EXHIBIT 10(j)
ASSET PURCHASE AGREEMENT
BY AND AMONG
ONEIDA COMMUNITY CHINA, INC.,
ONEIDA LTD.,
SAKURA, INC.,
XXXXX XXXXX
AND
XXXX XXXXXXXXX
DATED MAY 23, 2000
ASSET PURCHASE AGREEMENT
THIS ASSET PURCHASE AGREEMENT is entered into this 23rd day of May,
2000, by and among ONEIDA COMMUNITY CHINA, INC., a New York corporation (the
"Buyer"); ONEIDA LTD., a New York corporation ("Oneida"); SAKURA, INC., a New
York corporation ("Sakura" or the "Seller"); XXXXX XXXXX ("Xx. Xxxxx"); and XXXX
XXXXXXXXX ("Xx. Xxxxxxxxx" and, together with Xx. Xxxxx, the "Shareholders").
RECITALS
A. The Seller is engaged, directly and indirectly through its
Affiliates, in the business of designing, licensing designs for use on,
sourcing, importing, warehousing, marketing, distributing, and selling ceramic,
plastic, glass and metal tableware, including but not limited to dinnerware,
flatware, beverageware, melamine, serveware, collectibles and giftware to the
consumer markets throughout the world; acting as an agent for the purchase of
products for sale for its own account and for the purchase of products for third
parties; and leasing and operating a product showroom in New York City (the
"Business").
B. The Seller proposes to sell, assign, transfer, convey and
deliver all of its assets, properties, goodwill and business of every kind and
description and wherever located, whether tangible or intangible, real, personal
or mixed, directly or indirectly owned by the Seller or to which it is directly
or indirectly entitled, for a purchase price as set forth in Section 2.2 of this
Agreement.
C. The parties hereto desire the Buyer to purchase
substantially all of the Seller's assets as set forth in this Agreement. The
Buyer is a wholly owned subsidiary of Oneida.
D. Contemporaneously with the execution of this Agreement, Xx.
Xxxxx is entering into an employment agreement with Oneida (the "Employment
Agreement"), which agreement will become effective upon the closing of the
transaction contemplated by this Agreement.
NOW, THEREFORE, in reliance on the representations and warranties of
each party to the others, in consideration of the covenants and agreements of
the parties set forth herein and for other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the parties hereto
hereby agree as follows:
ARTICLE I
RULES OF CONSTRUCTION; DEFINITIONS
1.1 Rules of Construction. Unless the context otherwise requires:
A capitalized term has the meaning assigned to it in this Agreement;
An accounting term not otherwise defined herein has the meaning
assigned to it in accordance with GAAP (as defined below);
"Or" is not exclusive and "including" means "without limitation,"
whether or not so expressed;
Words in the singular include the plural, and words in the plural
include the singular;
"Herein", "hereof" and other words of similar import refer to this
Agreement as a whole and not to any particular Article, Section or other
subdivision of this Agreement;
Words in the masculine gender include the neuter and feminine genders,
words in the feminine gender include the neuter and masculine genders and words
in the neuter gender include the feminine and masculine genders; and
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The Article and Section headings used or contained in this Agreement
are for convenience of reference only and shall not affect the construction of
this Agreement. References herein to Articles, Sections, Schedules or Exhibits
mean and refer to Articles and Sections of, and Schedules and Exhibits to, this
Agreement, unless otherwise specified.
1.2 Definitions. For purposes of this Agreement the following terms
shall have the meanings ascribed to them in this Section 1.2:
"Acquired Assets" has the meaning given to it in Section 2.1 of this
Agreement.
"Action" means any claim, action, suit, arbitration, inquiry,
proceeding or investigation by or before any Governmental Authority.
"Affiliate" has the meaning given to it in Rule 405 promulgated under
the Securities Act of 1933.
"Agreement" or "this Agreement" means this Asset Purchase Agreement,
including the Seller Disclosure Schedule, the exhibits and annexes hereto, and
all amendments made in accordance with the provisions of Section 11.7.
"Allocation Schedule" has the meaning given to it in Section 2.6 of
this Agreement.
"Assumed Liabilities" has the meaning given to it in Section 2.5 of
this Agreement.
"Authorized Agent" has the meaning given to it in Section 11.2 of this
Agreement.
"Balance Sheet Date" has the meaning given to it in Section 3.11 of
this Agreement.
"Business" has the meaning given to it in the recitals to this
Agreement.
"Business Day" means any day that is not a Saturday, a Sunday or other
day on which banks are required or authorized by law to be closed in The City of
New York.
"Buyer" has the meaning given to it in the preamble of this Agreement.
"Buyer Parties" has the meaning given to it in Section 10.2 of this
Agreement.
"Cause" has the meaning given to it in Section 5.6 of this Agreement.
"CERCLA" has the meaning given to it in Section 3.22 of this Agreement.
"Claim" has the meaning given to it in Section 10.4 of this Agreement.
"Closing" has the meaning given to it in Article VI of this Agreement.
"Closing Date" has the meaning given to it in Article VI of this
Agreement.
"COBRA" has the meaning given to it in Section 3.10 of this Agreement.
"Code" has the meaning given to it in Section 2.6 of this Agreement.
"Contractual Obligations" has the meaning given to it in Section 3.13
of this Agreement.
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"Dinnerware" means all china, porcelain, stoneware and melamine
dinnerware, including plates, bowls, cups, saucers, mugs, platters, salt and
pepper shakers, sugar bowls, creamers, gravy boats, tea pots, pitchers,
canisters, cookie jars, and other similar pieces and accessories, and any sets
or combinations thereof.
"Employee Benefit Plan" means any "employee benefit plan" as defined in
Section 3(3) of ERISA and any other plan, policy, program, practice, agreement,
understanding or arrangement (whether written or unwritten) providing
compensation or other benefits to any current or former director, officer,
employee or consultant (or to any dependent or beneficiary thereof), of the
Seller or any ERISA Affiliate, which are now, or were within the past six years,
maintained by the Seller or any ERISA Affiliate, or under which the Seller or
any ERISA Affiliate has or could have any obligation or liability, whether
actual or contingent (and including, without limitation, any liability arising
out of an indemnification, guarantee, hold harmless or similar agreement),
including, without limitation, all incentive, bonus, deferred compensation,
vacation, holiday, cafeteria, medical, disability, stock purchase, stock option,
stock appreciation, phantom stock, restricted stock or other stock-based
compensation plans, policies, programs, practices or arrangements.
"Employment Agreement" has the meaning given to it in the recitals to
this Agreement.
"Environmental Claim" means any written accusation or allegation,
notice of violation, action, claim, lien, demand, abatement or other order or
written direction (conditional or otherwise) by any Governmental Authority or
any other Person for personal injury (including sickness, disease or death),
tangible or intangible property damage, damage to the environment, nuisance,
pollution, contamination or other adverse effects on the environment, or for
fines, penalties or restrictions resulting from or based upon (i) the existence,
or the continuation of the existence, of a release (including, without
limitation, sudden or non-sudden accidental or non-accidental releases) of, or
exposure to, any Hazardous Material, odor or audible noise in, into or onto the
environment (including, without limitation, the air, soil, surface water or
groundwater) at, in, by, from or related to any property owned, operated or
leased by the Seller or any activities or operations thereof; (ii) the
transportation, storage, treatment or disposal of Hazardous Materials in
connection with any property owned, operated or leased by the Seller or its
operations or facilities; or (iii) the violation, or alleged violation, of any
Environmental Law or order of or from any Governmental Authority relating to
environmental matters connected with any property owned, leased or operated by
the Seller and any of its subsidiaries.
"Environmental Law" means any federal, state, local, or foreign law
(including common law), statute, code, ordinance, rule, regulation or other
requirement relating to the environment, natural resources, or public or
employee health and safety and includes, but is not limited to, CERCLA, the
Hazardous Materials Transportation Act, 49 U.S.C.'SS' 1801 et seq., the Resource
Conservation and Recovery Act, 42 U.S.C.'SS' 6901 et seq., the Clean Water Act,
33 U.S.C. 'SS' 1251 et seq., the Clean Air Act, 33 U.S.C. 'SS' 2601 et seq., the
Toxic Substances Control Act, 15 U.S.C. 'SS' 2601 et seq., the Federal
Insecticide Fungicide, and Rodenticide Act, 7 U.S.C. 'SS' 136 et seq., the Oil
Pollution Act of 1990, 33 U.S.C 'SS' 2701 et seq., the Occupational Safety and
Health Act, 29 U.S.C. 'SS' 651 et seq., and California Proposition 65, as such
laws have been amended or supplemented, and the regulations promulgated pursuant
thereto, and all analogous state or local or foreign statutes.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended.
"ERISA Affiliate" means any entity (whether or not incorporated) other
than the Seller that, together with the Seller, is or was a member of (i) a
controlled group of corporations within the meaning of Section 414(b) of the
Code, (ii) a group of trades or businesses under common control within the
meaning of Section 414(c) of the Code, or (iii) an affiliated service group
within the meaning of Section 414(m) of the Code.
"Escrow Agent" has the meaning given to it in Section 2.3 of this
Agreement.
"Escrow Agreement" has the meaning given to it in Section 7.7 of this
Agreement.
"Escrowed Funds" has the meaning given to it in Section 2.3 of this
Agreement.
"Excluded Assets" has the meaning given to it in Section 2.1 of this
Agreement.
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"Excluded Liabilities" has the meaning given to it in Section 2.5 of
this Agreement.
"Final Date" has the meaning given to it in Section 9.1 of this
Agreement.
"GAAP" means generally accepted accounting principles, as in effect in
the United States, consistently applied.
"Governmental Authority" means any United States federal, state or
local or any foreign government, governmental, regulatory or administrative
authority, agency or commission or any court, tribunal, or judicial or arbitral
body.
"Hazardous Material" means any substance, material or waste that is
regulated by any Governmental Authority or the United States or other national
government, including, without limitation, lead or other heavy metals and any
material, substance or waste that is defined as a "hazardous waste," "hazardous
material," "hazardous substance," "extremely hazardous waste," "restricted
hazardous waste," "contaminant," "toxic waste" or "toxic substance" under any
provision of Environmental Law, which includes, but is not limited to,
petroleum, petroleum products, asbestos, urea formaldehyde and polychlorinated
biphenyls.
"HSR Act" means the Xxxx-Xxxxx-Xxxxxx Antitrust Improvements Act of
1976, as amended, and the rules and regulations thereunder.
"Indemnitee" has the meaning given to it in Section 10.4 of this
Agreement.
"Indemnitor" has the meaning given to it in Section 10.4 of this
Agreement.
"Independent Accountants" has the meaning given to it in Section 2.4 of
this Agreement.
"Intellectual Property Rights" means all corporate, promotional and
trade names and all designs used in connection with the business of a Person,
all worldwide industrial and intellectual property rights, including, without
limitation, patents, patent applications, patent rights, trademarks, trademark
applications, trade names, service marks, service xxxx applications, copyright,
copyright applications, franchises, licenses, inventories, know-how, trade
secrets, customer or trading agent lists, proprietary processes and formulae,
all source and object code, algorithm, architecture, structure, display screens,
layouts, inventions, development tools and all documentation and media
constituting, describing or relating to the above, including, without
limitation, manuals, memoranda and records.
"Inventories" means all inventory, merchandise, finished goods, raw
materials, packaging, supplies and other personal property related to the
Business, maintained, held or stored by or for the Seller on the Closing Date
and any prepaid deposits for any of the same.
"Knowledge of the Shareholders and the Seller" means all information
that is actually known, or in the exercise of reasonable diligence in the normal
course of employment, the normal course of duties, or in the review of the
Transaction Documents, should have been known, by Xx. Xxxxx, Xx. Xxxxxxxxx or
Xxxx X. Xxxxxxx, the Chief Financial Officer of Sakura.
"Lien" has the meaning given to it in Section 3.3 of this Agreement.
"Loss(es)" has the meaning given to it in Section 10.4 of this
Agreement.
"Material Adverse Effect" means any circumstance, change in, or effect
on, the Business that, individually or in the aggregate with any other
circumstances, changes in, or effects on, the Business: (a) is, or could
reasonably be expected to be, materially adverse to the business, operations,
assets or liabilities (including, without limitation, contingent liabilities),
employee relationships, customer or supplier relationships, prospects, results
of operations or the condition (financial or otherwise) of the Business, (b)
does, or could reasonably be expected to, materially adversely affect the
ability of the Buyer or Oneida to operate or conduct the Business in the manner
in which it is
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currently operated or conducted by the Seller, or (c) does, or could reasonably
be expected to, materially impair the ability of the Seller or the Shareholders
to perform their respective obligations under this Agreement.
"Nishiwaki Non-compete Period" means the period beginning on the
Closing Date and ending on the fifth anniversary of the Closing Date.
"Oneida" has the meaning given to it in the preamble of this Agreement.
"Permits" has the meaning given to it in Section 3.6 of this Agreement.
"Person" means any individual, firm, corporation, partnership, trust,
incorporated or unincorporated association, joint venture, joint stock company,
Governmental Authority or other entity of any kind, and shall include any
successor (by merger or otherwise) of such entity.
"Pre-Closing Period" means all taxable periods ending on or before the
Closing Date and the portion ending on or before the Closing Date of any taxable
period that includes (but does not end on) the Closing Date.
"Pro Forma Income Statement" has the meaning given to it in Section 3.5
of this Agreement.
"Purchase Price" has the meaning given to it in Section 2.2 of this
Agreement.
"Returns" has the meaning given to it in Section 3.15 of this
Agreement.
"Sakura" has the meaning given to it in the preamble of this Agreement.
"Sakura Common Stock" has the meaning given to it in Section 3.2 of
this Agreement.
"Sakura Net Asset Value" means the difference between the book value of
the Acquired Assets acquired from Sakura and the book value of the Assumed
Liabilities assumed from Sakura.
"Sakura Target Amount" means $8,179,000 (US) which is the Sakura Net
Asset Value as of January 31, 2000.
"Seller" has the meaning given to it in the preamble of this Agreement.
"Seller Balance Sheet" has the meaning given to it in Section 3.5 of
this Agreement.
"Seller Debt" has the meaning given to it in Section 2.5 of this
Agreement.
"Seller Disclosure Schedule" means the schedule delivered by the Seller
and the Shareholders in connection with this Agreement, which is dated the date
hereof and incorporated herein by reference.
"Seller IP Rights" has the meaning given to it in Section 3.17 of this
Agreement.
"Seller IP Rights Agreement" has the meaning given to it in Section
3.17 of this Agreement.
"Seller Parties" has the meaning given to it in Section 10.3 of this
Agreement.
"Shareholders" has the meaning given to it in the preamble of this
Agreement.
"Significant Customers" means the 10 customers that have effected the
most purchases of products or services, in U.S. dollar terms, of the Business
during the past four fiscal quarters.
"Significant Suppliers" means the 10 suppliers that have supplied the
largest amount by U.S. dollar volume of products or services to the Business
during the past four fiscal quarters.
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"Simon Non-compete Period" means the period beginning on the Closing
Date and ending on the later of (x) the fifth anniversary of the Closing Date
and (y) the second anniversary of the termination of the Employment Agreement if
such termination occurs on or before the fourth anniversary of the Closing Date
or the first anniversary of the termination of the Employment Agreement if such
termination occurs after the fourth anniversary of the Closing Date.
"Special Purpose Statement" has the meaning given to it in Section 2.4
of this Agreement.
"Survival Date" has the meaning given to it in Section 10.1 of this
Agreement.
"Tableware Business" means (i) the Business and (ii) the business of
manufacturing, importing, selling, distributing or otherwise dealing in
Dinnerware, metalware (including flatware and holloware), giftware, glassware,
stemware, kitchen utensils and gadgets.
"Taxes" means taxes, fees, levies, duties, tariffs, imposts, and
governmental impositions or charges of any kind in the nature of (or similar to)
taxes, payable to any federal, state, local or foreign taxing authority,
including (without limitation) (i) income, franchise, profits, gross receipts,
ad valorem, net worth, value added, sales, use, service, real or personal
property, special assessments, capital stock, license, payroll, withholding,
employment, social security, workers' compensation, unemployment compensation,
utility, severance, production, excise, stamp, occupation, premiums, windfall
profits, transfer and gains taxes, and (ii) interest, penalties, additional
taxes and additions to tax imposed with respect thereto.
"Third Party Claim" has the meaning given to it in Section 10.4 of this
Agreement.
"Transaction Documents" means this Agreement, the Escrow Agreement, the
Employment Agreement and the other agreements executed and delivered or to be
executed and delivered by a party to this Agreement on the date hereof or on the
Closing Date.
ARTICLE II
PURCHASE AND SALE OF THE ASSETS
2.1 Purchase and Sale of the Assets. On the Closing Date, the Buyer
shall buy, and the Seller shall sell, assign, transfer, convey and deliver, upon
the terms herein and subject and pursuant to the covenants, conditions,
representations and warranties contained in this Agreement, all the assets,
properties, goodwill and business of every kind and description and wherever
located, whether tangible or intangible, real, personal or mixed, directly or
indirectly owned by the Seller or to which it is directly or indirectly
entitled, other than the Excluded Assets (the assets to be purchased by the
Buyer being referred to as the "Acquired Assets"), including, without
limitation, the following:
(i) the Business as a going concern;
(ii) the corporate name, customer and trading agent list, customer or
trading agent contact files, books, records, data, accounts receivable,
commissions receivable, new and used Inventory and work-in-process, property,
plant and equipment, prepaid expenses and other prepaid items;
(iii) Seller IP Rights;
(iv) contract rights, including manufacturer authorizations, licenses
and agreements, files, and books and records, including Tax records, except for
(i) income Tax records and (ii) corporate minute books and stock ledgers, so
long as copies have been provided to the Buyer;
(v) all claims, causes of action, choses in action, rights of recovery
and rights of setoff of any kind (including duty drawback rights, rights to
insurance proceeds and rights under and pursuant to all warranties,
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representations and guarantees made by suppliers of products, materials or
equipment, or components thereof), pertaining to, arising out of, and inuring to
the benefit of the Seller;
(vi) all sales and promotional literature, customer lists and other
sales-related materials owned or, to the extent that the Seller can convey
rights therein, used in connection with the Business at the Closing Date;
(vii) all rights of the Seller under all leases, commitments, and sales
and purchase orders, and under all commitments, bids and offers (to the extent
such offers are transferable);
(viii) all municipal, state and federal franchises, permits, licenses,
agreements, waivers and authorizations held or used by the Seller in connection
with, or required for, the Business, to the extent transferable; and
(ix) all of the Seller's right, title and interest on the Closing Date
in, to and under all other assets, rights and claims of every kind and nature
used or intended to be used in the operation of, or residing with, the Business,
including, without limitation, those set forth on Schedule 2.1A attached hereto,
but, however, excluding cash and any other assets listed on Schedule 2.1B
attached hereto the "Excluded Assets").
(b) At the Closing, the Seller shall execute and deliver to the Buyer
such bills of sale and other instruments as are necessary to transfer, convey or
otherwise assign all of the Acquired Assets to the Buyer.
2.2 Purchase Price. The purchase price (the "Purchase Price") for the
Acquired Assets shall be Forty Million Dollars ($40,000,000) subject to the
post-closing adjustment contemplated by Section 2.4. In addition, at the Closing
the Buyer shall assume certain liabilities and obligations of the Seller, but
only to the extent and as expressly provided in Section 2.5.
2.3 Payment of Purchase Price. Payment of the Purchase Price shall be
made on the Closing Date by the Buyer in exchange for a receipt for the Purchase
Price, by wire transfer of immediately available funds to one or more accounts
specified by the Seller at least three Business Days before the Closing Date;
provided, however, that, on the Closing Date, the Buyer shall deposit on behalf
of the Shareholders, by wire transfer of immediately available funds to an
account designated by the escrow agent (the "Escrow Agent") under the Escrow
Agreement, Two Million Dollars ($2,000,000) of the Purchase Price (the "Escrowed
Funds"), which amount shall be held in escrow and disposed of in the manner
provided in the Escrow Agreement.
2.4 Post-Closing Adjustment.
(a) Preparation of Special Purpose Statement. As soon as reasonably
practicable following the Closing Date (but in no event later than 60 days
thereafter), Sakura shall prepare and deliver to the Buyer a special purpose
statement, as of the close of business on the day immediately preceding the
Closing Date, reflecting Acquired Assets and Assumed Liabilities being
transferred by Sakura pursuant to this Agreement (the "Special Purpose
Statement"). The Special Purpose Statement shall be prepared in accordance with
GAAP using the same accounting principles and practices employed by the Seller
in connection with the preparation of the Seller Balance Sheet, to the extent
that such accounting principles and practices are in accordance with GAAP. All
expenses incurred in connection with the preparation of the Special Purpose
Statement shall be paid one-half (1/2) by the Seller and one-half (1/2) by the
Buyer. All expenses of the Seller incurred in connection with this Agreement and
the transactions contemplated hereby, whether incurred before or after the
Closing Date, shall be reflected as expenses of the Seller in the preparation of
the Special Purpose Statement, but only to the extent that such expenses have
been or will be paid by the Seller, and not by the Shareholders.
