STOCK TRANSFER AND SHAREHOLDER AGREEMENT
Agreement (AAgreement@) made as of this 20th day of December, 1997, by and
between Tokai Industrial Sewing Machine Company, Ltd. (ATokai@), a Japan
corporation having offices at No. 1800 Ushyama-Cho, Kasugai 486, Aichi Pref.,
Japan, and Xxxxxx International Corp. (AHirsch@ and, together with Tokai,
collectively referred to herein as the AShareholders@), a Delaware corporation
having offices at 000 Xxxxxxxx Xxxxxxxxx, Xxxxxxxxx, Xxx Xxxx 00000.
W I T N E S S E T H:
WHEREAS, Xxxxxx is the record and beneficial owner of one hundred (100)
shares of the common stock, without par value, of Tajima USA, Inc. (the
AShares@), a corporation organized under the laws of the State of Delaware and
authorized to do business in the State of New York (ACorporation@); and
WHEREAS, Tokai desires to purchase from Xxxxxx and Xxxxxx desires to sell
to Tokai forty-five (45) of the Shares owned by Xxxxxx on the terms and subject
to the conditions as set forth herein.
NOW, THEREFORE, in consideration of the mutual covenants and conditions
contained herein, receipt of which is hereby acknowledged, the parties hereto
agree as follows:
1. Purchase of Shares. Xxxxxx hereby sells, assigns and transfers to Tokai
and Tokai hereby purchases from Xxxxxx forty-five of the Shares owned by Xxxxxx
for and in consideration of Nine Hundred Thousand ($900,000.00) Dollars, payable
in legal tender of the United States, remitted by wire transfer.
2. Transfer of Shares. Xxxxxx shall deliver its certificate evidencing
ownership of one hundred (100) shares to the Corporation and shall cause the
Corporation to issue new certificates evidencing ownership by Xxxxxx of
fifty-five (55) Shares and Tokai of forty-five (45) Shares.
3. Board of Directors. So long as the parties are shareholders, each agrees
to vote its shares to elect as members of the Board four (4) persons designated
by Xxxxxx and one (1) person designated by Tokai. Each party reserves the right,
from time to time, to designate different persons to serve as members of the
Board, provided the proportionate representation of each of the parties is not
modified. Appropriate corporate resolutions shall, from time to time, be
executed by the parties to effect their intent.
4. Restriction on Transfer of Shares.
(a) The Shareholders shall not pledge or otherwise encumber their Shares,
nor will they make any disposition of such Shares except with the prior written
consent of the other Shareholders or as otherwise permitted by this Agreement.
Any purported pledge, encumbrance or disposition in violation of the terms of
this Agreement shall be void from the inception.
(b) The Corporation's share certificates representing the Shares owned by
each of the Shareholders shall have inscribed thereon the following endorsement:
"THE SALE, TRANSFER, PLEDGE OR OTHER ENCUMBRANCE OF SHARES REPRESENTED BY
THIS CERTIFICATE IS SUBJECT TO THE TERMS OF A STOCK TRANSFER AND SHAREHOLDERS
AGREEMENT DATED AS OF DECEMBER 20, 1997, A COPY OF WHICH IS ON FILE AT THE
OFFICE OF THE CORPORATION."
(c) Notwithstanding the foregoing, if either party wishes to sell its
Shares, notice shall be given and the remaining party shall have the right, but
not the obligation, to purchase the Shares for an amount equal to the book value
of the selling Shareholder=s interest or the fair market value of his interest,
whichever is greater. In the event the remaining party elects not to purchase
the Shares when offered, then the party wishing to sell shall be free to offer
its Shares to a third party for a period of six months, provided, however, the
remaining Shareholder shall have the option to purchase the Shares on the same
terms and conditions as a third party is willing to purchase the Shares by
giving notice within ten (10) business days after receipt of confirmation that a
third party exists and intends to purchase the shares.
5. Sale of Business or Public Offering. Notwithstanding any provision of
law or bylaws of the Corporation to the contrary, the parties agree that, except
with their unanimous consent, there shall be no sale of the business of the
Corporation, all or substantially all of its assets or a public offering of its
securities.
6. Representations and Warranties.
(a) Xxxxxx represents and warrants to Tokai that (i) it is the record and
beneficial owner of the Shares, (ii) it has full right, power, authority and
capacity to sell, transfer, and deliver such Shares in accordance with the terms
of this Agreement, (iii) upon delivery thereof as herein contemplated Tokai will
receive good and marketable title to the Shares, and (iv) the Shares are free
and clear of any claims, liens, pledges and encumbrances of any kind.
