Exhibit 2.1(b)
AMENDMENT TO PURCHASE AGREEMENT
THIS AMENDMENT TO PURCHASE AGREEMENT (the "Amendment"), is entered into
effective as of December 21, 2001, by and among Xxxxxxxx Xxxxx Co., a Utah
corporation ("FCC"), Xxxxxxxx Xxxxx Canada, Ltd., an Ontario corporation ("FC
Canada") (FCC and FC Canada are collectively referred to herein as "Sellers" and
sometimes individually referred to herein as a "Seller") and School Specialty,
Inc. a Wisconsin corporation ("SSI"), and 3956831 Canada, Inc., a Canadian
federal corporation ("SSI Canada")(SSI and SSI Canada are collectively referred
to as the "Buyers" and sometimes individually referred to herein as a "Buyer").
For the purpose of this Amendment, Premier Agendas, Inc. a Washington
corporation shall be known as "Premier Agendas" and Premier School Agendas Ltd.
Agendas Scolaire Premier Ltee, a corporation incorporated under the Canadian
Business Corporations Act and registered to do business in British Columbia
shall be known as "PSA".
RECITALS
WHEREAS, Sellers and Buyers are parties to that certain Purchase Agreement
dated as of November 13, 2001 (the "Agreement"); and
WHEREAS, the parties desire to amend the Agreement as follows.
AGREEMENT
NOW, THEREFORE, in consideration of the promises set forth herein and other
good and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto do mutually promise and agree as follows:
1. Defined Terms. Capitalized terms used herein shall have the meanings
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assigned in the Agreement, unless otherwise defined herein or if the context
clearly indicates otherwise.
2. Amendment to Section 1.5. Section 1.5 shall be amended and restated as
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follows:
1.5 WORKING CAPITAL PAYMENTS. In addition to the amounts due under Section
1.2 (a) herein, the Sellers, operating the business of the Acquired
Companies in the Ordinary Course of Business, shall have the right (i) up
through and including the Closing Date, to withdraw all cash in accounts of
the Acquired Companies, and (ii) on the Closing Date, to withdraw the
lesser of (a) Twelve Million Nine Hundred Thousand Dollars ($12,900,000.00)
or (b) the amount of the Combined Working Capital, determined in accordance
with GAAP, as of the Closing Date (the "Working Capital Payment"). In no
event shall the Acquired Companies' line of credit balance exceed $0.00 as
of the Closing Date and in no event shall the Combined Working Capital be
less than $0.00 as of the Closing Date. The amount by which the Working
Capital Payment exceeds the cash balance of the Acquired Companies as of
the Closing Date, if any, shall
then be tendered from SSI to FCC in the form of a promissory note dated as
of the Closing Date (but delivered to FCC by SSI at the time of the
delivery by FCC of the Closing Balance Sheet under Section 1.6(a), below
and subject to the adjustments set forth in Section 1.6(c), below, if any),
which shall be due six (6) months from the Closing Date and which shall
bear an interest rate of two percent (2%) plus LIBOR as of the Closing Date
(the "Working Capital Note"). All interest and principal under this note
shall be due upon its maturity. All other payments and distributions not
defined in this Section 1.5 or elsewhere in this Agreement made from the
Acquired Companies to the Sellers from the date of this Agreement through
the Closing Date shall be prohibited.
3. Amendment to Section 1.6(a). Section 1.6(a) shall be amended and
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restated as follows:
(a) Within fifteen (15) business days following the Closing
Date, Sellers shall prepare and deliver to Buyers a combined
balance sheet effective as of the Closing Date (the "Closing
Balance Sheet"), and a related combined statement of income for
the period beginning September 1, 2001 and ending as of the
Closing Date, of the Acquired Companies, showing the final status
of all assets and liabilities (including Combined Working
Capital, but excluding all assets and liabilities related to the
Adult Leadership Training Program) as of the Closing Date and the
results of its operations for the periods then ended, all
prepared in accordance with GAAP. The Closing Balance Sheet shall
be reviewed by the Buyers and, if the Buyers have any objections
to the Closing Balance Sheet, Buyers and Sellers shall work
reasonably and in good faith to resolve such objections.
