CONFIDENTIAL MATERIALS OMITTED AND
FILED SEPARATELY WITH THE SECURITIES
AND EXCHANGE COMMISSION.
ASTERISKS DENOTE OMISSIONS.
To IBM Italia S.p.A. and
to IBM Semea Servizi Finanziari S.p.A.
▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇
▇▇▇▇▇▇
Toronto, February 9, 2000
Dear Sirs,
as agreed please find herein below the terms and conditions upon which we are
available to execute the following transaction.
QUOTA (SHARE) PURCHASE AGREEMENT
BETWEEN
IBM ITALIA SPA
AND
IBM SEMEA SERVIZI FINANZIARI SPA
AND
1
CELESTICA INC.
AND
CELESTICA EUROPE INC.
QUOTA (SHARE) PURCHASE AGREEMENT
BETWEEN
IBM ITALIA S.p.A., a corporation formed under the laws of Italy,
with registered office at ▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇ (▇▇▇▇▇), with a corporate
capital of Lire 700,000,000,000 entirely paid in, registered with the
Registry of Enterprises of Milan at no. 334553, fiscal code no. 01442240030.
IBM SEMEA SERVIZI FINANZIARI S.p.A., a corporation formed under the
laws of Italy, with registered office at ▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇ (▇▇▇▇▇), with
a corporate capital of Lire 70,000,000,000, entirely paid in, registered with
the Registry of Enterprises of Milan at no. 271598, fiscal code no.
08824510153.
(hereinafter collectively referred to as "Seller")
AND
CELESTICA INC., incorporated under the laws of the Province of
Ontario, Canada
AND
2
CELESTICA EUROPE INC., incorporated under the laws of the Province
of Ontario, Canada
(hereinafter COLLECTIVELY referred to as "Buyer");
WHEREAS
(a) Seller, which is an Affiliate of International Business Machines
Corporation, owns a Participation equal to the entire corporate capital of
WCE Italia S.r.l. ("Company").
(b) The Company will own and operate a business in the area of
electronic card assembly and test manufacturing at the plant in Vimercate
(Milan, Italy) and in the area of electronic card assembly and test and
assembly of the other components of information technology systems located at
the plant in Santa ▇▇▇▇▇▇▇ (Rome, Italy);
(c) Seller wishes to sell, on the terms and conditions set forth in the
present Agreement, the entire Participation owned in the Company;
(d) Buyer belongs to a group with a leading position in the electronic
components contract manufacturing business and has recently expressed its
intention to expand its business in Europe;
(e) In this respect Buyer has conducted such due diligence
investigation of the Manufacturing Operations and the Company as it deems
appropriate, and Buyer desires, under the terms and conditions set forth
herein, to acquire from Seller all the participation owned by Seller in the
Company;
NOW, THEREFORE, IN CONSIDERATION OF THE RECITALS
3
THE PARTIES AGREE AS FOLLOWS:
ARTICLE 1
RECITALS AND PURPOSE OF THE AGREEMENT
The above recitals form an integral part of this Agreement.
Pursuant to and on the terms and conditions of this Agreement Buyer
shall purchase from Seller, and Seller shall sell to Buyer, the Participation
against the payment of the Purchase Price.
ARTICLE 2
DEFINITIONS
CERTAIN DEFINITIONS. As used in this Agreement, the following terms shall
have the meanings specified below:
"AGREEMENT" means this Quota (Share) Purchase Agreement, as well as
all the Attachments, Annexes, Exhibits and Schedules attached hereto and
thereto;
"AFFILIATE" shall mean, as to any entity, any company under
"Control" (as defined hereinbelow) of, and/or any company which is
exercising Control over that entity and/or any company which is under common
Control with that entity;
"BUSINESS DAY" means every working day upon which banks are normally
open for business in Milan and Rome, Italy;
"CLOSING INVENTORY/ASSET STATEMENT" shall have the meaning set forth
in Section 3.3;
"COMPANY" means WCE Italia S.r.l., an Italian SOCIETA A RESPONSABILITA
LIMITATA (limited liability company, incorporated by quotas) with a head
office in Novedrate, Italy;
"CONTROL" has the meaning ascribed to such work in Article 2359 of the
Italian Civil Code whether used as a noun or as a verb;
"DATE OF EXECUTION" means the date on which this Agreement is signed
(executed);
"EMPLOYEES" shall have the meaning set forth in Section 5.3;
"FINANCIAL INFORMATION" means the information attached as Schedule A;
4
"GOVERNMENTAL AUTHORITY" shall mean any country, local or foreign
court, governmental or administrative agency or commission or other
governmental agency, authority, instrumentality or regulatory body;
"MANUFACTURING OPERATIONS" means the business operated by an IBM
Affiliate in the area of electronic card assembly and test manufacturing at
the plant in Vimercate (Milan, Italy) and in the area of electronic card
assembly and test and assembly of other components of information technology
systems located at the plant in Santa ▇▇▇▇▇▇▇ (Rome, Italy);
"MATERIAL ADVERSE EFFECT" means an adverse impact in an amount exceeding
ITL 50 billion on the profitability, revenues, assets or financial position
of the Company or the Manufacturing Operations;
"OPERATIVE AGREEMENTS" means the Quota (Share) Purchase Agreement, the
Transitional Services Agreement and the Lease Agreements, executed in
connection with this transaction at or prior to the Date of Execution,
between and among the indicated Affiliates of Buyer and Seller. When the
titles of these agreements are capitalized in this Agreement, it is a
reference to the specifically referenced agreement, respectively, as
identified above;
"PARTICIPATION" means the quotas (shares) corresponding to 100% of the
Company's corporate capital, currently owned and which will be owned by and
available to Seller at the Quota Purchase Closing Date to be transferred to
Buyer pursuant to this Agreement;
"PARTY"/"PARTIES" means Buyer or Seller, respectively, or all of them
collectively when used in the plural form;
"PERMITTED LIENS" means: (i) Security Interests created or imposed by
operation of law and arising in the ordinary course of business and not as a
result of any default or omission on the part of the Seller; (ii) Security
Interests for taxes not yet due or Security Interests for taxes being
contested in good faith by appropriate proceedings for which, in any event,
adequate reserves have been established and passed to the Company (and as to
which the property subject to such Security Interest is not yet subject to
foreclosure, sale or loss on account thereof); (iii) rights-of-way and
restrictions (including zoning restrictions) and other similar charges not,
in any event, interfering with the ordinary conduct of business at the
relevant property; (iv) all liens imposed by law or regulation which are set
forth under titles 3, 4,5 or 6 of the Libro Terzo of the Italian Civil Code;
and (v) all liens described in Schedule QSPA Permitted Liens to this
Agreement;
"PERSON" shall mean any individual, firm, corporation, partnership,
limited liability company, trust, joint venture, Governmental Authority or
other entity, and shall include any successor (by merger or otherwise) of
such entity;
"PURCHASE PRICE" means the amount specified in Section 3.2.1;
5
CONFIDENTIAL MATERIALS OMITTED AND
FILED SEPARATELY WITH THE SECURITIES
AND EXCHANGE COMMISSION.
ASTERISKS DENOTE OMISSIONS.
