SHARE PURCHASE AND SALE AGREEMENT
BETWEEN
KAO CORPORATION
AND
PRIMARY MARKETING GROUP LIMITED
-------------------------------------------
NOVEMBER 28, 1998
Beauchamps
Xxxxxxx Xxxxx
Xxxxxxxxxx Xxxx
Xxxxxx 0
TABLE OF CONTENTS
SHARE PURCHASE AND SALE AGREEMENT
ARTICLES Page
1. DEFINITIONS..........................................................1
2. SALE OF SHARES.......................................................7
3. PURCHASE PRICE AND MISCELLANEOUS EXPENSES ...........................7
4. CLOSING.............................................................10
5. SELLER'S WARRANTIES.................................................15
6. BUYER'S WARRANTIES..................................................22
7. INTERIM PERIOD......................................................23
8. POST CLOSING........................................................26
9. RIGHT OF TERMINATION; DISPUTE SETTLEMENT............................30
10. BUYER'S INDEMNITY...................................................31
11. SELLER'S INDEMNITY..................................................32
12. SURVIVAL, REMEDIES AND PROCEDURE FOR
INDEMNIFICATION.....................................................33
13 MISCELLANEOUS..................................................... 37
EXHIBIT
Agreement of Guaranty........................................................42
SCHEDULES
Schedule 1.01 Directors .....................................................41
Schedule 1.02 Real Property .................................................43
Schedule 3.03 Valuation Procedure for Inventory,
Accounts Payable, Receivables and Other Miscellaneous Assets.................46
Schedule 5.20 Exceptions to Required Assets..................................48
Schedule 5.21 Software Compliance Year 2000.................................50
Schedule 8.08 Exceptions to NonCompetition Restrictions......................52
DISCLOSURE SCHEDULE
SHARE PURCHASE AND SALE AGREEMENT
THIS AGREEMENT, entered into and effective as of the 28th day
of November, 1998, by and between KAO CORPORATION, a Japanese corporation, with
its principal place of business at 14 -10 Nihonbashi Xxxxxxxxx, 0 -xxxxx,
Xxxx-Xx, Xxxxx 000 - 0000, Xxxxx ("Seller"), and PRIMARY MARKETING GROUP
LIMITED, a company incorporated in Ireland with registration number 236345, with
its principal place of business at Xxxx 0x, Xxxxxxxx Xxxxxxxxxx Xxxxxx, Xxxxxx,
Xxxxxx Xxxxxx, Xxxxxxx ("Buyer").
W I T N E S S E T H
WHEREAS, Seller and Seller's Affiliate are the legal and
beneficial owners of the Shares (as defined below along with other capitalized
terms); and
WHEREAS, Buyer desires to purchase the Shares, and Seller
desires to sell the Shares; and
WHEREAS, Zomax Optical Media, Inc., a Minnesota corporation,
owns directly or indirectly all the shares of Buyer;
NOW, THEREFORE, for good and valuable consideration, the
sufficiency and receipt of which is hereby acknowledged, and subject to the
terms, conditions, covenants and provisions of this Agreement, Seller and Buyer
mutually covenant and agree as follows:
ARTICLE 1
DEFINITIONS
1.01 As used in this Agreement, the following terms have the
following meanings:
"Accounts Payable" means:
(a) the trade accounts payable in the ordinary course of
business as of Closing (whether or not due) which have arisen from the purchase
of goods and/or services by the Business from its suppliers, together with any
accrued but unpaid rent in respect of the Real Property due on or prior to
Closing;
(b) wages, salaries and variable compensation earned by
Employees in the Business that is accrued and unpaid, in each case as of the
Closing Date;
(c) all other Employee benefits, liabilities and claims
incurred, accrued or earned and unpaid under any arrangement of the Company as
of Closing; and
(d) all liability of the Company for taxes of any kind payable
by the Company net of credits or offsets for tax losses of the Company as of
Closing.
"Affiliate" means with respect to a specified entity, an
entity that directly, or indirectly through one or more intermediaries,
Controls, or is Controlled by, or is under common Control with the entity
specified; provided, that, without limiting the generality of the foregoing, the
term "Affiliate" shall not include any entity in which a Party has a fifty
percent or less ownership interest.
"Agreement" means this Share Purchase and Sale Agreement
together with the Exhibit hereto,all its Schedules and the Disclosure Schedule.
"Business" means the Irish Business and the German Business.
"Business Assets" means the Real Property, the Machinery and
Equipment, the Office Equipment, the Permits, the Contracts, the Business
Records, the Inventory, the Computer Software Assets, Intellectual Property
Rights and Miscellaneous Assets but, for the avoidance of doubt, not including
the Excluded Assets.
"Business Records" means all business records of the Company
prepared in the ordinary course of business and now existing (subject to changes
in the ordinary course of business) relating solely or principally to the
Business (other than those related to the divestiture of the Business and those
comprising communications with Seller and Seller's Affiliates, attorneys,
accountants and consultants or not pertaining in some material way to the
Business Assets (the "Excluded Records"), subject in all cases to Third Party
confidentiality restrictions or legally required consents), including market
information, sales aids, customer and supplier lists, sales history and
historical site specific accounting information, and records related to
Intellectual Property Rights, whether or not located, as of the Closing Date, at
the Real Property, which relate exclusively or principally to the Business as it
is conducted by the Company at the Real Property.
"Buyer's Knowledge" and phrases of like impact shall mean the
actual knowledge of Buyer's employees, being Xx. Xxxxx X. Xxxxxxxx, Mr. Xxxxx
Xxxxxxxx, Xx. Xxxxxxx Xxxxxxxx and Mr. Xxxxxxx Xxxxx.
"Cash" means all cash on hand or in banks, including cash
equivalents and investments, which is held or owned by or for the account of the
Company (and not for the account of any customers of the Company).
"Closing" means the closing of the sale and purchase of the
Shares contemplated by this Agreement.
"Closing Date" means the date on which Closing occurs.
"Company" means Kao Infosystems (Ireland) Limited, a company
incorporated in Ireland with registered number 1907706 and having its registered
office at Xxxx 0, Xxxxxxxxxx Xxxxxxxxxx Xxxxxx, Xxxxxxxxxx, Xxxxxx 00.
"Company Benefit Schemes" means all existing employee pension,
death benefit, disability benefit or other like benefit schemes, plans,
programmes, arrangements and contracts of or operated by or in relation to the
Company at the Closing Date full particulars of which are set out in the
Disclosure Schedule.
"Computer Software Assets" means all computer software, data
rights and documentation used in the conduct of the Business as of the date
hereof.
"Contracts" means all sales orders and contracts, purchase
orders and contracts, distribution agreements, development agreements,
consulting agreements, Real Property leases, equipment and other chattel leases,
licences (including software licences) and other contracts or agreements and to
which the Company is a party, to the extent that they shall not have been
terminated on or prior to the Closing Date, but excluding any Excluded Assets.
"Control" and phrases of like impact shall mean the
possession, directly or indirectly, of the power to direct or cause the
direction of the management and operating policies of the entity in respect of
which the determination is being made, through the ownership of voting
securities, contract, voting trust or otherwise.
"Directors" means the several persons, being all the directors
of the Company at the Closing Date, whose names and addresses are set out in
Schedule 1.01.
"Disclosure Schedule" means the schedule entitled "Disclosure
Schedule" which is in a form approved by (and for the purposes of identification
signed or initialed by or on behalf of) the parties to this Agreement.
"Effective Date" means the effective date of this Agreement
being the date written in the preamble to this Agreement.
"Employees" means the employees employed as of Closing, in
connection with the Irish Business by the Company, and in connection with the
German Business, by the German branch of the Company, whose names are set out in
the respective staff lists in the Disclosure Schedule.
"Encumbrance" means any lien, mortgage, judgment, security
interest, easement, restriction or charge or other encumbrance.
"Environmental Claim" means any claim, action, cause of
action, investigation or written notice by any person or entity alleging
potential liability of the Company arising out of, based on or resulting from,
in part or in whole, (a) the presence, or release into the environment, of any
Materials of Environmental Concern on the premises comprising the Real Property
or (b) circumstances forming the basis of any violation, or alleged violation,
of Environmental Laws.
"Environmental Laws" means the applicable Irish or German
state, provincial, regional, county, parish, municipal and local environmental,
health or safety laws, regulations and rules and the common law relating to the
use, refinement, handling, treatment, removal, storage, production, manufacture,
transportation, disposal, emissions, discharges, releases or threatened release
of Materials of Environmental Concern or otherwise relating to protection of the
environment as the same may be amended or modified.
"Excluded Assets" means those assets of Company listed below
which at or prior to Closing shall vest in Seller or Seller's Affiliate:
(a) all promissory notes and indebtedness owing to the
Company, other than those associated with Receivables;
(b) except as expressly set forth in Section 8.05, all rights
in the trade name "Kao" and "Kao Infosystems", or any other trademark or trade
name, website or Internet domain name of Seller or its Affiliates;
(c) all insurance policies, proceeds therefrom, and rights thereunder;
(d) all contracts or licences under which the Company has been
directly or indirectly licensed through Seller to use certain intellectual
property rights as listed in the Disclosure Schedule; and
(e) Excluded Records.
"Excluded Liabilities" has the meaning ascribed to such term
in Section 3.02.
"GAAP" means as the context so requires or admits Irish or
German generally accepted accounting principles consistently applied.
"German Business" means the business of floppy disc
duplication, turnkey assembly and fulfillment carried on in Germany by the
German branch of the Company at the Effective Date.
"XXX" means XXX Ireland, otherwise or formerly known as the
Industrial Development Agency of Ireland, having its address at Xxxxxx Xxxxx,
Xxxxxx 0.
"XXX Xxxxx Agreements" means the four grant agreements to
which the XXX, the Company and Seller or (as the case may be) Seller's Affiliate
are party, being the agreements respectively dated 31st December 1993, 31st
December 1993, 23rd June 1995 and 27th April 1998.
"Intellectual Property Rights" means all right, title and
interest the Company has in any patents, trademarks, copyrights and technical
information that is protected by law from infringement, owned by it and used
exclusively by it in the Business (excluding rights granted to it by a third
party in a licence or other agreement) but for the avoidance of doubt excluding
any right to use, or any rights, title or interest in, the name "Kao" or "Kao
Infosystems" or any imitation thereof save as provided in Section 8.04 and
Section 8.05.
"Inventory" means the inventories of raw material, stores,
tools, work in progress, finished goods, supplies and packaging materials held
for use or generated by the Company at Closing, which are located at or in
transit to or from the Real Property, field warehouses or customer locations.
"Ireland" means the Republic of Ireland.
"Irish Business" means the business of compact disc
replication, floppy disc duplication, turnkey assembly, telemarketing and
fulfillment carried on in Ireland by the Company at the Effective Date.
"Losses" has the meaning ascribed in the first paragraph of
Article 10.
"Machinery and Equipment" means the manufacturing, storage,
distribution, transportation and other machines and equipment owned by the
Company (or Company's leasehold interest therein under leases that are
Contracts) and located on the Real Property on the date hereof subject to
changes in the ordinary course of business.
"Material Contract" means those contracts (including contracts
in relation to Real Property) to which the Company is a party (other than
purchase orders to sell or buy in the ordinary course of business) which relate
to the Business and have an aggregate remaining value of at least $25,000. For
the purposes of this Agreement, "remaining value" refers to the revenue thereon
as to which the Company has a contractual right, or the cost thereof as to which
the Company has a contractual duty, prior to expiration thereof or the possible
exercise of a termination right thereunder.
"Materials of Environmental Concern" means any toxic or
hazardous waste, pollutants or substances, including, without limitation,
asbestos, radon, PCBs , petroleum products and byproducts, substances defined or
listed as a pollutant, air pollutant, "hazardous substance" ,"toxic substance",
"toxic pollutant", "medical waste" or similar identified substances or mixtures,
in or pursuant to any Environmental Law.
