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
Date of Report: September 8, 1999 Commission file number: 0-16214
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ALBANY INTERNATIONAL CORP.
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(Exact name of registrant as specified in its charter)
Delaware 14-0462060
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(State or other jurisdiction of (IRS Employer Identification Number)
incorporation or organization)
1373 Broadway, Albany, New York 12204
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: 518-445-2200
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Item 2. Acquisition or Disposition of Assets
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On August 24, 1999, Albany International Corp. ("the Registrant") completed the
purchase of shares of the paper machine clothing business of The Geschmay Group
for approximately $232 million in cash. The acquired corporations ("Geschmay")
had aggregate 1998 sales of approximately $160 million and were part of a group
of family-owned companies. Geschmay's principal operations are located in Europe
and the United States.
In order to provide funds for this acquisition, the Registrant entered into a
new $750 million credit facility with its banks.
The Registrant's August 24, 1999 press release and the Share Purchase Agreement
each appear as an Exhibit to this Current Report and are incorporated herein by
reference.
Item 7. Financial Statements and Exhibits
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(a) Financial statements of business acquired.
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The financial statements of Geschmay are not available at this time.
The Registrant will include these financial statements in a Current
Report on Form 8-K that will be filed no later than 60 days from the
date of this filing.
(b) Pro forma financial information.
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The pro forma information of Geschmay is not available at this time.
The Registrant will include the pro forma financial information in a
Current Report on Form 8-K that will be filed no later than 60 days
from the date of this filing.
(c) Exhibits.
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Exhibit No. Description
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2.1 Share Purchase Agreement
99.1 Press Release
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 thereunto duly authorized.
ALBANY INTERNATIONAL CORP.
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(Registrant)
Date: September 8, 1999
By /s/ Michael C. Nahl
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Michael C. Nahl
Sr. Vice President and
Chief Financial Officer
Exhibit 2.1
Share Purchase Agreement
SHARE PURCHASE AGREEMENT
SHARE PURCHASE AGREEMENT, dated as of May 26, 1999, among the
undersigned:
A.
Mistral International Finance A.G., a Luxembourg corporation with a share
capital of D.M. 27,998,200, having its principal office at 241 Route
D'Arlon, L-1150 Luxembourg ("MIF1");
Golden Bridge S.A., a Belgian societe anonyme with a capital of BEF 2,500,000,
having its principal office at 4 Place de Tomberg, B 1200 Bruxelles,
Belgium ("GB"); and
(each of MIF1 and GB hereinafter referred to as a "Seller" and, collectively as
the "Sellers");
of the first part,
AND:
B. Albany International Corp., a corporation organized under the laws of
the State of Delaware, having its principal place of business at 1373
Broadway, Albany, New York, 12204;
(hereinafter referred to as "Albany");
of the second part,
WHEREAS
The Sellers are the owners, directly or indirectly, of the
following ownership interests (the "Shares") in the following entities:
2,899,200 shares par value ITL 2,000 of Feltrificio Veneto S.p.A., an
Italian S.p.A. with a capital of ITL 6,000,000,000, having its registered
office at Via delle Machine, 2-1 30175 Marghera, Venezia, Italy,
hereinafter referred to as "FV";
100,000 shares of Geschmay Asia Private Limited, a Singapore corporation
with a capital of 100,000 Singapore dollars, having its registered office
at 9 Raffles Place #55-01 Republic Plaza, Singapore 048619 hereinafter
referred to as "GAS";
Share participations (Geschaftsanteil) having a nominal value of DM
14,850,000 representing 99% of the share participation in Wurttembergische
Fitztuchfabrik D. Geschmay GmbH, a German GmbH with a capital of DM
15,000,000, having its registered office at Im Pfingstwasen-D 73035
Goppingen, Germany, hereinafter referred to as "WFG";
24,722 shares of common stock, no par value, of Wangner Systems
Corporation, a Delaware corporation having its principal business office
at 525 Piedmont Highway, Greenville, South Carolina, USA, hereinafter
referred to as "WSC";
99,994 shares of Cofpa S.A., a French societe anonyme with a capital of FR
10,000,000, having its registered office at 150 Route de Vars-F 16160 Gond
Pontouvre, hereinafter referred to as "COFPA"; and
100% of the share participations (Geschaftsanteil) in Geschmay Research
GmbH, a German GmbH with a capital of DM 50,000, having its registered
office at Im Pfingstwasen-D 73035 Goppingen, Germany, hereinafter referred
to as "Geschmay Research";
(each of FV, GAS, WFG, WSC, COFPA and Geschmay Research hereinafter referred to
as a "Company" and, collectively, as the "Companies").
The Sellers wish to sell, or cause to be sold by an Affiliate
of the Sellers, and Albany wishes to purchase, or cause to be purchased by an
Affiliate of Albany, the Shares on the terms and subject to the conditions
hereinafter set forth.
NOW, THEREFORE, THE PARTIES HERETO HEREBY AGREE AS FOLLOWS:
ARTICLE 0
DEFINED TERMS
0.1 "1997 Financial Statements" shall have the meaning specified
in Section 2.6(a).
0.2 "1998 Business Consolidated Financial Statements" shall have
the meaning specified in Section 2.6(b).
0.3 "1998 Financial Statements" shall have the meaning specified
in Section 2.6(a).
0.4 "Affiliate" shall mean, with respect to any person or entity,
(a) any other person or entity directly or indirectly
controlling, controlled by or under direct or indirect common
control with such person or entity (including, without
limitation, (i) any officer or director of such entity, (ii)
any person or entity that beneficially owns or controls 5% or
more of any class of voting securities of, equity interests
in, or profit interests in such designated person or entity,
or (iii) any person or entity of which such designated person
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or entity beneficially owns or controls 5% or more of any
class of voting securities, equity interests or profit
interests), (b) any relative of any such person, and (c) any
trust for the benefit of any person or entity described in
clauses (a) or (b) above.
0.5 "Agreement" shall mean this Share Purchase Agreement.
0.6 "Business" shall mean the PMC and Engineered Fabrics
businesses as currently conducted, directly or indirectly, by
the Sellers and their Affiliates, including, without
limitation, such Business conducted under the names
"Feltrificio Veneto", Wangner Systems Corporation" , "WFG",
"Geschmay", "Geschmay Asia", "Wangner Forming Fabrics" (North
America only), "Wangner System Exports", "Wangner System
Canada", "Brandon Drying Fabrics", "Geschmay Wet Felts",
"Cofpa", "Nuova Tele Industriali", and "NTI".
0.7 "Cash Portion" shall mean the cash portion of the Purchase
Price as described in Schedule 1.2 hereto.
0.8 "CERCLA" shall mean the Comprehensive Environmental Response,
Compensation and Liability Act, 42 U.S.C.
9601, et seq.
0.9 "Charitable Pledge" means the pledge agreement to be entered
into prior to the Closing Date between WFG and Keren Hayesod,
Jerusalem, Israel, a true and complete copy of which has
heretofore been delivered by the Sellers to Albany.
0.10 "Claim Notice" shall have the meaning specified in Section
7.2(a).
0.11 "Closing" shall mean the closing of the transactions
contemplated herein, as described in Section 1.3(a)
hereof.
0.12 "Closing Date" shall mean the date on which the Closing
occurs.
0.13 "Code" shall mean the United States Internal Revenue Code, as
amended.
0.14 "COFPA" shall have the meaning specified in the WHEREAS
clauses hereof.
0.15 "Company" shall mean each of FV, WFG, COFPA, WSC, GAS
and Geschmay Research.
0.16 "Company Business" shall mean the manufacture and/or sale of
(a) PMC and/or (b) Engineered Products.
0.17 "Competing Firm" shall mean any corporation, firm,
partnership, proprietorship or other entity, other than
Albany, which engages in any Company Business; except that
"Competing Firm" shall not mean Tissue Tec S.r.l. for as long
as the TT Supply Agreement is in effect.
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0.18 "Consent" shall mean any consent, waiver, approval,
authorization, exemption, registration, license or
declaration.
0.19 "Contract" shall mean any contract (written or oral),
undertaking, commitment, arrangement, plan or other legally
binding agreement or understanding.
0.20 "Covered Person" shall have the meaning specified in Section
4.4(a) hereof.
0.21 "CR Agreement" shall mean the Agreement between Albany, or an
entity designated by Albany, and the owner of the CR Shares,
substantially in the form of Exhibit A hereto.
0.22 "CR Consideration" shall mean the purchase price payable for
the CR Shares, as specified in the CR Agreement.
0.23 "CR Shares" shall mean the ownership
interest(Geschaftsanteil) of WFG to be transferred pursuant
to the CR Agreement.
0.24 "Damages" shall mean any and all damages, penalties,
judgments, assessments, losses, costs and expenses (including,
but not limited to, reasonable attorneys' fees and the costs
and expenses of litigating any claims).
0.25 "Date Data" shall mean any data of any type that includes date
information or which is otherwise derived from, dependent on
or related to date information.
0.26 "Date-Sensitive System" shall mean any software, microcode or
hardware system or component, including any electric or
electronically controlled system or component, that processes
any Date Data and that is installed, in development or on
order by any of the Target Group Companies for their internal
use, or which any of the Target Group Companies sells, leases,
licenses, assigns or otherwise provides, or the provision or
operation of which any of the Target Group Companies provides
the benefit, to its customers, vendors, suppliers, affiliates
or any other Person.
0.27 "Debt" shall mean short, medium or long term borrowings from
banks or other third parties, any obligations evidenced by
notes, bonds or similar instruments, capital lease
obligations,equipment lease obligations, recourse obligations
with respect to discounted notes or receivables, or
obligations (including off-balance sheet obligations; except
for (1) such obligations in the form of a mortgage or other
grant of collateral security, in which case
"Debt"shall mean only the amount of the underlying obligation,
without duplication, and (2) any amounts in the nature of
interest payable under finance leases) similar to the
foregoing,or any guarantees of any of the foregoing
obligations of any third party (including any of the foregoing
obligations that are owed to any Seller or any Affiliate of
any Seller).
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0.28 "Direct Claim" shall have the meaning specified in Section
7.2(a).
0.29 "Employment Agreement" shall mean any employment, consulting,
severance, termination, compensation or other agreement
between a Target Group Company and any of its officers,
directors or employees.
0.30 "Engineered Product" shall mean (a) any fabric or textile used
in the manufacture of spunbond, airlaid, glass mat or other
non-woven textiles, or (b) any fabric or textile used in the
pulp industry (including, without limitation, drum covers,
DNT's, chemi-washers, filtration fabrics and coarse forming
fabrics).
0.31 "Environmental Law" shall mean any United States federal,
state or local or non-U.S. Law or Judgment relating to
releases, discharges, emissions or disposals to air, water,
land or groundwater of Hazardous Materials; to the use
handling or disposal of polychlorinated biphenyl's, asbestos
or urea formaldehyde or any other Hazardous Material; to the
treatment, storage, disposal or management of Hazardous
Materials; to exposure to toxic, hazardous or other
controlled, prohibited or regulated substances; and to the
transportation, release or any other use of Hazardous
Materials, including CERCLA, RCRA, TSCA, the Occupational,
Safety and Health Act, 29 U.S.C. 651, et seq., the Clean Air
Act, 42 U.S.C. 7401, et seq., the Federal Water Pollution
Control Act, 33 U.S.C. 1251, et seq., the Safe Drinking Water
Act, 42 U.S.C. 300f, et seq., HMTA and EPCRA, and other
comparable Laws and all rules, regulations and guidance
documents promulgated pursuant thereto or published
thereunder.
0.32 "EPCRA" shall mean the Emergency Planning and Community Right
to Know Act, 42 U.S.C. 11001 et seq.
0.33 "ERISA" shall mean the Employee Retirement Income Security Act
of 1974, as amended.
0.34 "Escrow Agreement" shall mean the escrow agreement among the
parties hereto and the escrow agent identified therein,
substantially in the form of Exhibit B hereto.
0.35 "Escrow Amount" shall have the meaning specified in Section
1.3(c).
0.36 "Excluded Assets" shall mean the land, buildings and other
assets of FV and WFG listed on Schedule 0.36 hereto.
0.37 "FV" shall have the meaning specified in the WHEREAS clauses
hereof.
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0.38 "Geschmay GmbH" shall mean Geschmay GmbH, a German GmbH,
having its principal office at Im Pfingstwasen-D, 73035
Goppingen, Germany, a wholly-owned subsidiary of MIF1.
0.39 "Geschmay Research" shall have the meaning specified in the
WHEREAS clauses hereof.
0.40 "GAS" shall have the meaning specified in the WHEREAS clauses
hereof.
0.41 "GB" shall have the meaning specified in the WHEREAS clauses
hereof.
0.42 "Greenville Agreement" shall mean that agreement between the
Purchasers and the Sellers to be entered into on the Closing
Date, substantially in the form previously exchanged by the
parties.
0.43 "Hazardous Material" shall mean any explosive, radioactive or
abnormally flammable material, or any other hazardous or toxic
waste, substance or material, including substances defined as
"hazardous substances", "hazardous materials", "solid waste"
or toxic substances under any applicable laws (including,
without limitation, CERCLA, EPCRA, RCRA, TSCA or HMTA).
0.44 "HMTA" shall mean the Hazardous Materials Transportation Act,
49 U.S.C. 1802 et seq.
0.45 "Indemnity Amount" shall mean an amount initially equal to
$50 million, subject to increase by the Sellers as
provided in Section 7.6 hereof.
0.46 "Indemnity Basket" shall initially mean $5 million. During the
warranty periods described in section 7.4 hereof, the
Indemnity Basket will be increased by an amount equal to 50%
of any corporate income tax reduction (sec. 27 para. 1
Corporate Income Tax Act, "KStG") resulting from profit
distributions after the Closing Date up to a maximum of DM 2
million. The increase of the Indemnity Basket shall be limited
to the corporate income tax reduction resulting from the
distribution of retained profit accrued up to the Closing
Date. The Indemnity Basket increase shall not be diminished by
any corporate income tax increase (sec. 27 KStG) triggered by
such profit distribution. The corporate income tax reduction
shall be calculated on the basis of a (fictive) breakdown of
WFG's disposable equity (Gliederungsrechnung des verwendbaren
Eigenkapitals, sec. 30 KStG) as of the Closing Date under
consideration of WFG's profit accrued up to the Closing Date.