"QUOTA PURCHASE CLOSING" means the purchase by Buyer from Seller, and
the sale by Seller to Buyer, of the Participation, free from pledges, charges
and encumbrances of any kind, by way of the execution of the notarial deed of
transfer in the form provided for in Annex A (hereinafter the "Deed of
Transfer") and the simultaneous receipt by Seller of the Purchse Price; all
pursuant to, and on the terms and conditions of, this Agreement, which the
Parties agree shall take place at the offices of Seller in Segrate, Italy at
10 a.m. on the latter of April 28, 2000, or the last business day of the
calendar month, once this Agreement is executed, in both cases provided that
both of the following have occurred at least three Business Days prior
thereto: (i) the Parties have received the written consent to the Quota
Purchase Closing of International Business Machines Corporation and of
Celestica Inc. respectively, and (ii) the Parties have received any necessary
antitrust approvals or the expiration of any necessary antitrust waiting
periods under applicable law; or on the last Business Day of the first month
thereafter, provided both (i) and (ii) above have occurred, or as otherwise
agreed upon by the Parties before the Quota Purchase Closing Date;
"QUOTA PURCHASE CLOSING DATE" means the date on which the Quota Purchase
Closing shall take place;
"SELLER'S BANK" means Banca Commerciale Italiana, Sede di Milano; ▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇, ▇, ▇▇▇▇▇▇ branch, account no. **** for IBM Italia S.p.A.;
account no. **** for IBM Semea Servizi Finanziari S.p.A.; Swift Code **** (or
such other bank which the IBM Italia S.p.A. will communicate to Buyer at
least 10 (ten) Business Days prior to the Quota Purchase Closing Date also on
behalf of IBM Semea Servizi Finanziari S.p.A.);
"SECURITY INTEREST" means any mortgage, charge, pledge, lien,
hypothecation, right of set-off, assignment by way of security, reservation
of title, or any other security interest or encumbrance whatsoever, howsoever
created or arising or any other agreement or arrangement (including, without
limitation, a sale and repurchase agreement) having the practical effect of
conferring security and any agreement to enter into, create or establish any
of the foregoing.
ARTICLE 3
PURCHASE OF THE PARTICIPATION
3.1 QUOTA PURCHASE CLOSING. The Parties agree that, subject to the
receipt of the written consent as specified in the "Quota Purchase Closing"
definition, the Quota Purchase Closing shall take place on the Quota Purchase
Closing Date. More specifically, the Parties agree that the following shall
occur at the Quota Purchase Closing:
3.1.1 PURCHASE OF THE PARTICIPATION. Seller shall sell and transfer to
Buyer, which shall acquire and receive it, the Participation, free from any
Security Interest and any other
6
claim of any kind, by virtue of the execution of the Deed of Transfer; Buyer
shall pay to Seller the Purchase Price pursuant to the provisions set forth
in Section 3.2 below.
3.1.2 SINGLE STEP. The Parties expressly acknowledge to each other
that, for the purposes of this Agreement, the operations contemplated in
Section 3.1.1 above shall be deemed as a single and sole action and that if
one of the steps fails or is incompletely performed, the Quota Purchase
Closing shall be deemed not to have taken place.
3.2 PURCHASE PRICE.
3.2.1 PURCHASE PRICE. The Parties agree that the aggregate purchase
price to be paid by Buyer to Seller, and to be received from Buyer by Seller,
in order to acquire the Participation ("Purchase Price") is equal to four
hundred twenty two and one-half billion Italian Lire (ITL 422,500,000,000),
("Purchase Price"), as detailed on Schedule 3.2.1, and shall be divided
between IBM Italia S.p.A. and IBM Semea Servizi Finanziari S.p.A in
proportion of their respective quota of capital in the Company, provided,
however, that if the expert valuation performed by the technical expert
appointed by the judge according to article 2343 paragraph 1 of the Italian
Civil Code results in a higher valuation of the Manufacturing Operations, for
reasons other than those already provided for in Section 3.3, 3.4 and 3.5.
herein, then the Purchase Price shall be adjusted upward to reflect that
higher valuation established by such court appointed technical expert.
3.2.2 PAYMENT AND LIABILITIES. The Purchase Price will be paid by Buyer
to Seller on the Quota Purchase Closing Date, by electronic funds transfer or
by internal bank branch transfer from the Buyer's account, in each case to
the Sellers' bank accounts at Sellers' Bank, in immediately available funds
in Italian Lire. Such transfer will be timely made to enable Sellers' Bank to
confirm the crediting of the Purchase Price prior to the completion of the
Quota Purchase Closing. Upon the terms and subject to the conditions hereof,
as of the Quota Purchase Closing, through sale of the Participation in the
Company, Seller will indirectly transfer to Buyer, and Buyer will indirectly
assume, through its ownership of the Participation, and thereafter shall
cause the Company to fully perform and discharge, on a timely basis and in
accordance with their respective terms, the liabilities and obligations of
the Company, agreed to be assumed pursuant to this Agreement.
3.3 CLOSING INVENTORY/ASSET STATEMENT. Twenty (20) days after Quota
Purchase Closing, Seller will prepare and deliver to Buyer a closing
inventory/asset statement for the transaction, as of the Quota Purchase
Closing Date ("Closing Inventory/Asset Statement"). The purpose of the
Closing Inventory/Asset Statement is to show the numerical increase or
decrease, as applicable, in the physical fixed assets and inventory of the
Manufacturing Operations/Company (other than land and buildings and real
estate fixtures), between the amount set forth on Schedule 3.3 to this
Agreement at the signing of this Agreement, and the amount existing as of the
Quota Purchase Closing Date. Each item of inventory will be assigned the same
standard cost and manufacturing value add that is set forth for such items of
inventory at the date this Agreement is signed. Each physical fixed asset
(other than inventory and land and buildings and real estate fixtures) will
be assigned its net book value
7
on the books of Seller as of the Quota Purchase Closing Date. The Closing
Inventory/Asset Statement shall became final and binding upon the Parties
unless ▇▇▇▇▇ gives written notice of its disagreement of such items included
on or excluded from the Closing Inventory/Asset Statement within twenty (20)
days following Seller's receipt of the Closing Inventory/Asset Statement,
which disagreement will be based solely upon the methodology set forth in
Schedule 3.3 for reviewing the Closing Inventory/Asset Statement. Any such
notice shall specify in reasonable detail the nature of any disagreement so
asserted. In the event that the Closing Inventory/Asset Statement (as finally
resolved) indicates an adjustment in the Purchase Price, within fifteen (15)
days of such statement becoming final, such adjustment shall be made by
either (i) Seller transferring by immediately available electronic funds
transfer to Buyer in the event that Buyer overpaid at the Quota Purchase
Closing or (ii) Buyer transferring by immediately available electronic funds
transfer to Seller in the event that Buyer underpaid at the Quota Purchase
Closing.
3.4. ADDITIONAL PURCHASE PRICE ADJUSTMENT. The Purchase Price will also
be adjusted upwards after the Quota Purchase Closing Date to include amounts
equal to the aggregate of all of the following gross asset items that are
transferred to Buyer as part of the Company or otherwise, all in Italian
Lire: cash and near cash equivalents; prepaid expenses; and accounts
receiveable, including the receivables with Employees as set forth in
Schedule 3.5., Section 4, in each case related to the Manufacturing
Operations. In the event that such amounts are transferred to the Buyer as
part of the Company, Buyer shall pay the aggregate amounts so transferred by
immediately available electronic funds transfer to Seller within fifteen (15)
days of the Quota Purchase Closing Date.
3.5 PAYABLES PURCHASE PRICE ADJUSTMENT. The Parties agree that the
Purchase Price will also be adjusted downwards after the Quota Purchase
Closing Date to include amounts equal to the aggregate of (i) the total
liabilities of the Company to its Employees as set forth in Schedule 3.5.,
Sections 1, 2, 3, (ii) accounts payable transferred with the Company, which
remain unpaid by the Company and the Seller and its Affiliates, due for the
purchase of the assets by the Company or the Seller and its Affiliates of
inventory and physical fixed assets of the Manufacturing Operations/Company
whose value has already been received by the Seller through the asset
valuation and payment mechanism set forth in Section 3.2.1 or Section 3.3,
and (iii) the Seller's relative pro rata share, based upon calendar days
prior to the Quota Purchase Closing Date over the billing period, of unpaid
accounts payable transferred with the Company, under contracts for services
or for services, such as utility services, provided prior to the Quota
Purchase Closing Date, where either (x) billing cycles for such services
accounts payable cover the period both before and after the Quota Purchase
Closing Date or (y) such services or payables relate exclusively to periods
prior to the Quota Purchase Closing Date; all except as otherwise expressly
provided under this Agreement for assumed liabilities. In the event that such
accounts payables are transferred to the Buyer as part of the Company, Seller
shall pay the aggregate amounts, as set forth in (i), (ii) and (iii) of this
Section 3.5, so transferred to Buyer, by immediately available electronic
funds transfer to Buyer within fifteen (15) days of the Quota Purchase
Closing Date. To the extent that Seller or its Affiliates
8
have paid for contracts for or for services that relate to periods after the
Quota Purchase Closing Date, such sums will be treated as prepaid expenses
under Section 3.4.
