PURCHASE AND SALE AGREEMENT ("the Agreement"), made as of January 31, 2004,
by and among TAJIMA INDUSTRIES, LTD., a Japanese corporation maintaining its
principal place of business at 00-00, Xxxxxxxxx 0-xxxxx Xxxxxxx-xx, Xxxxxx
000-0000, Xxxxx ("Tajima" or "the Buyer"), TAJIMA USA, INC., a Delaware
corporation maintaining its principal place of business at 000 Xxxxxxxxx
Xxxxxxxxx, Xxxxxxxxxx, Xxx Xxxx 00000 (the "Company") and XXXXXX INTERNATIONAL,
INC., a Delaware corporation maintaining its principal place of business at 000
Xxxxxxxx Xxxxxxxxx, Xxxxxxxxx, Xxx Xxxx 00000 ("Xxxxxx" or "the Seller").
RECITALS
X. Xxxxxx is the record owner of 55 shares of common stock of the Company
("the Common Stock"), which represents 55% of the issued and outstanding shares
of common stock of the Company; and
X. Xxxxxx desires to purchase from Xxxxxx and Xxxxxx desires to sell to
Tajima all of the shares of Common Stock owned by Xxxxxx.
NOW, THEREFORE, in consideration of the mutual promises, covenants,
representations and warranties contained herein, Xxxxxx and Tajima hereby agree
as follows:
1. Purchase and Sale of Stock. Subject to the terms and conditions of this
Agreement and in reliance upon the representations and warranties contained
herein, in consideration of the payment of the Actual Purchase Price (as
hereinafter defined), Tajima shall acquire and purchase, and Xxxxxx shall sell
and deliver to Tajima, 55 shares of Common Stock ("the Shares") free and clear
of all liens, encumbrances, security interests and mortgages ("Liens").
2. Purchase Price.
A. The purchase price shall equal the Book Value of the Shares on January
31, 2004 (the "Actual Purchase Price").
B. The Actual Purchase Price shall be calculated in accordance with
generally accepted accounting principles ("GAAP") by Xxxxxx'x independent
certified public accountants on a post-closing basis as set forth below.
C. At the Closing, the Buyer shall pay the sum of $500,000. in partial
payment of the Actual Purchase Price in the manner set forth in Paragraph
3(D)(i) (the "Partial Payment").
D. The Buyer shall pay the difference between the Actual Purchase Price and
the Partial Payment in the manner set forth in Paragraph 3(D)(iii) concurrently
with the determination of the Actual Purchase Price as reflected in "the Final
Statement" (as hereinafter defined) (the "Balance Due").
E. A preliminary statement of the Actual Purchase Price and the calculation
of Book Value upon which it is based shall be delivered by the Seller to the
Buyer on or before March 15, 2004 ("the Preliminary Statement").
(i) Within ten (10) days after the delivery of the Preliminary Statement,
the Buyer shall notify the Seller of any objections or proposed
changes thereto, specifying in reasonable detail any such objections
or proposed changes.
(ii) Within ten (10) days after the Buyer's delivery to the Seller of a
notice setting forth objections or proposed changes to the Preliminary
Statement, the Seller shall notify the Buyer in writing whether it
accepts, rejects or is prepared to compromise with respect to the
objections or proposed changes.
F. The final statement of the Actual Purchase Price and the calculation of
Book Value shall be delivered by the Seller to the Buyer on or before April 30,
2004 ("the Final Statement").
(i) Within ten (10) days after the delivery of the Final Statement, the
Buyer shall notify the Seller of any objections or proposed changes
thereto, specifying in reasonable detail any such objections or
proposed changes.
(ii) Within ten (10) days after the Buyer's delivery to the Seller of a
notice setting forth objections or proposed changes to the Final
Statement, the Seller shall notify the Buyer in writing whether it
accepts, rejects or is prepared to compromise with respect to the
objections or proposed changes.
(a) If the Buyer does not notify the Seller of any objections or
proposed changes within the time period set forth above, or
following the parties' agreement upon the resolution of the
Buyer's objections or proposed changes, then the Final Statement
delivered by the Seller, with such changes as are agreed upon,
shall be final and binding.
