EXHIBIT 2.1
SALE AND PURCHASE AGREEMENT
between
NU-KOTE INTERNATIONAL, INC.
incorporated in Delaware and having its
principal place of business in Franklin,
Tennessee (the "Seller") of the first
part
and
PELIKAN HARDCOPY EUROPE LIMITED
incorporated in Scotland and having its
registered office at 000 Xx. Xxxxxxx
Xxxxxx, Xxxxxxx, Xxxxxxxx (the
"Purchaser") of the second part
RECITALS
(A) The Seller owns that number of shares or other ownership interest
specified in column 1 of Part 1 of the Schedule and that percentage of
the issued share capital of the Companies specified in column 3 of
Part 1 of the Schedule; and
(B) The Seller has agreed to sell and the Purchaser has agreed to purchase
all of the Seller's Shares in the Companies on the terms and
conditions set out in this Agreement.
NOW THEREFORE, in consideration of the representations, warranties and
covenants contained herein, and for other good and valuable consideration,
the receipt and sufficiency of which are hereby acknowledged, the parties
hereto, intending to be legally bound, hereby agree as follows:
STATEMENT OF AGREEMENT
1. DEFINITIONS AND INTERPRETATIONS
1.1 In this Agreement, unless otherwise provided or unless the
context so requires, the following words and expressions
shall have the meaning ascribed to them herein below:
"Agreement" Means this Sale and Purchase Agreement,
together with the Schedule hereto;
"Ancillary Agreements" Means a trademark and patent cross license
between the parties, a supply agreement
between the parties, non-compete agreement
and Escrow Agreements, all in a form to be
agreed upon by the parties;
"Affiliated Companies" Means in relation to the direct and indirect
subsidiaries of Nu-Kote Holding, Inc., any
company which is at the relevant time a
holding company of that company or a
subsidiary of any such holding company as
described in Part 1.1(a) of the Schedule;
"Business Day" Means a day on which clearing banks are open
for normal business in Scotland;
"Bankruptcy Estate" Means the estates of Nu-Kote Holding, Inc.,
the Seller, Future Graphics, Inc., Nu-Kote
Imaging International, Inc., Nu-Kote
Imperial, Inc., International Communication
Materials, Inc. and Nu-Kote Latin America,
Inc. as debtors in possession in Case No.
398-10600 in the United States Bankruptcy
Court, Middle District of Tennessee,
Nashville Division;
"Companies" Means the companies specified in Part 1.1(b)
of the Schedule;
"Completion" Means the Completion of the sale and
purchase of the Shares and of the other
matters set out in this Agreement, at the
Completion Date in accordance with the
provisions of Clause 4;
"Completion Date" Means such date as may be mutually agreed
between the parties hereto;
"Directors" Means the respective board members, deputy
board members and managing directors on the
date hereof of Seller, Holding and each of
the Group Companies, as the case may be, all
as set forth in Part 1.1(c) of the Schedule;
"Escrow Agreements" Means the agreements between the parties
hereto relating to the payment and further
terms relating to the Escrow Amount;
"Escrow Amounts" Means USD 3,280,000, plus any amount to be
held in escrow as contemplated by Clause 3.2
hereof;
"Group Companies" Means the Companies and the Subsidiaries and
"Group Company" means any one of them;
"Holding" Means Nu-kote Holding, Inc., a Delaware
corporation that is the parent corporation
of Seller;
"Intellectual Property
Rights" Means, whether registered or not, any right
to any patents, trademarks, registered
designs, business names, applications for
registration of any of the foregoing,
copyrights, know-how and any similar rights
in any country including unpatentable
inventions and trade secrets and all rights
under licenses and consents in relation to
any of the foregoing;
"Purchaser's
Solicitors" Means Xxxxxx Xxxxxx & Spens of 000 Xx.
