ASSET PURCHASE AGREEMENT
THIS ASSET PURCHASE AGREEMENT (the "Agreement"), made and entered
into as of November 10, 1997, by and among TOKAI ALUMINUM FOIL
CO., LTD., a Japanese corporation ("TAF"), TOKAI ELECTRONICS CO.,
LTD., a Japanese corporation (the "Seller"), CHECKPOINT
PRODUCTION JAPAN K.K., a Japanese corporation (the "Purchaser")
and CHECKPOINT SYSTEMS, INC., a Pennsylvania corporation
("Checkpoint").
W I T N E S S E T H :
WHEREAS, the Seller wishes to sell most of its assets (together
with the goodwill associated therewith);
WHEREAS, TAF controls the Seller and wishes to support the
Seller's sale of such assets;
WHEREAS, the Purchaser wishes to purchase such assets from the
Seller; and
WHEREAS, Checkpoint controls the Purchaser and wishes to support
the Purchaser's purchase of such assets;
NOW, THEREFORE, the parties hereto agree as follows:
ARTICLE I
DEFINITIONS
1.1. Definitions. For the purposes of this Agreement,
capitalized terms used herein without definition shall have the
respective meanings ascribed to them in Schedule 1.1.
1.2. Interpretation. The terms defined in this Agreement shall
mean and include the plural as well as the singular. Pronouns of
the masculine gender shall mean and include corresponding words
of the feminine and neuter gender. References to Articles,
Sections, Exhibits and Schedules and subdivisions thereof shall,
unless otherwise specifically set forth, be references to the
Articles of, Sections of, Exhibits to and Schedules to this
Agreement and subdivisions thereof respectively. The word "including"
shall be deemed to be followed by the words "without limitation."
A facsimile copy shall, unless otherwise specifically set forth, be deemed
to satisfy the requirement of "in writing", "written" and so on.
1.3. Headings. The headings in this Agreement are for convenience of
reference only and shall not limit or otherwise affect interpretation of any
of the terms or provisions of this Agreement.
ARTICLE II
SALE AND PURCHASE OF THE ASSETS
2.1. Sale and Purchase. At the Closing, on the terms and subject
to the conditions contained in this Agreement, the Seller shall
sell and the Purchaser shall purchase any and all rights and
interests the Seller has in the Transferred Assets at the
Purchase Price.
2.2. Assumption of Certain Liabilities. At the Closing, on the
terms and subject to the conditions contained in this Agreement,
the Seller shall assign and the Purchaser shall assume the
Assumed Liabilities and the Seller shall pay the Purchaser the
Adjustment Amount in consideration for the Purchaser's assumption
of the Assumed Liabilities.
2.3.Finalization of the Closing Accounts, the Purchase Price and
the Adjustment Amount.
(a)Promptly after the Closing, the Purchaser shall prepare its
draft of the Closing Accounts. Within 30 days after the Closing
Date, the Purchaser shall submit its draft of the Closing
Accounts to the Seller for review and audit. The Seller shall
have the right to conduct its review and audit promptly after
submission by the Purchaser of its draft of the Closing Accounts
in order to confirm the accuracy of such draft.
(b)No later than the later of: (i) the 15th day after the
Seller's receipt of the Purchaser's draft of the Closing Accounts
and (ii) the 45th day after the Closing Date (such later date
being the "Seller's Notice Day"), the Seller shall notify the
Purchaser in writing whether or not it approves the Purchaser's
draft of the Closing Accounts. If the Seller, within such time-
frame, notifies the Purchaser of its approval or fails to notify
the Purchaser of the Seller's disapproval, the Closing Accounts
shall be deemed to have been finalized.
(c)If the Seller notifies the Purchaser of its disapproval of the draft
of the Closing Accounts, the Seller and the Purchaser shall discuss in good
faith a possible solution to the difference in opinion between the Seller
and the Purchaser and use their reasonable efforts to agree on the Closing
Accounts. If the Seller and the Purchaser agree on the Closing Accounts at
any time, the Closing Accounts shall be deemed to have been
finalized.
(d)If the Seller and the Purchaser fail to agree on the Closing
Accounts within 30 days after the Purchaser's receipt of the
Seller's notice of its disapproval, either the Seller or the
Purchaser may initiate an arbitration under Section 14.3 for the final
determination of the Adjustment Amount. Unless they are
previously agreed under Section 2.3(c) above, the Purchase Price
and the Adjustment Amount shall be deemed to have been finalized
upon the service of the arbitration award to both the Seller and
the Purchaser.
2.4. Payment. The Purchase Price and the Adjustment Amount shall
be paid as follows:
(a)Payment of the Preliminary Amount. At the Closing, the
Purchaser shall, as the preliminary payment of the Purchase
Price, pay the amount (the "Preliminary Payment Amount") obtained
by (i) deducting (A) the Preliminary Adjustment Amount and (B)
such amount defined in Z of the Price Formula as agreed upon between
the Seller and the Purchaser from and (ii) adding such estimated amount
as agreed upon between the Seller and the Purchaser of the Approved Capital
Expenditures outstanding as of the Closing to 2,869,135,437 Yen, to the Seller.
(b)Payment of the Adjustment Amount.
