant third parties'
claims, which may be required to mitigate the amount of the Loss
for which indemnity is sought hereunder and shall cause the Company
to take all such reasonable actions and shall keep the Seller
promptly and fully informed of any such initiative or actions.
9.4.5. The taking by the Purchaser or the Company of any initiative,
settlements included, in respect of any third party's claim without
the Seller's prior written consent, which consent shall not be
unreasonably withheld, other than in accordance with Sections 9.4.3
and 9.4.4 above, or the failure by the Company to comply with the
foregoing provisions of this Section 9.4 shall result in the Seller
being discharged from its obligations to indemnify the Purchaser in
respect of said claim.
9.4.6. In no event the Seller shall be responsible for and/or shall be
liable to pay any indemnification for damages to Purchaser or to
the Company on the basis that any breach of the representations and
warranties set out in Sections 4 and 7 or elsewhere in
34
this Agreement diminishes the value of the Company in the absence
of an actual and realised economic loss deriving from such breach.
9.4.7. Notwithstanding any other provision of this Section 9, the
Purchaser may not assert any claim against the Seller for
indemnification or otherwise to the extent that such claim would
arise from, or be increased as a result of, any change in the
applicable law or in the interpretation of any existing law after
the date of signature of this Agreement.
10. RELEASE FROM GUARANTEES
10.1. Purchaser shall: (a) procure that within 90 (ninety) days from the Closing
Date the Seller, Finmeccanica and any Affiliate are released from any
obligation in any way arising from the Guarantees listed in Schedule 1.19
part A; and (b) make its best efforts in order to procure that the Seller,
Finmeccanica and any Affiliate(s) are released from any obligation in any
way arising from the Guarantee(s) under Schedule 1.19 part B, on the
understanding that, should such release not be obtained, within said 90
(ninety) days term, the Purchaser shall deliver to the beneficiary(ies) of
said Guarantee(s) under Schedule 1.19. part B, with copy to the Seller, a
guarantee(s) whose content shall not be less extended than that of the
Guarantee(s) under Schedule 1.19. part B given by Finmeccanica and/or the
Seller and/or the Affiliate(s) and not released as above said.
On the Closing Date, the Purchaser shall deliver to the Seller, also for
the benefit of Finmeccanica and the Affiliates:
(i) a first demand guarantee issued by Assicurazioni Generali S.p.A. in
the form attached hereto as Schedule 10.1.(i) for an amount equal to the
aggregate outstanding amount of the Guarantees under Schedule 1.19. part A
which have not been released on the same Closing Date. Such guarantee
shall secure repayment to the Seller, Finmeccanica and the Affiliates of
any amount payable by the same under the Guarantees listed in Schedule
1.19 part A and shall remain in effect until expiration of the Seller's,
Finmeccanica's and the Affiliates' obligations or exposure
35
under said Guarantees and shall, from time to time, be reduced
proportionately to the releases of the Seller, Finmeccanica and the
Affiliates obtained through the Purchaser; and
(ii) a guarantee issued by the Purchaser in the form attached hereto as
Schedule 10.1.(ii). Such guarantee shall secure repayment to the Seller,
Finmeccanica and the Affiliates of any amount payable by the same under
the Guarantees listed in Schedule 1.19. part B and shall remain in effect
until expiration of the Seller's, Finmeccanica's and the Affiliate's
obligations or exposure under said Guarantees and shall from time to time,
be reduced proportionately to the release of the Seller, Finmeccanica and
the Affiliates obtained through the Purchaser.
The Purchaser shall indemnify and hold harmless the Seller, Finmeccanica
and the Affiliates from any loss, damage, cost and expenses in any way
arising from the call and /or the lack of timely release and/or the
extension of the Guarantees, including costs and expenses borne by the
Seller and Finmeccanica, as well as any fees due to the same, for keeping
in force the Guarantees from the Closing Date to the dates of the
respective releases, unless such costs, expenses and fees are paid
directly by the Company; on the understanding, however, that the Seller
and Finmeccanica hereby waive the right to be paid the fees due by the
Company to them from the Closing Date until December 31, 1999 only in
respect of said outstanding Guarantees. Any amount to be so reimbursed or
directly paid by ASI shall be credited to the Seller, Finmeccanica and/or
the Affiliates and/or third parties, as the case may be, at the due
date(s), but in any case not later than 15 (fifteen) days from the
relevant requests of reimbursement or direct payment(s), as the case may
be.