"Mergers Act" means the Irish Mergers, Takeovers and
Monopolies (Control) Act, 1978 as amended from time to time.
"Miscellaneous Assets" means the Receivables, Cash, prepaid
expenses (including but not limited to prepaid royalties, prepaid tax
assessments and prepaid fees and charges for utilities and other periodic
payments relating to the Business), and other current assets (other than
Inventory), all as of the Closing Date.
"Office Equipment" means the office equipment, furniture,
files, cabinets, computer hardware and related tangible personal property owned
by the Company (or the Company's leasehold interest therein under leases that
are Contracts) and located on the Real Property on the date hereof, subject to
changes in the ordinary course of business provided that software loaded on
computers shall be deemed Business Assets only if such software constitutes
Computer Software Assets.
"Other Purchase and Sale Agreements" means the other
agreements, dated on or about the date hereof, which Buyer or its Affiliate has
entered into respectively with Kao Infosystems Canada Inc. and Kao Infosystems
Company for the purchase and sale of assets described in those other agreements.
"Party" means either Buyer or Seller.
"Parties" means both Buyer and Seller.
"Permits" means all rights in and to all permits, consents,
licenses, authorizations, and approvals used in the Business, which are required
by any governmental entity in order for the Company to conduct the Business as
presently conducted (excluding general corporate and other similar
authorizations not specific to the Business, such as qualifications to transact
business).
"Purchase Price" has the meaning ascribed in Section 3.03.
"Real Property" means the all the right, title and interest of
the Company in the property situate in Ireland and in Germany as described in
Schedule 1.02.
"Receivables" means the trade accounts receivable by the
Company as of Closing arising from the sale of products and/or services in the
course of the Business by the Company to its customers.
"Secretary" means the secretary of the Company, being HBK
Secretarial Services Limited, having its address at Xxxxxxx Xxxxx, Xxxxxxxxxx
Xxxx, Xxxxxx 0.
"Seller's knowledge" and phrases of like impact shall mean the
actual knowledge of the following persons: Xx Xxxxxxx Xxxxxxxx and Xx Xxxxxxx
Xxxxxx as to the Business, Mr. Xxxxxxx Xxxxxx as to the Irish Business and Xx
Xxxxx Xxxxx as to the German Business.
"Shares" means the 13,680,860 issued Ordinary Shares of
IR(pound)1 each in the capital of the Company.
"Tangible Property" means the Machinery and Equipment, Office
Equipment, Inventory and the Business Records.
"Taxes" means all forms of taxation, duties, imposts and
levies whether of Ireland or elsewhere, including (but without limitation)
income tax, corporation tax, corporation profits tax, advance corporation tax,
capital gains tax, capital acquisitions tax, residential property tax, wealth
tax, value added tax, customs and other import and export duties, excise duties,
stamp duty, capital duty, social insurance, social welfare or other similar
contributions and other amounts corresponding thereto whether payable in Ireland
or elsewhere, and any interest, surcharge, penalty or fine in connection
therewith.
"Third Party" shall mean a party other than either of the
Parties or their respective Affiliates.
"US Agreement" means the agreement dated on the date of this
Agreement, made between Kao Infosystems Company and Zomax or its Affiliate and
relating to the sale and purchase of assets described in such agreement.
"Zomax" means Zomax Optical Media, Inc, a Minnesota
corporation with its principal place of business at 0000 Xxxxxx Xxxx, Xxxxxxxx,
Xxxxxxxxx 00000, being the holding company (within the meaning of Section 155 of
the Companies Act, 1963) of Buyer.
"Zomax Guaranty" means the Agreement of Guaranty, in the form
attached hereto as an Exhibit, providing a guarantee by Zomax in favour of
Seller.
1.02 Unless otherwise noted, all dollar amounts set forth
herein are expressed in United States currency and the symbol "$" shall mean
United States dollars. If for any reason whatsoever it becomes necessary to
convert any sum due under this Agreement from one currency ("the first
currency") into United States dollars ("the second currency") or vice versa such
conversion shall be made at the rate of exchange prevailing on the business day
prior to the date payment is due. For this purpose "rate of exchange" means the
rate at which the party converting such currency could purchase the second
currency with the first currency using the rates quoted in the New York Times,
and "business day" means a day on which banks in Dublin and New York City are
generally open for business.
1.03 Reference to Sections are to Sections of Articles of this
Agreement and reference to Articles are to Articles of this Agreement.
1.04 Reference to Schedules and the Exhibit are to the
attached schedules and exhibit hereto which are incorporated by reference.
ARTICLE 2
SALE OF SHARES
Seller agrees to sell such of the Shares as are registered in
its name as of the Closing Date, and to cause its Affiliate to sell the
remaining Shares as are registered in its name as of the Closing Date, and Buyer
agrees to purchase as of the Closing Date the Shares, free from all Encumbrances
and with the benefit of all rights of whatsoever nature attaching or accruing to
the Shares including all rights to any dividends and distributions declared,
paid or made in respect of the Shares on or after the Closing Date.
ARTICLE 3
PURCHASE PRICE AND MISCELLANEOUS EXPENSES
Subject to the terms and conditions of this Agreement, Buyer
and Seller agree as follows:
3.01 Inclusion of Liabilities: Pursuant to the purchase of the
Shares, Buyer acknowledges that the Company continues to be liable to pay,
discharge and perform when due all liabilities and obligations (whether known or
unknown, fixed or contingent) of the Company, including all Accounts Payable but
other than Excluded Liabilities (the foregoing liabilities and obligations being
hereinafter referred to as the "Included Liabilities"). The Included Liabilities
include, but are not limited to:
(a) All obligations arising from and after the Closing under
Contracts, Permits and other agreements (including, without limitation, the
Contracts and agreements regarding Computer Software Assets); and
(b) All Accounts Payable existing on or after the Closing
Date.
3.02 No Excluded Liabilities: Except as provided in Section
3.01, it is intended that the Company shall not have any liabilities or
obligations (whether known or unknown, fixed or contingent) to the extent they
arise out of or relate to the Company's ownership, use or operation of the
Business or the Business Assets prior to the Closing Date (the "Excluded
Liabilities"). The Excluded Liabilities include, but are not limited to the
following:
(a) Indebtedness for borrowed money incurred prior to the
Closing Date.
(b) Liabilities with respect to capitalized leases.
(c) Other liabilities that are required under GAAP to be
accrued on the Company's balance sheet as of the Closing Date and are not
included in Accounts Payable or otherwise taken into account for purposes of
calculating the final Purchase Price under Section 3.03.
(d) Seller's Environmental Liabilities (as defined in Section
11.02 below).
(e) Seller's Taxes (as defined in Section 11.01 (a) below).
If any Excluded Liabilities are found to exist after the Closing Date, Seller
shall be liable therefor to the extent of its indemnity obligation as set forth
in Section 11.01 hereof.
3.03 (a) Purchase Price: The purchase price for the Shares and
for all other rights and liabilities contemplated hereunder ("Purchase Price")
shall be the sum of:
(1) Three million four hundred thousand Dollars
($3,400,000); and
(2) the value of the Inventory as of Closing computed
in accordance with Schedule 3.03; and
(3) the value of the Receivables and other
Miscellaneous Assets as of Closing computed in accordance with
the provisions of Schedule 3.03; and
(4) the value (expressed as a negative number) of
Accounts Payable as of Closing (net of any credits or refunds
accruing with respect thereto in the period prior to the
Closing Date) computed in accordance with the provisions of
Schedule 3.03.
(b) (1) Five business days prior to Closing Seller
shall provide to Buyer in writing an estimate of the values
described in Section 3.03(a)(2) (3) and (4) (whether totaling
a negative or positive number), which values shall be added to
the amount set forth in Section 3.03(a)(1) in order to
determine the amount paid by Buyer to Seller at the Closing.
All estimates shall be computed in accordance with the
methodology set forth in Schedule 3.03. Buyer shall be
provided access to the written information used by Seller to
calculate such estimates concurrent with Seller's preparation
of such estimates, and such estimates shall be explained to
Buyer promptly after they are calculated.
(2) No later than 45 days following Closing, Seller
shall provide to Buyer a report setting forth the actual
amount of the values described in Section 3.03(a)(2), (3) and
(4) as of the Closing, using the same valuation methods as
required herein to be used in preparing the estimates for such
values. Seller shall make available to Buyer Seller's books,
records and personnel (if any) related to and involved in the
calculation of such actual values, and Buyer shall make
available to Seller the Company's books, records and Employees
to the extent reasonably necessary for Seller to complete such
valuations.
(A) If the actual amount of the values
described in Section 3.03(a)(2), (3) and (4) as of
the Closing, when combined, is greater than the
estimate thereof, when combined, used to calculate
the Purchase Price, Buyer shall remit to Seller such
difference within 25 days of receipt by Buyer of
Seller's report, assuming objections to the report
are not submitted by Buyer in accordance herewith or
if such objections are submitted, within 7 days of
resolution of such objection. Buyer shall pay to
Seller within 25 days of receipt by Buyer of Seller's
report all amounts relating to the report that are
not disputed.
(B) If the actual amount of the values
described in Section 3.03(a)(2), (3) and (4) as of
the Closing, when combined, is less than the estimate
thereof, when combined, used to calculate the
Purchase Price, Seller shall remit to Buyer such
difference within 25 days of receipt by Buyer of
Seller's report, assuming objections to the report
are not submitted by Buyer in accordance herewith or
if such objections are submitted, within 7 days of
resolution of such objection. Seller shall pay to
Buyer within 25 days of receipt by Buyer of Seller's
report all amounts relating to the report that are
not disputed.
(3) By submittal of a written objection thereto no
later than 20 days following receipt of Seller's subsection
3.03(b)(2) report, Buyer may dispute any amounts reflected on
Seller's report but (A) only on the basis that the amounts
reflected thereon were not arrived at in accordance with the
terms of Schedule 3.03, and (B) only if the amount disputed
exceeds in the aggregate $25,000. Such objection shall
identify each disputed item with a reasonable description of
the amount in dispute and the nature of the objection. If
Buyer and Seller are unable to resolve such dispute within 30
days following Seller's receipt of Buyer's objection, they
shall submit the open matter(s) to a mutually agreed certified
public accountant (or if the Parties shall be unable to agree
within five days of a request by either Party to do so, a
certified public accountant jointly selected by the Parties'
respective accountants) who shall, within 30 days of such
submittal, issue a determination to both parties made in
accordance with the terms of this Agreement, which
determination shall be final and binding on the Parties. The
fees and expenses of such certified public accountant shall be
allocated between Buyer and Seller in the same proportion that
the aggregate amount of disputed items so submitted that is
unsuccessfully disputed by Buyer bears to the total amount of
all disputed items so submitted.
(c) If by operation of Section 3.03(b) above, an item of
Inventory or a Receivable or a Miscellaneous Asset is accorded no value, Seller
at its option and expense may require Buyer to return such Inventory item or
assign such Receivable or Miscellaneous Asset to Seller for no additional
consideration, and shall allow Seller reasonable access to any documentation
supporting collection of the Receivable or Miscellaneous Asset.
3.04 Payment Terms: The Purchase Price shall be payable in
immediately available funds in United States Dollars by wire transfer to an
account at a bank or banks to be designated by Seller in writing to Buyer prior
to the Closing Date.
3.05 Sales, Use, Transfer and Similar Taxes and Charges: Buyer
shall bear and pay all stamp, sales or use taxes and any transfer,
documentation, gross receipts, custom duties, value added and other taxes and
charges as well as interest and penalties thereon upon or with respect to the
sale or transfer of the Shares by Seller to Buyer pursuant to this Agreement but
shall not include income or capital gains taxes payable by Seller. To the extent
that any applicable law or regulation imposes upon Seller the obligation to
report or to pay such taxes or charges, Buyer shall promptly reimburse Seller
therefor upon receipt of Seller's invoice for the amount of such payments. If
the sale or transfer of the Shares is exempt from such taxes or charges, Buyer
shall provide Seller with appropriate exemption documents prior to the Closing
Date.
