6
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
April 14, 2000
Date of Report (Date of earliest event reported)
MOTO GUZZI CORPORATION
(Exact Name of Registrant as Specified in its Charter)
Delaware 000-22813 13-3853272
(State of Organization) (Commission File Number) (IRS Employer Identification
Number)
445 PARK AVENUE
NEW YORK, NY 10022
(Address of Registrant's Principal Executive Office) (Zip Code)
(212) 644-4441
(Registrant's telephone number, including area code)
NOT APPLICABLE
(Former Name or Former Address, if Changed Since Last Report)
<PAGE>
Item 5. Other Events.
Preliminary Share Sale and Purchase Agreement
On April 14, 2000, the Company entered into a Preliminary
Share Sale and Purchase Agreement (the "Share Purchase
Agreement") with Aprilia S.p.A. ("Aprilia") providing for the
sale of the Company's four operating subsidiaries: (i) Motto
Guzzi, S.p.A., (ii) MGI Motorcycle GmbH, (iii) Moto Guzzi
North America Inc., and (iv) Moto Guzzi France S.a.r.l. (the
"Subsidiaries").
The closing of the sale of the Subsidiaries is subject to
approval by the shareholders of the Company and shareholders'
approval of a change of the Company's corporate name to
eliminate the words "Moto Guzzi". The transaction will not
take place unless these approvals are obtained by August 31,
2000.
In connection with the Share Purchase Agreement, OAM S.p.A,
which owns approximately 61% of the Company's Class A Common
Stock, and approximately 13% of the Company's Series B
Preferred Stock, entered into an agreement with Aprilia to
vote all of its stock of the Company in favor of the
transaction. Assuming that no additional shares of Class A
Common Stock are issued by the Company (on conversion of the
Series B Preferred Stock or otherwise) prior to the record
date for the shareholder meeting, the affirmative vote of OAM
will be sufficient to ensure shareholder approval of the
transaction.
The sale price for the shares of the Subsidiaries will be Lit.
85.5 Billion (approximately $ 41.85 million) plus or minus the
amount by which the Subsidiaries' net worth at April 30, 2000
is more or less than its net worth at December 31, 1999 (which
was a negative net worth of Lit. 13.993 billion (approximately
$ 6.85 million). In addition, Aprilia will satisfy debts of
the Subsidiaries to the Company and OAM totaling an estimated
Lit. 19 billion (approximately $ 9.3 million) and will cause
OAM to be released from a Lit. 4 billion (approximately $1.95
million) guarantee of obligations of the Subsidiaries.
Under the Share Purchase Agreement, Aprilia will oversee the
Subsidiaries' operations beginning May 1, 2000. To carry that
out, Aprilia designees will be added to the Subsidiaries'
board of directors. Aprilia will lend the Subsidiaries any
funds they need to operate between May 1, 2000 and completion
of the sale of the Subsidiaries. If the sale of the
Subsidiaries does not take place, the loans will be repayable
when the Share Purchase Agreement terminates. The obligation
to repay the loans will be secured by up to 25% of the shares
of the Subsidiaries.
In the Share Purchase Agreement, the Company also agreed to
indemnify Aprilia against costs or liabilities resulting from
any shareholder litigation instituted in the United States
(other than by OAM) with regard to the transaction.
<PAGE>
Item 7. Exhibits.
Exhibit No. Description of Document
10.1 Preliminary Share Sale and
Purchase Agreement dated as
of April 14, 2000 by and
between the Company and
Aprilia S.p.A.
99.1 Press Release, dated April 14, 2000.
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of
1934, the Registrant has duly caused this report to be signed
on its behalf by the undersigned hereunto duly authorized.
MOTO GUZZI CORPORATION
(Registrant)
By: /s/ Mark S. Hauser
Mark S. Hauser
Chairman
Date: April 20, 2000
<PAGE>
EXHIBIT INDEX
Exhibit Number Description Page No.
10.1 Preliminary Share Sale and Purchase Agreement dated as
of April 14, 2000 by and between the Company and Aprilia
S.p.A.
99.1 Press Release, dated April 14, 2000.
EXHIBIT 10.1
MOTO GUZZI CORPORATION
(the "Vendor")
- and -
- on one side -
APRILIA S.p.A.
(the "Purchaser")
- on the other side -
-------------------------------------------
PRELIMINARY SHARE SALE AND PURCHASE AGREEMENT
-------------------------------------------
April 14th, 2000
<PAGE>
PRELIMINARY SHARE SALE AND PURCHASE AGREEMENT
THIS AGREEMENT dated this 14th day of April, 2000.
BY AND AMONG
Moto Guzzi Corporation, a corporation existing under the laws of Delaware, with
registered office in 350 Park Avenue, 10022 New York, NY USA, hereby represented
by Mr. Gianni Bulgari , (hereinafter the "Vendor");
on the first part
and
Aprilia S.p.A., a company existing under the laws of Italy, with registered
office in Via Galileo Galilei, 1, 30033 Noale (VE), fiscal code no. 10089520158
hereby represented by Mr. Ivano Beggio, in the quality of Chairman of the Board
of Directors (hereinafter the "Purchaser");
on the second part
WHEREAS
a) the Vendor is the owner of 100% of the subscribed, issued and fully
paid share capital of Moto Guzzi S.p.A., a company existing under the
Italian law, with registered office in Mandello del Lario (LC) via
Parodi 57;
b) the Vendor is the owner of 100% of the subscribed, issued and fully
paid quota capital of MGI Motorcycle GmbH, a company existing under the
German law, with registered office in Grasellenbach-Hammelbach;
c) the Vendor is the owner of 99% of the subscribed, issued and fully paid
quota capital of Moto Guzzi France S.a.r.l., a company existing under
the French law, with registered office in Villepinte, Zone d'Activites
Centrales, Parc de Villepinte lot D 18, 7 allee des Grives;
d) the remaining 1% of Moto Guzzi France S.a.r.l. (the "Remaining Quota")
is owned by Matteo Emilio Pizzoccaro, born in Milan on the 4th of
February, 1967, Fiscal Code: PZZ MTM 67B04 F205N;
e) the Vendor is the owner of 100% of the outstanding shares (all of which
are duly issued and fully paid) of Moto Guzzi North America Inc., a
company existing under the laws of North Carolina (USA), with
registered office in 455 W Depot Street, Angier, NC 27501 (Moto Guzzi
S.p.A., Moto Guzzi France S.a.r.l., MGI Motorcycle GmbH and Moto Guzzi
North America Inc.
hereinafter jointly referred to as the "Subsidiaries");
f) the Vendor desires to sell to the Purchaser and the Purchaser, based on
the information contained in the Information Memorandum delivered to
Purchaser prepared by Banca IMI, financial advisor to the Vendor and
the Vendor, and after evaluation of the Information (as defined
hereinafter) as a result of the due diligence activity, desires to
purchase from the Vendor the entire interest held by the Vendor in the
Subsidiaries; in particular, the Vendor desires to sell to the
Purchaser and the Purchaser desires to purchase from the Vendor: (i)
100% shareholding in Moto Guzzi S.p.A.; (ii) 99% quotaholding in Moto
Guzzi France S.a.r.l.; (iii) 100% quotaholding in MGI Motorcycle GmbH
and; (iv) 100% shareholding in Moto Guzzi North America Inc.
g) OAM (as defined below) and Vendor have granted to the Subsidiaries
certain shareholders' loans indicated in Schedule 1 attached hereto and
intend to be reimbursed of such loans in connection with the
transaction described herein;
h) OAM has secured certain repayment obligations undertaken by Moto Guzzi
SpA vis a vis Banca Nazionale del Lavoro, Modena Branch, by providing
cash collateral, and intends to be released from such guarantee
obligations in connection with the transaction described herein, and
the Purchaser intends to assume such guarantee obligations;
i) the Vendor is entitled to the use of certain industrial and
intellectual property of the Subsidiaries, including the Moto Guzzi
trademarks indicated in Schedule 2 and, with the consummation of the
transaction contemplated herein, intends to assign to Purchaser all its
interest in such industrial and intellectual property, including in all
Moto Guzzi trademarks and to cease all use thereof;
THIS AGREEMENT WITNESSES THAT in consideration of the foregoing premises and the
respective promises, covenants and agreements contained herein, the Parties
hereto hereby agree as follows:
1. INTERPRETATION
1.1 Defined Terms
For the purposes of this Agreement, unless the context otherwise
requires, the following terms shall have the meanings set out below and
grammatical variations of such terms shall have the corresponding
meanings; capitalised terms used in this Agreement and not otherwise
defined have the meanings set out in this section 1.1.