(b) If the parties shall fail to reach an agreement with respect to
the Buyer's objections or proposed changes within such ten (10)
day period, then all disputed objections or proposed changes
shall, not later than ten (10) days after the expiration of such
ten (10) day period, be submitted for resolution to an impartial
certified public accounting firm of regional standing which is
reasonably acceptable to the parties ("the Independent Auditor").
(c) The parties shall use reasonable efforts to cause such
Independent Auditor to use its best and independent judgment to
resolve the dispute submitted to it within twenty (20) days of
its appointment. The Final Statement delivered by Xxxxxx, as
adjusted by the parties or the Independent Auditor, shall be
final and binding.
(d) The Company shall provide the Independent Auditor with reasonable
access to its books and records (including, without limitation,
the work papers of its accountants) and its representatives and
accountants, in each case in connection with the preparation and
review of the of the statement of the Actual Purchase Price and
the calculation of Book Value.
(e) The fees and costs of such Independent Auditor shall be paid
equally by the Buyer and the Seller.
G. As used herein, the Book Value of the Shares means the amount, not less
than zero, which such Shares would receive on a fully-diluted basis (taking into
account all liquidation preferences and accrued and unpaid dividends) upon a
liquidation or other distribution of the assets of the Company in which the
amount to be distributed to stockholders equals the excess of (i) the aggregate
net book value of the assets (other than patents, patent rights, permits,
goodwill and other intangible assets classified as such in accordance with
generally accepted accounting principles) of the Company after all appropriate
adjustments in accordance with generally accepted accounting principles applied
on a consistent basis (including, without limitation, reserves for doubtful
receivables, obsolescence, depreciation and amortization and excluding the
amount of any write-up or revaluation of any asset) over (ii) all items which,
in accordance with generally accepted accounting principles applied on a
consistent basis, would properly be included on the liability side of the
balance sheet of the Company (other than capital equity, capital surplus and
retained earnings), in each case computed in accordance with generally accepted
accounting principles applied on a consistent basis. The Book Value of the
Company at any time in question shall be determined in accordance with generally
accepted accounting principles, consistently applied.
3. Closing.
A. Time and Place. The closing of the transaction contemplated by this
Agreement shall take place at the offices of Xxxxxxx & Masyr, LLP, 000 Xxxx 00xx
Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000 simultaneously with the execution of this
Agreement ("xxx Xxxxxxx").
B. Delivery by the Seller. At the Closing, and upon delivery of the Partial
Payment and in consideration of the application of "the Credit" (as hereinafter
defined) in reduction of the "Net Inter-Company Payable" (as hereinafter
defined), Xxxxxx will deliver to Tajima stock certificates ("the Certificates")
representing the Shares, in each case duly endorsed for transfer or accompanied
by stock powers signed in blank.
C. Delivery by the Buyer. At the Closing, and upon delivery of the
Certificates, Tajima will deliver the Partial Payment for the Shares to the
Company on behalf of Xxxxxx as provided in Paragraph 3(D)(i).
D. Payment by Xxxxxx of the Net Inter-Company Payable. The net amount owed
to the Company by Xxxxxx as of January 31, 2004 shall be calculated in
connection with the determination of the Book Value of the Shares and the Actual
Purchase Price (the "Net Inter-Company Payable").
(i) At the Closing, the Partial Payment shall be paid by the Buyer to
the Company on behalf of Xxxxxx, and the Company shall apply such
sum in reduction of the Net Inter-Company Payable owed to it by
Xxxxxx, pro tanto.
(ii) At the Closing, the Company shall apply the sum of $2,200,000. in
reduction of the Net Inter-Company Payable owed to it by Xxxxxx,
pro tanto (the "Credit").
(a) Xxxxxx hereby assigns to the Company its right to receive
the sum of $2,200,000. from the Buyer upon payment of the
Balance Due.
(iii)The Balance Due shall be paid by the Buyer to the Company on
behalf of Xxxxxx and as Xxxxxx'x assignee, and the Company shall
apply a sum in an amount equal to the difference between the
Balance Due and the Credit in reduction of the Net Inter-Company
Payable owed to it by Xxxxxx, pro tanto.