0.47 "IRS" shall mean the United States Department of the Treasury
Internal Revenue Service.
6
0.48 "Judgment" shall mean any judgment, injunction, order, ruling
or award of any court, arbitrator or other judicial authority
or any governmental, administrative or regulatory authority.
0.49 "Key Person Non-Competition Agreement" shall mean that
agreement between WFG and the other parties named therein,
substantially in the form of Exhibit C hereto, to be entered
into on the Closing Date.
0.50 "Law" shall mean any law, rule or regulation of any
governmental, administrative or regulatory authority.
0.51 "Liability" shall mean any liability or obligation of any
nature, whether known or unknown, accrued, absolute,
contingent or otherwise, and whether due or to become due.
0.52 "Lien" shall mean any mortgage, lien, pledge, charge, security
interest or surety. For purposes of this Agreement, a person
shall be deemed to hold subject to a Lien any asset or
property that is subject to the interest of a vendor or lessor
under any conditional sale agreement, lease or other title
retention agreement.
0.53 "Lodi1 Lease" shall mean that certain lease of real property
(including land and buildings), dated as of the Closing Date,
between FV and an Affiliate of the Sellers and relating to the
land and buildings located in Lodi, Italy in which the Sellers
have heretofore conducted the Business, in the form of Exhibit
D.
0.54 "Marghera Lease" shall mean that certain lease of real
property (including land and buildings), dated as of the
Closing Date, between FV and an Affiliate of the Sellers and
relating to the land and buildings located in Marghera, Italy
in which the Sellers have heretofore conducted the Business,
in the form of Exhibit E.
0.55 "Material Adverse Effect" shall mean (a) a material and
adverse effect on the condition (financial or otherwise),
assets, properties, liabilities, rights, obligations,
operations or prospects of the Target Group Companies or the
Business, or (b) a material impairment or delay of the ability
of the Sellers to perform their obligations under this
Agreement.
0.56 "Mistral Receivable" shall mean the receivable owed by MIF1 to
WFG in the amount of DM 12,047,141 plus interest at the rate
of 4.25% per year from February 1, 1999 to the date of payment
relating to the purchase of the share participation of
Geschmay GmbH from WFG.
0.57 "NTI" shall mean Nuova Tele Industriali (S.r.l.),an Italian
S.r.l. that was merged with and into FV during 1998.
0.58 "PBGC" shall mean the United States Pension Benefit Guaranty
Corporation.
7
0.59 "Permit" shall mean any permit, license, regulatory approval
or franchise from any governmental authority.
0.60 "PMC" shall mean paper machine clothing of any kind
(including, without limitation, forming, pressing and dryer
fabrics) and belts of any kind (including, without limitation,
corrugator, calendar and press belts) used in the pulp and
paper industry.
0.61 "Permitted Encumbrances" shall mean any Liens specifically
described in Schedule 0.61 hereto.
0.62 "Plan" shall mean any plan, program, arrangement,agreement or
commitment which is an employment, consulting, severance pay,
termination pay, change in control or deferred compensation
agreement, or an executive compensation, incentive bonus or
other bonus, employee pension, profit-sharing, savings,
retirement, stock option, stock purchase, stock appreciation
rights,severance pay, life, health, disability or accident
insurance plan or vacation, or other employee benefit plan,
program, arrangement, agreement or commitment, including any
"employee benefit plan" as defined in Section 3(3) of ERISA,
with respect to which any Target Group Company may have any
liability.
0.63 "Proceeding" shall mean any action, suit, claim or legal,
administrative, arbitration or other alternative dispute
resolution proceeding or investigation.
0.64 "Purchase Price" shall have the meaning specified in Section
1.2 hereof.
0.65 "Purchasers" shall mean Albany and one or more Affiliates of
Albany to be designated prior to the Closing.
0.66 "Purchasers'Accountants"shall mean PricewaterhouseCoopers LLP.
0.67 "RCRA" shall mean the Resource Conservation and Recovery Act,
42 U.S.C. 6901, et seq.
0.68 "Real Estate" shall have the meaning specified in Section 2.10
hereof.
0.69 "Seller" and "Sellers" shall have the meaning specified in
the preamble to this Agreement.
0.70 "Sellers' Accountants" shall mean KPMG.
0.71 "Sellers' Representative" shall have the meaning specified in
Section 9.10.
0.72 "Shares" shall have the meaning specified in the WHEREAS
clauses.
8
0.73 "Subsidiary" shall mean each company, partnership or other
business entity of which 10% or more of the outstanding share
capital or other equity interest is, or will at the Closing
be, owned, directly or indirectly, by any Company.
0.74 "Target Financial Statements" shall have the meaning specified
in Section 2.6(a) hereof.
0.75 "Target Group Company" shall mean any Company or Subsidiary.
0.76 "Tax" shall mean (i) any tax, assessment, levy, impost, duty,
fee, withholding, or other similar mandatory charge,
including, without limitation, any income tax, franchise tax,
transfer tax or fee, sales tax, excise tax, ad valorem tax,
value-added tax, withholding tax, payroll tax, unemployment
insurance tax, social security tax, minimum tax and social
charges or contributions, gross receipts tax, business license
tax, real and personal property tax, environmental tax,
registration tax, investment grants (Investitionszuschusse),
investment allowances (Investitionszulagen) or capital duties
and (ii) any interest, penalties or additions to tax imposed
on a Tax described in clause (i) hereof, imposed by any
national, regional,local or foreign government or subdivision
or agency of any of the foregoing.
0.77 "Tax Return" means a report, return, statement, notice,
election or other information (including any amendments)
required to be supplied to a governmental entity with respect
to Taxes including, where permitted or required, combined or
consolidated returns for any group of entities that includes
any of the Target Group Companies.
0.78 "Third Party Claim"shall have the meaning specified in Section
7.2(a) hereof.
0.79 "Trademark" shall mean any trademark (registered or
unregistered), trademark application, service mark, service
mark registration, service mark application, assumed name or
trade name (registered or unregistered) used or held by any of
the Target Group Companies in connection with its operations
or the Business.
0.80 "TT Supply Agreement" shall mean that certain supply agreement
to be dated as of the Closing Date, whereby one or more Target
Group Companies will purchase certain felts from Tissue Tec
S.r.l., substantially in the form of Exhibit F.
0.81 "TSCA" shall mean the Toxic Substances Control Act, 15 U.S.C.
2601, et seq.
0.82 "Visibilia Lease" shall mean that certain Lease Agreement
between Visibilia s.p.a. and FV in the form of Exhibit H
hereto.
9
0.83 "Visibilia Services Agreement" shall mean that certain
services agreement between Visibilia s.p.a./ Visibilia Team
s.p.a. and FV in the form of Exhibit G hereto.
0.84 "WFG" shall have the meaning specified in the preamble to this
Agreement.
0.85 "WSC" shall have the meaning specified in the preamble to this
Agreement.
0.86 "WSC Auction Agreement" shall mean the agreement, dated March
19, 1999, between Geschmay GmbH, Wangner Finckh GmbH and TIAG
AG relating to the acquisition of certain shares of WSC by
Geschmay GmbH or an Affiliate designated by Geschmay GmbH.
0.87 "WSC Employer Group" shall mean a group consisting of each
person that is considered a single employer with WSC for
purposes of Title IV of ERISA or section 414 of the Code.
0.88 "WSC Plan" means any plan, program, arrangement, agreement or
commitment which is an employment, consulting, severance pay,
termination pay, change in control or deferred compensation
agreement, or an executive compensation, incentive bonus or
other bonus, employee pension, profit-sharing, savings,
retirement, stock option, stock purchase, stock appreciation
rights, severance pay, life, health, disability or accident
insurance plan or vacation, or other employee benefit plan,
program, arrangement, agreement or commitment, including any
"employee benefit plan" as defined in Section 3(3) of ERISA,
with respect to which WSC may have any liability.
0.89 "Year 2000 Compliant" means (i) with respect to Date Data,
that such data is in proper format and accurate for all dates
in the twentieth and twenty-first centuries, and (ii) with
respect to Date-Sensitive Systems, that each such system
accurately processes all Date Data, including for the
twentieth and twenty-first centuries, without loss of any
functionality or performance, including but not limited to
calculating, comparing, sequencing, storing and displaying
such Date Data (including all leap year considerations), when
used as a stand-alone system or in combination with other
software or hardware.
ARTICLE I
SALE AND PURCHASE OF THE SHARES
1.1 Sale and Purchase of the Shares. Schedule 1.1 sets forth
each Seller's direct or indirect ownership of Shares in each Company, indicating
in each case the Affiliate of Sellers that owns such Shares directly. On the
terms and subject to the conditions of this Agreement, at the Closing: (i) the
10
Sellers agree to sell, or cause to be sold to Albany, or one or more Affiliates
of Albany to be identified by Albany prior to the Closing, and Albany agrees to
purchase, or to cause one or more such Affiliates of Albany to purchase, all of
the Shares, free and clear of all Liens and other interests of others, together
with all rights attaching thereto, including entitlement to all profits realized
during the 1998 and 1999 fiscal years as well as any undistributed profits from
prior fiscal years and (ii) the Sellers agree to cause CR to sell the CR Shares
to the purchaser identified in the CR Agreement.
1.2 Purchase Price. The aggregate consideration to be paid for
the Shares shall be as described in Schedule 1.2 hereto (the "Purchase Price").
The Purchase Price shall be paid in the manner and at the times set forth in
this Article I. The Purchase Price shall be allocated among the various Shares
in the manner set forth in Schedule 1.2.
1.3 Closing. (a) The closing of the transactions contemplated
in this Agreement (the "Closing") shall be held in Brussels, Belgium at the
offices of Cleary, Gottlieb, Steen & Hamilton, or, at Seller's option, in
Luxembourg at the offices of Advocat Nico Schaeffer, (x) on the tenth business
day after each of the conditions set forth in Article VI of this Agreement shall
have been fulfilled or waived in accordance herewith (but in any event no sooner
than 90 calendar days from the date hereof) or (y) at such other time, place and
date as the parties hereto may designate by mutual consent.
(b) All proceedings to be taken and all documents to be
executed and delivered by all parties at the Closing shall be deemed to have
been taken and executed simultaneously, and no proceedings shall be deemed taken
nor any documents executed or delivered until all have been taken, executed and
delivered.
(c) At the Closing (i) Purchasers and Sellers shall enter into
the Escrow Agreement with the escrow agent named therein, (ii) the Purchasers
shall pay, or cause to be paid, to the Sellers' Representative a portion of the
Purchase Price equal to the Purchase Price less the Indemnity Amount, (iii) the
Purchasers shall pay, or cause to be paid, to the escrow agent named in the
Escrow Agreement a portion of the Purchase Price equal to the Indemnity Amount
(the "Escrow Amount"), (iv) the parties thereto shall enter into the Marghera
Lease and the Lodi1 Lease, (v) the parties thereto shall enter into the TT
Supply Agreement, (vi) the parties thereto shall enter into the Key Person
Non-Competition Agreement, (vii) the parties thereto shall enter into the CR
Agreement, and (viii) the parties thereto shall enter into the Greenville
Agreement.
(d) The Purchase Price shall be paid by means of one or more
wire transfers in immediately available funds to accounts designated at least
ten business days prior to the Closing Date by the Sellers' Representative and
the escrow agent under the Escrow Agreement, as the case may be.
(e) At the Closing the Sellers shall deliver, or shall cause
to be delivered, to the Purchasers the certificates, transfer orders and all
other instruments described in Section 6.1(f) hereof.
(f) At the Closing, the Purchasers shall make, or cause to be
made, the payments required to be made pursuant to Section 5.6 hereof.
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1.4 Separate Agreements. In the interest of time and in order
to permit a public announcement of the transactions contemplated herein, the
parties have entered into this Share Purchase Agreement for the purchase of all
of the Shares of all of the Companies. The parties contemplate that
reorganization within their consolidated groups between the date hereof and the
Closing may make it desirable to replace this Agreement with a number of
separate agreements relating to the various Shares. It is not contemplated that
such separate purchase agreements would create any additional rights or
obligations for any party. No party hereto is under any obligation to enter into
any such replacement agreements.
ARTICLE II
REPRESENTATIONS AND WARRANTIES OF THE SELLERS
Each of the Sellers hereby represents and warrants to
Purchasers as follows:
2.1 Authority; Enforceability. Each of the Sellers has the
capacity to enter into this Agreement and to carry out its obligations
hereunder. This Agreement has been duly executed by each of them and constitutes
a legal, valid and binding obligation of each such person or entity, enforceable
against each in accordance with its terms. The execution of this Agreement and
the consummation of the transactions contemplated hereby have been duly
authorized by all necessary action on the part of each of the Sellers and no
other actions on the part of any of the Sellers is necessary to authorize the
execution of this Agreement or the consummation of the transactions contemplated
hereby.
2.2 Companies; Organization. (a) Schedule 2.2 (part 1) hereto
sets forth an accurate and complete list of each Subsidiary of each Company,
indicating the jurisdiction of incorporation, capital structure and the nature
and level of ownership in such Subsidiary by such Company and any other
stockholder. Except as set forth on Schedule 2.2 (part 2) hereto, none of the
Target Group Companies, directly or indirectly, owns any interest in any other
corporation, partnership or other business entity.
(b) Each of the Target Group Companies is, and at Closing will
be, a corporation duly organized, validly existing and in good standing under
the laws of its jurisdiction of incorporation and has full power and authority
to own, lease and operate the assets held or used by it and to conduct the
Business. Each of the Target Group Companies is, and at Closing will be, duly
licensed or qualified and in good standing in all jurisdictions in which the
character of the properties owned or leased by it or the nature of the Business
requires it to be so licensed or qualified. Complete and correct copies of the
constitutive documents of each of the Companies have heretofore been delivered
by the Sellers to Albany; except that no constitutive documents for COFPA prior
to the Articles of Incorporation dated 23/11/1965 have been provided. Sellers
represent that no provision of any such document not provided (i) will have a
Material Adverse Effect or (ii) would cause any representation or warranty
herein to be inaccurate. The minute books or similar records of each of the
Target Group Companies contain an accurate record of all meetings and other
corporate action of its stockholders and Board of Directors (and any committees
of such Board), to the extent required by applicable law.