4. Amendment to Section 2.14. The following sentence shall be added to end
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of Section 2.14:
"Prior to Closing, Premier Agendas shall assign and transfer sponsorship of
the Premier Agendas, Inc. 401(k) Plan (the "401(k) Plan") to FCC, and FCC
shall accept and assume sponsorship of the 401(k) Plan. Thereafter, neither
Premier Agendas nor its employees shall be designated as a plan
administrator of the 401(k) Plan, Premier Agendas shall not be designated
as a plan fiduciary, and any Premier Agenda employee serving as a 401(k)
Plan fiduciary at the time of Closing shall resign such position in
accordance with the terms of the plan. Notwithstanding the foregoing,
following Closing Buyer shall: (i) provide and cause Premier Agendas to
provide to the Sellers, following reasonable notice, access to and copies
of such records, generated prior to the Closing Date, and access to consult
with such employees as may be reasonably requested by Sellers in connection
with the Sellers administration, winding up and termination of the 401(k)
Plan by Sellers; and (ii) cause Premier Agendas to retain all currently
existing records relevant to the prior administration of the 401(k) Plan
(including, without limitation, payroll and personnel records) for at least
four years following Closing.
5. License Agreement. The Buyers and the Sellers hereby acknowledge and
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agree that the modified License Agreement in the form attached hereto as Exhibit
4.6(i) shall supercede and replace the form of license agreement originally
attached to the Agreement.
6. Amendment to Section 4.6. The following Sub-Sections shall be added to
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Section 4.6 of the Agreement as new Sub-Sections (l) and (m):
(l) a certified copy of resolutions of the Board of Directors of
Premier Agendas assigning and transferring sponsorship of Premier Agendas'
401(k) plan to FCC, and a certified copy of the resolutions of the board of
directors of FCC accepting and assuming sponsorship of such plan, both
effective prior to Closing; and
(m) a Product Sales Retailer Agreement shall have been entered
into between FCC and Premier Agendas in the form attached hereto as Exhibit
4.6(m).
7. Amendment to Section 6.12. Section 6.12 shall be amended and restated as
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follows:
6.12 RETAINED CLAIMS. Notwithstanding the foregoing, both prior to
and after Closing, Sellers shall retain all liability with respect to, have
sole authority for, and responsibility to act in the defense, settlement,
or other resolution of:
(i) (a) Black et al v. The Premier Company and Xxxxxxxx Xxxxx
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Company (Civil Action No. 01-4317, pending in the Federal
District Court of the Eastern District of Pennsylvania); (b)
Xxxxxxxxx x. Premier Graphics (37 ECR 0037-01-2, pending
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before the State of Washington Human Rights Commission (the
"WHRC") and Equal Employment Opportunity Commission (the
"EEOC")); (c) Xxxxxxx Xxxxxxx v. Xxxxxxxx Xxxxx Company
-
(EEOC charge no. 380A200199, pending before the WHRC and the
EEOC); (d) Xxxx Xxxxx v. Xxxxxxxx Xxxxx Company (EEOC charge
-
no. 380A200219, pending before the WHRC and the EEOC); (e)
Xxxxxxxx Narome v. Xxxxxxxx Xxxxx Co. (EEOC charge no.
-
380A11148); (f) XxXxxx Xxxxxxx v. Xxxxxxxx Xxxxx Co. (EEOC
-
charge no. 380A11154); (g) Xxxxx Xxxxx v. Premier School
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Agendas (EEOC charge no. 380A11184); (h) Xxxxx Hanky v.
-
Xxxxxxxx Xxxxx Co. (EEOC charge no. 380A11152); (i) Xxxxxxxx
Xxxxx v. Xxxxxxxx Xxxxx Co. (EEOC charge no. 000X00000); (j)
-
Xxxxx Buracchiov v. Xxxxxxxx Xxxxx Co. (EEOC charge no.
-
380A11171); (k) Xxxx X. Xxxxxxxxx v. Xxxxxxxx Xxxxx Co.
-
(EEOC charge no. 380A11207); (l) Xxxxxx Xxxx x. Xxxxxxxx
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Xxxxx Co. (EEOC charge no. 380A11155); (m) Xxxx Xxxxxxxx v.
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Premier Company (EEOC charge no. 170A11479); (n) Xxxxxxxx
Xxxxxxx v. Premier Company (EEOC charge no. 170A11480); and
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(o) any successor or related claims and any claims alleging
unlawful discrimination in employment against any of the
Sellers and/or the Acquired Companies related to periods
prior to the Closing Date;
(ii) any obligations, liabilities, damages or other claims
relating to (a) the termination by Premier Agendas of the
office lease in Houston, Texas, and (b) the air quality
issues at such facility, including, but not limited to (x)
injuries or damages suffered by employees or other third
parties and (y) Texas Worker's Compensation penalties,
fines, damages or any related claims against Premier Agendas
for denial of Worker's Compensation coverage related to such
air quality issues, all as more fully described in Part 2.11
of the Disclosure Letter, as supplemented; and
(iii) any obligations, liabilities, damages or other claims
relating to the resolution of the Quebec good standing
issues of PSA for the years of 1996, 1997, 1998 and 1999, as
described in Part 2.1 of the Disclosure Letter, as
supplemented.
