Exhibit 2.1
EXECUTION COPY
ASSET PURCHASE AGREEMENT
This Asset Purchase Agreement ("AGREEMENT") dated December 22, 2005 is
by and among Sato International Pte. Ltd., an entity organized under the laws of
the Republic of Singapore (and, as applicable, together with any assignees or
designees, jointly and severally "BUYER"), and Checkpoint Systems, Inc., a
Pennsylvania corporation ("SELLER").
RECITALS
Seller desires to sell to Buyer, and Buyer desires to purchase from
Seller, the Acquired Business (as defined below) as a going concern.
The parties, in consideration of the foregoing premises and the
following agreed upon terms and conditions, intending to be legally bound, agree
as follows:
1. DEFINITIONS AND USAGE
1.1 DEFINITIONS
"ACCOUNTS RECEIVABLE" - the accounts receivable reflected on
Final Statement of Net Operating Assets (as defined below in Section 2.3(e)),
consisting of the trade accounts receivable and other rights to payment from
customers of Acquired Business and the full benefit of all security for such
accounts or rights to payment, including all trade accounts receivable
representing amounts receivable in respect of goods shipped or products sold or
services rendered to customers of Acquired Business.
"ACQUIRED ASSETS - as defined in Section 2.1.
"ACQUIRED BUSINESS" - means the design, manufacture and/or
sales of: (i) with respect to North America, label converting for laser
printers, horticultural identification labeling solutions, (ii) with respect to
the United States of America, laser solutions/printers, thermal
solutions/printers, hand-held labeling solutions and the "Turn-O-Matic" ticket
dispensing systems, (iii) with respect to Europe, laser solutions/printers,
thermal barcode printers and associated thermal hardware (including track and
trace devices) and consumables (including stock/customized labels, tags and
tickets for retail, manufacturing, logistics, industrial and horticultural
applications), and (iv) with respect to the Asia Pacific region, thermal
solutions/printers, custom labels to the courier industry, prime labels to the
foodservice industry, white labels, and other specialized thermal barcode
printing applications; provided, however, that the Acquired Business shall not
include any labels or labels solutions that incorporate EAS, EM, RF or RFID
technology and Service Bureau Products. The definition of Acquired Business
shall not include the business of Checkpoint Meto Benelux B.V., Xxxxxxx Systems
B.V. and Checkpoint Systems France, S.A. with respect to which the Parties
intend to enter into a separate, but similar agreement (as far as possible under
Dutch and French law) after the necessary consultation procedures with the
workers' representation has been conducted, and the Purchase Price shall be
adjusted accordingly to reflect the exclusion of the assets of such businesses
from the Assets to be sold hereunder.
"APPURTENANCES" - all privileges, rights, easements,
hereditaments and appurtenances belonging to or for the benefit of the Land,
including all easements appurtenant to and for the benefit of any Land (a
"DOMINANT PARCEL") for, and as the primary means of access between, the Dominant
Parcel and a public way, or for any other use upon which lawful use of the
Dominant Parcel for the purposes for which it is presently being used is
dependent, and all rights existing in and to any streets, alleys, passages and
other rights-of-way included thereon or adjacent thereto (before or after
vacation thereof) and vaults beneath any such streets.
"ASSUMED EMPLOYEES" - as defined in Section 10.1(a)(ii).
"ASSUMED LIABILITIES" - as defined in Section 2.4(a).
"BREACH" - any breach of, or any inaccuracy in, any
representation or warranty or any breach of, or failure to perform or comply
with, any covenant or obligation, in or of this Agreement or any other Contract,
or any event which with the passing of time or the giving of notice, or both,
would constitute such a breach, inaccuracy or failure.
"BUSINESS DAY" - any day other than (a) Saturday or Sunday or
(b) any other day on which banks in the State of Delaware, U.S.A. are permitted
or required to be closed.
"BUYER" - as defined in the first paragraph of this Agreement.
"BUYER PARTIES" - as defined in Section 11.2(a).
"RETAINED ASSETS" - as defined in Section 2.2.
"CLOSING" - as defined in Section 2.7.
"CLOSING DATE" - the date on which the Closing actually takes
place.
"COBRA - means Section 49808B of the Code (as well as its
predecessor provision, Section 162(k) of the Code) and Sections 601 through 608,
inclusive of ERISA.
"CODE" - the Internal Revenue Code of 1986, as amended.
"COMMERCIALLY REASONABLE EFFORTS" - for purposes of this
Agreement, "commercially reasonable efforts" will not be deemed to require a
Person to undertake extraordinary or unreasonable measures, including the
payment of amounts in excess of normal and usual filing fees and processing
fees, if any.
"CONFIDENTIAL INFORMATION" - as defined in Section 12.1.
"CONSENT" - any approval, consent, ratification, waiver or
other authorization.
"CONVEYANCE DOCUMENTS" - as defined in Section 2.8(a)(i).
"CONTEMPLATED TRANSACTIONS" - all of the transactions
contemplated by this Agreement.
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"CONTRACT" - any written agreement, contract, lease, promise
or undertaking.
"DISCLOSURE SCHEDULES" - all of the disclosure schedules
identified in this Agreement delivered by Seller to Buyer concurrently with the
execution and delivery of this Agreement, except as otherwise specified herein.
"EAS" - Electronic Article Surveillance.
"EM" - means electromagnetic technology.
"EMPLOYEE PLANS" - as defined in Section 3.16(a).
"EMPLOYEES RECEIVING AN OFFER" - as defined in Section
10.1(a)(i).
"ENCUMBRANCE" - any charge, claim, condition, equitable
interest, lien, right of way, easement, encroachment, right of first option,
right of first refusal, restriction on use, transfer, receipt of income or
exercise of any other attribute of ownership.
"ENVIRONMENT" - soil, land surface or subsurface strata,
surface waters (including navigable waters and ocean waters), groundwater,
drinking water supply, stream sediments, ambient air (including indoor air),
plant and animal life and any other environmental medium or natural resource.
"ENVIRONMENTAL, HEALTH AND SAFETY LIABILITIES" - any cost,
damages, expense, liability, obligation or other responsibility arising from or
under any Environmental Law or Occupational Safety and Health Law.
"ENVIRONMENTAL LAW" - any Legal Requirement that requires or
relates to: (a) advising appropriate authorities of actual Releases of
pollutants or hazardous substances or materials, violations of discharge limits
or other prohibitions; (b) preventing or reducing to acceptable levels the
Release of pollutants or hazardous substances or materials into the Environment;
(c) reducing the quantities, preventing the Release or minimizing the hazardous
characteristics of wastes that are generated; (d) reducing to acceptable levels
the risks inherent in the transportation of hazardous substances, pollutants,
oil or other potentially harmful substances; or (e) cleaning up pollutants that
have been Released or paying the costs of such clean up or prevention.
"ERISA" - the Employee Retirement Income Security Act of 1974,
as amended.
"GOVERNING DOCUMENTS" - with respect to any particular entity,
(a) if a corporation, the articles or certificate of incorporation and the
bylaws; (b) if a general partnership, the partnership agreement and any
statement of partnership; (c) if a limited partnership, the limited partnership
agreement and the certificate of limited partnership; (d) if a limited liability
company, the articles of organization and operating agreement; (e) if another
type of Person, any other charter or similar document adopted or filed in
connection with the creation, formation or organization of the Person; (f) all
equity holders' agreements, voting agreements, voting trust agreements, joint
venture agreements, registration rights agreements or other agreements or
documents relating to the organization, management or operation of any Person or
relating to the rights, duties and obligations of the equity holders of any
Person; and (g) any amendment or supplement to any of the foregoing.
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"GOVERNMENTAL AUTHORIZATION" - any Consent, license,
registration or permit issued, granted, given or otherwise made available by or
under the authority of any Governmental Body or pursuant to any Legal
Requirement.
"GOVERNMENTAL BODY" - any: (a) nation, state, county, city,
town, borough, village, district or other jurisdiction; (b) federal, state,
local, municipal, foreign or other government; (c) governmental or
quasi-governmental authority of any nature (including any agency, branch,
department, board, commission, court, tribunal or other entity exercising
governmental or quasi-governmental powers); (d) multinational organization or
body; (e) body exercising, or entitled or purporting to exercise, any
administrative, executive, judicial, legislative, police, regulatory or taxing
authority or power; or (f) official of any of the foregoing.
"HAZARDOUS ACTIVITY" - the distribution, generation, handling,
importing, management, manufacturing, processing, production, refinement,
Release, storage, transfer, transportation, treatment or use (including any
withdrawal or other use of groundwater) of Hazardous Material in, on, under,
about or from any of the Leased Real Property or any part thereof into the
Environment and any other act, business, operation or thing that increases the
danger, or risk of danger, or poses an unreasonable risk of harm, to persons or
property on or off the Leased Real Property.
"HAZARDOUS MATERIAL" - any substance, material or waste which
is regulated by Environmental Laws enacted by any Governmental Body.
"INDEMNIFIED PARTY" - as defined in Section 11.4.
"INDEMNIFYING PARTY" - as defined in Section 11.4.
"INTELLECTUAL PROPERTY ASSETS" - means generally, the
intellectual property in which Seller has a proprietary interest that is used in
the Acquired Business, such Intellectual Property Assets being the Meto IP
Rights and the intellectual property set forth on Schedule 2.1(f).
"INVENTORIES" - all inventories of the Acquired Business
reflected on Final Statement of Net Operating Assets (as defined below in
Section 2.3(e)), wherever located, including all finished goods, work in
process, raw materials, spare parts and all other materials and supplies to be
used or consumed by Acquired Business in the production of finished goods.
"IRS" - the United States Internal Revenue Service and, to the
extent relevant, the United States Department of the Treasury.
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"KNOWLEDGE" means:
(a) With respect to Seller: the Knowledge of Seller, or words
of similar import, mean the actual knowledge and the knowledge that
such individuals should have had in the performance of their normal
duties on behalf of the respective employing entity in a reasonably
prudent manner, without inquiry or investigation, of the following
individuals: (i) Xxxxxx Off (Chairman and Chief Executive Officer),
(ii) W. Xxxxx Xxxxx (Executive Vice President, Chief Financial Officer
and Treasurer), (iii) Xxxx X. Xxxxxx, Xx. (President of Asia Pacific
and Latin America), (iv) Xxxxx X. Xxxxxx (President of North America),
(v) Per X. Xxxxx (President of Europe), (vi) Xxxx X. Xxx Xxxx (Senior
Vice President, General Counsel and Secretary, (vii) Xxxxxx X. Xxxx
(Vice President, Corporate Controller and Chief Accounting Officer,
(viii) Xxxx Gentle (General Manager, Label Solutions Europe), (ix)
Xxxxxx Xxxxxxx (Director of Marketing and Sales, Checkpoint Systems
GmbH, (x) Xxxx Xxxxxxxxx (Managing Director of Hirschhorn Facility),
(xi) Xxxx Xxxxxxxxx (Vice President and General Manager - North
America), (xii) Xxxxxx Xxxxxxxx (General Manager of Romeoville
Facility), (xiii) Xxxxxxx Xxxxxxx (Director of Sales Bar Code
Solutions), (xiv) Xxxxx Xxxx (Vice President and General Manager of
Horticulture Printing Facility), (xv) Badi Ala'i (Managing Director,
Checkpoint Australia and New Zealand), (xvi) Xxxxxxx Xxxxxxxxx
(Director of Supply Chain Solutions, Checkpoint Meto Limited), (xvii)
Xxxxx Xxx (Managing Director, Checkpoint Malaysia), and (xviii)
Xxxxxxxxxxx Xxxxxx (Director of Manufacturing, Checkpoint Meto
Australia), or
(b) With respect to Buyer: the Knowledge of Buyer, or words of
similar import, mean the actual knowledge, without investigation, of
the following individuals: (i) Mr. Masonori Otsuka (President and COO
of Sato Corporation), Xx. Xxxxxxxxx Xxxx (Managing Director of Sato
International Pte. Ltd.), Xx. Xxxxx Xxxxxxxxx (Director and General
Manager of Sato International Pte. Ltd., and Xx. Xxxxxxxx Xxxxxx
(Director and Senior Manager of Sato International Pte. Ltd.).
"LAND" - all parcels and tracts of land in which Seller has an
ownership interest.
"LEASE" - any Leased Real Property agreement or any other
lease or rental agreement, license, right to use or installment and conditional
sale agreement to which a Seller is a party and any other Seller Contract
pertaining to the leasing or use of any Tangible Personal Property.
"LEASED REAL PROPERTY" - any land, improvements and
Appurtenances subject to a Lease to which Seller is a party.
"LEGAL REQUIREMENT" - any legally binding federal, state,
local, municipal, foreign, international, multinational or other constitution,
law, ordinance, principle of common law, code, regulation, statute or treaty.
"LIABILITY" - with respect to any Person, any liability or
obligation of such Person of any kind, character or description, whether known
or unknown, absolute or contingent, accrued or unaccrued, disputed or
undisputed, liquidated or unliquidated, secured or unsecured, joint or several,
due or to become due, vested or unvested, executory, determined, determinable or
otherwise, and whether or not the same is required to be accrued on the
financial statements of such Person.
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"LOSSES" - defined in section 11.2(a).
"MATERIAL ADVERSE CHANGE" - means a change in (or effect on)
the condition (financial or otherwise), of the properties, assets, liabilities,
rights, obligations, operations or business of the Acquired Business, taken as a
whole, which change (or effect) individually or in the aggregate, is materially
adverse to such condition, properties, assets, liabilities, rights, obligations,
operations or business of the Acquired Business taken as a whole (it being
understood that changes in generally prevailing economic conditions or
conditions which affect all companies in the Acquired Business' industry in a
similar fashion do not constitute a Material Adverse Change).
"MATERIAL CONSENTS" - as defined in Section 7.3.