12
2.3 Ownership of the Shares. (a) Each Seller or Affiliate of a
Seller holds full title to, and is the duly registered as the owner of, all of
the Shares listed as owned by such Seller or Affiliate of a Seller on Schedule
1.1, free and clear of all Liens and other interests of others and together with
all rights attaching thereto. The Shares, together with the CR Shares,
constitute, and at Closing will constitute, all of the capital, equity or other
ownership interests of the Companies (except: (1) in the case of COFPA, for six
(6) directors' qualifying shares owned by such persons in such amounts as is set
forth in Schedule 2.3(b) hereto, in each case subject to valid and enforceable
repurchase agreements providing for repurchase at any time by COFPA at a nominal
price, and (2) 100,800 shares of FV held as treasury shares pursuant to and in
compliance with Article 2357 of the Italian Civil Code). Except for the Shares
and the CR Shares, none of the Target Group Companies has issued or undertaken
to issue any interest in the capital or any other ownership interest of any kind
of any such company, including any rights, of whatsoever nature, that may be
converted into any such capital or ownership interest. All of the Shares and the
CR Shares have been duly created and validly issued and are fully paid. There
are, and at Closing will be, no shareholders or similar agreements currently in
effect with respect to any of the Shares.
(b) All of the outstanding shares of capital stock or other
equity ownership interests of each of the Subsidiaries are validly issued and
fully paid and, except for directors' qualifying shares subject to repurchase
agreements which are set forth in Schedule 2.3(b), all of such outstanding
shares and interests are owned or will be owned at the Closing by one or more of
the Companies free and clear of all Liens.
(c) There are not now, and at Closing will be, authorized or
outstanding any subscriptions, options, conversion rights, warrants or other
agreements, securities or commitments of any nature whatsoever (whether oral or
written and whether firm or conditional) obligating (i) any of the Target Group
Companies to issue, deliver or sell, or cause to be issued, delivered or sold,
any authorized or outstanding shares of the capital stock, or any securities
convertible into or exchangeable for shares of capital stock, of any of the
Target Group Companies or (ii) obligating any of such person or entity to grant,
extend or enter into any such agreement or commitment.
(d) Except for (i) the Marghera Lease, the Lodi1 Lease and the
TT Supply Agreement and (ii) the Debt of the Target Group Companies owed to MIF1
set forth in Schedule 2.6(g), there are now, and at Closing will be, no loans,
assets, properties, rights or businesses presently used in the Business and
operations of the Target Group Companies that are owned, directly or indirectly,
by the Sellers, by any Affiliate, director or employee of any of the Target
Group Companies, or any Affiliate of any Seller or any such person. Except for
the Shares, the Debt of the Target Group Companies owned to MIF1 set forth in
schedule 2.6(g), and the directors' retainer shares described in Schedule
schedule 2.3(b), no such person holds any debt of, or has any other interests
in, any of the Target Group Companies.
2.4 No Breach. Neither the execution of this Agreement nor the
performance by the Sellers of their respective obligations hereunder nor the
consummation of the transactions contemplated hereby does or will:
13
(i) conflict with or violate any provision of the constitutive
documents of any Seller, any Affiliate of any Seller currently owning any
Shares, or any of the Target Group Companies,
(ii) except as disclosed in Schedule 2.4 hereto, violate,
conflict with or result in the breach or termination of, or otherwise give any
other person the right to accelerate, renegotiate or terminate or receive any
payment, or constitute a default, event of default (or an event which with
notice, lapse of time, or both, would constitute a default or event of default),
under the terms of any Contract or any Permit to which any Seller, any Affiliate
of any Seller currently owning any Shares, or any Target Group Company is a
party or by which any of them or their respective securities, properties or
businesses are bound,
(iii) result in the creation of any Lien upon, or any adverse
interest in, any asset of any Target Group Company, or
(iv) constitute a violation of any Laws or Judgments.
2.5 Brokers. None of the Sellers, any Target Group Company,
any Affiliate of any Seller or Target Group Company, or any person acting for or
on behalf of any of the foregoing has taken any action that would obligate the
Purchasers or any of the Target Group Companies to anyone acting as broker,
finder, financial advisor or in any similar capacity in connection with this
Agreement or the transactions contemplated hereby.
2.6 Financial Statements; Liabilities. (a) Complete and
correct copies of (i) the consolidated financial statements (balance sheets,
profit and loss statements and notes on the Financial Statements, including
off-balance sheet undertakings) of each of FV (including the operations of NTI,
which was merged with and into FV effective January 1, 1998), WFG, WSC, COFPA,
GAS and Geschmay Research (in each case, including their respective
subsidiaries) as of and for the period ended December 31, 1998 (the "1998
Financial Statements"), (ii) the consolidated financial statements (balance
sheets, profit and loss statements and notes on the Financial Statements,
including off-balance sheet undertakings) of each of FV, NTI, WFG, WSC, COFPA
and Geschmay Research (in each case, including their respective subsidiaries) as
of and for the period ended December 31, 1997 (the "1997 Financial Statements")
and (iii) the unaudited accounts of each of FV, WFG, GAS and WSC for the
three-month period ending March 31, 1999 and the unaudited accounts of COFPA for
the four-month period ended April 30, 1999 (the "1999 Accounts") have heretofore
been delivered and verified by the Sellers to Albany. The 1997 Financial
Statements and the 1998 Financial Statements are hereinafter together referred
to as the "Target Financial Statements". The Target Financial Statements are
reguliers and sinceres and give a true and accurate account of the financial
condition, assets and liabilities of the Target Group Companies to which they
relate at the dates thereof and the results of the operations and changes in
financial condition of such Target Group Companies for the periods ended at such
date. The Target Financial Statements have been prepared in accordance with
local generally accepted accounting principles, as consistently applied. The
1999 Accounts have been prepared in accordance with internal reporting policies
of the Target Group Companies, consistently applied and in accordance with past
14
practice. To the best knowledge of the Sellers', the 1999 Accounts fairly
present, in all material respects, the revenues and operating income of the
Target Group Companies to which they relate for the periods presented. Each of
the 1997 and 1998 Financial Statements have been audited and certified without
qualification by Sellers' Accountants; except that (i) the 1997 Financial
Statements of FV and NTI have not been audited or certified and (ii) the 1998
Financial Statements of FV have not been audited but have been reviewed by
Sellers' Accountants.
(b) Sellers have heretofore delivered and verified complete
and correct copies of the combined financial statements (balance sheets, profit
and loss statements and notes thereto, not including off-balance sheet
undertakings) of the Target Group Companies as of and for the period ended
December 31, 1998, giving effect to the elimination of the Excluded Assets
("1998 Business Consolidated Financial Statements"). The 1998 Business
Consolidated Financial Statements are reguliers and sinceres, give a true and
accurate account of the combined revenues, profits, losses, financial condition,
assets, liabilities and operations of all of the Target Group Companies
excluding the Excluded Assets at the date thereof and the consolidated results
of their operations and changes in financial condition for the period then
ended, and have been prepared in accordance with IAS as consistently applied.
The 1998 Business Consolidated Financial Statements reflect all material
adjustments necessary to restate the 1998 Financial Statements in accordance
with IAS and to give effect to the elimination of the Excluded Assets. The
parties acknowledge and accept that the 1998 Business Consolidated Financial
Statements have been presented in US$ using an exchange rate of 1 US$ = 1.6859
DM. (Items recorded in other European currencies were first converted to DM at
rates in effect on December 31, 1998.) All Liabilities in respect of Debt
(including, without limitation, Debt relating to finance leases) as of December
31, 1998 have been reflected in the 1998 Business Consolidated Financial
Statements as "Interest bearing loans and Borrowings" (excluding accrued
interest not yet due as of such date).
(c) As of December 31, 1998, none of the Target Group
Companies had any Liabilities (including Debt) (other than Liabilities related
to the Excluded Assets) which were not reflected or expressly reserved against
in the 1998 Financial Statements and the 1998 Business Consolidated Financial
Statements or specifically disclosed in the notes thereto. Since December 31,
1998, none of the Target Group Companies has incurred any Liability (including
Debt) except (i) trade payables incurred in the ordinary course consistent with
past practice, (ii) short-term Debt to finance working capital requirements in
the ordinary course consistent with past practice, (iii) Liabilities in respect
of capital investments comprised in the investment plan set forth in Schedule
2.6(c) (part 1) hereto, (iv) Liabilities in respect of other capital investments
that do not exceed $80,000 each or $1 million in the aggregate, and (v) other
Liabilities set forth in Schedule 2.6(c) part (2) hereto.
(d) Except as disclosed in Schedule 2.6(d) hereto, since
December 31, 1998, each of the Target Group Companies has conducted its
businesses only in the ordinary and usual course of business consistent with
past practice, and has not taken any of the actions described in subparagraphs
(a) through (n) of Section 4.1 of this Agreement. Except as disclosed in the
1999 Accounts, since December 31, 1998 up to the date of this Agreement no
15
Target Group Company has undergone or suffered any change in its condition
(financial or otherwise), properties, operations or prospects which has been, in
any case or in the aggregate, materially adverse.
(e) All notes and accounts receivable shown on the 1998
Financial Statements and the 1998 Business Consolidated Financial Statements or
acquired by the Target Group Companies subsequent to the date of such
Statements, except to the extent thereafter collected in the ordinary course of
business, are bona fide accounts receivable created in the ordinary course of
business and have been collected or are collectible in amounts not less than the
aggregate amount thereof carried on the books of the Target Group Companies, net
of any reserves for bad accounts specifically set forth in the 1998 Financial
Statements and the 1998 Business Consolidated Financial Statements.
(f) The inventory appearing in the 1998 Financial Statements
and the 1998 Business Consolidated Financial Statements has been properly
valued. Such inventory of semi-finished and finished products reflected in the
1998 Financial Statements and the 1998 Business Consolidated Financial
Statements, except for obsolete or unusable items that have been properly
written down, is of good and salable quality. The Target Group Companies
maintain raw materials, semi-finished and finished products inventory in
quantities that are sufficient to meet the day-to-day requirements, and do not
exceed the reasonably foreseeable requirements, of each of the Target Group
Companies and their customers.
(g) Schedule 2.6(g) sets forth a complete and accurate
accounting of all Debt owed to the Sellers and their Affiliates, indicating in
each case (A) the amount owed and (B) the entity to whom it is owed.
2.7 Consents. Except for the antitrust filings and consents
specifically referred to in Section 6.1(e)(i) and 6.1(e)(ii), no Consent of or
by, or filing with, any other person is required to be made or obtained by the
Sellers or any of the Target Group Companies in connection with (i) the
execution or enforceability of this Agreement or (ii) the consummation of any of
the transactions contemplated hereby.
2.8 Actions and Proceedings. Except as set forth on Schedule
2.8, there is no action, suit, claim or legal, administrative, arbitration,
alternative dispute resolution or other proceeding or investigation (each, a
"Proceeding" and collectively, "Proceedings") (in each case, whether or not the
defense thereof or Liability in respect thereof is covered by policies of
insurance) pending or, to the best knowledge of the Sellers, threatened, to
which any of the Target Group Companies is, or may become, a party, nor any
Judgment outstanding against any of the Target Group Companies, which, if
determined adversely, would have a Material Adverse Effect. No Proceeding is
pending or, to the best knowledge of the Sellers, threatened, to restrain or
prohibit, or to obtain damages or other relief in connection with, this
Agreement or any of the transactions contemplated hereby. Notwithstanding the
lack of any risk provision or other disclosure in the Target Company Financial
Statements for WSC, Sellers shall not be liable for any Damages of Purchasers
hereunder relating to such Proceedings.
2.9 Taxes and Tax Returns. (a) Each of the Target Group
Companies has filed and will file on a timely basis all Tax Returns required to
16
be filed by them prior to the Closing and have timely given and delivered or
will timely give and deliver all notices, accounts and information required to
be given by them in respect of Taxes for which any of the Target Group Companies
may be liable. All information provided in such returns, reports, notices,
accounts and information was or will be, when filed or given, complete and
accurate. All Taxes required to be paid by any of the Target Group Companies
that were due and payable prior to the date hereof or the Closing Date have been
or will be paid. Adequate reserves or provisions in accordance with local GAAP
consistently applied have been made in the 1998 Financial Statements for the
payment of all Taxes for which the Target Group Companies may be liable for the
periods covered thereby that were not yet due and payable as of the dates
thereof, regardless of whether the liability for such Taxes is disputed.
(b) Except for an IRS audit of WSC scheduled to begin in June
1999, there are no pending or, to the best knowledge of the Sellers, threatened
audits or investigations relating to any Taxes for which any of the Target Group
Companies may become (directly or indirectly) liable. No deficiencies for any
Taxes have been proposed, asserted or assessed against any of the Target Group
Companies and no state of facts exists or has existed that would constitute
grounds for the assessment of a Tax liability against any of the Target Group
Companies. There are no agreements in effect to extend the period of limitations
for the assessment or collection of any Taxes for which any of the Target Group
Companies may become liable and no requests for any such agreements are pending.
(c) Each of the Target Group Companies has withheld, and until
the Closing will withhold, from its employees, and timely paid, or will timely
pay, to the appropriate authority proper and accurate amounts for all periods
through the date hereof and through the Closing Date in compliance with all Tax
withholding provisions of all applicable Laws.
(d) The Sellers have furnished or made available to Purchasers
complete and accurate copies of all returns and reports of all Taxes filed by
any of the Target Group Companies with respect to the tax year beginning January
1, 1994 and all subsequent tax years.
(e) None of the Target Group Companies (i) has elected or will
elect, or has otherwise been granted, any preferential tax treatment or made any
sort of commitment vis-a-vis any Tax authorities (whether in connection with a
reorganization or otherwise), (ii) is or will become a party to any tax sharing
agreement, or (iii) has agreed or will agree to assume any Tax liability of any
other person..