(i) If the amount (the "Net Purchase Price") obtained by
deducting the Adjustment Amount from the Purchase Price is larger
than the Preliminary Payment Amount, no later than the 10th
Business Day after the finalization of the Purchase Price and the
Adjustment Amount under Section 2.3, the Purchaser shall pay to the
Seller the difference between the Net Purchase Price and the Preliminary
Payment Amount, together with the interest calculated on such difference
at the Interest Rate for the period after 60th day of the Closing
Date.
(ii) If the Net Purchase Price is less than the Preliminary
Payment Amount no later than the 10th Business Day after the
finalization of the Purchase Price and the Adjustment Amount
under Section 2,3, the Seller shall pay to the Purchaser the
difference between the Preliminary Payment Amount and the Net
Purchase Price, together with the interest calculated on such
difference at the Interest Rate for the period after 60th day of
the Closing Date.
(c)Payment Method. The payment of the preliminary amount under
Section 2.4(a) shall be made by banker's checks in Japanese yen
to be issued by a prime bank in Japan. All other payments under
this Agreement shall be made by wire-transfer (denshin-sokin) of
the relevant amount in Japanese yen to the receiving party's bank account
in Tokyo or Yokohama; provided that the receiving party shall designate such
bank account and notify the paying party of it in writing no later than
5 Business Days prior to the date of the relevant transfer.
2.5. The Parties Expenses Related to Transaction.
(a)Each party hereto shall bear the stamp duty payable with
respect to the originals of this Agreement to be retained by such
party. The Purchaser shall bear the registration license tax
(toroku-menkyo-zei) payable in connection with the registration
of the transfer of the ownership of the Real Properties from the
Seller to the Purchaser under this Agreement, and the Seller and
the Purchaser shall bear the consumption tax payable in
connection with their respective payments under this Agreement
and pay it by adding the amount of the applicable consumption tax
to the relevant payment. Each party hereto shall bear any other
Tax which such party is obligated to pay to the relevant tax
authorities under applicable laws.
(b)The Seller shall be responsible for the payments of Taxes
imposed on the Transferred Assets and the Taxes and social
security changes to be withheld by employers and other expenses
related to the Transferred Employees for the period up to the
Closing Date, and the Purchaser shall be responsible for the same
on and after the Closing Date. The Seller and the Purchaser agree
to settle such payments between the Seller and the Purchaser promptly
after the relevant amount is finalized.
2.6. No Assumption of Liability. The Purchaser shall not assume
(and TAF and the Seller shall, jointly and severally, indemnify
and hold harmless each Checkpoint Indemnitee from) (a) any
liabilities of TAF or the Seller, or (b) any liabilities arising
out of or attributable to any event occurring or any condition
existing prior to the Closing in connection with the Transferred
Assets, the Transferred Business, the Transferred Employees,
except for the Assumed Liabilities. Notwithstanding the preceding
sentence, the parties hereto agree that with regard to any losses,
liabilities, damages, deficiencies, claims, costs and expenses
(including reasonable attorney's fees and disbursements) arising out
of the disputes with ID Canada or its Affiliates, TAF and the Seller shall
indemnify and hold harmless, jointly and severally, each
Checkpoint Indemnitee only from such losses, liabilities,
damages, deficiencies, claims, costs and expenses (including
reasonable attorney's fees and disbursements) suffered or
incurred by such Checkpoint Indemnitee arising from any
liabilities or claims succeeded from the Seller (other than
claims against ID Canada or its Affiliates). Nothing in this
Section 2.6 shall require TAF or the Seller to indemnify and hold
harmless each Checkpoint Indemnitee from any liability owed by it
to ID Canada arising out of such Checkpoint Indemnitee's own
activities.
2.7. Default Interest. Any amount payable under this Agreement,
but not paid when due, shall bear interest at the Interest Rate
which shall accrue on a daily basis until such amount are paid.
2.8. No Prejudice to Indemnification. Neither the finalization
of the Closing Accounts nor the payment or receipt of the
Purchase Price or Adjustment Amount shall prejudice the parties'
rights under any other provisions of this Agreement.
ARTICLE III
REPRESENTATIONS AND WARRANTIES
3.1. Representations and Warranties of TAF and Seller. As of the
date hereof, TAF and the Seller, jointly and severally, represent
and warrant to the Purchaser as set forth in Schedule 3.1.
3.2. Representations and Warranties of the Purchaser. As of the
date hereof, the Purchaser and Checkpoint, jointly and severally,
represent and warrant to TAF and the Seller as set forth in
Schedule 3.2.
3.3. Effect of Due Diligence Review. No due diligence review
conducted by any of the parties hereto shall affect in any manner
whatsoever the validity or effect of the representations and
warranties contained herein or made pursuant hereto or of the
indemnifications or remedies related thereto.
3.4. Survival of Representations and Warranties.
(a)The Purchaser and the Seller have the right to rely fully upon
the representations and warranties of the other party contained
in or made pursuant to this Agreement in connection with the
transactions contemplated under this Agreement. Except as
otherwise provided in the following sentences of this Section 3.4(a),
all such representations and warranties shall survive the Closing for a
period of 30 months after the Closing Date. The representations
and warranties of the Seller or the Purchaser which are contained in (a),
(b), (c) and (d) of Schedules 3.1 and 3.2 shall survive the Closing
and shall continue at all times thereafter. The representations
and warranties related to Taxes contained in this Agreement shall
survive the Closing Date and continue at all times thereafter so
long as a relevant claim can be made against the Purchaser or any
of the Purchaser's Affiliates by any taxing or related authority
of any relevant jurisdiction.
