EXHIBIT 4.6
Jostens, Inc.
$60,000,000 of
14% Senior Redeemable Payment In-Kind Preferred Stock with
Warrants to Purchase 531,325 Shares of Class E Common Stock
PURCHASE AGREEMENT
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May 10, 2000
DB Capital Investors, L.P.
000 Xxxxxxx Xxxxxx
00xx Xxxxx
Xxx Xxxx, XX 00000
Ladies and Gentlemen:
The undersigned hereby confirms its agreement with you (the
"Purchaser") as set forth below.
1. The Securities. Subject to the terms and conditions herein
contained, Jostens, Inc., a Minnesota corporation (the "Company"), proposes to
issue and sell to the Purchaser 60,000 shares of the 14% Senior Redeemable
Payment In-Kind Preferred Stock of the Company (the "Preferred Stock") with an
aggregate liquidation preference of $60,000,000, together with Warrants (the
"Warrants") to purchase an aggregate of 531,325 shares of the Series E common
stock of the Company, par value $0.01 per share (the "Common Stock"), to be
issued upon exercise of the Warrants (the "Warrant Shares") representing 5% of
the outstanding Common Stock of the Company on a fully diluted basis. The
Preferred Stock and the Warrants are referred to herein collectively as the
"Securities".
The Securities will be offered and sold to the Purchaser without being
registered under the Securities Act of 1933, as amended (the "Act"), in reliance
on exemptions therefrom.
The Securities will be offered in connection with a recapitalization
transaction (such transaction, together with the Merger referred to below, the
"Recapitalization") as a result of which (x) Investcorp Investment Equity
Limited and certain of its affiliates (collectively, "Investcorp") and certain
other institutional equity investors would own up to approximately 94% of the
outstanding common stock of the Company and (y) the Company's existing
shareholders would retain the remaining common stock in the Company. The
undersigned understands that the Recapitalization will be effected by means of a
merger of a newly formed company created by Investcorp and its affiliates
("MergerCo") with and into the Company, with the Company being the surviving
corporation (the "Surviving Corporation") of such merger (the "Merger"),
pursuant to an agreement and plan of merger entered into between MergerCo and
the Company (the "Merger Agreement") dated as of December 27, 1999. Concurrently
with the consummation of the Recapitalization, the Company and its subsidiaries
will refinance
substantially all of their outstanding debt (the "Refinancing" and, together
with the Recapitalization and the incurrence of the financings described below,
the "Transaction").
In connection with the issuance of senior subordinated notes generating
gross cash proceeds of $240.0 million (the "Senior Subordinated Notes"), the
Company has prepared a preliminary offering memorandum dated April 16, 2000 (the
"Preliminary Memorandum") and will prepare a final offering memorandum to be
dated May 3, 2000 (the "Final Memorandum"; the Preliminary Memorandum and the
Final Memorandum each herein being referred to as the "Memorandum," and if the
Final Memorandum is not prepared, then each reference to the Final Memorandum
herein shall be deemed a reference to the Preliminary Memorandum) setting forth
or including a description of the Company and the Subsidiaries (as defined
below) and any material developments relating to the Company and the
Subsidiaries occurring after the date of the most recent historical financial
statements included therein.
The Company will enter into (i) a registration rights agreement with
respect to the Preferred Stock, whereby the Company will agree to file a shelf
registration statement covering resales of the Preferred Stock (the "Preferred
Stock Registration Rights Agreement"), (ii) a registration rights agreement with
respect to the Warrant Shares and certain other shares of the capital stock of
the Company, whereby the Company will agree to file a registration statement
covering resales of the Warrant Shares (the "Registration Rights Agreement") and
(iii) a Warrant Agreement (the "Warrant Agreement"), prior to, or concurrently
with, the issuance of the Securities. In addition, the Company will file a
Certificate of Designation with respect to the Preferred Stock (the "Certificate
of Designation") with the Secretary of State of the State of Minnesota.
2. Representations and Warranties. The Company represents and warrants
to, and agrees with the Purchaser that:
(a) Neither the Preliminary Memorandum as of the date thereof
nor the Final Memorandum nor any amendment or supplement thereto as of
the date thereof and, in the case of the Final Memorandum and any
amendment or supplement thereto, at all times subsequent thereto up to
the Closing Date (as defined in Section 3 below) contained or shall
contain any untrue statement of a material fact or omitted or omits to
state a material fact necessary to make the statements therein, in the
light of the circumstances under which they were made, not misleading,
except that (i) the representations and warranties set forth in this
Section 2(a) do not apply to statements or omissions made in reliance
upon and in conformity with information furnished to the Company in
writing by the Purchaser expressly for use in the Preliminary
Memorandum, the Final Memorandum or any amendment or supplement thereto
and (ii) the Memorandum was designed as an offering memorandum for the
Senior Subordinated Notes and not the Securities. The Final Memorandum
conforms in all material respects to the requirements of the Act and
the rules and regulations promulgated thereunder as if it was a
prospectus filed as part of a registration statement on Form S-3
relating to the Senior Subordinated Notes.