ARTICLE 4
MANAGEMENT OF THE COMPANY PRIOR TO THE QUOTA PURCHASE CLOSING
Seller, for the period between the Date of Execution and the Quota
Purchase Closing, will manage the Manufacturing Operations in the ordinary
course of business, except as the preparation for this transaction varies from
such ordinary course.
Seller further agrees that between the Date of Execution of this
Agreement and the Quota Purchase Closing, it will not, without the Buyer's
prior written consent: effect a merger of the Company with other companies, or
demerge (spin-off) assets used in the Manufacturing Operations or take any
action or cause the Manufacturing Operations or the Company to take any
action, other than as contemplated by the Operative Agreements and other than
in the ordinary course of business, that would have a material adverse effect
upon the Manufacturing Operations or Company.
ARTICLE 5
OBLIGATIONS OF THE PARTIES PRIOR TO OR AFTER THE QUOTA PURCHASE CLOSING
5.1 RESIGNATIONS. Prior to the completion of the Quota Purchase Closing
Seller shall arrange that all the members of the board of directors and all
the members of the board of statutory auditors of the Company shall have
tendered their resignations in writing, effective as of the Quota Purchase
Closing, from all the offices held by them in the Company. Seller will
cooperate with Buyer so that the Company can adopt, as soon as practical
after the Quota Purchase Closing, actions necessary to appoint a new board of
directors and statutory auditors chosen by ▇▇▇▇▇.
5.2 RESOLUTION. Buyer and its Affiliates hereby irrevocably undertake
not to take, participate in, or cause to be taken by the Company or
others, any action for liability or damages against any of the officers,
employees, directors or statutory auditors of the Company appointed by the
Seller and resigning from their offices in compliance with Section 5.1,
arising out of or in connection with the activities of such representatives
acting in such capacities prior to the Quota Purchase Closing. ▇▇▇▇▇ agrees
that, concurrent with the Quota Purchase Closing, a quotaholders resolution
will be validly adopted in a form satisfactory to Seller, confirming this
Section 5.2.
5.3. EMPLOYMENT MATTERS. The term Employee(s) shall mean the employee(s)
being employed with the Company at the time of the Quota Purchase Closing.
The employees employed by Seller in connection with the Manufacturing
Operations at the date hereof are listed in Schedule 5.3.1. Schedule 5.3.1
also shows their present status of employment. This Schedule will be updated
immediately prior to the Quota Purchase Closing to reflect changes
9
related to such employee(s) between the Date of Execution and the Quota
Purchase Closing. Seller will not intentionally enlarge the total number of
Employees above the number shown on Schedule 5.3.1 without the prior written
consent of Buyer. The number of Employees may vary due to events outside of
Seller's control, transactions in the ordinary course of business,
preparations for the transaction contemplated by the Operative Agreements, or
the effects of the applicable transfer of undertaking legal provisions.
Seller and ▇▇▇▇▇▇'s Affiliates have in relation to each of such employees,
complied with all the terms of the respective employment statutes,
regulations, codes of conduct, collective agreements and orders relevant to
the listed status of the Employees.
▇▇▇▇▇ agrees to apply to the Employees, for a period of three (3) years after
the Quota Purchase Closing Date, the terms and conditions of employment
provided by the Seller to such Employees immediately prior to the Quota
Purchase Closing Date except for changes which might be agreed through
individual or collective agreements. Such terms and conditions of employment
are summarized in Schedule 5.3.2. Further, ▇▇▇▇▇ agrees to cause the Company
to comply with article 2112 of the Italian Civil Code. Previously accrued
employment benefits and future employment benefits, which cannot be provided
or cannot be provided in precisely the same form or manner by Buyer because
of the change of ownership in the Company from Seller to Buyer (e.g.
incentive stock options), shall be financially compensated by Buyer on an
equivalent level.
▇▇▇▇▇ agrees that, in relation to Seller and Seller's Affiliates, the Company
is solely liable for any claims of its Employees which relate to the period
after the Quota Purchase Closing Date, including but not limited to areas
where the applicable law provides for any joint liability of Seller and the
Company or Buyer as a consequence of the transfer of the Manufacturing
Operations from Seller into the Company and the transfer of the Company from
Seller to Buyer and that Seller is solely liable for any claims of Employees
which relate to the period up to and including the Quota Purchase Closing
Date, including, but not limited to, arrears where the applicable law
provides for joint liability of the Seller and the Company as a consequence
of the transfer of the Manufacturing Operations from Seller into the Company,
provided such claims are not pre-closing liabilities expressly transferred
with the Company pursuant to this Agreement.
▇▇▇▇▇ and Seller agree to furnish each other with such information concerning
Employees as is reasonably requested, subject to the privacy policies of both
Parties and subject to the extent permissible under applicable law.
5.4 IBM COMMERCIAL SOFTWARE. The Buyer agrees that it will execute a
standard IBM commercial software licensing agreement, in the forms attached
hereto as Exhibit S, effective on the Quota Purchase Closing Date, to cover
all of the commercially offered IBM software that is utilized by the Company,
if any, where that software is not being provided as part of a service to the
Company by IBM under the Transition Services Agreement. The
10
referenced software agreement will provide the standard IBM offerings and
prices for the licensing, maintenance and support of such IBM commercially
available software.
5.5. COMPANY TAXES. Except as provided in Section 9.2, at the Quota
Purchase Closing Date the Company will have complied with its duties under
any tax and social security laws and regulations in force from time to time
and applicable to the Company itself or the Manufacturing Operations and
taxes, interest, and penalties, if any, arising from the failure to comply
with such duties will be borne by Seller. With reference: (a) to the
provisions under article 26 of D.P.R. 26/10/1972 No. 643, Seller covenants
that there will be no tax liability against or to be borne by the Company
with reference to the transfer to the Company of the land and buildings of
the Manufacturing Operations; and (b) to the provisions under article 14 of
D. Lgs. 18/12/1997 No. 472, and subject to Section 9.2, Seller covenants that
there will be no tax liability against or to be borne by the Company with
reference to the joint liability between the Company and Seller provided for
by said article 14(1) of D.Lgs. 18/12/1997 No. 472.
5.6. WAIVER. The Seller hereby expressly agrees that Article 1495 of the
Italian Civil Code shall not apply in connection with the sale of the
Participation under this Agreement.
5.7 GOVERNMENTAL PROGRAMS. For the governmental contracts identified on
Schedule 9.1, if the transfer of the Participation under this Agreement
results in the applicable governmental agency with such authority exercising
any right it might have to (i) require early repayment of such loans, with
below market rates prior to the maturity date thereof or (ii) require
repayment of outright grants made under those contracts, the following
adjustment will be made: an amount equal to the outright grants so repaid and
the loan premium (the remaining term, amount and payment stream under such
revoked loans, when compared to an identical remaining term, amount and
payment stream under the borrowing interest rate for the Company during the
relevant remaining period) so lost, shall be damages included in the
calculation of the Limitation Amount set forth in Section 8.1.2.(a) for
purposes of the calculation of damages thereunder. The Parties agree to take
commercially reasonable steps to attempt to avoid the governmental actions
specified in this Section. For the avoidance of doubt, the normal repayment
of the loan contracts identified on Schedule 9.1 shall be the responsibility
of the Buyer.