3.06 Excluded Assets: Notwithstanding anything, express or
implied, to the contrary contained in this Agreement, any assets of the Company
which comprise Excluded Assets are excluded from the transaction described by
this Agreement and accordingly, at or before Closing the Excluded Assets shall
vest in Seller or Seller's Affiliate. After Closing Buyer will cause Company to
assign and deliver to Seller any Excluded Assets not removed, assigned,
distributed or delivered to Seller or its Affiliates prior to Closing.
ARTICLE 4
CLOSING
4.01 Place and Date of Closing: Closing shall take place at
the offices of Beauchamps, in Dublin , Ireland at 3.00 pm local time on the
business day that is the later of: (a) 15 days after the date of this Agreement;
or (b) the eighth business day following satisfaction (or waiver) by the Parties
of the conditions to the Closing set forth in Section 4.05 or Section 4.06, as
provided therein.
4.02 Buyer Deliverables at Closing: At Closing Buyer shall:
(a) Pay to Seller or Seller's Affiliate, as Seller shall
designate, by wire transfer in immediately available funds in Seller's favour,
the part of the Purchase Price set forth in Section 3.03(a)(1) .
(b) Pay to Seller by wire transfer in immediately available
funds in Seller's favor, in an amount equal to the estimate of the values
described in Sections 3.03(a)(2), (3) and (4) as determined pursuant to Section
3.03(b)(1).
(c) Deliver to Seller a certificate of a duly authorized
officer of Buyer confirming the accuracy on the Closing Date of the
representations and warranties of Buyer contained herein, and that Buyer has
performed or complied with all of the terms, covenants and conditions of this
Agreement to be performed or complied with by Buyer at or prior to Closing.
(d) Deliver to Seller a legal opinion of Buyer's legal counsel
that as of the Closing Date:
(i) Buyer is a corporation duly organized and
validly existing under the laws of Ireland
and has full corporate power to execute,
deliver and fulfill the provisions of this
Agreement.
(ii) Neither the execution, delivery nor
performance of this Agreement nor the
consummation of transactions contemplated by
this Agreement violate any provision of
Buyer's Memorandum or Articles of
Association.
(iii) All necessary corporate proceedings to
authorize the transactions contemplated by
this Agreement, the performance by Buyer of
its obligations under this Agreement have
been taken, and Buyer has executed and
delivered all instruments and other
documents contemplated hereby.
(e) Deliver to Seller a legal opinion of Zomax's legal counsel
that as of the Closing Date:
(i) Zomax is a corporation duly organized,
validly existing and in good standing under
the laws of the State of Minnesota, and has
full corporate power to execute, deliver and
fulfill the provisions of the Zomax
Guaranty.
(ii) Neither the execution, delivery or
performance by Zomax of the Zomax Guaranty
nor the consummation of transactions
contemplated by this Agreement violate any
provision of Zomax's Articles of
Incorporation or Byelaws.
(iii) All necessary corporate proceedings to
authorize the transactions contemplated by
this Agreement, and the performance by Zomax
of its obligations under, and the execution
and delivery of, the Zomax Guaranty have
been taken.
(f) Deliver to Seller the Zomax Guaranty duly executed by
Zomax.
4.03 Seller Deliverables At Closing: At the Closing, Seller
shall deliver to Buyer:
(a) duly executed share transfers in favour of Buyer and/or
Buyer's nominee in respect of all of the Shares together with related original
share certificates;
(b) a written (special) resolution of the Company (pursuant to
Section 141(8) of the Irish Companies, Act, 1963) dated on or prior or the
Closing Date thereby resolving that the name of the Company, subject to the
consent of the relevant governmental authority in Ireland, be changed to such
name as Buyer shall have designated for such purposes by notice to Seller (which
shall not be a name which includes "Kao" or "Kao Infosystems" or any combination
thereof), together with a completed Form G1Q and a copy of the Memorandum and
Articles of Association of the Company evidencing the new name of the Company
(subject as aforesaid) (together the "Change of Name Documents");
(c) the Certificate of Incorporation of the Company and all
the Company's Business Records, share registers, accounts books and other
documents together with the corporate seal and a copy of the Company's
memorandum and articles of association (in such case) certified by the Secretary
as a true and complete copy thereof as at the Closing Date;
(d) duly executed resignations of the Directors and the
Secretary of the Company, each such resignation containing an acknowledgement
that each has no claim against the Company in respect of breach of contract,
compensation for loss of office or otherwise howsoever;
(e) a letter of resignation of the auditors of the Company;
(f) evidence that the amount of the Company's long term debt
has been paid, discharged or waived as the case may be;
(g) a certificate of the kind described in paragraph 11(6) of
Schedule 4 to the Irish Capital Gains Tax Act, 1975 in respect of the Purchase
Price;
(h) such of the original title documents as are in the
possession of Seller (or its legal advisors) to all of the Real Property,
together with any other documentation as is agreed to be furnished concerning
such Real Property in accordance with the replies by or on behalf of Seller to
Buyer's requisitions on title (and any rejoinders and replies thereto);
(i) a legal opinion of the Director of Seller's Legal
Department that as of the Closing Date:
(1) Seller is a corporation duly organized, validly
existing and in good standing under the laws of Japan, and has
full corporate power to carry on its business as now being
conducted;
(2) The consummation of transactions contemplated by
this Agreement do not violate any provisions of Seller's
Articles of Association;
(3) All necessary corporate proceedings to authorize
the transactions contemplated by this Agreement, the
performance by Seller of its obligations hereunder, and the
execution and delivery by Seller of all instruments and other
documents contemplated hereby have been taken.
4.04 Board Meeting: Seller shall procure that a Board Meeting
of the Company is held at Closing at which:
(a) such persons as Buyer may nominate are appointed
directors, secretary and auditors of the Company; and
(b) the resignations referred to in Section 4.03 (c) are
submitted and accepted.
4.05 Conditions to Buyer's Obligation. The obligation of Buyer
to consummate the transactions contemplated by this Agreement is subject to the
satisfaction of the following conditions (unless Buyer expressly waives such
conditions):
(a) Buyer and Seller shall have received or obtained all
governmental and regulatory consents and approvals which are required
(including, without limitation, pursuant to the Mergers Act) to consummate the
sale and purchase of the Shares, and to enable Buyer to own the Shares.
(b) Buyer (or Seller on behalf of Buyer) shall have received
written confirmation from the XXX of XXX approval to the Controlling interest in
the Company being held, directly or indirectly, by Buyer and/or Zomax (in
replacement of or succession to Seller) for the purposes of the continuation of
the XXX Xxxxx Agreements.
(c) No injunction restraining or prohibiting the transactions
contemplated hereby shall have been issued by a court or governmental authority.
(d) Seller (and its Affiliates where required) and its
officers and counsel shall have executed and delivered the items described in
Section 4.03 of this Agreement.
(e) No damage to or loss of the Business Assets by fire or
other casualty shall have occurred between the date of this Agreement and the
Closing Date which has a material adverse impact on the Business Assets as a
whole.
(f) The closing of the Other Purchase and Sale Agreements
shall have occurred or shall occur simultaneously with Closing hereunder.
(g) Buyer and/or Zomax shall have obtained financing for this
transaction pursuant to a financing commitment letter from GE Capital dated
November [ ], 1998, a copy of which has been furnished by Buyer and/or Zomax to
Seller. Buyer shall, and shall cause Zomax and each of its Affiliates to, use
its best efforts, exercised in good faith, to secure said financing and shall
take no action, or permit any of its Affiliates to take any action, that is
intended to induce or have the effect of inducing GE Capital to withdraw or not
honour its agreement to extend credit to Buyer and/or Zomax or its Affiliates.
In the event that GE Capital does not provide financing for the transaction,
Buyer will use, and shall cause each of its Affiliates to use, its best efforts
to secure replacement financing on commercially reasonable terms. Further, Buyer
shall offer its full faith and credit in the effort to obtain such financing.
(h) In the aggregate no material adverse change in the
Business shall have occurred between the date of this Agreement and the Closing
Date, including any such change with respect to customer or supplier
relationships, other than changes in the ordinary course of business or changes
attributable to a negative reaction among customers or suppliers to the proposed
acquisition of the Company by Buyer.
(i) The leases and supplemental agreement in respect of the
premises known as Unit 1, 2 and 3 respectively, Xxxxxxxxxx Xxxxxxxxxx Xxxxxx,
Xxxxxxxxxx, Xxxxxx 00 and forming part of the Irish situate Real Property have
been finalised, executed by the landlord and duly stamped.
(j) In the event that the Company has or is to grant a
counter-indemnity and security to and in favour of Seller and/or Seller's
Affiliate in accordance with Section 8.07, Seller shall have provided evidence
of compliance with Section 60(2) - (11) of the Irish Companies Act, 1963 in
respect of the giving of such counter-indemnity and security by the Company.
4.06 Conditions to Seller's Obligation. The obligation of
Seller to consummate the transactions contemplated by this Agreement is subject
to the satisfaction of the following conditions (unless Seller expressly waives
any such conditions):
(a) Buyer and Seller shall have received or obtained all
governmental and regulatory consents and approvals which are required (
including, without limitation, pursuant to the Mergers Act) to consummate the
sale and purchase of the Shares, and to enable Buyer to own the Shares.
(b) Seller and/or (as applicable) Seller's Affiliate shall,
with effect on or prior to Closing, have been absolutely released (or agreed to
be so absolutely released) by the XXX from and in respect of all liabilities and
obligations (whether actual or contingent) of Seller and/or (as applicable)
Seller's Affiliate arising, or as may arise, under or pursuant to each of the
XXX Xxxxx Agreements.
(c) No injunction restraining or prohibiting the transactions
contemplated hereby shall have been issued by a court or governmental authority.
(d) Buyer shall have delivered to Seller the funds required to
be delivered to it pursuant to Sections 4.02 (a) and (b).
(e) Buyer (and its Affiliates where required), and its
officers and counsel shall have executed and delivered the items described in
Section 4.02 of this Agreement.
(f) The closing of the Other Purchase and Sale Agreements
shall have occurred or shall occur simultaneously with Closing hereunder.
ARTICLE 5
SELLER'S WARRANTIES
Except as otherwise provided in this Agreement or disclosed in
the Schedules or the Disclosure Schedule, Seller represents and warrants to
Buyer that as of the date hereof and as of the Closing Date as follows:
5.01 Organisation and Share Capital; Seller is a company duly
organised, validly existing and in good standing under the laws of Japan and has
corporate power to execute, deliver and perform this Agreement.
Regarding the share capital of the Company:
(a) The Shares are beneficially owned by Seller (over 99%) or
its Affiliate, Kao Infosystems U.K. Limited (less than 1%), free from any
Encumbrance and Seller and such Affiliate are entitled to sell and transfer to
Buyer full legal and beneficial ownership of the Shares on the terms of this
Agreement.
(b) The Shares comprise the whole of the allotted and issued
share capital of the Company and all of them are fully paid up including, for
the avoidance of doubt, in respect of any amounts payable by way of premium.
(c) No person has the right (whether actual or contingent) to
call for the issue, allotment or transfer of any shares or equity securities of
the Company under any option, profit sharing or other agreement, arrangement or
commitment (including conversion rights, rights of pre-emption and rights on
realisation of security) and no person has claimed to be entitled to any of the
foregoing.
(d) The Company is not and has not agreed to become a holder
of any class of share or other capital of any company and the Company is not and
has not agreed to become a member of any joint venture, partnership or
consortium involving the issue of any shares by the Company.