(b) Objection by the Buyer. The Special Purpose Statement shall become
final and binding upon the parties unless, within 30 days following its
submission to the Buyer, the Buyer notifies the Seller in writing of its
objection thereto, which objection may only be that the Special Purpose
Statement was not prepared in accordance with Section 2.4(a). If the Buyer so
notifies the Seller of its objection to the Special Purpose Statement, the
parties shall promptly begin to negotiate in good faith to resolve their
differences. If the parties are unable to resolve their differences within 30
days after the date that the Buyer notifies the Seller in writing of its
objections as aforesaid, the
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parties shall submit the dispute to the Syracuse, New York office of KPMG, LLP,
or if such firm is unable or otherwise declines to serve in such capacity, an
independent accounting firm mutually selected by the parties (as applicable, the
"Independent Accountants"), which firm shall resolve the dispute using the
methods and criteria and such procedures as the Independent Accountants may
determine in their sole discretion, all pursuant to the standards set forth in
Section 2.4(a). The Independent Accountants shall be limited to determining
(based upon submissions of the parties and not by way of independent review)
whether the Special Purpose Statement was prepared in accordance with the
standards set forth in Section 2.4(a). The parties shall instruct the
Independent Accountants to use their reasonable efforts to make their
determination within 30 days. Absent fraud or manifest error, the determination
of the Independent Accountants shall be final and non-appealable, and shall be
binding upon the parties. Each party shall bear the fees and expenses of all
accountants, attorneys and others retained by it in connection with the
resolution of any differences, but the fees and expenses of the Independent
Accountants shall be paid one-half (1/2) by the Seller and one-half (1/2) by the
Buyer.
(c) Net Asset Value Adjustment. The Special Purpose Statement shall be
deemed final on the 31st day after delivery thereof (in case the Buyer shall not
have raised objections thereto within the aforesaid 30-day period) or on the
10th day after resolution (whether by the parties or by the Independent
Accountant) of any objections to the Special Purpose Statement raised by the
Buyer. After the Special Purpose Statement is deemed final, an adjustment to the
Purchase Price shall be made as follows:
(i) if the Sakura Net Asset Value reflected on the Special Purpose
Statement equals the Sakura Target Amount, no adjustment in the Purchase Price
shall be made;
(ii) if the difference between the Sakura Net Asset Value reflected on
the Sakura Special Purpose Statement and the Sakura Target Amount is a positive
number, then the Buyer shall pay the Shareholders, by wire transfer of
immediately available funds to one or more accounts and in proportions
designated by the Shareholders, an amount equal to such amount as an increase in
the Purchase Price, together with interest on such amount accruing from the
Closing Date to the date of payment at a rate of 8% per annum; and
(iii) if the difference between the Sakura Net Asset Value reflected on
the Sakura Special Purpose Statement and the Sakura Target Amount is a negative
number, then the Seller and the Shareholders shall be obligated, jointly and
severally, to pay the Buyer, by wire transfer of immediately available funds to
one or more accounts designated by the Buyer, an amount equal to such amount as
a reduction in the Purchase Price, together with interest on such amount
accruing from the Closing Date to the date of payment at a rate of 8% per annum.
The methodology for computing the Purchase Price adjustment, if any, required by
this subparagraph (c) is illustrated in Schedule 2.4(c) hereto.
(d) Payment of Adjustment. Amounts payable under subparagraph (c) shall
be paid within 10 days after the Special Purpose Statement is deemed final. In
the event that a payment is required under clause (iii) of subparagraph (c) and
the Seller and the Shareholders shall fail to make such payment within the
aforementioned 10-day period, the Buyer shall have the right to recover such
amount from the Escrowed Funds in accordance with the procedures contemplated by
the Escrow Agreement.
2.5 Assumption of Liabilities. At the Closing, the Buyer shall assume
and become responsible for only the liabilities and obligations (the "Assumed
Liabilities") of the Seller (a) that constitute accounts payable and commissions
payable, (b) that constitute accrued expenses (a description of which is set
forth in Section 2.5 of the Seller Disclosure Schedule) and that are properly
and adequately accrued or reserved for on the Special Purpose Statement, or (c)
under the agreements, contracts, commitments and leases that are not marked with
an asterisk in Section 3.13 of the Seller Disclosure Schedule (other than any
liabilities or obligations arising out of any breach by the Seller, including
without limitation, failure by the Seller to perform any obligations
thereunder). Other than the Assumed Liabilities, the Buyer shall not assume any
liabilities or obligations of the Seller of any kind or nature whatsoever (the
liabilities that are not expressly assumed being hereinafter referred to as
"Excluded Liabilities"). The Seller acknowledges that the following is a
non-exclusive listing of some of the Excluded Liabilities that the Buyer shall
not assume or agree to pay, perform or discharge (unless the liabilities or
obligations constitute Assumed
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Liabilities): (A) any and all items of governmental, judicial, or adversarial
proceedings (public or private), litigation, hearings, arbitrations, disputes or
investigations against or involving the Seller, its subsidiaries or affiliates,
directly or indirectly; (B) any and all amounts claimed against the Seller or
the Buyer by, or on behalf of, any former or current employee of the Seller,
relating to, based upon or arising from or in connection with (i) service
performed for the Seller prior to the Closing Date, including without limitation
any claim or claims relative to, based upon or arising from or in connection
with the terms and conditions of employment or the termination of employment
with the Seller, (ii) any contracts of employment or collective bargaining
agreements between the Seller and an employee or any union or representative
claiming to represent any employee of the Seller, (iii) any and all union or
collective bargaining contracts, agreements, benefit plans, or understandings to
which the Seller is a signatory or to which the Seller is claimed to be bound,
or (iv) any and all liabilities that arise out of or relate to pension, profit
sharing, health, welfare, disability, workers' compensation or other employment
benefit plans maintained by the Seller or any union or other labor organization
or any of its subsidiaries or affiliates, including without limitation any
liability arising from the Seller's under-funding or termination of any such
plans or reduction of, termination or failure to provide any other employment
benefits of any kind or nature whatsoever in connection with the consummation of
the transactions contemplated by this Agreement or otherwise; (C) Taxes,
including any Taxes arising as a result of the sale of Acquired Assets pursuant
to this Agreement, and including any Taxes of the Seller or either of the
Shareholders or with respect to Acquired Assets or the Business relating to the
Pre-Closing Period; (D) any and all claims arising out of, related to or based
upon any products sold, developed, delivered or manufactured, or any services
provided, by or on behalf of the Seller prior to the Closing and any and all
claims arising or accruing on or after the Closing with respect to sales or
manufacturing of products or provision of services that occurred prior to
Closing; (E) any and all claims, liabilities and obligations, costs and expenses
(including without limitation fees, disbursements and expenses of legal counsel,
experts and engineers and the costs of investigation, feasibility study and
remedial action) arising from or under any Environmental Law or Environmental
Claims, without regard as to whether the Buyer has conducted any environmental
due diligence, and whether the Environmental Claims arise or accrue before, on
or after the Closing in connection with acts, events or omissions that occurred,
or conditions or circumstances that existed, on or before the Closing; or (F)
any bank acceptances, loans payable, or other indebtedness for borrowed money of
the Seller (collectively, "Seller Debt") (which Seller Debt shall be discharged
at the Closing by the Seller). The parties hereto acknowledge that the Buyer is
not and will not be a successor-in-interest to the Seller.
2.6 Purchase Price Allocation. The Purchase Price shall be allocated
among the Acquired Assets in the manner required by Section 1060 of the Internal
Revenue Code of 1986, as amended, and the regulations promulgated thereunder
(the "Code") and in accordance with a schedule to be prepared jointly by the
Seller and the Buyer prior to the Closing Date (the "Allocation Schedule"). The
Buyer and the Seller shall each report the purchase and sale of the Acquired
Assets in accordance with the allocations set forth on the Allocation Schedule
for all Tax purposes, including, without limitation, the filing of Internal
Revenue Form 8594 (Asset Acquisition Statements of Allocation), and shall not
take any position, whether or not in writing, before any Governmental Authority
that is in any way inconsistent with the Allocation Schedule.
2.7 Withholding Rights. The Buyer shall be entitled to deduct and
withhold from the consideration otherwise payable pursuant to this Agreement to
the Seller or either Shareholder such amounts as counsel or independent public
accountants to Oneida or Buyer advises it to deduct and withhold with respect to
the making of such payment under the Code, or any provision of state, local or
foreign tax law. To the extent that the amounts are so withheld by the Buyer,
such withheld amounts shall be treated for all purposes of this Agreement as
having been paid to the Seller or such Shareholder in respect of which such
deduction and withholding was made by the Buyer. For this purpose, the Buyer
shall withhold from the Purchase Price an amount equal to ten percent (10%) of
any portion of the Purchase Price allocated to a "United States real property
interest" (as such term is defined in Section 897(c) of the Code), unless the
Seller establishes a reduction in or exemption from such withholding obligation.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF THE SELLER AND
THE SHAREHOLDERS
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The Seller and the Shareholders hereby, jointly and severally,
represent and warrant to Oneida and the Buyer that the statements made in this
Article III are true and correct.
3.1 Organization; Good Standing; Qualification and Power. The Seller is
a corporation duly organized, validly existing and in good standing under the
laws of New York, has all requisite corporate power and authority to own, lease
and operate its properties and to carry on its business as it is presently being
conducted, and is duly qualified to do business and is in good standing in each
jurisdiction in which the nature of its business or the ownership or leasing of
its properties makes such qualification necessary, other than in such
jurisdictions where the failure so to qualify would not reasonably be expected
to have a Material Adverse Effect. Section 3.1 of the Seller Disclosure Schedule
sets forth a correct and complete list of each jurisdiction in which the Seller
is qualified or authorized to do business as a foreign corporation. The Seller
has delivered to the Buyer a complete and correct copy of its certificate of
incorporation and bylaws, in each case as amended to the date of this Agreement.
3.2 Capital Structure. The authorized capital stock of Sakura consists
solely of 200 shares of common stock, no par value ("Sakura Common Stock"). An
aggregate of 14 shares of Sakura Common Stock is issued and outstanding, and is
owned of record and beneficially by the Shareholders in such amounts as set
forth on Section 3.2 of the Seller Disclosure Schedule, free and clear of all
Liens. No shares of Sakura Common stock are held by the Seller in its treasury.
Except as set forth on Section 3.2 of the Seller Disclosure Schedule, there are
no options, warrants, convertible securities or other rights, agreements or
other understandings relating to the capital stock of the Seller or obligating
it to issue or sell, or either Shareholder to sell, any shares of capital stock
or other ownership interests, in the Seller.
3.3 Acquired Assets. The Seller is the sole owner of the Acquired
Assets, free and clear of any lien, pledge, hypothecation, levy, mortgage,
charge, encumbrance, deed of trust, security interest, claim, lease, option,
right of first refusal or easement or other real estate declaration, covenant,
condition, restriction under any shareholder or similar agreement, encumbrance
or any other restriction or limitation whatsoever (a "Lien"), except as set
forth in Section 3.3 of the Seller Disclosure Schedule. The Seller has all
necessary power and authority to sell the Acquired Assets to the Buyer. Upon
delivery to the Buyer of bills of sale, assignments of contracts, copyrights,
patents and trademarks and other instruments of conveyance, the Buyer will
acquire good and marketable title to the Acquired Assets, free and clear of any
Lien. The Acquired Assets constitute all of the assets necessary to continue the
Business in the manner it is being conducted on the date hereof.
(b) Since the Balance Sheet Date, all the assets of the Seller (other
than Excluded Assets), including, without limitation, the benefit of any
licenses, leases or other agreements or arrangements, have been acquired in the
ordinary course of business on arm's-length terms.
3.4 Authority.
(a) Corporate Action. The Seller has all requisite corporate power and
authority to enter into the Transaction Documents to which it is a party and to
perform its obligations thereunder. Each Shareholder has all requisite power,
legal capacity and authority to enter into the Transaction Documents to which it
is a party. The execution and delivery by the Seller of the Transaction
Documents to which it is a party and the consummation by the Seller of the
transactions contemplated thereby have been duly authorized by all necessary
corporate action on the part of the Seller and the Shareholders. Each
Transaction Document to which the Seller or a Shareholder is a party is the
valid and binding obligation of the Seller or such Shareholder (as the case may
be), enforceable against it and each of them, as applicable, in accordance with
its terms, except that the enforceability may be subject to (i) applicable
bankruptcy, insolvency, reorganization, fraudulent transfer, conveyance or
moratorium or other similar laws affecting or relating to the enforcement of
creditors' rights generally and (ii) general principles of equity relating to
enforceability (regardless of whether considered in a proceeding at law or in
equity).
(b) No Conflict. Neither the execution, delivery and performance of the
Transaction Documents to which the Seller or either Shareholder is a party, nor
the consummation of the transactions contemplated thereby, or compliance with
the provisions thereof, will conflict with, or result in the violations of, or
cause a default (with or without notice or lapse of time, or both) under, or
give rise to a right of termination, amendment, cancellation or acceleration of
the obligation contained in, or the loss of the material benefit under, or
result in the creation of the
11
Lien upon, the of the properties or assets of the Seller under any term,
condition or provision of (x) the certificate of incorporation or bylaws of the
Seller, (y) any loan or credit agreement, note, bond, mortgage, indenture,
lease, license, permit, franchise or other material agreement, or (z) assuming
compliance with the HSR Act, any judgment, order, decree, statute, law,
ordinance, rule or regulation applicable to the Seller, either Shareholder or
their respective properties or assets, except, in the case of clauses (y) and
(z) above, for such conflicts, violations, breaches or defaults that,
individually or in the aggregate, would not be reasonably likely to materially
impair the ability of the Seller or either Shareholder to effect the
transactions contemplated by the Transaction Documents.
(c) Governmental Consents. Except for compliance with the HSR Act, no
consent, approval, order or authorization of, or registration, declaration or
filing with, the Governmental Authority is required to be obtained by the Seller
or either Shareholder in connection with the execution and delivery of the
Transaction Documents or the consummation of the transactions contemplated
thereby, except for such consents, approvals and the like, the failure of which
to obtain would not prevent or materially delay the Seller or either Shareholder
from performing their respective obligations under the Transaction Documents.
3.5 Financial Statements; Books and Records. (i) The reviewed financial
statements of Sakura at and for the fiscal years ended October 31, 1997, 1998
and 1999; (ii) the unaudited balance sheet of Sakura at and for the three-month
period ended January 31, 2000 (the "Seller Balance Sheet"); and (iii) the
unaudited combined Sakura Pro Forma Statement of Income for the Year Ended
October 31, 1999 (the "Pro Forma Income Statement"), (a) have been provided to
the Buyer by the Seller, (b) comply as to form in all material respects with the
applicable accounting requirements and the published rules and regulations with
respect thereto, (c) were prepared in accordance with the books of account and
other financial records of (I) the Seller and (II) GAAP consistently applied
(with respect to unaudited financial statements subject to normal year-end
adjustments, consisting of normal recurring accruals), (d) fairly present the
financial position of the Seller (which, in the case of the Pro Forma Income
Statement, is on a combined basis) as at the respective dates thereof and the
results of its operations and cash flows for the respective periods then ended,
and (e) include all adjustments (consisting only of normal recurring accruals)
that are necessary for a fair presentation of the financial condition of the
Seller and the results of operations of the Seller as of the respective dates
thereof and for the respective periods covered thereby. The accounting books and
records of the Seller reflect all items of income and expense, and all of its
assets and liabilities, required to be reflected in accordance with GAAP. All
such books and records have been made available to the Buyer.
(b) The minute books of the Seller for the period from January 1, 1996
to the date hereof contain records of all meetings of and reflect all other
actions taken by the shareholders (including but not limited to the
Shareholders), board of directors and all committees thereof of the Seller,
which records are accurate in all material respects. Complete and accurate
copies of all such minute books and of the stock register of the Seller for such
period have been provided by the Seller to the Buyer.
3.6 Compliance with Applicable Laws. The Business is being conducted in
material compliance with all laws, ordinances, regulations, rules and orders of
all Governmental Authorities, including, without limitation, the U.S. Foreign
Corrupt Practices Act, as amended, and to the Knowledge of the Shareholders and
the Seller, there are no such material violations by the Seller's agents,
suppliers or independent contractors. There is currently no investigation or
review by a Governmental Authority with respect to the Seller pending or, to the
Knowledge of the Shareholders and the Seller, threatened, nor has any
Governmental Authority notified in writing the Seller or either Shareholder of
its intention to conduct the same. The Seller has all permits, licenses,
approvals, orders, and franchises from Governmental Authorities ("Permits")
required to conduct the Business as now being conducted, except for Permits, the
failure of which to have obtained would not reasonably be expected to result in
a Material Adverse Effect. All of such Permits are in full force and effect.
Neither the Seller nor either Shareholder has received any written notice from
any Governmental Authority revoking, canceling, rescinding, materially modifying
or refusing to renew any such Permit.
3.7 Litigation. There is no suit, action, arbitration, demand, claim,
dispute, investigation or proceeding, pending or, to the Knowledge of the
Shareholders and the Seller, threatened, against the Seller or against either of
the Shareholders in respect of the Business, the Acquired Assets, the Assumed
Liabilities or the transactions contemplated by this Agreement or affecting any
of the assets of the Seller, nor is there any judgment, decree, injunction, rule
or order of any Governmental Authority or arbitrator outstanding against the
Seller or against either
12
of the Shareholders (i) relating to the Business or any of the Acquired Assets,
or (ii) that has, has had or is reasonably expected to have, individually or in
the aggregate, the effect of materially impairing or delaying the ability of
either Shareholder or the Seller to perform its obligations under the
Transaction Documents.
3.8 Title to Real Properties. Section 3.8 of the Seller Disclosure
Schedule sets forth a correct and complete list of real property leased by the
Seller. The Seller holds interest as lessee under leases in full force and
effect in all real property used in connection with the Business or otherwise
leased by it. The Seller does not own any real property.
3.9 Subsidiaries. Except as disclosed in Section 3.9 of the Seller
Disclosure Schedule, the Seller does not directly or indirectly own and has not
made, or committed to make, any investment in, any of the capital stock of, or
any other proprietary interest in, any other Person.
3.10 Employee Benefit Plans and Employment Matters. (a) Except as
disclosed in Section 3.10(a) of the Seller Disclosure Schedule, neither the
Seller nor any ERISA Affiliate maintains any Employee Benefit Plan.
(b) The Seller has delivered to the Buyer prior to the date hereof
complete and correct copies of (i) any procedures and policies relating to the
employment of employees of the Seller and the use of temporary employees and
independent contractors by the Seller (including summaries of any procedures and
policies that are unwritten), and (ii) plan instruments and amendments thereto
for all Employee Benefit Plans and related trust agreements, insurance and other
contracts, summary plan descriptions, summaries of material modifications and
material communications distributed to the participants of each Employee Benefit
Plan (and written summaries of any unwritten Employee Benefit Plans,
modifications to Employee Benefit Plans and employee communications).
(c) Neither the Seller nor any ERISA Affiliate maintains or has ever
maintained, contributed to or had an obligation to contribute to or could have
any actual or contingent obligation in respect of an Employee Benefit Plan
subject to Title IV of ERISA or to Section 412 of the Code. Neither the Seller
nor any ERISA Affiliate has ever contributed to, or withdrawn in a partial or
complete withdrawal from, any "multiemployer plan" (as defined in Section 3(37)
of ERISA) or has any fixed or contingent liability under Section 4204 of ERISA.
No Employee Benefit Plan is a "multiple employer plan" as described in Section
3(40) of ERISA or Section 413(c) of the Code.
(d) Each Employee Benefit Plan is and has been operated in all material
respects in compliance with its terms and all applicable laws, and by its terms
can be amended and/or terminated at any time and in any manner without incurring
liability on the part of Oneida or the Buyer thereunder. As of and including the
Closing Date, the Seller shall have made all contributions required to be made
by it up to and including the Closing Date with respect to each Employee Benefit
Plan, or adequate accruals therefor will have been provided for and will be
reflected on the Seller Balance Sheet provided to the Buyer by the Seller. All
notices, filings and disclosures required by ERISA or the Code (including
notices under Section 4980B of the Code) have been timely given or made.
(e) No Employee Benefit Plan provides for medical or health benefits,
or life insurance or other death benefits (through insurance or otherwise) or
provides for the continuation of such benefits or coverage for any employee or
any dependent or beneficiary of any employee after such employee's retirement or
other termination of employment except as may be required by Part 6 of Subtitle
B of Title I of ERISA and Section 4980B of the Code ("COBRA"), and there has
been no communication to any employee that could reasonably be expected to
promise or guarantee any such benefits.
(f) Except as required by law, neither the Seller nor either
Shareholder has proposed or has agreed to any changes to any Employee Benefit
Plan that would cause an increase in benefits under any such Employee Benefit
Plan (or the creation of new benefits or plans), nor to change any employee
coverage that would cause an increase in the expense of maintaining any such
Employee Benefit Plan.