(f) Except for the pending application filed with the German
tax authorities relating to the transfer of 94% of the ownership interests in
Geschmay GmbH (including WSC and its other Subsidiaries), there are now, and at
Closing will be, no tax elections made by any Target Group Company in effect, or
outstanding tax rulings or ruling requests applicable to any Target Group
Company.
(g) According to Laws currently in effect, neither the
purchase of the Shares by the Purchasers nor the CR Shares by the purchaser in
the CR Agreement will reduce or eliminate any tax benefit derived by, or subsidy
granted to, any of the Target Group Companies; provided that the purchaser in
the CR Agreement is not an Affiliate of Albany.
17
(h) The relevant Target Group Company is the owner for tax
purposes of all assets reflected in the Target Financial Statements; except for
(i) assets being leased pursuant to finance leases disclosed in the list
referred to in Section 2.13(a) hereof, and (ii) as of the Closing Date, for any
Excluded Assets divested prior to the Closing Date pursuant to Section 5.9
hereof.
(i) None of the Target Group Companies has been at any time
within the past five years, and will not be prior to the Closing Date, a "United
States real property holding corporation" within the meaning of section
897(c)(2) of the Code.
(j) None of the Target Group Companies has participated in,
and prior to the Closing Date none of the Target Group Companies will
participate in, an international boycott within the meaning of section 999 of
the Code.
(k) All intercompany sales between Target Group Companies
since January 1, 1998 have been and will be on terms that were at "arm's length"
under applicable Law in the relevant jurisdictions.
(l) All write downs of the tax basis (Teilwertabschreibungen)
on any assets of WFG stated in the 1998 Financial Statements have been made in
accordance with applicable Law.
2.10 Title to Property; Condition; Sufficiency. (a) Schedule
2.10 hereto sets forth a true and complete description of each parcel of real
property used by any Target Group Company in the Business ("Real Estate"). As of
the date of this Agreement, the Target Group Companies have (i) full title and
ownership to all Real Estate listed on Schedule 2.10 as owned, free and clear of
all Liens other than Permitted Encumbrances and (ii) valid and enforceable
rights as Lessee, sufficient to enable such Target Group Company to conduct its
Business as conducted during the period from January 1, 1998 to the date hereof,
with respect to each parcel listed on Schedule 2.10 as leased. Schedule 2.10
lists all leases to which any portion of the Real Estate is subject, and true
and correct copies of such leases have been provided to the Purchaser. Neither
the Target Group Company that is Lessee under any such lease, nor (to the best
knowledge of the Sellers) the Lessor thereunder is in default of any such lease.
As of the Closing Date, the foregoing representations will continue to be true,
except to the extent provided in Section 5.9 hereof with respect to the Excluded
Assets.
(b) As of the date of this Agreement, the Target Group
Companies have good title to all assets (other than Real Estate) purported to be
owned by them and reflected in the 1998 Financial Statements, free and clear of
all Liens and other adverse interests other than Permitted Encumbrances or
rights of lessors under finance leases disclosed in the list referred to in
Section 2.13(a) hereof. As of the Closing Date, the Target Group Companies will
have good title to all such assets, except for any Excluded Assets divested
prior to the Closing Date pursuant to Section 5.9 hereof, free and clear of all
Liens other than Permitted Encumbrances.
(c) The properties and other assets to be owned or leased
(including, without limitation, the properties subject to the Marghera Lease,
the Lodi1 Lease and the other leased properties described in Schedule 2.10) by
18
the Target Group Companies on the Closing Date constitute all properties and
other assets employed in, or necessary for the conduct of, the Business. None of
the Excluded Assets (other than the real property subject to the Marghera and
Lodi1 Leases) is currently employed in, or necessary for the conduct of, the
Business.
(d) The sales, service, technical, administrative and other
employees of the Target Group Companies (excluding the employees listed in
Schedule 5.5) are all of the employees necessary to continue to operate the
Business in the manner in which it has been conducted since January 1, 1998;
except for such employees who have left the Target Group Companies due to
retirement or otherwise in the ordinary course.
(e) Since September 1, 1998, none of the real or personal
property of the Target Group Companies has suffered any material damage or loss
as a result of fire, explosion, earthquake, flood, windstorm, riot or other
casualty or act of God, or of any taking by any governmental authority, that has
not been remedied.
2.11 Intellectual Property. (a) The conduct of the business of
each of the Target Group Companies, as conducted during the period from January
1, 1998 to the time of the Closing, does not infringe any patent, trademark,
tradename, copyright or other intellectual property right of any other person
(except Albany and its Affiliates) or depend in any material respect upon any
patent, trademark, tradename, copyright or other intellectual property right
that is held by any Seller, by any Affiliate of any Seller or any of the Target
Group Companies, or by any person or entity other than a Target Group Company.
The Sellers are, to the best of their knowledge, not aware of any such
infringement of any patent, trademark, etc. of Albany or its Affiliates. Except
to the extent provided in the WSC Auction Agreement or in Schedule 2.11,
immediately after the Closing, the Target Group Companies will have all such
patent, trademark, tradename, copyright and other intellectual property rights
as are required to conduct their respective businesses as conducted during the
period from January 1, 1998 to the time of the Closing, without infringement of
the rights of others.
(b) To the best knowledge of the Sellers, except to the extent
disclosed in the disclosure of the Asten litigation in Schedule 2.8, no person
or entity is infringing the rights of any Target Group Company with respect to
such the Trademarks or any patent that any Target Group Company purports to
hold.
2.12 Compliance with Legal Requirements. (a) Except for such
minor breaches which in the aggregate have not had, and will not have, a
Material Adverse Effect, the Target Group Companies are currently conducting,
and have in the past conducted, and until Closing will conduct, their respective
businesses in compliance with all applicable Laws, Judgments and Permits.
(b) The Target Group Companies possess, and upon consummation
of the transactions contemplated hereby will continue to possess, all
significant Permits necessary to conduct their respective operations as they are
currently being conducted and all such Permits will be in full force and effect
at Closing. No proceeding to modify, suspend, terminate or otherwise limit any
such Permit is pending or, to the best knowledge of the Sellers, threatened.
19
(c) Since January 1, 1998, none of the Target Group Companies
has received any notice in any form (including any citations, notices of
violations, complaints, consent orders or inspection reports) which would
indicate that any of such persons was not at the time of such notice or is not
currently in compliance with all such applicable Laws, Judgments and Permits;
except for such notices relating to minor instances of non-compliance that will
not, in the aggregate, have a Material Adverse Effect.
2.13 Outstanding Commitments. (a) Sellers have heretofore
delivered and verified to Albany an accurate and complete list of each Contract
to which any of the Target Group Companies is a party or by which any of its
assets or operations are bound or affected and which (i) is a Contract that
involves the obligation (including contingent obligations) by or to any of the
Target Group Companies to pay amounts in excess of $200,000 in the aggregate, or
$80,000 in any year (including Contracts involving lesser amounts that, when
aggregated with obligations in Contracts with the same party or parties, exceed
such amounts) (except for Employment Agreements or agreements with sales agents,
suppliers, distributors or customers, or Contracts for the supply of energy,
cleaning services, canteen services or credit lines), (ii) are Contracts with
terms exceeding one year or are unlimited and which may not be terminated by the
relevant Target Group Company on less than six (6) months' notice without
payment of any penalty (except for Employment Agreements or agreements with
sales agents, distributors or customers), (iii) are Contracts under whose terms
one or more of the Target Group Companies is bound to refrain from carrying out
or to restrict certain activities, or to refrain from competing with any third
party, (iv) are Contracts with the Sellers or any Affiliate of any Seller
(except for Employment Agreements, the Visibilia Services Agreement, the
Visibilia Lease and the Contracts described in Schedule 2.6(g)), or (v) were not
entered into in the ordinary course of business of the Target Group Companies.
To the extent that such list refers to a copy of a Contract being provided, such
copies are true and complete.
(b) All Contracts listed on the list referred to in Section
2.13(a) or material to the Business are valid and binding agreements enforceable
by one or more of the Target Group Companies in accordance with their respective
terms and none of the Target Group Companies is in default under any of such
Contracts. To the best knowledge of the Sellers, no other party to any of such
Contracts is in default thereunder nor does there exist any event or condition,
which upon the giving of notice or the lapse of time or both, would constitute a
default or event of default thereunder. There are no Contracts not listed on the
list referred to in Section 2.13(a) that reasonably could be expected to have a
Material Adverse Effect.
(c) None of the Contracts to which any Target Group Company is
a party or a beneficiary violates any provision of any applicable Law or
Judgment. All Contracts between any Target Group Company, on the one hand, and
its suppliers of goods or services, customers, distributors, sales agents or
licensees, on the other hand, have been concluded under fair market conditions,
in accordance with past practice or on terms that are consistent with current
commercial practice in the industry. No Contract with a sales agent or
distributor contains commission or other terms that are significantly more
favorable to such agent or distributor than current commercial practice in the
industry. Schedule 2.13(c) sets forth, by Target Group Company, the amounts of
Debt outstanding under (1) short-term credit lines, (2) long-term loans, (3)
20
financial lease Contracts and (4) obligations to the Sellers. Such list also
sets forth, in each case, the applicable interest rate, or, in the case of Debt
owed under more than one facility presented on a single line, a reasonable
approximation of the average of such rates, termination date and material
prepayment restrictions relating to each such obligation.
2.14 Employment Matters. (a) No Target Group Company has any
obligation to any employee other than under an Employment Agreement, applicable
Law or collective bargaining agreements between a Target Group Company and its
employees or of national application. Sellers have heretofore delivered and
verified to Albany true and complete copies of all national or company-specific
collective bargaining agreements relating to FV.
(b) No Target Group Company has concluded any exceptional
agreement with employee representatives or has any obligation to employee
representatives which exceed those provided for by Law or applicable collective
bargaining agreements.
(c) No Target Group Company has any profit-sharing, company
savings or incentive compensation scheme, except for such schemes as (i) may be
terminated upon not more than six months without penalty or (ii) are mandated by
Law.
(d) No Target Group Company has any retirement or health
insurance plan pursuant to which any employee is entitled to receive advantages
in addition to those contemplated by Law or applicable Company collective
bargaining agreements or any regional, local or individual company or
establishment practices which provide for advantages for any employee which
exceed those provided for by Law or applicable collective bargaining agreements;
except for (1) retirement rights of certain employees of WFG contained in their
Employment Agreements, (2) retirement, severance, health insurance or other
benefits described in the WSC employee policies and handbook (copies of which
have been provided to Albany), (3) supplemental retirement benefits provided to
"Quadri" employees of FV as described in Schedule 2.14(d), or (4) other
retirement or health insurance plans, copies of which have been delivered and
verified by the Sellers.
(e) The Target Group Companies have in the aggregate
approximately 1,500 employees.
(f) No Target Group Company has entered into an Employment
Agreement other than in the ordinary course.
(g) There is no Employment Agreement currently in effect, and
on the Closing Date there will be no Employment Agreement in effect, with any
officer, manager or management employee of any Target Group Company that
provides salary, bonus, severance, termination or other compensation on terms
that are significantly more favorable than those to which such officer or
employee was entitled during 1998; except in cases involving a significant
increase in responsibilities or new hires. No Employment Agreement provides for
payments measured by the value of any equity security of or interest in any of
the Target Group Companies. Except as disclosed in Schedule 2.4 hereto, no
Employment Agreement provides for payments in connection with any change in
control of any of the Target Group Companies and no amount will become due to
any employee, consultant or director of any of the Target Group Companies solely
as a result of the transactions contemplated by this Agreement.
21
(h) Each of the Target Group Companies is now and has in the
past been in compliance with all provisions of applicable labor and social
security Laws (including, where applicable, with respect to works councils),
collective bargaining agreements and Employment Agreements and all payments due
thereunder from each of the Target Group Companies have been made when due and
all Liabilities of any of the Target Group Companies in respect thereof which
have not been paid have been recorded on the books of such company and reflected
in the 1998 Financial Statements and the 1998 Business Consolidated Financial
Statements.
(i) Since January 1, 1996 there have not occurred any strikes,
slow downs, work stoppages or other similar labor actions by any group of
employees of the Target Group Companies except for such strikes, etc. as did not
have a Material Adverse Effect. No Proceeding arising out of any labor grievance
under any Law, collective bargaining agreement or any Employment Contract is
pending or, to the best knowledge of the Sellers, threatened which could
reasonably be expected to result in Damages in excess of $30,000.
(j) Except for an early retirement program initiated at WSC in
1998 (for which proper charges and accruals were made in the 1998 Financial
Statements), none of the Target Group Companies has made any commitment to any
public agency, labor organization, employees' representatives or any other
party, relating to (i) the number of its employees or agents, (ii) future
collective dismissals relating to the Business or (iii) levels of salary, bonus,
severance, termination compensation or other compensation.
(k) Except to the extent provided under the TT Supply
Agreement, none of the Target Group Companies and, to the best knowledge of the
Sellers, no director, employee or agent of any Target Group Company has any
material direct or indirect financial interest in any competitor or any material
supplier or customer of the Business, except for ownership of less than one
percent of any class of publicly traded securities of any such competitor,
supplier or customer whose securities are listed on any securities exchange.
(l) No employees of a Target Group Company has notified any of
the Target Group Companies that it does not intend to continue his or its
relationship with such Target Group Company following the completion of the
transactions contemplated hereby on the terms of the applicable collective
bargaining agreements and the Employment Agreements as currently in effect, and
none of the Target Group Companies has reason to believe that the Purchaser will
not be able to continue such relationships with such persons after the Closing.
None of the senior executives or management staff of any of the Target Group
Companies who are in office as of the date of this Agreement has resigned, or
made known his or her intention to resign, within the three months preceding
such date; except for (1) Carlo Belletti, former general manager of NTI, (2)
Giancarlo Micucci, domestic sales manager for FV, who will retire as of 1 August
1999, and (3) Rolando Nicolai, former head of bookkeeping at FV, who will retire
in July 1999.