ARTICLE 6
REPRESENTATIONS AND WARRANTIES OF THE SELLER
Except as set forth on the disclosure schedule delivered by Seller to
Buyer (the "Disclosure Schedule"), as updated to reflect events occurring
after the date hereof and prior to the Quota Purchase Closing Date, within
five Business Days of the end of each month, upon the occurrence of such
events, with the next to last such update to be delivered to the Buyer no
later than three Business Days before the Quota Purchase Closing Date (the
last update to cover only the intervening period), the Seller hereby
represents and warrants under this Article 6 to Buyer as of the date hereof
and as of the Quota Purchase Closing Date:
11
6.1 REGARDING THE SELLER:
6.1.1 ORGANIZATION AND GOOD STANDING. Both IBM Italia S.p.A. and
IBM Semea Servizi Finanziari S.p.A. are duly organized, validly existing and
in good standing, under the laws of Italy and are duly qualified, under all
applicable laws, to enter into this Agreement and to perform any and all of
their obligations under this Agreement. The books of the meetings of the
corporate bodies of the Company have been kept pursuant to the applicable law
and accurately reflect, without any omissions, the proceedings at such
meetings and the resolutions passed from time to time. Such resolutions have
been passed in compliance with the provisions of the respective by-laws in
force from time to time. This Agreement has been duly executed and delivered
by Seller and this Agreement constitutes a legal, valid and binding
obligation of Seller enforceable against Seller in accordance with its terms.
6.1.2 NO BANKRUPTCY PROCEEDINGS. Both IBM Italia S.p.A. and IBM
Semea Servizi Finanziari S.p.A. are validly existing and no liquidator,
administrative receiver, administrator or similar officer has been appointed
in respect of them and no action is currently being taken to appoint any such
liquidator, receiver, administrative receiver, administrator or similar
officer. Both IBM Italia S.p.A. and IBM Semea Servizi Finanziari S.p.A. have
not agreed to the assignment of their assets (or any part of them) for the
benefit of their creditors. There is no action or proceeding now pending or
threatened in writing to dissolve either IBM Italia S.p.A. or IBM Semea
Servizi Finanziari S.p.A. or to declare their corporate rights and powers, or
any of them, to be null and void or to declare that they or their board of
directors or any of their directors, officers, agents or employees have
exceeded or violated any of their corporate rights or powers.
6.1.3 NO BREACH. The execution of this Agreement and the
performance by the Seller of its obligations hereunder will not result in the
breach or violation of any of the provisions of, or constitute a default
under, or conflict with, violate, or cause the acceleration or the
revocation, termination or modification of any obligation or right of Seller
under: (i) the corporate documents of IBM Italia S.p.A. or of IBM Semea
Servizi Finanziari S.p.A.; (ii) any law or governmental order applicable to
IBM Italia S.p.A. or to IBM Semea Servizi Finanziari S.p.A.; (iii) any
contract, agreement or other arrangement, executed by IBM Italia S.p.A. or by
IBM Semea Servizi Finanziari S.p.A.; (iv) any judgment, injunction, decree,
order or award of any court, governmental body or arbitrator having
jurisdiction over IBM Italia S.p.A. or IBM Semea Servizi Finanziari S.p.A.;
(v) any material license, permit, approval, consent or authorization
necessary to the ownership of the Participation; all except where such
action, either individually or combined with other breaches of
representations and warranties by Seller and its Affiliates under the
Operative Agreements, would not have a material adverse effect.
6.1.4 TITLE TO ASSETS AND PARTICIPATION. At Closing the Company
will hold exclusive and full title to all its assets which are particularly
described in Schedule 6.3,
12
subject to the provisions of the Operative Agreements, all of which are free
from any constraint or lien, option, contractual right, right in rem or of
any other nature, and from any registration or prejudicial recording, other
than Permitted Liens. IBM Italia S.p.A. and IBM Semea Servizi Finanziari
S.p.A. are, or will be at the Quota Purchase Closing Date, the sole
registered and beneficial owners with full legal title to the Participation
and at the Quota Purchase Closing Date will be entitled to sell the full
legal title and ownership of the Participation to Buyer. The Participation is
free from pledges, claims charges and encumbrances or similar third party
rights of any kind, and there are no outstanding options, warrants,
agreements, conversion rights, preemption rights or other rights to subscribe
for purchase or otherwise acquire all or part of the Participation, including
quotaholders agreements.
6.2 REGARDING THE COMPANY:
6.2.1 ORGANIZATION AND GOOD STANDING. The Company is duly
organized, validly existing and in good standing, under the laws of Italy and
is duly qualified, under all applicable laws, to carry out the Manufacturing
Operations, subject to Section 6.2.4, except where the failure to so qualify
would not, either individually or combined with other breaches of
representations and warranties by Seller and its Affiliates under the
Operative Agreements, have a material adverse effect upon the transactions
contemplated by the Operative Agreements.
6.2.2 FINANCIAL INFORMATION. The Financial Information provided by
Seller to Buyer with respect to the Transferred Assets was derived from or
included in the financial records of the Seller, which have been maintained
in accordance with the Seller's normal internal practices for such
information.
6.2.3 EQUIPMENT. All manufacturing equipment owned by the Company
at the Quota Purchase Closing Date will have been, immediately prior to the
Closing, operated or used in compliance with applicable laws or regulations,
except where the failure to be in compliance would not, either individually
or combined with other breaches of representations and warranties by Seller
and its Affiliates under the Operative Agreements, have a material adverse
effect.
6.2.4 GOVERNMENTAL AUTHORIZATIONS -- COMPLIANCE WITH LAW. The
Company, prior to Closing, will have duly obtained, or will have filed an
application to obtain, all required authorizations, concessions and permits
whether issued by governmental, regional, or local authorities required for
carrying out the Manufacturing Operations, except where the failure to have
such licenses and permits would not, either individually or combined with
other breaches of representations and warranties by Seller and its Affiliates
under the Operative Agreements, have a material adverse effect. All permits
held at the date hereof by Seller in respect of the Manufacturing Operations,
which are transferable and exclusively utilized for such operations will,
prior to Closing, be transferred or will have been applied for a transfer, to
the Company.
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6.2.5 LITIGATION. There is no suit, action, arbitration,
proceeding or governmental proceeding or prosecution pending or, to Seller's
knowledge, threatened in a writing to IBM Italia or its Affiliates by or
against the Company or Seller in respect of the Manufacturing Operations and
there is no outstanding default of a judgment, decree, injunction, rule or
order of any Court, Board of Arbitrators or governmental or tax authority
against the Company or the Seller; in each case which, either individually or
combined with other breaches of representations and warranties by Seller and
its Affiliates under the Operative Agreements, have a material adverse effect.
6.2.6 NO OTHER REPRESENTATIONS & WARRANTIES. Except for the
express representations and warranties made by Seller in this Article 6,
Seller makes no representation or warranty, express or implied, concerning
either Seller, the Company or the Manufacturing Operations, it being
specifically understood by ▇▇▇▇▇ that, except for the express warranties set
forth in this Article 6, the Company's business is being transferred "as is"
in all respects. Seller specifically disclaims any warranty of suitability or
fitness for any particular purpose of Buyer's, whether or not Seller has been
made aware of any such purpose.
6.3. REGARDING THE MANUFACTURING OPERATIONS. Annexed as Schedule
6.3 subschedules hereto is a listing of the assets and liabilities of the
Manufacturing Operations, all of which (subject to acquisitions and
dispositions in the ordinary course of business between the date hereof and
the Quota Purchase Closing Date) will be assets and liabilities of the
Company as of the Closing:
(a) a description of the land and buildings, described in Schedule
6.3(a);
(b) a listing of the machinery, production equipment, computer
equipment, hardware, fixtures, vehicles, furnishings, parts, supplies,
accessories, tools, dies, jigs and other fixed assets described in Schedule
6.3(b);
(c) an estimated inventory valuation, in Schedule 6.3(c);
(d) a listing of the contracts described in Schedule 6.3(d)
6.4 RECORDS. At or prior to Closing, copies of the operational
records relating to the Manufacturing Operations and the assets described in
Schedule 6.3, including, without limitation, the Employees' records, cost
records, manufacturing data, outstanding purchase orders, production records,
supply records, inventory records, correspondence files and environmental
reports, data, information and materials (together with, in the case of such
information which is stored electronically, copies of the media on which the
same is stored), all in conformance with applicable law, will be provided.