(b) After giving effect to the Merger, as of the Closing Date,
the Company will have the authorized and issued capital stock set forth
in the Final Memorandum under the
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heading entitled "Capitalization"; the Company will own the percentage
of the issued and outstanding stock (or other equity securities) of
each of the Subsidiaries as listed on Schedule 1 hereto; all of the
outstanding shares of capital stock of the Company and the Subsidiaries
as of the Closing Date will be duly authorized and validly issued, are
fully paid and nonassessable and were not issued in violation of any
preemptive rights; except as set forth in the Final Memorandum and
certain warrants in favor of Investcorp or its affiliates that will be
exercisable for Class B common stock of the Company to the extent an
equal number of shares of Class B common stock of the Company is being
redeemed contemporaneously, there are no outstanding (i) options,
warrants or other rights to purchase from the Company and the
Subsidiaries, (ii) agreements or other obligations of the Company or
any of the Subsidiaries to issue or (iii) other rights to convert any
obligation into, or exchange any securities of, shares of capital stock
of, or other equity securities of, the Company or any of the
Subsidiaries. The entities listed on Schedule 1 hereto (collectively,
the "Subsidiaries") are the only subsidiaries, direct or indirect, of
the Company. Except as disclosed on Schedule 1, the Company does not
own, directly or indirectly, any capital stock or any other equity/or
long-term debt securities or have any equity interests in any firm,
partnership, joint venture, limited liability company or other entity.
(c) The Company and each of the Subsidiaries has been duly
incorporated, is validly existing and is in good standing as a
corporation under the laws of its jurisdiction of incorporation, with
all requisite corporate power and authority to own its properties and
conduct its business as now conducted, and as described in the Final
Memorandum; each of the Company and the Subsidiaries is duly qualified
to do business as a foreign corporation in good standing in all other
jurisdictions where the ownership or leasing of its properties or the
conduct of its business requires such qualification, except where the
failure to be so qualified would not, individually or in the aggregate,
reasonably be expected to affect the business, financial condition or
results of operations of the Company, together with its Subsidiaries,
taken as a whole, excluding in all cases: any events or conditions
generally affecting the industries in which the Company operates or
arising from changes in general business or economic conditions (a
"Material Adverse Effect").
(d) The Company has all requisite corporate power and
authority to execute, deliver and perform its obligations under each of
the Preferred Stock Registration Rights Agreement, the Registration
Rights Agreement and the Warrant Agreement. Each of such agreements has
been duly and validly authorized, executed and delivered by the Company
and will constitute a valid and legally binding agreement of the
Company enforceable against the Company in accordance with its terms,
except as the enforceability thereof may be limited by bankruptcy,
insolvency, reorganization, fraudulent conveyance, moratorium,
indemnity, contribution or other similar laws affecting the enforcement
of creditors' rights generally and by general equitable principles
(regardless of whether the issue of enforceability is considered in a
proceeding in equity or at law).
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(e) The Warrants have been duly authorized by the Company and,
when issued and delivered by the Company in accordance with the terms
of this Agreement and the Warrant Agreement, will constitute valid and
legally binding obligations of the Company, enforceable in accordance
with their terms, except as the enforceability thereof may be limited
by bankruptcy, insolvency, reorganization, fraudulent conveyance,
moratorium or other similar laws affecting the enforcement of
creditors' rights generally and by general equitable principles
(regardless of whether the issue of enforceability is considered in a
proceeding in equity or at law).
(f) The Warrant Shares have been duly and validly authorized
and validly reserved for issuance and when issued and paid for upon
exercise of the Warrants in accordance with the terms of the Warrants
and the Warrant Agreement, will be validly issued, fully paid,
nonassessable and free of preemptive rights.
(g) The Certificate of Designation relating to the Preferred
Stock and any additional Preferred Stock issued as dividends in
accordance with the terms of the Certificate of Designation (such
additional Preferred Stock being referred to herein as the "Dividend
PIK Preferred Stock") have been duly authorized by the Company. Upon
filing of such Certificate of Designation with the Secretary of State
of the State of Minnesota, the Preferred Stock and the Dividend PIK
Preferred Stock will be duly authorized and, when issued and delivered
by the Company against payment therefor in accordance with, in the case
of the Preferred Stock, the provisions of this Agreement and, in the
case of the Dividend PIK Preferred Stock, in accordance with the terms
of the Certificate of Designation, will be validly issued, fully paid
and nonassessable and free of any preemptive rights; the certificates
for the Preferred Stock and the Dividend PIK Preferred Stock will be in
due and proper form; and the holders of such Preferred Stock and
Dividend PIK Preferred Stock will not be subject to personal liability
by reason of being such holders. The Company has reserved for issuance,
and duly authorized the issuance of, the number of shares of Preferred
Stock (60,000 shares), and the maximum number of shares of Dividend PIK
Preferred Stock issuable as dividends pursuant to the terms of the
Certificate of Designation allowed by its certificate of incorporation
(247,500 shares). The certificate of incorporation of the Company, by
virtue of the filing of the Certificate of Designation, will set forth
the rights, preferences and priorities of the Preferred Stock and the
Dividend PIK Preferred Stock.