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(m) None of the Target Group Companies is the subject of any
proceedings initiated by Government authorities responsible for workers' health
and safety ("Inspection du Travail") for failure to comply with any applicable
Law or order. The Sellers have ensured that all procedures relating to
consultation of workers' committees or similar organs have been complied with in
a timely fashion. Any information provided to said workers' committees or organs
concerning the Purchaser and its plans for the Target Group Companies has
received the prior written approval of the Purchaser.
(n) WSC does not have any liability, including any contingent
liability, under Title IV of ERISA. Neither WSC nor any person with whom WSC
would be jointly and severally liable under Title IV of ERISA maintains any plan
subject to Title IV of ERISA.
(o) All Liabilities of the Target Group Companies, including
contingent liabilities and taxes, penalties or other similar liabilities, under
or related to any Plan are fully reflected on the 1998 Financial Statements of
the respective Target Group Companies. Each WSC Plan which is intended to
qualify under Section 401(a) of the Code has received a favorable determination
letter from the IRS that such plan is qualified and that its related trust has
been determined to be exempt from taxation under Section 501(a) of the Code, and
nothing has occurred since the date of such letter that has or is likely to
adversely affect such qualification or exemption. There are no actions, suits,
claims or governmental investigations, inquiries or audits pending (other than
routine claims for benefits) or, to the best knowledge of the Sellers,
threatened with respect to any Plan. With respect to each Plan, the relevant
Target Group Company has complied with, and each Plan conforms in form and
operation to, all applicable Laws, domestic or foreign, including, but not
limited to, ERISA and the Code (where applicable), in all material respects.
(p) All pension Liabilities of the Target Group Companies have
been calculated in a manner that establishes the true aggregate liability
therefor, and all accruals in respect of pension Liabilities reflect the true
aggregate liability therefor, and are reflected in the 1998 Financial
Statements. No Target Group Company which maintains a pension fund is or will at
any time be liable for pension Liabilities which the assets of such pension fund
are insufficient to cover.
(q) The consummation of the transactions contemplated hereby,
either alone or in combination with another event, will not (i) entitle any
employee or former employee of any Target Group Company or any group of such
employees to any payment, (ii) increase the amount of compensation due to any
such employee or (iii) accelerate the time of vesting of any compensation, stock
incentive or other economic benefit.
(r) No Target Group Company has announced any plan of general
applicability or commitment, whether or not legally binding, to create any
additional Plans of general applicability, or to amend or modify any existing
Plan of general applicability.
2.15 Environmental, Health and Safety. (a) Each of the Target
Group Companies has obtained and been, and until Closing will be, in compliance
with all terms and conditions of all Permits which are required under, and has
complied and will comply with all other limitations, restrictions, conditions,
23
standards, prohibitions, requirements, obligations, schedules and timetables
which are contained in, all Laws and Judgments relating to public health and
safety, worker health and safety, and pollution or protection of the
environment, including Laws relating to emissions, discharges, releases or
threatened releases of pollutants, contaminants or chemical, industrial,
hazardous or toxic materials or wastes into ambient air, surface water, ground
water or lands or otherwise relating to the testing, characterization,
classification, manufacture, processing, distribution, use, treatment, storage,
disposal, transport or handling of pollutants, contaminants or chemical,
industrial, hazardous or toxic materials or wastes, except for minor instances
of non-compliance that will not, in the aggregate, have a Material Adverse
Effect. All such Permits are valid and in full force and effect for the conduct
of the businesses of each of the Target Group Companies as such businesses are
presently conducted, and where applicable, timely renewal applications have been
submitted for all such Permits. No Proceeding has been filed or commenced
against any of the Companies alleging any failure to comply with any such Laws,
Judgments or Permits.
(b) Except as set forth in Schedule 2.15(b), none of the
Target Group Companies has any Liability (and there is no past or present fact,
status, condition, activity, occurrence, action or failure to act related to the
past or present operations, properties or facilities of any of the Target Group
Companies that forms or reasonably could form the basis for the imposition of
any Liability) (i) under any Law relating to protection of human health or
safety or concerning employee or worker health and safety or relating generally
to the environment, (ii) for damage to any site, location, natural resources or
body of water (surface or subsurface) or for failure to report or clean up any
discharges of any substance, or (iii) for any illness of or personal injury to
any of its employees or any third party; except for Liabilities that would not,
in the aggregate, have a Material Adverse Effect.
(c) To the best knowledge of the Sellers, WSC has not received
notice from any Person of any actual or potential Liability with respect to (i)
the investigation, reporting or remediation of any release or disposal of
Hazardous Materials, or (ii) the use, storage, treatment, transportation or
disposal of Hazardous Material.
2.16 Insurance. The Target Group Companies maintain, have
maintained, and will until Closing maintain, insurance with respect to their
property, assets and operations, and with respect to liability for bodily
injury, death or property damage suffered by others by reason of their
operations or on or about any of their premises, with reputable companies in
such amounts and covering such risks as are customarily insured against by
companies similarly situated. All such policies, binders and Contracts of
insurance, including those listed on Schedule 2.16, are and will be in full
force and effect in accordance with their respective terms and will not be
terminated as a consequence of the Closing. The Sellers have provided the
Purchasers with copies of all policies, etc., listed on Schedule 2.16. None of
the Target Group Companies has received any notice that it is in default with
respect to any provision of any such policies, binders and Contracts. None of
the Target Group Companies has provided inaccurate, incomplete or misleading
information in connection with any such policies, binders and Contracts or
failed to give any notice or present any claim thereunder in due and timely
fashion or as required by any such policies, binders or Contracts so as to
jeopardize full recovery thereunder.
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2.17 Bank Accounts and Signature Powers. Sellers will provide
within 30 days of the date of this Agreement a complete list and a brief
description of (a) all checking, custody or other accounts with a financial
institution of any kind, and any safe deposit box or similar custodial
arrangement, in the name of a Target Group Company, or with respect to which a
Target Group Company has any right, with the names of those persons authorized
to access or direct matters with respect to such accounts, boxes or other
arrangements, and (b) all delegations of powers granted by the Target Group
Companies for purposes other than the direction of accounts, boxes or other
arrangements described in the preceding sentence, with details of powers
delegated and the posts occupied by the beneficiaries.
2.18 Year 2000 Compliance. All Date Data and Date-Sensitive
Systems of the Target Group Companies which are material to the operation of the
Business are, or at Closing will be, Year 2000 Compliant. To the best knowledge
of the Target Group Companies, the ability of the Target Group Companies'
product and service suppliers, customers and others with which it does business
to identify and resolve their Year 2000 issues will not have a Material Adverse
Effect.
2.19 Disclosure. No representation or warranty by the Sellers
in this Agreement, and no exhibit, document, statement, certificate or schedule
furnished or to be furnished to Purchasers pursuant hereto, or in connection
with the transactions contemplated hereby, contains or will contain any untrue
statement of a material fact. The Sellers have not willfully omitted and will
not willfully omit to state any material fact necessary to make the statements
or facts contained herein or therein not misleading.
2.20 WSC. Geschmay GmbH (including, for purposes of this
Section 2.20, GB as assignee of Geschmay GmbH under the WSC Auction Agreement)
has paid for the B shares (as defined in the WSC Auction Agreement) and is the
valid owner thereof, free and clear of any Liens. Neither Geschmay GmbH nor GB
has defaulted on any of its obligations under the WSC Auction Agreement. Except
as provided in the WSC Auction Agreement and the related supply agreement and
guarantee (copies of which have been delivered and verified by the Sellers), no
Target Group Company has any continuing obligations to the former shareholders
(other than the Sellers) of WSC. To the best knowledge of the Sellers, no other
party to the WSC Auction Agreement is in default thereof. The WSC Auction
Agreement has not been amended or modified, and no rights of Geschmay GmbH or GB
thereunder have been waived, except to the extent described in the written
summary referred to in Section 2.11.
2.21 No Other Warranties. The Sellers make no representations
or warranties relating to the Business, either express or implied, other than as
set forth in this Agreement or in a Schedule or document required to be
delivered pursuant to this Agreement.
2.22 Any fact specifically disclosed by Seller in this
Agreement or any Schedule or Exhibit hereto or any document specifically
required to be disclosed hereunder shall be deemed to be disclosed to the
Purchasers for purposes of any other such Schedule or document.
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ARTICLE III
REPRESENTATIONS AND WARRANTIES OF PURCHASERS
Purchasers hereby represent and warrant to the Sellers as
follows:
3.1 Organization; Authority and Enforceability. Purchasers are
corporations validly existing under the laws of their jurisdiction of
incorporation. Purchasers have the corporate power and authority to enter into
this Agreement and to carry out their obligations hereunder. The execution of
this Agreement and the consummation of the transactions contemplated hereby have
been duly authorized by the Boards of Directors of Purchasers and no other
corporate proceeding on the part of Purchasers is necessary to authorize the
execution of this Agreement or the consummation of any of the transactions
contemplated hereby. This Agreement has been duly executed by Purchasers and
constitutes a legal, valid and binding obligation of Purchasers, enforceable
against them in accordance with its terms.
3.2 No Breach. Neither the execution of this Agreement nor the
performance by Purchasers of their obligations hereunder nor the consummation of
the transactions contemplated hereby does or will: (i) conflict with or violate
any provision of the constitutive documents of Purchasers, (ii) except for loan
agreements and other borrowing arrangements, violate, conflict with or result in
the breach or termination of, or constitute a default, event of default (or an
event which with notice, lapse of time, or both, would constitute a default or
event of default), under the terms of, any Contracts or any Permits to which
Purchasers are a party or by which Purchasers or their securities, properties or
businesses are bound, or (iii) constitute a violation by Purchasers of any Laws
or Judgments, other than any violation, conflict, breach or default that would
not prevent Purchasers from consummating the transactions contemplated hereby or
otherwise performing their obligations hereunder.
3.3 Consents. Except for the approvals of antitrust
authorities described in Section 6.1(e)(i) and 6.1(e)(ii) hereof, no Consent is
required to be made or obtained by Purchasers in connection with (i) the
execution or enforceability of this Agreement or (ii) the consummation of any of
the transactions contemplated hereby.
3.4 Brokers. No Purchaser or Affiliate of any Purchaser or any
person acting for or on behalf of any of the foregoing has taken any action that
would obligate the Sellers to anyone acting as a broker, finder, financial
advisor or in any similar capacity in connection with this Agreement or the
transactions contemplated hereby.
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ARTICLE IV
COVENANTS OF THE SELLERS
4.1 Ordinary Course of Business. During the period from the
date of this Agreement to the Closing, except as specifically provided in this
Agreement or as otherwise consented to in writing by Purchasers, the Sellers
will cause each of the Target Group Companies to:
(a) carry on the Business in, and only in, the ordinary course
in substantially the same manner as heretofore conducted and, to the extent
consistent with the Business, use all reasonable efforts to preserve intact
their present business organization, keep available the services of their
present employees and preserve their relationships with clients, suppliers,
customers, distributors and others having business dealings with them, maintain
all assets other than those disposed of in the ordinary course of business in
good repair and condition, maintain all policies of insurance on current terms,
maintain their books of account and records in the usual, regular and ordinary
manner, and preserve their good will and ongoing business;
(b) promptly advise Purchasers in writing of any change in
their condition (financial or otherwise), properties, liabilities, operations or
prospects which has had or may reasonably be expected to have a Material Adverse
Effect;
(c) not amend any of their constitutive documents;
(d) not acquire, by merger, consolidation, purchase of stock
or assets or otherwise, any corporation, partnership, association or other
business organization or division thereof;
(e) not alter their outstanding capital stock or equity
interests or declare, set aside, make or pay any dividend or other distribution
of any kind (whether direct or indirect) in respect of their capital stock or
equity interests (in cash or otherwise), or purchase or redeem any shares of
their capital stock or equity interests;
(f) not issue or sell (or agree to issue or sell) any of their
capital stock or equity interests or any options, warrants or other rights to
purchase any such stock or interests or any securities convertible into or
exchangeable for such stock or interests;
(g) not incur any additional Debt (except for short-term
borrowings to finance working capital requirements in the ordinary course
consistent with past practice), or vary the terms of any existing Debt (except
for short-term borrowings to finance working capital requirements in the
ordinary course consistent with past practice), or otherwise become liable for
any Liabilities of any third party;
(h) not mortgage, pledge or subject to any Lien, any of their
properties;
(i) not discharge or satisfy any material Lien or pay or
satisfy any material contingent obligation or compromise, settle or otherwise
adjust any material claim or litigation;
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(j) not acquire or dispose of any substantial assets or rights
(except to the extent provided in Section 5.9 hereof with respect to the
Excluded Assets) or enter into any Employment Agreement, other than in the
ordinary course of business; or enter into any material Contract; or enter into
any new transactions that would give rise to the payment of any commission or
other amount to any Seller or Affiliate, pursuant to any Contract described in
Section 4.3(b), otherwise than consistent with past practice;
(k) not make any change in their accounting procedures or
practices;
(l) not grant to any director, officer, manager, consultant or
employee any significant increase or modification of compensation or benefits,
or any severance or termination pay, other than as required Law or by existing
collective bargaining agreements, or make any loan to any such person, or enter
into any agreement or arrangement with any such person that extends past the
Closing;
(m) not adopt, enter into, amend in any material respect,
announce any intention to adopt or terminate, any collective bargaining
agreements or other employee benefit plan, program or arrangement, in each case
of general applicability;
(n) not enter into any transaction with any Seller or any
Affiliate of any Seller (except to the extent provided in Section 5.9 hereof
with respect to the Excluded Assets); and
(o) not agree to take any of the actions set forth in the
foregoing subparagraphs (c) through (n).
Albany agrees to use its best efforts to respond to any request for consent to
any action described above within 48 hours of receipt. Failure timely to respond
shall be deemed a lack of consent. Sellers shall not be liable hereunder due to
failure to take any such requested action for which consent has not been
granted.
4.2 Inspections. During the period from the date of this
Agreement to the Closing, the Sellers shall permit, or shall cause their
Affiliates (including the Target Group Companies) to permit, Purchasers and
their representatives (including Purchasers' Accountants) full access to all
facilities, properties, assets and operations of the Target Group Companies, and
all books and records of the Sellers or the Target Group Companies pertaining
thereto, and shall arrange for Purchasers and such representatives to discuss
with appropriate employees and representatives of the Sellers and the Target
Group Companies such matters related to the transactions contemplated herein as
Purchasers may reasonably request, including, without limitation, the Target
Financial Statements and the 1998 Business Consolidated Financial Statements.