5.02 No Conflict with Other Instruments or Agreements: Neither
the execution, delivery or performance of this Agreement by Seller, nor the
consummation of the transactions contemplated by this Agreement by Seller,will:
(a) violate any provision of the Articles of Incorporation of
Seller or Articles of Association of the Company, or any law, rule, regulation,
order, judgment or decree by which Seller, the Company or the Business may be
bound; or
(b) conflict with, result in a breach of the terms and
conditions of, or result in the imposition of any lien or other Encumbrance on
or with respect to any of the Shares or the Business Assets as a result of the
provision of, or constitute a default under, any agreement (except with respect
to any Contract under which Third Party consent may be required to the
continuation of such Contract following the change in Control of the Company
from Seller to Buyer) to which the Company is a party or by which it or the
Shares or the Business may be bound.
5.03 Authorisation: Seller has the corporate power, including
all necessary authorisation, to execute, deliver and perform this Agreement and
to comply with its obligations hereunder.
5.04 Binding Effect: This Agreement constitutes a legal, valid
and binding agreement of Seller, enforceable against Seller in accordance with
its terms, except as enforcement may be limited by bankruptcy, insolvency,
reorganization, or similar Laws affecting the enforcement of creditor's rights
generally and rules and laws concerning equitable remedies.
5.05 Litigation and Investigations: There is no material
litigation, action, or proceeding to which the Company is a party, nor to
Seller's knowledge is any material litigation, proceeding or investigation
threatened or pending by or against the Company as a result of its ownership of
the Business Assets or operation of the Business or against the Business Assets
or concerning the trustees of the Company Benefit Schemes (for which the Company
is or would be liable) for any reason whatsoever; and the operation of the
Business is not subject to any injunction, order, judgment, writ or decree to
any material extent.
5.06 Environmental Matters: There are no pending Environmental
Claims of a material nature, nor has the Company received any written notice of
any Environmental Claims of a material nature, nor to Seller's knowledge are
there any facts or circumstances relating to the Business Assets or the Business
that give rise to any Environmental Claims of a material nature, or any
noncompliance with or liability or responsibility under any administrative or
judicial judgments or orders or Environmental Laws.
5.07 Real Property:
(a) No person is in possession or occupation of the Real
Property or has any interest of any kind in such premises (whether adversely to
the interests of the Company and the German branch of the Company or otherwise)
save as disclosed in the Disclosure Schedule and subject thereto the Company and
its German branch are entitled to and have exclusive vacant possession of the
Real Property. The Real Property is free from any Encumbrance in any case
whether by the Company or any Third Party.
(b) All original deeds and documents necessary to prove the
Company's title to the Real Property are in the possession of the Company or its
German branch and are not held to the order of any other person or are in the
possession of a person other than the Company or its German branch and are held
to the order of the Company or its German branch and such deeds and documents
have been fully stamped and where appropriate have been adjudicated fully
stamped by the Irish Revenue Commissioners and there are no deeds or documents
of title in relation to the Properties which require to be registered in the
Land Registry or Registry of Deeds or in any other registry which have not been
so registered.
(c) The Real Property comprises all of the premises and land
owned or used by the Company and the German branch of the Company or otherwise
used in connection with the Business, and the particulars of title set out in
Schedule 1.02 are true and correct in every respect and the leases under which
the Company holds the premises comprising Irish Real Property situate at
Clondalkin and Ballsbridge in Dublin, are valid, binding and of full legal
effect with respect to the parties to such leases, and the Real Property is free
from any option to acquire such Real Property and there is appurtenant to each
of the properties comprised in the Real Property all necessary rights of access
and for necessary utilities..
(d) No notices or orders to Seller's knowledge, which would
adversely affect the use, ownership, occupation or value of the Real Property or
the operation of the Business by the Company, have been served upon or received
by the Company relating to the Real Property and the Company is not aware of an
intention to serve any such notice or order in respect of the Real Property.
(e) All accesses to and egresses from the Real Property and
all services serving same have been taken in charge by the relevant local
authority and where they have not been taken in charge the Company has all
necessary easements and rights for the full use of same on terms which do not
entitle any person to terminate or curtail same.
5.08 Title to Tangible Property:
(a) The Company has legal and beneficial ownership of the
Tangible Property.
(b) The Tangible Property will, as of Closing, be free and
clear of all liens, mortgages, judgments, security interests, easements,
restrictions, charges or other encumbrances.
(c) No Third Party has any option or right of first refusal to
purchase all or any part of the Tangible Property.
5.09 Contracts and Other Agreements: The Disclosure Schedule
sets forth a list that includes or incorporates by reference (but is not
necessarily limited to) all Material Contracts. Subject to confidentiality
restrictions, true and correct copies of the Material Contracts have been
provided to Buyer. No other party to any Material Contract has notified the
Company in writing that it considers the Company to be in breach thereof, and,
to Seller's knowledge, no other party to any Material Contract is threatening to
allege such breach. To Seller's knowledge, the Company is not in material
default of any provision of a Material Contract. However, Buyer shall form its
own opinion with regard to Contracts which require the consent of a Third Party
to the continuation of such Contract following the change in Control of the
Company from Seller to Buyer.
5.10 Intellectual Property:
(a) Except as may be disclosed to Buyer in the Disclosure
Schedule, the Company has legal and beneficial ownership of the Intellectual
Property Rights and Company has not received written notice of any pending, nor
to Seller's knowledge is there currently threatened any, material claim, suit or
proceeding contesting any of the Intellectual Property Rights.
(b) Except as set forth in the Disclosure Schedule, the
Company has not received written notice of any pending, nor to Seller's
knowledge is there currently threatened any material claim, suit or proceeding
alleging that the operation or use of the Business Assets infringes a patent of
another party. To Seller's knowledge, the operation and use of the Business
Assets by the Company does not infringe the patents, trademarks, copyrights and
technical information rights owned by others to any material extent.
5.11 Compliance with Law; Governmental Consents:
(a) To Seller's knowledge, the operations of the Business and
the Real Property are in substantial compliance with all material applicable
laws and regulations having the force of law, and neither the Company nor Seller
has been notified in writing of any non compliance therewith. This is not
intended to relieve Buyer of its responsibility for ensuring such compliance by
the Company from the Closing Date forward.
(b) Except for filing and approval requirements under the
Mergers Act, no consent, authorization, or approval of, or exemption by, or
filing with, any court or governmental, public, or self-regulatory body of
authority, that is material to the operation of the Business, is required in
connection with the execution, delivery and performance by Seller of this
Agreement or of any of the instruments or agreements herein referred to, or the
taking of any action herein contemplated to be taken by Seller.
(c) All returns, particulars, resolutions and other documents
required to be delivered on behalf of the Company to the Register of Companies
have been properly made and delivered. The statutory books of account of the
Company are up to date and maintained in accordance with all applicable legal
requirements on a proper and a consistent basis.
5.12 Brokers or Finders: Except for its obligations to KPMG,
for which Seller and its Affiliates are solely responsible, Seller has not
incurred an obligation or liability, contingent or otherwise, for broker's or
finder's fees with respect to the matters provided for in this Agreement.
5.13 Taxes: No Taxes related to the Business are in dispute to
any material extent. The Company has, or as of Closing shall have, filed all
Irish and German state and local tax returns and reports then required to be
filed and paid all taxes, interest, penalties and other charges then due on such
tax returns and reports or claimed by any Irish or German taxing authority or
otherwise to be due in respect thereof to any material extent.
5.14 Labour Matters:
(a) Except as set forth in the Disclosure Schedule, the
Company has no employment contracts or collective bargaining agreements relating
to the Employees.
(b) As of the date of this Agreement, there is no labour
dispute, strike or work stoppage against the Company pending or, to Seller's
knowledge, threatened that may interfere with the Business.
(c) To Sellers's knowledge, the Company has complied in all
material respects relating to the Business with all applicable legal
requirements relating to the employment of personnel, plant closing, layoffs,
termination of employment and collective bargaining.
5.15 Employee Benefit Matters.
(a) The Disclosure Schedule lists the Company Benefit Schemes
which are maintained, contributed to or required to be contributed to by the
Company, for the benefit of any Employee or any former employee of the Company
employed in connection with the Irish Business. Seller has made available to
Buyer or its agents a copy of all material documentation relating to the
Company's Benefit Schemes to which the Company (or any trustee of the Company's
Benefit Schemes) is entitled. With the exception of the Company Benefit Schemes,
the Company is not under any legal liability or obligation (including
obligations established by custom) or exgratia arrangement or promise to pay
pensions, gratuities death or disability benefits or the like to or in respect
of any Employee or former employee of the Company. The Company Benefit Scheme
known as Kao Infosystems (Ireland) Retirement and Death Benefit Scheme is a
defined contribution scheme within the meaning of Section 2 of the Irish
Pensions Act, 1990. No person is a member of (or eligible to become a member
of), or is entitled to benefit under, and the Company has no obligation to
contribute to, the Company Benefit Scheme called the Kao Infosystems Life
Assurance Scheme.
(b) Each of the Company's Benefit Schemes which provides
pensions and/or death benefits is an exempt approved scheme within the meaning
of Chapter 1, Part 30 of the Irish Taxes Consolidation Act, 1997 and Seller has
no knowledge of anything which has been done or omitted to be done which will or
may result in the Company's Benefit Schemes ceasing to be such an exempt
approved scheme.
(c) The Company's Benefit Schemes have at all times complied
with and been duly administered in all material respects in accordance with all
applicable laws in Ireland, including revenue and trust law requirements,
Article 119 of the Treaty of Rome and the Irish Pensions Act, 1990 (and any
regulations made thereunder).
5.16 Receivables: The Receivables represent transactions
entered into by the Business for good and valuable consideration resulting from
the bona fide sale of products or performance of services in the ordinary course
of the conduct of the Business.
5.17 Subsidiaries: The Company has no equity or other
ownership interests in any corporation, partnership, limited partnership, joint
venture, trust, limited liability company, association or other legal entity
(save its ownership of the German branch of the Company).
5.18 Product Liability: Since January 1, 1998, to Seller's
knowledge, there have been no material claims or complaints, and there are no
material claims or complaints existing or threatened, of a material nature,
against the Company for product liability in respect of any product
manufactured, sold or distributed at any time by the Company in connection with
the Business, including any claim on account of any express or implied warranty,
except for normal returns and allowances in the ordinary course of business
consistent with past practice.
5.19 Financial Statements: Seller has furnished to Buyer
and/or Zomax and Xxxxxx Xxxxxxxx LLP, Buyer's and/or Zomax's accountants and tax
auditors ("AA"), copies of certain statements of operations, statements of cash
flow, balance sheets and general ledgers with respect to the Business (the
"Financial Statements") as well as certain projections (the "Projections").
Seller makes no representations or warranties regarding the Financial Statements
or the Projections. Seller has been advised that AA has reviewed and taken
certain exceptions to the Financial Statements based on its due diligence
activities. Seller represents that if the financial books and records provided
to Buyer and/or Zomax and AA (other than the Financial Statements) were used and
accepted as accurate by competent Certified Public Accountants to prepare
financial statements in accordance with GAAP, such financial statements would
present fairly the financial condition of the Company and the financial results
of the Company with respect to the Business for the dates and periods,
respectively, to which they relate.
5.20 Required Assets. Except as described in Schedule 5.20 or
elsewhere herein, the Business Assets, together with any Material Contracts not
included as a part thereof, include all intellectual property rights needed to
conduct the Business as presently conducted, without infringing on the rights of
any other party except for the Excluded Assets.
5.21 Year 2000 Compliance. Seller makes no representation or
warranty that any of the Business Assets are compliant with Year 2000 and makes
no other representation or warranty with respect to the occurrence of the Year
2000 or any date after 31 December 1998. To Seller's knowledge, based solely on
information received from the vendors and/or licensors of software used by the
Company, and without any independent investigation thereof, the software listed
on Schedule 5.21 is or is not Year 2000 compliant as so indicated therein. To
Seller's knowledge, Seller has provided to Buyer all information known to
Seller, including the studies and reports identified in Schedule 5.21, with
respect to Year 2000 compliance or lack of compliance, of the Business Assets.