(h) The Company has all requisite corporate power and
authority to execute, deliver and perform its obligations under this
Agreement and to consummate the transactions contemplated hereby. This
Agreement has been duly and validly authorized, executed and delivered
by the Company.
(i) No consent, approval, authorization or order of any court
or governmental agency or body or third party is required for the
execution, delivery or performance by the Company or any Subsidiary of
this Agreement, the Preferred Stock Registration Rights Agreement, the
Registration Rights Agreement, the Warrant Agreement, and the
Certificate of Designation, or the consummation by the Company or any
of the Subsidiaries of the transactions contemplated hereby or thereby
that are to be completed
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on or before the Closing Date, except such as have been obtained or
disclosed in the Final Memorandum and except for approvals and
authorizations contemplated by the Preferred Stock Registration Rights
Agreement and the Registration Rights Agreement. None of the Company or
any of the Subsidiaries is (i) in violation of its articles of
incorporation or bylaws (or similar organizational document), (ii) in
breach or violation of any statute, judgment, decree, order, rule or
regulation applicable to any of them or any of their respective
properties or assets, or (iii) in breach of or in default under (nor
has any event occurred which, with notice or passage of time or both,
would constitute a default under) or in violation of any of the terms
or provisions of any indenture, mortgage, deed of trust, loan
agreement, note, lease, license, franchise agreement, permit,
certificate, contract or other agreement or instrument to which any of
them is a party or to which any of them or their respective properties
or assets is subject (collectively, "Contracts") except in the case of
clauses (ii) and (iii) above such violations, breaches or defaults that
would not, individually or in the aggregate, have a Material Adverse
Effect.
(j) The execution, delivery and performance by the Company of
this Agreement, the Preferred Stock Registration Rights Agreement, the
Registration Rights Agreement, the Warrant Agreement and the
Certificate of Designation, and the consummation by the Company of the
transactions contemplated hereby and thereby, will not conflict with or
constitute or result in a breach of or a default under (or an event
which with notice or passage of time or both would constitute a default
under) or violation of any of (i) the terms or provisions of any
Contract except such conflicts, breaches, defaults or violations, that
would not, individually or in the aggregate, have a Material Adverse
Effect, (ii) the certificate of incorporation or by-laws (or similar
organizational documents) of the Company, or (iii) any statute,
judgment, decree, order, rule or regulation applicable to the Company
or any of its properties or assets except such conflicts, breaches,
defaults or violations that would not, individually or in the
aggregate, have a Material Adverse Effect.
(k) None of the Company, the Subsidiaries nor any agent acting
on any of their behalf has taken or will take any action that might
cause this Agreement or the sale of the Securities to violate
Regulation T, U or X of the Board of Governors of the Federal Reserve
System, in each case as in effect, or as the same may hereafter be in
effect, on the Closing Date.
3. Purchase, Sale and Delivery of the Securities. On the basis of the
representations, warranties, agreements and covenants herein contained and
subject to the terms and conditions herein set forth, the Company agrees to
issue and sell to the Purchaser, and the Purchaser agrees to purchase from the
Company 60,000 shares of Preferred Stock and Warrants to purchase an aggregate
of 531,325 Warrant Shares for an aggregate purchase price of $60.0 million. One
or more certificates in definitive form for the shares of Preferred Stock and
the Warrants that the Purchaser has agreed to purchase hereunder, and in such
denomination or denominations and registered in such name or names as the
Purchaser requests upon notice to the Company at least 48 hours prior to the
Closing Date, shall be delivered by or on behalf of the Company to the
Purchaser, against payment by or on behalf of the Purchaser of the purchase
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price therefor by wire transfer to such account or accounts as the Company shall
specify prior to the Closing Date, or by such means as the parties hereto shall
agree prior to the Closing Date. Such delivery of and payment for the Securities
shall be made at the offices of Xxxxxx, Xxxx & Xxxxxxxx LLP, 000 Xxxx Xxxxxx,
Xxx Xxxx, Xxx Xxxx 00000 at 10:00 A.M., New York time, on May 9, 2000, or at
such other place, time or date as the Purchaser, on the one hand, and the
Company, on the other hand, may agree upon, such time and date of delivery
against payment being herein referred to as "Closing Date." The Company will
make such certificate or certificates for the Securities available for
inspection by the Purchaser at such place as designated by the Purchaser at
least 24 hours prior to the Closing Date.
4. Representations and Warranties of Purchaser. Purchaser hereby
represents and warrants to the Company as follows:
(a) Purchaser is a limited partnership duly organized, validly
existing and in good standing under the laws of Delaware and has full
power and authority to enter into and consummate the transactions
contemplated by this Agreement.