"MATERIAL CONTRACT" - Each Contract that relates solely to the
Acquired Business that (i) represents One Hundred Thousand Dollars ($100,000) or
more of revenues or expenses; or (ii) contains a material covenant not to
compete or otherwise significantly restricts the Seller's ability to conduct the
Business; or (iii) provides for the extension of credit to a customer other than
consistent with normal credit terms; or (iv) provides for a material guaranty or
indemnity by Seller; (v) contains a right of first refusal for any of the
Acquired Assets; or (vi) requires Seller to buy or sell goods or services with
respect to which there will be material losses or will be costs and expenses
materially in excess of expected receipts (other than as provided for or
otherwise reserved against on the most recent of the balance sheets); or (vii)
is otherwise material to the Acquired Business.
"NET OPERATING ASSETS" - shall mean those asset line items set
forth on Schedule 2.3(b) net of the liability line items set forth on Schedule
2.3(b), all as set forth on the Most Recent Balance Sheet (as defined in Section
2.3).
"OCCUPATIONAL SAFETY AND HEALTH LAW" - any Legal Requirement
designed to provide safe and healthful working conditions and to reduce
occupational safety and health hazards, including the Occupational Safety and
Health Act, and any program, whether governmental or private (such as those
promulgated or sponsored by industry associations and insurance companies),
designed to provide safe and healthful working conditions.
"ORDER" - any order, injunction, judgment, decree, ruling,
assessment or arbitration award of any Governmental Body or arbitrator.
"ORDINARY COURSE OF BUSINESS" - an action taken by a Person
will be deemed to have been taken in the ordinary course of the Acquired
Business only if that action is consistent in nature, scope and magnitude with
the past practices of Seller.
"PERMITTED ENCUMBRANCES" - as defined in Section 3.6.
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"PERSON" - an individual, partnership, corporation, business
trust, limited liability company, limited liability partnership, joint stock
company, trust, unincorporated association, joint venture or other entity or a
Governmental Body.
"PROCEEDING" - any action, arbitration, audit, hearing,
investigation, litigation or suit (whether civil, criminal, administrative,
judicial or investigative, whether formal or informal, whether public or
private) commenced, brought, conducted or heard by or before any Governmental
Body or arbitrator.
"PURCHASE PRICE" - as defined in Section 2.3.
"RECORD" - information that is inscribed on a tangible medium
or that is stored in an electronic or other medium and is retrievable in
perceivable form.
"RELEASE" - any release, spill, emission, leaking, pumping,
pouring, dumping, emptying, injection, deposit, disposal, discharge, dispersal,
leaching or migration on or into the Environment or into or out of any property.
"REPRESENTATIVE" - with respect to a particular Person, any
director, officer, manager, employee, agent, consultant, advisor, accountant,
financial advisor, legal counsel or other representative of that Person.
"RETAINED LIABILITIES" - as defined in Section 2.4(b).
"RF" - radio frequency.
"RFID" - means a radio frequency identification circuit.
"SCHEDULE" - a schedule contained in the Disclosure Schedules.
"SELLER" - means CHECKPOINT SYSTEMS, INC. or, with respect to
certain Acquired Assets owned by or vested in a Seller Local Entity, A SELLER
LOCAL ENTITY, as required by the context of this Agreement depending on the
actual ownership with respect to a specific Acquired Asset.
"SELLER CONTRACT" - any Contract related solely to the
Acquired Business.
"SELLER LOCAL ENTITY" - as defined in Section 2.1.4
"SERVICE BUREAU PRODUCTS" - sales, brokering, order processing
and/or production anywhere in the world, not limited to current sales by Seller
under Check-Net(R), of the following: tags and labels with either static and/or
dynamically changing variable data, graphic tags and labels, woven labels, care
labels, and other retail and/or apparel trim items, excluding EM, RF and RFID,
where customers, products, and orders are setup, received, parsed, transmitted,
shipped, and updated by electronic means or otherwise, for sales to the retail
and apparel markets.
"TANGIBLE PERSONAL PROPERTY" - as defined in Section 2.1(a).
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"TAX" - any income, gross receipts, license, payroll,
employment, excise, severance, stamp, occupation, premium, property,
environmental, customs, vehicle, or other title or registration, capital stock,
franchise, employees' income withholding, foreign or domestic withholding,
social security, unemployment, disability, real property, personal property,
sales, use, transfer, value added, alternative, add-on minimum and other tax,
fee, assessment, levy, tariff, charge or duty of any kind whatsoever and any
interest, penalty, addition or additional amount thereon imposed, assessed or
collected by or under the authority of any Governmental Body or payable under
any tax-sharing agreement or any other Contract.
"TAX RETURN" - any return (including any information return),
report, statement, schedule, notice, form, declaration, claim for refund or
other document or information filed with or submitted to, or required to be
filed with or submitted to, any Governmental Body in connection with the
determination, assessment, collection or payment of any Tax or in connection
with the administration, implementation or enforcement of or compliance with any
Legal Requirement relating to any Tax.
"THIRD PARTY" - a Person that is not a party to this
Agreement.
"THIRD PARTY CLAIM" - any claim against any Indemnified Person
by a Third Party, whether or not involving a Proceeding.
"TRANSFERABLE EMPLOYEES" - as defined in Section 3.15.
"TRANSFERRED EMPLOYEES - as defined in Section 10.1(a)(ii).
2 SALE AND TRANSFER OF ACQUIRED ASSETS; CLOSING
2.1 ASSETS TO BE SOLD
2.1.1 Upon the terms and subject to the conditions set forth
in this Agreement (including the conditions listed in this Section 2.1 below),
at the Closing, Seller shall, or Seller shall cause a Seller Local Entity
(defined below in this Section 2.1) to, sell, convey, assign, transfer and
deliver to Buyer or Buyer's nominee, and Buyer or Buyer's nominee shall purchase
and acquire from Seller, free and clear of any Encumbrances other than Permitted
Encumbrances, all of Seller's, or all of Seller Local Entity's, right, title and
interest in and to the following assets of the Acquired Business as a going
concern (but excluding the Retained Assets):
(a) the tangible personal property items listed or described
in Schedule 2.1.1(a), which Schedule shall be updated at Closing
("TANGIBLE PERSONAL PROPERTY");
(b) the Inventories reflected on the Final Statement of Net
Operating Assets;
(c) the Accounts Receivable reflected on the Final Statement
of Net Operating Assets;
(d) the Seller Contracts (including the Leased Real Property)
listed or described in Schedule 2.1.1(d);
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(e) the data and Records related to the operations of the
Acquired Business, excluding all personnel Records and other Records
that Seller is required by law to retain in its possession (copies of
which shall be made available to Buyer on request);
(f) the Intellectual Property Assets of the Acquired Business
listed in Schedule 2.1.1(f); and
(g) pre-payments relating to the Acquired Business and other
miscellaneous assets of the Acquired Business listed on Schedule
2.1.1(g).
2.1.2 All of the property and assets to be transferred to
Buyer under this Section 2.1 shall be herein referred to collectively as the
"ACQUIRED ASSETS." With respect to the Schedules referenced in this Section 2.1
("ASSET SCHEDULES"), Seller hereby provides to Buyer on the date hereof a
current schedule of such Assets. Not later than five (5) days prior to the
Closing Date, Seller shall deliver to Buyer final updated Asset Schedules. Buyer
shall have an opportunity to review all such updated asset schedules and request
that Seller provide an explanation and/or support that any assets added to such
schedules are part of the Acquired Business. The final disposition of the
Acquired Assets may be adjusted by the Final Statement of Net Operating Assets
(as defined in Section 2.3(e)).
2.1.3 Notwithstanding the foregoing, the transfer of the
Acquired Assets pursuant to this Agreement shall not include the assumption of
any Liability related to the Acquired Assets unless Buyer expressly assumes that
Liability pursuant to Section 2.4(a).
2.1.4 Seller shall cause each applicable local subsidiary of
Seller (a "SELLER LOCAL ENTITY") in each of the jurisdictions where the Acquired
Assets are being transferred to transfer those Acquired Assets owned by such
Seller Local Entity to Buyer or Buyer's nominee. Seller shall cause each Seller
Local Entity to enter into a separate written agreement (each a "LOCAL
AGREEMENT") for the sale and transfer of the portion of the Acquired Assets
which are being transferred from the respective Seller Local Entity to Buyer or
a local entity of Buyer in the jurisdiction in which the assets are being
transferred. Except for modifications required pursuant to applicable laws of a
local jurisdiction, each Local European Agreement shall be substantially in the
form of the German Local Agreement unless otherwise agreed upon by the parties.
The parties agree that each Local entity shall be a third party beneficiary
under this agreement and shall have standing to enforce any rights and remedies
that it may have under this Agreement. To the extent this Asset Purchase
Agreement provides for remedies of either party, the parties acknowledge that
either party can seek remedies not only for their own damages but also for
damages of the Seller Local Entity (with respect to the Seller) or the Buyer
Local Entity (with respect to the Buyer).
2.1.5 In the event that the transfer of any non-material
assets from a Seller Local Entity to a nominee of Buyer cannot occur prior to
Closing due to the need for a notice or other waiting period to expire (such
assets not sold at Closing shall be referred to herein as the "PENDING ASSETS"),
the parties, in their sole discretion, shall Close on all of the transferable
Acquired Assets; provided, however, that neither party shall be required to
Close if the waiting period applies to the Acquired Assets located in Germany.
To the extent that there are Pending Assets at the end of Closing, the parties
agree that the Pending Assets shall be transferred to Buyer as soon as
practicable after such transfer is permissible under applicable local law, and
payment by Buyer will deferred until, and until such xxxx Xxxxxx shall hold the
Pending Assets in escrow and the risk of loss therefor will not pass to Buyer
until the parties execute and deliver to the other the Local Transfer Agreement.
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2.1.6 The Local Agreements for Germany shall be in a form as
set out in Schedule 2.1.6 ("GERMAN LOCAL AGREEMENTS"). The Local Agreements in
the remaining jurisdictions shall be as far as possible (taking into account the
particularities of the respective jurisdiction) similar to the German Local
Agreement. The precise nature and conditions of the Local Agreements will depend
on the laws, regulations and practices applying within each of the jurisdictions
concerned. Where appropriate, the Parties to this Agreement will cause their
local subsidiaries to comply with any applicable legal requirement prior to
entering into the Local Agreements and, in particular, any obligation that may
exist to consult with relevant employee representation.
2.1.7 The Local Agreement of Checkpoint Systems Italia SPA
("ITALIAN LOCAL AGREEMENT") shall be based in the German Local Agreement but
shall include the following provision:
"The respective obligations of each of the transferor/seller and
transferee/purchaser to effect the Local Agreement shall be subject to the
satisfaction at or prior to the Closing Date of the following condition:
Each of the transferor/seller and transferee/purchaser shall have (i)
duly completed the procedure of information and consultation with trade
unions/works council set forth by Section 47 of Law No. 428 of December 29, 1990
and (ii) duly accomplished any obligations set forth by the applicable National
Bargaining Collective Agreement or any union agreements currently applied in
connection with the transactions contemplated by this Agreement."
2.1.8 The remaining Local Agreements shall be concluded as
soon as possible under the local Legal Requirements, in particular under the
applicable local labour law regulations.
2.2 RETAINED ASSETS
Notwithstanding anything to the contrary contained in Section 2.1 or
elsewhere in this Agreement, for purposes of clarity the following assets of
Seller (collectively, "RETAINED ASSETS"), together with all other assets owned
by Seller not listed as an Acquired Asset, are not part of the sale and purchase
contemplated hereunder, are excluded from the Acquired Assets and shall remain
the property of Seller after the Closing:
(a) all cash, cash equivalents and short-term investments
related to the Acquired Business, except for cash attributable to any
prepaid deposits or other items of deferred revenue set forth as an
asset on the Statement of Estimated Net Operating Assets, as adjusted
by the Final Statement of Net Operating Assets;
(b) all minute books, stock Records and corporate seals of the
Sellers;
(c) all intellectual property rights in the name Meto,
including, without limitation, all trade name, trademark, and service
name rights ("METO IP RIGHTS");
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(d) all claims for refund of Taxes and other governmental
charges of whatever nature; and
(e) all rights, including intellectual property, associated
with sale of Service Bureau Products. RFID labels, tags and tickets and
all processes associated with the design, fabrication, testing and
implementation of RFID into consumer product, commercial and industrial
solutions.
2.3 CONSIDERATION
(a) Purchase Price. The aggregate consideration, subject to
the application of Sections 2.6(a), 2.6(b) and 10.2 below, for the
Acquired Assets (the "PURCHASE PRICE") shall be determined as follows:
(i) the Estimated Net Operating Assets Amount, as
determined in Section 2.3(b), paid by Buyer to Seller on the
Closing Date, plus
(ii) the Additional Cash Purchase Price, as set forth
in Section 2.3(c), paid by Buyer to Seller on the Closing Date
net of the payment of the Escrow Amount (as defined in Section
2.3(d) below) (the Additional Cash Purchase Price together
with the Estimated Net Operating Assets Amount is referred to
herein as the "INITIAL PURCHASE PRICE"), plus or minus
(iii) the Final Net Operating Assets Adjustment (as
determined pursuant to either Section 2.3(f) or Section
2.3(g)), paid in accordance with Section 2.3(h).
(b) Estimated Net Operating Assets Amount. The "ESTIMATED NET
OPERATING ASSETS AMOUNT" shall be the amount designated as such on the
Statement of Estimated Net Operating Assets (as defined in this Section
2.3(b)). On the date hereof, Seller has prepared and delivered to Buyer
the most recently internally prepared, un-audited, month-end balance
sheet for the Acquired Business, attached hereto as Schedule 2.3(b),
which will also contain an initial statement of Net Operating Assets
amount as of such date ("MOST RECENT BALANCE SHEET"). Not later than
5:00 p.m. eastern United States standard time on the day immediately
preceding the Closing Date, the Seller shall deliver to Buyer an
internally prepared, un-audited, balance sheet as of the Closing Date
and a statement of estimated Net Operating Assets as of the Closing
Date ("STATEMENT OF ESTIMATED NET OPERATING ASSETS"), prepared in a
manner consistent with the Most Recent Balance Sheet and also made a
part of Schedule 2.3(b). The Statement of Estimated Net Operating
Assets shall include a calculation of the Estimated Net Operating
Assets Amount. Not later than three (3) days prior to the Closing Date,
the Seller shall provide Buyer a preliminary pro forma calculation of
the Statement of Estimated Net Operating Assets.