"Agreement" means this preliminary share sale and purchase agreement as
per articles 1351, 2645 bis, and 2932 of the Italian Civil Code,
together with all recitals and the Schedules hereto, as amended or
supplemented from time to time in accordance with its terms.
"Applicable Laws" means all statutes, laws, by-laws, regulations,
ordinances, codes, directives, instructions, rules and orders of
governmental or other public authorities having jurisdiction in respect
of a particular matter, and all amendments thereto, and any judicial or
administrative interpretation thereof by any Governmental Entity,
including any judicial or administrative order, consent, decree or
judgement, applicable to the Subsidiaries;
"Banca IMI" means Banca d'Intermediazione Mobiliare S.p.A., with
registered office in Milano, Corso Matteotti n. 4/6, Italy.
"Business Day" means a day which is neither a Saturday, a Sunday nor a
legal holiday in Italy or the United States of America.
"Closing" means the consummation of the sale and the completion of all
the formalities described in Article 3.4.2 of this Agreement.
"Closing Date" means July 31st, 2000 or such other date as may be agreed
upon in writing between the Parties, as soon as the conditions precedent
under article 2 are fulfilled; provided however that (i) Purchaser and
Vendor, as far as each of them is respectively concerned, shall make all
their best efforts to ensure that all conditions precedent under article
2 shall be fulfilled within July 31st, 2000, and (ii) under no
circumstances the Closing Date may take place after August 31st, 2000.
"DM" means the currency of Germany that, at the time of payment, is
legal tender.
"Escrow Account": shall mean the escrow account jointly opened by Vendor
and Purchaser with the Escrow Agent to be managed in accordance with the
Escrow Agreement attached hereto as Schedule 4.
"Escrow Agent": shall mean Banca di Intermediazione Mobiliare IMI SpA,
with registered offices in Milan, Corso Matteotti, 4/6, and/or a
fiduciary company of the same group as Banca IMI, designated by the said
Banca IMI.
"Escrow Agreement": shall mean the escrow agreement substantially in the
form attached hereto as Schedule 4, being understood that the economic
terms and conditions contained therein shall not be modified.
"Escrow Fund": means the amount of ITL 10.375.000.000 (ten billion three
hundred seventy five million) deposited in the Escrow Account.
"FF" means the currency of France that, at the time of payment, is legal
tender.
"Financial Statements" means, collectively, the Management Date
Financial Statement and the Interim Financial Statement, prepared
according to US GAAP.
"Information" means all facts, documents and instruments, and
information relating to both the Vendor and the Subsidiaries, made
available to the Purchaser, either directly or through its advisors,
with respect to which the Purchaser acknowledges that it was made aware
of the Information and was able to assess its contents, and includes the
Information Memorandum ("Information Memorandum") prepared by Banca IMI
and the Vendor. The Parties however agree that the Information
Memorandum is subject to the disclaimers contained therein, which apply
to the sole Banca IMI, and that therefore Banca IMI will not in any way
be responsible for the information contained in such Information
Memorandum and for the Information.
"Interim Financial Statement" means the aggregate asset and liability
statement relating to the Subsidiaries as at December 31st, 1999, a copy
of which is included in Schedule 5, prepared according to US GAAP.
"ITL" means the currency of Italy that, at the time of payment, is legal
tender.
"Liens" means any title defect, conflicting or adverse claim of
ownership, mortgage, security interest, lien, encumbrance, pledge,
claim, right of first refusal, option, charge, restriction, lease,
attachment, easement or any other encumbrance.
"Losses", any damage, cost, loss or liability effectively borne by a
Party which are a direct consequence of the breach of any of the terms
and conditions of this Agreement, or of the shareholders' litigation
described in article 2.5 below.
"Management Date": means April 30th, 2000 at 12.00 p.m. Milan time.
"Management Date Financial Statement" means the aggregate asset and
liability statement relating to the Subsidiaries as of the Management
Date, prepared according to US GAAP and, more precisely, as set out in
the Schedule 3.
"Management Period": means the period between the Management Date and
the Closing Date.
"OAM": means OAM SpA, a company existing under the laws of Italy, with
registered offices in Via Fieno, 8, Milan Italy.
"Parties" means, collectively, the Vendor, and the Purchaser and "Party"
means any one of them.
"Purchase Price" means the price to be paid by the Purchaser for the
purchase of the Shares, as set out in section 3.2, and as to be adjusted
in accordance with article 3.6 below.
"Purchaser" means Aprilia S.p.A., a company existing under the laws of
Italy with registered office at Via Galileo Galilei, 1, 30033 Noale
(Venezia).
"Purchaser's Auditor": means the auditor which shall be designated by
the Purchaser by April 18th, 2000.
"Remaining Quota" means 1% quotaholding of Moto Guzzi France S.a.r.l.
held by Mr. Matteo Emilio Pizzoccaro.
"Schedule" refers to one of the several written schedules attached to
this Agreement.
"Shareholders' Loans": means the shareholders' loans granted by OAM and
Vendor to the Subsidiaries, as indicated in Schedule 1 attached hereto.
"Shares" means the total of (i) 2.000.000 shares of Moto Guzzi S.p.A.,
which represent 100% of the issued corporate capital of said company or
such number of shares as shall represent 100% of the entire share
capital of Moto Guzzi S.p.A. at the Closing Date; (ii) 4950 quota of
Moto Guzzi France S.a.r.l., which represent 99% of the issued corporate
capital of said company or such number of quotas as shall represent 99%
of the entire capital of Moto Guzzi France S.a.r.l. at the Closing Date;
(iii) DM 100.000 quota of MGI Motorcycle GmbH, which represent 100% of
the issued corporate capital of said company or such number of quotas as
shall represent 100% of the entire capital of MGI GmbH at the Closing
Date, and; (iv) 600 shares of Moto Guzzi North America Inc., which
represent 100% of the issued and outstanding corporate capital of said
company, or such number of shares as shall represent 100% of the issued
and outstanding capital of Moto Guzzi North America Inc. at the Closing
Date.
"Tax" means any tax, levy, charge, duty, impost, stamp duty or other
tax, payable or levied by any Governmental Entity on the Subsidiaries.
"Tax Return" means any return, declaration, report, information return,
statement or other similar document relating to Taxes, including any
schedule or attachment thereto and any amendment thereof.
"US $" means the currency of the United States of America that, at the
time of payment, is legal tender.
"US GAAP" means the Generally Accepted Accounting Principles in use in
the United States of America.
"Vendor" means, Moto Guzzi Corporation.
"Vendor's Auditor": means Arthur Andersen SpA, Milan office.
1.2 Interpretation Generally
For the purpose of this Agreement, except as otherwise expressly provided
or unless the context otherwise requires:
(a) the terms defined in this Agreement have the meanings ascribed
to them herein and include the plural as well as the singular
and the use of any gender herein shall include the other
gender;
(b) each reference to an "Article" of this Agreement shall include
all sections of such Article and, similarly, each reference to
a "section" shall include all subsections of such section.
1.3 Schedules
The following Schedules are attached to and form part of this Agreement:
1) Shareholders' Loans
2) Trademarks
3) Form of Management Date Financial Statement
4) Escrow Agreement
5) Interim Financial Statement
6) Clifford Chance Timetable
7) Attribution of the payment of the Purchase Price to each
Subsidiary
8) Resignation letter by corporate officers
9) By laws of the Subsidiaries
10) Liens on Assets
11) Lease Agreements
12) Liens on Real Property
13) Litigation
14) Law 626/1994 Issues
15) Employees
16) Wages
17) Product liability
18) Insurance policies
19) Commitment not to compete
20) Opinion by Counsel to Vendor
1.4 Accounting Terms
The Interim Financial Statement have been prepared in accordance with US
GAAP. Any accounting term used in this Agreement, or to be used for the
drafting of the Financial Statements shall have the meaning ascribed
thereto pursuant to the US GAAP.
