-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, FVPfC0KxB+naSF4rt70PyOcbb/Z2HG0DCoPUqJlz9foXvDNUTlAiUowxsns5iSd8 Z9R0nWpCeTXynVWg195sFw== 0000941302-99-000157.txt : 19991022 0000941302-99-000157.hdr.sgml : 19991022 ACCESSION NUMBER: 0000941302-99-000157 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 4 CONFORMED PERIOD OF REPORT: 19991021 ITEM INFORMATION: ITEM INFORMATION: FILED AS OF DATE: 19991021 FILER: COMPANY DATA: COMPANY CONFORMED NAME: NU KOTE HOLDING INC /DE/ CENTRAL INDEX KEY: 0000812423 STANDARD INDUSTRIAL CLASSIFICATION: PENS, PENCILS & OTHER ARTISTS' MATERIALS [3950] IRS NUMBER: 161296153 STATE OF INCORPORATION: TX FISCAL YEAR END: 0331 FILING VALUES: FORM TYPE: 8-K SEC ACT: SEC FILE NUMBER: 000-20287 FILM NUMBER: 99731605 BUSINESS ADDRESS: STREET 1: 200 BEASLEY DR CITY: FRANKLIN STATE: TN ZIP: 37064 BUSINESS PHONE: 6157949000 MAIL ADDRESS: STREET 1: 200 BEASLEY DR CITY: FRANKLIN STATE: TN ZIP: 37064 8-K 1 SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 _______________________ FORM 8-K CURRENT REPORT Pursuant To Sections 13 or 15(d) of the Securities Exchange Act of 1934 October 7, 1999 Date of Report (Date of Earliest Event Reported) Nu-kote Holding, Inc. (Exact Name of Registrant as Specified in Charter) Texas 0-20287 16-1296153 (State or Other Jurisdiction (Commission (IRS Employer of Incorporation) File Number) Identification No.) 200 Beasley Dr. Franklin, Tennessee 37064 (Address and Zip Code of Principal Executive Offices) (615) 794-9000 (Registrant's Telephone Number, Including Area Code) ITEM 2. ACQUISITION OR DISPOSITION OF ASSETS Nu-kote International, Inc., a wholly owned subsidiary of Nu-kote Holding, Inc. ("Nu-kote"), has sold certain of its subsidiaries to Pelikan Hardcopy Europe Limited ("Pelikan"), a Scottish company. The subsidiaries sold include Pelikan Productions AG, Pelikan Scotland Limited, Grief-Werke GmbH, Pelikan Hardcopy Asia Pacific Limited and Dongguan Pelikan Hardcopy Limited (collectively, the "Companies"). Under the terms of the agreement, Pelikan paid $16.5 million in cash at the close of the transaction in exchange for all of the capital stock or other equity interests of the Companies. Pelikan was formed by the management of the Companies for the purpose of making the acquisition. Nu-kote will continue to sell products under the Pelikan brand name in North America but not elsewhere. This disposition is part of Nu-kote's efforts to dispose of non-essential assets and focus on the restructuring of its core business in the United States. The sale and the price paid for the Companies was approved by the U.S. Bankruptcy Court for the Middle District of Tennessee. ITEM 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION AND EXHIBITS (b) Pro Forma Financial Information. The required pro forma financial information will be filed by an amendment not later than 60 days after the date that the initial report on Form 8-K must be filed. (c) Exhibits. *2.1 Sale and Purchase Agreement, dated as of April 24, 1999, between Nu-kote International, Inc. and Pelikan Hardcopy Europe Limited. *2.2 Amendment No. 1 to Sale and Purchase Agreement, effective as of September 30, 1999, between Nu-kote International, Inc. and Pelikan Hardcopy Europe Limited. *99.1 Press Release. ________________________ * filed herewith [Remainder of this Page Intentionally Left Blank] SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized. Nu-kote Holding, Inc. Dated: October 21, 1999 By: /S/ PHILLIP THEODORE -------------------------------- Phillip Theodore, Senior Vice President and Chief Financial Officer EXHIBIT INDEX Exhibit No. Description - ----------- ----------- *2.1 Sale and Purchase Agreement, dated as of April 24, 1999, between Nu-kote International, Inc. and Pelikan Hardcopy Europe Limited. *2.2 Amendment No. 1 to Sale and Purchase Agreement, effective as of September 30, 1999, between Nu-kote International, Inc. and Pelikan Hardcopy Europe Limited. *99.1 Press Release. ___________________ * filed herewith EX-2.1 2 EXHIBIT 2.1 SALE AND PURCHASE AGREEMENT between NU-KOTE INTERNATIONAL, INC. incorporated in Delaware and having its principal place of business in Franklin, Tennessee (the "Seller") of the first part and PELIKAN HARDCOPY EUROPE LIMITED incorporated in Scotland and having its registered office at 151 St. Vincent Street, Glasgow, Scotland (the "Purchaser") of the second part RECITALS (A) The Seller owns that number of shares or other ownership interest specified in column 1 of Part 1 of the Schedule and that percentage of the issued share capital of the Companies specified in column 3 of Part 1 of the Schedule; and (B) The Seller has agreed to sell and the Purchaser has agreed to purchase all of the Seller's Shares in the Companies on the terms and conditions set out in this Agreement. NOW THEREFORE, in consideration of the representations, warranties and covenants contained herein, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto, intending to be legally bound, hereby agree as follows: STATEMENT OF AGREEMENT 1. DEFINITIONS AND INTERPRETATIONS 1.1 In this Agreement, unless otherwise provided or unless the context so requires, the following words and expressions shall have the meaning ascribed to them herein below: "Agreement" Means this Sale and Purchase Agreement, together with the Schedule hereto; "Ancillary Agreements" Means a trademark and patent cross license between the parties, a supply agreement between the parties, non-compete agreement and Escrow Agreements, all in a form to be agreed upon by the parties; "Affiliated Companies" Means in relation to the direct and indirect subsidiaries of Nu-Kote Holding, Inc., any company which is at the relevant time a holding company of that company or a subsidiary of any such holding company as described in Part 1.1(a) of the Schedule; "Business Day" Means a day on which clearing banks are open for normal business in Scotland; "Bankruptcy Estate" Means the estates of Nu-Kote Holding, Inc., the Seller, Future Graphics, Inc., Nu-Kote Imaging International, Inc., Nu-Kote Imperial, Inc., International Communication Materials, Inc. and Nu-Kote Latin America, Inc. as debtors in possession in Case No. 398-10600 in the United States Bankruptcy Court, Middle District of Tennessee, Nashville Division; "Companies" Means the companies specified in Part 1.1(b) of the Schedule; "Completion" Means the Completion of the sale and purchase of the Shares and of the other matters set out in this Agreement, at the Completion Date in accordance with the provisions of Clause 4; "Completion Date" Means such date as may be mutually agreed between the parties hereto; "Directors" Means the respective board members, deputy board members and managing directors on the date hereof of Seller, Holding and each of the Group Companies, as the case may be, all as set forth in Part 1.1(c) of the Schedule; "Escrow Agreements" Means the agreements between the parties hereto relating to the payment and further terms relating to the Escrow Amount; "Escrow Amounts" Means USD 3,280,000, plus any amount to be held in escrow as contemplated by Clause 3.2 hereof; "Group Companies" Means the Companies and the Subsidiaries and "Group Company" means any one of them; "Holding" Means Nu-kote Holding, Inc., a Delaware corporation that is the parent corporation of Seller; "Intellectual Property Rights" Means, whether registered or not, any right to any patents, trademarks, registered designs, business names, applications for registration of any of the foregoing, copyrights, know-how and any similar rights in any country including unpatentable inventions and trade secrets and all rights under licenses and consents in relation to any of the foregoing; "Purchaser's Solicitors" Means Maclay Murray & Spens of 151 St. Vincent Street, Glasgow G2 5NJ, Scotland; "Schedule" Means the Schedule in three parts annexed hereto. To the extent that any Part of the Schedule referred to herein or any matter referred to in any part of the Schedule is not attached or set out at the time of execution of this