(g) Section 3.10(g) of the Seller Disclosure Schedule lists all
employees of Sakura as of the date of this Agreement, their salaries as of the
date of this Agreement, the date and amount of their most recent salary
increases and their accrued and unused vacation. Except as disclosed on Section
3.10(g) of the Seller Disclosure
13
Schedule, no Person has an employment or severance agreement with the Seller. No
"leased employee" (within the meaning of Section 414(n) or (o) of the Code)
performs any services for the Seller.
(h) Except as disclosed on Section 3.10(h) of the Seller Disclosure
Schedule, no Employee Benefit Plan provides benefits or payments based on or
measured by the value of an equity security of or interest in the Seller or any
ERISA Affiliate.
(i) No condition exists as a result of which the Seller has or may
reasonably be expected to have a material liability, whether absolute or
contingent, including any obligations under the Employee Benefit Plans, with
respect to any misclassification of a person performing services for the Seller
as an independent contractor rather than as an employee.
(j) Except as disclosed on Section 3.10(j) of the Seller Disclosure
Schedule, (i) no Employee Benefit Plan is a plan, agreement or arrangement
providing for benefits, in the nature of severance benefits, and (ii) the Seller
does not have outstanding any liabilities with respect to any severance benefits
available under any Employee Benefit Plan or otherwise, nor are any such
liabilities created by the transactions contemplated by the Transaction
Documents.
(k) Except as disclosed on Section 3.10(k) of the Seller Disclosure
Schedule or except as expressly set forth in this Agreement, the consummation of
the transactions contemplated by the Transaction Documents, either alone or in
combination with another event (including, without limitation, the termination
of employment of any Person), will not result in (i) any payment (including,
without limitation, severance, unemployment compensation, golden parachute or
bonus payments or otherwise) becoming due to any director, officer, employee or
consultant of the Seller, (ii) any increase in the amount of compensation or
benefits payable in respect of any director, officer, employee or consultant of
the Seller, or (iii) acceleration of the vesting or timing of payment of any
benefits or compensation payable in respect of any director, officer, employee
or consultant of the Seller, in each case under any Employee Benefit Plan or
otherwise. No Employee Benefit Plan provides benefits or payments contingent
upon, triggered by or increased as a result of a change in the ownership or
effective control of the Seller.
(l) Except as disclosed on Section 3.10(l) of the Seller Disclosure
Schedule, neither the Seller nor any ERISA Affiliate is a contractor or
subcontractor with obligations under any federal, state or local or foreign
government contracts.
(m) The Seller is in compliance with all applicable laws (including any
legal obligation to engage in affirmative action), agreements and contracts
relating to the employment of former, current and prospective employees,
independent contractors and "leased employees" (within the meaning of Section
414(n) of the Code) of the Seller, including all such laws, agreements and
contracts relating to wages, hours, collective bargaining, employment
discrimination, immigration, disability, civil rights, fair labor standards,
occupational safety and health, workers' compensation, pay equity, wrongful
discharge and violation of the potential rights of such former, current and
prospective employees, independent contractors and leased employees, and has
timely prepared and filed all appropriate forms (including Immigration and
Naturalization Service Form I-9) required by any relevant Governmental
Authority, except in respect of all of the foregoing for such non-compliance or
failure to file as would not reasonably be expected to result in a Material
Adverse Effect.
(n) To the Knowledge of the Shareholders and the Seller (i) Sakura's
relations with its employees are good and (ii) none of Sakura's employees
intends to leave its employ as a result of the transactions contemplated hereby.
(o) The Seller is not engaged in any unfair labor practice within the
meaning of 29 U.S.C. 'SS'158. No collective bargaining agreement with respect to
the business of the Seller is currently in effect or being negotiated. The
Seller has no obligation to negotiate any such collective bargaining agreement,
and to the Knowledge of the Shareholders and the Seller, none of the employees
of Sakura desire to be covered by a collective bargaining agreement.
14
(p) With respect to the employees of Sakura, there are no strikes,
slowdowns or work stoppages pending or, to the Knowledge of the Shareholders and
the Seller, threatened, nor has any such strike, slowdown or work stoppage
occurred or, to the Knowledge of the Shareholders and the Seller, been
threatened since January 1, 1997. There is no representation claim or petition
pending before the National Labor Relations Board or any foreign, state or local
labor agency and, to the Knowledge of the Shareholders and the Seller, no
question concerning representation has been raised or threatened by any employee
of Sakura, or any labor union or other Person purporting to represent Sakura
employees, since January 1, 1997 respecting the employees of Sakura.
(q) There are no complaints or charges against the Seller pending
before the National Labor Relations Board or any foreign, state or local labor
agency and, to the Knowledge of the Shareholders and the Seller, no person has
threatened since January 1, 1997 to file any complaint or charge against the
Seller with any such board or agency.
(r) To the Knowledge of the Shareholders and the Seller, no charges
with respect to or relating to the business of the Seller or any affiliate
thereof are pending before the Equal Employment Opportunity Commission, or any
foreign, state or local agency responsible for the prevention of unlawful
employment practices.
(s) Since January 1, 1997, the Seller has not received any written
notice of the intent of any federal, state, local or foreign agency responsible
for the enforcement of labor or employment laws to conduct an investigation of
the Seller and, to the Knowledge of the Shareholders and the Seller, no such
investigation is in progress or threatened.
(t) There is no unpaid severance due or claimed to be due from the
Seller to any Person whose employment with the Seller was terminated.
(u) Except as set forth on Section 3.10(u) of the Seller Disclosure
Schedule, prior to the date of this Agreement, neither the Seller nor either of
the Shareholders has made any statements or representations or distributed any
written material to any of Sakura's employees regarding future operating plans
of the Seller or the Buyer after the Closing or the Seller's or the Buyer's
continued employment of the Seller's employees subsequent to the Closing, other
than any such statements, representations or written material authorized by the
Buyer in writing and specifically referred to in the Transaction Documents.
(v) Schedule 3.10(v) hereto contains (i) a complete and correct list of
all employment, management or other similar agreements, and all consulting or
independent contractor agreements, with any Persons employed or retained by the
Seller, complete and correct copies of which have been delivered to the Buyer,
and (ii) the names of all employees or former employees of the Seller who are
receiving or are entitled to receive at any time continuing payments of any kind
after termination of employment, other than pursuant to a plan or program
described in this Section 3.10.
3.11 Absence of Undisclosed Liabilities. At January 31, 2000 (the
"Balance Sheet Date"), the Seller had no direct or indirect liabilities or
obligations of any nature (matured or unmatured, fixed or contingent) other than
those reflected or adequately reserved against, in accordance with GAAP, on the
Seller Balance Sheet at its Balance Sheet Date, and any such liabilities or
obligations incurred by the Seller since the Balance Sheet Date were incurred in
the ordinary course of business consistent with prior practice, none of which
are individually greater than $25,000 or in the aggregate more than $100,000.
3.12 Absence of Certain Changes or Events. Except as disclosed in
Section 3.12 of the Seller Disclosure Schedule, since the Balance Sheet Date,
the Business has been conducted in the ordinary course and consistent with past
practice and there has not occurred:
(a) any Material Adverse Effect;
(b) any amendments or changes in the certificate of
incorporation or bylaws of the Seller;
15
(c) any damage, destruction or loss of the Seller's material
assets or properties, whether covered by insurance or not;
(d) any redemption, repurchase or other acquisition of shares
of capital stock by the Seller, or any declaration, setting aside or payment of
any dividend or other distribution (whether in cash, stock or property) with
respect to its capital stock;
(e) any increase in or modification of the compensation or
benefits payable or to become payable by the Seller to any of its directors,
employees or consultants;
(f) any modification of any terms of, or benefits payable
under, any Employee Benefit Plan;
(g) any acquisition or sale of a material amount of property
or assets of the Seller other than the acquisition and sale of Inventories in
the ordinary course of business consistent with past practice, or by the Seller
of any property or assets of either of the Shareholders;
(h) any (A) incurrence, assumption or guarantee by the Seller
of any debt for borrowed money; (B) issuance or sale of any securities
convertible into or exchangeable for debt securities of the Seller; or (C)
issuance or sale of options or other rights to acquire from the Seller or the
either Shareholder, directly or indirectly, debt securities of the Seller or any
securities convertible into or exchangeable for any such debt securities;
(i) any creation or assumption by the Seller of any mortgage,
pledge, material security interest or lien or other encumbrance on any asset;
(j) any making of any loan, advance or capital contribution to
or investment in any Person other than travel loans or advances made in the
ordinary course of business of the Seller;
(k) any entering into, amendment of, relinquishment,
termination or non-renewal by the Seller of any contract, lease transaction,
license agreement, commitment or other right or obligation, except for purchase
and sale commitments entered into in the ordinary course of business, consistent
with past practice;
(l) any transfer or grant of a right under the Seller IP
Rights;
(m) any labor dispute or charge of unfair labor practice
(other than routine individual grievances), any activity or proceeding by a
labor union or representative thereof to organize any employees of the Seller or
any campaign being conducted to solicit authorization from employees to be
represented by such labor union;
(n) any agreement or arrangement made by either Shareholder or
the Seller to take any action which, if taken prior to the date hereof, would
have made any representation or warranty set forth in this Agreement, including,
without limitation, this Section 3.12, untrue or incorrect as of the date when
made unless otherwise disclosed;
(o) any waiver or release by the Seller of any right or claim
except for the waiver or release of non-material claims in the ordinary course
of business, consistent with past practice;
(p) any material change in the accounting methods or practices
used by the Seller, any write-up or write-down of the value of any Inventory or
receivables or revaluation of any assets of the Seller;
(q) any material change in any of the Seller's accounts
payable, accrued expenses or commissions;
(r) any capital expenditure or commitment for any capital
expenditure in an amount in excess of $50,000 in the aggregate; or
16
(s) the issuance or sale of any capital stock or other
securities, or any option, warrant or other rights to acquire the same, of, or
any other interest in, the Seller.
3.13 Agreements. (i) Section 3.13 of the Seller Disclosure
Schedule sets forth a list of any of the following written or oral contracts,
agreements and other instruments ("Contractual Obligations") entered into by or
on behalf of the Seller, copies of each of which have been delivered to Buyer:
(a) contract with or commitment to any labor union;
(b) contract for the future purchase, sale or manufacture of
products, Inventory, material, supplies, equipment or services requiring payment
to or from the Seller in an amount in excess of $25,000 per annum that is not
terminable on notice of 30 days or less without cost or other liability at or at
any time after the Closing Date or in which the Seller has granted or received
manufacturing rights, most favored nation pricing provisions or exclusive
marketing rights relating to any product, group of products or territory;
(c) vendor or customer contracts on open purchase order, or
agreements or contracts with trading agents or licensing agents or under which
the Seller serves as a sales representative for another Person;
(d) joint venture contract or agreement which has involved or
is reasonably expected to involve a sharing of profits or losses in excess of
$25,000 per annum with any other party;
(e) contract or commitment for the employment of any officer,
employee or consultant, severance agreement, non-competition agreement,
non-disclosure agreement, agreement requiring a change of control or parachute
payments, or any other type of contract or understanding with any officer,
employee, sales agent or consultant that is not immediately terminable without
cost or other liability;
(f) indenture, mortgage, promissory note, loan agreement,
guarantee or other agreement or commitment for the borrowing of money, for a
line of credit or for a leasing transaction of a type required to be capitalized
in accordance with Statement of Financial Accounting Standards No. 13 of the
Financial Accounting Standards Board;
(g) lease or other agreement under which the Seller is lessee
of or holds or operates any items of tangible personal property or real property
owned by any third party and under which payments to such third party exceed
$25,000 per annum;
(h) agreement or arrangement for the sale or purchase of any
assets, properties or rights having a value in excess of $25,000;
(i) agreement that restricts the Seller, any of its employees,
any independent contractor of the Seller, or either of the Shareholders from
engaging in any aspect of its business or competing in any line of business in
any geographic area;
(j) Seller IP Rights Agreements, including without limitation,
license agreements;
(k) open letters of credit as of the date of this Agreement;
(l) agreement between the Seller and either of the
Shareholders; or
(m) all other contracts and agreements, whether or not made in
the ordinary course of the Business, that are material to the Business, taken as
a whole or the absence of which would have a Material Adverse Effect.
(ii) Except as disclosed in Section 3.13(ii) of the Seller Disclosure
Schedule, each Contractual Obligation: (A) is legal, valid and binding on the
Seller and to the Knowledge of the Shareholders and the Seller, the other
parities thereto and, to the Knowledge of the Shareholders and the Seller, is in
full force and effect, (B) is
17
freely and fully assignable to the Buyer without penalty or other adverse
consequences and (C) upon consummation of the transactions contemplated by the
Transaction Documents shall continue in full force and effect without penalty or
other adverse consequence. The Seller is not in breach of, or default under, any
Contractual Obligation.
(iii) Except as disclosed in Section 3.13(iii) of the Seller Disclosure
Schedule, there is no contract, agreement or other arrangement granting any
Person any preferential right to purchase, other than in the ordinary course of
the Business consistent with past practice, any of the properties or assets of
the Seller, including, without limitation, the Acquired Assets.
3.14 No Defaults. The Seller is not in default under, and there exists
no event, condition or occurrence and none would result from the execution,
delivery and performance by Seller of any Transaction Document to which it is a
party or the consummation of the transactions contemplated thereby, which, after
notice or lapse of time, or both, would constitute such a default by the Seller
(or, to the Knowledge of the Shareholders and the Seller, by any of the other
parties thereto) under, any contract or agreement to which the Seller or either
Shareholder is a party.
3.15 Taxes. Except as otherwise set forth in Section 3.15 of the Seller
Disclosure Schedule:
(a) The Seller has timely filed with the appropriate taxing authorities
all returns and reports in respect of Taxes ("Returns") required to be filed
(taking into account any extension of time to file granted to or on behalf of
the Seller). The information on such Returns is complete and accurate in all
material respects. The Seller has paid or will pay on a timely basis all Taxes
(whether or not shown on any Return) due and payable, except for such Taxes, the
payment of which are being contested in good faith by appropriate proceedings
and with respect to which adequate reserves have been set aside. There are no
Liens for Taxes (other than for current Taxes not yet due and payable) upon the
assets of the Seller.
(b) No unpaid (or unreserved in accordance with GAAP) deficiencies for
Taxes have been claimed, proposed or assessed by any taxing or other
Governmental Authority with respect to the Seller for any period prior to the
Closing Date, and there are no pending or, to the Knowledge of the Shareholders
and the Seller, threatened, audits, investigations or claims for or relating to
any liability in respect of Taxes of the Seller. No extension of a statute of
limitations relating to any Taxes is in effect with respect to the Seller.
(c) (i) The Seller has made or will make provision for all Taxes
payable by the Seller with respect to any Pre-Closing Period that are not
payable prior to the Closing Date; (ii) the provisions for Taxes with respect to
the Seller for the Pre-Closing Period (excluding any reserve for deferred Taxes
established to reflect timing differences between book and Tax income) are
adequate to cover all Taxes with respect to such period; (iii) the Seller has
withheld and paid all material amounts of Taxes required to have been withheld
and paid in connection with amounts paid or owing to any employee, independent
contractor, creditor, shareholder or other third party; (iv) the Seller has
never been a member of an affiliated group within the meaning of Section 1504 of
the Code, or filed or been included in a combined, consolidated or unitary
return of any Person; (v) the Seller is not liable for Taxes of any other
Person, nor is it currently under any contractual obligation to indemnify any
Person with respect to Taxes, nor is it a party to any tax sharing agreement or
any other not agreement providing for payments by it with respect to Taxes; (vi)
the Seller is not a party to any joint venture, partnership, or other
arrangement or contract which could be treated as a partnership for federal
income tax purposes; and (vii) the Seller is not a party to any agreement,
contract, arrangement or plan that would result (taking into account the
transactions contemplated by this Agreement), separately or in the aggregate, in
the payment of any "excess parachute payments" within the meaning of Section
280G of the Code.
(d) Sakura made a valid election under Section 1362 of the Code and
under the corresponding New York State tax provision to be taxed as an
Subchapter S corporation at least since the taxable year 1996, and no such
election has been terminated. Further, no event has occurred that would cause
Sakura's status as a Subchapter S corporation for New York State or federal
income tax purposes to be terminated upon examination by the Internal Revenue
Service or the New York State Department of Taxation.
As used in this Section 3.15, "Seller" shall mean, individually and
collectively, (i) the Seller and (ii) any individual, trust, corporation,
partnership or other entity as to which the Seller may be liable for Taxes
incurred by
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such individual or entity as a transferee, pursuant to any agreement or pursuant
to any provision of federal, state, local or foreign law or regulation.
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3.16 Outstanding Borrowings. Section 3.16 of the Seller Disclosure
Schedule sets forth (a) the amount of all outstanding borrowings of the Seller
as of the date of this Agreement, (b) any Liens that relate to such outstanding
borrowings and (c) the name of each lender thereof.
3.17 Intellectual Property. (a) The Seller owns, or has the right to
use, sell or license all Intellectual Property Rights used in the Business as
presently conducted and as it is expected to be conducted as of the Closing
Date, including but not limited to (i) those set forth and described on Section
3.17(a) of the Seller Disclosure Schedule, (ii) all of the trade names and
corporate names referred to in Section 5.7, and (iii) all of the product designs
and related materials and all of the promotional materials used in the Business
(the Intellectual Property Rights described in (i) through (iii) being
hereinafter collectively referred to as the "Seller IP Rights") and such rights
to use, sell or license are sufficient for such conduct of the Business;
(b) the execution, delivery and performance of this Agreement and the
consummation of the transactions contemplated hereby will not constitute a
breach of any instrument or agreement governing any Seller IP Right (the "Seller
IP Rights Agreements"), will not cause the forfeiture or termination or give
rise to a right of forfeiture or termination of any Seller IP Right or impair
the right of the Seller or, after the Closing Date, the Buyer to use, sell or
license any Seller IP Right or portion thereof;
(c) there are no royalties, honoraria, fees or other payments payable
by the Seller to any Person other than as set forth in the Seller IP Rights
Agreements listed in Section 3.13 of the Seller Disclosure Schedule;
(d) the Seller IP Rights, and the Business, as presently conducted and
as it is expected to be conducted as of the Closing Date, do not and will not
violate any license or agreement between the Seller and any third party or
infringe any Intellectual Property Right of any other party, and there is no
pending or, to the Knowledge of the Shareholders and the Seller, threatened,
claim or litigation contesting the validity, ownership or right to use, sell,
license or dispose of any Seller IP Right nor, to the knowledge of the
Shareholders and the Seller, is there any basis for any such claim, nor has the
Seller or either Shareholder received any written notice asserting that any
Seller IP Right or the proposed use, sale, license or disposition thereof
conflicts or will conflict with the rights of any other party; and
(e) The Seller has taken reasonable and practical steps designed to
safeguard and maintain the secrecy and confidentiality of, and its proprietary
rights in, all Seller IP Rights. All consultants of the Seller who have created
Seller IP Rights have executed and delivered to the Seller an agreement
assigning to the Seller all Intellectual Property Rights arising from their
services and such Intellectual Property Rights are works made for hire and the
Seller is the author and owner of all such rights under the Copyright Act of
1976, as amended, and the rules and regulations promulgated thereunder. No
current or prior officers, employees or consultants of the Seller claim or have
a right to claim an ownership interest in any Seller IP Rights as a result of
having been involved in the development or licensing of such property while
employed by or consulting to the Seller, or otherwise.
(f) Section 3.17(f) of the Seller Disclosure Schedule sets forth a list
of all applications, registrations, filings and other formal actions made or
taken pursuant to federal, state and foreign laws by the Seller to perfect or
protect its interest in Seller IP Rights, including, without limitation, all
patents, patent applications, trademarks and service marks, trademark and
service xxxx applications, copyrights and copyright applications.
(g) Section 3.17(g) of the Seller Disclosure Schedule lists and briefly
describes the material terms of all of the licenses of Intellectual Property
Rights held by the Seller; all such licenses are valid, enforceable and in full
force and effect, and will continue to be so in all material respects on
identical terms immediately following the Closing Date.
(h) Except as set forth in Section 3.17(h) of the Seller Disclosure
Schedule, to the Knowledge of the Shareholders and the Seller, there is no
unauthorized use, infringement or misappropriation of any of Seller IP Rights by
any third party including any employee or former employee of the Seller.
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3.18 Receivables and Payables. The accounts and notes receivable
reflected on the Seller Balance Sheet as of the Balance Sheet Date and the
accounts and commissions receivable arising subsequent to the Balance Sheet
Date, have arisen only from bona fide transactions in the ordinary course of the
Business, represent valid obligations to the Seller and are collectible, net of
any allowance for uncollectibles recorded on the Seller Balance Sheet in a
manner consistent with past practice, in the ordinary course of business without
resort to litigation; and none of such accounts and commissions receivable is or
will at the Closing Date be subject to any defense, counterclaim or setoff.
