STOCK PURCHASE AGREEMENT
By and Between
▇▇▇▇▇▇▇▇▇ TECHNOLOGIES, INC.
(as Buyer)
(on the one part)
and
▇▇▇▇▇▇▇ ▇▇▇▇▇▇ & C. S.A.P.A. and GESTIN S.R.L.
(as Sellers)
(on the other part)
dated as of
July 31, 1997
TABLE OF CONTENTS
Section Page
SECTION 1. DEFINITIONS. . . . . . . . . . . . . . . . . . . . . 2
SECTION 2. BASIC TRANSACTION. . . . . . . . . . . . . . . . . . 5
(a) Purchase and Sale of the Entire Share Capital of SRT and
All the Capital Stock of Syntech, Inc.. . . . . . . . . . 5
(b) Purchase Price and Consideration for Noncompete . . . . . 5
(c) The Escrow. . . . . . . . . . . . . . . . . . . . . . . . 5
(d) Transfer of Certificates Representing the Shares. . . . . 6
(e) Sellers Noncompetition Obligations . . . . . . . . . . . 6
SECTION 3. REPRESENTATIONS AND WARRANTIES OF THE SELLERS. . . . 7
(a) Organization; Capitalization. . . . . . . . . . . . . . . 7
(b) Authorization of Transaction. . . . . . . . . . . . . . . 7
(c) Noncontravention. . . . . . . . . . . . . . . . . . . . . 7
(d) Brokers Fees . . . . . . . . . . . . . . . . . . . . . . 8
(e) Title to Assets . . . . . . . . . . . . . . . . . . . . . 8
(f) Subsidiaries and Affiliates . . . . . . . . . . . . . . . 8
(g) Financial Statements. . . . . . . . . . . . . . . . . . . 8
(h) Events Subsequent to Most Recent Fiscal Year End. . . . . 9
(i) Undisclosed Liabilities . . . . . . . . . . . . . . . . . 10
(j) Legal Compliance. . . . . . . . . . . . . . . . . . . . . 10
(k) Tax Matters . . . . . . . . . . . . . . . . . . . . . . . 11
(l) Real Property . . . . . . . . . . . . . . . . . . . . . . 11
(m) Intellectual Property . . . . . . . . . . . . . . . . . . 13
(n) Tangible Assets . . . . . . . . . . . . . . . . . . . . . 15
(o) Inventory . . . . . . . . . . . . . . . . . . . . . . . . 15
(p) Contracts . . . . . . . . . . . . . . . . . . . . . . . . 15
(q) Notes and Accounts Receivable . . . . . . . . . . . . . . 16
(r) Powers of Attorney. . . . . . . . . . . . . . . . . . . . 16
(s) Insurance . . . . . . . . . . . . . . . . . . . . . . . . 16
(t) Litigation. . . . . . . . . . . . . . . . . . . . . . . . 17
(u) Product Warranty. . . . . . . . . . . . . . . . . . . . . 17
(v) Product Liability . . . . . . . . . . . . . . . . . . . . 17
(w) Employees . . . . . . . . . . . . . . . . . . . . . . . . 17
(x) Employee Benefits . . . . . . . . . . . . . . . . . . . . 18
(y) Guaranties. . . . . . . . . . . . . . . . . . . . . . . . 18
(z) Environmental, Health, and Safety . . . . . . . . . . . . 18
(aa) Certain Business Relationships. . . . . . . . . . . . . . 18
(ab) Customers.. . . . . . . . . . . . . . . . . . . . . . . . 18
(ac) Disclosure. . . . . . . . . . . . . . . . . . . . . . . . 19
SECTION 4. REPRESENTATIONS AND WARRANTIES OF THE BUYER. . . . . 19
(a) Organization of the Buyer . . . . . . . . . . . . . . . . 19
(b) Authorization of Transaction. . . . . . . . . . . . . . . 19
(c) Noncontravention. . . . . . . . . . . . . . . . . . . . . 19
(d) Brokers Fee. . . . . . . . . . . . . . . . . . . . . . . 19
SECTION 5. SURVIVAL AND INDEMNIFICATION . . . . . . . . . . . . 19
(a) Survival of Representations and Warranties. . . . . . . . 19
(b) Indemnification Provisions for the Benefit of the Buyer . 20
(c) Indemnification Notice and Payments . . . . . . . . . . . 21
(d) Indemnification Provisions for the Benefit of the Sellers 21
(e) Matters Involving Third Parties . . . . . . . . . . . . . 21
(f) Other Indemnification Provisions. . . . . . . . . . . . . 22
(g) Amnesty . . . . . . . . . . . . . . . . . . . . . . . . . 22
(h) Limitations on and Special Provisions Relating to
Indemnification. . . . . . . . . . . . . . . . . . . . . 23
(i) Environmental Remediation . . . . . . . . . . . . . . . . 24
SECTION 6. POST-CLOSING COVENANTS . . . . . . . . . . . . . . . 24
(a) General . . . . . . . . . . . . . . . . . . . . . . . . . 24
(b) Litigation Support. . . . . . . . . . . . . . . . . . . . 24
(c) Transition. . . . . . . . . . . . . . . . . . . . . . . . 25
(d) Guarantees. . . . . . . . . . . . . . . . . . . . . . . . 25
SECTION 7. MISCELLANEOUS. . . . . . . . . . . . . . . . . . . . 25
(a) Press Releases and Public Announcements . . . . . . . . . 25
(b) No Third-Party Beneficiaries. . . . . . . . . . . . . . . 25
(c) Entire Agreement. . . . . . . . . . . . . . . . . . . . . 25
(d) Succession and Assignment . . . . . . . . . . . . . . . . 25
(e) Counterparts. . . . . . . . . . . . . . . . . . . . . . . 25
(f) Headings. . . . . . . . . . . . . . . . . . . . . . . . . 26
(g) Notices . . . . . . . . . . . . . . . . . . . . . . . . . 26
(h) Amendments and Waivers. . . . . . . . . . . . . . . . . . 26
(i) Severability. . . . . . . . . . . . . . . . . . . . . . . 27
(j) Expenses. . . . . . . . . . . . . . . . . . . . . . . . . 27
(k) Construction. . . . . . . . . . . . . . . . . . . . . . . 27
(l) Incorporation of Exhibits and Schedules . . . . . . . . . 27
(m) Italian Antitrust . . . . . . . . . . . . . . . . . . . . 27
SECTION 8. GOVERNING LAW AND ARBITRATION. . . . . . . . . . . . 27
(a) Governing Law . . . . . . . . . . . . . . . . . . . . . . 27
(b) Arbitration . . . . . . . . . . . . . . . . . . . . . . . 27
EXHIBITS
Exhibit A -- Disclosure Schedule
Exhibit B -- Form of Escrow Agreement
Exhibit C -- Financial Statements
STOCK PURCHASE AGREEMENT
Agreement entered into as of July 31, 1997 (this Agreement ), by and
between:
1. ▇▇▇▇▇▇▇▇▇ Technologies, Inc., a Delaware corporation with
offices in ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇,
▇.▇.▇. represented by ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇ pursuant to a board of directors
resolution dated July 28, 1997 (the "Buyer");
(on the one part)
and
2. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ & C. S.a.p.a., an Italian corporation with its
registered office in Torino, ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇/▇, capital Italian
Lire 5,300,000,000, registered with the Companies Register of Torino
under no. 2806/90, tax code 02126980040, VAT code 0595202013,
represented by ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ pursuant to a board of directors
resolution dated July ___, 1997 ("Sapa") and Gestin S.r.l., an Italian
corporation with its registered office in Torino, Via ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
11, capital Italian Lire 14,400,000,000, registered with the Companies
Register of Torino under no. 4897/87, tax and VAT code 05390660016,
represented by ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ pursuant to a board of directors
resolution dated July 15, 1997 (Gestin) (Sapa and Gestin are collectively
referred herein as the Sellers ).
(on the other part)
The Buyer and the Sellers are referred to collectively herein as the
Parties and individually as a Party .
WHEREAS
A. Each of the Sellers owns 50% of the capital
stock of Synthetic Resin Technologies S.A., a Luxembourg
corporation with its registered office in Luxembourg,
▇▇, ▇▇▇▇▇▇ ▇▇ ▇▇ ▇▇▇▇▇▇▇, capital Italian Lire
8,000,000,000 (in addition to reserves in the amount of
Italian Lire 22,000,000,000), represented by 800,000
shares, par value Italian Lire 10,000 each ( SRT ).
B. SRT is a holding company that owns, as its
only asset, 100% of the capital stock of Syntech S.p.A.,
a corporation organized under the laws of Italy with its
registered office in Torino, Via ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ 11,
capital Italian Lire 5,220,000,000 (wholly paid-in),
registered with the Companies Register of Torino under
no. 4153/92, tax and VAT code 03109120018 ("Syntech").
C. Syntech owns all of the capital stock of the
following Subsidiary companies:
- Syntech France s.a.r.l., a corporation
organized under the laws of France with its
registered office in Lyon, ▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇,
▇▇▇▇▇▇▇ ▇▇▇▇▇▇ 50,000, of which Syntech
owns 100% of the capital stock; and
- Syntech, Inc., a corporation organized
under the laws of South Carolina, U.S.A.
with its principal place of business
located at ▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇,
▇▇▇▇▇ ▇▇▇▇▇▇▇▇, U.S.A., of which Syntech
owns 100% of the capital stock.
D. Syntech owns, directly or indirectly, less
than a majority of the capital stock of the following
Affiliate companies:
- Raisio Chemicals Italia S.r.l., a
corporation organized under the laws of
Italy with its registered office in Torino,
▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇, capital Italian Lire
1,200,000,000, of which Syntech owns 49% of
the capital stock;
- Syntech (Far East) Company Limited, a
corporation organized under the laws of
Hong Kong with its registered office in
Hong Kong, Suite 9A, 9th Floor, Tung Hip
Commercial Building, 244-248 Des Voeux
Road, Central Hong Kong, of which Syntech
owns 50% of the capital stock; and
- Shunde Syntech Synthetic Resin Company
Limited, a corporation organized under the
laws of China with its registered office in
Bei Jiao Economic Industrial Zone, Bei Jiao
Town, Shunde City, Guangdong, China, of
which Syntech Far East Ltd. owns 100% of
the capital stock.
E. Syntech also owns 3.26% of the capital
stock of 3 R Associati S.p.A., a
corporation organized under the laws of
Italy with its registered office in Milan,
Italy, capital Italian Lire 19,378,000,000.
F. Syntech, its Subsidiaries listed in Recital
C and its Affiliates listed in Recital D are active in
the research, development, production, and marketing of
resins for the paint and industrial paper industries.
G. The Buyer is a specialty chemicals company
that develops, manufactures, and markets a wide range of
resin products and technologies for the coatings and
fiberglass industries.