Agreement, the Seller agrees to provide the Purchaser with copies thereof not less than five days prior to the date of the hearing to approve the transaction contemplated herein by the U.S. Bankruptcy Court as contemplated by Clause 5.2.1; "Seller's Solicitors" Means Akin, Gump, Strauss, Hauer & Feld L.L.P. of 1700 Pacific Avenue, Dallas, Texas 75201, United States of America; "Shares" Means that number of shares or other ownership interest set out beside each of the Companies in column 1 of Part 1 of the Schedule; "Subsidiaries" Means the subsidiaries of the Companies as specified in Part 2 of the Schedule; "Taxes" Means all direct and indirect taxes and charges, social security fees, duties and other assessments (including but not limited to any income tax (whether actual or deemed), sales tax, use tax, transfer tax, transaction tax, investment tax, capital tax, real property tax, real estate gains tax, gift tax, value added tax, withholding tax, employment tax, asset holding tax or registration tax and deferred taxes) wherever arising, together with any interest, penalties, residual tax charges or addition to tax; "Trademark License Means that certain trademark license Agreement" agreement dated as of Completion between the Purchaser and Pelikan Holding A.G. in respect of the use of the "Pelikan" trademark; "USD" Means United States Dollars; and "Warranties" Means the representations, warranties and undertakings contained in Part 3 of the Schedule and "Warranty" means any of them. 1.2 In this Agreement; 1.2.1 The singular includes the plural and the masculine includes the feminine and vice versa; 1.2.2 References to persons shall include bodies corporate, unincorporated associations and partnerships; 1.2.3 References to recitals, clauses, the schedule and sub- divisions of the schedule are, unless the contrary intention appears, references to the recitals and clauses of and to the schedule and sub-divisions thereof to this Agreement; 1.2.4 The headings and sub-headings of this Agreement are inserted for convenience only and shall not form part of the construction thereof; and 1.2.5 Reference to a document "in the agreed form" shall be a reference to a document initialed by the Seller's Solicitors and the Purchaser's Solicitors for the purposes of identification only. 1.3 Where a warranty is qualified by the expression "to the best of the Seller's knowledge," or words of like effect, such warranty shall be deemed, save where expressly stated otherwise, to mean or to be predicated upon only those specific facts of which any of Patrick Howard, Phillip Theodore, Richard Larsen and Ronald Baiocchi are actually aware after (i) due inquiry of the Seller's attorneys, auditors, tax advisors and registered agent(s) and (ii) review of their own respective files and records relating to the Group Companies. Further, any facts and information known to the directors of the Group Companies (other than Richard Larsen) shall not be imputed to Messrs. Howard, Theodore, Larsen or Baiocchi. 1.4 Any legal term used in this agreement that has no absolute meaning in the relevant jurisdiction of any of the Group Companies shall be interpreted , to the extent possible, in order to give effect to the transfers of title contemplated by this Agreement. 2. SALE AND PURCHASE OF THE SHARES 2.1 The Seller agrees to sell the Shares as the beneficial owner thereof and the Purchaser relying on the representations, warranties and undertakings set out or referred to herein agrees to purchase the Shares with effect from the Completion Date, free from all options, liens, charges and encumbrances and together with all rights, privileges and advantages attached or accruing thereto, all on the terms and subject to the conditions of this Agreement. 3. PURCHASE PRICE AND PAYMENT 3.1 The purchase price for the Shares (the "Purchase Price") shall be USD 16,500,000, allocated as set out in Part 1(d) of the Schedule, which Purchase Price shall be apportioned among the Companies as set out in column 4 of Part 1 of the Schedule. 3.2 The Purchase Price shall be paid as set forth on Part 1.1(e) of the Schedule. The Purchaser and the Seller agree that if title to Dongguan Pelikan Hardcopy Ltd. cannot be transferred at the Completion because the requisite governmental consents have not been obtained, then an additional amount equal to USD 660,000 shall be escrowed until such time as the consents are obtained. Upon receipt of such consents, the USD 660,000 in escrow shall be released to the Seller. 3.3 The Purchaser shall fund the Escrow Amount on the Completion Date in accordance with the Escrow Agreements. 4. COMPLETION 4.1 Completion shall, unless otherwise agreed in writing between the parties, take place on the day one Business Day after the day on which the last of the conditions specified in Clause 5 is satisfied at the offices of the Seller's Solicitors. 4.2 At Completion: 4.2.1 The Seller shall, in exchange for the payment of the Purchase Price in accordance with Part 1.1(e) of the Schedule, transfer the Shares and deliver to the Purchaser all the share certificates representing the Shares; provided, however, to the extent the requisite governmental consents to the transfer of the Seller's shares of Dongguan Pelikan Hardcopy Ltd. have not been obtained by Completion, then the Seller shall execute the documents necessary to transfer such shares and deposit them in escrow for release upon receipt of such consent and to the extent such transfers are incapable because consent to the transfer of such Shares by the appropriate governmental agency of China has not been received, then the Seller shall deliver a declaration that the ownership interest in Dongguan Pelikan Hardcopy Ltd. is being held by the Seller for the benefit of the Purchaser. Upon receipt of such consent, the documents shall be released to the Purchaser; 4.2.2 The Seller and the Purchaser shall deliver to each other duly executed copies of the Ancillary Agreements; 4.2.3 The Seller shall deliver to the Purchaser a Certificate of Seller, executed by the Seller's Chief Executive Officer, certifying that there have been no changes in the Schedule previously delivered by the Seller or identifying any changes that have occurred in reasonable detail; 4.2.4 The Seller shall deliver to the Purchaser the shareholders register for the Companies; 4.2.5 The Seller shall deliver conditional resignations, subject to the completion of the fiscal year 1999 statutory audits, in the agreed form from the existing auditors of each of the Group Companies; 4.2.6 Except with respect to obligations arising between the Purchaser and the Seller under this Agreement or under any of the Ancillary Agreements, the Purchaser and the Group Companies shall release the Seller, Holding, each of their Affiliated Companies and all of such entities respective officers and directors from any and all liabilities or claims, of any kind which do exist or may have existed, in favor of the Seller or any of the Affiliated Companies, including the Group Companies; 4.2.7 Except with respect to obligations arising between the Purchaser and the Seller under this Agreement or any of the Ancillary Agreements, the Seller shall release the Purchaser and each of the Group Companies and their respective officers and directors from any and all liabilities or claims in favor of the Seller; and 4.2.8 The respective fees and expenses of Seller's professionals set forth on Part 1.1(e) of the Schedule shall be paid out of the Purchase Price to such parties by the Seller. 5. CONDITIONS PRECEDENT 5.1 The obligations of the Seller to pursue the approval of the U.S Bankruptcy Court required by Clause 5.2.1 below shall be subject to the following having occurred within ten (10) days after the Seller has filed a motion with the U.S. Bankruptcy Court to approve this Agreement and the transactions contemplated hereby: 5.1.1 The secured lenders of the Seller, Holding and the Group Companies shall have consented in writing and in form and substance satisfactory to the Seller's bankruptcy counsel to the transactions contemplated hereby and to releases required by 5.4.4 and the transaction contemplated by Clause 5.4.6; and 5.1.2 The secured lenders of the Seller shall have agreed in writing to pay the fees and expenses of the Seller's professionals incurred in connection with this transaction in an amount not to exceed $700,000.00 if there is not completion and shall have provided such security therefor as Akin, Gump, Strauss, Hauer & Feld, L.L.P. shall have requested. 