There has been no material adverse change since the Balance Sheet Date in the
amounts of accounts and commissions receivable or the allowances with respect
thereto, from that reflected in the Seller Balance Sheet at such date. All of
the accounts and notes payable and accrued expense of the Seller have been
incurred or have arisen only from bona fide transactions in the ordinary course
of business consistent with past practice. Except as set forth on Schedule 3.18,
there is no dispute between the Seller and any payee with respect to any account
or note payable.
3.19 Fees and Expenses. Neither the Seller nor either of the
Shareholders has paid or become obligated to pay any fee or commission to any
broker, finder or intermediary in connection with the transactions contemplated
by this Agreement.
3.20 Insurance. The Seller has obtained insurance policies listed in
Section 3.18 of the Seller Disclosure Schedule with the effective date and
coverage amounts indicated thereon. Such insurance coverage and coverage amounts
are adequate and, to the Knowledge of the Shareholders and the Seller, customary
for the Business. To the Knowledge of the Shareholders and the Seller, such
policies and binders are valid and enforceable in accordance with their terms
and are in full force and effect.
3.21 Ownership of Property. Except (a) as disclosed in Section 3.21 of
the Seller Disclosure Schedule, (b) for liens for current Taxes not yet
delinquent or (c) for liens imposed by law and incurred in the ordinary course
of business for obligations not yet due to carriers, warehousemen, laborers,
materialmen and the like, the Seller has good and marketable title to all of the
Acquired Assets being transferred by it hereunder, in each case free and clear
of all Liens. All material real and personal property owned or leased by the
Seller is generally in good repair and is operational and usable in Business,
subject to ordinary wear and tear. The Seller is not in violation of any
material zoning, building or safety ordinance, regulation or requirement or
other law or regulation applicable to the operation of owned or leased
properties, nor has it received any written notice of violation with which it
has not complied.
3.22 Environmental Matters. During the period that the Seller has
leased its properties or owned or operated any Acquired Assets or other
facilities, neither it nor, to the Knowledge of the Shareholders and the Seller,
any other Person has disposed, released, or participated in or authorized the
release or threatened release of Hazardous Materials on, from or under such
properties or facilities. To the Knowledge of the Shareholders and the Seller
there is no presence, disposal, release or threatened release of Hazardous
Materials on, from or under any of such properties or facilities, that occurred
prior to the Seller having taken possession of any of such properties or
facilities. For the purposes of this Agreement, the terms "disposal," "release"
and "threatened release" shall have the definitions assigned thereto by the
Comprehensive Environmental Response, Compensation and Liability Act of 1980, 42
U.S.C. 'SS' 9601 et seq., as amended ("CERCLA").
(a) The Business is being conducted in material compliance with
Environmental Laws. During the time that the Seller has owned or leased its
properties and facilities, neither the Seller nor, to the Knowledge of the
Shareholders and the Seller, any other Person, has used, generated, manufactured
or stored on, under or about such properties or facilities or transported or
arranged for the disposal to or from such properties or facilities any Hazardous
Materials.
(b) The Seller is not the subject of any outstanding Environmental
Claim.
3.23 Interested Party Transactions. Except as previously disclosed to
Oneida and the Buyer in a written instrument signed by one or more of the
Shareholders or as set forth in Section 3.23 of the Seller Disclosure Schedule,
no Shareholder, officer or director of the Seller has had, either directly or
indirectly, any interest in: (i) any person or entity that purchases from or
sells, licenses or furnishes to the Seller any goods, property,
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technology or intellectual or other property rights or services, (ii) any
contract or agreement to which the Seller is a party or by which it may be
bound, or (iii) any other transaction involving the Seller or any of the
Acquired Assets.
3.24 Customers and Suppliers. Section 3.24 of the Seller Disclosure
Schedule sets forth a complete and accurate list of all Significant Customers
and Significant Suppliers. None of the Significant Customers has canceled or
substantially reduced or, to the Knowledge of the Shareholders and the Seller,
is currently attempting to or threatening to cancel or substantially reduce, any
purchases of goods or services from the Seller, in each case as a result of the
transactions contemplated hereby or otherwise. None of the Significant Suppliers
has canceled or substantially reduced or, to the Knowledge of the Shareholders
and the Seller, is currently attempting to or threatening to cancel or
substantially reduce, the supply of products or services to the Seller, in each
case as a result of the transactions contemplated hereby or otherwise. Except as
set forth in Section 3.24 of the Seller Disclosure Schedule, the Seller has not
received any material customer complaints concerning its products or services,
nor has it had any of its products returned by a purchaser thereof or any
requests for warranty service except for normal warranty returns and service,
consistent with past history.
3.25 Disclosure. Neither this Agreement nor the other Transaction
Documents when taken together as a whole contain any untrue statement of a
material fact, or omits to state a material fact necessary to make the
statements or facts contained herein or therein not misleading in light of the
circumstances under which they were furnished.
3.26 Restrictions on Business Activities. There is no agreement,
judgment, injunction, order or decree binding upon the Seller or either of the
Shareholders that has or could reasonably be expected to have the effect of
prohibiting or materially impairing the conduct of the Business as currently
conducted or to be conducted on or after the Closing Date.
3.27 Inventories. (a) Subject to amounts reserved therefor on the
Seller Balance Sheet, the values at which all Inventories are carried on the
Seller Balance Sheet reflect the historical inventory valuation policy of the
Seller of stating such Inventories at the lower of cost (determined on the
first-in, first-out method) or market value. Except as set forth in Section 3.27
of the Seller Disclosure Schedule, the Seller has good and marketable title to
the Inventories free and clear of all Liens. The Inventories do not consist of,
in any material amount, items that are obsolete, damaged, below standard quality
or slow-moving. The Inventories do not consist of any items held on consignment.
The Inventories are in good and merchantable condition in all material respects,
are suitable and usable for the purposes for which they are intended and can be
sold in the ordinary course of the Business consistent with past practice. The
Seller is not under any obligation or liability with respect to accepting
returns of items of Inventory or merchandise in the possession of its customers
other than in the ordinary course of the Business consistent with past practice.
No clearance or extraordinary sale of the Inventories has been conducted by the
Seller since the Balance Sheet Date. The Seller has not acquired or committed to
acquire or manufactured Inventory for sale that is not of a quality and quantity
usable in the ordinary course of the Business within a reasonable period of time
and consistent with past practice, nor has the Seller changed the price of any
Inventory except for (i) reductions to reflect any reduction in the cost thereof
to the Seller, (ii) reductions and increases responsive to normal competitive
conditions and consistent with the Seller's past sales practices, (iii)
increases to reflect any increase in the cost thereof to the Seller and (iv)
increases and reductions made with the written consent of the Buyer. Section
3.27 of the Seller Disclosure Schedule contains a complete list of the addresses
of all warehouses and other facilities in which the Inventories are located.
(b) The value of all items of obsolete materials and of materials of
below standard quality has been written down to realizable market value or has
been adequately reserved for on the Seller Balance Sheet.
3.28 Sales and Purchase Order Backlog. (a) As of five Business Days
prior to the date hereof, open sales orders for the Business totaled
U.S.$10,255,970. Section 3.28(a) of the Seller Disclosure Schedule lists all
sales orders for the Business which were open as of five Business Days prior to
the date hereof.
(b) As of five Business Days prior to the date hereof, open purchase
orders for the Business totaled U.S.$4,708,942. Section 3.28(b) of the Seller
Disclosure Schedule lists all purchase orders for the Business which were open
as of five Business Days prior to the date hereof.
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ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF THE BUYER
The Buyer hereby represents and warrants to the Seller that:
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4.1 Organization; Good Standing; Qualification and Power. The Buyer is
a corporation duly incorporated, validly existing and in good standing under the
laws of the state of its incorporation, has all requisite organizational power
and authority to own, lease and operate its properties and to carry on its
business as it is presently being conducted.
4.2 Authority.
(a) Corporate Action. The Buyer has all requisite corporate power and
authority to enter into this Agreement and to perform its obligations under each
Transaction Document to which it is a party and to consummate the transactions
contemplated thereby. The execution and delivery of any Transaction Document to
which it is a party by the Buyer and the consummation by the Buyer of the
transactions contemplated thereby have been duly authorized by all necessary
corporate action on the part of the Buyer. The Transaction Documents to which
the Buyer is a party have been duly executed and delivered by the Buyer and are
the valid and binding obligation of the Buyer, enforceable against it in
accordance with their respective terms, except that such enforceability may be
subject to (i) applicable bankruptcy, insolvency, reorganization or other
similar laws affecting or relating to the enforcement of creditors' rights
generally and (ii) general principles of equity relating to enforceability
(regardless of whether considered in a proceeding at law or in equity).
(b) No Conflict. Neither the execution, delivery and performance of any
Transaction Document to which the Buyer is a party nor the consummation of the
transactions contemplated thereby, nor compliance with the provisions thereof
will conflict with, or result in any violations of, or cause a default (with or
without notice or lapse of time, or both) under, or give rise to a right of
termination, amendment, cancellation or acceleration of any obligation contained
in, or the loss of any material benefit under, or result in the creation of any
lien, security interest, charge or encumbrance upon any of the properties or
assets of the Buyer under, any term, condition or provision of (x) the
certificate of incorporation or bylaws of the Buyer, (y) any loan or credit
agreement or other document or instrument representing an obligation for
borrowed money, or (z) assuming compliance with the HSR Act, any judgment,
order, decree, statute, law, ordinance, rule or regulation applicable to Buyer
or its properties or assets, except, in the case of clauses (y) and (z) above,
for such conflicts, violations, breaches or defaults that, individually or in
the aggregate, would not be reasonably likely to materially impair the ability
of the Buyer to effect the transactions contemplated by the Transaction
Documents.
(c) Governmental Consents. Except for compliance with the HSR Act, no
consent, approval, order or authorization of, or registration, declaration or
filing with, any Governmental Authority is required to be obtained by the Buyer
in connection with the execution and delivery of the Transaction Documents, or
the consummation of the transactions contemplated thereby, except for where the
failure to obtain such consents, approvals and the like, would not prevent or
materially delay the Buyer from performing its obligations under the Transaction
Documents. Litigation. There is no suit, action, arbitration, demand, claim,
dispute, investigation or proceeding, pending or, to the actual knowledge of the
Buyer after due inquiry, threatened, against the Buyer or affecting any of its
assets, nor is there any judgment, decree, injunction, rule or order of any
Governmental Authority or arbitrator outstanding against the Buyer that, in
either case, has, has had or is reasonably expected to have, individually or in
the aggregate, the effect of materially impairing or delaying the ability of the
Buyer to perform its obligations under the Transaction Documents.
(d) Fees and Expenses. The Buyer has not paid or become obligated to
pay any fee or commission to any broker, finder or intermediary in connection
with the transactions contemplated by this Agreement.
ARTICLE V
OTHER AGREEMENTS
5.1 Conduct of Business Pending the Closing. The Seller hereby
covenants and agrees that, prior to the Closing, except as contemplated by this
Agreement or as set forth in Section 5.1 of the Seller Disclosure Schedule, and
except as consented to in writing by the Buyer in accordance with Section 11.7,
it shall (and the Shareholders hereby covenant and agree to cause the Seller to
comply with the provisions of this Section 5.1):
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(a) conduct the Business in the usual, regular and ordinary course
consistent with past practice and use its commercially reasonable efforts to
take, or refrain from taking, as the case may be, any action which would cause
the representations and warranties made in Article III, including, without
limitation, Section 3.12, to be untrue or inaccurate; and
(b) use its commercially reasonable efforts to maintain and preserve
its business organization and relationships with its customers, suppliers and
others having business dealings with it and retain the services of its officers
and employees; provided, however, that neither the Seller nor the Shareholders
shall be required to expend any funds outside the ordinary course of business in
respect of this covenant.
5.2 No Solicitation. Neither Shareholder shall, nor shall either
Shareholder permit the Seller to, directly or indirectly, initiate contact with,
solicit, encourage, respond to or participate in any way in discussions or
negotiations with, or provide any information or assistance to, or take any
other action intended or designed to facilitate the efforts of, any Person
(other than the Buyer or Oneida) concerning any acquisition of any equity
interest in the Seller or any assets of the Seller (including by merger or other
similar transaction) except for sales of Inventory conducted in the ordinary
course of the Business. The Seller and the Shareholders shall promptly notify
Oneida if any of them is contacted or approached in respect of any such
transaction, as well as the terms of the proposed transaction and the identity
of the other party.
5.3 Further Assurances. (a) Upon the terms and subject to the
conditions of this Agreement, each of the parties hereto shall use all
commercially reasonable efforts to take or cause to be taken all action, and to
do or cause to be done, and to assist and cooperate with the other parties in
doing, all things necessary, proper or advisable to consummate and make
effective as promptly as practicable the transactions contemplated by this
Agreement, including using commercially reasonable efforts to (i) obtain all
consents or approvals required or desirable in connection with the transactions
contemplated hereby, (ii) effect promptly all necessary or appropriate
registrations or filings with any Governmental Authorities, including, without
limitation, filings and submissions with the Federal Trade Commission and the
Department of Justice pursuant to the HSR Act, and (iii) fulfill or cause the
fulfillment of the conditions to Closing set forth in Article VII and Article
VIII. In case at any time after the Closing Date any further action is
reasonably necessary or desirable to carry out the purposes of this Agreement,
each of the parties hereto shall take such further action without additional
consideration.
(b) At their expense, each of the Seller and the Shareholders shall use
its best efforts to effect the transfer and assignment of the licenses and
agreements set forth in Section 5.3(b) of the Seller Disclosure schedule to the
Buyer or its designees.
5.4 Access and Information. (a) Prior to the Closing, each Shareholder
shall afford, and shall cause the Seller to afford, to the Buyer, Oneida and
their respective accountants, counsel and other representatives reasonable
access upon reasonable prior notice and during normal business hours to the
Shareholders and all of the Seller's properties, books, accounts, records,
contracts, and personnel and, during such period, each Shareholder shall, and
shall cause the Seller and its accountants, counsel and other representatives
to, furnish promptly to the Buyer, Oneida and their respective representatives
all information concerning the Seller's business, properties and personnel as
the Buyer, Oneida or their respective representatives may reasonably request;
provided, however, that such investigation shall be conducted in a manner so as
to minimize any unreasonable disruptions to the operations of the Business. In
addition, after the Closing, each Shareholder shall, and shall cause the Seller
to, provide the Buyer with such cooperation and information as the Buyer
reasonably may request in filing any Return, amended Return, claim for refund,
determining a liability for Taxes for a right to a refund of Taxes,
participating in or conducting any audit or other proceeding in respect of Taxes
or making any representations to or furnishing information of parties
subsequently desiring to purchase any part of the Business from the Buyer.
(b) After the Closing, the Buyer shall retain the books and records
(including any Tax returns and records (including workpapers and other
supporting information)) of the Seller acquired hereunder and, unless otherwise
consented to in writing by the Seller or the Shareholders, the Buyer shall not,
for the period of three (3) years following the Closing (or for a period of six
(6) years, in the case of any Tax returns or records), destroy or otherwise
dispose of, the books and records of the Seller acquired by the Buyer hereunder.
Upon reasonable notice,
25
the Buyer shall make such books and records available to the Seller,
Shareholders, their attorneys, accountants and representatives, for examination
and copying.
(c) After the Closing, the Seller and/or the Shareholders shall retain
the books and records (including any Tax returns and records (including
workpapers and other supporting information)) of the Seller that have not been
conveyed hereunder and, unless otherwise consented to in writing by the Buyer,
the Seller and the Shareholders shall not, for the period of three (3) years
following the Closing (or for a period of six (6) years, in the case of any Tax
returns or records), destroy or otherwise dispose of such books and records.
Upon reasonable notice, the Seller and the Shareholders shall make such books
and records available to the Buyer, its attorneys, accountants and
representatives, for examination and copying.
(d) In addition, the Buyer shall furnish to the Seller and the Seller
shall furnish to the Buyer, on a timely basis, all financial and Tax return
information as may be reasonably requested for the purpose of filing and/or
defending any Tax returns.
5.5 Notification of Certain Matters. The Seller and the Shareholders
shall promptly notify the Buyer and Oneida in writing:
(i) if, subsequent to the date of this Agreement and prior to the
Closing Date, any of them becomes aware of the occurrence of any event or the
existence of any fact that would render any of the representations and
warranties made in Article III, if made on or as of the date of such event or
the Closing Date, inaccurate or untrue (other than with respect to
representations and warranties made as of a specified date);
(ii) of any breach by any of them of any covenant or agreement
contained in this Agreement;
(iii) of any notice or other communication from any third party
alleging that the consent of such third party, is or may be required in
connection with the transactions contemplated by this Agreement;
(iv) of any notice or other communication from any Governmental
Authority in connection with or relating to the transactions contemplated
hereby; or
(v) if any of them becomes aware of any material deterioration in the
relationship with any customer, supplier or employee of the Business.
(b) The Buyer shall promptly notify the Seller and the Shareholders in
writing:
(i) if, subsequent to the date of this Agreement and prior to the
Closing Date, it becomes aware of the occurrence of any event or the existence
of any fact that would render any of the representations and warranties made in
Article IV, if made on or as of the date of such event or the Closing Date,
inaccurate or untrue (other than with respect to representations and warranties
made as of a specified date);
(ii) of any breach by it of any covenant or agreement contained in this
Agreement;
(iii) of any notice or other communication from any third party
alleging that the consent of such third party is or may be required in
connection with the transactions contemplated by this Agreement; or
(iv) of any notice or other communication from any Governmental
Authority in connection with or relating to the transactions contemplated
hereby.
5.6 Seller Personnel. (a) The Buyer shall offer employment (effective
as of the Closing Date) to all of Sakura's employees and without a waiting
period or other delay, and such employees shall be immediately eligible for all
medical, vacation, sick leave, and other benefits under the Buyer's then
existing employee benefit plans
26
subject to eligibility and other requirements under such plans. To the extent
that service is relevant for purposes of eligibility, participation or vesting
under any Employee Benefit Plan, program or arrangement established, maintained
or contributed to by the Buyer or any of its Affiliates (excluding any service
plan, program or arrangement), Sakura employees shall be credited for service
with Sakura prior to the Closing to the extent that such service is recognized
under such employee benefit plan, program or arrangement of the Buyer or its
Affiliates; provided, however, that such prior service with Sakura shall not be
taken into consideration in the calculation or accrual of benefits under such
plans. The Seller will assist the Buyer in hiring those employees of the Seller.
The Seller shall assist and cooperate with the Buyer in communicating the
proposed terms of employment or any employee benefits to employees designated by
the Buyer; provided, however, that the Seller shall not make any unilateral
statement to any employee in that regard. The Buyer shall not be obligated to
continue or maintain any retirement, pension, health, insurance, or other
Employee Benefit Plan maintained by the Seller for the benefit of the Seller's
employees or retain any such employees for any specified period of time, it
being understood that all such employees (other than for Xx. Xxxxx) shall be
employed at will. The Seller solely is responsible for and shall timely pay or
provide all wages, salaries, employment benefits of any kind or nature, arising
out of or related to service performed through the Closing Date, including,
without limitation, retirement, health and other benefits (including, without
limitation, benefits required to be provided under COBRA), vacation pay, sick
pay and any termination pay, whether due immediately or at some future date,
whether or not required under any collective bargaining agreement. All wages,
salaries, vacation and sick pay, termination pay and any other employment
benefits earned with respect to or arising out of service performed through the
Closing Date shall be paid by the Seller at or prior to the Closing Date.
Nothing in this Agreement, either expressed or implied, shall confer upon any
employee of the Seller any rights or remedies including, without limitation, any
right to employment or continued employment for any specified period or of any
nature or kind whatsoever under or by reason of this Agreement.
(b) Notwithstanding any provision in Section 5.6(a) to the contrary,
the Buyer agrees to make severance payments to the Sakura employees listed on
Section 5.6(b) of the Seller Disclosure Schedule who are terminated by the Buyer
without Cause during the one-year period commencing on the Closing Date (such
period, the "Severance Period"). During the Severance Period, the Buyer shall
give written notice of termination to each such Sakura employee at least one
hundred eighty days prior to the date of his or her termination of employment.
The amount of the severance payments to be made to the affected Sakura employees
is set forth on Section 5.6(b) of the Seller Disclosure Schedule, and such
payments shall be paid as salary continuation in accordance with the payroll
practices of the Buyer, net of any applicable income or employment tax
withholdings.
For purposes of this Section 5.6(b), "Cause" shall mean a termination
of employment because of:
(i) any willful failure by an employee to substantially perform his or
her duties or to comply with the policies of the Buyer or its Affiliates;
(ii) any willful commission by an employee of acts that are
demonstrably or materially injurious to the Buyer or its Affiliates, monetarily
or otherwise; and
(iii) an employee's conviction of, or a plea of nolo contendere to, any
felony or a misdemeanor involving financial misconduct, moral turpitude, or
other act which can be reasonably considered to render such employee unfit or
unable to perform his or her duties.