(b)Any right pursuant to this Agreement with respect to a claimed
breach of a representation or warranty shall expire at the end of
the survival period (as set forth in Section 3.4(a)) of the
relevant representation or warranty claimed to be breached (the
"Termination Date") unless on or prior to the Termination Date,
written notice asserting such breach, which shall reasonably set
forth, in light of the information then known to the party giving
such notice, a description of, and estimate (if then reasonable
to make) of the amount involved in, such breach (the "Claim") has
been given to the party from whom indemnification or other remedy
is sought. If the parties cannot amicably reach a settlement of the
Claim or unless such Claim is satisfied by payment, set-off or otherwise,
the party making the Claim must institute arbitration proceedings with
respect to the Claim in accordance with the terms of Section 14.3
of this Agreement prior to the first anniversary of the later of:
(i) the Termination Date of the representation and warranty to
which such Claim relates or (ii), if the amount of Checkpoint's
Losses or Tokai's Losses (as each defined in Article XI) related
to such Claim are not realized or cannot reasonably be determined
before the Termination Date, the date at which such amount is
reasonably determined (the "Loss Determination Date"). Provided
that a Claim is made on or prior to the Termination Date of the
relevant representation and warranty and the arbitration for the
Claim is commenced in accordance with this Section 3.4(b), the
Checkpoint's Loss or the Tokai's Loss related to such Claim may
continue to be claimed beyond the first anniversary of the
relevant Termination Date or Loss Determination Date.
3.5. Construction. Each representation and warranty is to be
construed independently of the others and is not limited by
reference to any other representation and warranty.
ARTICLE IV
ACTIONS TO OCCUR PRIOR TO CLOSING
4.1. Operation of the Seller. Except as contemplated in
Schedule 4.1 or elsewhere in this Agreement or as otherwise
approved by the Purchaser or Checkpoint in writing, during the
period from the date hereof to the Closing, the Seller shall, and
TAF shall cause the Seller to, conduct its business and
operations only in the ordinary course of its business and keep
its records and accounting books in accordance with Japanese GAAP
consistently applied to the Seller. The Seller shall not enter
into any new transactions other than those related to the
Transferred Business.
4.2. Specific Undertaking for Operation. Without prejudice to
the generality of Section 4.1 but except as contemplated in
Schedule 4.1 or elsewhere in this Agreement or as otherwise
approved by the Purchaser or Checkpoint in writing, during the
period from the date hereof to the Closing, TAF and the Seller
jointly and severally undertake:
(a)that no contract or commitment shall be entered into, amended,
terminated or modified by the Seller except for those to be
entered into in the ordinary course of its business;
(b)that the Seller shall not borrow any additional funds other than as
required in the ordinary course of its business or provide any guarantee
or incur or assume any contingent liabilities;
(c)that the Seller shall not waive, or agree to waive, any claims
or rights;
(d)that the Seller shall not (i) sell, assign, transfer, pledge
or otherwise dispose of any business or asset other than an
individual asset with a value of less than 100,000 yen or (ii)
purchase, lease or otherwise acquire any business or asset other than an
individual asset with a value of less than 100,000 yen, or enter into an
agreement to that effect;
(e)that the Seller shall not increase, or agree to increase, the
rates of compensation (including bonuses) payable or to become
payable to any director, statutory auditor, officer, employee,
agent, independent contractor or consultant, or accelerate, or
agree to accelerate, the rate at which any such compensation is
paid, or modify any other employment terms and conditions, or
enter into any collective bargaining agreement or any agreement
with any labor union;
(f)that the Seller shall not change accounting methods,
principles or practices;
(g)that the Seller shall not change its internal rules, credit
and policies (or any application of any such rules or policies to
the operation thereof); and
(h)to give the Purchaser prompt notice of any default by any
party under a Material Contract and any event which might have a
material adverse effect on the business or financial condition of
TAF or the Seller.
4.3. Settlement with ID Canada. Nothing provided for in Sections
4.1 and 4.2 shall prohibit the Seller from (a) entering into (i)
such amicable settlement with ID Systems Canada Inc. ("ID
Canada") as approved by Checkpoint in writing or (ii) such
amicable settlement with ID Canada which consists solely of a
monetary payment (and no continuing obligations of the Seller,
TAF or the Purchaser which impact in any way on the continuing
business of the Seller, TAF or the Purchaser), and (b) implementing such
amicable settlement in accordance with its terms.
4.4. TAF's Support. During the period from the date hereof to
the Closing Date, TAF shall provide the Seller with such
financial and other support as are necessary for the Seller to
perform its obligations under this Agreement.
4.5. Access to Information. During the period from the date
hereof to the Closing Date, (i) the Seller shall allow the
Purchaser to have full access to all directors, statutory
auditors, officers and employees and all books, records, computer
files, offices and other facilities and properties of the Seller
and to make such inspections thereof as the Purchaser may
reasonably request, (ii) TAF shall provide Checkpoint with TAF's
interim financial statements for six month period ended on
September 30, 1997 and (iii) TAF, the Seller and Checkpoint shall
cooperate with the Purchaser and its Affiliates in their work to
prepare the smooth and orderly transfer of the Transferred
Business, the Transferred Assets and the Transferred Employees.