5.1.3 The secured lenders shall have agreed to permit the Seller to retain USD 250,000.00 out of the Purchase Price to pay the cost of completing Fiscal Year 1999 U.S. GAAP audits of the Group Companies following Completion. 5.2 The obligations of the Seller to consummate the transactions contemplated by this Agreement shall be subject to the following having occurred on or prior to the Completion Date, any of which conditions may (except for Clause 5.2.1) be waived at the discretion of the Seller: 5.2.1 The approval of the U.S. Bankruptcy Court, which is considering the Chapter 11 bankruptcy procedures in the United States in relation to the Seller, to the transactions contemplated by this Agreement; 5.2.2 The Seller having received satisfactory advice of counsel regarding any tax consequences resulting from the consummation of the transactions contemplated hereby confirming that there are no material adverse tax consequences to the Seller as a result of the transactions contemplated hereby; 5.2.3 The Seller having received satisfactory advise of counsel that no additional material administrative liabilities will accrue to or material adverse consequences be suffered by the Bankruptcy Estate as a result of the transactions contemplated hereby; and 5.2.4 Pelikan Holding A.G. shall have released all of its pre- petition claims asserted against the Bankruptcy Estate. 5.3 The obligations of the Purchaser to consummate the transactions contemplated by this Agreement shall be subject to the following having occurred on or prior to the Completion Date, any of which conditions may be waived at the discretion of the Purchaser: 5.3.1 That no breach in respect of any of the Seller's representations, Warranties or covenants herein has occurred from the date hereof up to and including the Completion Date; 5.3.2 That there has been no material adverse change in the financial or trading position of any of the Group Companies or any breach of any of the provisions of Clause 6; provided that the Purchaser acknowledges that there shall be no material adverse change for purposes of this Clause 5.3.2 by virtue of the fact that the Group Companies have continued to trade in a manner consistent with their current trading pattern; 5.3.3 The Purchaser having completed funding arrangements satisfactorily with its prospective funders; 5.3.4 The approval of the U.S. Bankruptcy Court, which is considering the Chapter 11 bankruptcy procedures in the United States in relation to the Seller, to the transactions contemplated by this Agreement, which such approval is not the subject of an appeal; provided that the Purchaser may elect to complete the transactions contemplated by this Agreement notwithstanding the existence of such an appeal; and 5.3.5 The shares of N-K Holding Limited having been transferred out of the ownership of any of the Group Companies. 5.4 The obligations of the Seller and the Purchaser to consummate the transactions contemplated by this Agreement shall be subject to the following having occurred on or prior to the Completion Date, any of which conditions in favor of the other party may be waived at the discretion of the Seller or the Purchaser, as the case may be: 5.4.1 Any governmental or regulatory consents of any jurisdiction required to give effect to this Agreement having been obtained; 5.4.2 All intercompany debt owed by and between the Seller and/or Holding and each of the Group Companies having been released; 5.4.3 There having been no failure to comply with the delivery requirements set forth in Clause 4 hereof; 5.4.4 The Seller's and Holding's secured lending groups shall have expressly consented to the transactions contemplated hereby, agreed to accept the net proceeds of the sale contemplated herein in full and final satisfaction of all debt owed by any of the Group Companies or their Affiliate Companies to the secured lending groups and shall have released all liens on the Seller's Intellectual Property, all obligations (including debt repayment obligations) of the Group Companies to such secured lending group, all liens on assets of the Group Companies and all liens on the Shares. The Group Companies' secured lenders shall have released all guarantees given by the Seller and its domestic subsidiaries and all obligations (including debt repayment obligations) of the Group Companies for indebtedness of the Group Companies, all liens on all Intellectual Property of the Seller and its Affiliated Companies, all liens on the Shares and all other assets of the Group Companies; 5.4.5 Any resignations of officers and directors of the Group Companies requested by the Purchaser having been executed and delivered to the Seller; 5.4.6 The Seller's secured lending group shall have agreed to convert the full amount of the debt owed by Pelikan Scotland Ltd. into equity shall have agreed to sell such equity to the Purchaser at Completion for USD 1.00; 5.4.7 The Purchaser shall have received the Trademark License Agreement from Pelikan Holding AG and the Seller shall have received an executed, amended trademark license agreement from Pelikan Holding AG; 5.4.8 The Seller, Holding, the Group Companies and the Purchaser will have taken all steps necessary to effectuate the granting of mutual releases contemplated by Clauses 4.2.6 and 4.2.7 hereof; and 5.4.9 The Seller and the Purchaser will have memorialized all of the Ancillary Agreements in written form mutually acceptable to Purchaser's Solicitors and Seller's Solicitors. 5.5 The Seller shall use its reasonable endeavors to ensure that the conditions set out in Clauses 5.1, 5.2 and 5.4 are satisfied as at the Completion Date. 5.6 The Purchaser shall use its reasonable endeavors to ensure that the conditions set out in Clauses 5.2.4, 5.3 and 5.4 are satisfied as at the Completion Date. 5.7 In the event that the conditions set out in Clause 5.2 to 5.4.9 (inclusive) above have not been fulfilled on or prior to 15 June 1999 or on such other date as the parties may agree, without prejudice to any other remedies available to either party, either party shall have the right to terminate this agreement forthwith in writing and neither party shall be entitled to any compensation of any kind, save as specified in Clause 8, from the other due to such termination. 6. CONDUCT OF BUSINESS In the period between execution of this agreement by the Seller and the Completion Date, the Seller will not, except as required by applicable law, authorize or direct without the prior written consent of the Purchaser: 6.1 The making of any change in the authorized or issued share capital of the Group Companies or to the rights attached to Shares; 6.2 The making of any change to the Memorandum and Articles of Association or equivalent constitutional documentation of any of the Group Companies; 6.3 The granting of any option, right to acquire or other interest in shares or securities of any of the Group Companies; 6.4 The making of any material change in the nature of the Business of any of the Group Companies; 6.5 The disposal of any part of the business or of any asset of the Group Companies other than in the ordinary course of business; 6.6 The making of any change to the Directors of any of the Group Companies; or 6.7 The taking of any action which would give rise to a breach of the Warranties. 