(iv) In addition to the application of the Partial Payment and the
Balance Due in reduction of the Net Inter-Company Payable owed to
the Company by Xxxxxx, Xxxxxx shall make the following payments
to the Company in satisfaction of the Net Inter-Company Payable:
(a) Xxxxxx shall make monthly installment payments to the
Company ("the Installment Payments") as set forth in
Schedule 3(D) hereto; and
(b) Simultaneously upon payment of the Balance Due, Xxxxxx shall
pay an additional sum to the Company in an amount equal to
the difference between the Net Inter-Company Payable (as
minuend) minus the aggregate of the Partial Payment, the
Balance Due, and the total of the Installment Payments
(collectively as the subtrahend).
4. Buyer's Representations and Warranties. The Buyer represents and
warrants to the Seller as follows:
A. Authorization; Enforcement. The Buyer has all requisite power and
authority to authorize, execute, deliver and perform this Agreement. The
execution, delivery and performance of this Agreement by the Buyer, and the
consummation by the Buyer of the transactions contemplated hereby, have been
duly authorized by all necessary action on the part of the Buyer and no further
consent or authorization therefor is presently required by the Buyer. This
Agreement has been duly and validly executed and delivered by the Buyer and
constitutes the valid and binding obligations of the Buyer, enforceable against
the Buyer in accordance with its terms.
B. No Conflicts. None of the execution, delivery or performance of this
Agreement by the Buyer will conflict with the organizational documents of the
Buyer, in each case as in effect on the date hereof, or result in any material
breach of, or constitute a material default under, any (y) material contract,
agreement or instrument to which the Buyer is a party or by which it or any of
its assets is bound or (z) material law or regulation to which the Buyer or any
of its assets is subject.
C. Consents; Approvals. Neither the execution, delivery or performance of
this Agreement by the Buyer, nor the consummation by it of the obligations and
transactions contemplated hereby, requires any consent or approval of,
authorization by, exemption from, filing with or notice to any governmental
entity or any other person.
5. Seller's Representations and Warranties. The Seller represents and
warrants to the Buyer as follows:
A. Authorization; Enforcement. The Seller has all requisite power and
authority to authorize, execute, deliver and perform this Agreement. The
execution, delivery and performance of this Agreement by the Seller, and the
consummation by the Seller of the transactions contemplated hereby, have been
duly authorized by all necessary action on the part of the Seller and no further
consent or authorization therefor is presently required by the Seller. This
Agreement has been duly and validly executed and delivered by the Seller and
constitutes the valid and binding obligations of the Seller, enforceable against
the Seller in accordance with its terms.
B. No Conflicts. None of the execution, delivery or performance of this
Agreement by the Seller will conflict with the organizational documents of the
Seller, in each case as in effect on the date hereof, or result in any material
breach of, or constitute a material default under, any (x) material contract,
agreement or instrument to which the Seller is a party or by which it or any of
its assets is bound or (y) material law or regulation to which the Seller or any
of its assets is subject.
C. Consents; Approvals. Other than filings required pursuant to the
Securities Exchange Act of 1934, as amended, and the rules and regulations
thereunder ("the Exchange Act"), neither the execution, delivery or performance
by the Seller of this Agreement, nor the consummation by it of the obligations
and transactions contemplated hereby, requires any consent or approval of,
authorization by, exemption from, filing with or notice to any governmental
entity or any other person.
D. Ownership of the Shares. Xxxxxx owns the Shares free and clear of all
Liens.
E. Waiver and Release. Xxxxxx hereby waives, releases, and relinquishes any
and all claims it may have to any and all of the office equipment, furniture and
fixtures now at the Company's office at 000 Xxxxxxxxx Xxxxxxxxx, Xxxxxxxxxx, Xxx
Xxxx 00000.
6. Indemnification.
A. The Buyer hereby agrees that it will indemnify the Seller and each of
its affiliates and each of their respective directors, officers, partners,
employees, owners, representatives, agents, heirs, executors, administrators,
stockholders, successors, assigns and controlling persons ("the Buyer
Indemnified Parties") and agrees to hold each of the Buyer Indemnified Parties
harmless from and against, and to pay to each of the Buyer Indemnified Parties
the amount of, any loss, liability, claim, damage (including incidental and
consequential damages), expense (including reasonable attorneys' fees) or
diminution of value, whether or not involving a third party claim, arising,
directly or indirectly, from or in connection with, or in respect of any breach
of this Agreement, the breach of any warranties made herein, or the inaccuracy
of any representation made herein.