Xxxxxxx Xxxxxx, Xxxxxxx X0 0XX, Xxxxxxxx;
"Schedule" Means the Schedule in three parts annexed
hereto. To the extent that any Part of the
Schedule referred to herein or any matter
referred to in any part of the Schedule is
not attached or set out at the time of
execution of this Agreement, the Seller
agrees to provide the Purchaser with copies
thereof not less than five days prior to the
date of the hearing to approve the
transaction contemplated herein by the U.S.
Bankruptcy Court as contemplated by Clause
5.2.1;
"Seller's Solicitors" Means Akin, Gump, Strauss, Xxxxx & Xxxx
L.L.P. of 0000 Xxxxxxx Xxxxxx, Xxxxxx, Xxxxx
00000, Xxxxxx Xxxxxx of America;
"Shares" Means that number of shares or other
ownership interest set out beside each of
the Companies in column 1 of Part 1 of the
Schedule;
"Subsidiaries" Means the subsidiaries of the Companies as
specified in Part 2 of the Schedule;
"Taxes" Means all direct and indirect taxes and
charges, social security fees, duties and
other assessments (including but not limited
to any income tax (whether actual or
deemed), sales tax, use tax, transfer tax,
transaction tax, investment tax, capital
tax, real property tax, real estate gains
tax, gift tax, value added tax, withholding
tax, employment tax, asset holding tax or
registration tax and deferred taxes)
wherever arising, together with any
interest, penalties, residual tax charges or
addition to tax;
"Trademark License Means that certain trademark license
Agreement" agreement dated as of Completion between the
Purchaser and Pelikan Holding A.G. in
respect of the use of the "Pelikan"
trademark;
"USD" Means United States Dollars; and
"Warranties" Means the representations, warranties and
undertakings contained in Part 3 of the
Schedule and "Warranty" means any of them.
1.2 In this Agreement;
1.2.1 The singular includes the plural and the masculine includes
the feminine and vice versa;
1.2.2 References to persons shall include bodies corporate,
unincorporated associations and partnerships;
1.2.3 References to recitals, clauses, the schedule and sub-
divisions of the schedule are, unless the contrary intention
appears, references to the recitals and clauses of and to
the schedule and sub-divisions thereof to this Agreement;
1.2.4 The headings and sub-headings of this Agreement are inserted
for convenience only and shall not form part of the
construction thereof; and
1.2.5 Reference to a document "in the agreed form" shall be a
reference to a document initialed by the Seller's Solicitors
and the Purchaser's Solicitors for the purposes of
identification only.
1.3 Where a warranty is qualified by the expression "to the best
of the Seller's knowledge," or words of like effect, such
warranty shall be deemed, save where expressly stated
otherwise, to mean or to be predicated upon only those
specific facts of which any of Xxxxxxx Xxxxxx, Xxxxxxx
Xxxxxxxx, Xxxxxxx Xxxxxx and Xxxxxx Xxxxxxxx are actually
aware after (i) due inquiry of the Seller's attorneys,
auditors, tax advisors and registered agent(s) and (ii)
review of their own respective files and records relating to
the Group Companies. Further, any facts and information
known to the directors of the Group Companies (other than
Xxxxxxx Xxxxxx) shall not be imputed to Messrs. Xxxxxx,
Xxxxxxxx, Xxxxxx or Xxxxxxxx.
1.4 Any legal term used in this agreement that has no absolute
meaning in the relevant jurisdiction of any of the Group
Companies shall be interpreted , to the extent possible, in
order to give effect to the transfers of title contemplated
by this Agreement.
2. SALE AND PURCHASE OF THE SHARES
2.1 The Seller agrees to sell the Shares as the beneficial owner
thereof and the Purchaser relying on the representations,
warranties and undertakings set out or referred to herein
agrees to purchase the Shares with effect from the
Completion Date, free from all options, liens, charges and
encumbrances and together with all rights, privileges and
advantages attached or accruing thereto, all on the terms
and subject to the conditions of this Agreement.
3. PURCHASE PRICE AND PAYMENT
3.1 The purchase price for the Shares (the "Purchase Price")
shall be USD 16,500,000, allocated as set out in Part 1(d)
of the Schedule, which Purchase Price shall be apportioned
among the Companies as set out in column 4 of Part 1 of the
Schedule.