2. ANTITRUST - aPPROVALS - DISCLOSURE - SHAREHOLDERS' LITIGATION
2.1 Antitrust Communication
This Agreement is subject to the notification by the Parties to the
Autorita Garante della Concorrenza e del Mercato ("Italian Antitrust
Authority") of the transaction contemplated hereunder. To this end the
Purchaser, with the cooperation of the Vendor, hereby undertakes to
perform all the obligations set forth in article 16 of Law October 10,
1990, No. 287 by making the required notification within 10 Business
Days from the date hereof.
2.2 Approval by Vendor
The Vendor represents and warrants hereby that the execution of this
Agreement and the consummation of the transaction contemplated herein
have been duly approved by its Board of Directors, including any
relevant Committees, where applicable. The Purchaser shall receive, as
soon as practicable after the date hereof, and prior to April 30th,
2000, the opinion of US Counsel to the Board of Directors of Vendor,
draft of which is attached hereto as Schedule 20.
2.3 Condition precedent - approval by the Shareholders meeting
The Vendor's Board of Directors shall convene or cause to convene, as
soon as practicable and after the execution of this Agreement and in
compliance with the Applicable Laws, a shareholders meeting of Moto
Guzzi Corp. having as an agenda, inter alia, (i) the approval by the
Vendor's Shareholders of this Agreement and of the transactions
contemplated hereunder and (ii) the change of the corporate name so as
to eliminate the name "Moto Guzzi". A memorandum by Clifford Chance,
legal counsel of the Vendor in the U.S.A., concerning the forecasted
timing to convene the shareholders meeting of the Vendor is contained in
Schedule 6.
The Parties agree that any and all effects of this Agreement are
conditional upon the due approval of the Vendor's shareholders of this
Agreement and of the transactions contemplated hereunder. The Parties
acknowledge that such shareholders' approval is required under USA
federal and state laws and regulations in order to clear the
transactions hereunder. Should such approval not take place within
August 31st, 2000, this Agreement shall be terminated and the Closing
Date transactions shall not take place. In such event the Escrow Agent
shall act in compliance with the Escrow Agreement.
The Parties also agree that the consummation of the transactions
described herein shall be, at Purchaser's option, conditional upon the
absence at the Management Date of any pending bankruptcy proceeding
filed against any of the Subsidiaries.
2.4 Disclosure - OAM undertaking to approve the transaction
The Parties acknowledge that OAM, controlling shareholder of the Vendor,
undertook vis-a-vis the Purchaser, inter alia, to vote the approval of
this Agreement and the transactions contemplated hereunder at the
Vendor's shareholders meeting provided in Section 2.3. The Vendor will
comply with any form of disclosure pursuant to the Applicable Laws in
respect thereof.
2.5 Indemnification for litigation involving the Purchaser in the USA, as
direct consequence of executing this Agreement
The Vendor agrees to indemnify and hold harmless the Purchaser from any
and all Losses related to or arising out of litigation started in the
USA by any of the Vendor's shareholders, with the exception of OAM, or
creditors vis-a-vis the Purchaser where such litigation is direct
consequence of the execution of this Agreement and is intended to
challenge the effectiveness of this Agreement.
3. PURCHASE AND SALE OF THE SHARES
3.1 Purchase and Sale of the Shares
Subject to the terms and conditions contained in this Agreement, the
Vendor hereby undertakes to sell, assign and transfer to the Purchaser
and the Purchaser - for itself or for an entity to be designated prior
to the Closing Date in accordance with article 1401 Italian civil code
but in any case fully controlled by the Purchaser, which shall remain
jointly and severally liable with such designated entity - subject to
the terms and conditions contained herein undertakes to purchase from
the Vendor legal and beneficial title to the Shares, free and clear of
any and all Liens.
In order to comply with the undertakings under this Agreement the
Parties shall fulfil all the formalities in order to render the transfer
of the Shares of the Subsidiaries effective according to the Applicable
Laws.
3.2 Purchase Price
The Purchase Price of the Shares is equal to ITL 85.500.000.000 (eighty
five billion five hundred million) less ITL 13.993.000.000, i.e. the
aggregate negative net worth of the Subsidiaries as on December 31st,
1999 as shown on the Interim Financial Statement, subject to adjustment
as per article 3.6 below. The Purchase Price is to be considered as a
whole for all the transactions provided hereunder and is referred to
each Subsidiary as indicated in Schedule 7.
3.3 Shareholders' Loans
The amount of the Shareholders'Loans is equal to ITL 18.972.061.747, as
estimated by Vendor at the date hereof, subject to review as per article
3.5 below.
3.4 Management Date and Closing Date transactions
3.4.1 At the Management Date the following transactions shall occur:
(i) approval of the balance sheets related to the last
corporate year of the Subsidiaries by the duly convened
Shareholders' meetings of all Subsidiaries (as far as
Moto Guzzi SpA is concerned, assemblea totalitaria);
(ii) delivery by the Vendor to the Purchaser of letters, in
the form contained in Schedule 8, for each member of the
Board of Directors and of the Statutory Auditors, or
similar corporate bodies, of each Subsidiary providing
that all such Directors, Auditors, or members of any
such corporate bodies shall have no claim or request
whatsoever against any of the Subsidiaries, even with
respect to obligations due to companies or entities
anyhow connected to such Directors, Auditors or members
of such corporate bodies (such as by way of example only
the company Como Consultants of Jersey), and save for
the outstanding fees due to them which shall be taken
into account in the Management Date Financial Statement;
(iii) the Vendor shall cause the shareholders' meetings of
each Subsidiary, duly convened in compliance with all
Applicable Laws, to appoint all such Directors and
Auditors as shall be designated by Purchaser being
however understood that Mr. Gianni Bulgari, Mr. Nick
Speyer as well as Mr. Alessandro Brusi, the current
Chairman of the Board of Auditors, shall be re-elected
to serve for the same office until the Closing Date;
(iv) signing of the Escrow Agreement by and among Vendor,
Purchaser and the Escrow Agent;
(v) deposit by the Purchaser into the Escrow Account of the
amount of ITL 71.507.000.000, and delivery to the Escrow
Agent by the Vendor of the Shares, fiduciarily endorsed
to the Escrow Agent, with irrevocable instructions to
the Escrow Agent to (i) pay at the Closing Date to
Vendor the Purchase Price as adjusted after
determination of the Management Date Financial Statement
in accordance with article 3.6 below and after deduction
of the Escrow Fund; (ii) transfer at the Closing Date to
Purchaser the Shares by endorsing such Shares to
Purchaser in full and unrestricted property.
3.4.2 The completion of the sale and purchase of the Shares shall take
place on the Closing Date, at 10.00 a.m., at the offices of
Studio Legale Carnelutti, in Via Principe Amedeo n. 3, Milan,
Italy. On the Closing Date the following activities shall take
place:
(i) transfer by the Escrow Agent to Purchaser of the Shares,
and endorsement of the full and unrestricted ownership
of the Shares to Purchaser, in compliance with all
Applicable Laws;
(ii) the Escrow Agent shall: (a) pay to Vendor the adjusted
Purchase Price, as per articles 3.6 below, by means of
crediting to the Vendor's account to be indicated in
writing to Purchaser prior to the Closing Date opened
with Banca IMI of an amount equal to the adjusted
Purchase Price after deduction of the Escrow Fund ; (b)
hold in deposit into the Escrow Account of the Escrow
Fund; it is agreed that at the request of Vendor the
Escrow Fund may be extinguished after the Closing Date
and its amount may be paid to Vendor provided that, in
order to secure the indemnification obligations it has
undertaken pursuant to this Agreement, the Vendor shall
deliver to Purchaser an unconditional first demand bank
guarantee acceptable to the Purchaser for an amount
equal to the Escrow Fund, issued by a primary Italian
bank agreed by Purchaser;
(iii) replacement of the ITL 4.000.000.000 cash collateral
given by OAM to Banca Nazionale del Lavoro Modena Branch
by means of an equivalent guarantee provided by
Purchaser and discharge of OAM from all liability
deriving therefrom;
(iv) reimbursement to Vendor of all outstanding Shareholders'
Loans as precisely determined in the Management Date
Financial Statement;
(v) transfer by the Vendor to Purchaser or to Moto Guzzi
SpA, as the case may be, of all Moto Guzzi trademarks
and trade names;
(vi) furthermore, the Vendor shall procure that, at the
Closing Date, Matteo Emilio Pizzoccaro shall sell the
Remaining Quota to the Purchaser for a consideration of
ITL. 1.000.