5.22 Permits and Licenses. The Company has maintained in full
force and effect all permits, certificates of occupancy and licenses required to
operate the Business prior to Closing.
5.23 Company's Books and Records. To Seller's knowledge, the
Company's non-financial books and records which, to Seller's knowledge, were
provided in the due diligence process (including customer order files,
employment records and production and manufacturing records) are in all material
respects accurate and to the extent maintained by the Company in the ordinary
course of business, complete unless otherwise disclosed therein or otherwise.
5.24 Inventory. The Inventory represents the normal supplies
and stock in trade of the Company on hand as of the close of business on the
Closing Date. The Inventory is and as of Closing will be good, merchantable and
saleable in the ordinary course of business.
5.25 Encumbrances. There are no Encumbrances affecting the
Company or the Business Assets (except liens arising by operation of law in the
normal course of trading).
Notwithstanding anything herein or elsewhere to the contrary, it is agreed as
follows:
5.26 NO OTHER REPRESENTATIONS OR WARRANTIES: EXCEPT AS
OTHERWISE EXPRESSLY SET FORTH IN THIS AGREEMENT, NEITHER SELLER NOR ANY
AFFILIATE, AGENT OR REPRESENTATIVE OF SELLER HAS MADE, AND SELLER IS NOT LIABLE
FOR OR BOUND IN ANY MANNER BY, ANY EXPRESS OR IMPLIED WARRANTIES, GUARANTEES,
PROMISES, STATEMENTS, INDUCEMENTS, REPRESENTATIONS, OR INFORMATION PERTAINING TO
THE COMPANY, THE BUSINESS OR THE BUSINESS ASSETS OR ANY PART THEREOF (INCLUDING
WITHOUT LIMITATION THEIR DESIGN, CAPACITY, CONDITION, NON-INFRINGEMENT,
MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE). WITHOUT LIMITING THE
FOREGOING, EXCEPT AS EXPRESSLY SET FORTH IN THIS AGREEMENT, SELLER IS NOT LIABLE
FOR OR BOUND BY (AND BUYER HAS NOT RELIED UPON) ANY VERBAL OR WRITTEN
STATEMENTS, REPRESENTATIONS, OR ANY OTHER INFORMATION RESPECTING ANY PORTION OF
THE COMPANY, THE BUSINESS OR THE BUSINESS ASSETS FURNISHED BY THE SELLER NOR ANY
AFFILIATE OR ANY BROKER, EMPLOYEE, AGENT, CONSULTANT OR OTHER PERSON
REPRESENTING OR PURPORTEDLY REPRESENTING THE COMPANY.
5.27 NO WARRANTY OF PROBABLE SUCCESS OR CONDITION OF ASSETS:
SELLER MAKES NO WARRANTY REGARDING THE PROBABLE SUCCESS OR PROFITABILITY OF THE
OWNERSHIP, USE OR OPERATION OF THE COMPANY, THE BUSINESS OR THE BUSINESS ASSETS
AFTER THE CLOSING. ANY FORECASTS OR PROJECTIONS OR STATEMENTS REGARDING FUTURE
PERFORMANCE OR RESULTS, FINANCIAL OR OTHERWISE, PROVIDED TO BUYER ARE NOT
INTENDED TO BE RELIED UPON BY BUYER AND BUYER ACKNOWLEDGES AND AGREES THAT IT IS
NOT RELYING ON SAME. EXCEPT AS SPECIFICALLY SET FORTH IN THIS AGREEMENT, SELLER
MAKES NO WARRANTY AS TO THE PHYSICAL CONDITION OR SUITABILITY FOR ANY PARTICULAR
PURPOSE OF ANY OF THE BUSINESS ASSETS, INDIVIDUALLY OR COLLECTIVELY, WHICH
ASSETS ARE ALL BEING PURCHASED THROUGH PURCHASE OF THE SHARE CAPITAL OF THE
COMPANY ON AN "AS IS", "WHERE IS" AND "WITH ALL FAULTS" BASIS.
ARTICLE 6
BUYER'S WARRANTIES
Buyer represents and warrants to Seller that as of the date
hereof and as of the date of Closing:
6.01 Organization; Good Standing: Buyer is a corporation duly
organized, validly existing and in good standing under the laws of Ireland and
has full corporate power to execute, deliver and perform this Agreement.
6.02 No Conflict with Other Instruments or Agreements: Neither
the execution, delivery or performance of this Agreement by Buyer, nor the
consummation of transactions contemplated by this Agreement by Buyer will:
(a) violate any provision of the Memorandum or Articles of
Association or similar constitutional documents of Buyer, or any law, rule,
regulation, order, judgment or decree by which the Buyer may be bound; or
(b) conflict with, result in a breach of the terms and
conditions of, or constitute a default under, any agreement to which Buyer is a
party or by which it may be bound.
6.03 Authorization; Binding Effect:
(a) Buyer has the corporate power, including all necessary
authorization, to execute, deliver and fulfill the provisions of this Agreement,
and this Agreement constitutes a legal, valid and binding agreement of Buyer
enforceable against Buyer in accordance with its terms, except as enforcement
may be limited by bankruptcy, insolvency, reorganization, or similar laws
affecting the enforcement of creditors' rights generally and rules and laws
concerning equitable remedies.
(b) Except for filing and approval requirements under the
Mergers Act, no consent, authorization, or approval of, or exemption by, or
filing with, any court or governmental, public, or self-regulatory body or
authority, that is material to the operation of the Business, is required in
connection with the execution, delivery and performance by Buyer of this
Agreement or of any of the instruments or agreements herein referred to, or the
taking of any action herein contemplated to be taken by Buyer.
6.04 Brokers or Finders: Buyer has incurred no obligation or
liability, contingent or otherwise, for brokers' or finders' fees with respect
to the matters provided for in this Agreement.
6.05 Permits and Licenses: Buyer will, or will cause the
Company to, apply for and retain in full force and effect all permits,
certificates of occupancy and licenses required by or for the Company to operate
the Business on and after Closing.
6.06 No Instigation of Investigations: Except for action
required under Section 6.05 or taken in the ordinary course of business, Buyer
will not instigate any activity that would require or encourage any governmental
or public body or authority to investigate matters covered by Seller's
warranties or indemnities.
ARTICLE 7
INTERIM PERIOD
Seller and Buyer covenant and agree that between the date of
this Agreement and the Closing Date:
7.01 Operation of the Business: Seller shall cause the Company
not to, without having received the prior written consent or at the written
request of Buyer, do any of the following with respect to the Business:
(a) demolish, remove, alter, enlarge or dispose of any of the
Business Assets other than in the ordinary course of business, other than
removal of any of the "Kao" and/or "Kao Infosystems" names and logo from the
Company's property pursuant to Section 8.04 and the removal or disposal of any
Excluded Assets;
(b) make any material change in the Real Property or in the
Company's operation of the Business Assets other than in the ordinary course of
business;
(c) sell or otherwise dispose of any of the Business Assets
other than Excluded Assets or assets that would be included in the Inventory,
Receivables and Miscellaneous Assets except in the ordinary course of business;
(d) make or become a party to any contract, commitment or
other arrangement or review, extend, amend or modify any contract, commitment,
or other arrangement (other than contracts noted or described in the Disclosure
Schedule as being "under negotiation") which in any one case involves an amount
in excess of $25,000 except in a manner and on terms consistent with past
practices;
(e) pay or agree to pay conditionally or otherwise any bonus,
additional compensation, pension or severance pay to any of its present
employees whose annual base compensation and expected commissions exceed $50,000
or other than such payments as the Company is or may become obligated to pay
pursuant to agreements or benefit plans in effect on the date hereof;
(f) increase the rate of compensation (including salaries,
fees, commission rates, bonuses, profit sharing, incentive, pension, retirement,
or other similar payments or benefits and benefits) being paid at the date of
this Agreement to any Employees whose annual base compensation and expected
commissions) exceed $50,000;
(g) hire any employee whose annual base compensation and
expected commissions exceed $50,000;
(h) make any material change in the Business Assets other than
the Excluded Assets or those that would be included in the Inventory,
Receivables and Miscellaneous Assets;
(i) sell or otherwise dispose of any leases pertaining to the
Business Assets (other than capitalized leases), or enter into any renewals or
extensions of existing leases or enter into any new lease which in any case
involve an amount in excess of $25,000;
(j) permit any amendment or termination (other than an
expiration of the contract) of any Material Contract if the Company has the
contractual right to prevent same;
(k) alter or revise its accounting principles, procedures,
methods or practices;
(l) remove or permit to be removed from the Real Property any
Business Assets other than Excluded Assets or assets that would be included in
the Inventory, Receivables and Miscellaneous Assets except in the ordinary
course of business;
(m) change its credit policy as to sales of inventory or
collection of accounts receivable;
(n) create, or issue, or allot or redeem or vary any shares or
equity securities or give any option in respect of any shares or equity
securities;
(o) borrow any new money from any Third Party (other than
Seller or Seller's Affiliates) for an amount which would exceed (whether solely
or in aggregate) $25,000, save any new money which is to be discharged or repaid
on or before Closing;
(p) create any Encumbrance (other than a lien arising by
operation of law) over the whole or any part of the Business Assets, and which
has not been released or discharged on or before Closing;
(q) make any loan or advance or give any credit (other than
normal trade credit) in excess of $25,000 to any Third Party (other than Seller
or Seller's Affiliates);
(r) give any guarantee or indemnity to secure the liabilities
or obligations of any Third Party other than arising in the ordinary course of
Business, save as will not bind the Company as and from Closing.
7.02 Exceptions: Notwithstanding Section 7.01 or any other
provision of this Agreement, Seller may cause Company to do, and Company may do,
any of the following between the date of this Agreement and the Closing Date:
(a) take action or inaction that affects only the Excluded
Assets or results in the removal or destruction of Excluded Assets and does not
materially and adversely affect the Business Assets;
(b) take action or inaction that results in the reduction,
elimination or removal of Excluded Liabilities and any lien or encumbrance not
contemplated hereunder to exist on the Closing Date.
7.03 Work Diligently Towards Closing: Buyer and Seller shall
each use its reasonable best efforts to work diligently towards completing the
transaction contemplated by this Agreement on the contemplated Closing Date, and
to obtain all authorizations, consents, orders and approvals of, and to give all
notices to and make all filings with, all governmental authorities and other
Third Parties that may be or become necessary for its execution and delivery of,
and the performance of its obligations pursuant to this Agreement, and also to
enable Buyer to own the Shares, and each party will cooperate fully with the
other Party in promptly seeking to obtain all such authorizations, consents,
orders and approvals, giving such notices, and making such filings. Each Party
agrees to make an appropriate filing of a notification pursuant to the Mergers
Act with respect to the transactions contemplated hereby within five business
days of the date of this Agreement and to supply promptly any additional
information and documentary material that may be requested pursuant to the
Mergers Act. The Parties acknowledge that time shall be of the essence in this
Agreement and agree not to take any action that will have the effect of
unreasonably delaying, impairing or impeding the receipt of any required
authorizations, consents, orders or approvals.
ARTICLE 8
POST CLOSING
Seller and Buyer agree that after the Closing Date:
8.01 Access to Records: From time to time, upon request by
Seller, Buyer shall, and shall cause Company to, permit Seller reasonable access
to and copies of the Business Records for purposes of tax and other legal
compliance. Buyer shall retain such Business Records (including employment
records) for a period of at least seven years from the Closing Date or such
longer period as may be required by applicable law.