(c) Additional Cash Purchase Price. The "ADDITIONAL CASH
PURCHASE PRICE" is equal to US$8,579,000.
(d) Escrow. On the date hereof, Buyer shall initialize a wire
transfer of US$2,025,000 (an amount equal to five percent (5%) of the
sum of: (i) the initial statement of Net Operating Assets amount as
shown on the Most Recent Balance Sheet plus (ii) the Additional Cash
Purchase Price) (the "ESCROW AMOUNT") to an escrow account established
by Chicago Title and Trust Company ("ESCROW AGENT"). The balance of the
Initial Purchase Price will be paid by Buyer to Seller on the Closing
Date via wire transfer of immediately available funds. The Escrow
Amount will be held and distributed by the Escrow Agent in accordance
with the terms and provisions of an escrow agreement which will be
executed and delivered by the parties hereof concurrently with the
execution and delivery of this Agreement.
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(e) Seller's Preparation of Final Statement of Net Operating
Assets. As promptly as possible following the close of business on the
Closing Date, but in no event later than forty-five (45) days after the
Closing Date, the Seller shall prepare, at the expense of Seller, a
final statement of Net Operating Assets ("FINAL STATEMENT OF NET
OPERATING ASSETS"). Seller shall prepare the Final Statement of Net
Operating Assets in a manner consistent with the Most Recent Balance
Sheet, the Estimate Statement of Net Operating Assets and shall include
a calculation, based upon the Final Statement of Net Operating Assets,
of either: (i) an increase to the Estimated Net Operating Assets Amount
or (ii) a decrease to the Estimated Net Operating Assets Amount ("FINAL
NET OPERATING ASSETS ADJUSTMENT") as part of the Final Statement of Net
Operating Assets.
(f) Buyer's Review. Buyer shall have a period of forty-five
(45) days following delivery to it of the Final Statement of Net
Operating Assets to review, at the expense of the Buyer, the Final
Statement of Net Operating Assets and the calculation of the Final Net
Operating Assets Adjustment. Seller agrees to provide to Buyer
materials or information in its possession reasonably required by Buyer
to review the preparation of the Final Statement of Net Operating
Assets and the calculation of the Final Net Operating Assets
Adjustment. In the event that Buyer does not provide written notice to
Seller within such forty-five (45) day period that Buyer disagrees with
the Final Statement of Net Operating Assets and/or the calculation of
the Final Net Operating Assets Adjustment ("NOTICE OF DISAGREEMENT"),
then such Final Statement of Net Operating Assets shall be deemed
final.
(g) Independent Review. In the event Buyer provides Seller
with a Notice of Disagreement and the parties have not resolved such
disagreement and made an appropriate payment in connection therewith
within thirty (30) days after the date of delivery of the Notice of
Disagreement, the parties shall submit to a KPMG LLP ("INDEPENDENT
AUDITOR") such Initial Statement, Statement of Estimated Net Operating
Assets, the Final Statement of Net Operating Assets and calculation of
the Final Net Operating Assets Adjustment, the Most Recent Balance
Sheet, the Notice of Disagreement, and any other documents or
information which the parties deem, or the Independent Auditor deems,
pertinent in order to make a final and binding determination of any
issues as to which the parties are in disagreement. The Independent
Auditor shall advise the parties of its decision relative to the
controversy within sixty (60) days (or as soon as practicable) after
its receipt of the applicable statements and other documents or
information which it has requested and at such time the Final Net
Assets Adjustment shall be deemed final. Such firm shall be acting as
an arbitrator and not as an auditor and shall decide only those issues
as to which the parties are not in agreement. The fees and expenses of
the Independent Auditor shall be equally apportioned between the Buyer
and the Seller.
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(h) Payment of Final Net Operating Assets Adjustment. Within
fifteen (15) days after the final determination of the Final Net
Operating Assets Adjustment as provided in either Section 2.3(f) or
Section 2.3(g), (i) if the Final Net Operating Assets Adjustment
results in an increase from the Initial Purchase Price, Buyer shall pay
to Seller by wire transfer in immediately available funds such increase
together with interest thereon from the Closing Date to the date of
payment thereof, at an interest rate equal to the "prime rate" as
published in The Wall Street Journal (the "PRIME RATE") in effect on
the date of determination of the Final Net Operating Assets Adjustment
("ACCRUED INTEREST"), and (ii) if the Final Net Operating Assets
Adjustment results in a decrease from the Initial Purchase Price,
Seller shall pay to Buyer by wire transfer in immediately available
funds such decrease together with the Accrued Interest. In the event
that a party does not make its total payment as required by this
Section 2.3(h), then the unpaid amount shall accrue interest at an
annual rate equal to the Prime Rate plus five percent (5%) until fully
paid.
2.4 LIABILITIES
(a) Assumed Liabilities. On the Closing Date, Buyer shall
assume and agree to pay, discharge or perform, as appropriate, the
following liabilities and obligations of Seller (the "ASSUMED
LIABILITIES"):
(i) all trade accounts payable and accrued
liabilities reflected on the Final Statement of Net Operating
Assets;
(ii) any warranty obligations of Seller under written
warranty agreements and statutory and common law warranty
obligations to customers of the Acquired Business in the
Ordinary Course of Business prior to the Closing Date; and
(iii) any obligations of Seller under the Seller
Contracts listed or described on Schedule 2.1(d) arising
subsequent to the Closing Date.
(b) Retained Liabilities. The Retained Liabilities (AS
HEREINAFTER DEFINED) shall remain the sole responsibility of and shall
be retained, paid, performed and discharged solely by Seller. "RETAINED
LIABILITIES" shall mean every Liability of Seller other than the
Assumed Liabilities.
2.5 ALLOCATION
The Purchase Price shall be allocated in each jurisdiction where a
Local Seller Entity transfers its Acquired Assets in accordance with Schedule
2.5. In any Proceeding related to the determination of any Tax, neither Buyer
nor Seller shall contend or represent that such allocation is not a correct
allocation.
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2.6 POST-CLOSING ADJUSTMENTS TO THE PURCHASE PRICE
(a) Accounts Receivable. Buyer shall use its Commercially
Reasonable Efforts to collect all Accounts Receivable, but shall not be
required to institute litigation or refer uncollectible receivables to
any collection agency. Any transferred Accounts Receivable which are
not paid to Buyer within one hundred twenty (120) days of Closing shall
be reassigned and transferred to Seller at face value and Buyer shall
forthwith receive a payment for the amount so reassigned and
transferred. On the 60th and 90th day following Closing, Buyer shall
provided to Seller an Accounts Receivable aging report in writing. At
any time after the 90th day following Closing, Seller may elect to have
any Account Receivable reassigned to Seller and Buyer shall reassign
such Account Receivable to Seller concurrently with Seller's payment to
Buyer therefor.
(b) Inventory. On the first anniversary of Closing, Buyer
shall prepare and deliver to Seller a written schedule of all obsolete,
non-usable Inventory and shall reassign and transfer to Seller such
items at an amount equal to the value assigned to such item on the
Final Statement of Net Operating Assets and Buyer shall forthwith
receive payment for all inventory so reassigned and transferred.
2.7 CLOSING
The purchase and sale provided for in this Agreement (the "CLOSING")
will take place at the offices of Buyer's counsel at 000 Xxxxx Xxxxxxxx Xxxxxx,
Xxxxx 0000, Xxxxxxx 00000 at 10:00 a.m. (local time) on January 26, 2005, unless
Buyer and Seller otherwise agree. The Closing shall be deemed effective at 11:59
p.m. (local time) that same day with respect to each Seller. Subject to the
provisions of Article 9, failure to consummate the purchase and sale provided
for in this Agreement on the date and time and at the place determined pursuant
to this Section 2.7 will not result in the termination of this Agreement and
will not relieve any party of any obligation under this Agreement. In such a
situation, the Closing will occur as soon as practicable, subject to Article 9.
2.8 CLOSING OBLIGATIONS
In addition to any other documents to be delivered under other
provisions of this Agreement, at the Closing:
(a) Seller shall deliver to Buyer:
(i) such bills of sale, assignment and assumption
agreements, the German Local Agreements, the Italian Local
Agreement and all other Local Agreements and other instruments
of transfer; release of lien instruments, and conveyance as
may reasonably be requested by Seller and/or Buyer, each in
form and substance satisfactory to the parties and their legal
counsel as appropriate and executed by Seller (without
limitation, "CONVEYANCE DOCUMENTS");
(ii) assignments of all intellectual property set
forth on Schedule 2.1(f) executed by Seller;
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(iii) non-competition and non-solicitation agreements
in the form of EXHIBIT 2.8(A)(iii), for the benefit of Buyer
with respect to the Acquired Assets, executed by Seller;
(iv) a certificate executed by Seller as to the
material accuracy of their representations and warranties as
of the date of this Agreement and as of the Closing in
accordance with Section 7.1 and as to their material
compliance with and performance of their covenants and
obligations to be performed or complied with at or before the
Closing in accordance with Section 7.2;
(v) a certificate of the Secretary of Seller
certifying, as complete and accurate as of the Closing,
attached copies of the Governing Documents of Seller,
certifying and attaching all requisite resolutions or actions
of Seller's board of directors (and shareholders, if required
by the Governing Documents or by any legal requirement)
approving the execution and delivery of this Agreement and the
consummation of the Contemplated Transactions and certifying
to the incumbency and signatures of the officers of Seller
executing this Agreement and any other document relating to
the Contemplated Transactions and accompanied by the requisite
documents for amending the relevant Governing Documents of
Seller required to effect such change of name in form
sufficient for filing with the appropriate Governmental Body;
(vi) the legal opinion of counsel to Seller, as to
the organization and authority of Checkpoint Systems, Inc. to
enter into this Agreement and the enforceability of this
Agreement with respect to Checkpoint Systems, Inc.
(vii) duly executed assignments of leases for each of
the Leased Real Property and all other material Leases assumed
by Buyer with applicable consents from each such lessor or
other party thereto, as applicable and where required.
(b) Buyer shall deliver to Seller as the case may be:
(i) the Initial Purchase Price to an account
specified by Seller in a writing delivered to Buyer at on the
Closing Date;
(ii) all Conveyance Documents executed by Buyer;
(iii) non-competition and non-solicitation agreements
in the form of EXHIBIT 2.8(B)(iii) (subject to completion of
the exhibits thereto), for the benefit of Seller with respect
to Seller's business not transferred hereunder, executed by
Buyer;
(iv) a certificate executed by Buyer as to the
material accuracy of its representations and warranties as of
the date of this Agreement and as of the Closing in accordance
with Section 8.1 and as to its material compliance with and
performance of its covenants and obligations to be performed
or complied with at or before the Closing in accordance with
Section 8.2; and
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(v) a certificate of the Secretary of Buyer
certifying, as complete and accurate as of the Closing,
attached copies of the Governing Documents of Buyer and
certifying and attaching all requisite resolutions or actions
of Buyer's board of directors approving the execution and
delivery of this Agreement and the consummation of the
Contemplated Transactions and certifying to the incumbency and
signatures of the officers of Buyer executing this Agreement
and any other documents relating to the Contemplated
Transactions.
2.9 Break-up Fee. In the event that the Closing of the Contemplated
Transactions does not occur on or before February 28, 2006 due to Buyer's
failure to materially perform its obligations under this Agreement, where such
failure is not due to Seller's failure to materially perform its obligations
under this Agreement, Buyer shall pay to Seller, an amount equal to One Million
US Dollars (US $1,000,000) in immediately available funds, via wire transfer to
an account designated by Seller, payable immediately out of the Escrow Amount
(the "BREAK-UP FEE").
3. REPRESENTATIONS AND WARRANTIES OF SELLER
No specific representation or warranty shall limit the generality or
applicability of a more general representation or warranty. Representations and
warranties of the Seller are initially made as of the date hereof. All
representations and warranties of Seller are made subject to the exceptions
noted in the Schedules delivered by Seller to Buyer concurrently herewith and
incorporated herein by reference. All exceptions noted in the Schedules are
numbered to correspond with the applicable paragraph of Article III to which
such exception refers. All representations and warranties shall be certified to
as of the Closing Date pursuant to Section 7.1. Except as otherwise indicated on
the Schedules, each Seller Local Entity and Seller, jointly and severally,
represents and warrants to Buyer as follows:
3.1 ORGANIZATION AND AUTHORITY
Each Seller is a corporation duly organized, validly existing and in
good standing under the laws of its jurisdiction of incorporation, with full
corporate power and authority to conduct its business as it is now being
conducted, to own or use the properties and assets that it purports to own or
use, and to perform all its obligations hereunder and under the Seller
Contracts.
3.2 ENFORCEABILITY; NO CONFLICT
(a) This Agreement constitutes the legal, valid and binding
obligation of each Seller, enforceable against each Seller in
accordance with its terms. Upon the execution and delivery by each
Seller of each agreement to be executed or delivered by any or all of
Seller at the Closing (collectively, the "SELLER'S CLOSING DOCUMENTS"),
each of Seller's Closing Documents will constitute the legal, valid and
binding obligation of each Seller, enforceable against each of them in
accordance with its terms. Each Seller has the absolute and
unrestricted right, power and authority to execute and deliver this
Agreement and the Seller's Closing Documents to which it is a party and
to perform its obligations under this Agreement and the Seller's
Closing Documents and to transfer, convey and sell to Buyer at the
Closing the Acquired Assets to be sold, and such action has been duly
authorized by all necessary action by Seller.