H. This Agreement contemplates a transaction in
which the Buyer will purchase from the Sellers, and the
Sellers will sell to the Buyer, the shares representing
all of the capital of SRT in return for cash.
Now, therefore, in consideration of the premises
(which are an integral and essential part of this
Agreement together with the Exhibits hereto) and the
actual promises herein made, and in consideration of the
representations, warranties, and covenants herein
contained, the Parties agree as follows.
SECTION 1. DEFINITIONS.
"Adverse Consequences" means all damages,
penalties, fines, costs, amounts paid in settlement,
liabilities, obligations, Taxes, losses, expenses, and
fees, including court costs and attorneys' fees and
expenses, all of which have been actually suffered and
paid.
"Affiliate" means any corporation with respect to
which a specified Person does not own the majority of
the capital stock or does not have control thereof by
not having the power to vote or direct the voting of
sufficient securities to elect a majority of the
directors.
"Agreement" means this Agreement with its
Exhibits, as amended or supplemented from time to time.
"Amnesty" has the meaning set forth in Section 5(g) below.
"Basket" has the meaning set forth in Section 5(b)(z)(v) below.
"Buyer" means ▇▇▇▇▇▇▇▇▇ Technologies, Inc. as identified in the Preamble.
"Controlling Persons" has the meaning set forth in Section 2(e)(i) below.
"Disclosure Schedule" has the meaning set forth in Section 3 below and is
attached hereto as Exhibit A.
"Environmental, Health, and Safety Laws" means all applicable laws
(including rules, regulations, codes, plans, injunctions, judgments, orders,
decrees, rulings, and charges thereunder) of all relevant authorities
concerning pollution or protection of the environment, public health and
safety, or employee health and safety, including laws relating to emissions,
discharges, releases, or threatened releases of pollutants, contaminants, or
chemical, industrial, hazardous, or toxic materials (including petroleum
products and asbestos) or wastes into ambient air, surface water, ground
water, or lands or otherwise relating to the manufacture, processing,
distribution, use, treatment, storage, disposal, transport, or handling of
pollutants, contaminants, or chemical, industrial, hazardous, or toxic
materials or wastes ( Hazardous Substances ).
"Escrow" has the meaning set forth in Section 2(b) below.
"Escrow Agent" has the meaning set forth in Section 2(b) below.
"Escrow Agreement" has the meaning set forth in Section 2(b) below.
"Escrow Amount" has the meaning set forth in Section 2(b) and
Section 2(c) below.
"Financial Statements" has the meaning set forth in Section 3(g) below.
"GAAP" means the accounting principles prepared by the Consigli
Nazionali dei Dottori Commercialisti e dei Ragionieri of Italy and the
relevant provisions of Italian law and, with respect to SRT, Syntech France
s.a.r.l., and Syntech Inc., the accounting principles provided by the
applicable national laws or regulations.
"Gestin" means Gestin S.r.l. as identified in the Preamble.
"Hazardous Substances" has the meaning set forth in the definition of
Environmental, Health, and Safety Laws.
"Indemnified Party" has the meaning set forth in Section 5(e) below.
"Indemnifying Party" has the meaning set forth in Section 5(e) below.
"Intellectual Property" means (a) all trade
secrets and confidential business information, (b) all
trademarks, service marks, logos, trade names, and
corporate names, together with all translations,
adaptations, derivations, and combinations thereof and
including all goodwill associated therewith, and all
applications, registrations, and renewals in connection
therewith, (c) all inventions (whether patentable or
unpatentable and whether or not reduced to practice),
all improvements thereto, and all patents and patent
applications, (d) all copyrightable works, all
copyrights, and all applications, registrations in
connection therewith, (e) all computer software
(including data and related documentation) and (f) all
other proprietary rights.
"Material Adverse Change" means any circumstance
that materially impairs the business, financial
condition, operations or results of operations of SRT,
Syntech or its Subsidiaries, taken as a whole, or
reduces the consolidated net worth of SRT, Syntech and
its Subsidiaries by more than Italian Lire
4,000,000,000.
"Most Recent Financial Statements" has the meaning
set forth in Section 3(g) below.
"Most Recent Fiscal Year End" has the meaning set forth in
Section 3(g) below.
"Noncompetition Period" has the meaning set forth in Section 2(e) below.
"Party" and "Parties" each has the meaning set forth in the Preamble.
"Participate in" has the meaning set forth in Section 2(e) below.
"Participation" has the meaning set forth in Section 2(e) below.
"Permits" means all franchises, approvals,
permits, licenses, orders, registrations, certificates,
variances, exemptions, and similar rights obtained from
governments and governmental agencies.
"Person" means an individual, a partnership, a
corporation, an association, a joint stock company, a
limited liability company or partnership, a trust, a
joint venture, an unincorporated organization, or a
governmental entity (or any department, agency, or
political subdivision thereof).
"Purchase Price" has the meaning set forth in Section 2(b) below.
"Sapa" means ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ & C. S.a.p.a. as identified in the Preamble.
"Security Interest" means any lien, encumbrance, mortgage, pledge,
charge, or other security interest.
"Sellers" means Sapa and Gestin as identified in the Preamble.
"Shares" means the shares representing all of the capital stock of SRT
as defined in Section 2(a) below.
"SRT" means Synthetic Resin Technologies S.A. as identified in Recital
A above.
"Subsidiary" means any corporation with respect to
which a specified Person (or a Subsidiary thereof) owns
a majority of the common stock or has the power to vote
or direct the voting of sufficient securities to elect
a majority of the directors.
"Syntech" means Syntech S.p.A. as identified in
Recital B above.
"Tax" means any income, gross receipts, license,
payroll, employment, excise, severance, stamp,
occupation, premium, windfall profits, environmental,
customs duties, capital stock, quota, franchise,
profits, withholding, social security (or similar),
unemployment, disability, real property, personal
property, sales, use, transfer, registration, value
added, alternative or add on minimum, estimated, or
other tax and/or levy of any kind whatsoever, and any
interest, penalty, or addition thereto.
"Tax Return" means any return, declaration,
report, claim for refund, or information return or
statement relating to Taxes, including any schedule or
attachment thereto, and including any amendment thereof.
"Third Party Claim" has the meaning set forth in Section 5(e) below.
SECTION 2. BASIC TRANSACTION.
(a) Purchase and Sale of the Entire Share Capital of SRT and All the
Capital Stock of Syntech, Inc.
(i) On and subject to the terms and
conditions of this Agreement, the Buyer hereby
purchases from the Sellers, and the Sellers
hereby sell to the Buyer, the entire share
capital of SRT, represented by share certificates
no. 1 and 2 (the Shares ), free and clear of any
Security Interests, for the consideration and
according to the mechanics specified below in
this Section 2.
(ii) The Buyer and the Sellers acknowledge
that immediately prior to the execution of this
Agreement, Syntech sold to the Buyer all of the
capital stock of Syntech, Inc. for Italian Lire
200,000 in cash.
(b) Purchase Price and Consideration for Noncompete.
Contemporaneously with the execution of this Agreement, the
Buyer shall pay to the Sellers an aggregate amount (the Purchase
Price ) equal to Italian Lire 30,000,000,000, of which the Sellers
and the Buyer agree that the Buyer shall pay Italian Lire
20,000,000,000 directly to the Sellers in consideration of
the Sellers noncompetition obligations set forth in Section 2(e) below.
The Purchase Price shall be allocated between the Sellers as
follows: (a) Italian Lire 15,000,000,000 shall be payable to Sapa,
and (b) Italian Lire 15,000,000,000 shall be payable to Gestin.
The Purchase Price shall be paid as follows: (i) an amount equal
to Italian Lire 11,000,000,000 shall be paid to each of the
Sellers by delivery of cash payable by wire transfer or delivery
of other immediately available funds; and (ii) an amount equal to
Italian Lire 8,000,000,000 (the Escrow Amount ) shall be deposited
in an interest bearing escrow account (the Escrow) established
pursuant to the terms and conditions of the escrow agreement by
and among the Buyer, the Sellers and an escrow agent (the "Escrow Agent")
substantially in the form of Exhibit B attached hereto (the Escrow Agreement).
(c) The Escrow. The Parties agree that the
Escrow shall be utilized for the purposes of the
indemnification under Section 5 below and, subject to the terms
of the Escrow Agreement, shall remain in place
from the date hereof through December 31, 2000, it being
understood that the Escrow Amount (i) shall be of
Italian Lire 8,000,000,000 for the period from the date
hereof through the first anniversary date thereof, (ii)
shall be reduced to Italian Lire 6,000,000,000 on the
day following the first anniversary of the date thereof
and (iii) shall be further reduced to Italian Lire
4,000,000,000 on the day following the second
anniversary of the date thereof; provided in each case
no claims with respect to the Escrow are then pending
and as further provided in the Escrow Agreement. In
accordance with the provisions of the Escrow Agreement,
the outstanding Escrow Amount shall be returned by the
Escrow Agent to the Sellers, and equally apportioned
between Sapa and Gestin, on January 1, 2001, together
with the interest accrued thereon, provided no claims
with respect to the Escrow are then pending and as
further provided in the Escrow Agreement. Likewise, on
the respective days following the first and second
anniversary dates of the date hereof, the Escrow Agent
shall return to the Sellers the excess amounts of the
Escrow Amount, together with the interest accrued
thereon, so that the respective amounts under the Escrow
as of such dates shall be the amounts reduced pursuant
to items (ii) and (iii) of this Section 2(c), provided no
claims with respect to the Escrow are then pending and
as further provided in the Escrow Agreement.
(d) Transfer of Certificates Representing the
Shares. Contemporaneously with the execution of this
Agreement, the Sellers will duly endorse and deliver to
the Buyer share certificates no. 1 and 2 representing
the Shares in accordance with the provisions of
Luxembourg law.
(e) Sellers Noncompetition Obligations. In
consideration of the Italian Lire 20,000,000,000 payment
set forth in Section 2(b) above, the Sellers agree and covenant
with the Buyer as follows:
(i) During the period commencing with
the date of this Agreement and ending on the 15th
anniversary of the date hereof (the
"Noncompetition Period"), the Sellers will not
(and will cause ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇▇,
and ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ (the "Controlling Persons") to
not) Participate in any business that currently
competes with the business of the Buyer or
Syntech anywhere in Europe or North America. For
purposes of this Agreement, the terms "Partici-
▇▇▇▇ in" and "Participation" will include,
without limitation, having any direct or indirect
interest in any corporation, limited liability
company, partnership, joint venture or other
entity, whether as a sole proprietor, owner,
member, stockholder, partner, or joint venturer,
or rendering any direct or indirect service or
assistance to any individual, corporation,
limited liability company, partnership, joint
venture or other business entity (whether as a
director, officer, member, manager, supervisor,
employee, agent, consultant or otherwise);
provided the ownership of less than 5% of a
listed company itself shall not constitute
"Participation".