Shortly after signature of this Agreement Vendor and Purchaser shall
issue a joint press release concerning the transaction described herein,
to be prepared in compliance with applicable laws and securities
exchange regulations.
3.5 Management Date Financial Statement
a) Vendor and Purchaser agree that the Management Date Financial Statement
shall be contradictorily prepared by the Vendor's Auditor and by the
Purchaser's Auditor for the purpose to assess the aggregate net worth of
the Subsidiaries and the precise amount of the Shareholders' Loans at
the Management Date. Vendor's Auditor and Purchaser's Auditor shall
deliver to Vendor and Purchaser the Management Date Financial Statement
within and not later than June 15th, 2000.
b) Should Vendor's Auditor and Purchaser's Auditor agree on the
determination of the Management Date Financial Statement, the Management
Date Financial Statement so determined shall not be subject to challenge
and shall be final and binding for Vendor and Purchaser.
c) Should Vendor's Auditor and Purchaser's Auditor not reach an agreement
on the determination of the Management Date Financial Statement within
and not later than June 15th, 2000, each of Vendor's Auditor and of
Purchaser's Auditor shall deliver within the aforesaid deadline to each
of Vendor and Purchaser its proposed draft of Management Date Financial
Statement and shall specify the items of disagreement (the "Disputed
Items").
d) Should Vendor and Purchaser not reach an agreement upon the Disputed
Items within 15 days after the date of delivery of the proposed drafts
of Management Date Financial Statements, an auditor jointly appointed
for such purpose by Vendor's Auditor and Purchaser's Auditor within the
Management Date (the "Independent Auditor") shall determine the
Management Date Financial Statement. The Independent Auditor shall issue
its decision on the Disputed Items and shall deliver to both Vendor and
Purchaser the Management Date Financial Statement within and not later
than July, 25th, 2000.
e) The Management Date Financial Statement determined by the Independent
Auditor shall not be subject to challenge and shall be final and binding
for Vendor and Purchaser;
f) it is agreed that the information contained in the Schedules attached
hereto shall be kept into account for the purpose of determining the
Management Date Financial Statement, unless expressly provided to the
contrary, such as by way of exemplification in article 4.2.14 below, and
that no indemnification shall be due by Vendor under article 7.1 below
if the relevant loss has been taken into account for the purpose of the
determination of the Management Date Financial Statement
3.6 Adjustment to the Purchase Price
The amount of the adjustment to the Purchase Price shall be equal to the
difference between (i) the aggregate net worth of the Subsidiaries as
set forth in the Interim Financial Statement and (ii) the aggregate net
worth of the Subsidiaries as set forth in the Management Date Financial
Statement. Should the aggregate net worth of the Subsidiaries as set
forth in the Management Date Financial Statement be higher than the
aggregate net worth of the Subsidiaries indicated in the Interim
Financial Statement the Purchase Price shall be increased by the
relevant difference. If such aggregate net worth is lower, the Purchase
Price shall be decreased by the relevant difference, and shall therefore
be lower than ITL 71.507.000.000; such difference shall be forthwith
credited by the Escrow Agent to Purchaser.
If the Purchase Price as a consequence of the adjustment to the Purchase
Price is higher than ITL 71.507.000.000, the Purchaser shall forthwith
pay into the Escrow Account the increase in the Purchase Price
4. REPRESENTATIONS AND WARRANTIES
4.1 General Representations and Warranties
In connection with the undertakings of this Agreement and in view of the
proposed sale and purchase of the Shares, the Vendor hereby represents
and warrants as follows.
The Purchaser acknowledges that prior to the date hereof, it has had
access to facts, documents and information (the "Information") relating
to both the Vendor and the Subsidiaries, either directly or through its
advisors, which were made available to it in a data room from 9.00 a.m.
to 8.00 p.m. of 16th and 17th February 2000, from 3.00 p.m. to 8.00 p.m.
of March 10th, 2000 and from 9.00 a.m to 8.00 p.m. of March 13th, 2000
and in New York, USA, from 9.00 a.m. to 8.00 p.m. of March 15th, 2000
and March 16th, 2000. The Purchaser also had the following meetings: (i)
two one-day meetings in March 2000, with Nick Speyer, director of Moto
Guzzi S.p.A. in order to discuss Subsidiaries' finances, (ii) a one-day
meeting in February, 2000, a meeting on March 7, 2000 and a meeting on
March 24, 2000, with Arthur Andersen auditing firm of the Vendor, and
Nick Speyer to discuss the accounting principles used, among other
things, for the stock, (iii) and in February 2000 Mr. Cattaneo, a
technical consultant of the Purchaser, had a one-day short visit to the
Moto Guzzi S.p.A. plant and had meeting with the managers of Moto Guzzi
S.p.A.
Therefore, with respect to the Information, the Purchaser acknowledges
that it was made aware of the Information, and was able to assess its
contents.
The representations and warranties given to the Purchaser by the Vendor
are limited to those set out below, to the exclusion of any other
expressed or implied warranty.
The Purchaser acknowledges that the Information shall be treated as a
disclosure against the representations and warranties and the Vendor
shall not be responsible for any Losses as long as the Information is
deemed complete, consistent and correct in any material aspect
All representations and warranties, and all indemnification provisions
contained herein (i) shall survive to the consummation of the Closing
transactions, (ii) shall not be affected by article 1495 of the Italian
civil code, and (iii) do not exclude the application of any other remedy
available at law.
4.2 Representations and Warranties of the Vendor
4.2.1 Powers and authority of the Vendor. The Vendor has all necessary
powers and authority to execute and deliver this Agreement as
well as to undertake and perform its obligations hereunder, save
as regards the condition precedent of the approval by the
Shareholders' meeting of Vendor, which shall occur prior to the
Closing Date; the Vendor hereby also represents and warrants
that it is not subject to any bankruptcy procedures nor have
bankruptcy petitions been filed against it.
4.2.2 Organisation of the Subsidiaries. Each Subsidiary is a company
limited by shares, duly organised, validly existing under the
Applicable Laws in its jurisdiction of incorporation;
furthermore, each Subsidiary has all necessary corporate powers
and authority to carry on its business as established in its
formation documents or by-laws, which are annexed to this
Agreement and contained in Schedule 9.None of the Subsidiaries
is subject to any bankruptcy procedures nor have bankruptcy
petitions been filed against it and to the best knowledge of
Vendor, no such bankruptcy proceeding is pending against any of
the Subsidiaries.
4.2.3 Authorisation. This Agreement has been duly authorised, executed
and delivered by the Vendor, save as regards the condition
precedent of the approval by the Shareholders' meeting of
Vendor.
4.2.4 Ownership of the Shares. The Shares have been validly issued and
fully paid and represent, respectively, 100% of the corporate
capital of Moto Guzzi S.p.A., MGI Motorcycle GmbH and Moto Guzzi
North America Inc. and 99% of Moto Guzzi France S.a.r.l.. The
Vendor is the registered and beneficial owner of the Shares,
with good, marketable, undisputed and unrestricted title thereto
(e.g. the Shares are not subject to any pre-emption or option
rights or any other contractual restrictions), free and clear of
all Liens. As a result of the purchase and sale transactions
contemplated by this Agreement, all of the Shares will be owned
by the Purchaser as the registered and beneficial owner, with
good, marketable, undisputed and unrestricted title thereto.