(b) Purchaser is an "accredited investor" as such term is
defined in Rule 501(a) promulgated under the Act, and is financially
able to hold the Securities for long term investment and to suffer a
complete loss of its investment in the Securities. The Securities are
being purchased by Purchaser for its own account for investment
purposes, and not with a view to any distribution thereof within the
meaning of the Act. Purchaser has had the opportunity to ask questions
of the Company and its officers and employees and to receive to its
satisfaction such information about the business and financial
condition of the Company as it considers necessary or appropriate for
deciding whether to purchase the Securities, and Purchaser is fully
capable of understanding and evaluating the risks associated with the
ownership of the Securities.
(c) Purchaser has conducted its own diligence investigation
with respect to the merits and risks associated with the Merger and
related financings. Notwithstanding that representatives of Investcorp
may have provided information to Purchaser (including, without
limitation, information concerning Jostens, the Merger and related
matters), Purchaser is not relying on and has not relied on any
representation by Investcorp or any affiliate or representative of
Investcorp with respect to any aspect of the Merger, the financings or
the business or prospects of Jostens, other than the representations
and warranties of the Company hereunder and those representations and
warranties of the Company contained in the Merger Agreement.
5. Acknowledgments and Agreements of Purchaser. Purchaser acknowledges
and agrees that:
(a) The Securities will not be registered under the Act or
under the securities laws of any state and must be held by Purchaser
indefinitely unless the resale of the Securities is subsequently
registered under the Act and any applicable state securities law or an
exemption from such registration becomes or is available. In addition
to any legend required by law or any other agreement by which Purchaser
is bound, the Company shall
6
place a legend in substantially the following form on any certificate
representing the Securities:
"THESE SECURITIES HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933 OR THE SECURITIES LAWS OF ANY STATE AND
MAY NOT BE OFFERED, SOLD, OR OTHERWISE TRANSFERRED OTHER THAN
IN ACCORDANCE WITH REGULATIONS PROMULGATED UNDER THAT ACT, OR
IF SO REGISTERED UNDER THAT ACT, OR IF AN EXEMPTION FROM SUCH
REGISTRATION IS AVAILABLE."
Additionally, the Company shall place a legend in
substantially the following form of any certificate representing the
Securities:
"THESE SECURITIES ARE SUBJECT TO MANDATORY REDEMPTION BY THE
CORPORATION. THE CORPORATION WILL FURNISH WITHOUT CHARGE TO
EACH SHAREHOLDER WHO SO REQUESTS A FULL STATEMENT OF THE
DESIGNATIONS, PREFERENCES, LIMITATIONS AND RELATIVE RIGHTS OF
EACH CLASS OF STOCK OR SERIES OF STOCK OF THE CORPORATION
AUTHORIZED TO BE ISSUED, SO FAR AS THEY HAVE BEEN DETERMINED,
AND THE AUTHORITY OF THE BOARD OF DIRECTORS TO DETERMINE THE
RELATIVE RIGHTS AND PREFERENCES OF SUBSEQUENT CLASSES OR
SERIES."
"THIS SECURITY IS ALSO SUBJECT TO A SHAREHOLDERS AGREEMENT,
DATED AS OF MAY 10 , 2000, AMONG THE COMPANY, INVESTCORP
INVESTMENT EQUITY LIMITED, THE OTHER HOLDERS OF THE CLASS D
COMMON STOCK OF THE COMPANY AND DB CAPITAL INVESTORS L.P. A
COPY OF SUCH SHAREHOLDERS AGREEMENT MAY BE OBTAINED WITHOUT
CHARGE AND UPON REQUEST ADDRESSED TO THE SECRETARY OF THE
COMPANY AT THE REGISTERED OFFICE OF THE COMPANY"
6. Expenses. The Company agrees to pay, upon the consummation of the
Recapitalization (including the purchase of the Securities pursuant to this
Agreement), all reasonable costs and expenses of the Purchaser and its
affiliates (including the reasonable fees and expenses of White & Case LLP and
other counsel to the Purchaser and the Purchaser's and its affiliates', out of
pocket expenses) arising in connection with the purchase of the Securities, the
Recapitalization and the other transactions contemplated hereby and thereby (and
the Purchaser's due diligence efforts in connection herewith).
7. Conditions of the Purchaser's Obligations. The obligation of the
Purchaser to purchase and pay for the Securities shall, in their reasonable
discretion, be subject to the satisfaction or waiver of the following conditions
on or prior to the Closing Date:
(a) On the Closing Date, the Purchaser shall have received the
opinion, dated as of the Closing Date and addressed to the Purchaser,
of Faegre & Xxxxxx LLP, Minnesota
7
counsel to the Company, or, as to paragraphs (iii), (iv) and (viii) (to
the extent relating to matters under New York state or Federal law or
to the extent relating to the filing of the Certificate of
Designation), paragraph (ix) (to the extent relating to any matters
under New York state or Federal law), and paragraphs (xi), (xiii) and
(xiv), of Xxxxxx, Xxxx and Xxxxxxxx LLP, New York counsel for the
Company, or, as to paragraphs (ii) (to the extent relating to shares of
capital stock issued prior to the Closing Date, contractual preemptive
or similar rights or the second sentence of paragraph (ii)), (iii) and
(iv) (to the extent relating to execution, issuance and delivery by the
Company), (v) (to the extent relating to contractual preemptive
rights), (vi) (to the extent relating to contractual preemptive
rights), (vii) (to the extent relating to execution and delivery,
(viii) (second sentence), (ix) (to the extent relating to Material
Contracts (as defined herein)), (x) and (xii), by Xxxxxxx Xxxxxx,
General Counsel to the Company in form and substance reasonably
satisfactory for counsel to the Purchaser, dated the Closing Date,
substantially to the effect that:
(i) The Company has been duly incorporated, is
validly existing and is in good standing as a corporation
under the laws of its jurisdiction of incorporation, with all
requisite corporate power and authority to own its properties
and conduct its business as now conducted, and as described in
the Final Memorandum.