5.7 Intellectual Property. (a) The Seller agrees that from and after
the Closing, it shall not use the trade name or any name similar or related to
the name "Sakura" or "Sakura Inc.", in connection with the operation of any
business. The Seller also agrees that from and after the Closing, the Buyer may
change its name (or the name of any of its Affiliates) to the name "Sakura,
Inc." or any derivative thereof. The Seller further agrees to amend, as soon as
practicable following the Closing, its certificate of incorporation and bylaws
to change its corporate name to a name which does not contain the words "Sakura"
or any name similar or related thereto.
(b) From and after the Closing, neither the Seller nor either
Shareholder shall use any Seller IP Rights.
5.8 Bulk Transfer Laws. (a) The Buyer hereby waives compliance by the
Seller with any applicable bulk sale or bulk transfer laws of any jurisdiction
in connection with the sale of the Acquired Assets to the Buyer
27
(other than any obligations with respect to the application of the proceeds
herefrom). Pursuant to Article X, the Seller and the Shareholders have agreed to
indemnify the Buyer Parties against any and all liabilities that may be asserted
by third parties against the Buyer Parties as a result of the Seller's
noncompliance with any such law.
(b) The Seller and the Buyer agree to comply timely with the provisions
of Section 1141(c) of the New York Tax Law and the regulations issued
thereunder, including, without limitation, the provisions relating to
notification of the New York State Tax Commission prior to a bulk sale of
business assets.
5.9 Confidentiality. The Seller and the Shareholders agree to, and
shall cause their respective agents, representatives, Affiliates, employees,
officers and directors to: (i) treat and hold as confidential (and not disclose
or provide access to any Person to) all information relating to trade secrets,
processes, patent or trademark applications, product development, price,
customer and supplier lists, pricing and marketing plans, policies and
strategies, operations methods, product development techniques, business
acquisition plans, new personnel acquisition plans and any other confidential
information with respect to the Business or the Seller, (ii) in the event that
the Seller or any such agent, representative, Affiliate, employee, officer or
director becomes legally compelled to disclose any such information, provide the
Buyer with prompt written notice of such requirement so that the Buyer may seek
a protective order or other remedy or waive compliance with this Section 5.9,
(iii) in the event that such protective order or other remedy is not obtained,
or the Buyer waives compliance with this Section 5.9, furnish only that portion
of such confidential information that is legally required to be provided and
exercise its best efforts to obtain assurances that confidential treatment will
be accorded such information, and (iv) promptly furnish (prior to, at, or as
soon as practicable following, the Closing) to the Buyer any and all copies (in
whatever form or medium) of all such confidential information then in the
possession of the Seller or either Shareholder or any of their respective
agents, representatives, Affiliates, employees, officers and directors and
destroy any and all additional copies then in the possession of the Seller
either Shareholder or any of their respective agents, representatives,
Affiliates, employees, officers and directors of such information and of any
analyses, compilations, studies or other documents prepared, in whole or in
part, on the basis thereof; provided, however, that this sentence shall not
apply to any information that, at the time of disclosure, is available publicly
and was not disclosed in breach of this Agreement by the Seller and Shareholders
or their respective agents, representatives, Affiliates, employees, officers or
directors; provided further that specific information shall not be deemed to be
within the foregoing exception merely because it is embraced in general
disclosures in the public domain. In addition, any combination of features shall
not be deemed to be within the foregoing exception merely because the individual
features are in the public domain unless the combination itself and its
principle of operation are in the public domain.
5.10 Excluded Liabilities. The Seller will pay and discharge the
liabilities and obligations not expressly assumed by the Buyer hereunder as and
when the same become due and payable.
5.11 Non-Competition. (i) (a) partial consideration of the payment of
the Purchase Price, Xx. Xxxxx, Oneida and the Buyer agree that, for the Simon
Non-compete Period, Xx. Xxxxx shall not engage, directly or indirectly, in the
Tableware Business in the United States or, without the prior written consent of
Oneida or the Buyer, directly or indirectly, own an interest in, manage,
operate, join, control, or render other assistance (whether paid or unpaid) to
or participate in or be connected with, as a partner, stockholder, director,
officer, employee, consultant or otherwise, any Person that engages in the
Tableware Business in the United States; provided, however, that, for the
purposes of this Section 5.11(i), ownership of securities having no more than
five percent, on a fully diluted basis, of the outstanding voting power of any
entity that engages in the Tableware Business, which securities are listed on
any national securities exchange or traded actively in the national
over-the-counter market, shall not be deemed to be in violation of this Section
5.11(i) so long as Xx. Xxxxx has no other connection or relationship with such
entity.
(b) As a separate and independent covenant, Xx. Xxxxx agrees with
Oneida and the Buyer that for the Simon Non-compete Period, Xx. Xxxxx shall not
in any way, directly or indirectly, in respect of the Tableware Business, call
upon, solicit, advise or otherwise do, or attempt to do, business with any
customers or clients of the Business, or Oneida or the Buyer (provided, however,
that the foregoing clause shall not apply to Xx. Xxxxx in respect of any action
that he takes as part of his employment with Oneida pursuant to the Employment
Agreement); solicit, induce or persuade any customer, supplier, vendor,
designer, licensor, representative or other Person doing business with Oneida,
the Buyer or their Affiliates to discontinue its business relationship with
Oneida, the Buyer or
28
their Affiliates, or take away or interfere or attempt to interfere with any
trade, business or patronage of the Buyer, Oneida or the Business; or induce or
attempt to induce any officer, employee, representative, key consultant or agent
of the Buyer, Oneida or the Business to leave the employ of the Buyer, Oneida or
any of their Affiliates or violate the terms of their contracts, or any
employment arrangements, with the Buyer, Oneida or any of their Affiliates.
(c) The Simon Non-compete Period shall be extended by the length of any
period during which Xx. Xxxxx is in breach of the terms of this Section 5.11(i).
(d) Xx. Xxxxx acknowledges that his covenants set forth in this Section
5.11(i) are an essential element of this Agreement and that, but for the
agreement of Xx. Xxxxx to comply with these covenants, Oneida and the Buyer
would not have entered into this Agreement. Xx. Xxxxx acknowledges that this
Section 5.11(i) constitutes an independent covenant and shall not be affected by
performance or nonperformance of any other provision of this Agreement by the
Buyer or Oneida. Xx. Xxxxx has independently consulted with his counsel and,
after such consultation, Xx. Xxxxx agrees that the covenants set forth in this
Section 5.11(i) are reasonable and proper, and Xx. Xxxxx agrees not to challenge
the reasonableness or enforceability of this Section 5.11(i) in any proceeding
to enforce the terms hereof.
(ii) (a) In partial consideration of the payment of the Purchase Price,
Xx. Xxxxxxxxx, Oneida and the Buyer agree that, for the Nishiwaki Non-compete
Period, Xx. Xxxxxxxxx shall not engage, directly or indirectly, in the Tableware
Business in the United States or, without the prior written consent of Oneida or
the Buyer, directly or indirectly, own an interest in, manage, operate, join,
control, or render other assistance (whether paid or unpaid) to or participate
in or be connected with, as a partner, stockholder, director, officer, employee,
consultant or otherwise, any Person that engages in the Tableware Business in
the United States; provided, however, that, for the purposes of this Section
5.11(ii), ownership of securities having no more than five percent, on a fully
diluted basis, of the outstanding voting power of any entity that engages in the
Tableware Business, which securities are listed on any national securities
exchange or traded actively in the national over-the-counter market, shall not
be deemed to be in violation of this Section 5.11(ii) so long as Xx. Xxxxxxxxx
has no other connection or relationship with such entity.
(b) As a separate and independent covenant, Xx. Xxxxxxxxx agrees with
Oneida and the Buyer that for the Nishiwaki Non-compete Period, Xx. Xxxxxxxxx
shall not in any way, directly or indirectly, in respect of the Tableware
Business, call upon, solicit, advise or otherwise do, or attempt to do, business
with any customers or clients of the Business, or Oneida or the Buyer; solicit,
induce or persuade any customer, supplier, vendor, designer, licensor,
representative or other Person doing business with Oneida, Buyer or their
Affiliates to discontinue its business relationship with Oneida, the Buyer or
their Affiliates, or take away or interfere or attempt to interfere with any
trade, business or patronage of the Buyer, Oneida or the Business; or induce or
attempt to induce any officer, employee, representative, key consultant or agent
of the Buyer, Oneida or the Business to leave the employ of the Buyer, Oneida or
any of their Affiliates or violate the terms of their contracts, or any
employment arrangements, with the Buyer, Oneida or any of their Affiliates.
(c) The Nishiwaki Non-compete shall be extended by the length of any
period during which Xx. Xxxxxxxxx is in breach of the terms of this Section
5.11(ii).
(d) Xx. Xxxxxxxxx acknowledges that his covenants set forth in this
Section 5.11(ii) are an essential element of this Agreement and that, but for
the agreement of Xx. Xxxxxxxxx to comply with these covenants, Oneida and the
Buyer would not have entered into this Agreement. Xx. Xxxxxxxxx acknowledges
that this Section 5.11(ii) constitutes an independent covenant and shall not be
affected by performance or nonperformance of any other provision of this
Agreement by the Buyer or Oneida. Xx. Xxxxxxxxx has independently consulted with
his counsel and after such consultation Xx. Xxxxxxxxx agrees that the covenants
set forth in this Section 5.11(ii) are reasonable and proper, and Xx. Xxxxxxxxx
agrees not to challenge the reasonableness or enforceability of this Section
5.11(ii) in any proceeding to enforce the terms hereof.
(iii) The parties hereto recognize that the laws and public policies of
various jurisdictions may differ as to the validity and enforceability of
covenants similar to those set forth in this Section 5.11. It is the intention
of the parties that the provisions in this Section 5.11 be enforced to the
fullest extent permissible under the laws and policies of each jurisdiction in
which enforcement may be sought, and that the unenforceability (or the
modification
29
to conform to such laws or policies) of any provisions in this Section 5.11
shall not render unenforceable, or impair, the remainder of the provisions
hereof. Accordingly, if at the time of enforcement of any provision hereof, a
court of competent jurisdiction holds that the restrictions stated in this
Section 5.11 are unreasonable under circumstances then existing, the parties
hereto agree that the maximum period, scope, or geographic area reasonable
under such circumstances will be substituted for the stated period, scope or
geographical area and that such court shall be allowed to revise the
restrictions contained in this Section 5.11 to cover the maximum period, scope
and geographical area permitted by law.
5.12 Conveyances. Prior to the Closing, at their expense, the
Shareholders shall cause any and all, receivables, letters of credit, commercial
letters, similar drafts, or sight drafts in favor of Affiliates of the
Shareholders or the Seller relating to the Business to be assigned to the Buyer,
Oneida or any of their respective Affiliates designated in writing by the Buyer
or Oneida to the Seller.
5.13 Dissolution of Entities. Prior to the Closing, at their expense,
if so requested in writing by Oneida or the Buyer, the Shareholders shall cause
the dissolution of any one or more entities that are Affiliates of the
Shareholders or the Seller and engaged in the Business.
ARTICLE VI
THE CLOSING
6.1 Closing. Subject to the terms and conditions of this Agreement, the
sale and purchase of the Acquired Assets and the assumption of the Assumed
Liabilities contemplated by this Agreement shall take place at a closing (the
"Closing") to be held at the offices of Shearman & Sterling, 000 Xxxxxxxxx
Xxxxxx, Xxx Xxxx, Xxx Xxxx at 10:00 A.M. New York time on the fifth Business Day
following satisfaction or waiver of all other conditions to the obligations of
the parties set forth in Article VII and Article VIII, or at such other place or
at such other time or on such other date as the Seller and the Buyer may
mutually agree upon in writing (the day on which the Closing takes place being
the "Closing Date"). At the Closing, the Buyer shall deliver the Purchase Price
to the Seller in accordance with and subject to the procedures set forth in
Section 2.3.
ARTICLE VII
CONDITIONS PRECEDENT TO OBLIGATIONS OF THE SELLER
The obligations of the Seller under this Agreement are subject to the
fulfillment or satisfaction on or before the Closing of each of the following
conditions (any one or more of which may be waived by the Shareholders on behalf
of the Seller by a signed written notice of such waiver to other parties
hereto):
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7.1 Accuracy of Representations and Warranties. The representations and
warranties of the Buyer set forth in Article IV that are qualified as to
materiality shall be true and correct as of the Closing Date (other than such
representations and warranties as are made as of a certain date, which shall be
true and correct as of such certain date), and the representations and
warranties of the Buyer contained in this Agreement that are not so qualified
shall be true and correct in all material respects as of the Closing Date (other
than such representations and warranties as are made as of a certain date, which
shall be true and correct in all material respects as of such certain date), and
the Seller shall have received certificates to such effect executed by a duly
authorized officer of the Buyer.
7.2 Covenants. The Buyer shall have performed and complied in all
material respects with all of the covenants required to be performed by it under
this Agreement on or before the Closing, and the Seller shall have received
certificates to such effect executed by a duly authorized officer of the Buyer.
7.3 No Proceeding or Litigation. No claim, action, suit, arbitration,
inquiry, proceeding or investigation by or before any Governmental Authority
shall have been commenced by or before any Governmental Authority against any
party to this Agreement, seeking to restrain or materially and adversely alter
the transactions contemplated by this Agreement which, in the reasonable, good
faith determination of the Seller, is likely to render it impossible or unlawful
to consummate such transactions; provided; however, that the provisions of this
Section 7.3 shall not apply if the Seller or either Shareholder has directly or
indirectly solicited or encouraged any such action.
7.4 Government Consents. There shall have been obtained on or before
the Closing such material permits or authorizations, and there shall have been
taken such other action, as may be required to consummate the transactions
contemplated hereby by any regulatory authority having jurisdiction over the
parties and the actions herein proposed to be taken.
7.5 Xxxx-Xxxxx-Xxxxxx Act. All waiting periods applicable to the
consummation of the transactions contemplated hereby under the HSR Act shall
have expired or been terminated.
7.6 Opinion of Counsel. The Seller and the Shareholders shall have
received from Xxxxxxxxx X. Xxxxxxxxx, Esq., the Secretary of the Buyer, a legal
opinion, covering such matters as the Seller and the Shareholders may reasonably
request.
7.7 Escrow Agreement. The Buyer, the Seller, the Shareholders and the
Escrow Agent shall have entered into an escrow agreement, substantially in the
form of Exhibit A attached hereto (the "Escrow Agreement").
7.8 Assumption Agreement. The Buyer shall have executed and delivered
to the Seller an agreement, substantially in the form of Exhibit B annexed
hereto, to assume all liabilities and obligations in connection with the Assumed
Liabilities.
7.9 Secretaries' Certificates. The respective Secretaries of the Buyer
and Oneida shall have delivered certificates to the Seller with respect to the
following: (i) the signatures and incumbency of the individual signing this
Agreement on behalf of the Buyer or Oneida, as the case may be; (ii) the
certificate of incorporation and bylaws of the Buyer or Oneida, as the case may
be, and (iii) due authorization by the respective Boards of Directors of the
Buyer and Oneida to adopt this Agreement and to approve and authorize the
transactions contemplated by this Agreement.
7.10 Release and Cancellation of Shareholder Guarantees. Following the
discharge by the Seller of all Seller Debt, the Shareholders shall have obtained
releases and cancellation of all Shareholders' guarantees in respect of all
Seller Debt.
ARTICLE VIII
CONDITIONS PRECEDENT TO OBLIGATIONS OF THE BUYER AND ONEIDA
31
The obligations of the Buyer and Oneida under this Agreement are
subject to the fulfillment or satisfaction on or before the Closing of each of
the following conditions (any one or more of which may be waived by Oneida with
respect to the Buyer and itself by a signed written notice of such waiver to the
other parties hereto, provided, however, that the condition described in Section
8.11 shall be deemed to have been waived by Oneida on July 7, 2000 unless, prior
to such date, Oneida shall have notified the Seller and the Shareholders of the
failure thereof):
8.1 Accuracy of Representations and Warranties. The representations and
warranties of the Seller and the Shareholders set forth in Article III that are
qualified as to "Material Adverse Effect" or materiality shall be true and
correct as of the Closing Date (other than such representations and warranties
as are made as of a certain date, which shall be true and correct as of such
certain date), and the representations and warranties of the Seller and the
Shareholders contained in this Agreement that are not so qualified shall be true
and correct in all material respects as of the Closing Date (other than such
representations and warranties as are made as of a certain date, which shall be
true and correct in all material respects as of such certain date), and the
Buyer shall have received certificates to such effect executed by each
Shareholder and by the President of the Seller.
8.2 Covenants. The Seller and each Shareholder shall have performed and
complied in all material respects with all of their respective covenants
required to be performed by them under this Agreement on or before the Closing,
and the Buyer shall have received certificates to such effect executed by each
Shareholder and by the President of the Seller.
8.3 No Proceeding or Litigation. No claim, action, suit, arbitration,
inquiry, proceeding or investigation by or before any Governmental Authority
shall have been commenced by or before any Governmental Authority against any
party to this Agreement, seeking to restrain or materially and adversely alter
the transactions contemplated by this Agreement which, in the reasonable, good
faith determination of the Buyer, is likely to render it impossible or unlawful
to consummate such transactions; provided, however, that the provisions of this
Section 8.3 shall not apply if the Buyer or Oneida has directly or indirectly
solicited or encouraged any such action.
8.4 Government Consents. There shall have been obtained on or before
the Closing such material permits or authorizations, and there shall have been
taken such other action, as may be required to consummate this Agreement by any
regulatory authority having jurisdiction over the parties and the actions herein
proposed to be taken.
8.5 Xxxx-Xxxxx-Xxxxxx Act. All waiting periods applicable to the
consummation of the transactions contemplated hereby under the HSR Act shall
have expired or been terminated.
8.6 Opinion of Counsel. The Buyer and Oneida shall have received from
Xxxxxx Xxxxxxxx Frome Xxxxxxxxxx & Xxxxxxx LLP, counsel to Sakura and the
Shareholders, a legal opinion, covering such matters as the Buyer and Oneida may
reasonably request.
8.7 Other Agreements. The Seller shall have entered into an Escrow
Agreement with the Buyer and the Escrow Agent, substantially in the form of
Exhibit A annexed hereto, and the Employment Agreement shall be in full force
and effect.
8.8 Documents. The Buyer shall have received evidence satisfactory to
the Buyer of the repayment and discharge of all Seller Debt and shall also have
received all written consents, assignments, waivers, authorizations or other
certificates necessary (i) to provide for the continuation in full force and
effect of the contracts, licenses and leases of the Seller identified in Section
8.8 of the Seller Disclosure Schedule and (ii) for the Seller to consummate the
transactions contemplated hereby.
8.9 Assignments and Xxxx of Sale. The Seller shall have executed and
delivered to the Buyer such bills of sale, assignments of contracts, copyrights,
patents and trademarks and other instruments of conveyance as may be reasonably
requested by the Buyer in order to evidence the transfer of the Acquired Assets
to the Buyer hereunder.
8.10 Secretarys' Certificate. The Secretary of the Seller shall have
delivered a certificate to the Buyer with respect to the following: (i) the
signatures and incumbency of the individual signing this Agreement on behalf
32
of the Seller; (ii) the certificate of incorporation of the Seller; (iii) the
bylaws of the Seller; and (iv) the resolutions of the Board of Directors of the
Seller and of the Shareholders, which adopt this Agreement and approve and
authorize the transactions contemplated by this Agreement.
8.11 Due Diligence. Oneida and the Buyer shall have completed, or cause
to be completed by their attorneys, accountants and other agents, a due
diligence review of the Business (including its customers, suppliers, licensors
and foreign trading agents as well as the Affiliates of the Seller engaged in
the Business), and Oneida and the Buyer shall have been satisfied that
substantially all the earnings and cash flows generated by the Business will
accrue and be payable to them after the Closing.
8.12 Renewal or Extension. The Buyer shall have received written
evidence reasonably acceptable to it of the renewal or extension by the Seller
of each license agreement described on Exhibit C at least until the date
indicated next to the name of such agreement on Exhibit C.
8.13 Release of Liens. The Buyer shall have obtained releases and
discharges of all Liens on any of the Acquired Assets.
8.14 Conveyances. The Shareholders shall have caused the assignment to
designees of the Buyer or Oneida, pursuant to Section 5.12, of all receivables,
letters of credit, commercial letters, similar drafts or sight drafts in favor
of Affiliates of the Shareholders or the Seller relating to the Business.
8.15 Dissolution of Entities. The Shareholders shall have caused the
dissolution of all entities as requested by Oneida or the Buyer pursuant to
Section 5.13.