4.2.5 Authorised and Subscribed Capital of Moto Guzzi S.p.A.. The
authorised and subscribed capital of Moto Guzzi S.p.A. consists
of 2.000.000 shares, each with a par value of ITL 10.000. All
shares in the corporate capital of Moto Guzzi S.p.A. have been
subscribed and fully paid. There is no option right, stock
option plan, or warrant in favour of any third party which
grants to such third party the right to purchase or subscribe,
for any portion of the share capital of Moto Guzzi S.p.A..
4.2.6 Authorised and Subscribed Capital of Moto Guzzi France S.a.r.l..
The authorised and subscribed capital of Moto Guzzi France
S.a.r.l. consists of 1000 shares, each with a par value of FF
500. All shares in the corporate capital of Moto Guzzi France
S.a.r.l. have been subscribed and fully paid. There is no option
right, stock option plan, or warrant in favour of any third
party which grants to such third party the right to purchase or
subscribe, for any portion of the capital of Moto Guzzi France
S.a.r.l.
4.2.7 Authorised and Subscribed Capital of MGI Motorcycle GmbH. The
authorised and subscribed capital of MGI GmbH consists of DM
100,000 total quota capital. All quotas in the corporate capital
of MGI Motorcycle GmbH have been subscribed and fully paid.
There is no option right, stock option plan, or warrant in
favour of any third party which grants to such third party the
right to purchase or subscribe, for any portion of the capital
of MGI GmbH.
4.2.8 Authorised and Subscribed Capital of Moto Guzzi North America
Inc.. The authorised and outstanding capital of Moto Guzzi North
America Inc. consists of 600 shares, each with a par value of US
$ 1. All the outstanding shares of Moto Guzzi North America Inc.
have been validly issued and are fully paid. There is no option
right, stock option plan, or warrant in favour of any third
party which grants to such third party the right to purchase,
subscribe or otherwise acquire any portion of the capital of
Moto Guzzi North America Inc..
4.2.9 Assets. Each and all of the Subsidiaries own or have the right
to use, and shall own and shall have the right to use at the
Closing Date, all tangible and intangible assets necessary for
the effective operation of its business as currently carried on;
all such tangible and intangible assets are, and shall be at the
Closing Date, free and clean of any and all Liens with the sole
exceptions set forth in Schedule 10 attached hereto.
4.2.10 Real property. The freehold and leasehold properties comprise
land and buildings owned or leased by each and all of the
Subsidiaries. All lease agreements pertaining to the leased real
property are listed in Schedule 11 attached hereto; all such
agreements are valid and in full force and effect and the
relevant Subsidiary is not in breach of any of the material
provisions of these agreements. The sole Liens affecting the
real property of each and all of the Subsidiaries are those
listed in Schedule 12 attached hereto.
4.2.11 Intellectual Property. Save as provided for by article 6.5
below, the Subsidiaries own or have the right to use, and shall
own and shall have the right to use at the Closing Date, free
and clean of any Lien, all the industrial and intellectual
property, including patents, know how, trademarks and trade
names necessary or relevant for the carrying out their business.
No third party has made any claim, nor is there any basis for
any third party to make any claim, affecting the full title to
all patents, copyrights, computer programs, trademarks, trade
names, know-how, industrial secrets and other industrial or
intellectual property rights, such as used at present by each
and all of the Subsidiaries. 4.2.12 Litigation. With the
exceptions mentioned in Schedule 13 attached hereto, and to the
sole extent mentioned therein: (i) the Subsidiaries are not
involved in any litigation pending in front of civil, criminal
or administrative courts or authority, or arbitration
proceedings;(ii) nor, to the best of Vendor's knowledge, is any
such litigation or arbitration proceeding threatened at the date
hereof.
4.2.13 Taxes. With respect to each and all of the Subsidiaries: (i) all
periodic and annual Tax returns required to be filed by them
have been filed with the appropriate Tax authorities in all
jurisdictions in which such Tax returns are required to be
filed; (ii) the above mentioned Tax returns have been prepared
in accordance with Tax laws applicable to the Subsidiaries and;
(iii) all amounts due (including interest, penalties, dues,
rights and other assessments) have been paid by each and all of
the Subsidiaries.
4.2.14 Environment, waste disposal, safety on the workplace. Except as
described in Schedule 14, the business of each and all of the
Subsidiaries is run in compliance with all applicable provisions
of law, related to the protection of the environment, the waste
disposal, the safety on the workplace and accident prevention;
all permits, approvals, authorisations or licences related
thereto have been duly obtained; no disputes related thereto are
pending or, to the best of the Vendor's knowledge, threatened.
As far as Italian law 626/1994 ("Work Safety Law") is concerned,
Moto Guzzi S.p.A. is not in compliance with the Work Safety Law
and that an amount equal to ITL 2.900.000.000, is necessary in
order to fulfil the requirements provided by the said Work
Safety Law, as indicated in Schedule 14. The Purchaser
acknowledges that this amount has been considered in determining
the Purchase Price, and therefore Vendor's responsibility
vis-a-vis the Work Safety Law's requirements is limited to the
costs exceeding such an amount of ITL 2.900.000.000, and in any
case is limited to the maximum amount of ITL 1.000.000.000.
4.2.15 Balance sheets, books and records. All balance sheets, corporate
books and records of each and all of the Subsidiaries are and
shall be at the Management Date truthful and correct; they are
prepared, and they shall be prepared until the Management Date
in compliance with all applicable laws and with consistent
application of US GAAP. The balance sheets related to the last
corporate year shall be approved prior to the Management Date.
4.2.16 Ordinary course of business. The business of each and all of the
Subsidiaries has been managed, and shall be managed until the
Management Date, according to good and sound business practice
and all agreements have been entered, and shall be entered until
the Management Date, according to normal market conditions.
Until the date hereof the production, distribution, sale and
marketing of the Subsidiaries' products has been made, and shall
be made until the Management Date, in compliance with all
Applicable Laws.
4.2.17 Accounts receivable. All accounts receivable of each and all of
the Subsidiaries have been calculated properly, and shall be
properly calculated until the Management Date, in the accounts
of each and all of the Subsidiaries, subject to reserves which
are reflected in the Management Date Financial Statement. Such
accounts receivable shall be collectible on the ordinary time
thereof with the sole exception of the receivables among
Subsidiaries.
4.2.18 Employees. The sole employees, including directors and
dirigenti, of each and all of the Subsidiaries are, and shall be
at the Management Date, those listed in Schedule 15. All such
employees are, and at the Management Date shall not exceed, the
number of 329 and are, and shall be at the Management Date, duly
registered in the relevant paybooks; the overall economic
treatment due to each of said employees and their relative
positions are, and shall be at the Management Date, those which
result from the paybooks and payroll and there are no, and there
shall not be at the Management Date, other forms of remuneration
or special treatments which have been agreed; such employees
have been duly remunerated, and shall be duly remunerated at the
Management Date, for all their services carried out during their
respective employment relationships with each and all of the
Subsidiaries, in compliance with the applicable provisions of
law and national collective bargaining agreement, and, with
reference to the amounts or rights accrued and not yet payable,
sufficient funds have been set up, and shall have been set up at
the Management Date, to cover the relative charges; all the
payments due in relation to the obligatory social insurance and
social security contributions and tax withholdings provided by
law have been duly effected, and shall be duly effected at the
Management Date. All details of any kind of compensation due or
paid by each and all of the Subsidiaries to all their current
and former directors and dirigenti (also according to any kind
of agreement or arrangement with companies or entities anyhow
connected to such directors or dirigenti) are listed in detail
in Schedule 16 attached hereto, under the item "Totale Stipendi
Amministrativi"; all arrangements thereof are compliant with
applicable Tax provisions.
On February 7th, 2000, the Italian Ministry of Labour has
approved with Decree n. 2777/50, the redundancy fund
contribution plan filed by Moto Guzzi S.p.A., involving 34
workers and 15 employees for the period between August 30, 1999,
through August 27, 2000 ("CIGS").
Notwithstanding the above provision, the Parties agree that the
Vendor will not in any way be responsible for any or all of
employees' requests or actions caused, directly or indirectly,
by Purchaser's decision to adopt collective dismissal or
individual dismissal procedures (licenziamenti collettivi o
individuali).