7. WARRANTIES, REPRESENTATIONS AND UNDERTAKINGS 7.1 The Seller warrants, represents and undertakes to the Purchaser that at the date five (5) days before the day on which the relevant U.S. Bankruptcy Court holds a hearing to approve this Agreement, subject only to matters fairly disclosed in the Schedule or the Certificate referred to in Clause 4.2.3 each of the Warranties shall be true and correct and will continue to be so as of the Completion Date. 7.2 Each party agrees to promptly advise the other as soon as it becomes aware of any fact of circumstances which would cause, in the case of the Seller, a Warranty to be untrue or, in the case of either party, prevent the satisfaction of any condition precedent. 7.3 If, at any time prior to Completion, any matter contained in the Schedule or the Certificate delivered pursuant to Clause 4.2.3 would (if it had not been so contained), in the reasonable opinion of the Purchaser, constitute a material breach of the Warranties, the Purchaser shall be entitled to terminate this Agreement by notice to the Seller and the parties shall have no further obligations to each other. 8. EXPENSE REIMBURSEMENT 8.1 If the Seller sells the Shares or the assets and undertakings of the Group Companies to a third party, unless the sale is other than in connection with the Seller's bankruptcy, the Seller shall pay to the Purchaser an amount equal to the reasonable costs and expenses incurred by the Purchaser and its funders, including the advisors' costs and fees of the Purchaser and its funders, as determined by the U.S. Bankruptcy Court in an amount not to exceed USD1,250,000.00 ; unless the Purchaser fails to complete the transactions contemplated hereby because of the Purchaser's failure to satisfy a condition precedent or other breach of the Agreement by the Purchaser. 9. NON COMPETITION 9.1 As part consideration of the Purchaser paying to the Seller the Purchase Price, the parties have agreed to enter into a non-competition agreement at Completion. 10. CONFIDENTIALITY The parties hereto undertake not to and shall procure that none of their respective Affiliated Companies shall disclose and shall make reasonable efforts to prevent the use or disclosure of any information, whether written or oral, including, without limitation, financial information, trade secrets, client lists and other proprietary business information, regarding the other or this Agreement, which information is not known to the general public, unless (i) required to do so by law or any stock exchange, (ii) required in furtherance of good faith efforts to obtain approval of the transactions contemplated by this Agreement from the U.S. Bankruptcy Court or (iii) unless such disclosure has been consented to by the other party hereto (acting reasonably). 11. ANNOUNCEMENTS 11.1 Subject to Clause 11.2, neither party may, before Completion, make or send a public announcement, communication or circular concerning the transactions referred to in this Agreement unless it first has obtained the other party's written consent (not to be unreasonably withheld or delayed). 11.2 Clause 11.1 does not apply to a public announcement, communication or circular required by law if the party required to make or send it has, if practicable, first consulted and taken into account the reasonable requirements of the other party. 12. AMENDMENTS This Agreement may only be amended by an instrument in writing duly executed by the parties. no change, termination or modification or any of the provisions of this Agreement shall be binding on the parties, unless made in writing. 13. PARTIAL INVALIDITY If any provision of this Agreement or the Application thereof shall be declared or deemed void, invalid or unenforceable, the remaining provisions hereof shall not be affected thereby and all such provisions of this Agreement shall be valid and in force to the fullest extent permitted by law. 14. NOTICES All notices, consents and other communications required or permitted under this Agreement shall be made in writing and be deemed to have been duly given by the parties if addressed and delivered personally, by registered mail or by courier or by telefax with copy by ordinary mail to the addresses and numbers set forth below or to such other addresses or numbers as may be given by written notice in accordance with this Clause. If to the Seller: 200 Beasley Drive Franklin, Tennessee 37179 Attn: Phillip L. Theodore Fax: 615-791-6100 If to the Purchaser: 151 St. Vincent St. Glasgow, Scotland Attn: G. McNally c/o Magnus Swanson Fax: 44-141-248-5819 15. FURTHER ASSURANCE 15.1 Upon and after Completion each party shall execute all such other documents and do all such other acts and things or procure the execution of such other documents or the performance of all such other acts and things, as the other party shall reasonably require in order to perfect the right, title and interest of the Purchaser to the Companies and to perfect the transactions intended to be effected under or pursuant to this Agreement. 15.2 The Seller shall provide or procure to be provided to the Purchaser all information in its possession or under their control or in the possession of control of any third party which the Purchaser shall from time to time reasonably require upon reasonable notice relating to the Group Companies and will give, or procure to be given, to the Purchaser, its Directors and agents such access (including the right to take copies) to such documents containing such information as the Purchaser may from time to time reasonably require upon reasonable notice. 15.3 The Purchaser shall provide and procure to be provided to the Seller all information in its possession or under its control or in the possession of any third party which the Seller shall from time to time require upon reasonable notice relating to any law or order of any regulatory body, including but not limited to any tax audit, and will give, or procure to be given, to the Seller, its Directors and agents such access (including the right to take copies) to such documents containing such information as the Seller may from time to time reasonably require for such purpose upon reasonable notice. 15.4 The parties recognize and acknowledge that certain Group Companies are incorporated in jurisdictions other than Scotland and particular local formalities may be required to effectively transfer ownership of the Group Companies to the Purchaser. Accordingly the parties agree to take all steps necessary or desirable to give effect to the intent and substance of this Agreement. 16. MEDIATION If a dispute arises under this Agreement and cannot be settled through negotiation, both parties hereto agree first to try in good faith to settle the dispute by mediation in New York, New York, U.S.A. before resorting to arbitration, litigation, or some other formal dispute resolution procedure. Any party wishing to submit any matter to mediation shall give the other party written notice not less than fourteen (14) days prior to making such submission. Both parties shall have the right to be represented by an attorney during the mediation. Any such dispute shall be submitted to a mediator selected by mutual agreement of the parties. If the parties cannot jointly agree on a mediator within thirty (30) days after written request for mediation is made by one party to the controversy, then each party shall appoint a neutral, certified mediator, each of whom shall then jointly appoint a neutral, certified mediator to serve as mediator in the matter. Unless the parties agree to an alternative arrangement, the mediator's fee and expenses shall be equally divided between the parties. 