(ii) During the Noncompetition Period, the
Sellers shall not (and shall cause the
Controlling Persons to not) (i) induce or attempt
to induce any employee of the Buyer or its
Subsidiaries (including Syntech) to leave the
employ of the Buyer or its Subsidiaries
(including Syntech), or in any way interfere with
the relationship between the Buyer or its
Subsidiaries (including Syntech) and any employee
thereof, or (ii) hire at any time directly or
through another entity for two years from the
date hereof any person who was an employee of the
Buyer or its Subsidiaries (including Syntech) at
any time during or prior to the Noncompetition
Period; provided, however, the Sellers and the
Controlling Persons may hire directly or through
another entity any former employee of the Buyer
or its Subsidiaries (including Syntech) for
employment in any business which is not in
competition with the Buyer or its Subsidiaries
(including Syntech) (A) who was involuntarily
terminated by Syntech or (B) who was not an
employee of such entities at any time during the
12 months before being hired by the Sellers or
the Controlling Persons.
SECTION 3. REPRESENTATIONS AND WARRANTIES OF THE SELLERS.
The Sellers jointly and severally represent and
warrant to the Buyer the following as of the date of
this Agreement. To the extent that any of the
representations and warranties contained in this Section 3 are
made to the knowledge of Seller, such knowledge shall
mean the knowledge of each of ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇
▇▇▇▇▇▇▇, and ▇▇▇▇▇▇▇ ▇▇▇▇▇▇. All representations and
warranties made herein are subject to the specific
qualifications and exceptions set forth in the relevant
section of the disclosure schedule attached to this
Agreement as Exhibit A (the Disclosure Schedule ). The
Disclosure Schedule will be arranged in paragraphs
corresponding to the lettered and numbered paragraphs
contained in this Section 3.
(a) Organization; Capitalization. Each of the
Sellers, Syntech and SRT is a corporation duly
organized, validly existing, and in good standing under
the laws of its respective jurisdiction of
incorporation. Each of the Sellers, Syntech and SRT is
duly authorized to conduct business and is in good
standing under the laws of each jurisdiction where such
qualification is required. Each of Syntech, the
Sellers, and SRT has full corporate power and authority
and all licenses, permits, and authorizations necessary
to carry on the businesses in which it is engaged and to
own the properties owned by it. Section 3(a) of the Disclosure
Schedule lists the directors and officers of each of the
Sellers, Syntech and SRT. The Sellers have made
available to the Buyer correct and complete copies of
the charter and bylaws of each of Syntech and SRT (as
amended to date). The minute books required under
applicable law (containing the records of meetings of
the shareholders and the board of directors) of each of
Syntech and SRT are correct and complete. None of the
Sellers, Syntech or SRT is in default under or in
violation of any provision of its charter or bylaws.
The share capital of (i) SRT is Italian Lire
8,000,000,000 and (ii) Syntech is Italian Lire
5,220,000,000. The Sellers own all the share capital of
SRT. SRT owns all of the share capital of Syntech.
There are no outstanding or authorized options,
warrants, purchase rights, contracts or commitments that
require Syntech or SRT to issue, sell, or otherwise
cause to become outstanding any of its capital.
(b) Authorization of Transaction. Each of the
Sellers has full power and authority to execute and
deliver this Agreement and to perform and cause SRT to
perform its respective obligations hereunder. Each of
the Sellers has full power and authority to execute and
deliver this Agreement, and this Agreement constitutes
the valid and legally binding obligation of each of the
Sellers enforceable in accordance with its terms and
conditions.
(c) Noncontravention. Neither the execution and
the delivery of this Agreement, nor the consummation of
the transactions contemplated hereby will (i) violate
any constitution, statute, regulation, rule, injunction,
judgment, order, decree, ruling, charge, or other
restriction of any government, governmental agency or
court to which the Sellers, SRT, Syntech or any of its
Subsidiaries or Affiliates is subject or any provision
of the charter or bylaws of SRT or Syntech or any of its
Subsidiaries or Affiliates or (ii) conflict with, result
in a breach of, constitute a default under, result in
the acceleration of, create in any party the right to
accelerate, terminate, modify, or cancel, or require any
notice under any agreement, contract, lease, license,
instrument, or other arrangement to which any of the
Sellers, SRT, Syntech, or any of its Subsidiaries or
Affiliates is a party or by which it is bound or to
which any of its assets is subject (or result in the
imposition of any Security Interest upon any of its
assets). None of the Sellers, SRT, Syntech, or any of
its Subsidiaries or Affiliates needs to give any notice
to, make any filing with, or obtain any authorization,
consent, or approval of any government or governmental
agency in order for the Parties to consummate the
transactions contemplated by this Agreement. The
Sellers' noncompetition obligation specified in Section 2(e)
above does not and will not result in a breach of the
terms, conditions or provisions of any agreement, order
or decree to which any of the Sellers is subject.
(d) Brokers Fees. None of the Sellers, SRT,
Syntech or any of its Subsidiaries or Affiliates has any
liability or obligation to pay any fees or commissions
to any broker, finder, or agent with respect to the
transactions contemplated by this Agreement for which
the Buyer could become liable or obligated.
(e) Title to Assets. SRT, Syntech and its
Subsidiaries have good and marketable title to, or a
valid leasehold interest in, the properties and assets
used by them, located on their premises, or shown on the
Most Recent Financial Statements or acquired after the
date thereof, free and clear of all Security Interests,
except for properties and assets disposed (also by way
of security to third parties) of in the ordinary course
of business since the date of such Most Recent Financial
Statements.
(f) Subsidiaries and Affiliates. Section 3(f) of the
Disclosure Schedule sets forth for each Subsidiary and
Affiliate of Syntech, as applicable, (i) its name and
jurisdiction of incorporation, (ii) the number of shares
of authorized capital stock of each class of its capital
stock, (iii) the number of issued and outstanding shares
of each class of its capital stock, the names of the
holders thereof, and the number of shares held by each
such holder, (iv) the number of shares of its capital
stock held in treasury, and (v) its directors and
officers. Each Subsidiary and Affiliate of Syntech is
a corporation duly organized, validly existing, and in
good standing under the laws of the jurisdiction of its
incorporation. Each Subsidiary and Affiliate of Syntech
is duly authorized to conduct business and is in good
standing under the respective laws of each jurisdiction
where such qualification is required. Each Subsidiary
and Affiliate of Syntech has full corporate power and
authority and all licenses, permits, and authorizations
necessary to carry on the businesses in which it is
engaged and to own and use the properties owned and used
by it. The Sellers have made available to the Buyer
correct and complete copies of the charter and bylaws of
each of the Subsidiaries and Affiliates of Syntech (as
amended to date). All of the issued and outstanding
shares of capital stock of each Subsidiary of Syntech
have been duly authorized and are validly issued, fully
paid, and nonassessable. All of the outstanding shares
of each Subsidiary of Syntech are held of record and
owned beneficially by Syntech, free and clear of any
restrictions on transfer, Security Interests, options,
warrants, purchase rights, claims and demands. There are
no outstanding or authorized options, warrants, purchase
rights, subscription rights, conversion rights, exchange
rights, or other contracts or commitments that could
require any of SRT, Syntech and its Subsidiaries to
sell, transfer, or otherwise dispose of any capital
stock of any of their Subsidiaries or that could require
any Subsidiary of Syntech to issue, sell, or otherwise
cause to become outstanding any of its own capital stock
(other than this Agreement). There are no outstanding
capital stock appreciation, phantom stock, profit
participation, or similar rights with respect to any
Subsidiary of Syntech. Except as set forth on Section 3(f) to
the Disclosure Schedule, there are no voting trusts,
proxies, or other agreements or understandings with
respect to the voting of any capital stock or quota of
any Subsidiary of Syntech. Section 3(f) to the Disclosure
Schedule sets forth the names and details of the
majority shareholders of Syntech s Affiliates, with
relevant information regarding the applicable
shareholders agreements. The minute books required by
applicable law (containing the records of meetings of
the holders of capital, the board of directors, and any
committees of the board of directors), the shareholders
books, the stock certificate books, and the stock record
books of each Subsidiary of Syntech are correct and
complete as provided by applicable law. None of the
Subsidiaries of Syntech is in default under or in
violation of any provision of its charter or bylaws.
None of Syntech and its Subsidiaries controls directly
or indirectly or has any direct or indirect equity
participation in any corporation, partnership, trust or
other business association which is not a Subsidiary or
Affiliate of Syntech.
(g) Financial Statements. Attached hereto as
Exhibit C are the following financial statements
(collectively, the Financial Statements ): (i)
financial statements required by applicable law as of
and for the fiscal years ended December 31, 1989,
December 31, 1990, December 31, 1991, December 31, 1992,
December 31, 1993, December 31, 1994, December 31, 1995
and December 31, 1996 (the Most
Recent Fiscal Year End ) for each of Syntech and its Subsidiaries;
(ii) unaudited unconsolidated management accounts of Syntech
and its Subsidiaries as of May 31, 1997 (the Most
Recent Financial Statements ); and (iii) the unaudited
financial statements of SRT as of July 31, 1997. The
Financial Statements (including the notes thereto) have
been prepared in accordance with GAAP applied on a
consistent basis throughout the periods covered thereby,
present fairly the financial condition of SRT, Syntech
and its Subsidiaries as of such dates, and the results
of operations of SRT, Syntech and its Subsidiaries for
such periods, are in accordance with applicable law, and
are consistent with the books and records of SRT,
Syntech and its Subsidiaries (which books and records
are in accordance with applicable law); provided,
however, the Most Recent Financial Statements exclude
ordinary year-end adjustments, are subject to reasonable
management estimates with respect to depreciation
amounts, and reserves for bad debt, foreign currency and
inventory obsolescence, and are presented in a format
which may depart from GAAP. The Parties acknowledge
that no physical inventory was taken with respect to the
Most Recent Financial Statements.
(h) Events Subsequent to Most Recent Fiscal Year
End. Since the Most Recent Fiscal Year End, there has
not been any Material Adverse Change and SRT, Syntech,
and its Subsidiaries have conducted their respective
businesses only in the ordinary and usual course.