4.2.19 Contracts. Except as indicated in the Schedules attached hereto,
there is no contract, and there shall not be any contract at the
Management Date, which could materially and adversely affect the
operations of any of the Subsidiaries.
4.2.20 Guarantees. There is no guarantee or commitment whatsoever given
by any of the Subsidiaries, in favour of third parties, of
Vendor, or of OAM, and no such guarantee shall be given until
the Management Date.
4.2.21 Product liability. Except as disclosed in Schedule 17 attached
hereto, there is no product liability claim vis a vis any of the
Subsidiaries.
4.2.22 Insurance policies. Schedule 18 is a correct and complete list
of the material insurance Contracts (specifying the insurer, the
coverage and the policy number or covering note number with
respect to bonders) maintained by the Subsidiaries in connection
with the conduct and operation of their respective businesses or
by which any of their assets are covered. Except as otherwise
disclosed in such Schedule 18 , the policy holder is in good
standing with respect to its obligations under the insurance
contracts. The Contracts listed in Schedule 18 are in full force
and effect in accordance with their respective terms and will
remain in full force and effect after the Closing. The Vendor
has not provided inaccurate, incomplete or misleading
information in any material aspect in connection with any such
Contracts nor has the Vendor failed to give any notice or
present any claim thereunder in due and timely fashion, or as
required by any such Contracts, so as to jeopardize full
recovery thereunder.
4.3 Representations and Warranties of the Purchaser
4.3.1 Organisation. The Purchaser is a company existing and in good
standing under the laws of Italy and has all necessary corporate
powers and authority to execute and deliver the documents
described herein to which it will be a party and to perform its
obligations hereunder and thereunder.
4.3.2 Authorisation. This Agreement has been duly authorised, executed
and delivered by the Purchaser.
4.3.3 No Violation. The execution and delivery of this Agreement by
the Purchaser and the consummation of the transactions provided
for herein will not result in the violation of, or constitute a
default under or conflict with or cause the acceleration of any
obligation of the Purchaser under: (i) any contract to which the
Purchaser is a party or by which it is bound; (ii) any provision
of the by-laws or resolutions of the board of directors or
shareholders of the Purchaser; (iii) any judgement, decree,
order or award of any court, Governmental Entity or arbitrator
having jurisdiction over the Purchaser.
4.3.4. Immediately available Funds/No Financing The Purchaser warrants
and represents that it has and will have at the Closing Date all
the necessary funds in order to pay the Purchase Price and to
reimburse the Shareholders'Loans as provided respectively in
Articles 3.2 and 3.3 of this Agreement. The Purchaser warrants
and represents that it will not make any request for financing
or loans from any third party which could affect the completion
of any of the transactions hereunder.
5. SURVIVAL OF REPRESENTATIONS AND WARRANTIES
5.1 Survival of Representations and Warranties of the Vendor
The representations and warranties of the Vendor contained in this
Agreement and any agreement, instrument, certificate or other document
executed or delivered pursuant hereto shall survive the Closing Date for
a period of two years and, notwithstanding the Closing Transactions, nor
any investigation made by or on behalf of the Purchaser, shall continue
in full force and effect for the benefit of the Purchaser during such
period. It is in any case understood that, as far as Tax, labour and
social contribution matters are concerned, all representations and
warranties of the Vendor contained in this Agreement and any agreement,
instrument, certificate or other document executed or delivered pursuant
hereto shall remain in full force and effect until the relevant
forfeiture dates, such as, as regards Italy at the present date, seven
years after the Closing Date for Tax matters and five years after the
Closing Date for labour and social contribution matters.
5.2 Survival of the Representations and Warranties of the Purchaser
The representations and warranties of the Purchaser contained in this
Agreement and any agreement, instrument, certificate or other document
executed or delivered pursuant hereto shall survive the Closing for a
period of two years.
6 UNDERTAKINGS
6.1 Conduct of Business until the Management Date.
From December 31st, 1999 and through the Management Date, the Vendor has
caused and shall cause the Subsidiaries to conduct their respective
businesses only in the ordinary and normal course consistent with good
management practices and shall cause the Subsidiaries to: (a) preserve
intact their present business organization; (b) keep available the
services of present officers and employees without modifying the
relevant employment terms and conditions; (c) preserve the present
business relationships with customers, suppliers and all third parties
in general; (d) maintain and keep the properties, equipment, supplies,
inventory and other assets of the Subsidiaries in good repair and
condition except for deterioration due to ordinary wear and tear and
damage due to casualty; (e) maintain in full force and effect insurance
coverage comparable in amount and in scope of coverage to that now
maintained and adequate to the business; (f) comply with and perform all
obligations and duties imposed by applicable laws, rules, regulations
and orders imposed by administrative authorities, except as may be
contested by the Subsidiaries in good faith by appropriate proceedings.
Until the Management Date the Vendor shall be entitled to execute the
conversion into equity of the Shareholders' Loans, and to grant further
loans at fair market conditions to the Subsidiaries, provided that such
conversion and further loans are previously communicated to Vendor and
that the overall amount of the loans does not exceed ITL 28.000.000.000
(twenty eight billion) including those converted. It is understood that
all such transaction shall be taken into account for the purpose of the
assessment of the Management Date Financial Statement.
6.2 No Dividends
Until the Closing Date, no Subsidiary shall pay any dividend, make any
payments on account of dividends or make any distribution to its
shareholders; the Vendor shall not cause the Subsidiaries to reimburse
in whole or in part the Shareholders' Loans.
6.3 No amendment to statutory documents
The Vendor covenants that, from the date hereof to the Closing Date, the
Articles of Incorporation and By-laws of the Subsidiaries shall not be
amended without the prior written consent of the Purchaser.
6.4 No change in the Subsidiaries structure
The Vendor covenants that, from the date hereof until the Closing Date,
the present ownership structure of the Subsidiaries shall not be
modified.
6.5 Industrial and intellectual property
The Vendor assigns hereby to Purchaser all its interests in all
industrial and intellectual property, including patents, know how,
trademarks and trade names necessary or relevant for carrying out the
business of the Subsidiaries, or in any case used in such business, and
in particular the trademark and trade name "Moto Guzzi", effective as on
the Closing Date subject to the conditions precedent set forth herein.
The Vendor therefore undertakes hereby the obligations (i) not to
dispose in any manner of such industrial and intellectual property,
including by means of licensing or sub licensing, until the Closing
Date, (ii) to use until the Management Date such industrial and
intellectual property only in the ordinary course of business of the
Subsidiaries, and (iii) to desist, as of the Management Date, from using
worldwide all such industrial and intellectual property. Within the
Closing Date Vendor shall modify its corporate name so as to eliminate
the name "Moto Guzzi".
6.6 Non competition For a period of three years after the Management Date
the Vendor shall not engage worldwide directly or indirectly, also by
means of acquisition of any controlling interest, in the business of
manufacturing, selling, anyhow distributing, or marketing motorcycles,
components or spare parts thereof. The Vendor acknowledges and accepts
that all consideration for such non competition obligation has been duly
calculated and included in the Purchase Price. The Vendor shall procure
that the resigning Directors, with the exception of Mr. Scandellari,
director of Moto Guzzi S.p.A., shall undertake analogous valid and
binding commitments in favor of Purchaser, to be given at the Management
Date, in the form contained in Schedule 19.
6.7 Management of the Subsidiaries in the Management Period
6.7.1 During the Management Period the Purchaser shall oversee the
management of the Subsidiaries. To this purpose, Vendor agrees
to cause the Shareholders' meetings of the Subsidiaries duly
convened prior to the Management Date to appoint at the
Management Date to serve in the Boards of Directors of the
Subsidiaries the candidates designated by Purchaser. Mr. Gianni
Bulgari as the representative of Vendor shall be appointed to
serve as Chairman of the Board of Directors of Moto Guzzi SpA
until the Closing Date, and Mr. Nick Speyer shall be appointed
to serve as Director of Moto Guzzi SpA until the Closing Date.
Mr. Alessandro Brusi, the current Chairman of the Board of
Auditors shall be re-elected to serve for the same office until
the Closing Date.