3.2 The Purchase Price shall be paid as set forth on Part 1.1(e)
of the Schedule. The Purchaser and the Seller agree that if
title to Dongguan Pelikan Hardcopy Ltd. cannot be
transferred at the Completion because the requisite
governmental consents have not been obtained, then an
additional amount equal to USD 660,000 shall be escrowed
until such time as the consents are obtained. Upon receipt
of such consents, the USD 660,000 in escrow shall be
released to the Seller.
3.3 The Purchaser shall fund the Escrow Amount on the Completion
Date in accordance with the Escrow Agreements.
4. COMPLETION
4.1 Completion shall, unless otherwise agreed in writing between
the parties, take place on the day one Business Day after
the day on which the last of the conditions specified in
Clause 5 is satisfied at the offices of the Seller's
Solicitors.
4.2 At Completion:
4.2.1 The Seller shall, in exchange for the payment of the
Purchase Price in accordance with Part 1.1(e) of the
Schedule, transfer the Shares and deliver to the Purchaser
all the share certificates representing the Shares;
provided, however, to the extent the requisite governmental
consents to the transfer of the Seller's shares of Dongguan
Pelikan Hardcopy Ltd. have not been obtained by Completion,
then the Seller shall execute the documents necessary to
transfer such shares and deposit them in escrow for release
upon receipt of such consent and to the extent such
transfers are incapable because consent to the transfer of
such Shares by the appropriate governmental agency of China
has not been received, then the Seller shall deliver a
declaration that the ownership interest in Dongguan Pelikan
Hardcopy Ltd. is being held by the Seller for the benefit of
the Purchaser. Upon receipt of such consent, the documents
shall be released to the Purchaser;
4.2.2 The Seller and the Purchaser shall deliver to each other
duly executed copies of the Ancillary Agreements;
4.2.3 The Seller shall deliver to the Purchaser a Certificate of
Seller, executed by the Seller's Chief Executive Officer,
certifying that there have been no changes in the Schedule
previously delivered by the Seller or identifying any
changes that have occurred in reasonable detail;
4.2.4 The Seller shall deliver to the Purchaser the shareholders
register for the Companies;
4.2.5 The Seller shall deliver conditional resignations, subject
to the completion of the fiscal year 1999 statutory audits,
in the agreed form from the existing auditors of each of the
Group Companies;
4.2.6 Except with respect to obligations arising between the
Purchaser and the Seller under this Agreement or under any
of the Ancillary Agreements, the Purchaser and the Group
Companies shall release the Seller, Holding, each of their
Affiliated Companies and all of such entities respective
officers and directors from any and all liabilities or
claims, of any kind which do exist or may have existed, in
favor of the Seller or any of the Affiliated Companies,
including the Group Companies;
4.2.7 Except with respect to obligations arising between the
Purchaser and the Seller under this Agreement or any of the
Ancillary Agreements, the Seller shall release the Purchaser
and each of the Group Companies and their respective
officers and directors from any and all liabilities or
claims in favor of the Seller; and
4.2.8 The respective fees and expenses of Seller's professionals
set forth on Part 1.1(e) of the Schedule shall be paid out
of the Purchase Price to such parties by the Seller.
5. CONDITIONS PRECEDENT
5.1 The obligations of the Seller to pursue the approval of the
U.S Bankruptcy Court required by Clause 5.2.1 below shall be
subject to the following having occurred within ten (10)
days after the Seller has filed a motion with the U.S.
Bankruptcy Court to approve this Agreement and the
transactions contemplated hereby:
5.1.1 The secured lenders of the Seller, Holding and the Group
Companies shall have consented in writing and in form and
substance satisfactory to the Seller's bankruptcy counsel to
the transactions contemplated hereby and to releases
required by 5.4.4 and the transaction contemplated by Clause
5.4.6; and
5.1.2 The secured lenders of the Seller shall have agreed in
writing to pay the fees and expenses of the Seller's
professionals incurred in connection with this transaction
in an amount not to exceed $700,000.00 if there is not
completion and shall have provided such security therefor as
Akin, Gump, Strauss, Xxxxx & Xxxx, L.L.P. shall have
requested.