B. The Seller hereby agrees that it will indemnify the Buyer and the
Company and each of their affiliates and each of their respective directors,
officers, partners, employees, owners, representatives, agents, heirs,
executors, administrators, stockholders, successors, assigns and controlling
persons ("the Seller Indemnified Parties") and agrees to hold each of the Seller
Indemnified Parties harmless from and against, and to pay to each of the Seller
Indemnified Parties the amount of, any loss, liability, claim, damage (including
incidental and consequential damages), expense (including reasonable attorneys'
fees) or diminution of value, whether or not involving a third party claim,
arising, directly or indirectly, from or in connection with, or in respect of
any breach of this Agreement or any warranties made herein or the inaccuracy of
any representation made herein.
C. To the extent not reflected in the Actual Purchase Price and the
calculation of Book Value, Xxxxxx agrees to indemnify the Company from and
against and to pay to the Company an amount equal to fifty-five (55%) percent of
any taxes, interest and penalties assessed by any governmental agency or
authority and paid by the Company for all periods through and including January
31, 2004. Xxxxxx shall make such payment to the Company within five (5) business
days after Xxxxxx'x receipt of written demand therefor accompanied by copies of
notices received by the Company from any taxing authorities. Except as
hereinafter set forth, and to the extent not reflected in the Actual Purchase
Price and the calculation of Book Value, the Company agrees to pay to Xxxxxx an
amount equal to fifty-five (55%) percent of any refund received or to be
received by the Company for any taxes, interest and penalties paid or to be paid
by the Company for all periods through and including January 31, 2004. The
Company shall make such payment to Xxxxxx within five (5) business days after
the check for such refund has cleared. The foregoing notwithstanding, the
Company shall not be obligated to pay to Xxxxxx any portion of such refund if
the refund results from activities and operations subsequent to January 31, 2004
or if the refund results from activities and operations of an entity other than
the Company, including by way of specification but not limitation, the carryback
of a loss incurred in any period subsequent to January 31, 2004 and/or the
application of a loss incurred during any period (including periods through and
including January 31, 2004 and subsequent thereto) by an entity merged into or
acquired by the Company or whose activities and operations (and the reporting
thereof) are otherwise consolidated with those of the Company.
D. Nothing set forth in this Section 6 shall be deemed to be exclusive of
any other rights or remedies that any of the parties may have in respect of the
subject matter of this Section 6, whether by law, contract or otherwise.
7. Miscellaneous.
A. Entire Agreement. This Agreement constitutes the entire agreement among
the parties with respect to the subject matter hereof. This Agreement supersedes
any prior agreement or understanding among them, and may not be modified or
amended in any manner other than by an instrument in writing signed by the
parties hereto, or their respective successors or assigns, or otherwise as
provided herein. Without limiting the foregoing, with respect to the
transactions contemplated by this Agreement and the subject matter of this
Agreement, neither Xxxxxx and its affiliates nor Tajima and its affiliates make
any representations or warranties other than those explicitly set forth in this
Agreement.
B. Choice of Law. Except as otherwise provided herein, this agreement shall
be governed by and interpreted and enforced in accordance with the substantive
laws of the state of New York, without giving effect to the conflicts of law
principles thereof.
C. Jurisdiction. The parties hereto agree that any proceeding arising out
of or relating to this Agreement or the breach or threatened breach of this
Agreement shall be commenced and prosecuted exclusively in a court in the State
of New York.
E. Successors and Assigns. This Agreement shall be binding upon and inure
to the benefit of the parties and their legal representatives, heirs,
administrators, executors, successors and permitted assigns. Except for the
provisions of Section 6, nothing in this Agreement, express or implied, is
intended or shall be construed to give any person other than the parties to this
Agreement and their respective successors or permitted assigns, any legal or
equitable right, remedy or claim under or in respect of any agreement or any
provision contained herein.