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(b) Except as set forth in Schedule 3.2(b), neither the
execution and delivery of this Agreement or any of the Seller's Closing
Documents nor the consummation or performance of any of the
Contemplated Transactions will, directly or indirectly (with or without
notice or lapse of time, or both):
(i) Breach (A) any provision of any of the Governing
Documents of Seller, (B) any resolution currently in effect as
adopted by the board of directors or the shareholder(s) of
Seller, or (C) any Legal Requirement;
(ii) Breach any provision of, or give any Person the
right to declare a default or exercise any remedy under, or to
accelerate the maturity or performance of, or payment under,
or to cancel, terminate or modify, any material Seller
Contract; or
(iii) result in the imposition or creation of any
Encumbrance upon or with respect to any of the Acquired
Assets.
(c) Except as set forth in Schedule 3.2(c), Seller has given
all notices to or obtained every Consent from any Person in connection
with the execution and delivery of this Agreement or, prior to or on
Closing, any of the Seller's Closing Documents or the consummation or
performance of any of the Contemplated Transactions, except where the
absence of such notice or Consent would not have, either individually
or in the aggregate, a Material Adverse Change.
3.3 FINANCIAL STATEMENTS
Seller has delivered to Buyer the un-audited, internally prepared, pro
forma statement of operations and statement of assets and liabilities for the
12-month period ended December 26, 2004 and the 6-month period ended June 26,
2005 and the 9-month period ended September 25, 2005, each attached hereto on
Schedule 3.3(a). Since December 26, 2004, there has been no change in the
accounting policies, practices or procedures relating to the Acquired Business
undisclosed to the Buyer.
3.4 ACQUIRED ASSETS
Except for the Retained Assets, the Acquired Assets, which Seller is
selling to Buyer hereunder, constitute all of the assets, tangible and
intangible, set forth on the Estimated Statement of Net Operating Assets, as
adjusted by the Final Statement of Net Operating Assets, and are, as of the date
hereof, and will be, as of the Closing Date, utilized by Seller in the Acquired
Business.
3.5 DESCRIPTION OF LEASED REAL PROPERTY
(a) [Intentionally Omitted].
(b) Schedule 3.5(b) contains an accurate description (by
location, name of lessor, date of Lease and term expiry date) of all
Leased Real Property to be assigned or sublet to Buyer.
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(c) Seller has been in peaceable possession since the
commencement of the original term of its Leases and is not in material
default thereunder and no waiver, indulgence or postponement of the
obligations of Seller under any lease has been granted by any lessor.
Each such lease is in full force and effect and to Seller's Knowledge,
the lessor is not in default thereof, and no occurrence, condition, or
act, including the execution and delivery of this Agreement and the
other agreements and transactions contemplated thereby, which (with or
without notice or lapse of time or both) would constitute a default
thereunder.
3.6 TITLE TO ASSETS; ENCUMBRANCES
Seller owns good and transferable title to all of the Acquired Assets
free and clear of any Encumbrances other than those described in Schedule 3.6
("PERMITTED ENCUMBRANCES"). Upon consummation of the Closing, Buyer will acquire
from each Seller legal and beneficial ownership of, and good and marketable
title to, the Acquired Assets, free and clear of encumbrances except the
Permitted Encumbrances.
3.7 CONDITION OF PROPERTY
(a) Use of the Leased Real Property for the various purposes
for which it is presently being used is permitted as of right under all
applicable zoning legal requirements and is not subject to "permitted
nonconforming" use or structure classifications. All improvements are
in compliance with all applicable Legal Requirements, including those
pertaining to zoning, building and the disabled, are in good repair and
in good condition, ordinary wear and tear excepted, and are free from
latent and patent defects.
(b) Each item of Tangible Personal Property is suitable for
immediate use in the Ordinary Course of Business in a manner consistent
with historical use. No item of Tangible Personal Property is in need
of repair or replacement other than as part of routine maintenance in
the Ordinary Course of Business. Except as disclosed in Schedule
3.7(b), all Tangible Personal Property used in Seller's business is in
the possession of Seller.
3.8 ACCOUNTS RECEIVABLE
All Accounts Receivable that are reflected on the Final Statement of
Net Operating Assets represent or will represent valid obligations arising from
sales actually made or services actually performed by Seller in the Ordinary
Course of Business.
3.9 INVENTORIES
All items included in the Inventories consist of a quality and quantity
usable and, with respect to finished goods, saleable, in the Ordinary Course of
Business of Seller.
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3.10 NO MATERIAL ADVERSE CHANGE
Since June 30, 2005 and except as set forth on Schedule 3.10, there has
been:
(a) no Material Adverse Change with respect to the Acquired
Business or any Leased Real Property;
(b) no express waiver or release by any Seller of any material
right of any Material Contract;
(c) no change in or event affecting the Acquired Business that
is reasonably likely to have a Material Adverse Change;
(d) no casualty, loss, damage or destruction (whether or not
covered by insurance) of any of the Acquired Assets or the Leased Real
Property, or that has involved or is reasonably likely to involve a
loss, individually, of more than Twenty-Five Thousand Dollars ($25,000)
or, in the aggregate, of more than One Hundred Thousand Dollars
($100,000); and
(e) no written notice received from any material customer or
supplier of the Acquired Business to the effect that such customer or
supplier intends to terminate or materially decrease expected ongoing
purchases from, or sales to, as the case may be, Seller and Seller has
no Knowledge of such termination or decrease.
3.11 GOVERNMENTAL AUTHORIZATIONS
Seller has all of the material Governmental Authorizations necessary to
permit Seller to lawfully conduct and operate the Acquired Business in the
manner in which it currently conducts and operates such business and to permit
Seller to own and use the Acquired Assets in the manner in which it currently
owns and uses such assets. The Parties acknowledge, however, that it is
necessary to re-grant to the Buyer the Governmental Authorizations which were
granted on a personal basis (Personalkonzessionen) to Seller. There have been no
notices from any Governmental Body in the last twelve (12) months that has had
or is reasonably likely to have a Material Adverse Change. All such Governmental
Authorizations are valid and in full force and effect and, to the extent
assignable, will remain so upon consummation of the transactions contemplated by
this Agreement. To Seller's Knowledge, no suspension, cancellation or
termination of any such Permits is threatened or imminent.
3.12 LEGAL PROCEEDINGS; ORDERS
Except as set forth in Schedule 3.12, there is no pending or, to
Seller's Knowledge, threatened Proceeding or Order that challenges, or that is
reasonably likely to have the effect of preventing, delaying, making illegal or
otherwise interfering with, any of, or any aspect of, the Contemplated
Transactions or, if determined adversely is reasonably to have a Material
Adverse Change or materially interfere with Seller's ability to perform this
Agreement. To the Knowledge of Seller, no event has occurred or circumstance
exists that is reasonably likely to give rise to or serve as a basis for the
commencement of any such Proceeding or Order.
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3.13 CONTRACTS; NO DEFAULTS
(a) Schedule 3.13(a) contains an accurate and complete list,
and Seller has delivered to Buyer true, accurate and complete copies,
of all Material Contracts.
(b) Except as set forth in Schedule 3.13(b):
(i) each Material Contract identified or required to
be identified in Schedule 3.13(a) and which is to be assigned
to or assumed by Buyer under this Agreement is in full force
and effect, and there exists no default by Seller or, to the
Knowledge of Seller, any other party to such Material
Contract, and each Material Contract is valid and enforceable
in accordance with its terms; and
(ii) each Material Contract identified or required to
be identified in Schedule 3.13(a) and which is being assigned
to or assumed by Buyer is assignable by Seller to Buyer
without the consent of any other Person and the consummation
of the transactions contemplated by this Agreement will not
(and will not give any Person the unilateral right to)
terminate or modify any rights of, or accelerate or augment
any obligation of, any party to such Material Contract, unless
indicated otherwise in Schedule 3.13(a).
3.14 ENVIRONMENTAL MATTERS
Except as disclosed in Schedule 3.14 and with respect to both the
Acquired Assets and the Leased Real Property:
(a) Seller is, and at all times has been, in material
compliance with, and has not been, and is not, in material violation of
any Environmental Law. Seller has no basis to expect, nor has any other
Person for whose conduct they are or may be held to be responsible
received, any written notice from (i) any Governmental Body or private
citizen acting in the public interest or (ii) the current or prior
owner or operator of any Leased Real Property, of any actual or
potential violation or failure to comply with any Environmental Law.
(b) There are no pending or, to the Knowledge of Seller,
threatened claims in writing resulting from any Environmental, Health
and Safety Liabilities or arising under or pursuant to any
Environmental Law with respect to or affecting any Leased Real Property
or any Acquired Asset.
(c) There has been no generation, use, transportation,
treatment, storage or Release of any Hazardous Materials at or from any
of the Leased Real Property which has created or is reasonably likely
to create any material liability under any Environmental Law or which
would require reporting to or notification of any Governmental Body,
Acquired Assets which would have a Material Adverse Change.
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3.15 EMPLOYEES
(a) With respect to the Employees Receiving an Offer (as
defined in Section 10.1(a)(i)) in the United States:
(i) Except as listed on Schedule 3.15(a)(i), none of
the Employees Receiving an Offer has written employment
contracts or agreements which are being transferred to,
assumed by, or assigned to Buyer. A full, complete and
accurate list of the following information for each Employees
Receiving an Offer shall be provided to the Buyer not later
than seven (7) days prior to the Closing Date: employer; name;
job title; date of commencement of employment; current
compensation paid or payable; sick and vacation leave that is
accrued but unused; and service credited for purposes of
vesting and eligibility to participate under any Employee
Plan.
(ii) To the Seller's Knowledge, Seller is and has
been with respect to the Employees Receiving an Offer, in
substantial compliance with all applicable laws respecting
employment and employment practices, terms and conditions of
employment and wages and hours, including, without limitation,
any such laws respecting employment discrimination,
occupational safety and health, and unfair labor practices.
(iii) Seller is not delinquent in payments to any of
the Employees Receiving an Offer for any wages, salaries,
commissions, bonuses or other compensation for any services
performed by them to the Closing Date or amounts required to
be reimbursed to such employees.
(iv) The termination by Seller of the employment of
any of the Employees Receiving an Offer at Closing will not
subject Buyer to any liability to such employees for severance
pay after the Closing Date.
(v) Seller has no Knowledge of any intention of or
indication by a Significant Employee (as herein defined) that
such Significant Employee has terminated or intends to
terminate his employment with Seller prior to Closing. As used
herein, "SIGNIFICANT EMPLOYEE" means the individuals listed on
Schedule 3.15(a)(v).
(b) With respect to the Transferred Employees located in the
European Union and Norway, the second sentence in subsections (a)(i) of
this Section 3.15 and subsections (a)(ii) and (a)(iii) of this Section
3.15 shall apply mutatis mutandis, provided the employment relation of
the respective employee in fact transfers to the Buyer in connection
with the completion of the transaction contemplated by this Agreement.
(c) With respect to the Transferred Employees located in
Australia, New Zealand and Malaysia, the second sentence in subsections
(a)(i) of this Section 3.15 and subsections (a)(ii) and (a)(iii) of
this Section 3.15 shall apply mutatis mutandis, provided the employment
relation of the respective employee in fact transfers to the Buyer in
connection with the completion of the transaction contemplated by this
Agreement.
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3.16 EMPLOYEE BENEFITS
(a) With respect to the Transferable Employees located in the
United States:
(i) Set forth in Schedule 3.16(a)(i) is a complete
list of all "employee benefit plans" as defined by Section
3(3) of ERISA, and all other bonus, incentive-compensation,
deferred-compensation, profit-sharing, stock-option,
stock-appreciation-right, stock-bonus, stock-purchase,
employee-stock-ownership, savings, severance,
change-in-control, supplemental-unemployment, layoff,
salary-continuation, retirement, pension, health,
life-insurance, life-insurance, disability, accident,
group-insurance, vacation, holiday, sick-leave, fringe-benefit
fringe-benefit or welfare plan, and any other employee
compensation or benefit plan, agreement, policy, practice,
commitment, contract or understanding (whether qualified or
nonqualified, currently effective or terminated, written or
unwritten) and any trust, escrow or other agreement related
thereto that: (i) is maintained or contributed to by Seller
for the benefit of the Transferred Employees and (ii) provides
benefits, or describes policies or procedures applicable to
any Transferred Employee (collectively the "EMPLOYEE PLANS").
(ii) Seller has delivered or made available to Buyer
necessary and reasonable copies of: (i) the documents
comprising each Employee Plan, (ii) all trust agreements,
insurance contracts or any other funding instruments related
to the Employee Plans and (iii) all summary plan descriptions,
summaries of material modifications and memoranda, employee
handbooks and other written communications regarding the
Employee Plans.
(iii) To Seller's Knowledge, all Employee Plans
comply in all material respects with and are and have been
operated in accordance with each applicable provision of
ERISA, the Code (including, without limitation, the
requirements of Code Section 401(a) to the extent any Plan is
intended to conform to that Section), and any applicable Legal
Requirement.
(iv) To the Seller's Knowledge, neither any Employee
Plan or plan fiduciary has engaged in any transaction in
violation of Section 406 of ERISA or any "prohibited
transaction" (as defined in Section 4975(c)(1) of the Code)
and there has been no "reportable events" (as defined in
Section 4043(b) of ERISA) with respect to any of the Employee
Plans. Seller has not incurred or suffered to exist any
"accumulated funding deficiency" (as defined in Section 302 of
ERISA) whether or not waived by the IRS, involving any of the
Employee Plans. Except as noted on Schedule 3.16(a)(iv),
Seller has made all contributions and paid all amounts due and
owing as required by the terms of any of the Employee Plans or
any other applicable law.
(v) Other than routine claims for benefits, there are
no material pending or, to Seller's Knowledge, threatened
claims by any Transferable Employee covered under any Employee
Plan.
22
(b) With respect to the employees located in the European
Union and Norway, all employee benefits are governed by applicable
local statutory law. Except as noted on Schedule 3.16(b), Seller has
made all contributions and paid all amounts due and owing as required
by the terms of any of the Employee Plans or any other applicable law.
(c) With respect to the employees located in Australia, New
Zealand and Malaysia, all employee benefits are governed by applicable
local statutory law. Except as noted on Schedule 3.16(c), Seller has
made all contributions and paid all amounts due and owing as required
by the terms of any of the Employee Plans or any other applicable law.