Without limiting the generality of the foregoing, since
the Most Recent Fiscal Year End, the Sellers have not
caused or permitted any of SRT, Syntech and its
Subsidiaries to (other than pursuant to binding
commitments prior to the date of this Agreement
disclosed by the Sellers to the Buyer in Section 3(h) of the
Disclosure Schedule and other than as consented to in
writing by the Buyer):
(i) declare, set aside, or pay any
dividend or make any distribution with respect to
its share of capital (whether in cash or in kind)
or redeem, purchase, or otherwise acquire any of
its quota;
(ii) sell, lease, transfer, or assign any
of its assets, tangible or intangible, to any
third party other than for a market-price
consideration in the ordinary course of business;
(iii) enter into any agreement, contract,
lease, or license (or series of related
agreements, contracts, leases, and licenses)
either involving more than Italian Lire
400,000,000 or outside the ordinary course of
business;
(iv) accelerate, terminate, modify, or
cancel any agreement, contract, lease, or license
(or series of related agreements, contracts,
leases, and licenses) involving more than Italian
Lire 400,000,000 to which any of SRT, Syntech and
its Subsidiaries is a party or by which any of
them is bound;
(v) impose any Security Interest upon any
of its assets, tangible or intangible;
(vi) make any capital expenditure (or
series of related capital expenditures) either
involving more than Italian Lire 400,000,000 or
outside the ordinary course of business;
(vii) make any capital investment in, any
loan to, or any acquisition of the securities or
assets of, any other Person (or series of related
capital investments, loans, and acquisitions);
(viii) delay or postpone the payment
of accounts payable and other liabilities outside
the ordinary course of business;
(ix) fail to maintain the level or quality
of its inventory consistent with past conduct and
practice;
(x) accelerate the collection of
accounts, notes, or other receivables;
(xi) cancel, compromise, waive, or release
any right or claim (or series of related rights
and claims) either involving more than Italian
Lire 400,000,000 or outside the ordinary course
of business;
(xii) grant any license or sublicense of
any rights under or with respect to any
Intellectual Property;
(xiii) change or authorize a change in
the charter or bylaws of any of SRT, Syntech and
its Subsidiaries;
(xiv) issue, sell or otherwise dispose of
any of its share capital, or grant any options,
warrants, or other rights to purchase or obtain
(including upon conversion, exchange, or
exercise) any of its share capital;
(xv) make any loan to, or enter into any
other transaction with, any of its directors,
officers, and employees (other than pursuant to
the provision on the advance of the severance
indemnity or required to be made by statutory
law);
(xvi) enter into any employment contract
written or oral, or modify the term of any
existing such contract (other than pursuant to
existing commitments or the law);
(xvii) grant any increase in the
compensation (including base salary and bonus) of
any of its directors, officers, and employees
(other than pursuant to existing commitments
described on Section 3(h) to the Disclosure Schedule or
the law);
(xviii) make any other change in
service or employment terms for any of its
directors, officers, and employees (other than
pursuant to existing commitments described on
Section 3(h) to the Disclosure Schedule or the law); or
(xix) make or pledge to make any charitable
or other capital contribution outside the
ordinary course of business.
(i) Undisclosed Liabilities. None of SRT,
Syntech or its Subsidiaries has any liability (and to
the best knowledge of the Sellers, there is no basis for
any present or future action, suit, proceeding, hearing,
investigation, charge, complaint, claim, or demand
against any of them giving rise to any liability),
except for (i) liabilities set forth on the Most Recent
Financial Statements and (ii) liabilities which have
arisen after the Most Recent Fiscal Year End to the date
hereof in the ordinary course of business (none of which
results from, arises out of, or was caused by any breach
of contract, breach of warranty, tort, infringement, or
violation of law by SRT, Syntech or its Subsidiaries).
(j) Legal Compliance. Each of SRT, Syntech and
its Subsidiaries, has complied with all applicable laws
(including rules, regulations, codes, plans,
injunctions, judgments, orders, decrees, rulings, and
charges thereunder), except where such non-compliance
could not result in a Material Adverse
Change, and no action, suit, proceeding, hearing, investigation,
charge, complaint, claim, demand, or notice has been
filed or commenced against any of them alleging any
failure so to comply.
(k) Tax Matters. Except as and to the extent
adequately reserved for in the Financial Statements:
(i) Each of SRT, Syntech and its
Subsidiaries has filed all Tax Returns that it
was required to file. All such Tax Returns were
correct and complete in all material respects at
the time of filing. All Taxes owed by any of
SRT, Syntech and its Subsidiaries (whether or not
shown on any Tax Return) have been paid or
properly accrued on the Financial Statements. No
claim has ever been made by an authority in a
jurisdiction where any of SRT, Syntech and its
Subsidiaries does not file Tax Returns that it is
or may be subject to taxation by that
jurisdiction. There are no Security Interests on
any of the assets of any of SRT, Syntech and its
Subsidiaries that arose in connection with any
failure (or alleged failure) to pay any tax.
(ii) Each of SRT, Syntech and its
Subsidiaries has withheld and paid all Taxes
required to have been withheld and paid in
connection with amounts paid or owing to any
employee, independent contractor, creditor,
stockholder, quotaholder, or other third party.
(iii) There is no pending assessment
relating to Tax or any dispute or claim
concerning any Tax liability of any of SRT,
Syntech and its Subsidiaries claimed or raised by
any authority in writing. The Sellers have made
available to the Buyer all income Tax Returns
filed with respect to any of SRT, Syntech and its
Subsidiaries for taxable periods ended on or
after December 31, 1989 and have indicated those
Tax Returns that can be audited and all tax
amnesties ("condoni") filed by Syntech, including
relating to formal irregularities. The Sellers
have made available to the Buyer correct and
complete copies of all income Tax Returns,
examination reports, and statements of
deficiencies assessed against or agreed to by any
of SRT, Syntech and its Subsidiaries since
December 31, 1989.
(l) Real Property.
(i) Section 3(l)(i) of the Disclosure Schedule
lists all real property that any of SRT, Syntech
and its Subsidiaries owns. With respect to each
such parcel of owned real property, and except as
set forth on Section 3(l)(i) of the Disclosure Schedule:
(A) the identified owner has good
and marketable title to the parcel of real
property, free and clear of any Security
Interest, easement, covenant, or other
restriction, except for recorded easements,
covenants and other restrictions which do
not impair the current use, occupancy, or
value, or the marketability of title, of
the property subject thereto;
(B) there are no pending or, to the
best knowledge of the Sellers, threatened
condemnation proceedings, lawsuits, or
administrative actions relating to the
property or other matters affecting
adversely the current use, occupancy, or
value thereof;
(C) the legal description for the
parcel contained in the deed thereof
describes such parcel pursuant to the
provisions of applicable law, the buildings
and improvements are located within the
boundary lines of the described parcels of
land, are in substantial compliance with
applicable setback requirements, zoning
laws, and ordinances and do not
encroach on any easement which may burden the land,
the land does not serve any adjoining property
for any purpose inconsistent with the use
of the land;
(D) all facilities have received
all approvals of governmental authorities
(including licenses and permits) required
in connection with the ownership or
operation thereof, except where the failure
to obtain any such approval would not cause
a Material Adverse Change, and have been
operated and maintained in accordance with
applicable laws, rules, and regulations;
(E) there are no leases, subleases,
licenses, concessions, or other agreements,
written or oral, granting to any party or
parties the right of use or occupancy of
any portion of the parcels of real
property;
(F) there are no outstanding
options or rights of first refusal to
purchase the parcel of real property, or
any portion thereof or interest therein;
(G) there are no parties (other
than SRT, Syntech or its Subsidiaries) in
possession of the parcel of real property,
other than tenants under any leases
disclosed in Section 3(e)(i) of the Disclosure
Schedule who are in possession of space to
which they are entitled;
(H) all facilities located on the
parcel of real property are supplied with
utilities and other services necessary for
the operation of such facilities, including
gas, electricity, water, telephone, sewer
all of which services are adequate in
accordance with all applicable laws,
ordinances, rules, and regulations and are
provided via public roads or via permanent,
irrevocable, appurtenant easements
benefiting the parcel of real property; and
(I) each parcel of real property
abuts on and has direct vehicular access to
a public road, or has access to a public
road via a permanent, irrevocable,
appurtenant easement benefiting the parcel
of real property, and access to the
property is provided by paved public right-
of-way with adequate curb cuts available.
(ii) Section 3(l)(ii) of the Disclosure Schedule
lists and describes briefly all real property
leased or subleased to any of SRT, Syntech and
its Subsidiaries. The Sellers have made available
to the Buyer correct and complete copies of the
leases and subleases listed in Section 3(l)(ii) of the
Disclosure Schedule (as amended to date). With
respect to each lease and sublease listed in
Section 3(l)(ii) of the Disclosure Schedule:
(A) the lease or sublease is legal,
valid, binding, enforceable, and in full
force and effect;
(B) the lease or sublease will
continue to be legal, valid, binding,
enforceable, and in full force and effect
on identical terms following the
consummation of the transactions
contemplated hereby;
(C) no party to the lease or
sublease is in breach or default, and no
event has occurred which, with notice or
lapse of time, would constitute a breach or
default or permit termination,
modification, or acceleration thereunder;
(D) no party to the lease or
sublease has repudiated any provision
thereof;
(E) there are no disputes in
connection with the lease or sublease;
(F) with respect to each sublease,
the representations and warranties set
forth in subsections (A) through (E) above
are true and correct with respect to the
underlying lease;
(G) none of Syntech and its
Subsidiaries has assigned, transferred,
conveyed, mortgaged, deeded in trust, or
encumbered any interest in the leasehold or
subleasehold;
(H) all facilities leased or
subleased thereunder have received all
approvals of governmental authorities
(including licenses and permits) required
in connection with the operation thereof
and have been operated and maintained in
accordance with applicable laws, rules, and
regulations, except where any noncompliance
could not result in a Material Adverse
Change; and
(I) all facilities leased or
subleased thereunder are supplied with
utilities and other services necessary for
the operation of said facilities.
(m) Intellectual Property.
(i) SRT, Syntech and its Subsidiaries own
or have the right to use pursuant to license,
sublicense, agreement, or permission all
Intellectual Property necessary for the operation
of their respective businesses as presently
conducted, free and clear of any restrictions.
Each item of Intellectual Property owned or used
by any of SRT, Syntech and its Subsidiaries
immediately prior to the execution of this
Agreement will be owned or available for use by
SRT, Syntech or the Subsidiary on identical terms
and conditions immediately subsequent to the
execution of this Agreement. Each of SRT,
Syntech and its Subsidiaries has taken all action
deemed reasonably necessary to maintain and
protect each item of Intellectual Property that
it owns or uses.
(ii) To the best knowledge of the Sellers,
none of SRT, Syntech or its Subsidiaries has ever
received any charge, complaint, claim, demand, or
notice alleging any interference, infringement,
misappropriation, or violation of applicable laws
or Intellectual Property rights of third parties
(including any claim that any of SRT, Syntech and
its Subsidiaries must license or refrain from
using any Intellectual Property rights of any
third party). To the best knowledge of the
Sellers, no third party has interfered with,
infringed upon, misappropriated, or otherwise
come into conflict with any Intellectual Property
rights of any of SRT, Syntech and its
Subsidiaries.