ARTICLE IX
TERMINATION OF AGREEMENT
9.1 Termination. This Agreement may be terminated at any time prior to
the Closing Date, whether before or after approval of the transactions
contemplated hereby by the shareholders of the Seller:
(a) by mutual agreement of the parties hereto;
(b) by the Seller, if all the conditions for Closing set forth in
Article VII shall not have been satisfied or waived on or before August 31, 2000
(the "Final Date") other than as a result of a breach of this Agreement by the
Seller or either Shareholder;
(c) by the Buyer, if all the conditions for Closing set forth in
Article VIII shall not have been satisfied or waived on or before the Final Date
other than as a result of a breach of this Agreement by the Buyer or Oneida;
(d) by the Buyer if the Seller or a Shareholder makes a general
assignment for the benefit of creditors, or any proceeding shall be instituted
by or against the Seller or a Shareholder seeking to adjudicate it a bankrupt or
insolvent, or seeking liquidation, winding up or reorganization, arrangement,
adjustment, protection, relief or composition of its debts under any law
relating to bankruptcy, insolvency or reorganization;
(e) by any of the parties hereto, if a permanent injunction or other
order by any federal or state court which would make illegal or otherwise
restrain or prohibit the consummation of this Agreement shall have been issued
and shall have become final and nonappealable; or
(f) within 45 days of the date hereof, by the Buyer, upon notice to the
Seller given prior to July 7, 2000, if upon completion of the due diligence
review described in Section 8.11, Oneida and the Buyer determine, in their sole
discretion, that substantially all earnings and cash flows generated by the
Business will not accrue and be payable to them after the Closing.
33
9.2 Effect of Termination. In the case of any termination of this
Agreement as provided in this Article IX, this Agreement shall be of no further
force and effect, except (a) as set forth in Section 11.8 and (b) that nothing
herein shall relieve any party from liability for any breach of this Agreement
prior to such termination.
ARTICLE X
INDEMNITY
10.1 Survival of Representations and Warranties. Each of the
representations and warranties made by the parties in this Agreement or in any
Schedule, Exhibit, certificate or instrument delivered in connection herewith
shall survive for a period of 18 months from the Closing Date, except that (a)
any representation or warranty set forth in Sections 3.1 (only with respect to
due incorporation and requisite corporate power and authority) 3.3 or 3.4(a)
shall survive in perpetuity, (b) any representation or warranty set forth in
Section 3.10 or 3.15 shall survive until thirty calendar days after the
expiration of the applicable statute of limitations (after giving effect to any
extension thereof granted by the Seller or either Shareholder) and (c) insofar
as any claim is made by a Buyer Party for the breach of any representation or
warranty of the Seller or either Shareholder, which claim arises out of
allegations of personal injury or property damage suffered by any third party on
or prior to the Closing Date or attributable to products or Inventory sold or
shipped, or activities or omissions that occur, on or prior to the Closing Date,
such representations and warranties shall, for purposes of such claim by a Buyer
Party, survive until thirty calendar days after the expiration of the applicable
statute of limitations governing such claims (after giving effect to any
extension thereof granted by the Seller or either Shareholder) (as applicable in
each of (a) through (c), the "Survival Date"); provided that if there shall be
pending on the Survival Date any claim under this Section 10.1 that was asserted
by the applicable party prior to such date, such claim shall continue to be
subject to indemnification in accordance with this Article X. Neither the period
of survival nor the liability of the Buyer, on the one hand, and the Seller and
the Shareholders, on the other hand, with respect to their respective
representations and warranties, shall be reduced by any investigation made at
any time by or on behalf of the Buyer, on the one hand, or the Seller or the
Shareholders, on the other hand.
10.2 Buyer Indemnity. Subject to the limitations set forth in this
Article X, the Seller and each of the Shareholders hereby, jointly and
severally, indemnify and agree to hold the Buyer, Oneida and their respective
officers, directors, stockholders, employees, Affiliates, attorneys,
accountants, agents, successors and assigns (collectively, the "Buyer Parties")
harmless from, against and in respect of:
(a) any and all Loss suffered or incurred by a Buyer Party by reason of
any untrue representation, breach of warranty or nonfulfillment of any covenant
by the Seller or either Shareholder contained herein or in any Schedule,
Exhibit, certificate, document or instrument delivered to the Buyer or Oneida on
the date hereof or at the Closing;
(b) any and all Loss suffered or incurred by a Buyer Party in respect
of, in connection with or arising out of debts, liabilities or obligations of
the Seller, direct or indirect, absolute, accrued, fixed, contingent or
otherwise, (1) incurred or arising from and after the Closing, or (2) that are
based upon or arise from any act, transaction, circumstance, sale of goods or
services, state of facts or other condition that occurred or existed on or
before the Closing Date, whether or not then known, due or payable, except as
specifically assumed by the Buyer pursuant to the terms of this Agreement;
(c) Excluded Liabilities, including liabilities arising from or
relating to any Taxes of the Seller, either Shareholder or any of their
Affiliates, or attributable to any period, or any portion of any period, ending
on or prior to the Closing Date and any Taxes for which the Seller or either
Shareholder is liable under this Agreement;
(d) Liabilities of the Seller as of the Balance Sheet Date that are not
reflected on the Seller Balance Sheet arising from or relating to the ownership
or actions or inactions of the Seller or either Shareholder or the conduct of
the Business on or before the Balance Sheet Date;
(e) any Loss incurred or suffered by a Buyer Party arising out of or in
connection with applicable bulk sales laws and bulk transfer Tax laws
(notwithstanding the waiver contained in Section 5.8); and
34
(f) any and all actions, suits, proceedings, claims, demands,
assessments, judgments, costs and expenses, including legal fees and expenses,
incident to any of the foregoing or incurred in investigating or attempting to
avoid the same or to oppose the imposition thereof, or in enforcing this
indemnity.
To the extent that the undertakings of the Seller and the Shareholders
set forth in this Section 10.2 may be unenforceable, the Seller and the
Shareholders shall contribute the maximum amount that they are permitted to
contribute under applicable law to the payment and satisfaction of all losses
incurred by the Buyer Parties.
Any amounts required to be paid by the Seller or the Shareholders under
this Section 10.2 may be satisfied from the Escrowed Funds in accordance with
the procedures set forth in the Escrow Agreement; provided, however, that the
Escrowed Funds are not the exclusive remedy hereunder for satisfaction by the
Seller or the Shareholders of their obligations hereunder.
Notwithstanding the foregoing, neither the Seller nor either
Shareholder shall have any liability under Section 10.2(a) or (d) for a breach
or inaccuracy of any representation or warranty contained in this Agreement, or
in any Schedule, Exhibit, certificate, document or instrument delivered in
connection herewith by the Seller or either Shareholder, unless and until the
aggregate amount of Loss suffered or incurred by the Buyer Parties as a result
of one or more of such breaches or inaccuracies exceeds $250,000, and then only
with respect to so much of such Loss as exceeds $250,000.
10.3 Seller Indemnity. Subject to the limitations set forth in this
Article X, the Buyer and Oneida, jointly and severally, hereby agree to
indemnify and hold the Seller and its officers, directors, shareholders
(including without limitation, the Shareholders), employees, Affiliates,
attorneys, accountants, agents, successors and assigns (collectively, the
"Seller Parties") harmless from, against and in respect of:
(a) any and all Loss suffered or incurred by any of the Seller Parties
by reason of any untrue representation, breach of warranty or non-fulfillment of
any covenant by Buyer contained herein or in any Schedule, Exhibit, certificate,
document or instrument delivered to the Seller on the date hereof or at the
Closing;
(b) any and all liabilities or obligations of the Seller specifically
assumed by the Buyer pursuant to this Agreement in conformity with
representations, warranties and covenants of the Seller and the Shareholders;
(c) any and all liabilities or obligations arising from the Buyer's use
of the Acquired Assets from and after the Closing Date; and
(d) any and all actions, suits, proceedings, claims, demands,
assessments, judgments, costs and expenses, including legal fees and expenses,
incident to any of the foregoing or incurred in investigating or attempting to
avoid the same or to oppose the imposition thereof, or in enforcing this
indemnity.
To the extent that the undertakings of the Buyer and Oneida set forth
in this Section 10.3 may be unenforceable, the Buyer and Oneida shall contribute
the maximum amount that they are permitted to contribute under applicable law to
the payment and satisfaction of all Losses incurred by the Seller Parties.
Notwithstanding the foregoing, neither the Buyer nor Oneida shall have
any liability under Section 10.3(a) or (d) for a breach or inaccuracy of any
representation or warranty contained in this Agreement, or in any Schedule,
Exhibit, certificate, document or instrument delivered in connection herewith by
the Buyer or Oneida, unless and until the aggregate amount of Loss suffered or
incurred by the Seller Parties as a result of one or more of such breaches or
inaccuracies exceeds $250,000, and then only with respect to so much of such
Loss as exceeds $250,000.
10.4 Procedure.
(a) Notice. A party seeking indemnification under this Article (an
"Indemnitee") shall give written notice to the other party (an "Indemnitor") of
facts that are the basis of the indemnification claim (a "Claim") within a
reasonable time after the Indemnitee receives notification of the Claim;
provided, however, that the failure to
35
provide such notice shall not release the Indemnitor from any of its obligations
under this Article X except to the extent the Indemnitor is materially
prejudiced by such failure and shall not relieve the Indemnitor from any other
obligation or liability that it may have to any Indemnitee otherwise than under
this Article X. The amount of the Claim as set forth in the notice shall be
based upon the Indemnitee's good faith determination of the maximum Loss to
Indemnitee presented under the circumstances of the Claim; provided, however,
the amount set forth in the notice of Claim shall not limit Indemnitee's rights
to indemnification under this Article if the ultimate Loss to Indemnitee shall
exceed the amount set forth in the notice of Claim.
(b) Action on Claims. The Indemnitor shall give written notice to
Indemnitee within thirty (30) days after receipt of the notice required in the
preceding paragraph advising whether it acknowledges its obligation to indemnify
Indemnitee with respect to the Claim or it disputes its obligation to indemnify
Indemnitee with respect to the Claim or the amount of such Claim. If the
Indemnitor acknowledges its indemnification obligation with respect to the
Claim, and (i) such Claim is based upon an asserted liability or obligation to a
Person that is not a party to this Agreement (a "Third Party Claim"), Indemnitor
shall have the right to defend or settle such Third Party Claim at its expense
and through counsel of its choice if it gives notice of its intention to do so
to the Indemnitee within the thirty-day period set forth above; provided,
however, that if upon the advice of counsel to Indemnitee, there exists or is
reasonably likely to exist a conflict of interest that would make it
inappropriate in the judgment of the Indemnitee for the same counsel to
represent both the Indemnitee and the Indemnitor, then the Indemnitee shall be
entitled to retain its own counsel, in each jurisdiction for which the
Indemnitee, based upon such advice, determines counsel is required, at the
expense of the Indemnitor and provided further that all such Indemnitees shall
be entitled to no more than one such local counsel in each jurisdiction where
counsel is reasonably necessary; or (ii) such Claim is not a Third Party Claim,
and if the Seller or either of the Shareholders is the Indemnitor, Indemnitee
shall be entitled to satisfy such Claim as provided in subparagraph (c). In the
event that any Indemnitee shall seek indemnification as provided herein, it
shall make available to the Indemnitor, at the Indemnitor's expense, all
witnesses, pertinent records, materials and information in the Indemnitee's
possession or under its control as is reasonably required by the Indemnitor.
Similarly, in the event that an Indemnitee is, directly or indirectly,
conducting the defense against any such Third Party Claim, the Indemnitor shall
cooperate with the Indemnitee in such defense and make available to the
Indemnitee, at the expense of the Indemnitor, all such witnesses, pertinent
records, materials and information in the possession or under the control of the
Indemnitor relating thereto as is reasonably required by the Indemnitee.
Notwithstanding the foregoing, Indemnitor may not settle any Third Party Claim
unless it contains a full unconditional release of the Indemnitee and unless the
Indemnitee consents in writing, which consent shall not be unreasonably
withheld. If the Indemnitor is not entitled to defend or settle a claim pursuant
to the proviso set forth in this subparagraph (b) or because Indemnitor does not
acknowledge its indemnification obligation with respect to the Claim, Indemnitor
shall be deemed to have waived its right to defend or settle such Claim (if a
Third Party Claim), and Indemnitee shall have the right to defend or settle such
Claim (if a Third Party Claim) or take action to resolve or remedy any Claim
that is not a Third Party Claim and shall continue in either case to be entitled
to indemnification pursuant to this Article. If Indemnitor does not believe that
such proposed settlement is being made in good faith under the circumstances,
its sole remedy shall be to assume the defense of such Claim. In order to assume
the defense of any such Claim, Indemnitor must acknowledge its indemnification
obligation with respect to the Claim. The foregoing shall not be construed to
reduce or lessen the obligation of Indemnitor under this Article X if prior to
the expiration of the thirty (30) day notice period described above in this
subparagraph (b) the Indemnitee shall take action with respect to a Claim if
such action is reasonably required to minimize damages or avoid a forfeiture or
penalty imposed by law.
(c) Satisfaction of Claims. If Indemnitor has acknowledged its
obligation to indemnify Indemnitee with respect to a Claim and does not dispute
the amount of such Claim, Indemnitee shall be entitled to immediate satisfaction
of any related Claims, including any losses, damages, cost, expenses (including,
without limitation, attorneys', consultants' and accountants' fees), claims,
interest, awards, judgments, penalties and liabilities, including any Action
brought or otherwise initiated by a party (individually, a "Loss" and,
collectively, "Losses").
10.5 Treatment of Payments. The Seller, the Shareholders and the Buyer
agree to treat all payments made by either to or for the benefit of the other
under any indemnity provisions of this Agreement and for any misrepresentations
or breach of warranties or covenants as adjustments to the Purchase Price or as
capital contributions for Tax purposes and that such treatment shall govern for
purposes hereof except to the extent that the
36
laws of a particular jurisdiction provide otherwise, in which case such payments
shall be made in an amount sufficient to indemnify the relevant party on an
after-Tax basis.
10.6 Additional Limitations on Indemnification. For purposes of the
Article X, all Loss shall be computed net of (a) any insurance recovery actually
received with respect thereto, and (b) the amount of any net Tax benefit
actually realized relating to such Loss. In no event shall the aggregate amount
of all payments made by the Seller and the Shareholders in respect of their
obligations in respect of breach of the representations and warranties made by
them hereunder exceed $20,000,000, nor shall the liability of Oneida or the
Buyer under this Article exceed such amount.
ARTICLE XI
MISCELLANEOUS
37
11.1 Conveyance Taxes. The Seller shall be liable for and shall hold
Buyer harmless against any real property transfer or gains, sales, use,
transfer, value added, stock transfer, and stamp taxes, any transfer, recording,
registration, and other fees, and any similar Taxes which become payable in
connection with the transactions contemplated hereby, and shall file such
applications and documents as shall permit any such Tax to be assessed and paid
on or prior to the Closing Date in accordance with any available pre-sale filing
procedure. The Buyer shall execute and deliver all instruments and certificates
necessary to enable the Seller to comply with the foregoing. The Buyer shall
complete and execute a resale or other exemption certificate with respect to the
inventory items sole hereunder, and shall provide the Seller with an executed
copy thereof.
11.2 Governing Law; Venue. (a) The laws of the State of New York
(irrespective of its choice of law principles) will govern the validity of this
Agreement, the construction of its terms and the interpretation and enforcement
of the rights and duties of the parties hereto. All actions and proceedings
relating directly or indirectly to this Agreement shall be litigated in any
state court or federal court located in New York County, New York. The parties
hereto expressly consent to the jurisdiction of any such court and to venue
therein. Each of the Shareholders has appointed Xxxxxx Xxxxxxxx Frome Xxxxxxxxxx
& Xxxxxxx LLP as its authorized agent (the "Authorized Agent") upon whom process
may be served in any action arising out of or based on this Agreement or any of
the agreements or transactions contemplated herein.
(b) Each of the Shareholders represents and warrants that the
Authorized Agent has agreed to act as said agent for service of process and
agrees to take any and all actions that may be necessary to continue such
appointment in full force and effect as aforesaid. Service of process upon the
Authorized Agent and written notice of such service upon such party at the
address set forth in Section 11.9 shall be deemed, in every respect, effective
service of process upon such party; provided, however, that nothing herein shall
impair the right of any party to serve process in any other manner permitted by
law.
11.3 Assignment; Binding upon Successors and Assigns. Except as
provided in this Section 11.3, a party hereto may not assign any of its rights
or obligations hereunder without the prior written consent of the other parties.
Prior to the Closing, no party hereto may assign its rights or obligations
hereunder. After the Closing, Oneida and the Buyer may freely assign this
Agreement to (i) any of their respective Affiliates, and (ii) any successor in
interest to Oneida or the Buyer by way of a merger, consolidation, sale of all
or any material portion of the assets of the Tableware Business of Oneida or the
Buyer, or otherwise. In the event of such an assignment pursuant to the
preceding sentence, the assignee shall receive the benefit of this Agreement and
shall succeed to all of the rights of Oneida and the Buyer hereunder. This
Agreement will be binding upon and inure to the benefit of the parties hereto
and their respective successors, heirs, legatees and permitted assigns.
11.4 Severability. If any provision of this Agreement, or the
application thereof, will for any reason and to any extent be invalid or
unenforceable, the remainder of this Agreement and application of such provision
to other persons or circumstances will be interpreted so as reasonably to effect
the intent of the parties hereto so long as the economic or legal substance of
the transactions contemplated hereby is not affected in any manner materially
adverse to any party. The parties further agree to replace such void or
unenforceable provision of this Agreement with a valid and enforceable provision
that will achieve, to the greatest extent possible, the economic, business and
other purposes of the void or unenforceable provision.
11.5 Counterparts. This Agreement may be executed in any number of
counterparts, each of which will be an original as regards any party whose
signature appears thereon and all of which together will constitute one and the
same instrument. This Agreement will become binding when one or more
counterparts hereof, individually or taken together, will bear the signatures of
all the parties reflected hereon as signatories.
11.6 Other Remedies. Except as otherwise provided herein, any and all
remedies herein expressly conferred upon a party will be deemed cumulative with
and not exclusive of any other remedy conferred hereby or by law on such party,
and the exercise of any one remedy will not preclude the exercise of any other.
11.7 Amendment and Waivers. Any term or provision of this Agreement may
be amended, and the observance of any term of this Agreement may be waived
(either generally or in a particular instance and either
38
retroactively or prospectively) only by a writing signed by the party to be
bound thereby. The waiver by a party of any breach hereof or default in the
performance hereof will not be deemed to constitute a waiver of any other
default or any succeeding breach or default. The Agreement may be amended by the
parties hereto at the time before or after its approval by the shareholders of
the Seller, but, after such approval, no amendment will be made which by
applicable law requires the further approval of the shareholders of the Seller
without obtaining the further approval.
11.8 Expenses. The Seller and the Shareholders, on one hand, and the
Buyer, on the other, will bear their respective expenses and legal fees incurred
with respect to this Agreement, and the transactions contemplated hereby, except
that the Seller, on the one hand, and the Buyer, on the other hand, will share
equally any filing fees required to be paid under the HSR Act.
11.9 Notices. All notices and other communications pursuant to this
Agreement shall be in writing and deemed to be sufficient if contained in a
written instrument and shall be deemed given if delivered personally, sent by
nationally recognized overnight courier or mailed by registered or certified
mail (return receipt requested), postage prepaid, to the parties at the
following address (or at such other address for a party as shall be specified by
like notice):
If to the Seller to:
Xx. Xxxxx Xxxxx
at the address set forth
below his name
on the signature page hereof.
If to the Shareholders to:
The respective addresses set forth
below their names on the signature
page hereof.
With a copy in each case to:
Xxxxxx Xxxxxxxx Frome Xxxxxxxxxx & Xxxxxxx LLP
000 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxx X. Xxxxx, Esq.
And if to the Buyer or Oneida to:
Oneida Ltd.
000-000 Xxxxxxx Xxxxxx
Xxxxxx, Xxx Xxxx 00000
Attention: General Counsel
With a copy to:
Shearman & Sterling
000 Xxxxxxxxx Xxxxxx
Xxx Xxxx, XX 00000
Attention: Xxxxxx Xxxxxxx, Esq.
All such notices and other communications shall be deemed to have been
received (a) in the case of personal delivery, on the date of such delivery, (b)
in the case of delivery by nationally recognized overnight courier,
39
next day delivery requested, on the business day following dispatch, and (c) in
the case of mailing, on the fifth business day following such mailing.
11.10 Construction of Agreement. This Agreement has been negotiated by
the respective parties hereto and their attorneys and the language hereof will
not be construed for or against either party. A reference to a Section or an
exhibit will mean a Section in, or exhibit to, this Agreement unless otherwise
explicitly set forth. The titles and headings herein are for reference purposes
only and will not in any manner limit the construction of this Agreement which
will be considered as a whole.
11.11 No Joint Venture or Partnership. Nothing contained in this
Agreement will be deemed or construed as creating a joint venture or partnership
between any of the parties hereto. No party is by virtue of this Agreement
authorized as an agent, employee or legal representative of any other party. No
party will have the power to control the activities and operations of any other
and their status is, and at all times, will continue to be, that of independent
contractors with respect to each other. No party will have any power or
authority to bind or commit any other. No party will hold itself out as having
any authority or relationship in contravention of this Section.
11.12 Further Assurances. Each party agrees to cooperate fully with the
other parties and to execute such further instruments, documents and agreements
and to give such further written assurances as may be reasonably requested by
any other party to evidence and reflect the transactions described herein and
contemplated hereby and to carry into effect the intents and purposes of this
Agreement.