17. GOVERNING LAW 17.1 This Agreement shall be construed in accordance with and governed for all purposes by the laws of the State of Texas applicable to contracts executed and shall be deemed to be wholly performed with such State. [SIGNATURE PAGE FOLLOWS] IN WITNESS WHEREOF the parties hereto have executed this Agreement effective as of this ____ day of __________, 1999. NU-KOTE INTERNATIONAL, INC., a Delaware corporation By: __________________________ Name: ________________________ Title: _______________________ PELIKAN HARDCOPY EUROPE LIMITED, a limited liability company incorporated in Scotland By: _________________________ Name: G. McNally Title: Director SCHEDULE PART I ------ PELIKAN HARDCOPY EUROPE - LEGAL ENTITIES ---------------------------------------- (1) (2) (3) (4) Total No. of Issued and Shares Authorized Seller's Purchase Issued Share Percentage Price To Seller Capital Ownership Apportionment Pelikan Productions AG 100 Pelikan Scotland 100 Limited Grief-Werke-GmbH 100 Pelikan Hardcopy Asia 100 Pacific Limited Dongguan Pelikan 85 Hardcopy Limited PART 2 SUBSIDIARIES ------------ Caribonum Pension Trustees Limited Pelikan Hardcopy Deutschland GmbH Pelikan Nordic AB Pelikan Hardcopy Austria Ges.MBH Pelikan Hardcopy (International) AG PART 3 WARRANTIES ---------- All Warranties shall expire and be of no further force or effect upon Completion unless the Purchaser can show the Seller had knowledge that a Warranty was untrue at the time of Completion and did not disclose such inaccuracy in accordance with Clause 4.2.3 of the Agreement. The term "knowledge" in the preceding sentence means the actual awareness of specific facts (or predicated on such specific facts) of any of Patrick Howard, Phillip Theodore, Richard Larsen and Ronald Baiocchi after (i) due inquiry of the Seller's attorneys, auditors, tax advisors and registered agent(s) and (ii) review of their own respective files and records relating to the Group Companies. Further, facts and information known to directors of the Group Companies (other than Richard Larsen) shall not be imputed to Messrs. Howard, Theodore, Larsen or Baiocchi. 1. Existence and Corporate Authority --------------------------------- 1.1 Each Group Company is duly organized and validly existing under the laws of the country of its incorporation. The Seller has full corporate power and has taken all action necessary and have obtained all consents and approvals required to execute and deliver and to exercise their rights and at the Completion Date will be able to perform their obligations under this Agreement and each document to be executed at Completion. 2. Title to the Shares ------------------- 2.1 The Shares comprise the whole of each of the Company's allotted and issued share capital, have been properly allotted and issued and are fully paid or credited as fully paid. 2.2 There are no outstanding subscriptions, options, warrants or similar rights relating to the Shares and no securities giving a right of conversion into, or any agreement or arrangement which accords to any person the right to acquire, Shares. 2.3 At Completion, the Seller will lawfully own and have good and marketable title to the Shares and the entire issued share capital of the Subsidiaries. At Completion the Shares will be free and clear of all liens, charges and encumbrances and there exists no agreement to create any encumbrance, charge or lien over any such Shares. Upon the delivery by the Seller of the Shares against payment of the Purchase Price, the Purchaser will acquire good and marketable title to the Shares free of any and all liens, charges and encumbrances. 3. The Seller makes each of the following Warranties to the best of its knowledge: 3.1 Each Group Company has all necessary licenses, permits and authorizations to carry on its business as now conducted and to own, lease and operate the assets and properties used and necessary to use in connection therewith, the Seller has no knowledge of any facts that would lead it to believe this Warranty is untrue. 3.2 Title to Property and Assets ---------------------------- Each Group Company owns or has valid leases, licenses or rights in all properties and assets, tangible and intangible, necessary for it to carry on its business as presently conducted, and such properties and assets, tangible and intangible, are in good operating condition, ordinary wear and tear excepted, are properly maintained and serviced. 3.3. Agreements ---------- All material agreements are in full force and effect and are valid and enforceable and the text of such agreements accurately and completely reflect the contents of such agreements except for provisions implied by law. For the purposes hereof, a material agreement is one requiring the purchase or sale by a Group Company of goods or services with a value in excess of USD 2,000,000 in a one-year period or which requires more than 12 months notice to terminate. 3.4. Environmental Matters --------------------- Each Group has obtained all requisite permits or licenses required by any relevant environmental laws for the business and for any other business that has been conducted by the relevant Group Company and do fully comply, and have fully complied, with the conditions of those permits or licenses. The Seller has not received any formal or informal notice or other communication from which it appears that any Group Company may be or has been in violation of any environmental law or permit or license. 3.5 Intellectual Property --------------------- All Intellectual Property which is used in, or are necessary for, the business of each Group Company are owned by or licensed to the Seller or the relevant Group Company and not subject to any liens or encumbrances other than liens of the Sellers secured lenders to be released at Completion. 3.6 Compliance with Law ------------------- Each Group Company has in all material respects conducted its business at all times in accordance with and has complied with applicable laws relating to its operation and business and no circumstances have occurred which imply or could imply any limitation or restriction in the conduct of the present activities of any Group Company. 3.7 Employment Contract ------------------- The Seller is not a party to any contract with any employee of a Group Company who earns in excess of $50,000 or the equivalent thereof on an annual basis. 3.8. Litigation ---------- There is no suit, administrative, arbitration or other legal proceedings (including, but not limited to tax proceedings) pending or threatened against any Group Company, its business, properties or assets or their Directors. 3.9. Taxes ----- 3.9.1 Each Group Company has properly filed with the appropriate tax authorities all tax returns and reports required to be filed for all tax periods ending prior to the Completion Date and such filings are true, correct and complete and all information required for a correct assessment of tax has been provided, and are not in default with payment of any Taxes due to any tax authority. 3.9.2 All Taxes for the period prior to the Completion Date have been fully paid or fully provided for in the audited accounts of each Group Company and all Taxes for periods after the date of such accounts have been fully paid or provided for. 3.10 Guarantees ---------- 3.10.1 No guarantees or similar commitments which will not be released at Completion have been granted by any Group Company for obligations of the Seller or any of its Affiliated Companies. EX-2.2 3 EXHIBIT 2.2 AMENDMENT NO. 1 TO SALE AND PURCHASE AGREEMENT between NU-KOTE INTERNATIONAL, INC. incorporated in Delaware and having its principal place of business in Franklin, Tennessee (the "Seller") of the first part and PELIKAN HARDCOPY EUROPE LIMITED incorporated in Scotland and having its registered office at 151 St. Vincent Street, Glasgow, Scotland (the "Purchaser") of the second part RECITALS (A) The Seller and the Purchaser have entered into a Sale and Purchase Agreement dated as of April 24, 1999 pursuant to which Seller has agreed to sell and Purchaser has agreed to purchase the shares of the Companies on the terms and subject to the conditions set forth in the Agreement; and (B) Clause 5.7 of the Agreement provides that if the conditions set out in Clause 5.2 to 5.4.9 (inclusive) of the Agreement have not been fulfilled on or prior to 15 June 1999 or on such other date as the parties may agree, without prejudice to any other remedies available to either party, either party shall have the right to terminate the Agreement forthwith in writing and neither party shall be entitled to any compensation of any kind, save as specified in Clause 8 of the Agreement, from the other due to such