5.1.3 The secured lenders shall have agreed to permit the Seller
to retain USD 250,000.00 out of the Purchase Price to pay
the cost of completing Fiscal Year 1999 U.S. GAAP audits of
the Group Companies following Completion.
5.2 The obligations of the Seller to consummate the transactions
contemplated by this Agreement shall be subject to the
following having occurred on or prior to the Completion
Date, any of which conditions may (except for Clause 5.2.1)
be waived at the discretion of the Seller:
5.2.1 The approval of the U.S. Bankruptcy Court, which is
considering the Chapter 11 bankruptcy procedures in the
United States in relation to the Seller, to the transactions
contemplated by this Agreement;
5.2.2 The Seller having received satisfactory advice of counsel
regarding any tax consequences resulting from the
consummation of the transactions contemplated hereby
confirming that there are no material adverse tax
consequences to the Seller as a result of the transactions
contemplated hereby;
5.2.3 The Seller having received satisfactory advise of counsel
that no additional material administrative liabilities will
accrue to or material adverse consequences be suffered by
the Bankruptcy Estate as a result of the transactions
contemplated hereby; and
5.2.4 Pelikan Holding A.G. shall have released all of its pre-
petition claims asserted against the Bankruptcy Estate.
5.3 The obligations of the Purchaser to consummate the
transactions contemplated by this Agreement shall be subject
to the following having occurred on or prior to the
Completion Date, any of which conditions may be waived at
the discretion of the Purchaser:
5.3.1 That no breach in respect of any of the Seller's
representations, Warranties or covenants herein has occurred
from the date hereof up to and including the Completion
Date;
5.3.2 That there has been no material adverse change in the
financial or trading position of any of the Group Companies
or any breach of any of the provisions of Clause 6; provided
that the Purchaser acknowledges that there shall be no
material adverse change for purposes of this Clause 5.3.2 by
virtue of the fact that the Group Companies have continued
to trade in a manner consistent with their current trading
pattern;
5.3.3 The Purchaser having completed funding arrangements
satisfactorily with its prospective funders;
5.3.4 The approval of the U.S. Bankruptcy Court, which is
considering the Chapter 11 bankruptcy procedures in the
United States in relation to the Seller, to the transactions
contemplated by this Agreement, which such approval is not
the subject of an appeal; provided that the Purchaser may
elect to complete the transactions contemplated by this
Agreement notwithstanding the existence of such an appeal;
and
5.3.5 The shares of N-K Holding Limited having been transferred
out of the ownership of any of the Group Companies.
5.4 The obligations of the Seller and the Purchaser to
consummate the transactions contemplated by this Agreement
shall be subject to the following having occurred on or
prior to the Completion Date, any of which conditions in
favor of the other party may be waived at the discretion of
the Seller or the Purchaser, as the case may be:
5.4.1 Any governmental or regulatory consents of any jurisdiction
required to give effect to this Agreement having been
obtained;
5.4.2 All intercompany debt owed by and between the Seller and/or
Holding and each of the Group Companies having been
released;
5.4.3 There having been no failure to comply with the delivery
requirements set forth in Clause 4 hereof;
5.4.4 The Seller's and Holding's secured lending groups shall have
expressly consented to the transactions contemplated hereby,
agreed to accept the net proceeds of the sale contemplated
herein in full and final satisfaction of all debt owed by
any of the Group Companies or their Affiliate Companies to
the secured lending groups and shall have released all liens
on the Seller's Intellectual Property, all obligations
(including debt repayment obligations) of the Group
Companies to such secured lending group, all liens on assets
of the Group Companies and all liens on the Shares. The
Group Companies' secured lenders shall have released all
guarantees given by the Seller and its domestic subsidiaries
and all obligations (including debt repayment obligations)
of the Group Companies for indebtedness of the Group
Companies, all liens on all Intellectual Property of the
Seller and its Affiliated Companies, all liens on the Shares
and all other assets of the Group Companies;
5.4.5 Any resignations of officers and directors of the Group
Companies requested by the Purchaser having been executed
and delivered to the Seller;
5.4.6 The Seller's secured lending group shall have agreed to
convert the full amount of the debt owed by Pelikan Scotland
Ltd. into equity shall have agreed to sell such equity to
the Purchaser at Completion for USD 1.00;
5.4.7 The Purchaser shall have received the Trademark License
Agreement from Pelikan Holding AG and the Seller shall have
received an executed, amended trademark license agreement
from Pelikan Holding AG;
5.4.8 The Seller, Holding, the Group Companies and the Purchaser
will have taken all steps necessary to effectuate the
granting of mutual releases contemplated by Clauses 4.2.6
and 4.2.7 hereof; and
5.4.9 The Seller and the Purchaser will have memorialized all of
the Ancillary Agreements in written form mutually acceptable
to Purchaser's Solicitors and Seller's Solicitors.