6.5. SUPPLIERS. There are a number of suppliers to the
Manufacturing Operations whose products and services are not covered by
contracts that are directly with the Company.
14
These suppliers are part of larger contracts for the provision of products
and services to other entities owned by the Seller, in addition to the
Manufacturing Operations. Between the Date of Execution and the Closing, the
Company and the Seller will initiate contract negotiations with such
suppliers, for the provision of such products and services under separate
contracts with the Company. A list of the current products and services which
have been identified as falling within this category as of the Date of
Execution is set forth in Schedule 6.5.
6.6 SOFTWARE. The third party software licenses listed on Schedule
6.3(d) are the licenses being transferred along with the Company. There are
other third party software packages being utilized in the Manufacturing
Operations whose licenses are not being transferred, either because the
licenses are not transferable, or because other units of the Seller utilize
such software and need to retain the licenses; therefore the Buyer will need
to separately obtain licenses for such third party software; the currently
identified third party software that falls into this category is listed in
Schedule 6.6.
6.7. ENVIRONMENTAL MATTERS. (a) Definitions for this Section 6.7
and for Section 7.1.4:
"knowledge of Seller" shall mean the knowledge acquired based upon reasonable
inquiry of IBM Italy's management (with the position of EH&S Manager, H&S
Environmental Area Manager or site operations manager or higher title) in the
Manufacturing Operations and including the following persons at ▇▇▇▇▇▇▇
Controls: ▇▇▇▇▇▇▇ ▇▇▇▇▇, manager of ▇▇▇▇▇▇▇ Controls Environmental Affairs
Programs Italy; ▇▇▇▇▇▇▇ ▇▇▇▇▇, Vimercate Environmental Specialist and ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, Santa ▇▇▇▇▇▇▇ Environmental Specialist.
"Environmental Baseline" shall mean the environmental condition of the Real
Property as set forth in the Report.
"Environmental Law" shall mean any applicable Italian national, regional or
local or European Union law, statute, ordinance, judgment, governmental
directive, regulation or other governmental requirement that are generally
enforced and publicly promulgated by a Governmental Authority having
jurisdiction over the Real Property or the Manufacturing Operations,
including such environmental laws that are generally applied to and relate to
matters of pollution or of environmental regulation or control or protection
of the environment, as well as governmental directives or orders that are
properly issued with respect to the Real Property or the Manufacturing
Operations, as any have been amended to the date of Closing.
"Hazardous Materials" shall mean any hazardous substance, hazardous waste,
pollutant, contaminant, toxic material or words of similar import as defined
under any applicable Environmental Law, except that notwithstanding anything
to the contrary herein or in this Agreement, Hazardous Materials shall not
mean or include (i) contamination caused by the normal application of
pesticides, fungicides or other agricultural products for agricultural
purposes; (ii) soil, groundwater or surface water contamination that is below
concentration levels that would be actionable or in violation of any
applicable Environmental Law and
15
below any cleanup or remediation standards levels generally enforced and
publicly promulgated by an applicable Governmental Authority; (iii) any
amount of hazardous substances released or spilled to the environment which
are below any actionable concentration level under applicable Environmental
Law, which are not in violation of any applicable Environmental Law and which
are below such promulgated standards; (iv) naturally occurring contamination,
which is not resulting from human activity, or which is endemic to the
Provence of Milan and which did not originate from the Real Property and for
which the Seller would not be liable under applicable Environmental Law.
"Real Property" means the real property owned by the Company at the Quota
Purchase Closing Date.
"Report" means the Report referred to in Section 7A.1.4.
(b) The following representations are the sole and exclusive representations
made by Seller to Buyer relating to the environmental conditions at the Real
Property.
(i) Subject to Section 6.2.4, to the knowledge of Seller, as of the date
hereof and the Quota Purchase Closing Date, operations at the Real Property
are in compliance in all material respects with applicable Environmental Law.
(ii) Except as set forth in Schedule 6.7(b)(ii), the knowledge of Seller
there are no underground storage tanks for Hazardous Materials on the Real
Property.
(iii) To the knowledge of Seller, Seller has not received any notice, demand
letters or other summons from a Governmental Authority or third party, during
the five years prior to the date of this Agreement, indicating that any
person is, was or may be in material violation of or materially liable under
any applicable Environmental Law in connection with the Real Property or the
Manufacturing Operations. To the knowledge of Seller, during the five years
prior to the date of this Agreement, there has been no civil, criminal or
administrative actions, lawsuits, demand, claims or similar proceedings
pending or threatened against any person, with respect to the Real Property
or the Manufacturing Operations, relating to any violation of any applicable
Environmental Law.
(iv) To the knowledge of Seller, none of the Real Property has been used as a
Hazardous Materials disposal site.
(v) To the knowledge of Seller there is no environmental contamination on or
under the Real Property which would constitute a violation of any applicable
Environmental Law and which currently requires action or reporting under any
applicable Environmental Law.
(vi) Except as set forth in Schedule 6.7(b)(vi), Seller has, in full force
and effect, all material permits, licenses and other authorizations that are
required under applicable Environmental Law with respect to the operation of
Seller's business on the Real Property as of the date of this Agreement, and
Seller is, as of the date of this Agreement, in material compliance with
16
all such permits, licenses and authorizations, subject to Section 6.2.4 for
the handling of such matters following the date of this Agreement.
(vii) The Seller has delivered to the Buyer true and complete copies of all
formal and significant written environmental audits or written evaluations
requested by the Seller or any of its Affiliates during the five years prior
to the date of this Agreement, relating to the Real Property.
6.8. OTHER INFORMATION. This Agreement, the Exhibits, Appendices and
Schedules hereto, as each may be amended prior to the Closing, and all
certificates delivered to Buyer and its representatives from Seller at the
Quota Purchase Closing in connection with this Agreement do not and will not
contain any untrue statement of any material fact and do not and when
delivered will not omit to state a material fact necessary to make the
statement herein or therein not misleading.
6.9 CONTRACTS. The Company, Seller, or Seller Affiliates have performed
or are performing all material obligations required to be performed by it
under the contracts transferred pursuant to this agreement and such Seller
Affiliated performing party is not (with or without notice, lapse of time or
both) in breach or default in any material respect thereunder; and, to the
knowledge of Seller, no other party to any of such contracts is (with or
without notice, lapse of time or both) in breach or default in any material
respect thereunder.
ARTICLE 7
REPRESENTATIONS AND WARRANTIES OF BUYER
7.1 Celestica Inc. and Celestica Europe Inc. hereby represent and
warrant to Seller as of the date hereof and as of the Quota Purchase Closing
Date, each individually for such buying entity:
7.1.1 ORGANIZATION AND GOOD STANDING. Celestica Inc. is duly
organized, validly existing and in good standing, under the laws of the
Province of Ontario, Canada and is duly qualified, under all applicable laws,
to enter into this Agreement and to perform any and all of its obligations
under this Agreement. Celestica Europe Inc. is duly organized, validly
existing and in good standing, under the laws of the Province of Ontario,
Canada and is duly qualified, under all applicable laws, to enter into this
Agreement and to perform any and all of its obligations under this Agreement.
This Agreement has been duly executed and delivered by ▇▇▇▇▇ and this
Agreement constitutes a legal, valid and binding obligation of Buyer
enforceable against Buyer in accordance with its terms.
7.1.2 NO BANKRUPTCY PROCEEDINGS. Each Buyer is validly existing
and no liquidator, administrative receiver, administrator or similar officer
has been appointed in respect of it and no action is currently being taken
with a view to appoint any such liquidator, receiver, administrative
receiver, administrator or similar officer. There is no action or proceeding
now pending or threatened in writing to dissolve Buyer or to declare its
corporate
17
rights and powers, or any of them, to be null and void or to declare that it
or its board of Directors or any of its Directors, officers, agents or
employees has or have exceeded or violated any of its corporate rights or
powers.