6.7.2 During the Management Period the Purchaser shall ensure that:
(i) the business of the Subsidiaries shall be conducted only in
the ordinary and normal course, consistent with good management
practice and in order to cause the subsidiaries to preserve
intact their present business organisation; (ii) the
Subsidiaries shall refrain from entering into any extraordinary
transaction such as the disposal of shareholdings or of going
concerns.
6.7.3 Should it appear necessary for the ordinary conduct of business,
during the Management Period, to grant loans to the
Subsidiaries, such loans, if not granted by Vendor, after
consultations of Gianni Bulgari and/or Nick Speyer shall be
granted or procured by Purchaser at fair market conditions
provided that in such case the Shares are pledged by the Escrow
Agent to the Purchaser or the lender, upon simple presentation
of the loan documentation, in order to secure the reimbursement.
It is agreed in this respect that the Escrow Agent shall be duly
empowered to so act by Vendor and Purchaser in the Escrow
Agreement. The number of Shares to be pledged shall represent a
value (calculated on the basis of the Purchase Price) equal to
the double of the loan so granted, and shall not exceed 25% of
the existing and outstanding share capital of each Subsidiary.
6.7.4 Should this Agreement be terminated in accordance with article
2.3 and should Closing not take place:
a) Purchaser shall cause all Directors and Statutory
Auditors appointed to serve in the Subsidiaries during
the Management Period in accordance with this Agreement
to resign immediately from their office and the Vendor
shall appoint new Directors and Auditors;
b) The Vendor undertakes not to vote, or procures that the
Subsidiaries' shareholders'meeting shall not vote, any
resolution having the purpose of claiming any
responsibility action, as per article 2393 of the
Italian Civil Code (azione sociale di responsabilita) or
similar actions of the same nature, vis-a-vis all the
Directors and Auditors of the Subsidiaries having held
their office during the Management Period. The Vendor
agrees to indemnify and hold harmless each director
against any and all losses, claims, damages,
liabilities, expenses, judgements and expenses, except
in case of liability for fraud or gross negligence.
c) Vendor shall reimburse all loans granted by Purchaser to
the Subsidiaries and Purchaser shall release the pledges
granted in order to secure the reimbursement of such
loans;
d) all claims of the Parties, if any, regarding the
Management Period, shall be raised not later than 30
days after the end of the Management Period and shall be
finally settled by the binding decision of Vendor's
Auditor and Purchaser's Auditor within 60 (sixty) days
after the raising of the claim; should Vendor's Auditor
and Purchaser's Auditor disagree on the settlement of
such claims within the aforesaid deadline, the
Independent Auditor shall issue the final and binding
decision on the Parties within the following 30 days.
The Purchaser shall only be liable for fraud, gross
negligence or gross violation in the proper conduct of
the business of the Subsidiaries by the Directors
appointed upon its indications.
7. INDEMNIFICATION - DISCHARGE OF DIRECTORS
7.1 Indemnification by the Vendor
In the event of any breach of the representations and warranties
provided for in this Agreement, Vendor shall indemnify and hold harmless
Purchaser and/or each and all of the Subsidiaries, as the case may be,
from and against any and all claims, liabilities, charges or damages
suffered by said Purchaser and/or each and all of the Subsidiaries,
provided however that the aggregate indemnification obligation of Vendor
shall not exceed, in any case, an amount equal to 15% of the Purchase
Price, including and subject to the specific limitation of
responsibility under Section 4.2.14. The indemnification provided for in
this article 7.1 shall not apply unless and until the aggregate amount
of all claims, liabilities, charges or damages for which indemnification
is sought exceeds the amount of ITL 1.000.000.000 (one billion). All
indemnification due to Purchaser or to any of the Subsidiaries shall be
paid by means of deduction in favour of Purchaser or of the relevant
Subsidiary from the Escrow Account, as provided for in the Escrow
Agreement.
7.2 Indemnification by the Purchaser
In the event of any breach of the representations and warranties
provided for in this Agreement, Purchaser shall indemnify and hold
harmless Vendor from and against all claims, liabilities, charges or
damages suffered by Vendor. The indemnification provided for in this
article 7.2 shall not apply unless and until the aggregate amount of all
claims, liabilities, charges or damages for which indemnification is
sought exceeds the amount of ITL 1.000.000.000 (one billion).
7.3 Special Rights of the Vendor with respect to Receivables.
The Vendor shall be entitled to obtain the assignment of any receivables
in respect of which indemnification has been obtained by the Purchaser
pursuant to articles4.2 and 7 of this Agreement and to take all actions
necessary for the recovery of the amounts due.
7.4 Amnesty.
At any time between the Closing Date and the date upon which the
indemnity obligations of the Vendor shall expire pursuant to Section 5.1
of this Agreement, the Vendor shall have the right to notify the
Purchaser of its reasonable request that any of the Subsidiaries avail
itself of any Applicable Laws having as an effect the right to settle
any, in whole or in part, Tax or social security liabilities covered by
Vendor's indemnification obligations hereunder (any such Applicable Law
is hereinafter referred to as an "Amnesty"). In the case that the Vendor
provides such notice, the following provisions shall apply:
(i) the Purchaser shall have the right to determine, in its
sole discretion, whether or not the Subsidiaries should
avail itself of the Amnesty. In this case the Vendor
shall pay in advance all Amnesty costs and the overall
indemnification obligation of Vendor shall be reduced
accordingly; and
(ii) if the Purchaser elects not to allow the relevant
Subsidiary to avail itself of the Amnesty
notwithstanding the Vendor's reasonable request under
this Section 7.4 , the Vendor's liability under Section
7.1of this Agreement in respect of the matter or part
thereof constituting the subject of such Amnesty shall
be limited to the amount that would have been paid by
the Vendor had the Purchaser elect to proceed with the
Amnesty in accordance with the Vendor's request.
7.5 Handling of Claims
If any event occurs which could give rise to the Vendor's liability
under Section 7.1 of this Agreement, the following provision shall
apply:
(a) the Purchaser shall give prompt written notice to the Vendor of such
event, shall provide all reasonable particulars thereof and shall
specify (if possible) all amounts the payment of which is requested in
connection therewith; provided that the failure to promptly notify the
Vendor shall not relieve the Vendor from any liability it may have under
Section 7.1 , except to the extent the Vendor shall have been materially
prejudiced by such failure;
(b) in the case of an action brought by a third party, the Vendor shall have
the right, at its own cost and expense, to participate and, to the
maximum extent permitted by law, join by counsel of their choosing, in
the defense of any action asserted or initiated, which constitutes the
subject matter of a notice to the Vendor of the kind referred to under
Paragraph (a) preceding (a "Third Party Claim");
(c) the Purchaser shall diligently defend, and cause the Subsidiaries to
diligently defend, any Third Party Claim, unless the defense thereof has
been assumed by the Vendor with the consent of the Purchaser;
(d) neither the Purchaser nor the Vendor shall make or accept any settlement
of any Third Party Claim referred to under Paragraph (b) preceding, nor
shall the Purchaser permit the Subsidiaries to do so, without the prior
written consent of the Vendor, which consent shall not be withheld or
delayed without reasonable justification. If the Vendor without any
sound reason refuses or delays its consent to a settlement proposal
submitted by the Purchaser, the Purchaser shall be entitled to settle
the Third Party Claim and to seek and obtain indemnification from the
Vendor of any and all settlement amounts and expenses; and
(e) if the Purchaser has withheld its consent to a firm, purely monetary
offer to settle any Third Party Claim which the Vendor have indicated in
writing that they are prepared to accept, the Purchaser, the
Subsidiaries (as the case may be) shall be free to refuse to enter into
such settlement and to commence or continue litigation at their own
expense, and the Vendor liability under Section 7.1 of this Agreement
with respect to such Third Party Claim shall be limited to the amount of
the proposed settlement.
7.6 Discharge of Directors
The Purchaser undertakes not to vote, or procures that the Subsidiaries'
shareholders' meeting shall not vote, any resolution having the purpose
of claiming any responsibility action, as per article 2393 of the
Italian Civil Code (azione sociale di responsabilita) or similar actions
of the same nature, vis-a-vis all the directors of the Subsidiaries
having held their office for the 5 years preceding the Management Date.