termination; and (C) Clause 5.1 of the Agreement provides that the obligations of the Seller to pursue the approval of the U.S. Bankruptcy Court required by Clause 5.2.1 of the Agreement shall be subject to the events specified in Clause 5.1.1 through Clause 5.1.3 of the Agreement having occurred within ten (10) days after the Seller has filed a motion with the U.S. Bankruptcy Court to approve the Agreement; and (D) The Seller and the Purchaser have agreed to amend Section 4.1, Article 5 and Section 7.1 of the Agreement as hereinafter set forth and to add two new Clauses to the Agreement to be designated as Clause 7.4. and Clause 7.5. NOW THEREFORE, in consideration of the representations, warranties and covenants contained herein, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto, intending to be legally bound, hereby agree as follows: STATEMENT OF AGREEMENT 1. DEFINITIONS AND INTERPRETATIONS 1.1 In this Amendment, capitalized terms have the meaning ascribed to them in the Agreement. The following words and expressions shall have the meaning ascribed to them herein below: "Agreement" Means the Sale and Purchase Agreement dated as of April 24, 1999, together with the Schedule thereto; "Amendment" Means this Amendment No. 1 to the Agreement. "Schedule" Means the Schedule in three parts annexed hereto. "Swiss Facility" Means the CHF 50,000,000 Third Amended and Restated Revolving Credit Facility Agreement Between Pelikan Produktions AG and Pelikan Hardcopy (International) AG, as borrowers, Barclays Bank plc, as agent, NationsBank of Texas, N.A., as collateral agent, NationsBank of Texas, N.A., as documentation agent, Barclays Bank plc, NationsBank, N.A., Commerzbank AG, Atlanta Agency, Societe Generale, The First National Bank of Chicago, Deutsche Bank AG London, ABN Amro Bank, N.V. and Credit Lyonnais, S.A.. "UK Facility" Means the [POUND STERLING]6,275,000 Third Amended and Restated Revolving Credit Facility Agreement between Pelikan Scotland Limited, as borrower, Barclays Bank plc, as agent, NationsBank of Texas, N.A., as collateral agent, NationsBank of Texas, N.A., as documentation agent, Barclays Bank plc, NationsBank, N.A., Commerzbank AG, Atlanta Agency, Societe Generale, The First National Bank of Chicago, Deutsche Bank AG London, ABN Amro Bank, N.V. and Credit Lyonnais, S.A. 1.2 In this Amendment: 1.2.1 The singular includes the plural and the masculine includes the feminine and vice versa; 1.2.2 References to persons shall include bodies corporate, unincorporated associations and partnerships; 1.2.3 References to recitals, clauses, the Schedule and sub- divisions of the Schedule are, unless the contrary intention appears, references to the recitals and clauses of and to the Schedule and sub-divisions thereof to this Amendment; and 1.2.4 The headings and sub-headings of this Amendment are inserted for convenience only and shall not form part of the construction thereof. 2. AMENDMENTS TO THE AGREEMENT 2.1 The Seller and the Purchaser agree that Article 5 shall be amended to read in its entirety as follows: 5.1 The obligations of the Seller to consummate the transactions contemplated by this Agreement shall be subject to the following having occurred on or prior to the Completion Date, any of which conditions may (except for Clause 5.1.1) be waived at the discretion of the Seller: 5.1.1 The approval of the U.S. Bankruptcy Court, which is considering the Chapter 11 bankruptcy procedures in the United States in relation to the Seller, to the transactions contemplated by this Agreement; 5.1.2 The Seller having received satisfactory advice of counsel regarding any tax consequences resulting from the consummation of the transactions contemplated hereby confirming that there are no material adverse tax consequences to the Seller as a result of the transactions contemplated hereby; 5.1.3 The Seller having received satisfactory advise of counsel that no additional material administrative liabilities will accrue to or material adverse consequences be suffered by the Bankruptcy Estate as a result of the transactions contemplated hereby; 5.1.4 Pelikan Holding A.G. shall have released all of its pre-petition claims asserted against the Bankruptcy Estate; 5.1.5 The secured lenders of the Seller, Holding and the Group Companies shall have consented in writing and in form and substance satisfactory to the Seller's bankruptcy counsel to the transactions contemplated hereby and to releases required by 5.3.4 and the transaction contemplated by Clause 5.3.6; 5.1.6 The secured lenders shall have agreed in writing and in form and substance satisfactory to the Seller's bankruptcy counsel to permit the Seller to retain USD 250,000.00 out of the Purchase Price to pay the cost of completing Fiscal Year 1999 U.S. GAAP audits of the Group Companies following Completion; 5.1.7 The secured lenders shall have agreed in writing and in form and substance satisfactory to the Seller's bankruptcy counsel that the liability of Seller and its Affiliates under the guarantees given by them for the Swiss Facility and the UK Facility shall be reduced dollar for dollar for all monies actually received by the European Lenders at Completion and from any escrows established pursuant to the Agreement and from debt that is converted to equity pursuant to the condition set forth in Clause 5.3.6 of the Agreement; and 5.1.8 The Seller's secured lenders shall have agreed in writing to allow the fees and expenses of Seller's professionals incurred in connection with the transaction contemplated by this Agreement to be paid as a surcharge on the secured lender's collateral in the event that there is no Completion, which fees and expenses are estimated to be between $460,000 and $500,000 including approximately $100,000 in filing fees that may not be incurred if there is no Completion. 5.2 The obligations of the Purchaser to consummate the transactions contemplated by this Agreement shall be subject to the following having occurred on or prior to the Completion Date, any of which conditions may be waived at the discretion of the Purchaser: 5.2.1 That no breach in respect of any of the Seller's representations, Warranties or covenants herein has occurred from the date hereof up to and including the Completion Date; 5.2.2 That there has been no material adverse change in the financial or trading position of any of the Group Companies or any breach of any of the provisions of Clause 6; provided that the Purchaser acknowledges that there shall be no material adverse change for purposes of this Clause 5.2.2 by virtue of the fact that the Group Companies have continued to trade in a manner consistent with their current trading pattern; 5.2.3 The Purchaser having completed funding arrangements satisfactorily with its prospective funders; 5.2.4 The approval of the U.S. Bankruptcy Court, which is considering the Chapter 11 bankruptcy procedures in the United States in relation to the Seller, to the transactions contemplated by this Agreement, which such approval is not the subject of an appeal; provided that the Purchaser may elect to complete the transactions contemplated by this Agreement notwithstanding the existence of such an appeal; and 5.2.5 The shares of N-K International Holding Limited having been transferred out of the ownership of any of the Group Companies. 