3.17 LABOR DISPUTES; COMPLIANCE
(a) Seller has complied in all material respects with all
Legal Requirements relating to employment practices, terms and
conditions of employment, equal employment opportunity,
nondiscrimination, immigration, wages, hours, benefits, collective
bargaining and other requirements under applicable law, the payment of
social security and similar Taxes and occupational safety and health.
Seller is not liable for the payment of any Taxes, fines, penalties, or
other amounts, however designated, for failure to comply with any of
the foregoing Legal Requirements.
(b) Except as disclosed in Schedule 3.17(b): (i) Seller has
not been, and is not now, a party to any bargaining agreement or other
collective labor contract; (ii) since January 1, 2005, there has not
been, there is not presently pending or existing, and to Seller's
Knowledge there is not threatened, any strike, slowdown, picketing,
work stoppage or employee grievance process involving Seller; (iii)
there is not pending or, to Seller's Knowledge, threatened against
Seller any Proceeding relating to the alleged violation of any Legal
Requirement pertaining to labor relations, including any charge or
complaint filed with the National Labor Relations Board or any
comparable Governmental Body, and, to the Knowledge of Seller, there is
no material organizational activity or other labor dispute against or
affecting Seller or the Leased Real Property; (iv) no grievance or
arbitration Proceeding exists that might have an adverse effect on the
Acquired Business; and (v) to Seller's Knowledge there has been no
charge of discrimination filed against Seller with the Equal Employment
Opportunity Commission or similar Governmental Body.
3.18 INTELLECTUAL PROPERTY ASSETS
The Intellectual Property Assets listed in Schedule 2.1(f) and the Meto
IP Rights are all those necessary for the operation of the Acquired Business as
it is currently conducted. Seller is the owner or licensee of all right, title
and interest in and to each of the Intellectual Property Assets, free and clear
of all Encumbrances, and has the right to use, sell, license or dispose of use
without payment to a Third Party, Party all of the Intellectual Property Assets,
and with respect to the Meto IP Rights, to license such rights to the Buyer,
free and clear or any encumbrances.
3.19 TAX AND OTHER RETURNS AND REPORTS.
All Tax Returns have been filed with the appropriate governmental
agencies in all jurisdictions in which such Tax Returns are required to be filed
and all such Tax Returns properly reflect the tax liabilities of Seller with
respect to the Acquired Business for the periods, property or events covered
thereby. Seller has not received any notice of assessment or proposed assessment
in connection with any Tax Returns and there are no pending or, to Seller's
Knowledge, threatened, tax examinations or tax claims asserted against Seller
with respect to, or that would have a Material Adverse Change to, the Acquired
Assets. There are no tax liens (other than any lien for current taxes not yet
due and payable) on any of the Acquired Assets.
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3.20 ACCOUNTING RECORDS; INTERNAL CONTROLS.
(a) Accounting Records. Seller has records that accurately and
validly reflect its transactions relating to the Acquired Business, and
in Seller's opinion, accounting controls sufficient to insure that such
transactions are (i) executed in accordance with management's general
or specific authorization; and (ii) recorded so as to maintain
accountability for assets.
(b) Data Processing; Access. Such records, to the extent they
contain important information that is not easily and readily available
elsewhere, have been duplicated and such duplicates are stored safely
and securely pursuant to procedures and techniques utilized by
companies of comparable size in similar lines of business.
3.21 ACCURACY OF INFORMATION.
The representations and warranties contained in this Article 3 or in
any schedule, statement, certificate or document furnished or to be furnished to
Buyer pursuant to this Agreement do not contain any untrue statement of a
material fact or omit to state any material fact necessary in order to make the
statements and information contained in this Article 3 not misleading.
3.22 TRANSFER OF GOING CONCERN
Seller is transferring Assets to Buyer hereunder to permit Buyer to own
and operate the Acquired Business, as supplemented by the services identified in
the Transition Services Agreement, as a Going Concern, and there are no material
assets omitted from the Acquired Assets which will prevent Buyer from conducting
those business operations it is acquiring from Seller in the same manner that
Seller has operated the business.
4. REPRESENTATIONS AND WARRANTIES OF BUYER
Buyer represents and warrants to Seller as follows:
4.1 ORGANIZATION AND GOOD STANDING
Buyer is a corporation duly organized, validly existing and in good
standing under the laws of the Republic of Singapore, with full corporate power
and authority to conduct its business as it is now conducted.
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4.2 AUTHORITY; NO CONFLICT
(a) This Agreement constitutes the legal, valid and binding
obligation of Buyer, enforceable against Buyer in accordance with its
terms. Upon the execution and delivery by Buyer of each agreement to be
executed or delivered by Buyer at Closing (collectively, the "BUYER'S
CLOSING DOCUMENTS"), each of the Buyer's Closing Documents will
constitute the legal, valid and binding obligation of Buyer,
enforceable against Buyer in accordance with its respective terms.
Buyer has the absolute and unrestricted right, power and authority to
execute and deliver this Agreement and the Buyer's Closing Documents
and to perform its obligations under this Agreement and the Buyer's
Closing Documents, and such action has been duly authorized by all
necessary corporate action.
(b) Neither the execution and delivery of this Agreement by
Buyer nor the consummation or performance of any of the Contemplated
Transactions by Buyer will give any Person the right to prevent, delay
or otherwise interfere with any of the Contemplated Transactions
pursuant to:
(i) any provision of Buyer's Governing Documents;
(ii) any resolution adopted by the board of directors
or the shareholders of Buyer;
(iii) any Legal Requirement or Order to which Buyer
may be subject; or
(iv) any Contract to which Buyer is a party or by
which Buyer may be bound.
Buyer is not and will not be required to obtain any Consent from any
Person in connection with the execution and delivery of this Agreement or the
consummation or performance of any of the Contemplated Transactions.
4.3 CERTAIN PROCEEDINGS
There is no pending Proceeding that has been commenced against Buyer
and that challenges, or may have the effect of preventing, delaying, making
illegal or otherwise interfering with, any of the Contemplated Transactions. To
Buyer's Knowledge, no such Proceeding has been threatened.
5. COVENANTS OF SELLER PRIOR TO CLOSING
Between the date of this Agreement and the Closing, Seller shall not,
and shall cause each of the Seller Local Entities not, to:
(a) conduct its business in any manner except only in the
Ordinary Course of Business;
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(b) except as required by their terms, amend, terminate, renew
or renegotiate any Material Contract or default (or take or omit to
take any action that would constitute a default) in any of its
obligations under any Material Contract or enter into any new Material
Contract or take any action that would jeopardize the continuance of
any material supplier or customer relationship;
(c) terminate or fail to renew or preserve any material
Government Authorizations;
(d) grant or agree to grant (i) any general or uniform
increase to the rates of pay or benefits to officers or executive
employees (or a class thereof), or (ii) any more than a five percent
(5%) increase of pay or agree to pay a bonus to any Person, except for
scheduled salary increases or incentives consistent with past practice,
and disclosed on Schedule 5.1(d);
(e) except as disclosed on Schedule 5.1(e), make any capital
expenditure or commitments affecting the Leased Real Estate or the
Acquired Assets aggregating more than Twenty-Five Thousand Dollars
($25,000); and
(f) introduce a new method of management or operation with
respect to the Acquired Business.
5.2 REQUIRED APPROVALS
As promptly as practicable after the date of this Agreement, Seller
shall make all filings required by Legal Requirements to be made by it in order
to consummate the Contemplated Transactions. Seller shall also cooperate with
Buyer and its Representatives with respect to all filings, applications,
approvals and permits that Buyer elects to make or, pursuant to Legal
Requirements, shall be required to make in connection with the Contemplated
Transactions. Seller shall also cooperate with Buyer and its Representatives in
obtaining all Material Consents.
5.3 COMMERCIALLY REASONABLE EFFORTS
Seller shall use its Commercially Reasonable Efforts to cause the
conditions in Article 7 and Section 8.3 to be satisfied.
5.4 PRESERVATION OF BUSINESS PRIOR TO CLOSING DATE.
During the period beginning on the date hereof and ending on the
Closing Date, (i) Seller will use its Commercially Reasonable Efforts consistent
with past practices to preserve the Acquired Business and to preserve the
goodwill of the employees, customers, suppliers and others having business
relations with Seller in the Acquired Business; and (ii) Seller and Buyer will
consult with each other concerning the services of the officers and employees.
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5.5 NEGOTIATIONS.
During the period beginning on the date hereof and ending on
the Closing Date, or the earlier termination of this Agreement in accordance
with the provisions of Article 9, the Seller shall not, directly or indirectly,
take any action or seek any offer from any Person to purchase the Acquired
Assets from Seller.
6. COVENANTS OF BUYER PRIOR TO CLOSING
6.1 REQUIRED APPROVALS
As promptly as practicable after the date of this Agreement, Buyer
shall make, or cause to be made, all filings required by Legal Requirements to
be made by it to consummate the Contemplated Transactions. Buyer also shall
cooperate with Seller (a) with respect to all filings Seller shall be required
by Legal Requirements to make and (b) in obtaining all Consents identified in
Schedule 3.2(c), provided, however, that Buyer shall not be required to dispose
of or make any change to its business, expend any material funds or incur any
other burden in order to comply with this Section 6.1.
6.2 COMMERCIALLY REASONABLE EFFORTS
Buyer shall use its Commercially Reasonable Efforts to cause the
conditions in Article 8 and Section 7.3 to be satisfied.
7. CONDITIONS PRECEDENT TO BUYER'S OBLIGATION TO CLOSE
Buyer's obligation to purchase the Acquired Assets and to take the
other actions required to be taken by Buyer at the Closing is subject to the
satisfaction, at or prior to the Closing, of each of the following conditions
(any of which may be waived by Buyer, in whole or in part):
7.1 ACCURACY OF REPRESENTATIONS
All of Seller's representations and warranties in this Agreement
(considered collectively), and each of these representations and warranties
(considered individually), shall have been accurate in all material respects as
of the date of this Agreement, and shall be accurate in all material respects as
of the time of the Closing as if then made, without giving effect to any
supplement to the Disclosure Schedule.
7.2 SELLER'S PERFORMANCE
All of the covenants and obligations that Seller is required to perform
or to comply with pursuant to this Agreement at or prior to the Closing
(considered collectively), and each of these covenants and obligations
(considered individually), shall have been duly performed and complied with in
all material respects.
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7.3 CONSENTS
Each of the Consents identified in Schedule 7.3 (the "MATERIAL
CONSENTS") shall have been obtained and shall be in full force and effect.
Notwithstanding anything to the contrary herein, in connection with certain
non-material operating leases for items such as computers and other office
equipment, the transfer thereof may require certain consents which seller shall
not obtain and there may exist certain liens or other encumbrances thereon that
will not be removed by Seller.
7.4 GOOD STANDING
Seller shall provide to Buyer a Certificate of Good Standing or its
equivalent for Seller;
7.5 NO PROCEEDINGS
Since the date of this Agreement, there shall not have been commenced
or threatened against Buyer, or against any related Person of Buyer, any
Proceeding (a) involving any challenge to, or seeking Damages or other relief in
connection with, any of the Contemplated Transactions or (b) that may have the
effect of preventing, delaying, making illegal, imposing limitations or
conditions on or otherwise interfering with any of the Contemplated
Transactions.
7.6 NO CONFLICT
Neither the consummation nor the performance of any of the Contemplated
Transactions will, directly or indirectly (with or without notice or lapse of
time or both), contravene or conflict with or result in a violation of or cause
Buyer or any related Person of Buyer to suffer any adverse consequence under (a)
any applicable Legal Requirement or Order or (b) any Legal Requirement or Order
that has been published, introduced or otherwise proposed by or before any
Governmental Body.
7.7 LEASED REAL PROPERTY
The parties or their designees shall enter into and deliver to each
other mutually agreed upon lease or sublease agreements consented to by each
lessor, where required, for the Leased Real Property.
7.8 SUPPLY AGREEMENT
Buyer shall have entered into a Supply Agreement with Seller, the draft
basis for which is attached hereto as Exhibit 7.8.
7.9 GOVERNMENTAL AUTHORIZATIONS
Buyer shall have received such Governmental Authorizations as are
necessary to allow Buyer to operate the Acquired Assets from and after the
Closing.
7.10 NO MATERIAL ADVERSE CHANGE
There shall not have been any Material Adverse Change or event in or
affecting (or reasonably expected to affect) any material aspect of the Acquired
Business.
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7.11 INTENTIONALLY OMITTED
7.12 METO LICENSE
Buyer and Seller shall have entered into a License Agreement for the
Meto IP Rights, the draft basis for which is attached hereto as Exhibit 7.12.
7.13 TRANSITION SERVICES AGREEMENT
Buyer shall have entered into a Transition Services Agreement with
Seller, the draft basis for which is attached hereto as Exhibit 7.13.
8. CONDITIONS PRECEDENT TO SELLER'S OBLIGATION TO CLOSE
Seller's obligation to sell the Acquired Assets and to take the other
actions required to be taken by Seller at the Closing is subject to the
satisfaction, at or prior to the Closing, of each of the following conditions
(any of which may be waived by Seller in whole or in part):
8.1 ACCURACY OF REPRESENTATIONS
All of Buyer's representations and warranties in this Agreement
(considered collectively), and each of these representations and warranties
(considered individually), shall have been accurate in all material respects as
of the date of this Agreement and shall be accurate in all material respects as
of the time of the Closing as if then made.
8.2 BUYER'S PERFORMANCE
All of the covenants and obligations that Buyer is required to perform
or to comply with pursuant to this Agreement at or prior to the Closing
(considered collectively), and each of these covenants and obligations
(considered individually), shall have been performed and complied with in all
material respects.
8.3 CONSENTS
Each of the Consents identified in Schedule 8.3 shall have been
obtained and shall be in full force and effect.
8.4 LEASED REAL PROPERTY
The parties or their designees shall enter into and deliver to each
other mutually agreed upon lease or sublease agreements for the Leased Real
Property.