5.5 The Seller shall use its reasonable endeavors to ensure that
the conditions set out in Clauses 5.1, 5.2 and 5.4 are
satisfied as at the Completion Date.
5.6 The Purchaser shall use its reasonable endeavors to ensure
that the conditions set out in Clauses 5.2.4, 5.3 and 5.4
are satisfied as at the Completion Date.
5.7 In the event that the conditions set out in Clause 5.2 to
5.4.9 (inclusive) above have not been fulfilled on or prior
to 15 June 1999 or on such other date as the parties may
agree, without prejudice to any other remedies available to
either party, either party shall have the right to terminate
this agreement forthwith in writing and neither party shall
be entitled to any compensation of any kind, save as
specified in Clause 8, from the other due to such
termination.
6. CONDUCT OF BUSINESS
In the period between execution of this agreement by the
Seller and the Completion Date, the Seller will not, except
as required by applicable law, authorize or direct without
the prior written consent of the Purchaser:
6.1 The making of any change in the authorized or issued share
capital of the Group Companies or to the rights attached to
Shares;
6.2 The making of any change to the Memorandum and Articles of
Association or equivalent constitutional documentation of
any of the Group Companies;
6.3 The granting of any option, right to acquire or other
interest in shares or securities of any of the Group
Companies;
6.4 The making of any material change in the nature of the
Business of any of the Group Companies;
6.5 The disposal of any part of the business or of any asset of
the Group Companies other than in the ordinary course of
business;
6.6 The making of any change to the Directors of any of the
Group Companies; or
6.7 The taking of any action which would give rise to a breach
of the Warranties.
7. WARRANTIES, REPRESENTATIONS AND UNDERTAKINGS
7.1 The Seller warrants, represents and undertakes to the
Purchaser that at the date five (5) days before the day on
which the relevant U.S. Bankruptcy Court holds a hearing to
approve this Agreement, subject only to matters fairly
disclosed in the Schedule or the Certificate referred to in
Clause 4.2.3 each of the Warranties shall be true and
correct and will continue to be so as of the Completion
Date.
7.2 Each party agrees to promptly advise the other as soon as it
becomes aware of any fact of circumstances which would
cause, in the case of the Seller, a Warranty to be untrue
or, in the case of either party, prevent the satisfaction of
any condition precedent.
7.3 If, at any time prior to Completion, any matter contained in
the Schedule or the Certificate delivered pursuant to Clause
4.2.3 would (if it had not been so contained), in the
reasonable opinion of the Purchaser, constitute a material
breach of the Warranties, the Purchaser shall be entitled to
terminate this Agreement by notice to the Seller and the
parties shall have no further obligations to each other.