5.3 The obligations of the Seller and the Purchaser to consummate the transactions contemplated by this Agreement shall be subject to the following having occurred on or prior to the Completion Date, any of which conditions in favor of the other party may be waived at the discretion of the Seller or the Purchaser, as the case may be: 5.3.1 Any governmental or regulatory consents of any jurisdiction required to give effect to this Agreement having been obtained; 5.3.2 All intercompany debt owed by and between the Seller and/or Holding and each of the Group Companies having been released; 5.3.3 There having been no failure to comply with the delivery requirements set forth in Clause 4 hereof; 5.3.4 The Seller's and Holding's secured lending groups shall have expressly consented to the transactions contemplated hereby, agreed to accept the net proceeds of the sale contemplated herein in full and final satisfaction of all debt owed by any of the Group Companies or their Affiliate Companies to the secured lending groups and shall have released all liens on the Seller's Intellectual Property, all obligations (including debt repayment obligations) of the Group Companies to such secured lending group, all liens on assets of the Group Companies and all liens on the Shares. The Group Companies' secured lenders shall have released all obligations (including debt repayment obligations) of the Group Companies for indebtedness of the Group Companies, all liens on the Shares and all other assets of the Group Companies. In addition Seller's and Holding's secured lending groups and the Group Companies' secured lenders shall have expressly consented to the trademark and patent cross license to be granted by the parties on all Intellectual Property of the Seller and its Affiliated Companies and the Group Companies; 5.3.5 Any resignations of officers and directors of the Group Companies requested by the Purchaser having been executed and delivered to the Seller; 5.3.6 The Seller's secured lending group shall have agreed in writing and in form and substance satisfactory to the Seller's bankruptcy counsel to convert the full amount of the debt owed by Pelikan Scotland Ltd. into equity and shall have agreed to sell such equity to the Purchaser at Completion for USD 1.00; 5.3.7 The Purchaser shall have received the Trademark License Agreement from Pelikan Holding AG and the Seller shall have received an executed, amended trademark license agreement from Pelikan Holding AG; 5.3.8 The Seller, Holding, the Group Companies and the Purchaser will have taken all steps necessary to effectuate the granting of mutual releases contemplated by Clauses 4.2.6 and 4.2.7 hereof; and 5.3.9 The Seller and the Purchaser will have memorialized all of the Ancillary Agreements in written form mutually acceptable to Purchaser's Solicitors and Seller's Solicitors. 5.4 The Seller shall use its reasonable endeavors to ensure that the conditions set out in Clauses 5.1 and 5.3 are satisfied as at the Completion Date. 5.5 The Purchaser shall use its reasonable endeavors to ensure that the conditions set out in Clauses 5.1.4, 5.2 and 5.3 are satisfied as at the Completion Date. 5.6 In the event that the conditions set out in Clause 5.1 to 5.3.9 (inclusive) above have not been fulfilled on or prior to 30 September 1999 or on such other date as the parties may agree, without prejudice to any other remedies available to either party, either party shall have the right to terminate this agreement forthwith in writing and neither party shall be entitled to any compensation of any kind, save as specified in Clause 8, from the other due to such termination. 2.2 The Seller and the Purchaser agree that Section 4.1 shall be amended to read in its entirety as follows: 4.1 Completion shall, unless otherwise agreed in writing between the parties, take place on September 29, 1999, or, if later, the day one Business Day after the day on which the last of the conditions specified in Clause 5 is satisfied, at the offices of Pelikan Produktions, A.G., one of the Group Companies. 2.3 The Seller and the Purchaser agree that Section 7.1 shall be amended to read in its entirety as follows: 7.1 The Seller warrants, represents and undertakes to the Purchaser that, subject only to matters fairly disclosed in the Schedule or the Certificate referred to in Clause 4.2.3 each of the Warranties shall be true and correct and will continue to be so as of the Completion Date. 2.4 The Seller and the Purchaser agree that the following new Clauses to be designated as Clause 7.4 and Clause 7.5 shall be added to the Agreement: 7.4 For a period of six months following Completion, each party may continue to use existing stocks of marketing, packaging and shipping materials even though such materials refer to and include the other party's name and trademarks. Each party shall only use their existing stocks of marketing, packaging and shipping materials in the areas covered by their respective licenses from Pelikan Holding, A.G. to use the "Pelikan" trademark. 7.5 Purchaser acknowledges that Seller has entered into a Corporate Purchase Agreement with Unisys Corporation ("Unisys") dated March 1999 pursuant to which the Seller has agreed to supply Unisys with certain identified products. Purchaser further acknowledges that it is familiar with such agreement and is aware that the Group Companies manufacture certain of the identified products to be supplied to Unisys pursuant to such agreement. Purchaser covenants and agrees that following Completion it shall cause the Group Companies to continue producing such products for Unisys in accordance with all of the terms and conditions of the agreement between the Seller and Unisys. Seller covenants and agrees that during the first twelve months following Completion it shall not encourage, solicit, entice or request Unisys to cease doing business with or curtail the purchases it is making from the Purchaser and/or the Group Companies. The provisions of this Clause 7.5 shall survive for the term of the agreement between Unisys and the Seller. 3. OTHER TERMS Except as specifically set forth in this Amendment, all other terms and conditions of the Agreement shall remain unaltered and in full force and effect. 4. MEDIATION If a dispute arises under this Amendment and cannot be settled through negotiation, both parties hereto agree first to try in good faith to settle the dispute by mediation in New York, New York, U.S.A. before resorting to arbitration, litigation, or some other formal dispute resolution procedure. Any party wishing to submit any matter to mediation shall give the other party written notice not less than fourteen (14) days prior to making such submission. Both parties shall have the right to be represented by an attorney during the mediation. Any such dispute shall be submitted to a mediator selected by mutual agreement of the parties. If the parties cannot jointly agree on a mediator within thirty (30) days after written request for mediation is made by one party to the controversy, then each party shall appoint a neutral, certified mediator, each of whom shall then jointly appoint a neutral, certified mediator to serve as mediator in the matter. Unless the parties agree to an alternative arrangement, the mediator's fee and expenses shall be equally divided between the parties. 15. Governing Law This Amendment shall be construed in accordance with and governed for all purposes by the laws of the State of Texas applicable to contracts executed and shall be deemed to be wholly performed with such State. SIGNATURE PAGE TO FOLLOW IN WITNESS WHEREOF the parties hereto have executed this Agreement effective as of this ____ day of __________, 1999. NU-KOTE INTERNATIONAL, INC., a Delaware corporation By: __________________________ Name: ________________________ Title: _______________________ PELIKAN HARDCOPY EUROPE LIMITED, a limited liability company incorporated in Scotland By: _________________________ Name: G. McNally Title: Director SCHEDULE TO SALE AND PURCHASE AGREEMENT PART 1 ------ Pelikan Hardcopy Europe - Legal Entities ---------------------------------------- (1) (2) (3) (4) Total Seller's Purchase No. of Issued and Percentage Price Shares Authorized Ownership Apportionment Issued To Share Seller Capital Pelikan Productions AG CHF6,500K CHF6,500 100 $10,260,000 Pelikan Scotland [POUND [POUND 100 $1,100,000 Limited STERLING] STERLING] 1,852,892 5,000,000 Grief-Werke-GmbH DM22,000K DM22,000K 100 $979,000 Pelikan Hardcopy Asia HK$100K HK$100K 100 $1.00 Pacific Limited Dongguan Pelikan $1,300K $1,300K 85 $660,000 Hardcopy Limited PART 1.1(a): AFFILIATED COMPANIES - --------------------------------- JURISDICTION OF ENTITY FORMATION Nu-kote Holding, Inc. Delaware Nu-kote International, Inc. Delaware Nu-kote