(ii) All of the outstanding shares of capital stock
of the Company as of the Closing Date are duly authorized and
validly issued, are fully paid and nonassessable and were not
issued in violation of any preemptive or similar rights;
Except as set forth in the Final Memorandum and certain
warrants in favor of Investcorp or its affiliates that will be
exercisable for Class B common stock to the extent an equal
number of shares of Class B common stock is being redeemed
contemporaneously there are no outstanding (i) options,
warrants or other rights to purchase shares of capital stock
of the Company from the Company or the Subsidiaries, (ii)
agreements or other obligations of the Company or any of the
Subsidiaries to issue or (iii) other rights to convert any
obligation into, or exchange any securities of, shares of
capital stock of, or other equity securities of, the Company.
(iii) The Company has all requisite corporate power
and authority to execute, deliver and perform its obligations
under each of the Preferred Stock Registration Rights
Agreement, the Registration Rights Agreement and the Warrant
Agreement. Each of such agreements has been duly and validly
authorized, executed and delivered by the Company and
constitutes a valid and legally binding agreement of the
Company enforceable against the Company in accordance with its
terms, except as the enforceability thereof may be limited by
bankruptcy, insolvency, reorganization, fraudulent conveyance,
moratorium, indemnity, contribution or other similar laws
affecting the enforcement of creditors' rights generally and
by general equitable principles (regardless of whether the
issue of enforceability is considered in a proceeding in
equity or at law).
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(iv) The Warrants have been duly authorized by the
Company and, when issued and delivered by the Company in
accordance with the terms of this Agreement, will constitute
valid and legally binding obligations of the Company,
enforceable in accordance with their terms, except as the
enforceability thereof may be limited by bankruptcy,
insolvency, reorganization, fraudulent conveyance, moratorium
or other similar laws affecting the enforcement of creditors'
rights generally and by general equitable principles
(regardless of whether the issue of enforceability is
considered in a proceeding in equity or at law).
(v) The Warrant Shares have been duly and validly
authorized and validly reserved for issuance, and when issued
and paid for upon exercise of the Warrants in accordance with
the terms of the Warrants and the Warrant Agreement, will be
validly issued, fully paid, nonassessable and free of
preemptive rights.
(vi) The Certificate of Designation relating to the
Preferred Stock and any Dividend PIK Preferred Stock has been
duly authorized by the Company. Upon filing of such
Certificate of Designation with the Secretary of State of the
State of Minnesota, the Preferred Stock and the Dividend PIK
Preferred Stock will be duly authorized and, when issued and
delivered by the Company against payment therefor in
accordance with the provisions of this Agreement and, in the
case of any Dividend PIK Preferred Stock, in accordance with
the terms of the Certificate of Designation, will be validly
issued, fully paid and nonassessable and free of any
preemptive rights; the certificates for the Preferred Stock
and the Dividend PIK Preferred Stock will be in due and proper
form; and the holders of such Preferred Stock and Dividend PIK
Preferred Stock will not be subject to personal liability
under the Minnesota Business Corporation Act by reason of
being such holders. The Company has reserved for issuance, and
duly authorized the issuance of, the number of shares of
Preferred Stock (60,000 shares), and the maximum number of
shares of Dividend PIK Preferred Stock issuable as dividends
pursuant to the terms of the Certificate of Designation
allowed by its certificate of incorporation (247,500 shares).
The articles of incorporation of the Company, by virtue of the
filing of the Certificate of Designation, will set forth the
rights, preferences and priorities of the Preferred Stock and
the Dividend PIK Preferred Stock.
(vii) The Company has all requisite corporate power
and authority to execute, deliver and perform its obligations
under this Agreement and to consummate the transactions
contemplated hereby. This Agreement has been duly and validly
authorized, executed and delivered by the Company.
(viii) No consent, approval, authorization or order
of any United States federal, or New York or Minnesota state
court or governmental agency or body is required for the
execution, delivery or performance by the Company of this
Agreement, the Preferred Stock Registration Rights Agreement,
the Registration Rights Agreement, the Warrant Agreement, and
the Certificate of Designation, or the consummation by the
Company or any of the Subsidiaries of the transactions
9
contemplated hereby or thereby that are to be completed prior
to or on the date hereof, except such as have been obtained or
disclosed in the Final Memorandum and for approvals and
authorizations contemplated by the Preferred Stock
Registration Rights Agreement or the Registration Rights
Agreement. The Company is not in violation of its articles of
incorporation or bylaws (or similar organizational document),
except such violations as would not, individually or in the
aggregate, have a Material Adverse Effect.