8. EXPENSE REIMBURSEMENT
8.1 If the Seller sells the Shares or the assets and
undertakings of the Group Companies to a third party, unless
the sale is other than in connection with the Seller's
bankruptcy, the Seller shall pay to the Purchaser an amount
equal to the reasonable costs and expenses incurred by the
Purchaser and its funders, including the advisors' costs and
fees of the Purchaser and its funders, as determined by the
U.S. Bankruptcy Court in an amount not to exceed
USD1,250,000.00 ; unless the Purchaser fails to complete the
transactions contemplated hereby because of the Purchaser's
failure to satisfy a condition precedent or other breach of
the Agreement by the Purchaser.
9. NON COMPETITION
9.1 As part consideration of the Purchaser paying to the Seller
the Purchase Price, the parties have agreed to enter into a
non-competition agreement at Completion.
10. CONFIDENTIALITY
The parties hereto undertake not to and shall procure that
none of their respective Affiliated Companies shall disclose
and shall make reasonable efforts to prevent the use or
disclosure of any information, whether written or oral,
including, without limitation, financial information, trade
secrets, client lists and other proprietary business
information, regarding the other or this Agreement, which
information is not known to the general public, unless (i)
required to do so by law or any stock exchange, (ii)
required in furtherance of good faith efforts to obtain
approval of the transactions contemplated by this Agreement
from the U.S. Bankruptcy Court or (iii) unless such
disclosure has been consented to by the other party hereto
(acting reasonably).
11. ANNOUNCEMENTS
11.1 Subject to Clause 11.2, neither party may, before
Completion, make or send a public announcement,
communication or circular concerning the transactions
referred to in this Agreement unless it first has obtained
the other party's written consent (not to be unreasonably
withheld or delayed).
11.2 Clause 11.1 does not apply to a public announcement,
communication or circular required by law if the party
required to make or send it has, if practicable, first
consulted and taken into account the reasonable requirements
of the other party.
12. AMENDMENTS
This Agreement may only be amended by an instrument in
writing duly executed by the parties. no change,
termination or modification or any of the provisions of this
Agreement shall be binding on the parties, unless made in
writing.
13. PARTIAL INVALIDITY
If any provision of this Agreement or the Application
thereof shall be declared or deemed void, invalid or
unenforceable, the remaining provisions hereof shall not be
affected thereby and all such provisions of this Agreement
shall be valid and in force to the fullest extent permitted
by law.
14. NOTICES
All notices, consents and other communications required or
permitted under this Agreement shall be made in writing and
be deemed to have been duly given by the parties if
addressed and delivered personally, by registered mail or by
courier or by telefax with copy by ordinary mail to the
addresses and numbers set forth below or to such other
addresses or numbers as may be given by written notice in
accordance with this Clause.
If to the Seller: 000 Xxxxxxx Xxxxx
Xxxxxxxx, Xxxxxxxxx 00000
Attn: Xxxxxxx X. Xxxxxxxx
Fax: 000-000-0000
If to the Purchaser: 000 Xx. Xxxxxxx Xx.
Xxxxxxx, Xxxxxxxx
Attn: X. XxXxxxx c/o Xxxxxx Xxxxxxx
Fax: 00-000-000-0000
15. FURTHER ASSURANCE
15.1 Upon and after Completion each party shall execute all such
other documents and do all such other acts and things or
procure the execution of such other documents or the
performance of all such other acts and things, as the other
party shall reasonably require in order to perfect the
right, title and interest of the Purchaser to the Companies
and to perfect the transactions intended to be effected
under or pursuant to this Agreement.
15.2 The Seller shall provide or procure to be provided to the
Purchaser all information in its possession or under their
control or in the possession of control of any third party
which the Purchaser shall from time to time reasonably
require upon reasonable notice relating to the Group
Companies and will give, or procure to be given, to the
Purchaser, its Directors and agents such access (including
the right to take copies) to such documents containing such
information as the Purchaser may from time to time
reasonably require upon reasonable notice.
15.3 The Purchaser shall provide and procure to be provided to
the Seller all information in its possession or under its
control or in the possession of any third party which the
Seller shall from time to time require upon reasonable
notice relating to any law or order of any regulatory body,
including but not limited to any tax audit, and will give,
or procure to be given, to the Seller, its Directors and
agents such access (including the right to take copies) to
such documents containing such information as the Seller may
from time to time reasonably require for such purpose upon
reasonable notice.