Sellers shall not be obligated to provide access to customer-specific product
and technical specifications or data (including design applications and felt
calculation) in any format. Such investigations shall be conducted pursuant to
the guidelines set forth in Schedule 4.2 hereto. Albany shall notify Sellers'
Representative promptly after it becomes aware of any material denial of access
or assistance required hereunder.
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4.3 Cancellation of Related Party Contracts. (a) On or prior
to the Closing Date, all amounts owed to any Target Group Company by (i) the
Sellers, (ii) any past or present stockholder of any Seller or any Target Group
Company, (iii) any director, officer or employee of the Seller, (iv) any past or
present director or officer (except loans to current employees of the Target
Group Companies who are not Affiliates of any Seller, not exceeding $250,000 in
the aggregate) of any Target Group Company, or (v) any Affiliate or relative of
any of the foregoing shall have been paid in full (with any accrued interest). A
list of such obligations, with the identities of the obligors and obligees, is
set forth in Schedule 4.3(a) hereto.
(b) On or prior to the Closing Date, the Sellers shall
terminate or procure the termination, without any penalty or payment by, or
Liability to, the Target Group Companies, of all Contracts (including, without
limitation, Employment Agreements) between any Seller or any Affiliate of any
Seller, on the one hand, and the Target Group Company, on the other hand except
for (i) the Marghera Lease, (ii) the Lodi1 Lease, (iii) the TT Supply Agreement,
(iv) the Visibilia Services Agreement and (v) the Visibilia Lease. A list of
these Contracts, with the identity of the parties thereto, is set forth in
Schedule 4.3(b) hereto.
4.4 Non-Competition Agreement. (a) The Sellers and each
shareholder of the Sellers that will be a party to the Key Person
Non-Competition Agreement (each, a "Covered Person") hereby agrees not to engage
in any aspect of Company Business, during a period beginning on the Closing Date
and ending on the fifth anniversary thereof.
(b) A Covered Person shall be deemed to be engaging in Company
Business if he or she:
(A) directly or indirectly, whether or not for compensation,
participates in the ownership, management, operation or control of any Competing
Firm, or as an investor contributes to the capital of any Competing Firm through
loans, purchases of stock or otherwise in amounts constituting more than 1% of
the capital of such firm, or is employed by or performs consulting services for
any Competing Firm;
(B) directly or indirectly solicits any customer of any of the
Target Group Companies or any person who was a prospective customer of any of
the Target Group Companies, with a view to inducing such customer or prospective
customer to enter into an agreement or otherwise do business with any Competing
Firm with respect to Company Business;
(C) directly or indirectly solicits any person or entity with
a view to inducing such person or entity to enter into an agreement or otherwise
do business with a Competing Firm with respect to Company Business;
(D) releases any customer or prospect lists of any of the
Target Group Companies, any design specifications or any other documents
proprietary to any of the Target Group Companies; or
29
(E) makes an unsolicited offer of employment to any person who
is or was at any time after January 1, 1999 an employee of any Target Group
Company (except for an employee listed in Schedule 5.5 hereof), any Purchaser or
any Affiliate of any Purchaser or Target Group Company, or attempts to induce
any such employee to leave the employ of any Target Group Company, any Purchaser
or any Affiliate.
(c) Each of the covenants contained in this Section 4.4 shall
be construed as a separate covenant, and the covenant contained in sub-paragraph
(b)(C) above, as it relates to any geographic area, shall be construed as a
separate covenant for each such geographic area; and if, in any judicial
proceeding, a court shall refuse to enforce any of the separate covenants of
this Section 4.4, then such unenforceable covenant shall be deemed eliminated
from this Section 4.4 for the purpose of such proceeding or any other judicial
proceeding to the extent necessary to permit the remaining separate covenants to
be enforced.
(d) The restrictions in this Section 4.4 shall be in addition
to any restrictions imposed on any Covered Person under the laws of any
jurisdiction.
(e) Because the remedy at law for any breach of the provisions
of this Section 4.4 would be inadequate, the Covered Persons consent to the
granting by any court of an injunction or other equitable relief, without the
necessity of actual monetary loss being proved, in order that any breach or
threatened breach of such provisions may be effectively restrained.
4.5 Antitrust Filings. Sellers undertake as promptly as
practicable to make any required antitrust filings, at Purchaser's expense,
subject to any required cooperation of the Purchasers.
4.6 MIF1. Notwithstanding any obligations of GB or any other
Affiliates of MIF1 provided for herein, MIF1 shall remain liable for all
obligations of the Sellers hereunder.
ARTICLE V
ADDITIONAL AGREEMENTS
5.1 Further Actions. (a) Subject to the terms and conditions
contemplated herein, each of the parties hereto agrees to use its best efforts
to take, or cause to be taken, all actions and to do, or cause to be done, all
things necessary, proper or advisable under all applicable Laws to consummate
and make effective the transactions contemplated by this Agreement. Subject to
the terms and conditions herein provided, the Sellers and Purchasers will, and
will cause each of their respective Affiliates to, use their commercially
reasonable best efforts (i) to obtain all Consents or Permits necessary or
advisable to consummate and make effective the transactions contemplated by this
Agreement, and (ii) to cause each of the conditions precedent to their
respective obligations contemplated in Article VI to be satisfied.
Notwithstanding the foregoing, none of such persons shall be under any
obligation to (1) pay money to any third party (other than fees imposed by law
to obtain Consents or Permits) or (2) to agree with any applicable regulatory
authority to divest any assets of Albany or any Target Group Company or refrain
from any lawful activity currently conducted by Albany or any Target Group
30
Company; in each case, as a condition to receiving any such Consents or Permits.
In case at any time after the Closing any further action is necessary or
desirable to carry out its respective obligations under this Agreement, the
Sellers or the proper representative of Purchasers, as the case may be, shall
take or cause to be taken all such necessary action.
(b) The Sellers shall ensure that each workers' committee, if
any, of the Target Group Companies shall, if required by Law or Contract, be
informed of and consulted in connection with the execution and delivery of this
Agreement and the consummation of the transactions contemplated herein. All
information provided to such workers' committees concerning Purchasers and their
plans for the Target Group Companies shall have been approved in writing in
advance by Purchasers.
5.2 Certain Notifications. At all times prior to the Closing
Date, each party shall promptly notify the others in writing of the occurrence
of any event, action or omission which will or may result in the failure of any
of the conditions contained in Article VI to be satisfied. In the event that any
such potential failure of a condition would be as a result of a breach of the
other party of which the notifying party is aware, such notice shall provide
such reasonable detail of such breach as the notifying party has knowledge.
5.3 "Geschmay" Tradename. Purchasers and Sellers agree that neither WFG nor any
Purchaser or Affiliate of any Purchaser shall have any right to hold or use the
"Geschmay" name for any commercial purpose other than Company Business.
Purchasers agree to cause WFG to assign to MIF1 or an entity designated by MIF1,
on December 31, 2009, without any further consideration, all of WFG's rights to
hold and use the "Geschmay" tradename or trademark for use in Company Business
or any commercial purpose whatsoever. Albany agrees to cause WFG to exercise
such diligence and care to protect the "Geschmay" tradename against unauthorized
use by third parties in the Company Business as Albany would exercise to protect
its own tradenames and trademarks. Sellers covenant that they will refrain from
use of the Geschmay name in Company Business until December 31, 2019.
5.4 Acquisition Planning. The parties agree to use their best efforts to provide
mutual assistance on pre-acquisition planning. The parties agree to take such
steps before or after the Closing as either Party shall reasonably request in
order to optimize the structure of the Target Group Companies and the
acquisition. Each party agrees to reimburse the other for all costs and expenses
directly incurred as a result of such requested steps.
5.5 Certain Employees. Schedule 5.5 lists the name and
employer and title of certain employees who have been employed by one or more of
the Target Group Companies. The employment of such employees shall be terminated
at the end of the month following the month in which the Closing Date occurs.
Sellers agree to indemnify the Purchasers against any Damages they may incur in
connection with (i) the termination of all such employees in excess of $170,000
and (ii) any claims by such employees for any compensation, benefits, damages or
amounts relating to any events, acts or conditions occurring prior to such
termination, except for ordinary compensation and other benefits to which they
will be entitled with respect to their employment by FV between the Closing Date
and such termination. The balance sheet of FV as of December 31, 1998 properly
31
accrued the amount of this severance liability as of such date. All compensation
or other costs of any Target Group Company relating to such employees for any
period after such termination date shall be reimbursed by the Sellers upon
request of the Purchasers. Purchasers' agree that they will not employ, directly
or indirectly, or offer employment to any such employees for a period of five
years from the Closing Date. Sellers agree to make available to FV such listed
employees from time to time during the six-month period after the Closing Date
to provide such information on the Business and Target Group Companies as
Purchasers shall reasonably request.
5.6 Debt to Related Parties. Albany agrees to cause the Target
Group Companies to repay in full all Debt on Schedule 2.6(g) on the Closing
Date.
5.7 WSC Auction Agreement. Subject to the continued accuracy
of the representations in Section 2.20 as of the Closing Date and the
satisfaction of the closing conditions in Section 6.1 hereof, simultaneously
with the purchase of the Shares by Purchasers: (a) Sellers agree to assign, and
to cause Geschmay GmbH (including, for purposes of this Section 5.7, GB as
assignee of Geschmay GmbH under the WSC Auction Agreement) to assign, all of
their rights under the WSC Auction Agreement to Albany effective as of the
Closing Date and (b) Albany agrees to assume all obligations of Sellers and
Geschmay GmbH to the other parties under the WSC Auction Agreement as of the
Closing Date. Albany agrees to indemnify the Sellers against any Damages they
may incur as a result of any default by Albany of any assumed obligations under
the WSC Auction Agreement. The Sellers agree to indemnify Albany against any
Damages it may incur as a result of any default by Sellers or Geschmay GmbH of
its obligations under the WSC Auction Agreement relating to events or conditions
arising prior to the Closing Date. Sellers agree to provide prompt notice of
such assignment as required pursuant to the terms of the WSC Auction Agreement.
5.8 Charitable Pledge. Albany agrees to cause WFG to honor
all of its obligations under the Charitable Pledge.
5.9 Sale of Excluded Assets. (a) At any time and from time to
time before the Closing Date, FV and WFG may sell to one or more parties any
Excluded Assets (except for those described in Item 1(a) on Schedule 0.36).
(b) At any time prior to the Closing Sellers shall have the
right to cause FV to enter into a contratto preliminare di vendita unilaterale
whereby an Affiliate of the Sellers designated by them shall have the right to
purchase and FV shall be under the obligation to sell the parcels of real
property (including buildings thereon) described in Item 1(a) and, as the case
may be, to transfer all rights and obligations for any such parcels held
pursuant to finance leases described in Item 1(a) in Schedule 0.36 at the prices
set forth in Schedule 0.36 for each such parcel of real estate; provided, that
FV shall not be obliged to enter into any contratto definitivo pursuant to the
contatto preliminare above prior to January 15, 2000. The contratto preliminare
shall be filed with the competent Conservatorie Registri Immobiliari. After the
Closing, Purchasers shall cause FV to fulfill its obligation to transfer the
32
same parcels of real property, as well as all rights and obligations under the
finance leases, in accordance with terms and conditions of the contratto
preliminare. The parties agree to cause the parties thereto to amend the
Marghera Lease and the Lodi1 Lease (which shall nevertheless be entered into on
the Closing Date) to: (A) postpone the commencement of the Lease term until the
date on which such Excluded Assets are sold, (B) reset the expiration date to a
date twelve years from the date of commencement, (C) delay the commencement of
the first "Contractual Year" (as defined in each such Lease) until commencement
of the lease term, and (D) make such other modifications to the extent necessary
to give effect to the foregoing. Any such delay of the sale of such Excluded
Assets shall have no effect whatsoever on Albany's obligation to pay the full
amount of the Purchase Price for the Shares on the Closing Date in the manner
specified in Section 1.3(a) hereof. Parties agree that from the date hereof
until the transfer of the parcels of real property referred to above, FV shall
not be entitled to any rent under the Visibilia Lease.
(c) All sales of Excluded Assets will be at prices not to
exceed the sale prices indicated for each such item in Schedule 0.36 hereto. The
parties agree that the Excluded Assets will be sold "as is, where is", and that
neither FV, WFG nor Albany makes any representation or warranty with respect to
the Excluded Assets, including, without limitation, any warranty of title or
ownership, absence of Liens, or as to the condition, merchantability, absence of
defects or fitness for any purpose of any Excluded Asset. The Parties agree that
FV shall continue to honor its obligations (including payment obligations) under
any finance lease contracts referred to in clause (b) above until such contracts
have been transferred, at which time the purchaser thereof shall assume all such
obligations. The Sellers agree to indemnify Albany and the Target Group
Companies against any Damages arising as a result of any Claim of any third
party relating to the Excluded Assets (including such financial lease
arrangements). Albany agrees that any income taxes payable by FV or WFG as a
result of the sales of Excluded Assets shall be borne by Albany and/or FV or
WFG, as the case may be, and shall not give rise to any claim for Damages
hereunder (except to the extent that such income taxes exceed US$1.8M in the
aggregate).
5.10 Antitrust Filings. Albany undertakes as promptly as
practicable to make any required antitrust filings, at Albany's expense, subject
to any required cooperation of the Sellers.
5.11 Albany. Notwithstanding any designation of Albany
Affiliates permitted pursuant to Section 1.1 hereof, Albany shall remain liable
for all obligations of Purchasers hereunder.
5.12 Miscellaneous. (a) Albany agrees that, in the event of a
termination of this Agreement pursuant to Article 8 hereof, it will return to
the Sellers all copies of any documents delivered by the Sellers pursuant to
this Agreement, except to the extent and for such time as may be required in
order to finally resolve any pending claim or dispute of either party hereunder.