The matters described in this Section 6.12 shall be collectively
referred to as "Retained Claims." The Sellers shall have no obligation
to consult with Buyers concerning, such defense, settlement, or
resolution of the Retained Claims. Following Closing, Buyer shall
provide to the Sellers, following reasonable notice, but without the
necessity of service of legal process by Sellers, with access to such
records, generated prior to the Closing Date and access to its
employees as may be reasonably requested by Sellers in defense,
settlement, or resolution of the Retained Claims. Because the Sellers
have retained liability for all to the Retained Claims, notwithstanding
any other provision of this Agreement to the contrary, and
notwithstanding any requirements of GAAP there shall be no accrual of
any liability on the Closing Date Balance Sheet or for purposes of
calculating the Combined Working Capital of the Acquired Companies for
Retained Claims Matters.
8. Amendment to Section 8.1. Section 8.1(d) shall be amended and
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restated as follows:
(d) any claim regarding the representation or warranties under
Sections 2.16 (including Retained Claims) or 2.20, or covenants under
Sections 2.14, 6.10 and 6.12 of this Agreement regardless of the
contents of the Disclosure Letter and/or supplements thereto as same
may relate to these Sections. Notwithstanding anything to the contrary
herein, such information in the Disclosure Letter, as supplemented,
regarding Sections 2.16 or 2.20 shall be informational only and shall
not have any effect on the liability of the Sellers under the terms of
this Agreement; or
9. Amendment to Section 8.2. Section 8.2(a)(iii) shall be deleted and
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replaced with the following:
(iii) compliance issues regarding the covenants listed in
Sections 2.14 and 6.10 of this Agreement.
10. Definitions. The definition of Combined Working Capital shall be
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amended and restated as follows:
"COMBINED WORKING CAPITAL" total current assets minus total
current liabilities as determined on a combined basis, for the Acquired
Companies in accordance with GAAP excluding the current assets and
liabilities of the Adult Leadership Training Program. Notwithstanding the
foregoing, the amount of reserves included in Combined Working Capital,
as of the Closing Date shall be calculated in accordance with GAAP but
shall not be less than the amount as recorded in the Balance Sheets of
the Acquired Companies as of August 31, 2001. Further notwithstanding the
foregoing current assets and current liabilities in accordance with GAAP
for the purpose of determining Combined Working Capital shall not be
affected by deferred Tax assets, deferred Tax liabilities, and income
taxes payable/receivable.
11. Interpretation. Nothing contained herein shall be deemed to modify,
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reduce, waive or otherwise affect any rights, benefits, or obligations of the
parties hereto set forth in the Agreement. Any conflicts between the Agreement
as initially drafted and this Amendment shall be construed in favor of this
Amendment.
12. Continuing Effect. Except as amended herein, the terms, provisions
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and conditions of the Agreement shall remain in full force and effect and shall
continue to govern the parties thereto.
13. Counterparts. This Amendment may be executed in two or more
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counterparts, each of which shall be deemed an original but all of which
together shall constitute one and the same document.
IN WITNESS WHEREOF, the undersigned have executed this Amendment to the
Agreement as of the day, month and year first above written.
Xxxxxxxx Xxxxx Co.
By: /s/ Xxx X. Xxxxxxxxxxx
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Its: Executive Vice President
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Xxxxxxxx Xxxxx Canada Ltd.
By: /s/ Xxx X. Xxxxxxxxxxx
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Its: Executive Vice President
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School Specialty, Inc.
By: /s/ Xxxxxx X. Xxxxxxxxx
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Its: Vice President
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3956831 Canada, Inc.
By: /s/ Xxxxxx X. Xxxxxxxxx
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Its: Secretary
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AMENDMENT TO
PURCHASE AGREEMENT ATTACHMENTS
By and Among Xxxxxxxx Xxxxx Co., Franklin Quest Canada, Ltd.
And
School Specialty, Inc.