4.6. Bank Waiver Documents. TAF and the Seller shall jointly and
severally obtain the Bank Waiver Documents.
4.7. Consents to Assignment of Material Contracts. TAF and the
Seller shall jointly and severally use their reasonable efforts
to obtain written consents to the assignment of the Material
Contracts from the other parties thereto.
4.8. Termination of Employment. TAF shall terminate its
employment of such seconded employees as set forth in Schedule
4.8-A, subject to the occurrence of the Closing. The Seller
shall terminate its fiduciary relationships and employment of
such directors, statutory auditors and employees as set forth in
Schedule 4.8-B, subject to the occurrence of the Closing. TAF and
the Seller shall jointly and severally indemnify each Checkpoint
Indemnitee from any losses, liabilities, damages, deficiencies, costs
or expenses (including reasonable attorneys' fees and disbursements)
based upon, arising out of or in connection with any of such terminations
of fiduciary relationships and employment by TAF or the Seller.
4.9. Offer of Employment. Within 45 days after the date hereof,
the Purchaser shall offer to each of the persons as set forth in
Schedule 4.9, subject to the occurrence of the Closing,
employment on terms and conditions no less favorable than those
as of the date hereof under which such employees are employed by the
Seller or TAF with such changes as reflected in Schedule 4.9. With
respect to the Transferred Employees who waives his or her claim to
retirement allowances on termination of his or her employment with the
Seller or TAF, the Purchaser shall count each Transferred Employee's period
of service with the Seller or TAF as service with the Purchaser for the
purpose of calculating (i) his or her retirement allowances payable on
leaving employment of the Purchaser and (ii) the number of paid holidays to
which he or she is newly entitled at the Purchaser.
4.10. Best Efforts to Satisfy Condition Precedents. The
parties hereto shall use their respective best efforts to have
the relevant conditions precedent (with respect to TAF and the
Seller, those set forth in Article V and with respect to
Checkpoint and the Purchaser, those set forth in Article VI)
satisfied in a timely manner.
4.11. Preliminary Registration of the Transfer of Ownership.
The Seller shall promptly make the preliminary registration of
the transfer of the ownership of the Real Properties to the
Purchaser. The Purchaser shall bear all the registration tax for
such preliminary registration and shall cooperate with the Seller
in making such preliminary registration; provided, however, that
the Seller shall reimburse the Purchaser for half of the amount
of such registration tax if and when the Closing does not take
place. The Seller and the Purchaser shall equally bear all costs
and expenses associated with such preliminary registration other
than such registration tax. Upon the Seller's request, the Purchaser shall
deliver in advance to the Seller's legal counsel all the documents only
necessary to cancel the preliminary registration and authorize such counsel
to use the documents upon the termination of this Agreement.
4.12. Transfer of Kyosai. The Seller and the Purchaser shall
take all steps required to transfer the existing Kyosai arrangement for
retired allowances from the Seller to the Purchaser as of the Closing.
ARTICLE V
CONDITIONS PRECEDENT TO THE PURCHASER'S OBLIGATION
The obligation of the Purchaser to consummate the transactions
contemplated hereby is subject to the satisfaction of each of the
following conditions:
5.1. Accurate Representations and Warranties. All representations and
warranties of TAF and the Seller contained in this Agreement (after
replacing the words "as of the date hereof" or "to the date hereof" in
such representations and warranties by the words "as of the Closing" or
"to the Closing Date," as the case may be) shall be true as of the Closing
as if such representations and warranties were made as of the Closing. Upon
the delivery of the joint certificate of TAF and the Seller referred to in
Section 5.16(a) to the Purchaser, TAF and the Seller shall be deemed to have
made such representations and warranties on an updated basis to the Purchaser
as set forth in this Section 5.1.
5.2. Performance by TAF and the Seller. Each of TAF and the Seller shall
have performed and complied with all agreements, covenants and conditions
required by this Agreement to be performed and complied with by it prior
to or on the Closing.
5.3. No Material and Adverse Change. Since the date of this Agreement,
there shall have been no material and adverse change in the condition,
financial or otherwise, of TAF, the Seller, the Transferred Business or the
Transferred Assets, or TAF's or the Seller's ability to perform its
obligations hereunder or under the Associated Agreements.
5.4. Authorizations under Antimonopoly Law. The waiting period for the
Closing required under Article 16 of the Antimonopoly Law shall have expired
without any objection from the FTC.
5.5. Authorization under LPUL. The waiting period for the Closing required
under Article 23 of LPUL shall have expired without any objection from the
relevant governmental body or such governmental body has waived such waiting
period.
5.6. Employees' Consents. No later than 3 Business Days prior to the
Closing, at least 80% of the full time employees of the Seller as of the
date hereof (other than such persons as set forth in Schedule 5.6) shall
have accepted in writing offers of employment with the Purchaser under the
employment terms offered by the Purchaser. Such persons as set forth in
Schedule 5.6 shall have accepted in writing offers of employment with the
Purchaser.
5.7. Material Contracts. All other parties' written consents to the
assignment of each Material Contract from the Seller to the Purchaser shall
have been obtained.