8.02 Cooperation in Litigation: After Closing, each Party
shall reasonably cooperate with the other Party and the other Party's attorneys
in the defense or prosecution of any litigation, action, suit or proceeding
instituted against or by the other Party pertaining to the Company, the Business
Assets or the Business, excluding, however, any litigation, action, suit or
proceeding between the Parties (including their Affiliates). Such cooperation
shall include, but not be limited to, conferring with the other Party's
attorneys or experts at their offices during normal business hours at mutually
convenient times and making available to the other Party's attorneys documents
or copies of documents specific to the Company, the Business Assets or the
Business, and such cooperation shall include giving testimony voluntarily. Such
cooperation shall not require the cooperating Party to be joined as a Party in
any such litigation. Each Party further agrees that it shall not voluntarily
disclose to any third party without the other Party's consent any information or
documents received by it heretofore or hereafter from the other Party's
attorneys in connection with the defense or prosecution of any litigation or
proceedings. The other Party shall pay the out-of-pocket expenses of the
cooperating Party and those expenses of the cooperating Party's employees and
agents reasonably incurred in connection with providing such cooperation but
shall not be responsible for paying any fees or for reimbursing the cooperating
Party for the salaries or costs of fringe benefits or other similar expenses of
the cooperating Party's employees in connection with time spent providing such
cooperation to the other Party.
8.03 Change of Name of Company: Buyer shall immediately lodge,
or cause to be immediately lodged, with the relevant company registration
authorities in Ireland the Change of Name Documents referred to in Section
4.03(b) and shall promptly do all acts and things as are or would be necessary
to ensure that the name of the Company is, with effect not later than from the
Closing Date, changed to a name not including "Kao" or "Kao Infosystems" or any
combination thereof. Immediately following the issue of the relevant change of
name certificate as may be issued by or from such authorities as aforesaid,
Buyer shall cause a copy of such certificate to be forwarded to Seller. Not
later than 90 days after the Closing Date, Buyer shall ensure that:
(a) the Company shall cease to operate under any business name
which includes "Kao" or "Kao Infosystems" or any combination thereof.
(b) the registration of the German branch of the Company in
the Commercial Register in Langen, Germany is changed to reflect the change in
Control and name of the Company as contemplated hereunder.
8.04 Removal of Company's Name from Property: Not later than
90 days after the Closing Date, Buyer shall remove the "Kao" and/or "Kao
Infosystems" name, logo and identifying marks, from the exterior of the Real
Property, and from all vehicles, equipment and other assets (other than
Inventory) of the Company. In the event Buyer fails to remove the "Kao" and "Kao
Infosystems" name within the 90 day period, Buyer hereby grants Seller and its
representatives the right of access to said property, during normal business
hours to remove the "Kao " and "Kao Infosystems" name, logo and identifying
marks from the exterior of the Real Property and other assets. Buyer shall pay
the full cost of such removal at the rates charged by premium companies that do
such work.
8.05 Use of Current Supplies:
(a) The Company will have after the Closing in Inventory a
quantity of work-in-progress, preprinted stationery, packaging material and
other supplies (including all Inventory owned by the Company) which bear the
"Kao" or "Kao Infosystems" name and logo. For a period of six months from the
Closing Date, Seller shall grant or cause to be granted to the Company a
paid-up, royalty-free license, to remain in effect until the exhaustion of such
Inventory in the ordinary course of business (not to exceed six months), to use
in Ireland and Germany any trademarks, trade names, trade dress, copyright or
other proprietary rights of Seller associated with such Inventory. Such license
shall be non-exclusive and without any warranty of any kind, express or implied,
including but not limited to any warranty of non-infringement. Such license
shall be in addition to other licenses granted hereunder or under the other
documents in accordance with the terms of this Agreement. Neither the Company
nor Buyer shall be entitled to use the "Kao" or `Kao Infosystems" name and/or
logo for any purpose whatsoever except as specifically provided in this Section
8.05.
(b) Notwithstanding anything contained in this Section to the
contrary, so that the Company is not required to remaster existing customer
titles for optical discs, the Company may do the following to the extent it is
consistent in all respects with applicable laws: the Company may continue to
manufacture existing customer titles bearing the "Kao" or "Kao Infosytems" name
and/or logo on the mirror band but for a period not to exceed six months as and
from the Closing Date so long as the Company also discloses thereon, to the
extent required by law, that it is the manufacturer thereof and such optical
disc was made in Ireland and otherwise complies with applicable law. During such
six-month period the Company shall be required to use an identification xxxx
that identifies each optical disc with the "Kao" or "Kao Infosystems" name
and/or logo as having been replicated by the Company. When a title requires
remastering or is remastered, the Company must remove the "Kao" or "Kao
Infosystems" name and/or logo for such title. The licence to the Company set
forth in this Section shall be deemed to include the rights set forth in the
preceding section. Buyer shall fully indemnify and hold Seller and its
Affiliates harmless from all loss, costs, claims, suits and expenses, including
reasonable attorneys fees, arising out of the Company's use of the "Kao" or "Kao
Infosystems" name and/or logo. At the end of the aforesaid six-month period,
Buyer shall cause the Company to certify in writing to Seller that the Company
has destroyed and ceased using all stampers that imprint the "Kao" or "Kao
Infosystems" name.
8.06 Tax Matters: Buyer and Seller agree to reasonably
cooperate and assist one another regarding all tax matters related to the Shares
sold pursuant to this Agreement. Buyer agrees to, and will cause the Company to,
cooperate and assist Seller in connection with any tax audits of or tax matters
relating to the Company for any periods through the Closing Date.
8.07 Contracts - Change of Control. The Company is a party to
various Contracts relating to the Business and the Real Property, which require
the consent of a Third Party to the continuation of such agreements following a
change in Control of the Company. Further, Seller and/or Seller's Affiliate are
guarantee parties in respect of certain Contracts. Such Contracts include, but
are not limited to, (a) the XXX Xxxxx Agreements; and (b) leases that comprise
Real Property situated in Ireland. If a consent required to change of Control
from Seller to Buyer, or to a release of any such guarantee of Seller, or
Seller's Affiliate, has not been obtained prior to Closing, and if Closing shall
have nonetheless taken place, the Parties shall cooperate using reasonable
efforts to obtain such consent or release. At all events, Seller shall have no
liability resulting from the failure of such consent to be granted. In the case
of any guarantees given by Seller or Seller's Affiliate concerning or relating
to the matters specified in (a) and (b) of this Section 8.07 ("Seller's
Guarantees"), Buyer shall cause Zomax to offer, as soon as practicable after the
date hereof and accordingly prior to the Closing Date, to each beneficiary of
Seller's Guarantees an equivalent and replacement guarantee from Zomax in
substitution for Seller's Guarantees, and so that if such guarantee, in the case
of the lease of Phase 3 at Clondalkin, Xxxxxx 00 comprised in the Irish Real
Property is not accepted by the landlord thereof, Seller shall cause its
Affiliate, Kao Infosystems Company (US), to offer its guarantee in respect
thereof prior to the Closing Date, which such guarantee shall also accordingly
be a "Seller's Guarantee". In the case of any Seller's Guarantees which have not
been released on or by the Closing Date, Buyer shall indemnify Seller (acting
for itself or its Affiliate as the case may be) against all and any liability
(arising, and relating to a time or event, after the Closing Date) of Seller (or
Seller's Affiliate) as may arise in connection with such Seller's Guarantees.
Further, in the event that on or by Closing, Seller and/or Seller's Affiliates
has not been unconditionally and irrevocably released from any Seller's
Guarantees given in connection with any leases as referred to in (b) of this
Section 8.07, the Parties agree and acknowledge that they shall (subject to the
provisions of Section 4.05 (j), and insofar as within their respective powers so
to procure) cause the Company to grant to and in favour of Seller and/or
Seller's Affiliate, and with effect on or as soon as practicable after Closing
(as requested by Seller), a counter indemnity, together with an all sums on
demand first mortgage, charge or similar security interest over the Real
Property that is the subject of such lease(s) as security for any liabilities
incurred, or as may be incurred, by Seller and/or Seller's Affiliate under such
Seller's Guarantees, in each case in such form as is to the reasonable
satisfaction of Seller.
8.08 Noncompetition. In consideration of Seller's rights
under this Agreement, Seller agrees that, from and after the Effective Date and
continuing for five years thereafter, Seller will not and will cause any of its
Affiliates not to, do any of the following, except to the extent otherwise
provided in Schedule 8.08:
(a) directly or indirectly, own any interest in, control, or
render services to (including but not limited to services in research), any
person, entity, or subsidiary, subdivision, division, or joint venture of such
entity in connection with the following activities (collectively, the
"Restricted Activities"); the design, development, manufacture, marketing, or
sale of CD's, the marketing or sale of replicated or duplicated software, or the
assembly, packaging or distribution (including electronic distribution) of
software other than as an adjunct to or in connection with Core Activities (as
defined in Schedule 8.08 hereto) anywhere in the world;
(b) directly or indirectly solicit any of the Company's
present or future employees, excluding Xxxxxxx Xxxxxx, engaged in the Restricted
Activities (while such employees are employed by the Company) to leave their
employment with the Company for the purpose of hiring them or inducing them to
leave their employment with the Company;
(c) directly or indirectly solicit sales for LOGISTIX
(SINGAPORE) PTE LTD from Buyer's customers or potential customers;
(d) directly or indirectly engage in the Restricted
Activities.
8.09 Breach of Noncompetition Provisions of this Agreement. In
addition to any other relief or remedies afforded by law or in equity, if Seller
breaches the non-competition provisions of this Agreement, Seller agrees that
Buyer shall be entitled, as a matter of right, to injunctive relief in any court
of competent jurisdiction plus reasonable attorneys fees for seeking such relief
. Seller hereby admits that irreparable damage will result to the Buyer if
Seller violates or threatens to violate the terms of the non-competition
provisions of this Agreement. Buyer shall be able to pursue any other
appropriate relief including, without limitation, money damages against Seller
for breach of the non-competition provisions of this Agreement.
8.10 Use of Computer Software Assets. After the Closing Buyer
shall permit Seller and its Affiliate, Kao Infosystems U.K. Limited, reasonable
access to and the right to use Computer Software Assets to the extent needed by
Seller in the period it winds up and concludes its affairs concerning the
Company or needed by such Affiliate pending transition to an alternate system
under new ownership. Such Affiliate is an intended beneficiary of this covenant.
8.11 Misdirected Mail. After Closing, any mail or
communication that is addressed to one party (addressee) but is received by the
other party (recipient) will be forwarded by the recipient to the addressee. For
the purposes of this Section 8.11, Buyer shall forward any mail that it or the
Company receives that is addressed to, or is intended for, Seller to Seller at
its address as specified in Section 13.07.
ARTICLE 9
RIGHT OF TERMINATION; DISPUTE SETTLEMENT
9.01 Termination:
(a) The Parties recognize the potential damage to the Business
from a failure to close or a delay in Closing. Therefore, the conditions
precedent to Closing are limited as set forth in Section 4.05 and Section 4.06.
(b) This Agreement may, by notice given prior to or at the
Closing, be terminated
(i) by mutual written consent of Buyer and
Seller; or
(ii) by either Buyer or Seller if the Closing has
not occurred for any reason (other than
through the failure of the Party seeking to
terminate this Agreement to comply fully
with its obligations under this Agreement)
on or before February 15, 1999; or
(iii) by either Party in the event of a material
breach by the other Party hereunder where
such breach has not been cured within 30
days following receipt of notice of breach
from the non-breaching Party. For the
purposes of this Section 9.01(b)(iii), one
or more breaches will be material if in the
aggregate such breaches have a material
adverse impact on the Business or the
Business Assets as a whole. Solely for the
purposes of this Section 9.01(b)(iii), in
determining whether one or more breaches
will be material for such purposes, the
provisions of this Agreement susceptible of
breach shall be read as if no reference for
materiality were contained therein.