(iii) Section 3(m) of the Disclosure Schedule
identifies each patent or registration which has
been issued to any of SRT, Syntech and its
Subsidiaries with respect to any of its
Intellectual Property, identifies each pending
patent application or application for
registration which any of SRT, Syntech and its
Subsidiaries has made with respect to any of its
Intellectual Property, and identifies each
license, agreement, or other permission which any
of SRT, Syntech and its Subsidiaries has granted
any third party with respect to any of its
Intellectual Property (together with any
exceptions). The Sellers have made available to
the Buyer correct and complete copies of all such
patents, registrations, applications, licenses,
agreements, permissions (as amended to date) and
all other documentation evidencing ownership and
prosecution (if applicable) of each such item.
Section 3(m) of the Disclosure Schedule also identifies
each trade name or unregistered
trademark used by any of Syntech and its Subsidiaries
in connection with any of its businesses. With respect
to each item of Intellectual Property required to be
identified in Section 3(m) of the Disclosure Schedule:
(A) the item is not subject to any
outstanding injunction, judgment, order,
decree, ruling, or charge;
(B) no action, suit, proceeding,
hearing, investigation, charge, complaint,
claim, or demand is pending or threatened
which challenges the legality, validity,
enforceability, use, or ownership of the
item; and
(C) none of SRT, Syntech and its
Subsidiaries has ever agreed to indemnify
any Person for or against any interference,
infringement, misappropriation, or other
conflict with respect to the item.
(iv) Section 3(m) of the Disclosure Schedule
identifies each item of Intellectual Property
that any third party owns and that any of SRT,
Syntech and its Subsidiaries uses pursuant to
license, sublicense, agreement, or permission.
The Sellers have made available to the Buyer
correct and complete copies of all such licenses,
sublicenses, agreements, and permissions (as
amended to date). With respect to each such item
of used Intellectual Property required to be
identified in Section 3(m) of the Disclosure Schedule:
(A) the license, sublicense,
agreement, or permission will continue to
be binding and enforceable against SRT,
Syntech, or such Subsidiary, as applicable,
and to the best knowledge of the Sellers,
against the other party to such license,
sublicense, agreement, or permission, and
in full force and effect on identical terms
following the consummation of the
transactions contemplated hereby;
(B) neither SRT, Syntech nor its
Subsidiaries is in breach of the license,
sublicense, agreement, or permission and,
to the best knowledge of the Sellers, no
other party is in breach or default, and,
to the best knowledge of the Sellers, no
event has occurred which with notice or
lapse of time would constitute a breach or
default or permit termination,
modification, or acceleration thereunder;
(C) no party to the license,
sublicense, agreement, or permission has
repudiated any provision thereof;
(D) with respect to each sublicense
in which SRT, Syntech, or such Subsidiary,
as applicable, is the sublicensor, the
representations and warranties set forth in
subsections (A) through (C) above are true
and correct with respect to the underlying
license;
(E) to the best knowledge of the
Sellers, the underlying item of
Intellectual Property is not subject to any
outstanding injunction, judgment, order,
decree, ruling, or charge;
(F) to the best knowledge of the
Sellers, no action, suit, proceeding,
hearing, investigation, charge, complaint,
claim, or demand is pending or threatened
which challenges the legality, validity, or
enforceability of the underlying item of
Intellectual Property; and
(G) none of SRT, Syntech and its
Subsidiaries has granted any sublicense or
similar right with respect to the license,
sublicense, agreement, or permission.
(v) To the best knowledge of the Sellers,
none of SRT, Syntech and its Subsidiaries will
interfere with, infringe upon, misappropriate, or
otherwise come into conflict with, any
Intellectual Property rights of third parties as
a result of the continued operation of its
businesses as presently conducted and as
presently proposed to be conducted.
(n) Tangible Assets. SRT, Syntech and its
Subsidiaries own or lease all buildings, machinery,
equipment, and other tangible assets necessary for the
conduct of their businesses as presently conducted.
Each such tangible asset is substantially free from
structural defects, has been maintained in accordance
with normal industry practice, is in good operating
condition and repair (subject to normal wear and tear),
and is suitable for the purposes for which it presently
is used.
(o) Inventory. The inventory of SRT, Syntech
and its Subsidiaries consists of raw materials,
supplies, packaging goods, finished products, equipment,
machinery, and goods in process, all of which is
merchantable and fit for the purpose for which it was
procured or manufactured and is adequate for the
operation of SRT's, Syntech s or its Subsidiary's
respective businesses, and none of which is slow-moving,
off-specification, or scrap. For purposes of the
preceding sentence, (x) "slow moving" shall mean, with
respect to any inventory, at least six months old; (y)
"off-specification" shall mean, with respect to finished
products, containing physical properties inconsistent
with the physical properties agreed to by the seller and
the buyer of such finished products; and (z) "scrap"
shall mean, with respect to any inventory, unable to be
sold in accordance with industry standard and practice.
The parties will take a physical inventory as of the
date hereof within one month after the date hereof,
which inventory will specify slow moving, off-
specification, and scrap inventory. The Parties agree
that the Sellers shall indemnify the Buyer for any
breach of the representations contained in this Section 3(o) at
the end of the 13th month after the date hereof;
provided that the amount of any indemnification due from
Sellers to the Buyer as a result of such breach shall be
reduced by the salvage value of any slow-moving, off-
specification, or scrap inventory sold after the date
hereof and before the end of the 13th month after the
date hereof.
(p) Contracts. Section 3(p) of the Disclosure Schedule
lists the following contracts and other agreements to
which any of SRT, Syntech and its Subsidiaries is a
party:
(i) any agreement (or group of related
agreements) for the lease of personal property to
or from any Person providing for lease payments
in excess of Italian Lire 75,000,000 per annum;
(ii) any agreement (or group of related
agreements) for the purchase or sale of raw
materials, commodities, supplies, products, or
other personal property, or for the furnishing or
receipt of services, the performance of which
will extend over a period of more than one year,
that would result in a material loss to any of
SRT, Syntech and its Subsidiaries if terminated,
or that involves consideration in excess of
Italian Lire 75,000,000;
(iii) any agreement concerning a
partnership, joint venture or consortium;
(iv) any agreement (or group of related
agreements) under which it has created, incurred,
assumed, or guaranteed any indebtedness for
borrowed money, or any capitalized lease
obligation, in excess of Italian Lire 75,000,000
or under which it has imposed a Security Interest
on any of its assets, tangible or intangible;
(v) any agreement concerning
confidentiality or noncompetition;
(vi) any profit sharing, stock or quota
option, stock or quota purchase, stock or quota
appreciation, deferred compensation, severance,
or other plan or arrangement for the benefit of
its current or former directors, officers, and
employees;
(vii) any collective bargaining agreement
at the company level ("contratti integrativi
aziendali");
(viii) any agreement for the
employment of any individual on a full-time,
part-time, consulting, or other basis providing
annual compensation in excess of Italian Lire
75,000,000;
(ix) any agreement under which it has
advanced or loaned any amount to any of its
directors, officers, or employees;
(x) any agreement under which the
consequences of a default or termination could
result in a Material Adverse Change; or
(xi) any other agreement (or group of
related agreements) the performance of which
involves consideration in excess of Italian Lire
75,000,000.
The Sellers have made available to the Buyer a correct
and complete copy of each written agreement listed in
Section 3(p) of the Disclosure Schedule (as amended to date)
and a written summary setting forth the terms and
conditions of each oral agreement referred to in Section 3(p)
of the Disclosure Schedule. With respect to each such
agreement: (A) the agreement is legal, valid, binding,
enforceable, and in full force and effect; (B) the
agreement will continue to be legal, valid, binding,
enforceable, and in full force and effect on identical
terms following the consummation of the transactions
contemplated hereby; and (C) no party is in breach or
default, and no event has occurred which with notice or
lapse of time would constitute a breach or default, or
permit termination, modification, or acceleration, under
the agreement.
(q) Notes and Accounts Receivable. All notes
and accounts receivable of SRT, Syntech and its
Subsidiaries are reflected properly on their books and
records, are valid receivables, and are current and
collectible in accordance with their terms at their
recorded amounts.
(r) Powers of Attorney. Except as set forth in
Section 3(r) of the Disclosure Schedule, there are no
outstanding powers of attorney executed on behalf of any
of SRT, Syntech and its Subsidiaries.
(s) Insurance. Section 3(s) of the Disclosure Schedule
sets forth a list of each insurance policy to which any
of SRT, Syntech and its Subsidiaries is a party, a named
insured, or otherwise the beneficiary of coverage. With
respect to each such insurance policy: (A) the policy is
legal, valid, binding, enforceable, and in full force
and effect; (B) the policy will continue to be legal,
valid, binding, enforceable, and in full force and
effect on identical terms following the consummation of
the transactions contemplated hereby; and (C) none of
SRT, Syntech and its Subsidiaries nor any other party to
the policy is in breach or default (including with
respect to the payment of premiums or the giving of
notices), and no event has occurred which, with notice
or the lapse of time, would constitute such a breach or
default, or permit termination, modification, or
acceleration, under the policy. Each of Syntech and its Subsidiaries
has been covered during the past five years
by insurance in scope and amount customary and
reasonable for the businesses in which it has engaged
during the aforementioned period.
(t) Litigation. Section 3(t) of the Disclosure
Schedule sets forth each instance in which any of SRT,
Syntech and its Subsidiaries (i) is subject to any
outstanding injunction, judgment, order, decree, ruling,
or charge or (ii) is a party or is, to the best
knowledge of the Sellers, threatened to be made a party
to any action, suit, proceeding, hearing, or
investigation of, in, or before any court or quasi-
judicial or administrative agency of any jurisdiction or
before any arbitrator. None of the actions, suits,
proceedings, hearings, and investigations set forth in
Section 3(t) of the Disclosure Schedule could result in a
Material Adverse Change or could result in a judgment or
settlement in excess of Italian Lira 40,000,000.
(u) Product Warranty. Each product
manufactured, sold, leased, or delivered by any of SRT,
Syntech and its Subsidiaries has been in substantial
conformity with all applicable contractual commitments
and all warranties, and none of SRT, Syntech and its
Subsidiaries has any liability (and, to the best
knowledge of the Sellers, there is no basis for any
present or future action, suit, proceeding, hearing,
investigation, charge, complaint, claim, or demand
against any of them giving rise to any liability) for
replacement or repair thereof or other damages in
connection therewith, subject to the reserve for product
warranty claims set forth on the Most Recent Financial
Statements. No product manufactured, sold, or delivered
by any of SRT, Syntech and its Subsidiaries is subject
to any guaranty, warranty, or other indemnity beyond the
applicable standard terms and conditions of sale.