7.1.3 NO BREACH. The execution of this Agreement and of the
transactions contemplated herein will not result in the breach or violation
of any provision of Law as well as of any corporate document of each Buyer
which may affect the validity and enforceability of this Agreement.
7A.1.4 ENVIRONMENTAL MATTERS. (a) Buyer and Seller agree that the
Environmental Baseline shall be produced and be binding on both the Buyer and
the Seller and shall represent the environmental condition of the Real
Property as of the Quota Purchase Closing Date. The Buyer and Seller shall
select a qualified environmental consultant (the "Consultant") who shall be
mutually agreeable to them, acting reasonably, to conduct over a three month
period an environmental investigation, including testing and sampling of
existing and new boreholes and ▇▇▇▇▇ as it considers prudent, of the Real
Property (the "Investigation"), commencing as soon as reasonably possible
after the execution of this Agreement, for the purpose of producing the
Report referred to below outlining the environmental condition of the Real
Property. The consultant shall produce a report (the "Report") of its
findings setting out the location and concentration measurement or level of
each chemical constituent identified on or under the Real Property. The
concentration measurement or level at (and around any location as reasonably
determined by the Consultant) shall be the average of the levels in the
annual site monitoring records of the Seller for the location for the three
years 1997, 1998 and 1999 as well as the new testing, provided that where the
new testing provides a materially different result from previous site
monitoring records, sufficient new testing shall be conducted to provide a
result considered as reliable by the Consultant and the previous site
monitoring records for such location shall be taken into account to the
extent considered appropriate by the Consultant. In arriving at an average
concentration measurement or level the consultant shall be guided by the
norms and procedures generally used and applied by professionals in the
environmental sampling and testing industry. Seller and Seller's affiliates
will co-operate reasonably in connection with the conduct of the
Investigation, including, without limitation, making personnel reasonably
available. The parties further agree that the cost of the Consultant
including the cost to perform additional testing by the Consultant as well as
the creation of the Report shall be borne equally by the parties on a 50%-50%
basis, but in no event will the cost of the Consultant services exceed one
hundred eighty million Lire (ITL 180,000,000). Both parties shall be entitled
to copies of any and all documents created or used by the Consultant in the
performance of its work. If the Environmental Baseline indicates the presence
of Hazardous Material, Seller will undertake any action with respect thereto
which requires a remedial action under Environmental Law which is enforced by
an applicable Governmental Authority.
(b) ▇▇▇▇▇ agrees that any contamination caused by its consultants or
contractors or itself arising out of or resulting from any due diligence
investigations conducted by the Buyer or its consultants prior to the Quota
Purchase Closing Date shall be the responsibility of the Buyer.
18
CONFIDENTIAL MATERIALS OMITTED AND
FILED SEPARATELY WITH THE SECURITIES
AND EXCHANGE COMMISSION.
ASTERISKS DENOTE OMISSIONS.
(c) Without limiting Buyer's ability to rely on Section 6.7, Buyer
acknowledges that is has made its own investigation of the Real Property and
Buyer is aware of the various licenses and permits that the appropriate
Governmental Authorities will require on or after the Quota Purchase Closing
Date, and ▇▇▇▇▇ agrees and represents that it is responsible for obtaining
any such license or permit that may be required by any Governmental Authority
in order for Buyer to conduct its business operations on the Real Property on
or after the Quote Purchase Closing Date, subject only to Seller's obligation
(which is hereby agreed to) to assist Buyer in the transfer of any
transferable permits or licenses as may be allowed or permitted by applicable
law. ▇▇▇▇▇ further agrees that it will exercise reasonable efforts to satisfy
and effectuate on or prior to the Quota Purchase Closing Date, or as soon
thereafter as is practicable, the transfer or issuance of all licenses,
permits and other authorizations that are required by any appropriate
Governmental Authority to enable Buyer to operate its business on the Real
Property on or after the Quota Purchase Closing Date.
ARTICLE 8
EFFECTIVENESS OF THE REPRESENTATIONS AND WARRANTIES
8.1 REPRESENTATIONS AND WARRANTIES DATE. All the representations
contained in Articles 6 and 7 are true on the Date of Execution and will be
true, in all material aspects, at the Quota Purchase Closing, on the Quota
Purchase Closing Date, as if said representations had been actually rendered
and repeated on, and with respect to, the Quota Purchase Closing Date, with
the exception of representations and warranties that specifically refer to an
earlier date and with the exception of those changes in the Manufacturing
Operations which may have occurred in the ordinary course of business
subsequent to the Date of Execution and prior to the Quota Purchase Closing
Date in accordance with the terms hereof.
8.1.1 SURVIVAL OF REPRESENTATION & WARRANTIES. All claims made in
respect of the representations and warranties of Seller in the Operative
Agreements must be specifically notified prior to the **** after the Quota
Purchase Closing Date (subject in any case to the provisions of this
Article), other than representations and warranties as to the Seller's ***
(as modified in accordance with this Agreement), both of which shall expire
upon ***; and representations and warranties as to ***, which shall survive
until **** following the termination of the ***, and claims made in respect
of Seller's *** representations and warranties, which must be specifically
notified prior to the **** anniversary of the Quota Purchase Closing Date.
8.1.2 LIMITATION OF LIABILITY. The Parties hereby expressly agree
that:
(a) Seller and its Affiliates shall not be liable for any damages to
Buyer or the Company or their respective Affiliates as a result of or with
respect to a breach of the Seller's or its Affiliates' representations and
warranties under the Operative Agreements unless and
19
CONFIDENTIAL MATERIALS OMITTED AND
FILED SEPARATELY WITH THE SECURITIES
AND EXCHANGE COMMISSION.
ASTERISKS DENOTE OMISSIONS.
until such amounts shall exceed in the aggregate **** (the "Limitation
Amount"), at which ▇▇▇▇ ▇▇▇▇▇▇ and its Affiliates shall be liable for the
entire amount of such damages. There shall be no Seller or Seller Affiliate
liability with respect to any individual breach of a representation and
warranty which results in damages of less than **** and such amounts shall
not be taken into account in determining whether the Limitation Amount has
been exceeded.
(b) the maximum aggregate liability of Seller and its Affiliates for
damages, losses, costs and expenses deriving from the breach of the Seller's
or its Affiliates representations and warranties under the Operative
Agreements shall not exceed, in the aggregate, the sum of ****; provided,
however, that such limitation shall not be applicable with respect to
Seller's obligation of ****.
No right of indemnification or compensation will arise in favor of
Buyer or its Affiliates (other than as specifically set forth in the
Operative Agreements) towards Seller and its Affiliates for indirect,
incidental, punitive, special or consequential damages whatsoever, including
loss of profits or loss of chances or goodwill or similar losses or damages.
No right of indemnification or compensation will arise in favor of Seller or
its Affiliates towards Buyer and its Affiliates (other than as specifically
set forth in the Operative Agreements) for indirect, incidental, punitive,
special or consequential damages whatsoever, including loss of profits or
loss of chances or goodwill or similar losses or damages.
ARTICLE 9
FURTHER COMMITMENTS OF THE PARTIES
9.1 STATE SUBSIDIES. The Parties expressly agree that, subject to
Section 5.7, Buyer shall be liable on an exclusive basis for the performance
and the repayment, according to their terms, and for any damages, losses,
costs or expenses suffered or incurred by the Company or Seller or Seller
Affiliates, as a result of such subsidies and associated loans, including the
revocation by the competent Authority, of the state subsidies presently
granted and listed in Schedule 9.1. The Buyer agrees that it will execute
any documents deemed appropriate by the applicable governmental bodies
formalizing the implementation of this transfer of contract responsibilities.