F. Third Party Beneficiaries. It is expressly agreed that each of the
Indemnified Parties (other than Xxxxxx) shall be third party beneficiaries of
this Agreement for purposes of Section 6 of this Agreement and shall be entitled
to enforce it in accordance with its terms.
G. Amendments. Neither this Agreement nor any term or provision hereof may
be amended, modified, waived or supplemented orally, but only by a written
instrument executed by the parties hereto.
H. Assignability. Neither this Agreement nor any right, remedy, obligation
or liability arising hereunder or by reason hereof shall be assignable by Xxxxxx
or Tajima without the prior written consent of the other parties.
I. Notices. All notices, requests, claims, demands and other communications
hereunder shall be in writing and shall be deemed to have been duly given on the
date of delivery, if personally delivered, or if mailed (registered or certified
mail, postage prepaid, return receipt requested), on the third (3rd) business
day following mailing as follows:
If to Tajima Industries, Ltd.:
Tajima Industries, Ltd.
00-00, Xxxxxxxxx 0-xxxxx Xxxxxxx-xx
Xxxxxx 000-0000
Xxxxx
Fax: 000-00-00-000-0000
If to Tajima USA, Inc.:
Tajima USA, Inc.
000 Xxxxxxxxx Xxxxxxxxx
Xxxxxxxxxx, Xxx Xxxx 00000
Fax: (000) 000-0000
Attention: Xx. Xxxxxx Xxxxxxxx, President
with a copy to:
Xxxxxxx & Masyr, LLP
000 Xxxx 00xx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Fax: (000) 000-0000
Attention: Xxxxxxx X. Xxxxxxx, Esq.
If to Xxxxxx International, Inc.:
Xxxxxx International, Inc.
000 Xxxxxxxx Xxxxxxxxx
Xxxxxxxxx, Xxx Xxxx 00000
Fax: (000) 000-0000
Attention: Xxxxxxx Xxxxxx, Vice President - Finance,
Chief Financial Officer and Secretary
with a copy to:
Ruskin Moscou Faltischek, P.C.
000 XXX Xxxxx
00xx Xxxxx, Xxxx Xxxxx
Xxxxxxxxx, Xxx Xxxx 00000
Fax: (000) 000-0000
Attention: Xxxx X. Xxxxxxx, Esq.
J. Headings. Captions contained in this Agreement are inserted only as a
matter of convenience and in no way define, limit or extend the scope or intent
of this Agreement or any provision hereof.
K. Severability. If any provision of this Agreement, or the application of
such provision to any person or circumstance, shall be held invalid, the
remainder of this Agreement, or the application of such provision to persons or
circumstances other than those to which it is held invalid, shall not be
affected thereby.
L. Waivers. No provision of this Agreement shall be deemed to have been
waived unless such waiver is contained in a written notice given to the party
claiming such waiver, and no such waiver shall be deemed to be a waiver of any
other or further obligation or liability of the party or parties in whose favor
the waiver was given.
M. Counterparts. This Agreement may be executed in counterparts, each of
which shall constitute one and the same instrument.
N. Further Assurances. The parties agree to: (i) furnish upon request to
each other such further information; (ii) execute and deliver to each other such
other documents; and (iii) do such other acts and things, all as the other party
may reasonably request for the purpose of carrying out the intent of this
Agreement.
INTENDING TO BE BOUND THEREBY, Tajima Industries, Ltd., Xxxxxx
International, Inc., and Tajima USA, Inc. have executed this Agreement as of the
date first above written.
TAJIMA INDUSTRIES, LTD.
By:/s/ Xxxxxxx Xxxxxx
------------------
Name: Xxxxxxx Xxxxxx
Title: President
XXXXXX INTERNATIONAL, INC.
By:/s/ Xxxxx Xxxxxxx
-----------------
Name: Xxxxx Xxxxxxx
Title: CEO
TAJIMA USA, INC.
By:/s/ Xxx Xxxxxxxx
----------------
Name: Xxx Xxxxxxxx
Title: President
SCHEDULE 3(D)
The Installment Payments shall be paid by Xxxxxx to the Company as follows:
2/29/04 $735,167.
3/31/04 $735,167.
4/30/04 $735,167.
5/31/04 $735,167.
6/30/04 $735,167.
7/31/04 $735,167.