5.8. Review of Material Contracts. The Seller shall have delivered to the
Purchaser complete and accurate copies of such Tangible/Intangible Asset
Leases, Real Estate Leases and Material Contracts as requested by the
Purchaser or, if there are oral agreements in all or part, provided in
writing the material terms and conditions thereof to the Purchaser, and the
Purchaser shall have been reasonably satisfied with the terms and conditions
of such Tangible/Intangible Asset Leases, Real Estate Leases and Material
Contracts.
5.9. Release of Liens. All Liens on the Transferred Assets have
been released in a manner reasonably satisfactory to the
Purchaser.
5.10. Government Approvals. The Purchaser shall have
reasonably been satisfied that the Purchaser will be able to
obtain as of the Closing all governmental and statutory
registrations and approvals and all other licenses, approvals and
authorizations necessary or desirable for the Purchaser to
operate or develop the Transferred Business on the same basis as
the Seller.
5.11. Execution of the Associated Agreements. The Associated
Agreements shall have been executed and delivered, dated as of
the Closing Date, by the parties thereto (other than Checkpoint
and the Purchaser).
5.12. Environmental Issues. The Purchaser shall have been reasonably
satisfied with (a) the result of the review of the environmental exposures
associated with the Real Properties and (b) the arrangement regarding any
remedial action necessary for solving any material environmental or other
problem related to the Real Properties.
5.13. Subsequent Incorporation. The Purchaser shall have received from a
court-appointed-inspector his report on the result of investigation of this
Agreement.
[5.14 and 5.15 are reserved for additional conditions.]
5.16. Closing Documents. The Purchaser shall have received
the following documents:
(a)a certificate, dated as of the Closing Date, signed by a
representative director of TAF on behalf of TAF, and a representative
director of the Seller on behalf of the Seller, in the form and substance
reasonably satisfactory to the Purchaser,jointly and severally certifying:
(i) that the conditions set forth in Article V have been satisfied;
(ii) that TAF and the Seller waive any conditions set forth in ArtIcle VI
which may not have been satisfied at or prior to the Closing; and (iii) as
to the incumbency, authorization and signature of each of the persons
authorized to execute and deliver, on behalf of TAF or the Seller, this
Agreement, the Associated Agreements and any other documents executed or to
be executed by TAF or the Seller in connection with the transaction
contemplated hereby or thereby;
(b)written consents from such persons as set forth in Schedule
5.6 regarding their employment with the Purchaser; and
(c)such other documents and evidence (including the documentary
evidences of the corporate actions of TAF and the Seller
authorizing the transactions contemplated under this Agreement
and the Associated Agreements) as Checkpoint or the Purchaser may
reasonably request in order to ascertain the fulfillment of the
conditions set forth in this Article V.
ARTICLE VI
CONDITIONS PRECEDENT TO THE SELLER'S OBLIGATIONS
The obligation of the Seller to consummate the transactions
contemplated hereby is subject to the satisfaction of each of the
following conditions:
6.1. Accurate Representations and Warranties. All
representations and warranties of the Purchaser contained in this
Agreement (after replacing the words "as of the date hereof" or
"to the date hereof" in such representations and warranties by
the words "as of the Closing" or "to the Closing Date," as the
case may be) shall be true as of the Closing as if such
representations and warranties were made as of the Closing. Upon
the delivery of the Purchaser's certificate referred to in
Section 6.10(a) to the Seller, the Purchaser shall be deemed to
have made such representations and warranties on an updated basis
to TAF and the Seller as set forth in this Section 6.1.
6.2. Performance by the Purchaser. The Purchaser shall have performed and
complied with all agreements, covenants and conditions required by this
Agreement to be performed and complied with by it prior to or on the Closing.
6.3. No Material and Adverse Change. Since the date of this Agreement,
there shall have been no material adverse change in the condition, financial
or otherwise, of the Purchaser or the Purchaser's or Checkpoint's ability to
perform its obligations hereunder or under the Supply Agreement.
6.4. Execution of the Associated Agreements. The Associated Agreement shall
have been executed and delivered, dated as of the Closing Date, by the parties
thereto (other than TAF and the Seller).
6.5. Authorization under LPUL. The waiting period for the Closing required
under Article 23 of LPUL shall have expired without any objection from the
relevant governmental body or such governmental body has waived such waiting
period.
[6.6, 6.7, 6.8 and 6.9 are reserved for additional conditions.]
6.10. Closing Documents. The Seller shall have received the
following documents:
(a)a certificate, dated as of the Closing Date, signed by a duly
authorized officer of Checkpoint on behalf of Checkpoint, and a
representative director of the Purchaser on behalf of the
Purchaser, in the form and substance reasonably satisfactory to
TAF and the Seller, jointly and severally certifying: (i) that
the conditions set forth in Article VI have been satisfied; (ii)
that Checkpoint and the Purchaser waive any conditions set forth
in Article V which may not have been satisfied at or prior to the Closing;
and (iii) as to the incumbency, authorization and signature of each of
persons authorized to execute and deliver on behalf of Checkpoint or the
Purchaser, this Agreement, the Associated Agreements and any
other documents executed or to be executed by Checkpoint or the
Purchaser in connection with the transaction contemplated hereby
or thereby; and
(b)such other documents and evidence (including the documentary
evidences of the corporate actions of Checkpoint and the
Purchaser authorizing the transactions contemplated under this
Agreement and the Associated Agreements) as TAF or the Seller may
reasonably request in order to ascertain the fulfillment of the conditions
set forth in this Article VI.