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8.5 NO INJUNCTION
There shall not be in effect any Legal Requirement or any injunction or
other Order that (a) prohibits the consummation of the Contemplated Transactions
and (b) has been adopted or issued, or has otherwise become effective, since the
date of this Agreement.
8.5 ANCILLARY AGREEMENTS
Seller shall have entered into the agreements referenced of Exhibit
2.8(a)(iii) (Non-Competition Agreement), Exhibit 7.8 (Supply Agreement), Exhibit
7.12 (Meto License Agreement) and Exhibit 7.13 (Transition Services Agreement).
9. TERMINATION
9.1 TERMINATION EVENTS
By notice given prior to or at the Closing, subject to Section 9.2,
this Agreement, if Section 2.1 does not apply, may be terminated as follows:
(a) by Buyer if a material Breach of any provision of this
Agreement has been committed by Seller and such Breach has not been
waived by Buyer or cured by Seller within thirty (30) days following
delivery to Seller of written notice providing detail of such Breach;
(b) by Seller if a material Breach of any provision of this
Agreement has been committed by Buyer and such Breach has not been
waived by Seller or cured by Buyer within thirty (30) days following
delivery to Buyer of written notice providing detail of such Breach;
(c) by Buyer if any condition in Article 7 has not been
satisfied as of the date specified for Closing in the first sentence of
Section 2.7 or if satisfaction of such a condition by such date is or
becomes impossible (other than through the failure of Buyer to comply
with its obligations under this Agreement), and Buyer has not waived
such condition on or before such date;
(d) by Seller if any condition in Article 8 has not been
satisfied as of the date specified for Closing in the first sentence of
Section 2.7 or if satisfaction of such a condition by such date is or
becomes impossible (other than through the failure of Seller to comply
with their obligations under this Agreement), and Seller has not waived
such condition on or before such date;
(e) by mutual consent of Buyer and Seller;
(f) by Seller if the Closing has not occurred on or before
March 1, 2005, or such later date as the parties may agree upon, unless
the Seller is in material Breach of this Agreement.
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9.2 EFFECT OF TERMINATION
Each party's right of termination under Section 9.1 is in addition to
any other rights it may have under this Agreement or otherwise, and the exercise
of such right of termination will not be an election of remedies. If this
Agreement is terminated pursuant to Section 9.1, all obligations of the parties
under this Agreement will terminate, except that the obligations of the parties
in this Section 9.2 and Articles 12 and 13 will survive, provided, however,
that, if this Agreement is terminated because of a Breach of this Agreement by
the nonterminating party or because one or more of the conditions to the
terminating party's obligations under this Agreement is not satisfied as a
result of the 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.
10. ADDITIONAL COVENANTS
10.1 EMPLOYEES AND EMPLOYEE BENEFITS
(a) Employment of Seller Employees by Buyer.
(i) Schedule 10.1(a)(i) sets forth the employees of
the Acquired Business to which Buyer has agreed to offer
employment effective immediately subsequent to the Closing
Date (the "EMPLOYEES RECEIVING AN OFFER").
(ii) Schedule 10.1(a)(ii) sets forth the employees
of the Acquired Business to which Buyer shall employ
immediately subsequent to the Closing Date by operation of law
in accordance with the Legal Requirements of the jurisdiction
in which such employee is located or, if not by operation of
law shall employ the respective employee on the same
conditions as if the employment relationship had been
transferred by operation of law. However, the parties agree
that Schedule 10.1(a)(ii) is not exhaustive as labour courts
may determine that employees not listed are attributable to
the Acquired Business or that employees listed are not
attributable to the Acquired Business (the employees listed in
Schedule 10.1(a)(ii) together with the employees (irrespective
whether listed in Schedule 10.1(a)(ii) or not) whose
employment relationship is being transferred by operation of
law shall be referred to herein as the "ASSUMED EMPLOYEES"
and, together with the Employees Receiving an Offer, the
"TRANSFERRED EMPLOYEES"). The employees in the respective
jurisdictions will be transferred in accordance with the local
employment law and in accordance with the local agreement.
Notwithstanding anything to the contrary herein, Buyer shall
indemnify and hold Seller harmless from and against any and
all Losses arising from, or in connection with, the employment
of the Assumed Employees subsequent to the Closing Date.
(iii) On the Closing Date, Seller and Buyer shall
jointly prepare deliver a final updated Schedule 10.1(a)(i)
and Schedule 10.1(a)(ii).
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(iv) As of Closing Date, Buyer shall offer the
Employees Receiving an Offer: (i) compensation and employee
benefits which in the aggregate are substantially comparable
to such compensation and employee benefits (not to include
bonus compensation) offered to the Employees Receiving an
Offer by Seller immediately prior to the Closing Date and (ii)
credit for eligibility and vesting purposes for all of the
Employees Receiving an Offers' periods of service with Seller
prior to the Closing Date. In extending such benefits, Buyer
shall establish its own, or if practicable assume Seller's,
health and welfare plans to cover the Employees Receiving an
Offer and, in the event that new plans are established, shall
waive preexisting condition limitations in Buyer's plans that
might otherwise apply to the Transferred Employees except to
the extent the Employees Receiving an Offer have not satisfied
such limitations under the current health and welfare benefit
plans of Seller. Buyer shall assume responsibility under
Buyer's medical plans for all Employees Receiving an Offer and
their dependents who are entitled to COBRA continuation
coverage as of the Closing Date pursuant to Section 4980B of
the Code and Sections 601 to 606 of ERISA or, any comparable
Legal Requirement in the jurisdiction in which the Employees
Receiving an Offer reside. Seller shall be responsible for the
payment of all health and welfare plan benefits (including for
claims incurred but not reported) and premiums under the
Employee Plans covering employees of Seller with respect to
periods ending on or prior to Closing.
(v) Except for wages, payroll taxes and vacation
liability for the Transferred Employees (all of which will be
accrued on the Final Statement of Net Assets) assumed pursuant
to this Agreement or as expressly contemplated by this
Agreement, Buyer shall assume no liability for any agreements,
arrangements, Employee Plans, COBRA coverage for employees not
hired by Buyer or comparable legal requirement in foreign
jurisdictions, commitments, policies or understandings of any
kind relating to employment, compensation or benefits for the
present or former employees of the Acquired Business for all
employment prior to the Closing Date. The parties agree that
no employee shall be entitled to any third party beneficiary
status by virtue of this Section 10.1. Nothing in this
Agreement obligates Buyer to employ a Transferred Employee for
any specified minimum period of time and nothing in this
Agreement shall constitute a limitation on the right of Buyer
to terminate any Transferred Employee at will. All Transferred
Employees located in the US not employed by Buyer under an
employment agreement shall be employees at will and may be
terminated at any time, with or without notice, and with or
without cause. The parties are aware, that the transfer of
employment relationships by operation of European labour laws
comprises all rights and obligations out of the employment
relationship, including any pension obligations, and that such
rights and obligations shall be transferred as provided for by
the applicable labour laws.
(b) General Employee Provisions.
(i) Seller and Buyer shall give any notices required
by Legal Requirements and take whatever other actions with
respect to the plans, programs and policies described in this
Section 10.1 as may be necessary to carry out the arrangements
described in this Section 10.1.
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(ii) Seller and Buyer shall provide each other with
such plan documents and summary plan descriptions, employee
data or other information as may be reasonably required to
carry out the arrangements described in this Section 10.1.
(iii) If any of the arrangements described in this
Section 10.1 are determined by the IRS or other Governmental
Body to be prohibited by law, Seller and Buyer shall modify
such arrangements to as closely as possible reflect their
expressed intent and retain the allocation of economic
benefits and burdens to the parties contemplated herein in a
manner that is not prohibited by law.
(iv) If not provided prior to the date hereof, then
upon request by Seller, Buyer shall provide to Seller a
written true and complete statement of its then current plans
to make any future changes in the working conditions
(including any relocation thereof) of any of the Transferable
Employees ("CHANGE TO WORKING CONDITIONS STATEMENT") with the
understanding that, with respect to those jurisdiction that
require it, Seller shall include word-for-word the Change to
Working Conditions Statement provided by Buyer in an
informational letter to the applicable Transferable Employees
("STATUTORILY REQUIRED EMPLOYEE INFORMATION LETTERS"). The
details with regard to the German information procedure are
set out in Schedule 10.1(b)(iv).
(v) Seller, using its Commercially Reasonable
Efforts, shall commence or cause the Seller Local Entities to
commence the necessary consultation and information
proceedings, required under the national labour and employment
laws, in order to fulfill the legal requirements in the
relevant jurisdictions which have to be observed in order to
implement the sale and purchase contemplated by this
Agreement. Seller and Buyer will consult with each other
concerning these proceedings and Buyer shall cooperate with
Seller.
10.2 PAYMENT OF ALL TAXES RESULTING FROM SALE OF ASSETS BY SELLER
Buyer shall pay in a timely manner all Taxes resulting from or payable
in connection with the sale and transfer of the Acquired Assets pursuant to this
Agreement, regardless of the Person on whom such Taxes are imposed by Legal
Requirements. The Purchase Price as stated herein is net of value added tax
(VAT), if any. In the event that the tax authorities determines that any of the
transactions contemplated by this Agreement is subject to VAT under applicable
VAT law, Seller (or the applicable Seller Local Entity) shall present to Buyer
an invoice separately showing VAT at the applicable rate and Buyer shall pay
such VAT in addition to the net Purchase Price. Buyer shall also be responsible
for all interest and penalties, if any, that are assessed in connection with any
Taxes payable under the terms of this Section 10.2.
10.3 REMOVING RETAINED ASSETS
Within sixty (60) days after the Closing Date, Seller shall remove all
Retained Assets from all Leased Real Property to be occupied by Buyer. Such
removal shall be done in such manner as to avoid any material damage to the
Leased Real Property and other properties to be occupied by Buyer and any undue
disruption of the business operations to be conducted by Buyer after the
Closing.
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10.4 RETENTION OF AND ACCESS TO RECORDS
After the Closing Date, Buyer shall retain for a period consistent with
Buyer's record-retention policies and practices those Records of Seller
delivered to Buyer. Buyer also shall provide Seller and its Representatives
reasonable access thereto, during normal business hours and on at least three
days' prior written notice, to enable them to prepare financial statements or
tax returns or deal with tax audits. After the Closing Date, Seller shall
provide Buyer and its Representatives reasonable access to Records that are
Retained Assets, during normal business hours and on at least three days' prior
written notice, for any reasonable business purpose specified by Buyer in such
notice.
10.5 FURTHER ASSURANCES
The parties shall cooperate reasonably, without incurring any material
burden or expending any material amount of funds, with each other and with their
respective Representatives in connection with any steps required to be taken as
part of their respective obligations under this Agreement, and shall (a) furnish
upon request to each other such further information; (b) execute and deliver to
each other such other documents; and (c) 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 and the Contemplated Transactions. The Seller shall
make all commercially reasonable efforts to support the Buyer in obtaining its
own Governmental Authorizations.
The parties further agree between the date hereof and the Closing Date
to cooperate with one another and to deliver such further and additional
supplemental schedules and agreements, or modifications of existing schedules
and agreements, to carry out the intent and purpose of this Agreement.
10.6 NOTIFICATION OF CERTAIN MATTERS
Seller shall give prompt notice to Buyer, and Buyer shall give prompt
notice to Seller, of (i) the occurrence, or failure to occur, of any event that
would be reasonably likely to cause any representation or warranty contained in
this Agreement to be untrue or inaccurate in any material respect at any time
from the date of this Agreement to the Closing Date; (ii) any failure of Buyer
or Seller, as the case may be, to comply with or satisfy, in any material
respect, any covenant, condition or agreement to be complied with or satisfied
by it under this Agreement; and (iii) any event of which any of them obtains
Knowledge which has had, or would reasonably be expected to have, a Material
Adverse Change on the Acquired Business. No such notification shall affect the
representations and warranties of the parties or the conditions to their
respective obligations hereunder.
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10.7 COLLECTION OF ACCOUNTS RECEIVABLE AND SALE OF INVENTORY
Buyer agrees to use its Commercially Reasonable Efforts to collect all
Accounts Receivable subsequent to the Closing Date. Buyer agrees to use its
Commercially Reasonable Efforts to sell all Inventories subsequent to the
Closing Date.
11. INDEMNIFICATION; REMEDIES
11.1 SURVIVAL
All representations, warranties, covenants and agreements set forth in
this Agreement or in any certificate or other writing delivered in connection
with the Contemplated Transactions shall survive the Closing and the
consummation of the transactions contemplated thereby, notwithstanding any
examination made for or on behalf of Buyer or the acceptance of any certificate
or opinion, until the date eighteen (18) months after the Closing Date, except
(a) with respect to a matter as to which a claim for indemnification has been
made by written notice pursuant to Section 11.4 on or before such date; (b) with
respect to a claim pertaining to a representation or breach of warranty,
agreement or covenant under Sections 3.6 and 3.14 for which there shall be no
limitations on survival, except to the extent that there exists a statute of
limitations applicable thereto and, in such event, such claim must be made
within the applicable statute of limitations; and (c) with respect to any claim
pertaining to Sections 3.16 and 3.19 which claim must be made within the
applicable statute of limitations.
11.2 SELLER'S INDEMNIFICATION OF BUYER
(a) Subject to the limitations set forth in Section 11.2(b)
below, Seller shall, jointly and severally, indemnify Buyer and its
respective officers, directors, shareholders, members, managers,
affiliates, employees, agents, representatives, successors and assigns
(collectively, the "BUYER PARTIES") and hold each of them harmless
against and pay on behalf of or reimburse such Buyer Parties in respect
of any loss, liability, demand, claim, action, cause of action, cost,
damage, deficiency, tax, penalty, fine or expense, whether foreseeable
or unforeseeable, whether or not arising out of third party claims,
including, but not limited to, interest or other carrying costs,
penalties, legal, accounting and other professional fees and expenses
reasonably incurred ("LOSSES") which any such Buyer Party may suffer,
sustain or become subject to, arising from or directly relating to: (i)
any material inaccuracy or the breach of any representation or warranty
made by Seller contained in this Agreement or any Schedule or Exhibit
hereto, (ii) the breach of any covenant or agreement of Seller
contained in this Agreement, (iii) any claim (whether or not
successful) by any Person to cause or require Buyer to pay or discharge
any debt, obligation, liability or commitment, the existence of which
constitutes a breach of any Seller representation, warranty, covenant
or agreement, (iv) any other third party claims or demands regarding
acts of Seller relating to the conduct of the Acquired Business prior
to the Closing that are asserted after Closing and (v) any claim
(whether or not successful) by any of the Transferred Employees or by a
work council where Seller has made a statement that is incorrect,
incomplete or both incorrect and incomplete: (i) from that which is set
forth in Change to Working Conditions Statement or (ii) with regard to
what the Transferred Employee's work conditions will be subsequent to
Buyer's acquisition of the Acquired Business unless the making of such
statement was directed by Buyer.