Without prejudice to the right of first demand under the guarantee
indicated in Schedule 10.1 .(i), the Seller, before making any call on
such guarantee, will inform the Purchaser, as soon as reasonably possible,
of any notice received by any holder(s) of the Guarantees under Schedule
1.19. part A, claiming breach(es) of the relevant commercial orders or
contracts and/or calling of said Guarantees and will give to the
Purchaser, if and to the extent reasonably possible, sufficient time to
contact the claiming party and take the necessary measures to avoid any
threatened or requested call of said Guarantees.
10.2. From the Closing Date, the Purchaser shall grant or shall procure to be
granted the guarantees and financial support which may be required by the
Company in the conduct of its business.
36
11. MISCELLANEOUS
11.1. Entire Agreement and modification. This Agreement and the Schedules hereto
constitute the entire Agreement between the Parties relating to the
subject matter hereof. Any modification of this Agreement or additional
obligation assumed by any Party in connection with the subject matter
hereof shall be binding only if evidenced in writing and signed -by the
duly authorised representatives of Purchaser and Sellers.
11.2. Waiver. The waiver of any right under this Agreement by any Party hereto
shall not be construed as a waiver of the same right at a future time or
as a waiver of any other right under this Agreement.
11.3. Severability. Any provision of this Agreement which is prohibited or
unenforceable in any jurisdiction shall, as to such jurisdiction, be
ineffective to the extent of such prohibition and unenforceability without
invalidating the remaining provisions hereof. However, the Parties hereby
undertake to use their best efforts to agree on substitute valid
provisions which may achieve as closely as possible the same economic
effects as the invalid provisions.
11.4. Transfer taxes. All transfer, notarial and other costs and expenses in
connection with the transfer of the Shares shall be borne by Purchaser,
except for taxes due in case of transfer of shares that Italian law
requires to be paid by the Seller.
11.5. Costs and expenses. Each Party shall bear and pay its own legal,
accountancy and other professional costs in relation to this Agreement and
the performance of the obligations contemplated by it.
11.6. Confidentiality. This Agreement and any information provided by either
Party to the other or to the Company shall be confidential, save to the
extent that information is required to be given to any statutory,
governmental or regulatory authority. Any press release concerning this
Agreement shall be agreed between the Parties with the participation of
Rothschild Italia S.p.A. and Delzanno and Co. Inc..
37
11.7. Titles and subtitles. The titles and subtitles used in this Agreement are
used for convenience only and are not to be considered in construing or
interpreting this Agreement.
11.8. Notices. All notices, requests, demands and other communications required
or permitted hereunder shall be in writing and shall be deemed to have
been duly given when delivered by hand against acknowledgement of receipt
or mailed, certified or registered mail with postage prepaid, or sent by
facsimile or courier, as follows:
11.8.1. if to the Seller:
Ansaldo Invest S.p.A.
Xxxxxx Xxxxxxxxx, x. 0
Xxxxxx
Xxxxx
Attention:
Xx. Xxxxxx Xxxxx
or to such other person or address as Sellers shall designate by
notice in the manner provided in this Section 11.8;
11.8.2. if to the Purchaser:
High Voltage Engineering Corporation
000 Xxxxxxxxx Xxxxx - Xxxxx 000
Xxxxxxxxx, XX 00000 - 0000
Xxxxxx Xxxxxx xx Xxxxxxx
Attention:
Xx. Xxxxx Xxxxx
Vice President of Finance
or to such other person or address as Purchaser shall designate by
notice in the manner provided in this Section 11.8;
11.8.3. as to Finmeccanica:
Finmeccanica S.p.A.