The Purchaser agrees to indemnify and hold harmless each director
against any and all losses, claims, damages, liabilities, expenses,
judgements and expenses.
The provisions contained in this article 7.6 shall not apply to the
litigation pending against Mr. Falciola, nor in the event of liability
of directors for fraud or gross negligence.
8. MISCELLANEOUS
8.1 Notices
(a) Any notice or other communication required or permitted to be
given hereunder shall be delivered in person, transmitted by
telecopy and registered letter with return receipt, addressed as
follows:
(i) if to the Vendor:
MOTO GUZZI CORPORATION
350 Park Avenue
10022 New York, NY USA
Fax no. +1.212.6445757
Attn.: Mr. Mark Hauser
(ii) if to the Purchaser:
APRILIA S.p.A.
Attn.: The President of the Board of Directors
V. Galileo Galilei n(degree) 1
I - 30033 Noale (VE)
Fax no.: +39 0415800660
(b) Any such notice or other communication shall be deemed to have
been given and received on the day on which it was delivered or
transmitted (or, if such day is not a Business Day, on the next
following Business Day).
(c) Any Party may at any time change its address for service from
time to time by giving notice to the other parties in accordance
with this section 8.1.
8.2 Consultation
Subject to any obligations arising under Applicable Laws or regulatory
requirements in force from time to time, the Parties shall consult with
each other before issuing any press release or making any other public
announcement with respect to this Agreement or the transactions
contemplated herein and neither the Vendor nor the Purchaser shall issue
any such press release or make any such public announcement without the
prior written consent of the other, which consent shall not be
unreasonably withheld or delayed.
8.3 Disclosure
Except with respect to any public announcement of the transaction
contemplated hereby pursuant to section 8.2 (and then only to the extent
so disclosed in such public announcement), neither the Vendor nor the
Purchaser shall disclose this Agreement or any aspect of such
transaction except to its board of directors, its senior management, its
legal, accounting, financial or other professional advisors or as may be
required or opportune in accordance with any Applicable Laws or any
regulatory authority, stock exchange or stock quotation system having
jurisdiction.
8.4 Costs
The Vendor and the Purchaser shall each bear the respective costs
(including legal fees, accounting and other fees and disbursements)
incurred in connection with the negotiation, preparation, execution and
carrying into effect of this Agreement and all documents referred to
herein.
Purchaser shall bear all costs and expenses related to the activity of
Purchaser's Auditor; Vendor shall bear all costs and expenses related to
the activity of Vendor's Auditor; all costs and expenses related to the
activity of the Independent Auditor shall be sustained in equal parts by
Vendor and Purchaser.
8.5 Entire Agreement
This Agreement constitutes the entire agreement between the Vendor and
the Purchaser with respect to the subject matter hereof and supersedes
all prior agreements, understandings, negotiations and discussions,
whether written or oral. There are no conditions, covenants, agreements,
representations, warranties or other provisions, expressed or implied,
collateral, statutory or otherwise, relating to the subject matter
hereof except as herein provided.
8.6 Governing Law; Arbitration
(a) Governing Law. This Agreement shall be governed by, and
construed in accordance with, the laws of Italy.
(b) Arbitration. In the event of any dispute, claim, question or
disagreement arising out of or relating to this Agreement and
the Schedules attached hereto (a "Dispute"), the Parties shall
use all reasonable efforts to settle such Dispute by amicable
negotiations within a period of 30 Business Days. If settlement
cannot be reached, all Disputes shall be finally settled under
the Rules of Arbitration of the International Chamber of
Commerce by a panel of three arbitrators appointed in accordance
with the said Rules. The arbitration shall take place in Rome.
The language of the arbitration shall be the Italian.
8.7 Successors and Assigns
Each of the Parties may not assign and transfer any of the rights under
this Agreement, in whole or in part, without the prior written consent
of the other Party. This Agreement shall inure to the benefit of and
shall be binding on and enforceable by the Vendor and the Purchaser and,
where the context so permits, their respective successors and permitted
assigns.
8.8 Amendments and Waivers
No amendment or waiver of any provision of this Agreement shall be
binding on the Vendor and the Purchaser unless consented to in writing
by both of them. No waiver of any provision of this Agreement shall
constitute a waiver of any other provision, nor shall any waiver
constitute a continuing waiver unless otherwise expressly provided.
8.9 Best efforts
Subject to the terms and conditions herein provided, each of the Parties
hereto shall cooperate and use its respective reasonable best efforts to
take, or cause to be taken, all action and to do, or cause to be done,
all things necessary, proper or advisable under applicable laws and
regulations to consummate and make effective the transactions
contemplated by this Agreement, including using its best efforts to
obtain all necessary or appropriate waivers, consents and approvals
(including, without limitation, any required under any antitrust
provisions of applicable law), to effect all necessary registrations,
filings and submissions and to lift any injunction or other legal bar to
the transactions contemplated hereby (and, in such case, to proceed with
such transactions as expeditiously as possible); provided, that nothing
in this section 8.9 shall affect any responsibility or obligation
specifically allocated to any party in this Agreement.
8.10 No Brokers
Each Party warrants and represents that there are no brokers other than
Banca IMI and Caretti & Associati SpA involved in this Agreement and the
transactions contemplated hereunder, that all Banca IMI`s fees will be
paid by the Vendor, and that all Caretti & Associati SpA's fees shall be
paid by Purchaser.
IN WITNESS WHEREOF this Agreement has been executed by the Parties.
MOTO GUZZI CORPORATION
by:/s/Gianni Bulgari
________________
Title: Board Member
Authorised Signatory
APRILIA S.P.A.
by:/s/Ivano Beggio
_______________
Title: President
Authorised Signatory
EXHIBIT 99.1
Press Release
SALE OF MOTO GUZZI TO APRILIA S.P.A.
Noale (Venice), 14th April '00 - Today an agreement was signed at Noale
by Messrs Beggio (President of Aprilia S.p.A) and Bulgari (Board Member of Moto
Guzzi Corporation) for the acquisition by Aprilia S.p.A. of Moto Guzzi S.p.A.
and the three commercial companies Moto Guzzi France S.a.r.l., MGI Motorcycle
GmbH and Moto Guzzi North America Inc. which are all owned by Moto Guzzi
Corporation.
The purchase price including the assumption of debt is equivalent to 132 billion
Lire. The agreement is subject to the approval of Moto Guzzi Corporation
shareholders. The majority shareholder O.A.M. S.p.A. (a subsidiary of Trident
Rowan Group) has already signalled its intention to vote in favour of the
agreement at the shareholders meeting.
In addition the parties have agreed that Aprilia will be involved in the
management of the four Subsidiaries as from 1 May 2000. Gianni Bulgari will
become for a transition period the President of Moto Guzzi S.p.A. and his
appointment will take place in the next few days.
" We are delighted to see Moto Guzzi pass into the hands of Aprilia as we are
convinced that this will ensure a continued turnaround of the Company", said
Mark Hauser Chairman and Chief Executive of Moto Guzzi Corporation.
"We have recently brought an important new product - the V11 Sport - to the
market and it is enjoying considerable success. We had, however, reached the
conclusion that further major investments are needed and that a company such as
Aprilia was ideally placed to implement such a programme."
"We have worked with determination" said Ivano Beggio, President of Aprilia
S.p.A., "to return into Italian hands a brand of great tradition that has
contributed to motorcycling history. The agreement that we have reached gives me
particular satisfaction and the objective of realising the full potential of the
"Eagle" brand of Mandello Lario represents a new challenge that I am looking
forward to. We want to construct a national motorcycle grouping combining
tradition and strong innovative capacities which will be internationally
competitive".
"Moto Guzzi," explained President Beggio ,"will continue to be based at its
historical site at Mandello and the products will maintain all the sought after
characteristics that have made them famous, while at the same time taking
advantage of Aprilia's technological and R&D capabilities. It is our intention
to commit all of the know-how and financial resources that will be necessary for
the success of this project".
Moto Guzzi was advised by Banca IMI, lead by Dr. Christopher Wigley and Aprilia
was advised by Caretti & Associati lead by Dr. Francesco Caretti.