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(b) The indemnification provided for in Section 11.2(a) above
is subject to the following limitations:
(i) Subject to the qualifications of Section 11.1,
Seller shall be liable to Buyer with respect to claims
referred to in subsection (a) above only if Buyer gives Seller
written notice thereof within eighteen (18) months after the
Closing Date.
(ii) Seller shall not be liable to Buyer for any Loss
arising under subsection (a) above unless the aggregate amount
of all such Losses relating to Breaches thereunder exceeds one
percent (1%) of the Initial Purchase Price in the aggregate
(the "THRESHOLD"), in which case Seller shall be liable only
for any Losses in excess of the Threshold, but only up to an
amount which does not exceed twenty-five percent (25%) of the
Initial Purchase Price in the aggregate (the "CAP"); provided
that:
(1) the Threshold shall not apply to
breaches of the representations and warranties set
forth in Section 3.6 (Title), Section 3.14
(Environmental), Section 3.15 (Employees), Section
3.16 (Employee Benefits) and Section 3.19 (Taxes),
(2) the Cap shall not apply to breaches of
the environmental or tax related representations and
warranties set forth in Section 3.6 (Title), Section
3.14 (Environmental), Section 3.15 (Employees),
Section 3.16 (Employee Benefits) and
Section 3.19 (Taxes),
(3) with respect to the representations and
warranties contained in Section 3.8 and Section 3.9,
Seller shall not be liable to Buyer for any Loss
arising under such Sections unless Seller's breach is
found to have been grossly negligent or willful, and
(4) notwithstanding the Cap, all proceeds
received by Seller under Seller's liability insurance
policies shall be paid over to Buyer to the extent
necessary to satisfy any Losses which Buyer may incur
by reason of such claims and Seller shall use its
Commercially Reasonable Efforts to obtain such
proceeds from the applicable insurers.
Notwithstanding anything to the contrary herein, Buyer shall promptly,
after receipt thereof, reimburse Seller for all indemnification obligations paid
by Seller hereunder to the extent of: (i) any insurance proceeds received by
Buyer or by Seller and delivered to Buyer, and (ii) any other third-party
recovery in favor of Buyer. Notwithstanding anything to the contrary herein, the
parties agree that the protections and remedies for Buyer set forth in this
Section 11 shall be the exclusive remedies for Losses described under Section
11.2.
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(iii) Except as otherwise provided herein, any matter
reflected in this Agreement (including the exhibits and parts attached hereto)
and/or in documents, letters, memoranda, booklets, and brochures (the "DISCLOSED
DOCUMENTS") delivered to the Buyer which reasonably and adequately discloses a
claim or potential claim against any Seller, or a liability or potential
liability of Seller, shall be deemed a disclosure of such matter for all
purposes of this Agreement. As an example, if a contract between Seller and a
vendor is disclosed, Seller shall be relieved of any express payment obligations
due vendor and fully shown due in such contract. However, if Seller shall be in
material breach of its obligations under the Contract, and such breach is not
disclosed, Seller shall not be relieved of responsibility for any Loss resulting
therefrom.
11.3 BUYER'S INDEMNIFICATION OF SELLER.
(a) Subject to the limitations contained in 11.3(b) below,
Buyer agrees to indemnify Seller and its agents, representatives,
successors and assigns and to hold them harmless against any Losses
which they may suffer, sustain or become subject to, as the result of
(i) a breach of any representation, warranty, covenant, or agreement by
Buyer contained in this Agreement, (ii) Buyer's actions or omissions
with respect to the Acquired Business and the Assumed Liabilities
subsequent to the Closing Date, (iii) any claim (whether or not
successful) by any of the Transferred Employees that the Statutorily
Required Employee Information Letters containing the Change to Working
Conditions Statement was, with respect to such Statement, either
incomplete or incorrect or both incomplete and incorrect or that any
statements (either oral or written) made by Buyer or at the direction
of Buyer to any Transferred Employees prior to the date hereof were
incorrect, incomplete or both incorrect and incomplete, and (iv) in the
event that Buyer restructures any work or employment conditions in a
jurisdiction where there exists a work council and Seller incurs any
Losses due to any such restructuring.
(b) The indemnification provided for in Section 11.3(a) above
is subject to the following limitations:
(i) Buyer shall be liable to Seller with respect to
claims referred to in subsection (a) above only if Seller
gives Buyer written notice thereof within eighteen (18) months
after the Closing Date.
(ii) Buyer shall not be liable to Seller for any Loss
arising under subsection (a) above unless the aggregate amount
of all such Losses relating to Breaches thereunder exceeds one
percent (1%) of the Initial Purchase Price ("BUYER
THRESHOLD"), in which case Buyer shall be liable for all such
Losses in excess of one percent (1%) of the Initial Purchase
Price but only up to an amount which does not exceed
twenty-five percent (25%) of the Initial Purchase Price;
provided, however, that the Buyer Threshold shall not apply to
the indemnification obligations of Buyer under Section 11.2
(a) (iii) and (iv) and Section 10.1(b)(v).
Notwithstanding anything to the contrary herein, the parties agree that
the protections and remedies for Seller set forth in this Section 11 shall be
the exclusive remedies for Losses described under Section 11.3.
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11.4 INDEMNIFICATION PROCEDURES.
(a) If a Party hereto seeks indemnification under this Section
11, such Party (the "INDEMNIFIED PARTY") shall give written notice to
the other Party (the "INDEMNIFYING PARTY") of the facts and
circumstances giving rise to the claim. In that regard, if any suit,
action, claim, liability or obligation shall be brought or asserted by
any third party which, if adversely determined, would entitle the
Indemnified Party to indemnity pursuant to this Section 11, the
Indemnified Party shall promptly notify the Indemnifying Party of the
same in writing, specifying in detail the basis of such claim and the
facts pertaining thereto. The Indemnifying Party shall have thirty (30)
days after receipt of such notice to elect to assume and control the
defense thereof (and shall consult with the Indemnified Party with
respect thereto), including the employment of counsel reasonably
satisfactory to the Indemnified Party and the payment of all necessary
expenses. With respect to any claim for which the Indemnifying Party
assumes the defense of, the Indemnified Party agrees to cooperate with
the Indemnifying Party and to provide the Indemnifying Party with
access to the Indemnified Party's books, records, personnel and
premises in order to determine and defend such claim. Further, with
respect to any such claim, the Indemnifying Party shall have the
authority to settle such claim provided the Indemnifying Party shall
pay such settlement in full. In the event that the Indemnifying Party
does not elect to assume and control of the defense of such claim, the
Indemnified Party shall use Commercially Reasonable Efforts, consistent
with prudent business judgment, to defend such claim. If the
Indemnifying Party is permitted to assume and control the defense and
elects to do so, the Indemnified Party shall have the right to employ
counsel separate from counsel employed by the Indemnifying Party in any
such action and to participate in the defense thereof, but the fees and
expenses of such counsel employed by the Indemnified Party shall be at
the expense of the Indemnified Party. The Indemnifying Party shall not
be liable for any settlement of any such action or proceeding effected
without the written consent of the Indemnifying Party, however, if
there shall be a final judgment for the plaintiff in any such action,
the Indemnifying Party agrees to indemnify and hold harmless the
Indemnified Party from and against any loss or liability by reason of
such judgment.
(b) To secure payment of Seller's indemnification obligations,
inter alia, the parties have agreed to retain a portion of the Purchase
Price in a holdback account on the terms and conditions set forth in
the Escrow Agreement.
12. CONFIDENTIALITY
12.1 DEFINITION OF CONFIDENTIAL INFORMATION
(a) As used in this Article 12, the term "CONFIDENTIAL
INFORMATION" includes any and all of the information of Seller or Buyer
that has been or may hereafter be disclosed in any form, whether in
writing, orally, electronically or otherwise, or otherwise made
available by observation, inspection or otherwise by either party
(Buyer on the one hand or Seller, collectively, on the other hand) or
its Representatives (collectively, a "DISCLOSING PARTY") to the other
party or its Representatives (collectively, a "RECEIVING PARTY"):
38
(i) all information that is a trade secret under
applicable trade secret or other law;
(ii) all information concerning product
specifications, data, know-how, formulae, compositions,
processes, designs, sketches, photographs, graphs, drawings,
samples, inventions and ideas, past, current and planned
research and development, current and planned manufacturing or
distribution methods and processes, customer lists, current
and anticipated customer requirements, price lists, market
studies, business plans, computer hardware, Software and
computer software and database technologies, systems,
structures and architectures;
(iii) all information concerning the business and
affairs of the Disclosing Party (which includes historical and
current financial statements, financial projections and
budgets, tax returns and accountants' materials, historical,
current and projected sales, capital spending budgets and
plans, business plans, strategic plans, marketing and
advertising plans, publications, client and customer lists and
files, contracts, the names and backgrounds of key personnel
and personnel training techniques and materials, however
documented), and all information obtained from review of the
Disclosing Party's documents or property or discussions with
the Disclosing Party regardless of the form of the
communication; and
(iv) all notes, analyses, compilations, studies,
summaries and other material prepared by the Receiving Party
to the extent containing or based, in whole or in part, upon
any information included in the foregoing.
(b) Any trade secrets of a Disclosing Party shall also be
entitled to all of the protections and benefits under applicable trade
secret law and any other applicable law. If any information that a
Disclosing Party deems to be a trade secret is found by a court of
competent jurisdiction not to be a trade secret for purposes of this
Article 12, such information shall still be considered Confidential
Information of that Disclosing Party for purposes of this Article 12 to
the extent included within the definition. In the case of trade
secrets, each of Buyer, Seller hereby waives any requirement that the
other party submit proof of the economic value of any trade secret or
post a bond or other security.
12.2 RESTRICTED USE OF CONFIDENTIAL INFORMATION
(a) Each Receiving Party acknowledges the confidential and
proprietary nature of the Confidential Information of the Disclosing
Party and agrees that such Confidential Information (i) shall be kept
confidential by the Receiving Party; (ii) shall not be used for any
reason or purpose other than to evaluate and consummate the
Contemplated Transactions; and (iii) without limiting the foregoing,
shall not be disclosed by the Receiving Party to any Person, except in
each case as otherwise expressly permitted by the terms of this
Agreement or with the prior written consent of an authorized
representative of Seller with respect to Confidential Information of
Seller (each, a "SELLER CONTACT") or an authorized representative of
Buyer with respect to Confidential Information of Buyer (each, a "BUYER
CONTACT"). Each of Buyer and Seller shall disclose the Confidential
Information of the other party only to its Representatives who require
such material for the purpose of evaluating the Contemplated
Transactions and are informed by Buyer or Seller, as the case may be,
of the obligations of this Article 12 with respect to such information.
Each of Buyer and Seller shall (iv) enforce the terms of this Article
12 as to its respective Representatives; (v) take such action to the
extent necessary to cause its Representatives to comply with the terms
and conditions of this Article 12; and (vi) be responsible and liable
for any breach of the provisions of this Article 12 by it or its
Representatives.
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(b) Unless and until this Agreement is terminated, Seller
shall maintain as confidential any Confidential Information (including
for this purpose any information of Seller of the type referred to in
Sections 12.1(a)(i), (ii) and (iii), whether or not disclosed to Buyer)
of the Seller relating to any of the Acquired Assets or the Assumed
Liabilities. Notwithstanding the preceding sentence, Seller may use any
Confidential Information of Seller before the Closing in the Ordinary
Course of Business in connection with the transactions permitted by
Section 5.2.
(c) From and after the Closing, the provisions of Section
12.2(a) above shall not apply to or restrict in any manner Buyer's use
of any Confidential Information of the Seller relating to any of the
Acquired Assets or the Assumed Liabilities.
12.3 EXCEPTIONS
Sections 12.2(a) and (b) do not apply to that part of the Confidential
Information of a Disclosing Party that a Receiving Party demonstrates (a) was,
is or becomes generally available to the public other than as a result of a
breach of this Article 12 or the Confidentiality Agreement by the Receiving
Party or its Representatives; (b) was or is developed by the Receiving Party
independently of and without reference to any Confidential Information of the
Disclosing Party; or (c) was, is or becomes available to the Receiving Party on
a non-confidential basis from a Third Party not bound by a confidentiality
agreement or any legal, fiduciary or other obligation restricting disclosure.
Seller shall not disclose any Confidential Information of Seller relating to any
of the Acquired Assets or the Assumed Liabilities in reliance on the exceptions
in clauses (b) or (c) above.
12.4 LEGAL PROCEEDINGS
If a Receiving Party becomes compelled in any Proceeding or is
requested by a Governmental Body having regulatory jurisdiction over the
Contemplated Transactions to make any disclosure that is prohibited or otherwise
constrained by this Article 12, that Receiving Party shall provide the
Disclosing Party with prompt notice of such compulsion or request so that it may
seek an appropriate protective order or other appropriate remedy or waive
compliance with the provisions of this Article 12. In the absence of a
protective order or other remedy, the Receiving Party may disclose that portion
(and only that portion) of the Confidential Information of the Disclosing Party
that, based upon advice of the Receiving Party's counsel, the Receiving Party is
legally compelled to disclose or that has been requested by such Governmental
Body, provided, however, that the Receiving Party shall use Commercially
Reasonable Efforts to obtain reliable assurance that confidential treatment will
be accorded by any Person to whom any Confidential Information is so disclosed.