(b) Albany agrees that it will not (i) for a period of two
years following any termination pursuant to Article 8, make an offer of
employment to, or agree to employ, sales or service employees or production
managers currently employed by any Target Group Company, except for employees
that at the time of hiring have not been employed by any Target Group Company
33
for a period of one year, or (ii) for a period of three years following any
termination pursuant to Article 8 hereof, directly or indirectly through an
Affiliate, make an unsolicited offer of employment to any employee of any Target
Group Company, or attempt to induce any such employee to leave the employ of any
Target Group Company.
(c) Albany agrees that it shall cause FV, within 60 days after
the Closing Date, to cause the discharge and cancellation of the mortgage
identified in Schedule 0.62 hereof relating to the leased property under the
Lodi1 Lease. All Liabilities secured by such mortgage as of December 31, 1998
were properly recorded as Debt in the 1998 Business Consolidated Financial
Statements of FV.
(d) Albany agrees to take all reasonable steps (including the
granting of a substitute guarantee) to cause Batimap to release MIF1 and
Geschmay GmbH from the guarantees given by each of them relating to the
obligations of COFPA under the lease identified in Item 5 of the list referred
to in Section 2.13(a) hereto.
5.13 Release of Directors. Effective the Closing Date, Albany
agrees that it will not thereafter assert against any current or former director
of any Target Group Company, any claim arising out of any acts taken or not
taken by such person in his or her capacity as a director of such Target Group
Company. The foregoing notwithstanding, such waiver by Albany shall not apply to
claims relating to (1) actions of deliberate dishonesty by such person, or (2)
any personal financial gain by such person to which he or she was not legally
entitled.
ARTICLE VI
CONDITIONS PRECEDENT TO CLOSING
6.1 Conditions Precedent to Obligations of Purchasers. The
obligations of Albany to purchase the Shares, or cause such Shares to be
purchased, at the Closing are subject to the satisfaction at or prior to the
Closing of each of the following conditions (unless satisfaction of any such
condition is expressly waived in a writing delivered to the Sellers'
Representative):
(a) Each of the representations and warranties of the Sellers
contained in Article II shall be accurate as of the date of this Agreement and
as of the Closing Date as though restated on and as of such date (except in the
case of any representation and warranty that by its terms is made as of a date
specified therein, which shall be accurate as of such date); except for such
inaccuracies as would not, in the aggregate, result in an obligation of the
Sellers to pay Damages pursuant to Article VII hereof in excess of the Indemnity
Amount (as such amount may be increased pursuant to Section 7.6 hereof). Solely
for purposes of this clause (a), and notwithstanding the definition of "Damages"
in Section 0.24 hereof, "Damages" shall be deemed to include Damages as so
defined, plus any contingent Liabilities relating to such inaccuracies that are
reasonably possible or probable of occurrence, which contingent Liabilities
shall be valued in accordance with IAS.
34
(b) Each of the representations and warranties of the Sellers
contained in Article II shall be accurate as of the date of this Agreement and
as of the Closing Date as though restated on and as of such date (except in the
case of any representation and warranty that by its terms is made as of a date
specified therein, which shall be accurate as of such date); except for such
inaccuracies as would not, in the aggregate, result in an obligation of the
Sellers to pay Damages pursuant to Article VII hereof in excess of the lesser of
(i) the Indemnity Amount and (ii) $75 million. (For purposes of this clause (b),
"Damages" shall mean Damages as defined in Section 0.24, and therefore shall not
include contingent Liabilities.)
(c) The Sellers shall have performed and complied with, in all
material respects, all agreements (including, without limitation, Section 4.2
hereof) required by this Agreement to be performed or complied with by each of
them prior to or at the Closing.
(d) No Law or Judgment shall be in effect which prohibits or
declares illegal, or awards or has awarded a material amount of damages in
respect of, (A) the transactions contemplated by this Agreement or (B) the
ownership by Purchasers of any of the Shares or (C) the ownership of the CR
shares by the purchaser under the CR Agreement.
(e) (i) The German Federal Cartel Office (Bundeskartellamt)
shall have informed the parties that the conditions for a prohibition of the
transactions contemplated hereby are not met or the periods during which the
Federal Cartel Office may prohibit such transactions shall have lapsed without
any prohibition having been declared;
(ii) The parties shall have complied with all filing
and waiting period requirements of the Hart-Scott-Rodino Act relating
to the transactions contemplated hereby; and
(iii) All other Consents, the granting of which is
required by Law for the consummation of the transactions contemplated
by this Agreement, shall have been obtained and all waiting periods
specified under applicable Laws, and all extensions thereof, the
passing of which is necessary for such consummation shall have passed.
(f) Each Seller shall have delivered, or caused its Affiliates
to deliver, to the Purchasers, and shall have caused CR to deliver to the
purchaser under the CR Agreement, (i) duly completed and executed stock
certificates, endorsed in blank or accompanied by stock powers endorsed in
blank, transfer orders (ordres de mouvement), and all such other instruments and
documents as may be required by law to transfer all of the right, title and
interest of such Seller or Affiliate in and to such Shares and of CR in and to
the CR Shares, together with the share register and the shareholder accounts, or
the equivalent, of each Company, which shall reflect such transfer; (ii)
unconditional resignation letters, effective on the Closing Date (except, in the
case of FV, such letters shall be effective on the earliest practicable date on
which a shareholders' meeting may legally be held), from all the directors and
supervisory board members of the Target Group Companies, with the exception of
those persons identified by Purchasers to the Sellers' Representative not later
than fifteen (15) days prior to the Closing Date and (iii) a certified copy of
35
the minutes of an ordinary general meeting of the shareholders of each Company
appointing as directors, subject to the condition precedent of the completion of
the sale of the Shares contemplated herein, those persons which Purchasers shall
have identified to the Seller's Representative not later than fifteen (15) days
prior to the Closing Date.
(g) CR shall have delivered the CR Shares in accordance with
the CR Agreement.
(h) The other parties thereto shall each have executed and
delivered to the Purchasers: (i) the Lodi1 Lease, (ii) the Marghera Lease, (iii)
the TT Supply Agreement, (iv) the Key Person Non-Competition Agreement and (v)
the Escrow Agreement.
(i) The Sellers shall have executed and delivered to the
Purchasers the Greenville Agreement and related escrow agreement.
Albany agrees that it shall not be permitted to delay the Closing solely due to
non-completion of due diligence unless the condition in clause (c) above has not
been satisfied.
Any dispute between the parties with respect to the satisfaction of 6.1(a),
6.1(b) or any other condition shall be resolved pursuant to Section 9.7.
Furthermore, any determination of Damages solely for purposes of determining
whether the conditions in Sections 6.1(a) and 6.1(b) have been satisfied shall
exclude: (1) Damages relating solely to any matters with respect to which the
Sellers have provided indemnification under a separate agreement; (2) aggregate
Damages, not exceeding $12 million, as a result of any breaches hereunder that
relate to FV; and (3) Damages as a result of a breach of the representations in
Section 2.6(b) hereof relating to the profit and loss statement included in the
1998 Business Consolidated Financial Statements. The foregoing shall not in any
way limit Purchasers' right to assert Claims relating to such Damages under
Article VII hereof.
Notwithstanding any dispute between the parties (or pending arbitration of such
dispute), the conditions contained in clauses (a) and (b) of this Section 6.1
shall be deemed satisfied if Sellers increase the Indemnity Amount pursuant to
Section 7.6 hereof up to the amounts indicated in each such clause,
respectively. Any such increase in the Indemnity Amount shall not be deemed a
waiver of any right of Sellers to dispute the satisfaction of 6.1(a), 6.1(b) or
of any other condition pursuant to Section 9.7.
6.2 Conditions Precedent to Obligations of the Seller. The
obligations of the Sellers to sell, or cause their Affiliates to sell, the
Shares at the Closing are subject to the satisfaction at or prior to the Closing
Date of each of the following conditions (unless satisfaction of any such
condition is expressly waived in a writing delivered to Purchasers):
(a) Each of the representations and warranties of Albany
contained in Article III shall be accurate as of the date of this Agreement and
as of the Closing Date as though restated on and as of such date (except in the
case of any representation or warranty that by its terms is made as of a date
specified therein, which shall be accurate in all material respects as of such
date).
36
(b) Albany shall have performed and complied with, in all
material respects, all agreements required by this Agreement to be performed or
complied with by it prior to or at the Closing.
(c) No Law or Judgment shall be in effect which prohibits or
declares illegal the transactions contemplated by this Agreement.
(d) (i) The German Federal Cartel Office (Bundeskartellamt)
shall have informed the parties that the conditions for a prohibition of the
transactions contemplated hereby are not met or the periods during which the
Federal Cartel Office may prohibit such transactions shall have lapsed without
any prohibition having been declared;
(ii) The parties shall have complied with all filing
and waiting period requirements of the Hart-Scott-Rodino Act relating
to the transactions contemplated hereby; and
(iii) All other Consents required by Law for the
consummation of the transactions contemplated by this Agreement shall
have been made or obtained and all waiting periods specified under
applicable Laws, and all extensions thereof, the passing of which is
necessary for such consummation, shall have passed.
(e) Purchasers shall pay (or cause to be paid) the Purchase
Price payable at the Closing in the amounts and manner as provided in Section
1.3.
(f) The Purchasers shall have executed and delivered to the
Sellers the Escrow Agreement.
ARTICLE VII
INDEMNIFICATION
7.1 Indemnification by Sellers. From and after the Closing
Date, subject to the provisions of this Section 7, the Sellers jointly and
severally agree to pay and to indemnify fully, hold harmless and defend
Purchasers and their Affiliates, successors and assigns, from and against any
and all Damages incurred by any of them (including by any Target Group Company)
arising out of, relating to or based upon: (a) any inaccuracy or breach of any
representation or warranty of the Sellers contained in this Agreement or of CR
contained in the CR Agreement; (b) any breach of any covenant or agreement of
the Sellers contained in this Agreement or of CR contained in the CR Agreement;
or (c) the Excluded Assets. Purchasers' right to be indemnified hereunder shall
not be limited or affected by any investigation conducted or notice or knowledge
obtained by or on behalf of Purchasers.
7.2 Method of Asserting Claims, etc. All claims by Purchasers
under this Article VII shall be asserted and resolved as follows:
37
(a) In the event that (A) any claim, demand or Proceeding is
asserted or instituted against any Target Group Company or any Purchaser by any
person, other than the parties hereto and their Affiliates, which could give
rise to Damages for which Purchasers intend to seek indemnification from Sellers
hereunder (such claim, demand or Proceeding, a "Third Party Claim") or (B)
Purchasers intend to make a claim for Damages to be indemnified by Sellers which
does not involve a Third Party Claim (such claim, a "Direct Claim"), Purchasers
shall promptly send to Sellers' Representative a written notice specifying the
nature of such claim or demand and the amount or estimated amount of Damages
(which estimate shall not be conclusive of the final amount of such claim and
demand) (a "Claim Notice"); provided, however, that any failure to give such
notice will not waive any rights of Purchasers except, in the case of a Third
Party Claim, to the extent that the rights of the Sellers are actually
prejudiced.
(b) In the event of a Third Party Claim, Sellers'
Representative may participate, at its expense, in the defense against such
claim or demand with counsel of its choice, reasonably acceptable to Purchasers.
Unless Sellers' Representative shall have agreed in writing that any and all
Damages to Purchasers related to a claim or demand are fully covered by the
indemnities provided herein, no such claim or demand may be settled without the
consent of Purchasers, which consent will not be unreasonably withheld.
(c) In the event of a Direct Claim, unless Sellers'
Representative notifies the Purchasers within sixty (60) days of receipt of a
Claim Notice that the Sellers dispute such claim, the amount of such claim shall
be conclusively deemed a liability of Sellers hereunder and shall be paid to the
Indemnified Party immediately.
7.3 Character of Indemnity Payments; Limitations on
Indemnity Payments. (a) All amounts actually paid pursuant to this
Article VII shall be treated by such parties as adjustments to the
Purchase Price.
(b) No payment of any Damages by the Sellers shall be required
under this Article VII unless and until the aggregate amount of Damages for
which payment would be required under this Article (excluding the effect of this
clause (b)) exceeds the Indemnity Basket;
(c) No payment of indemnity by the Sellers shall be required
under this Article VII with respect to any Liability if, and to the extent that,
such Liability has been expressly reserved for or recorded on the balance sheet
included in the 1998 Business Consolidated Financial Statements. No payment of
indemnity by the Sellers shall be required under this Article VII with respect
to any contingent Liability unless and until such time as such Liability is no
longer contingent.
(d) Sellers shall not be obligated to make payments pursuant
to this Article VII in excess of the Indemnity Amount; provided that such
limitation shall not apply to any Damages resulting from (i) any dol by any
Seller, (ii) any breach of the representations set forth in Sections 2.1, 2.3 or
clauses (i) and (iv) of Section 2.4 hereof, or (iii) any breach of Sellers'
obligations under Article IV hereof (except for clauses (a), (b) and (l) of
Section 4.1).
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(e) The amount of Damages payable by the Sellers pursuant to
this Article VII in respect of any particular Claim shall be reduced by (i) the
amount of any proceeds actually received by the relevant Target Group Companies
in respect of such Claim pursuant to policies of insurance owned by the Target
Group Companies on or before the Closing Date, (ii) the amount, if any, by which
Taxes payable by the relevant Target Group Companies is actually reduced as a
result of such Damages (taking into account any payment received pursuant to
this Article or any insurance proceeds referred to in clause (e)(i) above), and
(iii) any amounts actually recovered from any other third party in respect of
such Damages. [German Tax Exhibit]
(f) Albany agrees to assign to the Sellers, or to cause to be
assigned to the Sellers, all rights of the relevant Target Group Company to any
uncollected notes or accounts receivable in respect of which Albany has claimed
Damages under this Article VII, immediately upon payment of such Damages by
Sellers.