9.2 OTHER TAX MATTERS. Notwithstanding Paragraph 5.5 above, the Parties
expressly and unconditionally agree that any Registration Tax (Imposta di
Registro), Stamp Duties (Imposta di Bollo e Tassa ▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇ ▇▇▇▇▇),
Mortgage Tax (Imposta Ipotecaria) and Cadastrian Tax (Imposta Catastale) and
related interest and penalties, if any, due and/or payable with reference, or
in relation (a) to the transfer of the Participation under this Agreement
and/or (b) to the contribution of the Manufacturing Operations to the
Company, shall be exclusively borne by the Buyer and paid, as according to
law, by the Buyer or by the
20
Company. It is therefore agreed between Seller and Buyer that Seller shall
have no liability or obligation vis-a-vis to the Company and/or to the Buyer
with reference to the above.
ARTICLE 10
TERMINATION
The Parties agree that the specific provisions set forth in this
Agreement do not represent a limitation to the right of the Parties to
terminate the Agreement for just cause, for supervening impossibility or for
excessive onerousness, according to the provisions contained in Chapter XIV,
Title II, Book IV of the Italian Civil Code.
ARTICLE 11
JOINT AND SEVERAL LIABILITY
The Parties agree that both IBM Italia S.p.A. and IBM Semea Servizi
Finanziari S.p.A. act as one party for the purposes of this Agreement and
that, in this respect, they are jointly and severally liable towards Buyer
for the fulfilment of any and all the obligations undertaken by Seller in
respect of Buyer under this Agreement. The Parties agree that both Celestica
Inc. and Celestica Europe Inc. act as one party for the purposes of this
Agreement and that, in this respect, they are jointly and severally liable
towards Seller for the fulfilment of any and all the obligations undertaken
by ▇▇▇▇▇ in respect of Seller under this Agreement.
ARTICLE 12
GENERAL PROVISIONS
12.1 CONFIDENTIALITY. The confidentiality agreement in effect between
International Business Machines Corporation and Celestica Inc., dated as of
August 5, 1999, concerning the subject matter of this transaction, shall also
apply to the Operative Agreements and the proposed transactions are subject
to and confidential under that confidentiality agreement or another
confidentiality agreement to be agreed upon between the Parties. For six (6)
months after the Closing Date, all public announcements relating to this
Agreement or the transactions contemplated hereby shall be made only after
consultation between ▇▇▇▇▇ and Seller, except for disclosures by any Party
that in the opinion of counsel for such Party are required by law, rule or
regulation. Any disclosures to customers in connection with commercial
relationships shall not reveal the Purchase Price contained in this
Agreement. Notwithstanding the foregoing, either Party shall have the right,
in its sole discretion, to make such disclosures as it may deem necessary or
advisable to any Governmental Authority and IBM Affiliates shall have the
right, in their sole discretion, to make such disclosures as they may deem
necessary or advisable to their employees and employee representatives,
provided that Seller intends to consult with Buyer on disclosures to
employees of the Company, with a view towards establishing a joint approach
to such matters where practical. In the event of a breach or anticipatory
breach of this Section 12.1 by any Party, the other Parties shall be
21
entitled, in addition to any and all other remedies available at law or in
equity, to preliminary and permanent injunctive relief and specific
performance without proving damages.
12.2 ASSIGNMENT. This Agreement and all of the provisions hereof shall
be binding upon and shall inure to the benefit of the Parties and their
respective permitted assigns, heirs or successors. Neither this Agreement nor
any of the rights, interests or obligations hereunder may be assigned without
the prior written consent of the other Parties.
12.3 SEVERABILITY OF THE PROVISIONS. Should any of the provisions of
this Agreement be held invalid or, in any event, non-enforceable, said defect
will not affect the validity of the remaining provisions of this Agreement,
which will continue to remain in full force and effect.
12.4 COMPLETENESS OF THIS AGREEMENT. The terms and conditions contained
in this Agreement and the other Operative Agreements constitute the entire
agreement between the Parties and replace all previous agreements, either
oral or written, between the Parties with reference to the subject matter
dealt with in such Agreements and no understanding or pact which amends or
amplifies such agreements shall be binding upon any of the Parties, unless it
is in writing, referring expressly to the agreement to be modified, and is
signed by the Parties by their respective representatives who have been duly
authorized.
12.5 HEADINGS. Article and Paragraph headings used in this Agreement
are for convenience only and shall not affect the meaning or construction of
this Agreement.
12.6 NOTICES. All notices and other communications hereunder shall be
in writing and shall be deemed properly given if delivered personally or
mailed by registered mail, return receipt, or transmitted by facsimile,
confirmed by registered letter sent within two Business Days subsequent to
the date of the facsimile, to the Parties at the following respective
addresses (or any other address which any of the Parties may specify by
giving notice in the above mentioned way):
(a) if to Buyer, to:
Celestica Inc.
▇▇▇ ▇▇▇ ▇▇▇▇▇ ▇▇▇▇, ▇▇/▇▇
▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇
▇▇▇ ▇▇▇
Attention: Vice President and General Counsel
Telecopy: ▇▇▇-▇▇▇-▇▇▇▇
with a copy to:
Celestica Europe Inc.
▇▇▇ ▇▇▇ ▇▇▇▇▇ ▇▇▇▇, ▇▇/▇▇
▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇
22
M3C 1V7
Attention: Vice President and General Counsel
(b) if to Seller, to:
IBM Italia S.p.A.
Circonvallazione Idroscalo,
20090 Segrate
Milan, Italy
Attention: ▇▇▇▇▇ ▇▇▇▇▇▇▇
with a copy to:
IBM Servizi Finanziari S.p.A.,
20090 Segrate
Milan, Italy
Attention: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇
with copy to:
International Business Machines Corporation
New Orchard Road
Armonk, New York 10504
Attention: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇, Esq.
Associate General Counsel
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
All notices and other communications hereunder which have been delivered
personally, or which have been transmitted by facsimile and confirmed by
registered letter sent within two Business Days subsequent to the date of the
facsimile, shall be deemed received by the addressee, respectively, on the
day of personal delivery or on the fifth calendar day subsequent to the date
of the telex or telefax.
12.7 EXPENSES. Unless otherwise expressly agreed in writing, all costs
and expenses incurred in connection with this Agreement and the transactions
contemplated hereby, including attorneys' fees, shall be paid by the Party
incurring such expenses. The notarial fees which become payable with regard
to this Agreement shall be borne by Buyer.
23
12.8 BROKERS AND FINDERS. No brokers, finders or merchant banks acting
for any of the parties hereto have participated in the negotiations or have
in any manner caused the exeuction of this Agreement; and there shall be no
fees or costs to be paid to any such brokers, finders or merchant banks.
12.9 INTERPRETATION OF THIS AGREEMENT. This Agreement shall be
interpreted in good faith, having regard to the common intention of the
Parties and the substantial result which, with the execution of this
Agreement, they intend to reasonably attain.
12.10 GOVERNING LAW AND EXCLUSIVE JURISDICTION. The law which governs
this Agreement and the transactions provided for hereby is the law of the
Republic of Italy. All disputes arising out of and in connection with this
Agreement shall be subject to the exclusive jurisdiction of the Courts of
Milan.
12.11 ORIGINALS. This Agreement is executed in three originals drawn up
in the English language. This English version shall prevail over any other
translation. The Parties acknowledge to each other that some of the
Schedules, Attachments, Annexes or Exhibits are drawn up in the Italian
language only, some in the English language only, and some in both languages;
in this latter case the prevailing language will be specified in the specific
document concerned.
12.12 FREEDOM OF ACTION. The Parties agree that article 2557 of the
Italian Civil Code does not apply.
12.13 DURATION. This Agreement shall automatically expire if the Quota
Purchase Closing has not taken place through no fault of either Party or its
Affiliates by October 31, 2000. If it expires, the provisions herein shall
have no further force and effect except the obligations of the Parties under
Sections 12.1, 12.2, 12.7, 12.9 and 12.11 shall remains in full force and
effect.