ARTICLE VII
CLOSING
7.1. Time and Place of the Closing. The closing process of the
transactions contemplated under Section 2.1 (the "Closing") shall
take place at the head office of The Bank of Yokohama, Limited,
commencing at 10:00 a.m., Tokyo time, February 2, 1998 or such
other time, date or place as may be agreed upon between the parties,
but in no event later than March 31, 1998. Subject to the completion of
the actions set forth in Section 7.2, the transfer of the Transferred
Business and the Transferred Assets shall be deemed to have taken
place as at 00:01 a.m. of the Closing Date.
7.2. Actions at the Closing. At the Closing, the parties will
take the following actions:
(a)TAF and Checkpoint or the Purchaser shall execute and deliver
the Supply Agreement, the Indemnity and Security Agreement and
the Non-Competition Agreement;
(b)the Seller shall deliver the Bank Waiver Documents and the
Title Documents to the Purchaser;
(c)the Purchaser shall pay the Preliminary Payment Amount to the
Seller;
(d)the Seller shall deliver to the Purchaser the Business
Documents and the complete and accurate copies of such corporate
accounting books and records of the Seller as the Purchaser
reasonably requests; and
(e)such other actions as the Seller or the Purchaser may
reasonably request in order to consummate and perfect the
transaction contemplated under Section 2.1.
ARTICLE VIII
COVENANTS
8.1. Post Closing Services. At any time or from time to time
after the Closing, TAF and the Seller shall take such further
actions (and execute such documents) as are reasonably necessary,
appropriate or desirable to consummate, perfect and make
effective the transactions contemplated by this Agreement.
8.2. TAF's Unconditional Guaranty. Without any prejudice to any
of TAF's obligations and liabilities under any other provisions
of this Agreement, TAF hereby unconditionally guarantees (rentai-
hosho) the due, complete and punctual performance by the Seller
of all of its obligations under this Agreement.
8.3. Checkpoint's Unconditional Guaranty. Without any prejudice
to any of Checkpoint's obligations and liabilities under any
other provisions of this Agreement, Checkpoint hereby unconditionally
guarantees (rentai-hosho) the due, complete and punctual performance by
the Purchaser of all of its obligations under this Agreement.
8.4. Cooperation on Tax Matters. TAF, the Seller, the Purchaser
and Checkpoint shall cooperate, and shall cause their respective
Affiliates, directors, statutory auditors, officers, employees,
agents, auditors and representatives to cooperate, in preparing
and filing all returns, including maintaining and making
available to each other all books and records necessary in
connection with Taxes and in resolving all disputes and audits
with respect to all taxable periods relating to Taxes and in all
other Tax matters, and to keep each party advised as to any issue
relating to Taxes which could have a bearing on such other
party's responsibility under this Agreement. The Seller and the
Purchaser shall allow any other parties to access its books and
records at such party's reasonable request to the extent
necessary for the smooth operation of the Transferred Business.
8.5. Liquidation of the Seller. After the Indemnity and Security
Agreement is terminated in accordance with its terms, the
Purchaser shall cooperate with the Seller in order for the Seller
to make a smooth liquidation of the Seller itself; provided,
however, that the Seller shall pay off all of its obligations to
the third parties outstanding as of the Closing and that TAF's
obligations under this Agreement and each Associated Agreement
shall not be affected by the Seller's liquidation in any manner.
8.6. Post Closing Service by the Purchaser. For the period not
exceeding 2 years after the Closing Date and upon the Seller's
request, the Purchaser shall provide the Seller's former
customers with a repair and maintenance service for those
products sold by the Seller with such reasonable terms and conditions
(including the Seller's payment of reasonable fees to the Purchaser) as
agreed upon in writing between the Seller and the Purchaser.
ARTICLE IX
[Reserved for an additional provision.]
ARTICLE X
SECRECY AND NON-COMPETITION
10.1. Secrecy. Each party hereto shall not disclose any
written or electronically or optically recorded information
related to the Transferred Assets or the Transferred Business to
any third parties and shall not use such information for any purposes,
except, in each case, in the ordinary course of operations of the
Transferred Business on or prior to the Closing Date; provided,
however, that the prohibitions contained in this sentence shall
not apply to (a) such information which (i) is in the public
domain as of the date hereof or (ii) becomes available to the
relevant party hereto on a non-confidential basis from a third
party and (b) Checkpoint and the Purchaser on and after the
Closing. Except for any press announcement as may be agreed
between TAF and Checkpoint in writing hereto (it being understood
that the contents of such press announcement shall have no effect
on the terms and conditions set forth in this Agreement or the
Associated Agreements), none of the parties hereto shall, and
each of the parties hereto shall procure that none of its
Affiliates shall, disclose the terms of this Agreement or the
Associated Agreements or the transaction contemplated hereby or
thereby other than to professional advisers or employees of the
relevant party or any of its Affiliates, who may need to be aware
of the same. Notwithstanding the foregoing, TAF, the Seller, the
purchaser or Checkpoint may, after consultation with the other parties,
disclose any information referred to in and prohibited to be disclosed under
this Section 10.1 if and to the extent required by (a) any stock exchange or
any governmental, quasi governmental or other regulatory body having
jurisdiction over it or its Affiliate or (b) as part of legal proceedings,
filings or similar process (including deposition, interrogatories, requests
for information or documents, subpoena, civil or criminal process).