(c) Each Party's right of termination under this Section 9.01
is in addition to any other rights it may have under this Agreement or
otherwise, and the exercise of a right of termination will not be an election of
remedies. If this Agreement is terminated pursuant to this Section 9.01, all
further obligations of the Parties shall terminate except that the obligations
arising under Section 13.09 will survive; provided, however, that if this
Agreement is terminated because of a breach of the Agreement by the other Party
or because one or more conditions to the terminating Party's obligations under
this Agreement is not satisfied as a result of the other Party's failure to
comply with its obligations under this Agreement, the terminating Party's right
to pursue all legal remedies will survive such termination unimpaired.
9.02 Dispute Settlement:
(a) The Parties shall attempt in good faith to promptly
resolve any dispute arising out of or relating to this Agreement by negotiation
between executives who have the authority to settle the controversy and who are
at a higher level of management than the parties with direct responsibility for
administration of this Agreement. Either Party may give the other Party written
notice of a dispute not resolved by such executives in the normal course of
business. If the matter has not been resolved by these persons within two months
of a disputing Party's notice, the dispute shall be referred to a more senior
executive of the Parties.
(b) In the event the Parties have not resolved a dispute
pursuant to Section 9.02(a), they shall be free to pursue any other remedy
provided by operation of law.
ARTICLE 10
BUYER'S INDEMNITY
Subject to the limitations and procedures set forth in Article
12 hereof, Buyer shall indemnify and hold Seller harmless from and against and
in respect of all losses, expenses (including without limitation reasonable
attorneys' fees), fines, debts, liabilities and obligations of any nature
whatsoever ("Losses") incurred by Seller to the extent that they relate to or
arise out of:
10.01 Environmental Liabilities:
(a) Any remediation, removal, response, abatement, cleanup,
investigative or monitoring costs, penalties, fines or damages for personal
injury or property damage, pursuant to a final judicial or administrative decree
or order or settlement agreement related to: (i) the generation, transportation,
storage, release or disposal of any Materials of Environmental Concern related
to the Business Assets or the Business on and after the Closing Date, either
during or after Buyer's ownership of the Shares or Company's ownership of the
Business Assets; and (ii) violations of federal, provincial, state or local
Environmental Laws, including requirements of environmental permits, by the
Company or the Business and on and after the Closing Date (the "Buyer's
Environmental Liabilities").
10.02 Breach of Warranty: Any breach of any of the
representations and warranties of Buyer contained in this Agreement, or
nonfulfillment of any agreement or covenant on the part of Buyer under this
Agreement.
10.03 Liability As to Employees: Any liability arising out of
the Company's termination of any Employee or the failure of the Company to
provide compensation and benefits to any Employees in accordance herewith and
substantially equivalent to the compensation and benefits paid or provided to
him or her prior to Closing.
10.04 No Consequential Damages: Notwithstanding anything to
the contrary, Buyer shall not be responsible for damages in the nature of
punitive, indirect or consequential damages arising out of any breach by Buyer
of Buyer's obligations under this Agreement.
ARTICLE 11
SELLER'S INDEMNITY
Subject to the limitations and procedures of Article 12
hereof, Seller shall, indemnify and hold Buyer harmless from and against and in
respect of all Losses incurred by Buyer to the extent they relate to or arise
out of:
11.01 Excluded Liabilities.
(a) Any liability of the Company for Taxes, net of credits or
offsets for losses of the Company in relation to Taxes existing as of the
Closing Date, arising in or in respect of the period prior to Closing or
occurring as a result of any payment, transaction, act, omission or occurrence
of whatever nature (whether or not the Company is a party thereto) occurring on
or prior to Closing (including the sale of the Shares to Buyer on Closing), to
the extent such Taxes: (i) were not paid at or prior to Closing, or (ii) were
not included in Accounts Payable or otherwise were not included in calculation
of the Purchase Price under Section 3.03 ("Seller's Taxes").
(b) Excluded Liabilities (other than Seller's Environmental
Liabilities and Seller's Taxes) existing after Closing.
11.02 Environmental Liabilities: Any remediation, removal,
response, abatement, cleanup, investigative or monitoring costs, penalties,
fines or damages for personal injury or property damage, pursuant to a final
judicial or administrative decree or order or settlement agreement related to:
(i) the generation, transportation, storage, release or disposal of any
Materials of Environmental Concern related to the Business Assets or the
Business prior to Closing, either before or during Company's ownership, use or
operation of the Business Assets; and (ii) violations of federal, provincial,
state or local Environmental Laws, including requirements of environmental
permits, by the Business prior to Closing (the "Seller's Environmental
Liabilities").
11.03 Breach of Warranty: Any breach of any of the
representations and warranties of Seller contained in this Agreement, or
nonfulfillment of any agreement or covenant on the part of Seller under this
Agreement.
11.04 No Consequential Damages: Notwithstanding anything to
the contrary, Seller shall not be responsible for damages in the nature of
punitive, indirect or consequential damages arising out of any breach by Seller
of Seller's obligations under this Agreement.
ARTICLE 12
SURVIVAL, REMEDIES AND PROCEDURE FOR INDEMNIFICATION
12.01 Period for Taking Action: Representations, warranties,
covenants and agreements hereunder shall survive Closing but only to the extent
set forth below.
(a) The representations and warranties of the Parties
hereunder shall survive Closing but only for a period of eighteen months from
and after the Closing Date; provided, however, Seller's representation and
warranty contained in Section 5.22 above shall survive Closing only for a period
of ninety days after Closing.
(b) The obligations of Buyer to indemnify Seller under Section
10.01 above shall survive Closing without any limitation as to time, subject to
applicable statutes of limitations.
(c) The obligations of Buyer to indemnify Seller under Section
10.02 above with respect to breaches of its representations and warranties
contained herein shall survive Closing but expire eighteen months after the
Closing.
(d) The agreements and covenants of Buyer, other than its
representations and warranties, shall survive Closing without limitation as to
time, subject to applicable statutes of limitations.
(e) The obligations of Buyer to indemnify Seller under Section
10.02 above with respect to the nonfulfillment of any agreement or covenant by
Buyer under this Agreement shall survive Closing without any limitation as to
time, subject to applicable statutes of limitations.
(f) The obligations of Seller to indemnify Buyer for
liabilities under Sections 11.01(a) and 11.02 above shall survive Closing
without any limitation as to time, subject to applicable statutes of limitations
but expire seven (7) years after Closing, and the obligations of Seller to
indemnify Buyer for liabilities under Section 11.01 (b) shall survive Closing
but expire three (3) years after Closing.
(g) The obligations of Seller to indemnify Buyer under Section
11.03 above with respect to breaches of its representations and warranties
contained herein shall survive Closing but expire eighteen months after the
Closing; provided, however, Seller's obligation to indemnify Buyer with respect
to Seller's representation and warranty contained in Section 5.22 above shall
survive Closing only for a period of ninety days after Closing.
(h) The agreements and covenants of Seller, other than its
representations and warranties, shall survive Closing without limitation as to
time, subject to applicable statutes of limitations.
(i) The obligations of Seller to indemnify Buyer under Section
11.03 above with respect to the nonfulfillment of any agreement or covenant by
Seller under this Agreement shall survive Closing without any limitation as to
time, subject to applicable statutes of limitations.
(j) Any claim made by Buyer against Seller in accordance with
this Agreement shall (if it has not been previously satisfied, settled or
withdrawn) be deemed to have been waived or withdrawn on the expiry of 6 months
after notice of such claim is received by Seller unless proceedings in respect
of such claim shall then have been commenced against Seller and for this purpose
proceedings shall not be taken to have been commenced unless they have been both
filed and served on Seller. Except as provided in the foregoing sentence, any
on-going claims, actions or demands commenced prior to expiration of the claim
period set forth in Section 12.01 or specifically stipulated elsewhere in this
Agreement may be pursued to conclusion even if final judgment or settlement of
such claim, action or demand occurs after the claim period has elapsed.
12.02 Notice: No claim for indemnification may be made with
respect to any of the indemnification provisions set forth in Articles 10 and 11
unless notice of such claim for indemnification which satisfies the provisions
of Section 12.06 below or Section 12.07 below with regard to environmental
matters is given to the indemnifying Party on or before the expiration date for
such indemnification provision as set forth in Section 12.01, but the actual
costs or expenses related thereto may be incurred or assessed after such
expiration date.
12.03 Claims: Subject to the limitation set forth in Section
12.04 below, a Party shall be liable in respect of any claim brought by the
other Party for indemnification for a breach by such Party of its
representations and warranties set forth in this Agreement only if such Party's
liability (but for this Section 12.03) for such claim exceeds $10,000 and if
such Party's aggregate liability for all such claims which exceed $10,000
exceeds in the aggregate one and one-half percent (1.5%) of the Purchase Price,
in which case such Party shall be liable for all such claims which exceed
$10,000.
12.04 Limit: The aggregate liability of any Party arising by
reason of any and all claims for indemnification or for a breach by such Party
of this Agreement other than those for indemnification pursuant to Sections
10.01, 10.03, 11.01 (a) and 11.02 above, shall not exceed an amount equal to
fifty percent (50%) of the Purchase Price; provided, however, to the extent that
a breach by Seller of the covenants set forth in Sections 8.08 and 8.09 and/or
Seller's indemnity obligation under Section 11.01 (b) above causes such
aggregate liability of Seller to exceed an amount equal to fifty percent (50%)
of the Purchase Price, this fifty percent (50%) of the Purchase Price limitation
shall be increased by the amount of the Seller's liability (but for this Section
12.04) for breach of the covenants set forth in Sections 8.08 and 8.09 above
and/or for Seller's indemnity obligation under Section 11.01 (b). In no event
shall Seller's aggregate liability arising by reason of any and all claims for
indemnification or for a breach by Seller of this Agreement other than for
indemnification pursuant to Sections 11.01 (a) and 11.02 above exceed one
hundred percent (100%) of the Purchase Price.
12.05 Not a Release of Other Obligations: Notwithstanding the
expiration of any of the indemnification provisions set forth in Articles 10 or
11 hereof or the limitations in this Article 12, such expiration and limits are
not intended to terminate or in any way modify or reduce the obligation of
Seller to be responsible for the payment and performance of its obligations
relating to Excluded Liabilities and the obligations of Buyer to be responsible
for the payment and performance of its obligations relating to the Included
Liabilities and payment of the Purchase Price in full.
12.06 Procedure: Except with respect to indemnification of
environmental matters, each Party to this Agreement shall give prompt written
notice to the other Party under each claim for indemnification hereunder
specifying that indemnification is sought pursuant to this Agreement, the amount
(to the extent known), nature of and event giving rise to the claim, and of any
matter which is likely to give rise to an indemnification claim. The
indemnifying Party shall have 30 days after receipt of the above-mentioned
notice to undertake control, at its expense, of the defense of any such matter
or its settlement; provided that: (i) the indemnifying Party shall not by this
Agreement permit to exist any lien, encumbrance or other adverse charge upon any
asset of any indemnified Party, (ii) the indemnifying Party shall permit the
indemnified Party to participate in such settlement or defense through counsel
chosen by the indemnified Party, provided that the fees and expenses of such
counsel shall be borne by the indemnified Party, and (iii) the indemnifying
Party shall agree promptly to reimburse the indemnified Party for the full
amount of any loss resulting from such claim and all related expense incurred by
the indemnified Party pursuant to this Article. Failure to give timely notice of
a matter which may give rise to an indemnification claim shall not affect the
rights of the indemnified Party to collect such claims from the indemnifying
Party so long as such failure to so notify does not adversely affect the
indemnifying Party's ability to defend such claim against a third party. No
indemnifying Party, in the defense of any claim or litigation, shall, except
with the consent of an indemnified Party, which consent shall not be
unreasonably withheld or delayed, consent to entry of any judgment or enter into
any settlement by which such indemnified Party is to be bound and which judgment
or settlement does not include as an unconditional term thereof the giving by
the claimant or plaintiff to such indemnified Party of a release from all
liability in respect to such claim or litigation.