12.14 NO THIRD PARTY BENEFICIARIES. This Agreement is for the sole
benefit of the Parties and their permitted successors and assigns and nothing
herein expressed or implied shall give or be construed to give any Person,
other than the Parties and such permitted successors and assigns, any legal
or equitable rights hereunder.
If you agree with the above please copy this wording and return it to us duly
signed and initialled in each page (including the annexes hereto) as
unconditional acceptance.
/s/ ▇. ▇▇▇▇▇▇▇
----------------------------------------
Celestica Inc.
/s/ ▇. ▇▇▇▇▇▇▇
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Celestica Europe Inc.
24
Amendment 1
to the Quota (Share) Purchase Agreement (QSPA)
entered into by IBM Italia S.p.A., IBM Semea Servizi Finanziari S.p.A.,
Celestica Inc. and Celestica Europe Inc. on February 9, 2000.
Seller and Buyer agree that the content of schedule 6.7 (b) (vi) of the QSPA
is amended effective February 9, 2000 and now reads as follows:
"The Water ▇▇▇▇▇ permit is not yet finalized. The permit was requested by IBM
to Italian Public Authority in 1966. The relevant request has been done again
in 1971, 1991 and 1992. There is evidence of all the above on the Official
Italian Bulletin (Gazzetta Ufficiale Italiana) in 1992 and 1996. Further IBM
has been paying taxes for the ▇▇▇▇▇ water usage".
Capitalized terms shall have the meaning set forth in the QSPA.
/s/ [illegible] 15/2/2000
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IBM Italia S.p.A Date
/s/ [illegible] 15/2/2000
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IBM Semea Servizi Finanziari S.p.A Date
/s/ ▇▇▇▇ ▇▇▇▇▇▇▇ 28/2/2000
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Celestica Inc. Date
/s/ ▇▇▇▇ ▇▇▇▇▇▇▇ 28/2/2000
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Celestica Europe Inc. Date
Second Amendment to Quota (Share) Purchase Agreement
This is the Second Amendment ("Second Amendment") to the Quota (Share)
Purchase Agreement dated February 9, 2000 between IBM Italia S.p.A., IBM
Semea Servizi Finanziari S.p.A., Celestica Inc., and Celestica Europe Inc.,
as amended by the First Amendment dated February 28, 2000 between the parties
("Quota (Share) Purchase Agreement").
This Second Amendment is dated as of May 31, 2000.
WHEREAS
The Parties have agreed that Buyer will buy substantially all of the
inventory owned by the Seller and, in consideration thereof, the Parties
hereby agree to amend the Purchase Price indicated in Section 3.2.1. and the
corresponding Schedule 3.2.1. "Assets Conveyed" of the Quota (Share) Purchase
Agreement. Furthermore the Parties hereby agree to amend Schedule 3.3.
"Methodology for Review of Closing Statement" of the Quota (Share) Purchase
Agreement in order to take into account the fair market value of the
inventory transferred which is to be scrapped.
The Parties to the Quota (Share) Purchase Agreement hereby agree to the
following modifications to that agreement:
Section 3.2.1. The previous Section 3.2.1, Purchase Price, is hereby
completely replaced with the following language:
"3.2.1 PURCHASE PRICE. The Parties agree that the aggregate purchase price to
be paid by Buyer to Seller, and to be received from Buyer by Seller, in order
to acquire the Participation ("Purchase Price") is equal to four hundred
forty one billion three hundred eight million Italian Lire (ITL
441,308,000,000), ("Purchase Price"), as detailed on Schedule 3.2.1, and
shall be divided between IBM Italia S.p.A. and IBM Semea Servizi Finanziari
S.p.A in proportion of their respective quota of capital in the Company,
provided, however, that if the expert valuation performed by the technical
expert appointed by the judge according to article 2343 paragraph 1 of the
Italian Civil Code results in a higher valuation of the Manufacturing
Operations, for reasons other than those already provided for in Section 3.3,
3.4 and 3.5. herein, then the Purchase Price shall be adjusted upward to
reflect that higher valuation established by such court appointed technical
expert."
In addition, the Parties hereby agree that the prior Schedules 3.2.1 and 3.3
of the Quota (Share) Purchase Agreement are hereby replaced with the Schedule
3.2.1 and Schedule 3.3
Second Amendment to Quota (Share) Purchase Agreement 0526
Page 1
which are attached to this Amendment and are hereby incorporated as part of
this amendment.
Except as specifically provided for in this Second Amendment, the Quota
(Share) Purchase Agreement shall continue in full force and effect and each
of the parties hereby confirms the terms of the Quota (Share) Purchase
Agreement, as so amended.
IN WITNESS WHEREOF, the Parties have duly exeucted this Second Amendment as
of the date first written above.
IBM ITALIA S.p.A. CELESTICA INC.
BY: /s/ ▇.▇. ▇▇▇▇▇▇▇ BY: /s/ ▇▇▇▇ ▇▇▇▇▇▇▇
-------------------------------------- ---------------------------------
NAME: ▇.▇. ▇▇▇▇▇▇▇ NAME: ▇. ▇▇▇▇▇▇▇
TITLE: General Manager TITLE: SENIOR VICE PRESIDENT
IBM SEMEA SERVIZI FINANZIARI S.p.A CELESTICA EUROPE INC.
BY: /s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ BY: /s/ ▇▇▇▇ ▇▇▇▇▇▇▇
--------------------------------- ---------------------------
NAME: ▇. ▇▇▇▇▇▇ NAME: ▇. ▇▇▇▇▇▇▇
--------------------------------- ---------------------------
TITLE: Managing Director TITLE: SENIOR VICE PRESIDENT
Second Amendment to Quota (Share) Purchase Agreement 0526
Page 2
SCHEDULE 3.2.1 QSPA PAGE 1/1
ASSETS CONVEYED
(In Billion Lire)
Inventory 234.808
Machinery and Equipment/
Furniture and Fixtures &
Data Processing Equipment 75.5
Land and Buildings 122.0
Goodwill 9.0
Total 441.308
Schedule 3.2.1. Version 0511
METHODOLOGY FOR REVIEW OF CLOSING STATEMENT
Assets and Inventory at signing are as set forth on Schedule 3.2.1, herein
incorporated by reference.
The following will be the methodology for reviewing the Closing Statement:
1. The ledger balance of WCE Italia S.r.l. as of the Closing Date will be
the basis for the Closing Statement.
2. A physical inventory sample to determine proper quantities will be
initiated by Seller and Buyer on the Closing Date. Seller will perform a
Rotating Inventory Audit (RIA) on the Warehouse based on PI (Perpetual
Inventory) Test check methodology. Additional sampling will be performed
on Work-in-Process based on MFI system data (Wip on Vimercate/▇. ▇▇▇▇▇▇▇
manufacturing floor) and PIV system data (Wip consigned to our Vendors).
3. Inventory will be valued according to Weighted Average Cost (WAC)
methodology.
4. Cost of acquisition will be added to the inventory, at 2.5%.
5. Inventory determined as above will be decreased by a provision for scrap
of three hundred ten million Lire (310,000,000)
6. Any completed assembly inventory will be valued at price for cards and at
BOM plus 9% for box/fab/mes.
7. A value for labor and overhead effort will be added to the
work-in-process inventory value, based on the 50% completion methodology
applicable to either ECAT (i.e. assumes 50% of all production
steps/profit has been completed in addition to BOM), and Box/Fab/MES
(i.e. assumes 50% of the 9% markup above BOM, equal to 4.5% of BOM markup
to be added in addition to BOM).
8. The cost of all parts sourced from Seller's Microelectronics Division
(currently valued at 90%) will be multiplied by a factor of 1.11 for the
purpose of valuing inventory.
9. All Machinery and Equipment, Furniture and Fixtures, and Data Processing
Machines will be valued at WCE Italia S.r.l.'s book value.
BOM = Bill of Material