11.13 Absence of Third Party Beneficiary Rights. No provisions of this
Agreement are intended, nor will be interpreted, to provide or create any third
party beneficiary rights or any other rights of any kind in any client,
customer, affiliate, shareholder, partner or any party hereto or any other
person or entity unless specifically provided otherwise herein, and, expect as
so provided, all provisions hereof will be personal solely between the parties
to this Agreement.
11.14 Public Announcement. The parties shall cooperate with respect to
any public announcement relating to the transactions contemplated hereby; and
neither party will issue any public statement announcing such transaction
without prior consultation with the others, except as such party in good faith
(based upon advice of counsel) believes is required by law and following notice
to the other party.
11.15 Survival. The representations, warranties, agreements and
obligations of each party contained in this Agreement shall survive the Closing
without limitation, except as specifically set forth in this Agreement.
11.16 Entire Agreement. The Transaction Documents, the exhibits thereto
and the documents referred to therein constitute the entire understanding and
agreement of the parties thereto with respect to the subject matter thereof and
supersede all prior and contemporaneous agreements or understandings,
inducements or conditions, express or implied, written or oral, between the
parties with respect thereto, other than the confidentiality agreement, dated
November 16, 1999, between Sakura and Oneida, which shall terminate immediately
and be of no further force and effect. The express terms of the Transaction
Documents control and supersede any course of performance or usage of the trade
inconsistent with any of the terms thereof.
11.17 Specific Performance. The parties hereto agree that irreparable
damage would occur in the event any provision of this Agreement was not
performed in accordance with the terms hereof and that the parties shall be
entitled to specific performance of the terms hereof, in addition to any other
remedy at law or equity, without the necessity of demonstrating the inadequacy
of money damages.
IN WITNESS WHEREOF, the parties hereto have executed this Asset
Purchase Agreement as of the date first above written.
ONEIDA COMMUNITY CHINA, INC.
40
By: /s/ XXXXX X. CONSUER
-----------------------------------
Name: Xxxxx X. Xxxxxxx
Title: President
ONEIDA LTD.
By: /s/ XXXXX X. XXXXXX
------------------------------------------------
Name: Xxxxx X. Xxxxxx
Title: President and Chief Executive Officer
SAKURA, INC.
By: /s/ XXXXX XXXXX
------------------------------------------------
Name: Xxxxx Xxxxx
Title: CEO
XXXXX XXXXX
/s/ XXXXX XXXXX
----------------------------------------------------
00 Xxxxxxx Xxxxx
Xxxxxxxx, Xxx Xxxx 00000
XXXX XXXXXXXXX
/s/ XXXX XXXXXXXXX
----------------------------------------------------
00 Xxxx Xxxxxxxxx Xxxxxx
Xxxxxxxxx, XX 00000
41
EXHIBIT A
ESCROW AGREEMENT
ESCROW AGREEMENT, dated as of June 30, 2000 (this "Agreement"), among ONEIDA
COMMUNITY CHINA, INC., a New York corporation (the "Buyer"), SAKURA, INC., a New
York corporation ("Sakura"), XXXXX XXXXX ("Xx. Xxxxx") and XXXX XXXXXXXXX ("Xx.
Xxxxxxxxx" and, together with Xx. Xxxxx, the "Shareholders"), and THE CHASE
MANHATTAN BANK N.A., a New York banking corporation (the "Escrow Agent"). All
capitalized terms not otherwise defined herein shall have the meanings ascribed
thereto in the Asset Purchase Agreement (as defined below).
W I T N E S S E T H:
WHEREAS, the Buyer, Oneida Ltd., a New York corporation ("Oneida"), Sakura and
the Shareholders have entered into an Asset Purchase Agreement, dated May 23,
2000 (the "Asset Purchase Agreement"), pursuant to which the Buyer has agreed to
purchase from Sakura, and Sakura has agreed to sell to the Buyer, the Acquired
Assets, and the Buyer has agreed to assume the Assumed Liabilities;
WHEREAS, it is contemplated under the Asset Purchase Agreement that the Buyer
will deposit or cause to be deposited into escrow the sum of $2,000,000 in cash
on the date hereof (the "Escrowed Funds") to be held and disbursed by the Escrow
Agent in accordance with Section 4 of this Agreement;
WHEREAS the Escrow Agent is willing to act as the Escrow Agent hereunder;
WHEREAS, the parties hereto agree that the Escrow Agent is not a party to the
Asset Purchase Agreement and has no rights or obligations thereunder, and that
the duties and obligations of the Escrow Agent shall be determined solely by
this Agreement; and
WHEREAS, the Escrow Agent will hold the Escrowed Funds in Account No. E 13098 at
the Chase Manhattan Bank, N.A., New York, New York (the "Escrow Account");
NOW, THEREFORE, in consideration of the foregoing and the mutual agreements
contained herein, and intending to be legally bound hereby, the parties hereby
agree as follows:
1. Appointment and Agreement of Escrow Agent and Representative of Sakura and
the Shareholders. (a) The Buyer, Sakura and the Shareholders hereby appoint the
Escrow Agent to serve as, and the Escrow Agent hereby agrees to act as, escrow
agent upon the terms and conditions of this Agreement.
(b) Sakura and the Shareholders hereby appoint Xx. Xxxxx as their representative
(the "Representative").
2. Establishment of the Escrow Fund. (a) Pursuant to Section 2.3 of the Asset
Purchase Agreement, the Buyer shall deliver to the Escrow Agent on the date
hereof the Escrowed Funds. The Escrow Agent shall hold the Escrowed Funds and
all interest and other amounts earned thereon (the "Escrow Fund") in escrow
pursuant to this Agreement in the Escrow Account.
(b) The Buyer, Sakura and the Shareholders confirm to the Escrow Agent and to
each other that the Escrow Fund is free and clear of all Liens except as may be
created by this Agreement and the Asset Purchase Agreement.
3. Purpose of the Escrow Fund. The Escrowed Funds will be deposited with the
Escrow Agent and will be held by the Escrow Agent to secure the obligations of
Sakura and each of the Shareholders to make payments to the Buyer (i) in the
event payment by Sakura and the Shareholders shall be required under Section
2.4(c)(iii) of the Asset Purchase Agreement and Sakura and the Shareholders
shall have breached their obligation to make such
42
payment within ten days after the Special Purpose Statement is deemed final
under the terms of the Asset Purchase Agreement (such event, a "Purchase Price
Adjustment Breach"), and (ii) with respect to any indemnification obligations of
Sakura and each of the Shareholders pursuant to Section 10.2 of the Asset
Purchase Agreement.
4. Payments from the Escrow Fund. (a) Payments to the Buyer due to Purchase
Price Adjustment Breach. In the event of a Purchase Price Adjustment Breach, the
Buyer shall deliver to the Escrow Agent a certificate of the Buyer, with a copy
to the Representative. Such certificate shall state that a Purchase Price
Adjustment Breach has occurred, and state the amount due to the Buyer in respect
of such Purchase Price Adjustment Breach. Such amount, as stated by the Buyer in
the aforementioned certificate, shall include interest accruing from the date
hereof to the date of payment at a rate of 8% per annum as provided in Section
2.4(c)(iii) of the Asset Purchase Agreement (it being understood that the Escrow
Agent shall not be responsible for calculating such accrued interest and that
the Buyer shall include such accrued interest in the amount stated in such
certificate), and the Escrow Agent shall promptly pay such amount (the "Purchase
Price Adjustment Remittance") to the Buyer, by wire transfer in immediately
available funds.
(b) Indemnification Payments from the Escrow Account.
(A) At any time on or prior to eighteen (18) months after the
date hereof (the "Expiration Date"), the Buyer may deliver to the Escrow Agent a
certificate of the Buyer, executed by an authorized officer of the Buyer (a
"Buyer's Certificate"), with a copy to the Representative. Such Buyer's
Certificate shall:
(i) state that a Buyer Party has paid or incurred a
Loss or is entitled to indemnification under Section 10.2 of the Asset Purchase
Agreement (an "Indemnification Item");
(ii) state the aggregate amount of such
Indemnification Item (such amount, a "Buyer Claim Amount"); and
(iii) specify in reasonable detail the nature and
amount of each individual Indemnification Item.
(B) If the Representative shall object to any Buyer Claim
Amount in connection with any Indemnification Item specified in any Buyer's
Certificate, the Representative shall, within ten (10) Business Days after
delivery by the Buyer to the Representative of such Buyer's Certificate, deliver
to the Escrow Agent an executed certificate of the Representative (a
"Shareholders' Certificate"), with a copy to the Buyer,
(i) specifying the Buyer Claim Amount to which the
Representative objects and
(ii) specifying in reasonable detail the nature and
basis for each such objection.
If the Escrow Agent shall not have received a Shareholders' Certificate
objecting to the Buyer Claim Amount with respect to an Indemnification Item
within ten (10) Business Days after delivery by the Buyer to the Representative
of a Buyer's Certificate specifying such Indemnification Item, the
Representative shall be deemed to have acknowledged the correctness of the Buyer
Claim Amount on such Buyer's Certificate with respect to such Indemnification
Item, and the Escrow Agent shall promptly transfer to the Buyer, by wire
transfer in immediately available funds, out of the Escrow Account, an amount in
cash equal to the lesser of (1) the Buyer Claim Amount in the Buyer's
Certificate with respect to such Indemnification Item and (2) the remaining
balance in the Escrow Account.
(C) If the Escrow Agent receives, within ten (10) Business
Days after delivery by the Buyer to the Representative of a Buyer's Certificate,
a Shareholders' Certificate objecting to the Buyer Claim Amount with respect to
any Indemnification Item specified in such Buyer's Certificate, the amount so
objected to shall be held by the Escrow Agent and shall not be released from the
Escrow Account except in accordance with either:
(i) written instructions executed by an authorized
officer of each of the Buyer and the Representative or
43
(ii) the final non-appealable judgment of a court
having jurisdiction over the matters relating to the claim by the Buyer for
indemnification from Sakura and each of the Shareholders.
In such an event, the Escrow Agent shall, promptly thereafter, transfer to the
Buyer, by wire transfer in immediately available funds, out of the Escrow
Account, an amount in cash equal to the portion of such Buyer Claim Amount set
forth in such written instructions or in such judgment, as the case may be,
provided, however, that any amount set forth in such written instructions or in
such judgment, as the case may be, as amounts to which a Buyer Party is not
entitled to under Section 10.2 of the Asset Purchase Agreement, shall
immediately cease to be treated as Buyer Claim Amounts for purposes of Section
4(c)(C).
(c) Distribution of Escrow Funds to the Representative.
(A) After the first anniversary of the date of this Agreement,
the Representative may deliver to the Escrow Agent, with a copy to the Buyer, a
certificate of the Representative (such notice, a "Return of Escrowed Funds
Demand") stating that the Representative is entitled to receive, from the Escrow
Fund, an amount equal to $1,000,000 (the "Base Amount") less the sum of (a) any
Purchase Price Adjustment Remittance, and (b) Buyer Claim Amounts.
(B) Upon receipt of a Return of Escrowed Funds Demand, the
Escrow Agent shall promptly review its records to determine the amount of any
Purchase Price Adjustment Remittance or Buyer Claim Amounts. Promptly
thereafter, the Escrow Agent shall pay to the Representative, by wire transfer
in immediately available funds, from the Escrow Fund, the sum of $1,000,000 less
the sum of (a) any Purchase Price Adjustment Remittance, and (b) Buyer Claim
Amounts.
(C) If at any time after the receipt of a Return of Escrowed
Funds Demand, Escrowed Funds cease to be Buyer Claim Amounts in accordance with
the proviso to Section 4(b)(C), such amount, to the extent it was deducted from
the Base Amount by the Escrow Agent in calculating the payment to be made to the
Representative pursuant to Section 4(c)(B), shall immediately be paid by the
Escrow Agent, by wire transfer in immediately available funds, to the
Representative.
(D) Unless at the Expiration Date the Escrow Agent is holding
Escrowed Funds pursuant to a Shareholders' Certificate in accordance with
Section 4(b)(C), the Escrow Agent shall, on the Expiration Date, promptly
liquidate all investments of the Escrow Fund and transfer to the Representative,
by wire transfer in immediately available funds, the amount in cash then
remaining in the Escrow Account. If at the Expiration Date the Escrow Agent is
holding Escrowed Funds pursuant to a Shareholders' Certificate in accordance
with Section 4(b)(C), the Escrow Agent shall continue to hold such Escrowed
Funds until disposed of in accordance with such Section, after which any
remaining Escrowed Funds will be distributed as provided in this Section
4(c)(D).
5. Liquidation of the Escrow Fund. Whenever the Escrow Agent shall be required
to make payment from the Escrow Fund, the Escrow Agent shall pay such amounts by
liquidating the investments of the Escrow Fund to the extent necessary to pay
such amounts in full and in cash. Subject to the provisions of Section 11(g) of
this Agreement, the Escrow Agent shall not be liable for any losses incurred in
any such liquidation.
6. Payments. Payments made by the Escrow Agent pursuant to the provisions of
Section 4 shall be made by wire transfer in immediately available funds to the
accounts specified by such party in Schedule A, or in any other manner later
designated to the Escrow Agent in writing by each such party at least three (3)
Business Days prior to the date any such payment is due. In the event that for
any reason such payment is rejected and returned to the Escrow Agent, the Escrow
Agent shall instead promptly effect such payment by mailing a bank check to such
party, via certified mail, to the address specified for such party in Section 15
of this Agreement.
7. Maintenance of the Escrow Fund; Termination of the Escrow Fund. The Escrow
Agent shall continue to maintain the Escrow Fund until the termination of this
Agreement as provided in Section 14.
44
8. Investment of Escrow Fund. (a) The Escrow Agent shall invest and reinvest
moneys on deposit in the Escrow Fund in the following, pursuant to joint written
instructions from the Representative and the Buyer: (i) readily marketable
direct obligations of the Government of the United States or any agency or
instrumentality thereof or readily marketable obligations unconditionally
guaranteed by the full faith and credit of the Government of the United States,
in each case with a maturity of one year or less, (ii) one or more portfolios of
The Chase Vista U.S. Government Money Market Mutual Fund, for which affiliates
of The Chase Manhattan Bank provide investment advisory and shareholder services
for a fee as described in the prospectus for these funds which has been provided
to the parties hereto, in addition to a 25 basis point fee as compensation for
administrative and accounting services provided to clients, (iii) insured
certificates of deposit of, or time deposits with, any commercial bank that is a
member of the Federal Reserve System and which issues (or the parent of which
issues) commercial paper rated as described in clause (iv), is organized under
the laws of the United States or any State thereof and has combined capital and
surplus of at least $1 billion, each of which certificate of deposit or time
deposit has a maturity of 180 days or less, or (iv) commercial paper in an
aggregate amount of no more than $1,000,000 per issuer outstanding at any time,
with a maturity of 270 days or less, issued by any corporation organized under
the laws of any State of the United States, rated at least "Prime-1" (or the
then equivalent grade) by Xxxxx'x Investors Services, Inc. or "A-1" (or the then
equivalent grade) by Standard & Poors, Inc. In the absence of timely investment
instructions, the Escrow Fund shall be invested in The Chase Vista U.S.
Government Money Market Mutual Fund.
(b) All trust investment orders under Section 8(a)(i), (iii) and (iv)
above shall be executed through Chase Asset Management ("CAM"), in the
investment management division of The Chase Manhattan Bank. Subject to the
principles of best execution, transactions shall be effected on behalf of the
Escrow Fund through broker-dealers selected by CAM. An agency fee, in the amount
specified in Schedule B hereto, shall be assessed in connection with each
transaction. The Buyer and the Representative shall be provided with periodic
statements reflecting the transactions executed on behalf of the Escrow Fund.
The Buyer and the Representative shall also have the right, upon request, to
receive a notification providing transaction details for the Escrow Fund within
five days of any securities transaction in that account. This notification shall
be provided without any additional cost and shall reflect the amount of the
agency fee.
9. Assignment of Rights to the Escrow Fund; Assignment of Obligations;
Successors. (a) Except as provided in this Section 9, a party hereto may not
assign any of its rights or obligations hereunder without the prior written
consent of the Escrow Agent, the Buyer and the Representative. The Buyer may
freely assign this Agreement (i) to any successor in interest to the Buyer by
way of a merger, consolidation, sale of all or any material portion of its
assets, or otherwise or (ii) to any Affiliate of Oneida or the Buyer. In the
event of each such assignment the assignee shall receive the benefit of this
Agreement and shall succeed to all of the rights of the Buyer hereunder. This
Agreement will be binding upon and inure to the benefit of the parties hereto
and their respective successors, heirs, legatees and permitted assigns.
(b) Anything in this Agreement to the contrary notwithstanding, in no
event shall the Escrow Agent be liable for special, indirect or consequential
loss or damage of any kind whatsoever (including but not limited to lost
profits), even if the Escrow Agent has been advised of the likelihood of such
loss or damage and regardless of the form of action. The parties hereto
acknowledge that the foregoing indemnities shall survive the resignation or
removal of the Escrow Agent or termination of this Agreement.
10. Tax Information. Upon execution of this Agreement, the Buyer, Sakura and
each of the Shareholders shall provide the Escrow Agent with a fully executed
W-8 or W-9 Internal Revenue Service form, which shall include their Tax
Identification Number (TIN) as assigned by the Internal Revenue Service. All
interest or other income earned under the Escrow Agreement shall be allocated
and paid as provided herein and reported by the recipient to the Internal
Revenue Service as having been so allocated and paid. It is understood and
agreed that any payments or distributions to the Buyer under this agreement
shall not be considered income and that any and all income generated by the
Escrowed Funds shall be treated as the income of Sakura and reported to the
Internal Revenue Service accordingly.
45
11. Escrow Agent. (a) Except as expressly contemplated by this Agreement or by
joint written instructions from the Buyer and the Representative or pursuant to
an order of a court of competent jurisdiction, the Escrow Agent shall not sell,
transfer or otherwise dispose of in any manner all or any portion of the Escrow
Fund.
(b) The duties and responsibilities of the Escrow Agent shall be
limited to those expressly set forth in this Escrow Agreement, and the Escrow
Agent shall not be subject to, nor obligated to interpret, any other agreements
to which the Buyer, Sakura or the Shareholders are parties. Except as otherwise
provided in the Preamble to this Agreement, reference in this Escrow Agreement
to the Asset Purchase Agreement is for identification purposes only and for
reference to the defined terms therein and its terms and conditions are not
thereby incorporated herein.
(c) In the performance of its duties hereunder, the Escrow Agent shall
be entitled to rely upon any document, instrument or signature believed by it in
good faith to be genuine and signed by any party hereto or an authorized officer
or agent thereof, and shall not be required to investigate the truth or accuracy
of any statement contained in any such document or instrument. The Escrow Agent
may assume that any Person purporting to give any notice in accordance with the
provisions of this Agreement has been duly authorized to do so.
(d) The Escrow Agent shall not be liable for any error of judgment, or
any action taken, suffered or omitted to be taken, hereunder except in the case
of its gross negligence, bad faith or willful misconduct. The Escrow Agent may
consult with counsel of its own choice and shall have full and complete
authorization and protection for any action taken or suffered by it hereunder in
good faith and in accordance with the opinion of such counsel.
(e) The Escrow Agent shall have no duty as to the collection or
protection of the Escrow Fund or income thereon, nor as to the preservation of
any rights pertaining thereto, beyond the safe custody of any such funds
actually in its possession.
(f) As compensation for its services to be rendered under this
Agreement, for each year or any portion thereof, the Escrow Agent shall receive
a fee in the amount specified in Schedule B to this Agreement and shall be
reimbursed upon request for all expenses, disbursements and advances, including
reasonable fees of outside counsel, if any, incurred or made by it in connection
with the preparation of this Agreement and the carrying out of its duties under
this Agreement. All such fees and expenses shall be shared equally by Sakura and
the Shareholders, on the one hand, and the Buyer, on the other. The parties
hereby grant the Escrow Agent a lien, right of set-off and security interest to
the account for the payment of any claim for compensation, expenses and amounts
due hereunder.
(g) The Buyer, Sakura and the Shareholders agree to jointly and
severally reimburse and indemnify the Escrow Agent for, and hold it harmless
against, any loss, liability or expense, including, without limitation,
reasonable attorneys' fees, incurred without gross negligence, bad faith or
willful misconduct on the part of the Escrow Agent arising out of, or in
connection with the acceptance of, or the performance of, its duties and
obligations under this Agreement. The Buyer, on the one hand, and Sakura and the
Shareholders, on the other, agree among themselves that they shall share equally
the costs of any such loss, liability or expense suffered by the Escrow Agent.