7.4 Survival of Representations and Warranties.
Notwithstanding any investigation conducted or notice or knowledge obtained by
or on behalf of any party hereto, each agreement in this Agreement shall survive
the Closing without limitation as to time until fully performed, and each
representation and warranty in this Agreement or in the Schedules, Exhibits,
certificates or other documents delivered pursuant to this Agreement shall
survive the Closing until December 31, 2002 (other than the representations and
warranties contained in Sections 2.1, 2.3 or clauses (i) and (iv) of Section
2.4, which shall survive the Closing without limitations as to time, Section
2.9, which shall survive the Closing until three months after the expiration of
the statutes of limitations, if any, applicable to the matters addressed
therein, including any extension thereof, and Section 2.6(e), which shall
survive the Closing until one year after the date of payment in full of the
notes and accounts referenced in such Section). Any claim for indemnification
under Section 7.1 arising out of the inaccuracy or breach of any representation
and warranty must be notified prior to the termination of the relevant survival
period. The foregoing periods shall not apply to any claim described in Section
7.3(d)(i) or Section 7.3(d)(ii).
7.5 Means of Indemnification. In addition to any other rights
or means the Purchasers may have to enforce the indemnities provided for in this
Article VII, the Purchasers shall be entitled to request the release of the
funds held in escrow pursuant to the Escrow Agreement. The Purchasers' right to
make a claim against the funds held under the Escrow Agreement shall not
prejudice their right to pursue, in addition or as an alternative to such right,
any other right or means the Purchasers may have to enforce the indemnification
provided for in this Article VII.
7.6 Increase of Indemnity Amount. The Sellers may, at their
option, increase the Indemnity Amount at any time prior to Closing to an amount
not to exceed $115 million.
7.7 Escrow. (a) At any time and from time to time Sellers
shall be entitled to substitute monies deposited with the escrow agent under the
Escrow Agreement with a guarantee of a Primary European Bank which terms shall
be consistent with the provisions of the Escrow Agreement. Without prejudice to
39
Purchasers' right of indemnification, the amount deposited with the escrow agent
under the Escrow Agreement shall be reduced by the amounts and in the manner
described in the Escrow Agreement. For purposes of this Section 7.7, "Primary
European Bank" shall mean ABN/AMRO or a commercial bank in Europe (i) which has
capital and surplus in excess of $500,000,000, (ii) which is in compliance with
minimum capitalization requirements under applicable Law, and (iii) the
securities of which are rated at least AA by Standard & Poor's Corporation, or
carry an equivalent rating by an internationally recognized rating agency.
(b) At any time after December 31, 2002, if, as the result of
(i) the expiration of applicable statutes of limitation, (ii) the issuance of
any final determination of the competent tax authorities (final assessment
notices, tax rulings or other final determinations in the nature of the
foregoing) or (iii) any other reason or cause provided for by applicable Law,
applicable Law would preclude any Liability for Taxes of the Target Group
Companies relating to the periods to which the representations and warranties of
the Seller contained in Section 2.9 refer, then the Purchaser and the Sellers
shall jointly instruct the agent under the Escrow Agreement to release all funds
held under such Agreement to the Sellers, less an amount equal to the aggregate
amount of all Demand Amounts (as defined in the Escrow Agreement) unsatisfied at
such date, in accordance with Section 4(b) of the Escrow Agreement. Any dispute
regarding the satisfaction of said conditions shall be submitted to arbitration
as per Section 9.7.
ARTICLE VIII
TERMINATION
8.1 Grounds for Termination. This Agreement may be terminated
in whole, but not in part, at any time prior to the Closing Date:
(a) By the written agreement of each of Purchasers and the
Sellers;
(b) By either Purchasers or the Sellers if the Closing shall
not have occurred on or prior to October 31, 1999, unless such eventuality shall
be due to the breach by the party seeking to terminate this Agreement of any of
the agreements herein to be performed or observed by such party prior thereto,
including, without limitation, any material breach of the covenant set forth in
Section 4.2 hereof.
8.2 Effect of Termination. If this Agreement is terminated as
permitted under Section 8.1, such termination shall be without liability to any
party to this Agreement or any Affiliate, director or representative of such
party, except for liability arising from a willful breach of this Agreement.
40
ARTICLE IX
MISCELLANEOUS
9.1 Publicity. From the date hereof through and including the
Closing Date, neither Purchasers nor the Sellers shall issue, or cause or permit
the written publication by any of their respective Affiliates or
representatives, of any press release or other public announcement with respect
to this Agreement except with the consent of the other party (which shall not be
unreasonably withheld) or as required by applicable Law. The Sellers shall,
however, be permitted to communicate to the employees of the Target Group
Companies the transactions contemplated herein. "Public announcement" shall not
be deemed to refer to internal company announcements or bulletins, or
discussions with analysts, banks or other financial institutions in the ordinary
course consistent with past practice.
9.2 Costs, Expenses and Taxes. (a) Whether or not the
transactions contemplated by this Agreement are consummated, each of the parties
to this Agreement shall bear its own expenses incurred in connection with the
negotiation, preparation, execution and consummation of this Agreement and the
transactions contemplated hereby.
(b) The amount of any registration or stamp transfer tax, if
any, due in respect of the sale of the Shares and the CR Shares, shall be borne
by Purchasers.
9.3 Notices. All notices or other communications required or
permitted by this Agreement shall be effective upon receipt and shall be in
writing and delivered personally or by overnight courier, or sent by facsimile
(with confirmation copies delivered personally or by courier within 3 business
days), as follows:
If to Albany, to:
Albany International Corp.
1373 Broadway
Menands, New York 12204
Attention: Legal Department
Facsimile: (518) 447-6575
If to the Sellers, to:
Mistral International Finance A.G.
Golden Bridge S.A.
c/o Etude d'Advocat Nico Schaeffer
Avenue de la Porte Neuve 12
L-2227 Luxembourg
Facsimile: 00352 475273
or to such other address as may be notified by the Sellers to the Purchasers, or
by the Purchasers to the Sellers, by a notice given pursuant to this Section
9.3.
41
9.4 Counterparts. This Agreement may be executed in any number
of counterparts, each of which shall be deemed an original, but all of which
together shall constitute a single instrument.
9.5 Entire Agreement. This Agreement (including the Schedules
and Exhibits referred to herein) sets forth the entire understanding and
agreement between the parties as to the matters covered herein and supersedes
and replaces any prior understanding, agreement, representations or warranty or
statement of intent, in each case, written or oral, of any and every nature with
respect thereto.
9.6 Governing Law. This Agreement shall be governed in all
respects, by the laws of Luxembourg, including validity, interpretation and
effect, without regard to principles of conflicts of law.
9.7 Arbitration. The parties hereto shall endeavor to settle
amicably any dispute arising out of or relating to this Agreement or any alleged
breach hereof. Any dispute not so settled shall be finally settled by an
arbitration under the Rules of Conciliation and Arbitration of the International
Chamber of Commerce conducted in English in Brussels, Belgium, by a panel of
three arbitrators appointed in accordance with such Rules. For purposes of such
an arbitration, MIF1 and Golden Bridge shall constitute one party, while Albany
shall constitute the other party. For purposes only of the appointment of
arbitrators under such Rules, Albany and MIF1 shall be considered the parties to
the dispute.
9.8 No Third Party Rights; Assignment. This Agreement is
intended to be solely for the benefit of the parties hereto and is not intended
to confer any benefits upon, or create any rights in favor of, any person other
than the parties hereto and shall not be assignable without the prior written
consent of the other party. Notwithstanding the foregoing, the Sellers
acknowledge and agree that Purchasers may assign all of their rights and
obligations under this Agreement to one or more direct or indirect,
majority-owned subsidiaries of Albany; provided that Purchasers shall remain
jointly and severally liable with any such assignee for the performance of their
obligations hereunder.
9.9 Waivers and Amendments. No modification of or amendment to
this Agreement shall be valid unless in a writing signed by the parties hereto
referring specifically to this Agreement and stating the parties' intention to
modify or amend the same. Any waiver of any term or condition of this Agreement
must be in a writing signed by the party sought to be charged with such waiver
referring specifically to the term or condition to be waived, and no such waiver
shall be deemed to constitute the waiver of any other breach of the same or of
any other term or condition of this Agreement.
9.10 Sellers' Representative. (a) Each of the Sellers hereby
irrevocably appoints MIF1 (the "Sellers' Representative") as such Seller's agent
and attorney-in-fact to take any action required or permitted to be taken by
Sellers under the terms of this Agreement, including, without limiting the
generality of the foregoing, the receipt of any payments in respect of the
Purchase Price for the Shares, the giving and receipt of any notices to be
delivered or received by or on behalf of the Sellers, the payment of expenses
relating to the transactions contemplated by this Agreement, the representation
42
of the Sellers in indemnification proceedings hereunder, and the right to waive,
modify or amend any of the terms of this Agreement, and agrees to be bound by
any and all actions taken by such agent on such Seller's behalf.
(b) Purchasers shall be entitled to rely exclusively upon any
communications or writings given or executed by the Sellers' Representative and
shall not be liable in any manner whatsoever for any action taken or not taken
in reliance upon the actions taken or not taken or communications or writings
given or executed by the Sellers' Representative. Purchasers shall be entitled
to disregard any notices or communications given or made by any Seller unless
given or made through the Sellers' Representative.
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IN WITNESS WHEREOF, three (3) original copies of this
Agreement have been executed in Brussels, Belgium as of the date first written
above.
MISTRAL INTERNATIONAL FINANCE A.G.
By /s/ Helmut Mianz
- -------------------------
GOLDEN BRIDGE S.A.
By /s/ Martine Schaeffer
- ------------------------------
ALBANY INTERNATIONAL CORP.
By /s/ Frank McKone
- -------------------------
44
SCHEDULES AND EXHIBITS
Schedule 0.36 Excluded Assets
Schedule 0.61 Permitted Encumbrances
Schedule 1.1 Seller's Share Ownership
Schedule 1.2 Purchase Price
Schedule 2.2 (part 1) Subsidiaries
Schedule 2.2 (part 2) Equity Investments
Schedule 2.3(b) Director's Qualifying Shares Subject
to Repurchase Agreements
Schedule 2.4 Conflicts
Schedule 2.6(c) (part 1) Liabilities
Schedule 2.6(c) (part 2) Other Liabilities
Schedule 2.6(d) Ordinary Course
Schedule 2.6(g) Debt Owed to Sellers and Their
Affiliates
Schedule 2.8 Proceedings
Schedule 2.10 Real Estate
Schedule 2.11 Intellectual Property
Schedule 2.13(c) Debt
Schedule 2.14(d) Certain Employee Matters
Schedule 2.15(b) Environmental, Health and Safety
Liabilities of Target Group
Companies
Schedule 2.16 Insurance Polices
Schedule 4.2 Due Diligence Guidelines
Schedule 4.3(a) Certain Loans
Schedule 4.3(b) Certain Contracts
Schedule 5.5 Certain Employees
Exhibit A Form of CR Agreement
Exhibit B Form of Escrow Agreement
Exhibit C Form of Key Person Non-Competition
Agreement
Exhibit D Lodi 1 Lease
Exhibit E Marghera Lease
Exhibit F TT Supply Agreement and Option
Agreement
Exhibit G Visibilia Services Agreement
Exhibit H Visibilia Lease
Schedule 1.2
The "Purchase Price" shall consist of an amount in US dollars equal to
$232,300,000 (two hundred thirty two million three hundred thousand dollars)
plus the net cash proceeds received by FV and WFG from the sale of the Excluded
Assets, plus the actual amount received by WFG from MIF1 in payment of the
Mistral Receivable, less the CR Consideration.
For purposes of clause (a) above, "net cash proceeds" shall mean the total cash
consideration received by FV and WFG from the sale of Excluded Assets pursuant
to Section 5.9, less any VAT, fees or expenses payable by FV or any other Target
Group Company in respect of such transactions, but before any related income
taxes payable in respect of such sales not to exceed US$1.8 million.
Any net cash proceeds or other consideration in DM or Italian Lira shall be
converted to US$ at the buying rates for US$ for such currencies as published by
Bundesbank and Banca d'Italia, respectively, as of the close of business on the
day preceding the Closing Date.
The Purchase Price shall be increased at the rate of 6% per annum for any period
by which the Closing Date is later than the 90th calendar day after the date of
this Agreement except to the extent that such delay is due to the fault of the
Sellers or failure of the conditions in Section 6.1 hereof to be satisfied;
provided that the foregoing shall not be deemed to limit the amount of damages
that may be claimed by Seller in the event of any breach of Purchasers of their
obligations hereunder.
The parties agree that the cash portion of the Purchase Price shall be allocated
as follows:
WFG $141.3 million (less the CR Consideration)
FV $27 million
WSC - 45% stake $7 million
WSC - 55% stake $40.6 million
COFPA $15.1 million
GAS $1.0 million
Geschmay Research $0.3 million
Any Purchase Price consisting of the actual amount received by WFG from MIF1 in
payment of the Mistral Receivable shall be allocated to the WFG Shares. Any
Purchase Price consisting of the amount of any net cash proceeds received by FV
or WFG from the sale of Excluded Assets shall be allocated respectively to FV
and WFG shares.
Exhibit 99.1
Press Release
For additional information contact:
Kenneth C. Pulver
Vice President, Corporate Communications
(518) 445-2214
FOR IMMEDIATE RELEASE
ALBANY INTERNATIONAL FINALIZES GESCHMAY ACQUISITION Albany, New
York, August 24, 1999 -- Albany International Corp.
(NYSE/PSE:AIN) announced today that it had completed the acquisition of the
Geschmay Group. The combination of these two companies reflects the increasing
global nature of paper manufacturing companies as well as their supplier base.
The addition of the Geschmay Group, supported by facilities in four countries,
enhances Albany's position as the world leader in paper machine clothing.
Combined turnover of the two companies is approximately $885 million.
While optimizing available synergies, Albany plans to maintain the
strong Geschmay product portfolio. With strong brands and identities worldwide,
Geschmay-branded products will continue to be available to customers globally.
Francis L. McKone, Chairman and Chief Executive Officer, commented, "We
expect the union of these two fine companies to represent added value for our
customers. The strong technology base and geographic customer coverage reflected
in the Geschmay business will enhance our combined ability to service our major
markets globally."
Albany International is the world's largest producer of paper machine
clothing and high performance doors with manufacturing plants in 15 countries
and sales worldwide. Additional information about the company's business and
products is available at www.albint.com.
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