Dated December 21, 2001
Revised Exhibit 4.6(i) - License Agreement
Exhibit 4.6(m) - Product Sales Retailer Agreement
DISCLOSURE LETTER TO
PURCHASE AGREEMENT
By and Among Xxxxxxxx Xxxxx Co., Xxxxxxxx Quest Canada, Ltd.
And
School Specialty, Inc.
Dated November 13, 2001
Part 2.1 - Organization and Good Standing; Subsidiaries; Residence
Part 2.2 - Authority; No Conflict
Part 2.3 - Capitalization
Part 2.4 - Financial Statements and Other Information
Part 2.5 - Books and Records
Part 2.6 - Title to Properties; Encumbrances
Part 2.7 - Intellectual Property
Part 2.8 - Condition and Sufficiency of Assets
Part 2.9 - Accounts Receivable
Part 2.10 - Inventory
Part 2.11 - Undisclosed Liabilities
Part 2.12 - Taxes
Part 2.13 - No Material Adverse Effect
Part 2.14 - Employee Benefits
Part 2.15 - Compliance with Legal Requirements; Governmental Authorizations
Part 2.16 - Legal Proceedings; Orders
Part 2.17 - Absence of Certain Changes and Events
Part 2.18 - Contracts; No Defaults
Part 2.19 - Insurance
Part 2.20 - Environment and Occupational Safety and Health Matters
Part 2.21 - Employees
Part 2.22 - Labor Matters
Part 2.23 - Certain Payments
Part 2.24 - Disclosure
Part 2.25 - Relationships with Related Persons
Part 2.26 - Brokers or Finders
Part 2.27 - Canadian Securities Laws
Part 2.28 - Ownership of Stock
Part 2.29 - Execution, Delivery and Enforceability of Agreement; No Violation
Part 2.30 - Brokers or Finders
Exhibit 2.1(a) - Jurisdiction
Exhibit 2.6 - Capital Leases/Subsequently Acquired Assets
Exhibit 2.7 - USA Trademarks
Exhibit 2.8 - Real Property
Exhibit 2.12 - Listing of Income Tax Returns Filed or To Be Filed
Exhibit 2.14 - Employee Handbook
Exhibit 2.15 - Certificates of Authority and Licenses
Exhibit 2.18 - Applicable Contracts
Exhibit 2.21 - Active Employees; Terminations 8-31-01 to 11-5-01; Current
Employees on Leave; Accrued PTO Balances; List of Employees with
Confidentiality/Non-Compete Agreements; Premier Employee Information; Premier -
Canada Employee Listing
Exhibit 2.28 - List of Shares
SUPPLEMENT TO DISCLOSURE LETTER TO
PURCHASE AGREEMENT
By and Among Xxxxxxxx Xxxxx Co., Franklin Quest Canada, Ltd.
And
School Specialty, Inc.
Dated December 21, 2001
Part 2.1 - Organization and Good Standing; Subsidiaries; Residence
Part 2.2 - Authority; No Conflict
Part 2.3 - Capitalization
Part 2.4 - Financial Statements and Other Information
Part 2.5 - Books and Records
Part 2.6 - Title to Properties; Encumbrances
Part 2.7 - Intellectual Property
Part 2.8 - Condition and Sufficiency of Assets
Part 2.9 - Accounts Receivable
Part 2.10 - Inventory
Part 2.11 - Undisclosed Liabilities
Part 2.12 - Taxes
Part 2.13 - No Material Adverse Effect
Part 2.14 - Employee Benefits
Part 2.15 - Compliance with Legal Requirements; Governmental Authorizations
Part 2.16 - Legal Proceedings; Orders
Part 2.17 - Absence of Certain Changes and Events
Part 2.18 - Contracts; No Defaults
Part 2.19 - Insurance
Part 2.20 - Environment and Occupational Safety and Health Matters
Part 2.21 - Employees
Part 2.22 - Labor Matters
Part 2.23 - Certain Payments
Part 2.24 - Disclosure
Part 2.25 - Relationships with Related Persons
Part 2.26 - Brokers or Finders
Part 2.27 - Canadian Securities Laws
Part 2.28 - Ownership of Stock
Part 2.29 - Execution, Delivery and Enforceability of Agreement; No Violation
Part 2.30 - Brokers or Finders
Supplemental Exhibit 2.1 - Jurisdiction
Supplemental Exhibit 2.6 - Capital Leases/Subsequently Acquired Assets
Supplemental Exhibit 2.8 - Real Property
Supplemental Exhibit 2.18 - Applicable Contracts
Supplemental Exhibit 2.21 - PAI Employees