The provisions of this Section 12.4 do not apply to any Proceedings between the
parties to this Agreement.
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12.5 RETURN OR DESTRUCTION OF CONFIDENTIAL INFORMATION
If this Agreement is terminated, each Receiving Party shall (a) destroy
all Confidential Information of the Disclosing Party prepared or generated by
the Receiving Party without retaining a copy of any such material; (b) promptly
deliver to the Disclosing Party all other Confidential Information of the
Disclosing Party, together with all copies thereof, in the possession, custody
or control of the Receiving Party or, alternatively, with the written consent of
a Seller Contact or a Buyer Contact (whichever represents the Disclosing Party)
destroy all such Confidential Information; and (c) certify all such destruction
in writing to the Disclosing Party, provided, however, that the Receiving Party
may retain a list that contains general descriptions of the information it has
returned or destroyed to facilitate the resolution of any controversies after
the Disclosing Party's Confidential Information is returned.
12.6 ATTORNEY-CLIENT PRIVILEGE
The Disclosing Party is not waiving, and will not be deemed to have
waived or diminished, any of its attorney work product protections,
attorney-client privileges or similar protections and privileges as a result of
disclosing its Confidential Information (including Confidential Information
related to pending or threatened litigation) to the Receiving Party, regardless
of whether the Disclosing Party has asserted, or is or may be entitled to
assert, such privileges and protections. The parties (a) share a common legal
and commercial interest in all of the Disclosing Party's Confidential
Information that is subject to such privileges and protections; (b) are or may
become joint defendants in Proceedings to which the Disclosing Party's
Confidential Information covered by such protections and privileges relates; (c)
intend that such privileges and protections remain intact should either party
become subject to any actual or threatened Proceeding to which the Disclosing
Party's Confidential Information covered by such protections and privileges
relates; and (d) intend that after the Closing the Receiving Party shall have
the right to assert such protections and privileges. No Receiving Party shall
admit, claim or contend, in Proceedings involving either party or otherwise,
that any Disclosing Party waived any of its attorney work-product protections,
attorney-client privileges or similar protections and privileges with respect to
any information, documents or other material not disclosed to a Receiving Party
due to the Disclosing Party disclosing its Confidential Information (including
Confidential Information related to pending or threatened litigation) to the
Receiving Party.
13. GENERAL PROVISIONS
13.1 EXPENSES
Except as otherwise provided in this Agreement, each party to this
Agreement will bear its respective fees and expenses incurred in connection with
the preparation, negotiation, execution and performance of this Agreement and
the Contemplated Transactions, including all fees and expenses of its
Representatives. If this Agreement is terminated, the obligation of each party
to pay its own fees and expenses will be subject to any rights of such party
arising from a Breach of this Agreement by another party. All fees and
commissions due to agents, brokers, finders or investment bankers engaged by
Seller in connection with the negotiation, execution or performance of this
Agreement, as a result of this Agreement shall be paid by Seller.
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13.2 PUBLIC ANNOUNCEMENTS
Any public announcement, press release or similar publicity with
respect to this Agreement or the Contemplated Transactions will be issued, if at
all, at such time and in such manner as Seller and Buyer mutually agree, except
to the extent that a particular action is required by applicable law.
13.3 NOTICES
All notices, Consents, waivers and other communications required or
permitted by this Agreement shall be in writing and shall be deemed given to a
party when (a) delivered to the appropriate address by hand or by nationally
recognized overnight courier service (costs prepaid); (b) sent by facsimile or
e-mail with confirmation of transmission by the transmitting equipment; or (c)
received or rejected by the addressee, if sent by certified mail, return receipt
requested, in each case to the following addresses, facsimile numbers or e-mail
addresses and marked to the attention of the person (by name or title)
designated below (or to such other address, facsimile number, e-mail address or
person as a party may designate by notice to the other parties):
Seller: Checkpoint Systems, Inc.
000 Xxxx Xxxxx
X.X. Xxx 000, Xxxxxxxxx, XX 00000
Attention: Xxxx Xxx Xxxx, General Counsel
Fax no.: 000.000.0000
E-mail address: xxxx.xxxxxxx@xxxxxxx.xxx
with a mandatory copy to:
Xxxxxxxx Ronon Xxxxxxx & Xxxxx, LLP
Xxx Xxxxxxxx Xxxxxx
Xxxxxxxxxxxx, XX 00000
Attention: Xxxxxxx X. Xxxxx, Esquire and
Xxxxxx X. Xxxxxx, Esquire
Fax no.: 000.000.0000
E-mail address: xxxxxx@xxxxxxxx.xxx and
xxxxxxx@xxxxxxxx.xxx
Buyer: Sato International Pte. Ltd.
000X Xxxxxxxxx Xxxx
#00-00/00
Xxxxxxxxx Xxxxxxxxxx
Xxxxxxxxx 000000
Attention: Xxxxxxxx Xxxxxx
Fax no.: x(00) 0000-0000
E-mail address: xxxxxx@xxxx-xxx.xxx
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with a mandatory copy to:
Xxxxx Xxxxxxxx & Xxxxxxxx, LLC
000 Xxxxx Xxxxxxxx Xxxxxx, Xxxxx 0000
Xxxxxxx, XX 00000
Attention: Xxxxxx X. Xxxxx
Fax no.: 000-000-0000
E-mail address: xxxxxx@xxxxxxxx.xxx
13.4 JURISDICTION; SERVICE OF PROCESS
Any Proceeding arising out of or relating to this Agreement or any
Contemplated Transaction may be brought in the United States Third Circuit
District Court, and each of the parties irrevocably submits to the exclusive
jurisdiction of each such court in any such Proceeding, waives any objection it
may now or hereafter have to venue or to convenience of forum, agrees that all
claims in respect of the Proceeding shall be heard and determined only in any
such court and agrees not to bring any Proceeding arising out of or relating to
this Agreement or any Contemplated Transaction in any other court. The parties
agree that either or both of them may file a copy of this paragraph with any
court as written evidence of the knowing, voluntary and bargained agreement
between the parties irrevocably to waive any objections to venue or to
convenience of forum. Process in any Proceeding referred to in the first
sentence of this section may be served on any party anywhere in the world.
13.5 WAIVER; REMEDIES CUMULATIVE
The rights and remedies of the parties to this Agreement are cumulative
and not alternative. Neither any failure nor any delay by any party in
exercising any right, power or privilege under this Agreement or any of the
documents referred to in this Agreement will operate as a waiver of such right,
power or privilege, and no single or partial exercise of any such right, power
or privilege will preclude any other or further exercise of such right, power or
privilege or the exercise of any other right, power or privilege. To the maximum
extent permitted by applicable law, (a) no claim or right arising out of this
Agreement or any of the documents referred to in this Agreement can be
discharged by one party, in whole or in part, by a waiver or renunciation of the
claim or right unless in writing signed by the other party; (b) no waiver that
may be given by a party will be applicable except in the specific instance for
which it is given; and (c) no notice to or demand on one party will be deemed to
be a waiver of any obligation of that party or of the right of the party giving
such notice or demand to take further action without notice or demand as
provided in this Agreement or the documents referred to in this Agreement.
13.6 ENTIRE AGREEMENT AND MODIFICATION
This Agreement supersedes all prior agreements, whether written or
oral, between the parties with respect to its subject matter (including any
letter of intent and any confidentiality agreement between Buyer and Seller) and
constitutes (along with the Disclosure Schedule, Exhibits and other documents
delivered pursuant to this Agreement) a complete and exclusive statement of the
terms of the agreement between the parties with respect to its subject matter.
This Agreement may not be amended, supplemented, or otherwise modified except by
a written agreement executed by the party to be charged with the amendment.
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13.7 DISCLOSURE SCHEDULE
(a) The information in the Disclosure Schedule constitutes (i)
exceptions to particular representations, warranties, covenants and
obligations of Seller as set forth in this Agreement or (ii)
descriptions or lists of assets and liabilities and other items
referred to in this Agreement. If there is any inconsistency between
the statements in this Agreement and those in the Disclosure Schedule
(other than an exception expressly set forth as such in the Disclosure
Schedule with respect to a specifically identified representation or
warranty), the statements in this Agreement will control.
(b) The statements in the Disclosure Schedule, and those in
any supplement thereto, relate only to the provisions in the Section of
this Agreement to which they expressly relate and not to any other
provision in this Agreement.
13.8 ASSIGNMENTS, SUCCESSORS AND NO THIRD-PARTY RIGHTS
No party may assign any of its rights or delegate any of its
obligations under this Agreement without the prior written consent of the other
parties, except that Buyer may assign any of its rights and delegate any of its
obligations under this Agreement to any subsidiary or affiliate of Buyer and may
collaterally assign its rights hereunder to any financial institution providing
financing in connection with the Contemplated Transactions. Subject to the
preceding sentence, this Agreement will apply to, be binding in all respects
upon and inure to the benefit of the successors and permitted assigns of the
parties. Nothing expressed or referred to in this Agreement will be construed to
give any Person other than the parties to this Agreement any legal or equitable
right, remedy or claim under or with respect to this Agreement or any provision
of this Agreement, except such rights as shall inure to a successor or permitted
assignee pursuant to this Section 13.8.
13.9 SEVERABILITY
If any provision of this Agreement is held invalid or unenforceable by
any court of competent jurisdiction, the other provisions of this Agreement will
remain in full force and effect. Any provision of this Agreement held invalid or
unenforceable only in part or degree will remain in full force and effect to the
extent not held invalid or unenforceable.
13.10 CONSTRUCTION
(a) The headings of Articles and Sections in this Agreement
are provided for convenience only and will not affect its construction
or interpretation. All references to "Articles," "Sections" and "Parts"
refer to the corresponding Articles, Sections and Parts of this
Agreement and the Disclosure Schedule.
(b) Interpretation. In this Agreement, unless a clear contrary
intention appears:
(i) the singular number includes the plural number
and vice versa;
44
(ii) reference to any Person includes such Person's
successors and assigns but, if applicable, only if such
successors and assigns are not prohibited by this Agreement,
and reference to a Person in a particular capacity excludes
such Person in any other capacity or individually;
(iii) reference to any agreement, document or
instrument means such agreement, document or instrument as
amended or modified and in effect from time to time in
accordance with the terms thereof;
(iv) reference to any Legal Requirement means such
Legal Requirement as amended, modified, codified, replaced or
reenacted, in whole or in part, and in effect from time to
time, including rules and regulations promulgated thereunder,
and reference to any section or other provision of any Legal
Requirement means that provision of such Legal Requirement
from time to time in effect and constituting the substantive
amendment, modification, codification, replacement or
reenactment of such section or other provision;
(v) "hereunder," "hereof," "hereto," and words of
similar import shall be deemed references to this Agreement as
a whole and not to any particular Article, Section or other
provision hereof;
(vi) all references to funds, money or dollars
hereunder shall mean United States dollars except that with
respect to Local Agreements where the applicable currency to
be paid by Buyer shall be stated therein; and
(vii) references to documents, instruments or
agreements shall be deemed to refer as well to all addenda,
exhibits, schedules or amendments thereto.
13.11 GOVERNING LAW
This Agreement will be governed by and construed under the laws of the
State of Delaware without regard to conflicts-of-laws principles that would
require the application of any other law.
13.12 EXECUTION OF AGREEMENT
This Agreement may be executed in one or more counterparts, each of
which will be deemed to be an original copy of this Agreement and all of which,
when taken together, will be deemed to constitute one and the same agreement.
The exchange of copies of this Agreement and of signature pages by facsimile
transmission shall constitute effective execution and delivery of this Agreement
as to the parties and may be used in lieu of the original Agreement for all
purposes. Signatures of the parties transmitted by facsimile shall be deemed to
be their original signatures for all purposes.
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13.13 SELLER SUBSIDIARIES
To the extent that a wholly-owned subsidiary of Seller will be the
actual transferor of any of the Acquired Assets, Seller shall cause such
affiliate to make such transfer in accordance with this Agreement.
13.14 HEADINGS
The descriptive headings of the Articles, Sections and subsections of
this Agreement are for convenience only and do not constitute a part of this
Agreement.
13.15 COUNTERPARTS
This Agreement and any other agreement (or document) delivered pursuant
hereto may be executed in one (1) or more counterparts and by different parties
in separate counterparts. All of such counterparts shall constitute one and the
same agreement (or other document) and shall become effective when one (1) or
more counterparts of this Agreement have been signed by each party and delivered
to the other party.
13.16 PARTIES IN INTEREST
This Agreement shall be binding upon and inure to the benefit of each
party and their respective successors and assigns, but nothing in this
Agreement, express or implied, is intended to confer upon any other person any
rights or remedies of any nature whatsoever under or by reason of this
Agreement. Nothing in this Agreement is intended to relieve or discharge the
obligation of any third person to or confer any right of subrogation or action
over or against, any party to this Agreement.
13.17 MISCELLANEOUS
The terms, provisions and conditions of each supplemental Asset
Purchase Agreement entered into by the parties, or the party's Local Entities,
are hereby incorporated herein by reference thereto. To the extent of any
inconsistency between the terms of this Asset Purchase Agreement and any
supplementary Asset Purchase Agreement, the provisions of this Agreement shall
control, except to the extent that such construction results in a local law
violation in the jurisdiction governed by the supplementary Asset Purchase
Agreement. A breach or default under any supplementary Asset Purchase Agreement
shall also result in a breach or default under this Agreement and shall entitle
the non-defaulting party to pursue all available remedies at law and in equity
under this Agreement.
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IN WITNESS WHEREOF, the parties have executed this Asset Purchase
Agreement as of the date first written above.
BUYER: Sato International Pte. Ltd.
-----
By:
--------------------------------------------
Name: Xxxxxxxxx Xxxx
Title: Managing Director
SELLER: Checkpoint Systems, Inc.
------
By:
--------------------------------------------
Name: Xxxxxx X. Off
Title: President and Chief Executive Officer
47