(h) The Escrow Agent may at any time resign by giving twenty (20)
Business Days' prior written notice of resignation to the Representative and the
Buyer. The Representative and the Buyer may at any time jointly remove the
Escrow Agent by giving ten (10) Business Days' written notice signed by each of
them to the Escrow Agent. If the Escrow Agent shall resign or be removed, a
successor Escrow Agent, which shall be a bank or trust company having its
principal executive offices in New York, New York, and assets in excess of
$10,000,000,000, and which shall be reasonably acceptable to the Representative,
shall be appointed by the Buyer by written instrument executed by the
Representative and the Buyer and delivered to the Escrow Agent and to such
successor Escrow Agent and, thereupon, the resignation or removal of the
predecessor Escrow Agent shall become effective and such successor Escrow Agent,
without any further act, deed or conveyance, shall become vested with all right,
title and interest to all cash and property held hereunder of such predecessor
Escrow Agent, net of any outstanding fees due the predecessor Escrow Agent, and
such predecessor Escrow Agent shall, on the written request of the
Representative or the Buyer execute and deliver to such successor Escrow Agent
all the right, title and interest
46
hereunder in and to the Escrow Fund of such predecessor Escrow Agent and all
other rights hereunder of such predecessor Escrow Agent. If no successor Escrow
Agent shall have been appointed within twenty (20) Business Days of a notice of
resignation by the Escrow Agent, the Escrow Agent's sole responsibility shall
thereafter be to hold the Escrow Fund until the earlier of its receipt of
designation of a successor Escrow Agent, a joint written instruction by the
Representative and the Buyer and termination of this Agreement in accordance
with its terms.
12. Merger. Any corporation into which the Escrow Agent in its individual
capacity may be merged or converted or with which it may be consolidated, or any
corporation resulting from any merger, conversion or consolidation to which the
Escrow Agent in its individual capacity shall be a party, or any corporation to
which substantially all the corporate trust business of the Escrow Agent in its
individual capacity may be transferred, shall be the Escrow Agent under this
Escrow Agreement without further act; provided, however, that such corporation
into which the Escrow Agent may be merged or converted, or with which may be
consolidated, or resulting from any such merger, conversion or consolidation,
shall be a bank or trust company having assets in excess of $10,000,000,000.
13. Conflicting Demands. In the event that the Escrow Agent shall be uncertain
as to its duties or rights hereunder or shall receive instructions, claims or
demands from any party hereto which, in its opinion, conflict with any of the
provisions of this Agreement, it shall be entitled to refrain from taking any
action and its sole obligation shall be to keep safely all property held in
escrow until it shall be directed otherwise in writing by all of the other
parties hereto or by a final order or judgment of a court of competent
jurisdiction.
14. Termination. Except as provided in the following sentence, this Escrow
Agreement shall terminate on the earlier of: (a) the date on which there are no
funds remaining in the Escrow Fund, (b) the Expiration Date. If at the
Expiration Date the Escrow Agent is holding Escrowed Funds pursuant to a
Shareholders' Certificate in accordance with Section 4(b)(C), the Escrow Agent
shall continue to hold such Escrowed Funds until disposed of in accordance with
such Section, at which time this Agreement shall also terminate.
15. Notices. All notices and other communications pursuant to this Agreement
shall be in writing and deemed to be sufficient if contained in a written
instrument and shall be deemed given if delivered personally, sent by nationally
recognized overnight courier or mailed by registered or certified mail (return
receipt requested), postage prepaid, to the parties at the following address (or
at such other address for a party as shall be specified by like notice):
If to the Representative, Sakura or the Shareholders:
Xx. Xxxxx at the address
set forth below his name
on the signature page hereof.
with a copy to:
Xxxxxx Xxxxxxxx Frome Xxxxxxxxxx & Xxxxxxx LLP
000 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxx X. Xxxxx, Esq.
If to the Buyer:
Oneida Ltd.
000-000 Xxxxxxx Xxxxxx
Xxxxxx, Xxx Xxxx 00000
Attention: Xxxxxxxxx X. Xxxxxxxxx, Esq.
with a copy to:
47
Shearman & Sterling
000 Xxxxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxx Xxxxxxx, Esq.
If to the Escrow Agent:
The Chase Manhattan Bank N.A.
000 Xxxx 00xx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxx XxXxxxx
All such notices and other communications shall be deemed to have been
received (a) in the case of personal delivery, on the date of such delivery, (b)
in the case of delivery by nationally recognized overnight courier, next day
delivery requested, on the Business Day following dispatch, and (c) in the case
of mailing, on the fifth Business Day following such mailing.
16. Governing Law. (a) The laws of the State of New York (irrespective of its
choice of law principles) will govern the validity of this Agreement, the
construction of its terms and the interpretation and enforcement of the rights
and duties of the parties hereto. All actions and proceedings relating directly
or indirectly to this Agreement shall be litigated in any state court or federal
court located in New York County, New York. The parties hereto expressly consent
to the jurisdiction of any such court and to venue therein. Each of the
Shareholders has appointed Xxxxxx Xxxxxxxx Frome Xxxxxxxxxx & Xxxxxxx LLP as its
authorized agent (the "Authorized Agent") upon whom process may be served in any
action arising out of or based on this Agreement or any of the agreements or
transactions contemplated herein.
(b) Each of the Shareholders represents and warrants that the
Authorized Agent has agreed to act as said agent for service of process and
agrees to take any and all actions that may be necessary to continue such
appointment in full force and effect as aforesaid. Service of process upon the
Authorized Agent and written notice of such service upon such party at the
address set forth in Section 15 shall be deemed, in every respect, effective
service of process upon such party; provided, however, that nothing herein shall
impair the right of any party to serve process in any other manner permitted by
law.
17. Amendment and Waivers. Any term or provision of this Agreement may be
amended, and the observance of any term of this Agreement may be waived (either
generally or in a particular instance and either retroactively or prospectively)
only by a writing signed by all parties hereto. The waiver by a party of any
breach hereof or default in the performance hereof will not be deemed to
constitute a waiver of any other default or any succeeding breach or default.
18. Severability. If any provision of this Agreement, or the application
thereof, will for any reason and to any extent be invalid or unenforceable, the
remainder of this Agreement and application of such provision to other persons
or circumstances will be interpreted so as reasonably to effect the intent of
the parties hereto so long as the economic or legal substance of the
transactions contemplated hereby is not affected in any manner materially
adverse to any party. The parties further agree to replace such void or
unenforceable provision of this Agreement with a valid and enforceable provision
that will achieve, to the greatest extent possible, the economic, business and
other purposes of the void or unenforceable provision.
19. Entire Agreement. This Agreement constitutes the entire agreement of the
parties hereto with respect to the subject matter hereof and supersedes all
prior agreements and undertakings, both written and oral, among Sakura, the
Shareholders, the Buyer and the Escrow Agent with respect to the subject matter
hereof.
20. No Third Party Beneficiaries. This Agreement is for the sole benefit of the
parties hereto and their permitted assigns and nothing herein, express or
implied, is intended to or shall confer upon any other person or entity any
legal or equitable right, benefit or remedy of any nature whatsoever under or by
reason of this Agreement.
48
21. Headings. The descriptive headings contained in this Agreement are included
for convenience of reference only and shall not affect in any way the meaning or
interpretation of this Agreement.
22. Counterparts. This Agreement may be executed in any number of counterparts,
each of which will be an original as regards any party whose signature appears
thereon and all of which together will constitute one and the same instrument.
This Agreement will become binding when one or more counterparts hereof,
individually or taken together, will bear the signatures of all the parties
reflected hereon as signatories.
23. Force Majeure. In the event that the Escrow Agent is unable to perform its
obligations under the terms of this Agreement because of acts of God, strikes,
equipment or transmission failure or damage reasonably beyond its control, or
other cause reasonably beyond its control, the Escrow Agent shall not be liable
for damages to the other parties for any unforeseeable damages resulting from
such failure to perform or otherwise from such causes. Performance under this
Agreement shall resume when the affected party is able to perform substantially
that party's duties.
IN WITNESS WHEREOF, the parties hereto have caused this Escrow
Agreement to be executed as of the date first written above, in the case of
Sakura, the Buyer and the Escrow Agent, by their respective officers thereunto
duly authorized.
ONEIDA COMMUNITY CHINA, INC.
By: /s/ XXXXX X. XXXXXXX
--------------------
Name: Xxxxx X. Xxxxxxx
Title: President
SAKURA, INC.
By: /s/ XXXXX XXXXX
---------------
Name: Xxxxx Xxxxx
Title: President
49
XXXXX XXXXX
/s/ XXXXX XXXXX
-----------------------------------------
Address: 00 Xxxxxxx Xxxxx
Xxxxxxxx, Xxx Xxxx 00000
XXXX XXXXXXXXX
/s/ XXXX XXXXXXXXX
------------------------------------------
Address: 00 Xxxx Xxxxxxxxx Xxxxxx
Xxxxxxxxx, XX 00000
THE CHASE MANHATTAN BANK N.A.
By: /s/ XXXXXX XXXXXXX
------------------------
Name: Xxxxxx XxXxxxx
Title: Assistant Vice President
50
SCHEDULE A
WIRING INSTRUCTIONS OF THE BUYER AND EACH SHAREHOLDER
Buyer:
Chase Manhattan Bank
New York, NY
ABA # 000000000
For the Account of Oneida Ltd.
Account # 0102042942
Xxxxx Xxxxx:
Xxxxx and Xxxxx Xxxxx
Bank of New York ABA # 000000000
Xxxxx Xxxxxx Account # 8900114096
For further credit to the Xxxxxx # WE80956-S6
Xxxx Xxxxxxxxx:
Shimazo and Xxxxxx Mishiwaki
Citibank ABA # 000000000
Account # 00000000
51
SCHEDULE B
FEES OF THE ESCROW AGENT
15 basis points of the highest value of collateral held on deposit per annum or
any part thereof without proration for partial years, subject to a minimum of
$7,500 per annum or any part thereof without proration for partial years,
(includes investment in [a Chase Manhattan Bank Money Market Account, Chase
Manhattan Bank Deposit Account or] The Chase Manhattan Bank Mutual Fund known as
the Vista Fund).
$75 per investment (excludes [Money Market, Deposit Account or] Vista Fund
investments).
52
EXHIBIT B
ASSUMPTION AGREEMENT
================================================================================
ASSUMPTION AGREEMENT, dated as of June 30, 2000 (this "Agreement"), by
and among SAKURA, INC., a New York corporation ("Sakura" or the "Seller") and
ONEIDA COMMUNITY CHINA, INC., a New York corporation (the "Buyer").
WITNESSETH
WHEREAS, the Seller, the Buyer and the shareholders of Sakura and
Spoonbill Trading have entered into an Asset Purchase Agreement, dated May 23,
2000 (the "Asset Purchase Agreement"; unless otherwise defined herein,
capitalized terms shall be used herein as defined in the Asset Purchase
Agreement);
WHEREAS, pursuant to the Asset Purchase Agreement, the Buyer has agreed
to assume certain liabilities and obligations of the Seller with respect to the
Business; and
WHEREAS, the execution and delivery of this Agreement by the Buyer is a
condition to the obligations of the Seller to consummate the transactions
contemplated by the Asset Purchase Agreement.
NOW, THEREFORE, in consideration of the premises and the mutual
agreements and covenants set forth herein and in the Asset Purchase Agreement,
and intending to be legally bound hereby, the Buyer and the Seller hereby agree
as follows:
1. Assumption of Liabilities. Subject to Section 2 hereof, the Buyer hereby
assumes and agrees to pay, perform and discharge when due only the following and
no other liabilities of the Seller as at the date hereof, other than the
Excluded Liabilities (the "Assumed Liabilities"):
(a) liabilities and obligations (i) that constitute accounts payable
and commissions payable, (ii) that constitute accrued expenses (a description of
which is set forth in Section 2.5 of the Seller Disclosure Schedule) and that
are properly and adequately accrued or reserved for on the Special Purpose
Statement; or
(b) liabilities and obligations under the agreements, contracts, and
commitments and leases that are not marked with an asterisk in Section 3.13 of
the Seller Disclosure Schedule (other than any liabilities or obligations
arising out of any breach by the Seller, including, without limitation, failure
by the Seller to perform any obligations thereunder).
2. Excluded Liabilities. Notwithstanding the provisions of Section 1 hereof, the
Seller shall retain, and shall be responsible for paying, performing and
discharging when due, and the Buyer shall not assume or have any responsibility
for, any liabilities of the Seller as of the date hereof or any time thereafter,
other than the Assumed Liabilities (the "Excluded Liabilities"), including,
without limitation:
(a) any and all items of governmental, judicial, or adversarial
proceedings (public or private), litigation, hearings, arbitrations, disputes or
investigations against or involving the Seller, its subsidiaries or affiliates,
directly or indirectly;
(b) any and all amounts claimed against the Seller or the Buyer by, or
on behalf of, any former or current employee of the Seller, relating to, based
upon or arising from or in connection with (i) service performed for the Seller
prior to the date hereof, including, without limitation, any claim or claims
relative to, based upon or arising from or in connection with the terms and
conditions of employment or the termination of employment with the Seller, (ii)
any contracts of employment or collective bargaining agreements between the
Seller and an employee or
53
any union or representative claiming to represent any employee of the Seller,
(iii) any and all union or collective bargaining contracts, agreements, benefit
plans, or understandings to which the Seller is a signatory or to which the
Seller is claimed to be bound, or (iv) any and all liabilities that arise out of
or relate to pension, profit sharing, health, welfare, disability, worker's
compensation or other employer benefit plans maintained by the Seller or any
union or other labor organization or any of its subsidiaries or affiliates,
including without limitation any liability arising from the Seller's
under-funding or termination of any such plans or reduction of, termination or
failure to provide any other employment benefits of any kind or nature
whatsoever in connection with the consummation of transactions contemplated by
this Agreement or otherwise;
(c) Taxes, including any Taxes arising as a result of the sale of
Acquired Assets pursuant to the Asset Purchase Agreement, and including any
Taxes of the Seller, any of the Shareholders or any of their Affiliates or with
respect to Acquired Assets or the Business attributable to any period, or any
portion of any period, ending on or prior to the date hereof, and including any
Taxes for which the Seller or the Shareholders are liable under the Asset
Purchase Agreement;
(d) any and all claims arising out of, related to or based upon any
products sold, developed, delivered or manufactured, or any services provided,
by or on behalf of the Seller prior to the date hereof and any and all claims
arising or accruing on or after the date hereof with respect to sales or
manufacturing of products or provision of services that occurred prior to the
date hereof;
(e) any and all claims, liabilities and obligations, costs and expenses
(including, without limitation, fees, disbursements and expenses of legal
counsel, experts and engineers and the costs of investigation, feasibility study
and remedial action) arising from or under any Environmental Law or
Environmental Claims, without regard as to whether the Buyer has conducted any
environmental due diligence, and whether such Environmental Claims arise or
accrue before, on or after the date hereof in connection with acts, events or
omissions that occurred, or conditions or circumstances that existed on or
before the date hereof; or
(f) any bank acceptances, loans payable, or other indebtedness for
borrowed money of the Seller.
3. No Third Party Beneficiaries. This Agreement shall be binding upon and inure
solely to the benefit of the parties hereto and their permitted assigns and
nothing herein, express or implied, is intended to or shall confer upon any
other Person any legal or equitable right, benefit or remedy of any nature
whatsoever, under or by reason of this Agreement.
4. Assignment. This Agreement may not be assigned by operation of law or
otherwise without the express written consent of the Seller and the Buyer (which
consent may be granted or withheld in the sole discretion of the Seller or the
Buyer); provided, however, that the Buyer may assign this Agreement to an
Affiliate of the Buyer without the consent of the Seller.
5. Counterparts. This Agreement may be executed in one or more counterparts, and
by the different parties hereto in separate counterparts, each of which when
executed shall be deemed to be an original but all of which taken together shall
constitute one and the same agreement.
6. Governing Law. This Agreement shall be governed by, and construed in
accordance with, the laws of the State of New York, applicable to contracts
executed in and to be performed entirely within that state.
IN WITNESS WHEREOF, the Buyer and the Seller have caused this Agreement
to be executed as of the date first written above by their respective officers
thereunto duly authorized.
SAKURA, INC.
54
By: /s/ XXXXX XXXXX
---------------
Name: Xxxxx Xxxxx
Title: President
ONEIDA COMMUNITY CHINA, INC.
By: /s/ XXXXX X. XXXXXXX
--------------------
Name: Xxxxx X. Xxxxxxx
Title: President
55
EXHIBIT C
CERTAIN LICENSE AGREEMENTS
Licensor: Extension Termination Date
--------- --------------------------
Xxxxxx Xxxx September 1, 2002
Xxxxxxxx Xxxxxxxxx, Inc. September 1, 2002
Xxxxxx Xxxxxx September 1, 2002
United Features Syndicate, Inc. (Peanuts) September 1, 2002
Xxxx'x the Word, Inc. September 1, 2002
56
AMENDMENT NO. 1
TO THE ASSET PURCHASE AGREEMENT
AMENDMENT NO. 1 dated June 30, 2000 (this "Amendment"), by and
among ONEIDA COMMUNITY CHINA, INC., a New York corporation (the "Buyer"), ONEIDA
LTD., a New York corporation ("Oneida"), SAKURA, INC., a New York corporation
("Sakura" or the "Seller"), XXXXX XXXXX, and XXXX XXXXXXXXX (together with Xxxxx
Xxxxx, the "Shareholders"), to the Asset Purchase Agreement dated as of May 23,
2000 (the "Agreement") by and among the Buyer, Oneida, the Seller and the
Shareholders. Capitalized terms used herein without definition have the meanings
assigned to them in the Agreement.
WHEREAS, pursuant to Section 11.7 of the Agreement, any term
or provision of the Agreement may be amended by a writing signed by the party to
be bound thereby;
WHEREAS, the Seller Disclosure Schedule is incorporated by
reference into the Agreement; and
WHEREAS, the Buyer, Oneida, the Seller and the Shareholders
wish to amend the Agreement as to certain of its terms, as specified herein;
NOW, THEREFORE, in consideration of the premises and the
mutual agreements and covenants hereinafter set forth, the Buyer, Oneida, the
Seller and the Shareholders hereby agree to amend the Agreement as follows:
SECTION 1. Amendment to Section 2.5. (a) Section 2.5 is hereby
amended by deleting the "or" immediately before the "(F)".
(b) Section 2.5 is hereby further amended by adding the
following to the end of the second sentence thereof:
"(G) any liability or obligation relating to or arising out of
any federal, state, local, or foreign law (including common law),
statute, code, ordinance, rule, regulation or other requirement
relating to customs, duties or tariffs"
SECTION 2. Amendment to Section 5.8. Section 5.8 is hereby
deleted in its entirety and replaced by the following:
"5.8 Bulk Transfer Laws. The Buyer hereby waives compliance by
the Seller with any applicable bulk sale or bulk transfer laws of any
jurisdiction in connection with the sale of the Acquired Assets to the
Buyer (other than any obligations with respect to the application of
the proceeds herefrom). Pursuant to Article X, the Seller and the
Shareholders have agreed to indemnify the Buyer Parties against any and
all liabilities that may be asserted by third parties against the Buyer
Parties as a result of the Seller's noncompliance with any such law."
SECTION 3. Amendment to Schedule 3.1. Schedule 3.1 of the
Seller Disclosure Schedule is hereby deleted in its entirety and replaced by the
following:
"Sakura is qualified to do business as a foreign corporation
in the State of California."
SECTION 4. Amendment to Schedule 3.13(l). Schedule 3.13(l) of
the Seller Disclosure Schedule is hereby deleted in its entirety and replaced by
the following:
"Shareholders' Agreement dated April 17, 1997."
SECTION 5. Effect on Agreement. Except as amended hereby, the
provisions of the Agreement are and shall remain in full force and effect.
57
SECTION 6. Governing Law. The laws of the State of New York
(irrespective of its choice of law principles) will govern the validity of this
Amendment, the construction of its terms and the interpretation and enforcement
of the rights and duties of the parties hereto. All actions and proceedings
relating directly or indirectly to this Amendment shall be litigated in any
state court or federal court located in New York County, New York. The parties
hereto expressly consent to the jurisdiction of any such court and to venue
therein. Each of the Shareholders has appointed Xxxxxx Xxxxxxxx Frome Xxxxxxxxxx
& Xxxxxxx LLP as its authorized agent upon whom process may be served in any
action arising out of or based on this Amendment.
IN WITNESS WHEREOF, the parties hereto have executed this
Amendment as of the date first above written.
ONEIDA COMMUNITY CHINA, INC.
By: /s/ XXXXX X. CONSUER
--------------------
Name:
Title:
ONEIDA LTD.
By: /s/ XXXXX X. XXXXXX
--------------------
Name:
Title:
SAKURA, INC.
By:/s/ XXXXX XXXXX
---------------
Name: Xxxxx Xxxxx
Title: President
XXXXX XXXXX
/s/ XXXXX XXXXX
---------------
00 Xxxxxxx Xxxxx
Xxxxxxxx, Xxx Xxxx 00000
XXXX XXXXXXXXX
/s/ XXXX XXXXXXXXX
------------------
00 Xxxx Xxxxxxxxx Xxxxxx
Xxxxxxxxx, XX 00000
58