(ix) The execution, delivery and performance by the
Company of this Agreement, the Preferred Stock Registration
Rights Agreement, the Registration Rights Agreement, the
Warrant Agreement and the Certificate of Designation, and the
consummation by the Company of the transactions contemplated
hereby and thereby, and the fulfillment of the terms hereof
and thereof, will not constitute or result in a breach of or a
default under (or an event which with notice or passage of
time or both would constitute a default under) any material
contract filed as an exhibit to the Company's annual report on
Form 10-K for the fiscal year ended 1999 (a "Material
Contract") or violate any of the articles of incorporation or
by-laws of the Company or violate any statute, judgment,
decree, order, rule or regulation of the United States or the
States of Minnesota or New York (of which such counsel is
aware) applicable to the Company or any of their respective
properties or assets except such breaches, defaults or
violations that would not, individually or in the aggregate,
have a Material Adverse Effect.
(x) To the knowledge of such counsel, there is not
pending or threatened any action, suit, proceeding, inquiry,
investigation or legislative mandate to which the Company is a
party or to which the property or assets of the Company are
subject, before or brought by any court, arbitrator or
governmental agency or body which seeks to restrain, enjoin,
prevent the consummation of or otherwise challenge the
issuance or sale of the Securities to be sold hereunder.
(xi) The execution, delivery and performance by the
Company of this Agreement or the sale of the Securities does
not violate Regulation T, U or X of the Board of Governors of
the Federal Reserve System, in each case as in effect on the
date hereof.
(xii) To the knowledge of such counsel, there are no
legal or governmental proceedings involving or affecting the
Company or any Subsidiary or any of their respective
properties or assets which would be required to be described
in a prospectus forming part of a registration statement filed
with the Commission pursuant to the Act that are not described
in the Preliminary Memorandum and the Final Memorandum.
(xiii) Neither the Company nor any of the
Subsidiaries is or immediately after the sale of the
Securities to be sold hereunder and the application of the
proceeds from such sale (as described in the Final Memorandum
under the caption "Use of Proceeds") will be an "investment
company" as such term is
10
defined in the Investment Company Act of 1940, as amended, and
the rules and regulations thereunder.
(xiv) Assuming accuracy of the representations and
warranties by the Purchaser under, and compliance by the
Purchaser with the provisions of, this Agreement, no
registration under the Act of the Securities is required in
connection with the sale of the Securities to the Purchaser.
In rendering such opinion, such counsel may make such opinion subject
to such assumptions, qualifications and limitations as are customary for
transactions of this type and, without limitation, as to matters of fact, to the
extent they deem proper, on certificates of responsible officers of the Company
and public officials.
(b) On the Closing Date, the Purchaser shall have received good
standing certificates for each of the Company and each of its Subsidiaries
guaranteeing the Issuer's Senior Subordinated Notes due 2010.
(c) On the Closing Date, the Purchaser shall have received the
following documents duly authorized, executed and delivered by each of the
parties thereto, in form and substance reasonably satisfactory for counsel to
the Purchaser, and containing such terms and conditions that are usual and
customary in transactions similar to those contemplated hereby and thereby,
dated the Closing Date:
(i) the Warrant Agreement;
(ii) the Preferred Stock Registration Rights Agreement;
(iii) the Registration Rights Agreement; and
(iv) the Certificate of Designation.
(d) The representations and warranties of the Company contained in this
Agreement shall be true and correct on and as of the date hereof and on and as
of the Closing Date as if made on and as of the Closing Date; the statements of
the Company's officers made pursuant to any certificate delivered in accordance
with the provisions hereof shall be true and correct on and as of the date made
and on and as of the Closing Date; the Company shall have performed in all
material respects all covenants and agreements and satisfied all conditions on
its part to be performed or satisfied hereunder at or prior to the Closing Date;
and, except as described in the Final Memorandum (exclusive of any amendment or
supplement thereto after the date hereof), subsequent to the date of the most
recent financial statements in such Final Memorandum, there shall have been no
event or development that, individually or in the aggregate, has had, or would
be reasonably likely to have, a Material Adverse Effect.
(e) The sale of the Securities hereunder shall not be enjoined
(temporarily or permanently) on the Closing Date.
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(f) There shall not have occurred or become known to the Purchaser any
change in the business, financial condition or results of operations of the
Company, together with its Subsidiaries, taken as a whole, from that set forth
in the Final Memorandum that constitutes or would be reasonably expected to
constitute a Material Adverse Effect.