12.07 Environmental Procedure; Access and Use of Real
Property:
(a) Buyer will at all times take all reasonable steps to
mitigate the Environmental Liabilities or potential Environmental Liabilities
which fall or may fall within the terms of Article 11. As soon as reasonably
practicable after a Party becomes aware of any Environmental Liabilities
(whether or not the Party is of the opinion that it has a valid claim against
the other Party under Articles 10 or 11), said Party shall give written notice
thereof to the other Party including all material details of any Environmental
Liabilities.
(b) With respect to any environmental matter for which Seller
may be required to indemnify Buyer under this Agreement, Seller shall have sole
control over all negotiations with governmental authorities concerning any
environmental measures for such environmental matters; provided that Seller
shall not take any action or fail to take any action with respect thereto that
has a material adverse impact on the Company or the Business. Seller shall
consult with Buyer from time-to-time as to the status of such negotiations and
shall promptly provide Buyer with copies of all proposed documents involving
such remediation, provided, however, that Seller shall not agree to any
environmental measures which shall adversely affect the Company's ownership, use
or operation of the Business Assets or the Business to any material extent
without the prior written approval of Buyer, which shall not be unreasonably
withheld.
(c) After Closing, Seller shall have access to the Real
Property (subject to the terms of the applicable lease) for environmental
remediation work as follows:
(i) Seller retains a right of access to the Real
Property after the Closing for purposes of
conducting environmental remediation work.
Seller shall make every reasonable effort in
implementing the work to reduce to the
extent practicable any interference with the
Company's operations at and use of the
property in question. Seller shall
coordinate its need to access the Real
Property with the Company's local
management, including at least ten days'
advance notice of use of any heavy
equipment.
(ii) At the conclusion of any environmental
remediation project by Seller at the Real
Property, Seller shall promptly dispose of
and/or decontaminate all rubbish and debris
caused by or otherwise associated with such
work, and shall remove all equipment,
materials and supplies, and shall restore
the property in question to its condition
immediately prior to the initiation of the
work and leave the same ready for ordinary
use, taking into account any necessary
above-ground fixtures necessary for the work
such as ground water monitoring equipment.
(d) Buyer acknowledges and agrees that Seller's obligations
for any environmental measures shall be limited to those measures applicable to
property that meets the present zoning classification of the Real Property.
12.08 Claim Limitations.
(a) A Party shall not be liable with respect to any claim
hereunder to the extent the liability or loss of the other Party in respect
thereof (i) is incurred or increased as a result of any legislation or
regulation (including those applicable to tax rates) not in force at the
Effective Date, any withdrawal of any published concession or ruling by any
relevant tax authority, or as a result of any change in legislation or
regulation thereafter; (ii) would not have arisen but for an act or omission
carried out after the date of this Agreement (other than in the ordinary course
of business) by Buyer or its Affiliates and which was carried out by a person
who knows or reasonably should have known that it would result in an increase in
the liability of the Seller hereunder; (iii) was or is subject to being offset
or reimbursed by a reduction in tax liability of the other Party or payment to
such other Party of insurance; (iv) a matter which has arisen in respect of any
act or omission stipulated to be carried out or omitted pursuant to this
Agreement or which is carried out or omitted at the written request of the Party
asserting the claim; or (v) a matter which was provided for or taken into
account in calculating the Purchase Price under Section 3.03.
(b) After Closing occurs, a Party may not bring a claim for
breach of a representation or warranty hereunder to the extent the basis for the
claim is known to the Party prior to the Closing (i.e. is within Seller's
knowledge or Buyer's knowledge, as the case may be), provided, however, that if
a Party obtains knowledge of the specific basis of a claim after the date hereof
and prior to the Closing Date that constitutes a material breach of a
representation or covenant and discloses such specific basis to the other Party,
and, if the transaction contemplated herein is consummated, the Party disclosing
such specific basis shall not be precluded solely by the operation of this
Section 12.08(b) from bringing a claim for breach hereunder; provided, however,
that the consent of the Party receiving such disclosure to proceed to Closing
shall be required if the Party making such disclosure is entitled or claims to
be entitled to terminate this Agreement under Section 9.01(b)(iii), failing
which consent neither Party shall be obligated to close hereunder.
(c) Nothing in this Article 12 shall derogate from either
Party's obligation to mitigate any loss which it suffers in consequence of a
breach of this Agreement.
(d) It is intended that the provisions of this Agreement with
respect to claims by one Party against the other shall apply to all claims
relating to the transactions contemplated hereby, regardless of whether such
claim is based in tort (including, without limitation, negligence) contract, or
otherwise, and shall provide the sole and exclusive remedy or remedies relating
to the subject matter hereof, the transactions contemplated hereby and the
Business Assets. All such claims are subject to the limitations set forth in
this Article 12 (including but not limited to Section 12.05).
ARTICLE 13
MISCELLANEOUS
13.01 Press Release: Buyer and Seller shall each be at liberty
to issue a press release or public announcement following execution of this
Agreement with respect to the transaction contemplated by this Agreement with
the prior written consent of the other Party, and the Parties shall consult each
other in advance on the form and content of such releases or announcements. Each
Party shall also be entitled to make such disclosures as may be required by
applicable law or by applicable regulations of regulatory authorities ("Required
Disclosure") without the prior consent of the other Party. Each Party shall
provide the other Party with a copy of any Required Disclosure prior to its
release. Any Required Disclosure that contains information that is not required
by applicable laws or regulations must be approved by the other Party, such
approval not to be unreasonably withheld.
13.02 Fees: Except as otherwise specifically provided herein,
the Parties shall pay their own expenses including attorney's fees, incident to
the preparation and performance of this Agreement, whether or not the
transactions contemplated herein are consummated.
13.03 Amendments: This Agreement shall not be amended or
modified except in writing, signed by both Parties.
13.04 Successors: This Agreement shall be binding upon and
inure to the benefit of the Parties hereto and their respective successors and
assigns, provided that prior to the Closing neither Party shall assign this
Agreement or any rights herein without the other Party's prior written consent.
This Agreement is not intended to confer upon any person except Buyer and Seller
(and their respective Affiliates) any rights or remedies hereunder.
13.05 Merger: All understandings and agreements heretofore
existing between the Parties regarding the purchase and sale of the Business
Assets are merged into this Agreement (including the Schedules and Exhibits
hereto). This Agreement fully and completely expresses the agreement of the
Parties and was entered into after adequate investigation. Neither Party is
relying upon any statement or representation not embodied in this Agreement, or
the Exhibits hereto, made by the other or the other's Affiliates, or by the
representative of the other or its Affiliates.
13.06 Non-waiver of Remedy: The failure of Seller or Buyer to
insist, in any one or more instances, upon the strict performance of any of the
terms, conditions or covenants of this Agreement shall not be construed as a
waiver or relinquishment for the future of such term, condition or covenant. A
receipt by Seller or Buyer of any money with knowledge of the breach of any
term, condition or covenant of this Agreement, shall not be deemed a waiver of
such breach, and no waiver, change, modification or discharge by either Party
hereto of any provision in this Agreement shall be deemed to have been made or
shall be effective unless expressed in writing and signed by both Seller and
Buyer. In addition to the other remedies provided in this Agreement, Seller and
Buyer shall be entitled to the restraint by injunction of the violation, or
attempted or threatened violation of any of the terms, conditions or covenants
of this Agreement, or to a decree compelling performance of any of such term,
condition or covenant.
13.07 Notices: All notices, consents, requests and approvals,
any notice of change in address for the purpose of this Article, and other
communications provided for or required herein, shall be deemed validly given,
made or served, if in writing, and delivered (a) on the day given if served
personally, (b) two days following if sent by telecopy to the facsimile number
indicated below with a confirmatory notice by delivery to a
nationally-recognized express delivery service with instructions and payment for
overnight delivery to the address set forth below; or (c) three days following
if sent by postage prepaid:
If to Seller, addressed to:
Kao Corporation
14-10 Nihonbashi Xxxxxxxxx 0-xxxxx
Xxxx-xx, Xxxxx 000-0000
XXXXX
Attention: Director, Legal Department
Telephone Number: 00 00 0 0000 0000
Facsimile Number: 00 81 3 3660 7942
With copy to:
Beauchamps Solicitors
Xxxxxxx Xxxxx
Xxxxxxxxxx Xxxx
Xxxxxx 0
XXXXXXX
Attn. Xxxxxx Xxxx
Telephone Number: (00) 000 00 00
Facsimile Number: (00) 000 00 00
and
Potter Xxxxxxxx & Xxxxxxx LLP
Hercules Plaza
0000 Xxxxx Xxxxxx Xxxxxx
Xxxxxxxxxx, Xxxxxxxx 00000 XXX
Attention: Xxxxx X. Xxxxx
Telephone Number: (000) 000-0000
Facsimile Number: (000) 000-0000
and
Kao America Inc.
c/o The Xxxxxx Xxxxxxx Company
0000 Xxxxxx Xxxxx Xxxxxx
Xxxxxxxxxx, XX 00000 XXX
Attention: VP Finance and CFO
Telephone Number: (000) 000-0000
Facsimile Number: (000) 000-0000
And if to Buyer, addressed to:
Primary Marketing Group Limited
Xxxx 0x, Xxxxxxxx Xxxxxxxxxx Xxxxxx
Xxxxxx
Xxxxxx Xxxxxx
Attn: Xxxxxxx Xxxxx
Telephone Number: (0000) 0000000
Facsimile Number: (0000) 0000000
With Copy to:
Zomax Optical Media Inc.,
0000 Xxxxxx Xxxx
Xxxxxxxx, XX 00000
Attn: Xxxxx X Xxxxxxxx
Telephone Number: (000) 000 0000
Facsimile Number: (000) 000 0000
and
Xxxxxxxxxx & Xxxxx, P.A.
1100 International Centre
000 0xx Xxxxxx Xxxxx
Xxxxxxxxxxx, XX 00000
U.S.A.
Attn: Xxxxxx West
Telephone Number: (000) 000 0000
Facsimile Number: (000) 000 0000
13.08 Governing Law: This Agreement shall be governed by and
construed according to the laws of Ireland. The Parties agree to submit to the
non-exclusive jurisdiction of the courts of Ireland in relation to any matters
concerning this Agreement or contemplated hereunder.
13.09 Confidentiality: The obligations of confidentiality set
forth in that letter from Xxxxx X. Xxxxx of Xxxxxx Xxxxxxxx & Xxxxxxx LLP to
Zomax (Attention: Xxx Xxxxxxxx) dated 24th June 1998 incorporated herein by
reference and will apply to and be binding on Buyer, to the benefit of Seller
and its Affiliates, as if (a) the parties referred to anonymously therein as
"OC" were expressly referred to therein as Seller and its Affiliates; and (b)
Buyer were the party who had signed such letter, regardless of whether or not
Buyer signed such letter at the time.
13.10 Severability: If any provision, or portion thereof, of
this Agreement is held to be invalid, illegal or unenforceable by a court of
competent jurisdiction, such invalidity, illegality or unenforceability shall
not affect any other provision hereof.
13.11 Headings: The various headings used in this Agreement
are for convenience only and are not to be used in interpreting the text of the
Article in which they appear or to which they relate.
13.12 Counterparts: This Agreement may be executed in two or
more counterparts, each of which shall be deemed an original, and all of which
shall constitute one and the same instrument.
IN WITNESS WHEREOF, the Parties hereto have caused this
Agreement to be executed the day and year first above written.
KAO CORPORATION
By: /s/ Katsuji Kasutani
Name: Xx Xxxxxxx Xxxxxxxx
Title: GM KaoInfosytems Europe
PRIMARY MARKETING GROUP LIMITED
By: /s/ Xxxxxxx Xxxxx
Name: Mr Xxxxxxx Xxxxx
Title: Director