10.2. Non-Competition. The Seller shall not, directly or indirectly,
either alone, jointly or in conjunction with any other entity or entities,
engage in any business competitive with the Transferred Business for 5 years
after the Closing.
10.3. No-Solicitation. TAF and the Seller shall not (and shall jointly
and severally procure that each of their respective Affiliates shall not)
directly or indirectly employ, solicit or otherwise encourage any of the
Transferred Employees to leave the Purchaser for 5 years after the Closing.
ARTICLE XI
INDEMNIFICATION
11.1. Indemnity by TAF and the Seller. TAF and the Seller shall, jointly
and severally, indemnify and hold harmless each Checkpoint Indemnitee from
and against all losses, liabilities, damages, deficiencies, claims, costs or
expenses (including reasonable attorneys' fees and disbursements) based upon,
arising out of or in connection with the breach of any representation or
warranty, or the non-performance, partial or total, of any covenant or
agreement of TAF or the Seller contained in, or made pursuant to, this
Agreement or any Associated Agreement.
11.2. Indemnity by Checkpoint and the Purchaser. Checkpoint and the
Purchaser shall indemnify and hold harmless each Tokai Indemnitee from and
against all losses, liabilities, damages, deficiencies, claims, costs or
expenses (including reasonable attorneys' fees and disbursements) based upon,
arising out of or in connection with the breach of any representation or
warranty, or the non-performance, partial or total, of any covenant or
agreement of Checkpoint or the Purchaser contained in, or made pursuant to,
this Agreement or any Associated Agreement.
11.3. Right of Set-Off. Nothing contained in this Agreement shall
prohibit or restrict TAF, the Seller, the Purchaser orCheckpoint from
setting off (a) its claims against any other party and (b) its obligations
owed to such other party in accordance with applicable laws.
ARTICLE XII
TERMINATION
12.1. Automatic Termination. If the Closing does not take place on or
before March 31, 1998, unless otherwise agreed in writing among the parties
hereto through their good faith negotiations, this Agreement shall
automatically terminate as of March 31, 1998.
12.2. Effect of Termination. If this Agreement shall terminate pursuant
to Section 12.1, such termination shall be without cost or liability to any
party hereto other than cost or liability for breach of any representation,
warranty, covenant or agreement contained in this Agreement.
12.3. Termination for Breach. If either TAF or the Seller breaches its
material obligation under this Agreement and fails to cure such a breach
within 30 days after its receipt of a notice of demand to cure such a breach
from Checkpoint, Checkpoint and the Purchaser may terminate this Agreement by
giving a notice of termination to TAF and the Seller. If either Checkpoint
or the Purchaser breaches its material obligation under this Agreement and
fails to cure such a breach within 30 days after its receipt of a notice of
demand to cure such breach from TAF, TAF and the Seller may terminate this
Agreement by giving a notice of termination to Checkpoint and the Purchaser.
ARTICLE XIII
GENERAL PROVISIONS
13.1. Notices. Any notice or other communication required or permitted
to be given hereunder shall be in the English language and in writing and
shall be delivered personally, transmitted by facsimile (in each case
followed by confirmation delivered by registered and express mail or
registered and express air mail, if applicable) or sent by registered and
express mail (or registered and express air mail, if applicable), postage
prepaid, and shall be deemed given when so delivered personally, or if
transmitted by facsimile, 1 day after the date of such facsimile or telex,
or if mailed, 5 days after the date of mailing, to the parties at the
following addresses (or to such other party and/or such other address as
shall be specified by like notice from the party to which notice or other
communication shall be given originally, provided, however, that such notice
of a change of party and/or address shall be effective only upon receipt
thereof):
(i) if to TAF to:
Tokai Aluminum Foil Co., Ltd.
Xxxxx Xxxxx 0X
0, Xxxxxx-xxx, Xxxxxxxx-xx
Xxxxxxxx 221, Japan
Attention: Executive Vice President
Facsimile Number: 00-00-000-0000
(ii) if to the Seller to:
Tokai Electronics Co., Ltd.
1071 Xxxxxx, Xxxxxxxxx Xxxx
Xxxxxxxx 000 Xxxxx
Attention: President
Facsimile Number: 81-467-86-7292
(iii) if to the Purchaser to:
Checkpoint Production Japan K.K.
c/o Checkpoint Systems, Inc.
000 Xxxx Xxxxx, X.X.Xxx 000
Xxxxxxxxx, Xxx Xxxxxx 00000
Attention: Vice President and General Counsel
Facsimile Number: 0-000-000-0000
(iv) if to Checkpoint to:
Checkpoint Systems, Inc.
000 Xxxx Xxxxx, X.X.Xxx 000
Xxxxxxxxx, Xxx Xxxxxx 00000
Attention: Vice President and General Counsel
Facsimile Number: 0-000-000-0000
13.2. Waivers and Amendments. This Agreement may be amended,
modified, superseded, cancelled, renewed or extended, and the
terms and conditions hereof may be waived only by a written
instrument signed by the parties or, in the case of a waiver, the
party waiving compliance. No delay on the part of any party in exercising
any right, power or privilege hereunder shall operate as a waiver thereof,
nor shall any waiver on the part of any party of any right, power or
privilege hereunder, nor any single or partial exercise of any
right, power or privilege hereunder, preclude any other or
further exercise thereof or the exercise of any other right,
power or privilege hereunder. Except as specifically provided
for otherwise, the rights and remedies herein provided are cumulative and are
not exclusive of any rights or remedies which any party may otherwise have.