(b) Tokai represents and warrants that (i) its purchase of the Shares of
the Corporation has been duly authorized, (ii) the execution and delivery of
this Agreement, including the terms and conditions contained herein, have been
duly authorized, (iii) each person from time to time designated to serve as a
member of the Board is and shall be duly authorized to act in the best interests
of the Corporation and (iv) the execution and delivery of this Agreement does
not and shall not violate any applicable laws, rules, governmental regulations,
agreements or bylaws to which Tokai is a party.
7. Indemnification. Xxxxxx and Tokai each hereby agrees to indemnify and
hold the other harmless from and against any and all claims, damages, liability,
cost and expense (including reasonable attorney=s fees) arising out of the
breach of any representation, warranty or covenant of the other party contained
herein or made pursuant hereto.
8. Notices. Any and all notices or other communications required or
permitted to be given under any of the provision of this Agreement shall be in
writing and shall be deemed to have been duly given when personally delivered,
or when mailed by certified or registered mail, return receipt requested,
addressed to the parties at the addresses first written above (or at such other
address as such party may specify by notice to the other party given as
aforesaid).
9. Governing Law. This Agreement and all amendments hereto shall be
governed by and construed and enforced in accordance with the laws of the State
of New York applicable to contracts made and to be performed therein and to the
Delaware Corporation Law to the extent of matters affecting the governance of
the Corporation.
10. Arbitration. Any dispute or controversy arising out of with or relating
to this Agreement, any document or instrument delivered pursuant to or in
connection with this Agreement, or any breach of this Agreement or any such
document or instrument shall be resolved by arbitration in accordance with the
rules then prevailing of the International Chamber of Commerce (AICC Rules@).
Such arbitration shall take place in Nassau or Suffolk County before a single
arbitrator appointed in accordance with the ICC Rules. Any decision rendered by
the arbitrator shall be final and may be entered as a judgment in the federal or
state courts of the State of New York or any other jurisdiction where
enforcement thereof may be required. Notwithstanding any ICC Rules to the
contrary, the Shareholders agree to exchange any and all documentary materials
relevant to the dispute not less than twenty (20) days prior to the time when
the arbitrator has scheduled hearings for the purpose of resolving the dispute.
The cost associated with the arbitration proceedings, including reasonable
attorneys fees incurred therein, shall be allocated by the arbitrator to the
prevailing party or as may otherwise be deemed appropriate.
11. Exclusive Jurisdiction. Each of the parties hereby submits to and
agrees to the exclusive jurisdiction for all purposes of the Courts of the
United States of America and, specifically, the appropriate federal and state
courts located within the County of Nassau, State of New York, to the extent any
judicial order is required to enforce any rights of the parties.
12. Miscellaneous.
(a) Independent Counsel. The parties hereby acknowledge that each of them
has received the advice of independent counsel in connection with the
transactions contemplated herein.
(b) No Adverse Construction. The rule that a contract is to be construed
against the party drafting the contract is hereby waived, and shall have no
applicability in construing this Agreement or any provision hereof.
(c) Binding Effect. This Agreement shall inure to the benefit of and be
binding on the parties hereto and their respective successors and assigns, heirs
and personal representatives.
(d) Entire Agreement. This Agreement constitutes the entire agreement of
the parties with respect to the subject matter hereof and supersedes all prior
agreements, arrangements or understandings related to the subject matter hereof.
This Agreement may not be modified, amended or terminated except by a written
agreement specifically referring to this Agreement signed by all parties hereto.
(e) No Waiver. No waiver of any breach or default hereunder shall be
considered valid unless in writing and signed by the party giving such waiver,
and no waiver shall be deemed a waiver of any subsequent breach or default of
the same or similar nature.
(f) Headings. The section headings contained herein are for the purpose of
convenience only and are not intended to define or limit the contents of said
sections.
(g) Severability. If any provisions of this Agreement is determined to be
legally invalid, inoperative or unenforceable, only that particular provision
shall be affected, and the determination shall have no effect whatsoever on any
other provision of this Agreement, and all other provisions shall remain in full
force and effect and fully enforceable.
(h) Further Assurances. Each party hereto shall cooperate, shall take such
further action and shall execute and deliver such further documents as may be
reasonably requested by the other party hereto in order to carry out the
provisions and purposes of this Agreement.
(i) Counterparts. This Agreement may be executed in one or more
counterparts, all of which taken together shall be deemed one original.
13. Translations. The parties acknowledge that this Agreement shall be
prepared and executed in English and Japanese. In the case of any conflict in
interpretation between the different versions of the documents, the parties
agree to be bound by the English translation for all purposes.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed as of the day and year first above written.
Tokai Industrial Xxxxxx International Corp.
Sewing Machine Co., Ltd.
By: /s/Xxxx Xxxxxx By: /s/Xxxxx Xxxxxxx
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Xxxx Xxxxxx, President Xxxxx Xxxxxxx, President