15.4 The parties recognize and acknowledge that certain Group
Companies are incorporated in jurisdictions other than
Scotland and particular local formalities may be required to
effectively transfer ownership of the Group Companies to the
Purchaser. Accordingly the parties agree to take all steps
necessary or desirable to give effect to the intent and
substance of this Agreement.
16. MEDIATION
If a dispute arises under this Agreement and cannot be
settled through negotiation, both parties hereto agree first
to try in good faith to settle the dispute by mediation in
New York, New York, U.S.A. before resorting to arbitration,
litigation, or some other formal dispute resolution
procedure. Any party wishing to submit any matter to
mediation shall give the other party written notice not less
than fourteen (14) days prior to making such submission.
Both parties shall have the right to be represented by an
attorney during the mediation. Any such dispute shall be
submitted to a mediator selected by mutual agreement of the
parties. If the parties cannot jointly agree on a mediator
within thirty (30) days after written request for mediation
is made by one party to the controversy, then each party
shall appoint a neutral, certified mediator, each of whom
shall then jointly appoint a neutral, certified mediator to
serve as mediator in the matter. Unless the parties agree
to an alternative arrangement, the mediator's fee and
expenses shall be equally divided between the parties.
17. GOVERNING LAW
17.1 This Agreement shall be construed in accordance with and
governed for all purposes by the laws of the State of Texas
applicable to contracts executed and shall be deemed to be
wholly performed with such State.
[SIGNATURE PAGE FOLLOWS]
IN WITNESS WHEREOF the parties hereto have executed this Agreement
effective as of this ____ day of __________, 1999.
NU-KOTE INTERNATIONAL, INC.,
a Delaware corporation
By: __________________________
Name: ________________________
Title: _______________________
PELIKAN HARDCOPY EUROPE LIMITED, a limited
liability company incorporated in Scotland
By: _________________________
Name: X. XxXxxxx
Title: Director
SCHEDULE
PART I
------
PELIKAN HARDCOPY EUROPE - LEGAL ENTITIES
----------------------------------------
(1) (2) (3) (4)
Total
No. of Issued and
Shares Authorized Seller's Purchase
Issued Share Percentage Price
To Seller Capital Ownership Apportionment
Pelikan Productions AG 100
Pelikan Scotland 100
Limited
Grief-Werke-GmbH 100
Pelikan Hardcopy Asia 100
Pacific Limited
Dongguan Pelikan 85
Hardcopy Limited
PART 2
SUBSIDIARIES
------------
Caribonum Pension Trustees Limited
Pelikan Hardcopy Deutschland GmbH
Pelikan Nordic XX
Xxxxxxx Hardcopy Austria Ges.MBH
Pelikan Hardcopy (International) AG
PART 3
WARRANTIES
----------
All Warranties shall expire and be of no further force or effect upon
Completion unless the Purchaser can show the Seller had knowledge that a
Warranty was untrue at the time of Completion and did not disclose such
inaccuracy in accordance with Clause 4.2.3 of the Agreement. The term
"knowledge" in the preceding sentence means the actual awareness of
specific facts (or predicated on such specific facts) of any of Xxxxxxx
Xxxxxx, Xxxxxxx Xxxxxxxx, Xxxxxxx Xxxxxx and Xxxxxx Xxxxxxxx after (i) due
inquiry of the Seller's attorneys, auditors, tax advisors and registered
agent(s) and (ii) review of their own respective files and records relating
to the Group Companies. Further, facts and information known to directors
of the Group Companies (other than Xxxxxxx Xxxxxx) shall not be imputed to
Messrs. Xxxxxx, Xxxxxxxx, Xxxxxx or Xxxxxxxx.
1. Existence and Corporate Authority
---------------------------------
1.1 Each Group Company is duly organized and validly existing under
the laws of the country of its incorporation. The Seller has
full corporate power and has taken all action necessary and have
obtained all consents and approvals required to execute and
deliver and to exercise their rights and at the Completion Date
will be able to perform their obligations under this Agreement
and each document to be executed at Completion.