(v) Product Liability. None of SRT, Syntech and
its Subsidiaries has any liability (and to the best
knowledge of the Sellers, there is no basis for any
present or future action, suit, proceeding, hearing,
investigation, charge, complaint, claim, or demand
against any of them giving rise to any liability)
arising out of any injury to individuals or property as
a result of the ownership, possession, or use of any
product manufactured, sold, or delivered by any of SRT,
Syntech and its Subsidiaries, which liability could
result in a Material Adverse Change.
(w) Employees.
(i) To the best knowledge of the Sellers,
no executive, key employee, or group of employees
has any plans to terminate employment with any of
SRT, Syntech and its Subsidiaries.
(ii) (A) There is no labor strike,
dispute, slowdown, work stoppage, or lockout, or
other labor controversy in effect against or
otherwise affecting or involving the business of
any of SRT, Syntech or its Subsidiaries nor has
any such labor controversy occurred within the
past three years; (B) there is no grievance which
might have result in a Material Adverse Change
and no arbitration proceeding is pending and no
claim therefor has been asserted nor has any such
action occurred within the past three years; (C)
there is no unfair labor practice charge or
complaint pending relating to the business of any
of SRT, Syntech or its Subsidiaries; (D) payment
in full to all of the employees of any of SRT,
Syntech and its Subsidiaries of all wages,
salaries, commissions, bonuses, benefits, and
other compensation due to such employees or
otherwise arising under any policy, practice,
agreement, plan, program, statute, or other law
has been made (with the exception of wages,
salaries and other compensation accrued but not
payable on the date hereof); and (E) no facility
of any of SRT, Syntech and its Subsidiaries has
been closed, there have not been any
implementations of any early retirement within
the past three years with respect to any of SRT,
Syntech and its Subsidiaries, nor, other than as
contemplated herein, are there any plans or
announcements of any such action or program for
the future.
(x) Employee Benefits. The employees of SRT,
Syntech and its Subsidiaries have not been granted
benefits which are not in line with normal industry
practice and the law. A list of such benefits are set
forth on Section 3(x) of the Disclosure Schedule.
(y) Guaranties. None of SRT, Syntech and its
Subsidiaries is a guarantor or otherwise is liable for
any liability or obligation (including indebtedness) of
any other Person.
(z) Environmental, Health, and Safety. Except
as set forth in Section 3(z) of the Disclosure Schedule:
(i) Each of SRT, Syntech and its
Subsidiaries has complied with all Environmental,
Health, and Safety Laws, and no action, suit,
proceeding, hearing, investigation, charge,
complaint, claim, demand, or notice has been
filed or commenced against any of them alleging
any failure so to comply. Section 3(z)(i) of the
Disclosure Schedule accurately sets forth a list
of all the Permits used in the business of SRT,
Syntech and its Subsidiaries and all
environmental audits or assessments or
occupational health studies undertaken by or on
behalf of SRT, Syntech and its Subsidiaries or
governmental agencies with respect to matters
relating to the Environmental, Health, and Safety
Laws. SRT, Syntech and its Subsidiaries have
substantially complied with all other
limitations, restrictions, conditions, standards,
prohibitions, requirements, obligations,
schedules, and timetables which are contained in
all Environmental, Health, and Safety Laws.
(ii) None of SRT, Syntech and its
Subsidiaries has any liability (and none of SRT,
Syntech and its Subsidiaries has handled or
disposed of any substance, arranged for the
disposal of any substance, exposed any employee
or other individual to any substance or
condition, or owned or operated any property or
facility in any manner that could form the basis
for any present or future action based on current
law, suit, proceeding, hearing, investigation,
charge, complaint, claim, or demand against any
of SRT, Syntech and its Subsidiaries giving rise
to any liability) for any reasonably foreseeable
damage to any site, location, or body of water
(surface or subsurface) or any reasonably
foreseeable illness of or personal injury to any
employee or other individual.
(iii) Section 3(z)(iii) of the Disclosure Schedule
sets forth a list of all Hazardous Substances
used by SRT, Syntech, and its Subsidiaries in the
manufacture of its products or used in its
laboratories.
(iv) Section 3(z)(iv) of the Disclosure Schedule
sets forth a list of all underground storage
tanks present on any of the properties used by
SRT, Syntech or its Subsidiaries, and sets forth
whether such tanks were previously abandoned or
removed.
(aa) Certain Business Relationships. None of the
Sellers and their directors, officers, and shareholders
has been involved in any business arrangement or
relationship with any of SRT, Syntech and its
Subsidiaries, and none of the Sellers and their
directors, officers, and shareholders owns any asset,
tangible or intangible, which is used in the business of
any of SRT, Syntech and its Subsidiaries.
(ab) Customers. Section 3(ab) of the Disclosure Schedule
sets forth (i) the names of the largest customers of
Syntech, in terms of sales, and (ii) the sales by
Syntech to each such customer. Syntech has not received
any notice and the Sellers have no knowledge that any
such customer intends to terminate or materially reduce
its business with Syntech and no such customer has
terminated or materially reduced its business with
Syntech in the last 12 months.
(ac) Disclosure. The representations and
warranties contained in this Section 3 are true and correct and
do not contain any untrue statement of a material fact
or omit to state any material fact necessary in order to
make the statements and information contained in this Section 3
not misleading.
SECTION 4. REPRESENTATIONS AND WARRANTIES OF THE BUYER.
The Buyer represents and warrants to the Sellers
the following as of the date of this Agreement.
(a) Organization of the Buyer. The Buyer is a
corporation duly organized, validly existing, and in
good standing under the laws of the jurisdiction of its
incorporation.
(b) Authorization of Transaction. The Buyer has
full power and authority (including full corporate power
and authority) to execute and deliver this Agreement to
perform its obligations hereunder. This Agreement
constitutes the valid and legally binding obligation of
the Buyer, enforceable in accordance with its terms and
conditions.
(c) Noncontravention. Neither the execution and
the delivery of this Agreement, nor the consummation of
the transactions contemplated hereby, will (i) violate
any constitution, statute, regulation, rule, injunction,
judgment, order, decree, ruling, charge, or other
restriction of any government, governmental agency, or
court to which the Buyer is subject or any provision of
its charter or bylaws or (ii) conflict with, result in
a breach of constitute a default under, result in the
acceleration of, create in any party the right to
accelerate, terminate, modify, or cancel, or require any
notice under any agreement, contract, lease, license,
instrument, or other arrangement to which the Buyer is
a party or by which it is bound or to which any of its
assets is subject. Except for Italian antitrust
matters, the Buyer does not need to give any notice to,
make any filing with, or obtain any authorization,
consent, or approval of any government or governmental
agency in order for the Parties to consummate the
transactions contemplated by this Agreement.
(d) Brokers Fee. Except for fees payable by
the Buyer to Bankers Trust International Plc, the Buyer
has no liability or obligation to pay any fees or
commissions to any broker, finder, or agent with respect
to the transactions contemplated by this Agreement for
which the Sellers could become liable or obligated. The
Buyer will keep the Sellers fully indemnified with
respect to amounts payable to Bankers Trust
International Plc and any other claim by any broker,
finder or agent of the Buyer in connection with the
transactions provided by this Agreement.
SECTION 5. SURVIVAL AND INDEMNIFICATION.
(a) Survival of Representations and Warranties.
All of the representations and warranties contained in
Sections 3 and 4 of this Agreement have been relied upon and
shall survive the execution of this Agreement, provided
that all such representations and warranties shall be
fully effective and enforceable only for a period from
the date hereof through and until December 31, 2000
(other than the representations and warranties contained
in Section 3(k) relating to Tax matters and Section 3(w)(ii)(D)
relating to employees salaries and wages which shall be
fully effective and enforceable from the date hereof
through and until their respective statute of limitation
periods expire) and shall thereafter be of no further
force or effect, except as to claims for indemnification
timely made pursuant to this Section 5 which shall survive
until resolved or judicially determined.
(b) Indemnification Provisions for the Benefit
of the Buyer. In the event of a misrepresentation or
breach of any of the Sellers representations,
warranties, and covenants contained in Section 3 of this
Agreement, and, provided the Buyer makes a written claim
for indemnification against the Sellers pursuant to
Section 5(c) below within the survival period set forth in
Section 5(a) above, then the Sellers agree to indemnify the
Buyer within the limits set forth in Section 5(h) below from
and against:
(x) any Adverse Consequences the Buyer has
suffered through the date of the claim for
indemnification (including any Adverse
Consequences the Buyer may have suffered after
the end of any applicable survival period
provided the claim has been made before the end
of such survival period) resulting from, arising
out of, or caused by the misrepresentation or
breach,
(y) any liability of whatever nature of
SRT, Syntech, and the Subsidiaries not reflected
in the Most Recent Financial Statements and any
liability deriving from acts, transactions or
omissions brought about by SRT, Syntech, and the
Subsidiaries between the date of the Most Recent
Financial Statements and the date hereof other
than in the ordinary course of business in such
period, and
(z) any lack ("insussistenza") or
insufficiency ("minusvalenza") of the assets with
reference to the Most Recent Financial
Statements, to the extent that:
(i) any such Adverse Consequences,
liability, lack, or insufficiency has not
been disclosed by the Sellers in this
Agreement (including the Disclosure
Schedule); or
(ii) any such Adverse Consequences,
liability, lack, or insufficiency cannot be
covered by any related provision or reserve
in the Most Recent Financial Statements or
is not offset by any related extraordinary
gain ( sopravvenienza attiva ) of SRT,
Syntech and the Subsidiaries with respect
to the Most Recent Financial Statements,
including any related amount actually
received by the Buyer, SRT, Syntech or the
Subsidiaries as indemnification payment
from third parties or pursuant to
applicable insurance policies;
(iii) with respect to Adverse
Consequences originating from Third Party
Claims, the Sellers shall not be obliged to
make any payment to the Buyer before SRT,
Syntech, or any Subsidiary (or the Buyer on
behalf of any of them) has made an actual
payment to third parties originated by such
Third Party Claim;
(iv) the Sellers shall not be
obliged to refund the Buyer any amounts
related to a breach of the representation
and warranty contained in Section 3(q) above or a
lack ( insussistenza ) or insufficiency
( minusvalenza ) of assets related to
accounts receivable, except as follows:
(i) it is finally established that the
receivable will not be collected because of
the debtor's insolvency (recognized by a
Court), or (ii) the Sellers shall pay to
the Buyer the amount by which the accounts
receivable of SRT, Syntech and its
Subsidiaries that are outstanding on the
first anniversary of the date hereof that
were also outstanding on the date hereof
(as set forth in the accounts receivables
statement of even date herewith to be
jointly determined by the Buyer and the
Sellers within 30 days from the date
hereof) is greater than Italian Lire
1,250,000,000, which payment shall be made
within 10 business days after the Sellers
and the Buyer shall have made a joint
determination of such amount; provided that
if no such joint determination is made
within 20 business days after the first
anniversary of the date hereof, then such
matters shall be
referred to arbitration pursuant to Section 8(b) below;
provided, however, that the Buyer shall return
to the Sellers any amount received by the Buyer
after making such determination, but before
December 31, 2000, in respect of such an
account receivable; and
(v) in no event shall any loss or
liability related to a single customer or
in connection with a related set of facts
or circumstances in an amount less than
Italian Lire 40,000,000 (the "Basket") give
rise to any claim of the Buyer against the
Sellers; provided, however, when such
liability is Italian Lire 40,000,000 or
greater, the Sellers will be obligated to
indemnify the Buyer from and against all
such Adverse Consequences relating back to
the first Lire).