The parties hereto acknowledge that, under Japanese law, action for
specific performance is broadly permitted and that monetary
damages may not always be an adequate remedy for any loss or damage
incurred as a result of any breach of this Agreement. Whether or not
expressly provided in this Agreement, the parties hereby agree to waive any
defense, in any action for specific performance of any obligation under
this Agreement, that monetary damages would be adequate remedy. The rights
and remedies of any party arising out of or otherwise in respect of
any inaccuracy in or breach of any material representation,
warranty, covenant or agreement contained in this Agreement shall
not be limited by the fact, in and of itself, that the act,
omission, occurrence or other state of facts upon which any claim
of any such inaccuracy or breach is based may also be the subject
matter of any other representation, warranty, covenant or agreement contained
in this Agreement (or in any other agreement between the parties) as to which
there is no inaccuracy or breach.
13.3. Binding Effect. This Agreement shall be binding upon and shall
inure to the benefit of the parties hereto and their respective successors
and assigns.
13.4. Disclaimer of Partnership or Agency. Nothing contained
or implied in this Agreement shall constitute or be deemed to constitute a
partnership among the parties nor shall this Agreement constitute any party
as the legal representative, agent or fiduciary of any other, nor shall any
party have the right or authority to assume, create or incur any commitment,
liability or obligation of any kind, express or implied, against or in the
name of or on behalf of any other party.
13.5. Expenses. Except as otherwise specifically set forth
in this Agreement, the parties hereto shall bear their respective
expenses including the Taxes incurred in connection with the
preparation, execution and performance of this Agreement and the
transactions contemplated hereby, including all fees and expenses
of agents, representatives, counsel and accountants, interpreters
and consultants.
13.6. Counterparts. This Agreement may be executed in four or more
counterparts, each of which shall be deemed an original but all of which
together shall constitute one and the same instrument.
13.7. Assignment. This Agreement or any right or obligation hereunder
may not be transferred or assigned by any party hereto without the prior
written consent of the all the other parties hereto.
13.8. Separability. Any term or provision of this Agreement
which is invalid or unenforceable shall be ineffective to the
extent of such invalidity or unenforceability without rendering
invalid or unenforceable the remaining terms and provisions of
this Agreement.
13.9. Entire Agreement. This Agreement constitutes the
entire agreement and understanding among the parties with respect
to the subject matter expressed herein and all other previous
agreements and understandings or other arrangements of any kind
with respect to the said subject matter (including the documents
dated as of June 25, 1997 and signed by TAF, Checkpoint and the
Seller) shall be cancelled and superseded completely by this
Agreement as of the dated hereof.
ARTICLE XIV
LANGUAGE, GOVERNING LAW AND DISPUTE RESOLUTION
14.1. Language. This Agreement is made in, and shall be
construed in accordance with, the English language (other than
those Schedules and Exhibits with respect to which the English
translations are not attached hereto).
14.2. Governing Law. This Agreement shall be governed by and
interpreted in accordance with the laws of Japan.
14.3. Arbitration. All disputes, controversies or
differences which may arise between the parties out of or in
relation of or in connection with this Agreement shall be finally
settled by arbitration. If the arbitration is initiated by
Checkpoint and/or the Purchaser, the arbitration shall be
conducted in Tokyo, Japan, in accordance with the commercial
arbitration rules of JCAA and if the arbitration shall be
initiated by TAF and/or the Seller, the arbitration shall be
conducted in Xxx Xxxx Xxxx, Xxx Xxxx, Xxxxxx Xxxxxx of America,
in accordance with the arbitration rules of AAA. In any event,
the arbitration shall be conducted in English. The arbitral
tribunal shall be composed of 3 arbitrators. In accordance with
the relevant rules of JCAA or AAA, as the case may be, each party
shall appoint 1 arbitrator, and JCAA or AAA, as the case may be
shall appoint the third arbitrator who shall not be a national of
either Japan or the United States of America. Awards rendered in
any arbitration hereunder shall be final and conclusive and
judgment thereon may be entered into in any court having
jurisdiction for enforcement thereof. There shall be no appeal
to any court from awards rendered hereunder. Awards rendered
hereunder shall apportion the costs of the arbitration concerned
including the fees of the arbitrators.
14.4. Provisional Relief. Nothing contained in this Article
14 shall be construed to limit or preclude a party from bringing
any action in any court of competent jurisdiction for injunctive
or other provisional relief to compel the other party to comply
with its obligations hereunder at any
time.
IN WITNESS WHEREOF, the parties have caused this Agreement to be
executed as of the day and year first above written.
TOKAI ALUMINUM FOIL CO., LTD. CHECKPOINT SYSTEMS, INC.
By: Shuhei Kubota By: Xxxxx X. Xxxx
President and Represenative President and
Director Chief Executive Officer
TOKAI ELECTRONICS CO., LTD. CHECKPOINT PRODUCTION JAPAN CO., LTD.
By: Xxxxxxxx Xxxxxx By: Xxxx X. Xxxxxx
Representative Director and Vice President, General Counsel
Executive Vice President and Secretary