2. Title to the Shares
-------------------
2.1 The Shares comprise the whole of each of the Company's allotted
and issued share capital, have been properly allotted and issued
and are fully paid or credited as fully paid.
2.2 There are no outstanding subscriptions, options, warrants or
similar rights relating to the Shares and no securities giving a
right of conversion into, or any agreement or arrangement which
accords to any person the right to acquire, Shares.
2.3 At Completion, the Seller will lawfully own and have good and
marketable title to the Shares and the entire issued share
capital of the Subsidiaries. At Completion the Shares will be
free and clear of all liens, charges and encumbrances and there
exists no agreement to create any encumbrance, charge or lien
over any such Shares. Upon the delivery by the Seller of the
Shares against payment of the Purchase Price, the Purchaser will
acquire good and marketable title to the Shares free of any and
all liens, charges and encumbrances.
3. The Seller makes each of the following Warranties to the best of
its knowledge:
3.1 Each Group Company has all necessary licenses, permits and
authorizations to carry on its business as now conducted and to
own, lease and operate the assets and properties used and
necessary to use in connection therewith, the Seller has no
knowledge of any facts that would lead it to believe this
Warranty is untrue.
3.2 Title to Property and Assets
----------------------------
Each Group Company owns or has valid leases, licenses or rights
in all properties and assets, tangible and intangible, necessary
for it to carry on its business as presently conducted, and such
properties and assets, tangible and intangible, are in good
operating condition, ordinary wear and tear excepted, are
properly maintained and serviced.
3.3. Agreements
----------
All material agreements are in full force and effect and are
valid and enforceable and the text of such agreements accurately
and completely reflect the contents of such agreements except for
provisions implied by law. For the purposes hereof, a material
agreement is one requiring the purchase or sale by a Group
Company of goods or services with a value in excess of USD
2,000,000 in a one-year period or which requires more than 12
months notice to terminate.
3.4. Environmental Matters
---------------------
Each Group has obtained all requisite permits or licenses
required by any relevant environmental laws for the business and
for any other business that has been conducted by the relevant
Group Company and do fully comply, and have fully complied, with
the conditions of those permits or licenses.
The Seller has not received any formal or informal notice or
other communication from which it appears that any Group Company
may be or has been in violation of any environmental law or
permit or license.
3.5 Intellectual Property
---------------------
All Intellectual Property which is used in, or are necessary for,
the business of each Group Company are owned by or licensed to
the Seller or the relevant Group Company and not subject to any
liens or encumbrances other than liens of the Sellers secured
lenders to be released at Completion.
3.6 Compliance with Law
-------------------
Each Group Company has in all material respects conducted its
business at all times in accordance with and has complied with
applicable laws relating to its operation and business and no
circumstances have occurred which imply or could imply any
limitation or restriction in the conduct of the present
activities of any Group Company.
3.7 Employment Contract
-------------------
The Seller is not a party to any contract with any employee of a
Group Company who earns in excess of $50,000 or the equivalent
thereof on an annual basis.
3.8. Litigation
----------
There is no suit, administrative, arbitration or other legal
proceedings (including, but not limited to tax proceedings)
pending or threatened against any Group Company, its business,
properties or assets or their Directors.
3.9. Taxes
-----
3.9.1 Each Group Company has properly filed with the appropriate tax
authorities all tax returns and reports required to be filed for
all tax periods ending prior to the Completion Date and such
filings are true, correct and complete and all information
required for a correct assessment of tax has been provided, and
are not in default with payment of any Taxes due to any tax
authority.
3.9.2 All Taxes for the period prior to the Completion Date have been
fully paid or fully provided for in the audited accounts of each
Group Company and all Taxes for periods after the date of such
accounts have been fully paid or provided for.
3.10 Guarantees
----------
3.10.1 No guarantees or similar commitments which will not be released
at Completion have been granted by any Group Company for
obligations of the Seller or any of its Affiliated Companies.