Xxxxxx Xxxxxxxxxxx, x. 0
00
00000 Xxxx
Xxxxx
Attention:
Servizio Affari Legali, Tributari e Societari
or to such other person or address as Finmeccanica shall designate
by notice in the manner provided in this Section 11.8.
11.9. Assignment. This Agreement and all the provisions hereto shall be
binding upon and inure to the benefit of the Parties hereto and their
respective legal representatives, successors and permitted assigns.
Neither this Agreement nor any of the rights, interests or obligations
of Sellers or Purchaser hereunder shall be assigned without the prior
written consent of the other Party.
11.10. Applicable law. This Agreement and all connected undertakings, deeds,
documents and instruments shall be governed by and construed and
interpreted under the laws of Italy.
11.11. Jurisdiction. Any dispute arising out of or in connection with the
present Agreement, its implementation, interpretation, termination or
enforcement shall be finally settled under the Rules of Conciliation and
Arbitration of the International Chamber of Commerce (ICC) by three
arbitrators who shall be appointed one by the claimant, one by the
respondent and the third one, who shall act as President of the Arbitral
Tribunal, shall be appointed by the two arbitrators so selected by the
Parties within 30 (thirty) days from the date of appointment of the
arbitrator named by the respondent. Should said two arbitrators
appointed by the Parties not be able to agree on the third arbitrator,
this latter shall be appointed by the Court of Arbitration of the
International Chamber of Commerce. The language of the arbitration shall
be the English language. In rendering their award the Arbitral Tribunal
shall apply Italian law and not equity principles. The venue of the
arbitration shall be Geneva, Switzerland.
Should Finmeccanica, as guarantor, participate to the arbitral
proceedings it shall be considered for all the purposes under this
Section 11.11 as one only party with the Seller.
Should the Designee under Section 11.13 participate to the arbitral
proceedings it shall be considered for all the purposes under this
Section 11.11. as one party with the Purchaser.
39
11.12. Finmeccanica Guarantee. This Agreement is countersigned by Finmeccanica
as guarantor ("fideiussore"), joint and several, of all Seller's
obligations and undertakings under this Agreement, within the limits of
Seller's liability as provided for in this Agreement. Such direct
guarantee relationship between Finmeccanica and the Purchaser shall be
governed by, construed and interpreted under the laws of Italy.
Finmeccanica agrees to submit to arbitration as provided for in Section
11.11. above.
11.13. Right to Designate. Purchaser may purchase the Shares through a
corporation or a company, provided that: (i) it notifies in writing the
Seller of its intention to do so not later than 10 Business Days prior
to the Closing Date indicating the name of the corporation or company
which shall purchase the Shares ("Designee"); (ii) the Designee is,
directly or indirectly, a wholly-owned subsidiary of the Purchaser; and
(iii) the Designee accepts in writing at the Closing to be bound by all
the obligations of the Purchaser under this Agreement, countersigning
the same for said purposes.
In any event the Purchaser shall not be relieved from any of its
obligations under this Agreement and shall remain jointly and severally
liable with the Designee for the full and prompt fulfilment of all of
the Purchaser's obligations under this Agreement.
11.14. COUNTERPARTS
This Agreement and the Schedules hereto are executed in three
counterparts, each of which shall be deemed an original.
* * *
IN WITNESS WHEREOF, the Parties hereto have caused this Agreement to be executed
by them in their individual capacity or as the case may be by their duly
authorised representatives as of the date first written above in two copies.
ANSALDO INVEST S.p.A. HIGH VOLTAGE ENGINEERING CORP.
By /s/ Xxxxxx Couli By /s/ Xxxxxxx X. Xxxxx Xx.
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40
FINMECCANICA S.p.A. as Guarantor
represented by Xx Xxxxxxx Xxxxxxx
duly empowered by power special power of attorney of October 7, 1999
By /s/ Xxxxxxx Xxxxxxx
----------------------