(c) Indemnification Notice and Payments. The
Indemnified Party (as defined below) shall deliver to
the Indemnifying Party written notice of its demand for
indemnification under this Section 5 by specifying in such
notice the basis for the claim and the amount of such
claim and any relevant details. Unless the Indemnifying
Party (as defined below) objects in writing to such
written claim within 20 days after receipt of such
written claim, such claim shall be deemed accepted. If
the Indemnifying Party objects in writing within such 20
days, the Parties shall use their best efforts to
resolve the objections. If such objections are not
resolved within 30 days after the Indemnified Party
receives such objections, the Parties shall immediately
submit the dispute to arbitration as set forth in Section 8(b).
Any indemnification payment agreed to, deemed accepted,
or fully adjudged or arbitrated as final and
nonappealable, shall be paid within 10 days thereafter.
If the Indemnified Party is the Buyer, the
indemnification notice under this Section 5(c) shall also be
sent to the Escrow Agent under the Escrow Agreement.
Likewise, any objection by the Sellers as Indemnifying
Party under this Section 5(c) shall also be sent to the Escrow
Agent under the Escrow Agreement.
(d) Indemnification Provisions for the Benefit
of the Sellers. In the event of a misrepresentation or
breach (or in the event any third party alleges facts
that, if true, would mean a misrepresentation or breach)
of any of the Buyer's representations, warranties, and
covenants contained in this Agreement, and, provided the
Sellers make written claim for indemnification against
the Buyer pursuant to Section 5(c) above within the survival
period set forth in Section 5(a) above, then the Buyer agrees
to indemnify the Sellers from and against any Adverse
Consequences the Sellers have suffered through the date
of the claim for indemnification (including any Adverse
Consequences the Sellers may have suffered after the end
of any applicable survival period provided the claim has
been made before the end of such survival period)
resulting from, arising out of, or caused by the
misrepresentation or breach.
(e) Matters Involving Third Parties.
(i) If any third party shall notify any
Party (the "Indemnified Party") with respect to
any matter (a "Third Party Claim") which may give
rise to a claim for indemnification against the
other Party (the "Indemnifying Party") under this
Section 5, then the Indemnified Party shall promptly
(and in any event within 15 days or with longer
advance notice to enable the defense of the
claim) notify the Indemnifying Party thereof in
writing; provided, however, that no delay on the
part of the Indemnified Party in notifying the
Indemnifying Party shall relieve the Indemnifying
Party from any obligation hereunder unless the
Indemnifying Party thereby is prejudiced,
including prejudiced in the defense of such Third
Party Claim.
(ii) The Indemnifying Party will have the
right to cooperate in the defense of the
Indemnified Party against the Third Party Claim
with counsel of its choice satisfactory to the
Indemnified Party so long as (A) the Indemnifying
Party notifies the Indemnified Party in writing
within 10 business days after the Indemnified
Party has given notice of the Third Party Claim
that the Indemnifying Party will indemnify the
Indemnified Party pursuant to the provisions of
this Section 5 from and against Adverse Consequences,
and (B) if either of the Sellers is the
Indemnifying Party, then the Escrow Amount is
sufficient to defend against the Third Party
Claim and fulfill the Seller's indemnification
obligations hereunder.
(iii) The Buyer shall cause Syntech and the
Subsidiaries not to make or accept any settlement
of any claim, action, suit or proceeding of the
kind referred to in this Section 5(e), nor shall make or
permit to be made acquiescence thereto, without
the prior written consent of the Sellers, which
consent shall be communicated by the Sellers in
writing within 10 business days from the date of
receipt of any written proposal and shall not be
withheld without reasonable justification. If
the Sellers refuse a settlement proposal
submitted by the Buyer without any reasonable
justification, they shall be bound to indemnify
the Buyer for the full amount claimed, it being
understood that the Buyer may proceed in any
event to a settlement if this is required by the
overriding interests of preserving the business
interests of SRT, Syntech, or its Subsidiaries
(including the likelihood of establishing a
precedential custom of practice adverse to the
continuing business interests of the Indemnified
Party), in which case the amount of the indemnity
will be determined through arbitration pursuant
to Section 8(b) hereof. If a firm offer is made to
settle any matter giving rise to the Sellers
indemnification hereunder which the Sellers, but
not the Buyer, are willing to accept, then the
Buyer and/or Syntech or the relevant Subsidiary
(as the case may be) shall be free not to enter
into such settlement and to commence or continue
litigation at their own expense, and the Sellers
liability hereunder shall be limited to the
amount of the proposed settlement.
(f) Other Indemnification Provisions. The
foregoing indemnification provisions under this Section 5 do
not derogate to the guarantee against eviction of the
Shares under articles 1480-1484 of the Italian Civil
Code. All indemnification payments, or reductions in
the Escrow Amount as applicable, under this Section 5 shall be
deemed adjustments to the Purchase Price.
(g) Amnesty. In the event that, at any time
between the date of this Agreement and the date upon
which the liability of the Sellers shall expire pursuant
to Section 5(a), any law, regulation, order or decree should be
enacted in Italy or other relevant jurisdiction having
as an effect the right to settle, in whole or in part,
Tax or social security obligations of SRT, Syntech
and/or the Subsidiaries covered by any indemnity
hereunder (any such law, regulation, order or decree is
hereinafter referred to as an Amnesty ), the following
provisions shall apply:
(i) the Sellers shall have the right to
notify the Buyer of its request that SRT, Syntech
and/or the Subsidiaries avail itself of the
Amnesty;
(ii) the Buyer shall have the right to
determine, in its sole discretion (irrespective
of any request of the Sellers under paragraph (i)
preceding), whether or not SRT, Syntech and/or
the Subsidiaries should avail itself of the
Amnesty;
(iii) if the Buyer elects to proceed with
an Amnesty without the prior agreement or request
of the Sellers, all costs and expenses of such
Amnesty shall be borne by SRT, Syntech or the
relevant Subsidiary, it being understood that if
the Sellers do not agree to proceed with an
Amnesty without a sound reasonable justification,
all costs and expenses of the Amnesty shall be
borne by the Sellers;
(iv) if the Buyer elects to proceed with
an Amnesty in agreement with the Sellers or
pursuant to their request hereunder, all costs
and expenses of such Amnesty shall be borne by
the Sellers; and
(v) if the Buyer elects not to proceed
with an Amnesty notwithstanding the request of
the Sellers pursuant to paragraph (i) above, they
shall be free to do so, but the indemnification
liability of the Sellers under Section 5 in respect of
the matter constituting the subject of such
Amnesty shall be limited to the amount that would
have been paid by the Sellers pursuant to
paragraph (iv) preceding had the Buyer elected to
proceed with the Amnesty in accordance with the
request of the Sellers.
(h) Limitations on and Special Provisions
Relating to Indemnification.
The Parties expressly agree that:
(i) The Buyer's remedy for any
indemnification under this Agreement shall be
satisfied solely from the Escrow and the Sellers
indemnification liability shall not exceed the
Escrow Amount as progressively reduced in
accordance with the provisions of Section 2(c) above and
the Escrow Agreement, except as provided in
paragraphs (ii), (iii), and (v) below.
(ii) The Sellers' indemnification
liability with respect to breaches of the
representations and warranties contained in Section 3(k)
or Section 3(w)(ii)(D) shall not exceed the aggregate
amount of Italian Lire 4,000,000,000 in the
period from December 31, 2000 to the end of the
respective statute of limitation periods, which
liability shall not be paid after December 31,
2000 out of the Escrow; provided that all
payments to the Buyer from the Escrow plus
payments under this Section 5(h)(ii) shall not exceed an
aggregate amount of Italian Lire 8,000,000,000.
(iii) The Sellers' indemnification
liability with respect to Tax matters in
connection with (A) the real estate transaction
relating to the property of Sant ▇▇▇▇▇▇ ▇▇▇▇▇ and
(B) the formation of, issuance of securities by,
or other transactions involving SRT prior to the
date hereof, in each case, shall not be satisfied
out of the Escrow Deposit, shall not be subject
to any amount limitations (excluding the Basket),
and shall survive up to the expiration of the
relevant statute of limitations period.
(iv) The Sellers shall reimburse the Buyer
out of the Escrow Deposit for the amounts set
forth in Section 5(b)(iv) above relating to accounts
receivable.
(v) The Sellers shall indemnify the Buyer
for the wilful misrepresentation of the matters
dealt with in Section 3; such liability shall not exceed
three times the Purchase Price and shall not be
satisfied out of the Escrow.
(vi) The Sellers shall indemnify the Buyer
out of the Escrow Deposit for all Adverse
Consequences relating to those certain employment
matters asserted by Hoechst or its Subsidiaries
or Affiliates against Syntech or its Affiliates;
such liability shall be paid out of the Escrow
Deposit, but shall not be subject to any
limitation as to amount (excluding the Basket).
(vii) All indemnification payments to be
made, if any, at the end of the 13th month after
the date hereof for breaches of the
representations contained in Section 3(o) relating to
inventory shall be payable out of the Escrow
Deposit, shall be treated hereunder collectively
as "a related
set of facts or circumstances" for
purposes of Section 5(b)(z)(v) above, and shall be
subject to the Basket.
(viii) The indemnification obligations
of the Sellers shall not extend to any Adverse
Consequences resulting from, arising out of, or
caused by any tax incurred by any of the Parties
(and Syntech and Syntech, Inc.) relating to the
manner of the sale for Italian Lire 200,000 of
all of the capital stock of Syntech, Inc. by
Syntech to the Buyer, as described under
Section 2(a)(ii) above (without limiting indemnification
for violation of the representations and
warranties in Section 3 for Adverse Consequences not
arising from the manner of sale).