Imperial, Ltd. Delaware International Communications Materials, Inc. Pennsylvania Viro-kote, Inc. Delaware Nu-kote Imaging International, Inc. Delaware Caribonum Pension Trustees Limited United Kingdom Future Graphics, Inc. California Nu-kote Latin American, Inc. Delaware Nu-kote Internacional de Mexico, S.A. de C.V. Mexico Nu-kote Quality Imaging GmbH Germany Interfas Holding, S.A. France Interfas, S.A. France Greif-Werke GmbH Germany Pelikan Hardcopy Deutschland GmbH Germany Pelikan Scotland Limited United Kingdom N-K International Holding, Limited United Kingdom N-K Interfas, Limited France N-K International, Ltd. United Kingdom Nu-kote Italia s.r.l. Italy Pelikan Produktions AG Switzerland Pelikan Handelsgeschaft mbH Austria Pelikan Hardcopy International AG Switzerland Pelikan Hardcopy Nordic AB Sweden Pelikan Nordic AB [Sweden] [Pelikan Hardcopy/Ges.MBH] Austria Dongguan Pelikan Hardcopy, Ltd. China Pelikan Hardcopy Asia Pacific, Ltd. Hong Kong PART 1.1(b): THE COMPANIES - -------------------------- Pelikan Productions AG Pelikan Scotland Limited Grief-Werke-GmbH Pelikan Hardcopy Asia Pacific Limited Dongguan Pelikan Hardcopy Limited PART 1.1(c): BOARD MEMBERS AND MANAGING DIRECTORS - ------------------------------------------------- Nu-kote Holding, Inc. Directors: John P. Rochon Patrick E. Howard Nu-kote International, Inc. Directors: Patrick E. Howard Phillip Theodore Greif-Werke GmbH Karl A. Kallinger Pelikan Hardcopy Deutschland GmbH Karl A. Kallinger Peter Sutter Pelikan Scotland Limited John Morgan Hans Paffhausen Gerry McNally Richard Larsen Pelikan Produktions AG Hans Paffhausen Gerry McNally Ulnch Morf Herbert Fehlmann Markus Malechiner Claus Peter Bruck Hans Rudolf Habermacher Matthias Hilzinger Pelikan Handelsgeschaft mbH Requested Pelikan Hardcopy International AG Hans Paffhausen Gerry McNally Ulnch Morf Peter Sutter Claus Peter Bruck Peter Kaase Hans Rudolf Habermacher Matthias Hilzinger Caribonum Pension Trustees Limited Michael J. Madellan Gerry McNally Tim Nattress Terence Panter Lan Prise Pelikan Nordic AB Requested Pelikan Hardcopy/Ges.MBH Josef Hosman Peter Sutter Pelikan Hardcopy Asia Pacific, Ltd. Richard Larsen Patrick Howard Dongguan Pelikan Hardcopy, Ltd. Richard Larsen Uli Morf PART 1.1(d): PURCHASE PRICE ALLOCATION - -------------------------------------- $000 ---- Consideration outline in offer letter dated 16,500 8 February 1999 Less: amount payable to Pelikan Holdings for 3,500 trademark license 13,000 13,000 ====== Being payment of secured bank debt in PPAG - 9,060 13.5 million Swiss francs Escrow due to real estate gains and transfer tax 880 arising in Switzerland - 1,310,000 Swiss francs Escrow account for Seiko Epson claim 1,000 Escrow account for environmental liability 1,000 Escrow account for MIT warranties 400 Escrow Account for China 660 ------ 13,000 ====== PART 1.1(e): PAYMENT OF PURCHASE PRICE - -------------------------------------- RECONCILIATION OF CASH $000 ---- Consideration outline in offer letter dated 8 February 1999 16,500 Less: amount payable to Pelikan Holdings for trademark licence 3,500 13,000 13,000 ====== Being payment of secured bank debt in PPAG - 13.5 million Swiss francs 8,210 Amount retained for audit costs 250 Escrow due to real estate gains and transfer tax arising in Switzerland - 1,310,000 Swiss francs 8801 Escrow account for Seiko Epson claim 1,000 Escrow account for China 660 Escrow account for environmental liability 1,000 Escrow account for MIT warranties 400 Professional Fees 600 ------ 13,000 ====== Note: Exchange used $1 - 1.49 Swiss francs (13 April 1999). 1 Efforts will be made to reduce the tax liabilities. Any savings from above estimate will be shared between Purchaser and Nu-kote. PART 2 ------ SUBSIDIARIES ------------ Caribonum Pension Trustees Limited Pelikan Hardcopy Deutschland GmbH Pelikan Nordic AB Pelikan Hardcopy Austria Ges.MBH Pelikan Hardcopy (International) AG PART 3 ------ WARRANTIES ---------- EXCEPTIONS TO WARRANTIES: - ------------------------ 2.1 Title to Shares 1. The share capital of Dongguan Pelikan Hardcopy, Ltd. has not been fully paid. Nu-kote International, Inc. is required to contribute capital in the amount of USD1,300,000.00 to Dongguan Pelikan Hardcopy, Ltd. However the actual capital contributions made only amount to USD1,127,741.36. 3.1 Licenses and Permits 1. Pelikan Holding AG has advised Nu-kote that its Trademark License Agreement has been terminated due to violations of the terms of that agreement by one of Nu-kote's distributors in the Middle East. 2. There is a dispute regarding whether certain countries in the Far East are covered by the Trademark License Agreement with Pelikan Holding AG. 3.2 Title to Property and Assets 1. Assets of Nu-kote International and certain Affiliates, including certain assets of the Group Companies, are pledged to the secured lending group. 2. Assets of Nu-kote International and certain Affiliates in the U.S. including Trademark License Agreement of Nu-kote Holding and its domestic subsidiaries are pledged to Norwest. 3. The entire contirbution required to be made to Dongguan Pelikan Hardcopy, Ltd. Has not been made. 3.3 Agreements 1. See 3.1(1) 3.4 Environmental Matters 1. Certain environmental conditions were identified on the Final Environmental Certificate delivered in connection with the closing of the Asset and Stock Purchase Agreement between Nu-kote Holding, Inc. and Pelikan Holding, AG. The matters and conditions listed in this certificate could give rise to a violation of environmental laws or permits or licenses held by the Group Companies. 3.5 Intellectual Property 1. See 3.1(1) and 3.1(2). 3.6 Compliance With Laws 1. See 3.4(1) above 3.7 Employment Contracts 1. Retention agreements between Hans Paffhausen and a Group Company and Gerry McNally and a Group Company may have been entered into in 1998. 3.8 Litigation 1. Pelikan Produktions AG has been sued by Seiko Epson in Europe and in United States Federal District Court. 2. Hans Paffhausen has been named as a defendant in the shareholders derivative lawsuit styled Lori Lemmer v. Nu-kote Holding, Inc. et. al. 3. Pelikan Hardcopy Deutschland GmbH has been sued by Seiko Epson in Europe. 3.9 Taxes 3.10 Guarantees 1. The Purchase and Sale Agreement, as amended, requires the Group Companies to supply products required under The Corporate Purchase Agreement between Unisys Corporation and Seller following Completion. EX-99.1 4 EXHIBIT 99.1 Nu-kote Holding Inc. announced today that as part of its overall strategic objective of restructuring its operations, Nu-kote International, Inc. ("International"), a wholly owned subsidiary of Nu-kote, has sold certain of its wholly owned subsidiaries to Pelikan Hardcopy Europe Limited ("Pelikan"), a Scottish corporation. The subsidiaries sold include Pelikan Productions A.G., Pelikan Scotland Limited, Greif-Werke GmbH, Pelikan Hardcopy Asia Pacific Limited, and Dongguan Pelikan Hardcopy Limited (the "Companies"). Under the terms of the agreement, Pelikan will pay $16.5 million at the close of the transaction in exchange for all of the capital stock or equity interests of the Companies. The Company has filed a motion in the United Bankruptcy Court for the Middle District of Tennessee and received approval for the sale. This disposition is part of Nukote's efforts to dispose of non-essential assets and focus on the restructuring of its core business in the North America. Nu-kote's North American Operations will retain the rights to market its products under the Pelikan brand name in the United States, Canada and Mexico, with the purchaser having the right to market its products under the Pelikan brand name throughout the rest of the world. In addition, Nu- kote will continue to market its products under the Nu-kote brand name anywhere in the world. The Company will also maintain its business forms operations in France. Through its operating subsidiaries, Nu-kote produces supplies for printers, copiers, fax machines and ink jet printers, sold primarily in North America and Europe. -----END PRIVACY-ENHANCED MESSAGE-----