(g) The Purchaser shall have received certificates of the Company,
dated the Closing Date, signed by its Chief Executive Officer and Chief
Financial Officer, to the effect that:
(w) The representations and warranties of the Company
contained in this Agreement are true and correct as of the date hereof
and as of the Closing Date, and the Company has performed all covenants
and agreements and satisfied all conditions on their part to be
performed or satisfied hereunder at or prior to the Closing Date;
(x) At the Closing Date, since the date hereof or since the
date of the most recent financial statements in the Final Memorandum
(exclusive of any amendment or supplement thereto after the date
hereof), no event or events have occurred, no information has become
known nor does any condition exist that, individually or in the
aggregate, has had, or could reasonably be expected to have, a Material
Adverse Effect;
(y) The sale of Securities hereunder has not been enjoined
(temporarily or permanently); and
(z) Such other information as the Purchaser may reasonably
request.
(h) The Purchaser shall have received a certificate from the corporate
secretary of the Company, dated the Closing Date, attaching certified copies of
(i) all resolutions of the Board of Directors of the Company authorizing (a) the
transactions contemplated by this Agreement and (b) the entering into of this
Agreement, the Preferred Stock Registration Rights Agreement, the Registration
Rights Agreement and the Warrant Agreement and (ii) the articles of
incorporation and by-laws of the Company and certifying the names and true
signatures of those officers of the Company executing any documents contemplated
by this Agreement.
(i) The Company shall have received, contemporaneously with the Merger,
the gross proceeds from an offering of the Senior Subordinated Notes in an
amount (currently anticipated to be $240.0 million) which, together with the
proceeds of the Credit Facility (as defined herein) and the net proceeds from
the issuance of the Securities and the capital contribution by MergerCo referred
to in paragraph (o) below, are sufficient to fund the Merger, which such Senior
Subordinated Notes shall be on customary terms for securities of their type and
maturity issued by issuers of similar credit quality, such terms to be
reasonably satisfactory to Purchaser in all material respects. Notwithstanding
anything to the contrary set forth herein, the Company shall be permitted to
initially obtain the funds anticipated to be received from the issuance of the
12
Senior Subordinated Notes out of the proceeds of a bridge financing on
substantially the terms and conditions of the bridge commitment letter (the
"Bridge Commitment Letter") among Investcorp, Bankers Trust Corporation, UBS AG,
Stamford Branch and West Street Fund I, L.L.C., dated as of December 27, 1999
and otherwise on material terms and conditions reasonably satisfactory to
Purchaser.
(j) The Company shall have entered into (x) a revolving credit facility
and (y) one or more term loan facilities (the "Credit Facility") on
substantially the terms and conditions of the commitment letter (the "Credit
Facility Commitment Letter") among Investcorp, The Chase Manhattan Bank, Chase
Securities, Inc., Deutsche Bank AG, Xxxxxxx Xxxxx Credit Partners L.P. and UBS
AG, Stamford Branch, dated as of December 27, 1999 and otherwise on material
terms and conditions reasonably satisfactory to Purchaser.
(k) There not having occurred or become known to Purchaser any material
adverse condition or material adverse change in or affecting, or which is
reasonably expected to affect the business, financial condition or results of
the Company, together with its subsidiaries, taken as a whole, excluding in all
cases any events or conditions generally affecting the industries in which the
Company operates or arising from changes in general business or economic
conditions (a "Material Adverse Effect").
(l) All material governmental (domestic and foreign) and third party
approvals and/or consents in connection with the Merger and the other
transactions contemplated hereby or otherwise referred to herein being obtained
and remaining in effect, and all applicable waiting periods having expired
without any action being taken by any competent authority which restrains,
prevents or imposes materially adverse conditions upon, the consummation of the
transactions contemplated hereby or otherwise referred to herein.
(m) There shall not exist any judgment, order, injunction or other
restraint prohibiting or imposing materially adverse conditions upon the
transactions contemplated hereby or referred to herein.
(n) All purchases of Purchaser shall be in compliance with the Bank
Holding Company Act of 1956, and all other applicable foreign and domestic
banking statutes, and all regulations (including, without limitation, all
regulations of the Federal Reserve Board) promulgated thereunder, in each case
as amended through the closing. Assuming that the investments by the Purchaser
that are contemplated by this Purchase Agreement are consummated on the basis
set forth in this Purchase Agreement, the Purchaser believes that such
investments will be in compliance with the Bank Holding Company Act of 1956, and
all other applicable foreign and domestic banking statutes, and all regulations
(including, without limitation, all regulations of the Federal Reserve Board)
promulgated thereunder, in each case as amended through the closing.
(o) The Company shall have received a common equity contribution in an
amount not less than $208,700,000 from MergerCo.
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On or before the Closing Date, the Purchaser and counsel for the
Purchaser shall have received such further documents, certificates, letters and
schedules or instruments relating to the business, corporate, legal and
financial affairs of the Company and the Subsidiaries as they shall have
heretofore reasonably requested from the Company and the Subsidiaries.
All such documents, opinions, certificates, letters, schedules or
instruments delivered pursuant to this Agreement will comply with the provisions
hereof only if they are reasonably satisfactory in all material respects to the
Purchaser and counsel for the Purchaser. The Company and the Subsidiaries shall
furnish to the Purchaser such conformed copies of such documents, opinions,
certificates, letters, schedules and instruments in such quantities as the
Purchaser shall reasonably request.