(i) Environmental Remediation. The Sellers
shall indemnify out of the Escrow Deposit the Buyer
against all costs and expenses to be evidenced by
appropriate documentation (not to exceed Italian Lire
1,200,000,000) incurred by the Buyer, Syntech, or its
Subsidiaries in conducting the following environmental
remediation and related actions following the date of
this Agreement:
(A) the Buyer shall, at its sole
discretion, remediate or cause to be remediated
any soil or groundwater contaminant located in or
on the off-site area (x) located northeast of the
underground storage tanks on Syntech's real
property site located in Sant'▇▇▇▇▇▇ ▇▇▇▇▇ (the
"Sant'▇▇▇▇▇▇ Site") and (y) located outside
Syntech's real property site located in Lazise
(the "Lazise" site), which soil or groundwater
contaminant the Buyer reasonably believes
emanates from the Sant'▇▇▇▇▇▇ Site, in order that
such off-site area meet or exceed the Dutch
Intervention Standards of the Soil Protection Act
of 1994 (the "Dutch Standards") or, if more
stringent, the Environmental, Health, and Safety
Laws otherwise applicable to such off-site area;
(B) the Buyer shall, at its sole
discretion, remediate or cause to be remediated
the soil or groundwater contaminants identified
in Section 5(i)(B) of the Disclosure Schedule that are
currently located in or on the Sant'▇▇▇▇▇▇ Site
and the Lazise Site, in order that each of the
Sant'▇▇▇▇▇▇ Site and the Lazise Site meets or
exceeds the Dutch Standards or, if more
stringent, the Environmental, Health, and Safety
Laws otherwise applicable to the Sant'▇▇▇▇▇▇ Site
or the Lazise Site; and
(C) the Buyer shall, at its sole
discretion, repair, decommission, remove, and
replace with above ground storage tanks the two
underground concrete waste vaults that are
currently located in the Sant'▇▇▇▇▇▇ Site or the
Lazise Site.
SECTION 6. POST-CLOSING COVENANTS.
The Parties agree as follows with respect to the
period following the date hereof:
(a) General. In case at any time after the date
hereof any further action is necessary to carry out the
purposes of this Agreement, each of the Parties will
take such further action (including the execution and
delivery of such further instruments and documents) as
any other Party may request, at the sole cost and
expense of the requesting Party (unless the requesting
Party is entitled to indemnification therefor
hereunder).
(b) Litigation Support. In the event and for so
long as any Party actively is contesting or defending
against any action, suit, proceeding, hearing,
investigation, charge, complaint, claim, or demand in
connection with (i) any transaction contemplated under
this Agreement or (ii) any fact, situation,
circumstance, status, condition, activity, practice,
plan, occurrence, event, incident, action, failure to
act, or transaction on or prior to the date hereof
involving any of SRT, Syntech and its Subsidiaries, each
of the other Parties will cooperate with it and its
counsel in the contest or defense, make available their
personnel, and provide such testimony and access to
their books and records as shall be necessary in
connection with the contest or defense, all at the sole
cost and expense of the contesting or defending Party
(unless the defending or contesting Party is entitled to
indemnification therefor hereunder).
(c) Transition. The Sellers will not take any
action that is designed or intended to have the effect
of discouraging any lessor, licensor, customer,
supplier, or other business associate of any of SRT,
Syntech and its Subsidiaries to cease its relations with
SRT, Syntech and its Subsidiaries after the date hereof.
(d) Guarantees. The Buyer undertakes to hold
harmless and indemnify the Sellers for any and all
claims by Syntech s lending banks in relation to
guarantees issued by Gestin in the interest of Syntech
listed in Section 3 (p) (iv) of the Disclosure Schedule.
Furthermore, the Buyer undertakes either (i) to deliver
to the banks guaranteed by Gestin an equivalent
guarantee replacing Gestin's original guarantee within
three months from the date hereof, or (ii) to cause the
underlying obligations to be extinguished.
SECTION 7. MISCELLANEOUS.
(a) Press Releases and Public Announcements. No
Party shall issue any press release or make any public
announcement relating to the subject matter of this
Agreement without the prior written approval of the
other Party; provided, however, that the Buyer may
disclose the subject matter of this Agreement to its
lenders and may make any public disclosure it believes
in good faith is required by applicable law concerning
its securities registered under the Securities Exchange
Act of 1934, as amended (in which cases the Buyer will
advise the Sellers prior to making the disclosure).
(b) No Third-Party Beneficiaries. This
Agreement shall not confer any rights or remedies upon
any Person other than the Parties and their respective
successors and permitted assigns.
(c) Entire Agreement. This Agreement (including
the documents referred to herein) constitutes the entire
agreement between the Parties and supersedes any prior
understandings, agreements, or representations by or
between the Parties, written or oral, to the extent they
related in any way to the subject matter hereof,
including but not limited to that certain letter by and
between the Buyer, the Sellers, and Syntech dated as of
February 13, 1997, as subsequently amended as of April
15, 1997, May 20, 1997, and June 10, 1997.
(d) Succession and Assignment. This Agreement
shall be binding upon and inure to the benefit of the
Parties named herein and their respective successors and
permitted assigns. No Party may assign either this
Agreement or any of its rights, interests, or
obligations hereunder without the prior written approval
of the other Party; provided, however, that the Buyer
may (i) assign any or all of its rights and interests
hereunder to one or more of its Subsidiaries or
Affiliates and (ii) designate one or more of its
Subsidiaries or Affiliates to perform its obligations
hereunder (in which case the Buyer nonetheless shall
remain responsible for the performance of all of its
obligations hereunder).
(e) Counterparts. This Agreement may be executed
in one or more counterparts, each of which shall be
deemed an original but all of which together will
constitute one and the same instrument.
(f) Headings. The section headings contained in
this Agreement are inserted for convenience only and
shall not affect in any way the meaning or
interpretation of this Agreement.
(g) Notices. All notices, requests, demands,
claims, and other communications hereunder will be in
writing. Any notice, request, demand, claim, or other
communication hereunder shall be deemed duly given upon
receipt if it is sent by facsimile (and confirmed by
reputable express courier) or reputable express courier
(including, but not limited to, FedEx and DHL Worldwide
Express), and addressed or otherwise sent to the
intended recipient as set forth below:
If to the Sellers, SRT or Syntech:
▇▇▇▇▇▇▇ ▇▇▇▇▇▇ & C. S.a.p.a. or Gestin S.r.l.
Torino, ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇/▇
▇▇▇▇▇
Copy to:
▇▇▇▇▇▇▇▇ ▇▇▇▇▇ - ▇▇▇▇▇▇▇▇▇ Studio Legale
▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇
▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇
Fax: ▇▇▇-▇▇-▇-▇▇▇▇▇▇
If to the Buyer:
▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇ Technologies, Inc.
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
Copy to:
▇▇▇▇▇▇▇ ▇.▇. ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, Will & ▇▇▇▇▇
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
Any party may change the address or facsimile number to
which notices, requests, demands, claims, and other
communications hereunder are to be delivered by giving
the other Party notice in the manner herein set forth.
(h) Amendments and Waivers. No amendment of any
provision of this Agreement shall be valid unless the
same shall be in writing and signed by each of the
Parties hereto. No waiver by any Party of any default,
misrepresentation, or breach of warranty or covenant
hereunder, whether intentional or not, shall be deemed
to extend to any prior or subsequent default,
misrepresentation, or breach of warranty or covenant
hereunder or affect in any way any rights arising by
virtue of any prior or subsequent such occurrence.
(i) Severability. Any term or provision of this
Agreement that is invalid or unenforceable in any
jurisdiction shall not affect the validity or
enforceability of the remaining terms and provisions
hereof.
(j) Expenses. Each of the Parties will bear its
own costs and expenses (including legal fees and
expenses) incurred in connection with this Agreement and
the transactions contemplated hereby. The Sellers agree
that none of SRT, Syntech and its Subsidiaries has borne
or will bear any of the costs and expenses of the
Sellers (including any of its legal fees and expenses)
in connection with this Agreement or any of the
transactions contemplated hereby.
(k) Construction. Any reference to any statute
or law shall be deemed also to refer to all rules and
regulations promulgated thereunder, unless the context
requires otherwise. The word including shall mean
including without limitation. Any reference to "days"
or "business days" contained in this Agreement shall
mean days in which banks are open for business in Italy,
the United States, and England.
(l) Incorporation of Exhibits and Schedules. The
Exhibits (including the Disclosure Schedule) identified
in this Agreement are incorporated herein by reference
and made a part hereof.
(m) Italian Antitrust. The Buyer and the Sellers
acknowledge that (i) the transactions contemplated
hereunder are subject to the obligation of the Sellers
to give notice to the Italian antitrust authority
( Autorita Garante della Concorrenza ) pursuant to
article 16 of the Italian law no. 287 of October 10,
1990 and (ii) that such authority has granted its
clearance to the transactions contemplated by this
Agreement by letter dated July 29, 1997.
SECTION 8. GOVERNING LAW AND ARBITRATION
(a) Governing Law. This Agreement shall be
governed by and construed in accordance with the laws of
Italy.
(b) Arbitration. Any disputes arising with
respect to, or in connection with this Agreement shall
be referred to binding arbitration, and finally settled,
by a panel of three arbitrators appointed in accordance
with the Rules of Reconciliation and Arbitration of the
International Chamber of Commerce, except as modified
herein or by mutual written agreement by the Parties.
The three arbitrators shall be appointed as follows: (1)
the Sellers shall promptly appoint one arbitrator; (2)
the Buyer shall promptly appoint one arbitrator; and (3)
such two arbitrators shall promptly appoint a third
arbitrator, provided that if such two arbitrators shall
not agree on such third arbitrator within 15 days of
their respective appointments, then the Court of
Arbitration of the International Chamber of Commerce
shall promptly appoint such arbitrator. Such Court shall
also appoint any arbitrator the Buyer or the Sellers
fails to appoint. The arbitration proceedings shall be
conducted in the English language and shall be held in
Geneva, Switzerland. The Parties acknowledge that the
Sellers shall be considered as one party to the
arbitration.
IN WITNESS WHEREOF, the Parties hereto have
executed this Agreement as of the date first above
written.
▇▇▇▇▇▇▇ ▇▇▇▇▇▇ & C.S.A.P.A.
By: /s/▇▇▇▇▇▇▇ ▇▇▇▇▇▇
Name: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
Title: Chairman
GESTIN S.R.L.
By: /s/▇▇▇▇▇▇▇ ▇▇▇▇▇▇
Name: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
Title: Chairman
▇▇▇▇▇▇▇▇▇ TECHNOLOGIES, INC.
By: /s/ ▇▇▇▇ ▇▇▇▇▇▇▇▇▇
Name: ▇▇▇▇ ▇▇▇▇▇▇▇▇▇
Title: Chairman of the Board
and Chief Executive Officer