8. Termination. (p) This Agreement may be terminated in the sole
discretion of the Purchaser by notice to the Company given prior to the Closing
Date in the event that the Company shall have failed, refused or been unable to
perform all obligations and satisfy all conditions on their respective part to
be performed or satisfied hereunder at or prior thereto or, if at or prior to
the Closing Date any of the following shall have occurred:
(i) any of the Company or the Subsidiaries shall have
sustained any loss or interference with respect to its businesses or
properties from fire, flood, earthquakes, hurricane, accident or other
calamity, whether or not covered by insurance, or from any strike,
labor dispute, slow down or work stoppage or any legal or governmental
proceeding, which loss or interference has had or would be reasonably
likely to have a Material Adverse Effect, or there shall have been, in
the sole judgment of the Purchaser, any other event or development
that, individually or in the aggregate, has or could be reasonably
likely to have a Material Adverse Effect (including without limitation
a change in control of the Company or the Subsidiaries), except in each
case as described in the Final Memorandum (exclusive of any amendment
or supplement thereto);
(ii) the sale of the Securities to the Purchaser hereunder
would violate the Bank Holding Company Act of 1956, as amended; and
(iii) a preliminary or permanent injunction or other order
shall have been issued by any court or by any government agency or body
which prohibits the consummation of the Merger or the other
transactions contemplated by the Agreement and is in effect at the
Closing Date.
(q) Termination of this Agreement pursuant to this Section 8 shall be
without liability of any party to any other party.
9. Notices. All communications hereunder shall be in writing and, if
sent to the Purchaser, shall be mailed or delivered to (i) DB Capital Investors,
L.P., 000 Xxxxxxx Xxxxxx, 00xx Xxxxx, Xxx Xxxx, Xxx Xxxx 00000, Attention:
Xxxxxx Xxxxx, with a copy to White & Case LLP, 0000 Xxxxxx xx xxx Xxxxxxxx, Xxx
Xxxx, Xxx Xxxx 00000, Attention: X. Xxxx Xxxxxxxxx, Esq.; if sent to the
Company, shall be mailed or delivered to the Company at 0000 Xxxxxx Xxxxxx
Xxxxx, Xxxxxxxxxxx, Xxxxxxxxx 00000 Attn: General Counsel.
14
All such notices and communications shall be deemed to have been duly
given: when delivered by hand, if personally delivered; five business days after
being deposited in the mail, postage prepaid, if mailed; and one business day
after being timely delivered to a next-day air courier.
10. Successors. This Agreement shall inure to the benefit of and be
binding upon the Purchaser, the Company, the Subsidiaries and their respective
successors and legal representatives, and nothing expressed or mentioned in this
Agreement is intended or shall be construed to give any other person (including
any purchaser of any Securities from the Purchaser) any legal or equitable
right, remedy or claim under or in respect of this Agreement, or any provisions
herein contained; this Agreement and all conditions and provisions hereof being
intended to be and being for the sole and exclusive benefit of such persons and
for the benefit of no other person.
11. APPLICABLE LAW. THE VALIDITY AND INTERPRETATION OF THIS AGREEMENT,
AND THE TERMS AND CONDITIONS SET FORTH HEREIN, SHALL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK APPLICABLE TO
CONTRACTS MADE AND TO BE PERFORMED WHOLLY THEREIN, WITHOUT GIVING EFFECT TO ANY
PROVISIONS THEREOF RELATING TO CONFLICTS OF LAW THAT WOULD REQUIRE THE
APPLICATION OF ANY OTHER LAW.
12. Counterparts. This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
15
If the foregoing correctly sets forth our understanding, please
indicate your acceptance thereof in the space provided below for that purpose,
whereupon this letter shall constitute a binding agreement between the Company
and the Purchaser.
Very truly yours,
JOSTENS, INC.
By: /s/ Xxx X. XxXxxxx
-----------------------------------
Name: Xxx X. XxXxxxx
Title: Vice President and Treasurer
The foregoing Agreement is hereby
confirmed and accepted as of the
date first above written.
DB CAPITAL INVESTORS, L.P.
By: DB Capital Partners, L.P.
its General Partner
By: DB Capital Partners, Inc.,
its General Partner
By: /s/ Xxxxxx Xxxxx
-------------------------------
Name: Xxxxxx Xxxxx
Title: Managing Director
16
SCHEDULE 1
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Subsidiaries of the Company
Jurisdiction of
Name Incorporation
---- -------------
American Yearbook Company, Inc. Kansas
Jostens Canada, Ltd. Canada
Balfirm Canada, Inc. Canada
Jostens Can Investments B.V. The Netherlands
Jostens International Holding B.V. The Netherlands
C.V. Jostens Global Trading The Netherlands
JC Trading, Inc. Puerto Rice
Conceptos Jostens, S.A. de C.V. Mexico
Reconocimientos E Incentivos, S.A. de C.V. Mexico
JostFer S.A. de C.V. Mexico
Reconocimientos, S.A. Columbia
