EXHIBIT 2.1
EXECUTION COPY
AGREEMENT AND PLAN OF MERGER
BY AND AMONG
RING HOLDING CORP.,
RING ACQUISITION CORP.
AND
JOSTENS, INC.
DATED AS OF JUNE 17, 2003
TABLE OF CONTENTS
Page
ARTICLE 1 DEFINITIONS..........................................................1
SECTION 1.1 DEFINITIONS.................................................1
ARTICLE 2 THE MERGER...........................................................9
SECTION 2.1 THE MERGER; EFFECTS OF THE MERGER...........................9
SECTION 2.2 CLOSING; EFFECTIVE TIME.....................................9
SECTION 2.3 ARTICLES OF INCORPORATION...................................9
SECTION 2.4 BYLAWS.....................................................10
SECTION 2.5 DIRECTORS..................................................10
SECTION 2.6 OFFICERS...................................................10
ARTICLE 3 CONVERSION OF SHARES................................................10
SECTION 3.1 EFFECT ON CAPITAL STOCK, WARRANTS AND COMPANY STOCK OPTIONS.......10
SECTION 3.2 PAYMENT FOR COMMON STOCK, WARRANTS AND COMPANY STOCK OPTIONS......11
ARTICLE 4 REPRESENTATIONS AND WARRANTIES OF THE COMPANY.......................13
SECTION 4.1 ORGANIZATION...............................................13
SECTION 4.2 CAPITALIZATION.............................................14
SECTION 4.3 SUBSIDIARIES...............................................14
SECTION 4.4 AUTHORITY RELATIVE TO THIS AGREEMENT.......................15
SECTION 4.5 NONCONTRAVENTION...........................................15
SECTION 4.6 GOVERNMENTAL APPROVALS.....................................15
SECTION 4.7 SEC FILINGS; FINANCIAL STATEMENTS..........................16
SECTION 4.8 ABSENCE OF CERTAIN CHANGES.................................17
SECTION 4.9 FINDERS AND INVESTMENT BANKERS.............................18
SECTION 4.10 VOTING REQUIREMENT.........................................18
SECTION 4.11 LITIGATION.................................................18
SECTION 4.12 TAXES......................................................18
SECTION 4.13 COMPLIANCE WITH LAWS.......................................21
SECTION 4.14 ENVIRONMENTAL MATTERS......................................21
SECTION 4.15 CERTAIN EMPLOYMENT AGREEMENTS..............................22
SECTION 4.16 EMPLOYEE BENEFIT MATTERS...................................22
SECTION 4.17 LABOR RELATIONS............................................24
SECTION 4.18 INTELLECTUAL PROPERTY......................................24
SECTION 4.19 REAL PROPERTY..............................................25
SECTION 4.20 CONTRACTS..................................................25
SECTION 4.21 INSURANCE..................................................26
SECTION 4.22 INVENTORIES; RECEIVABLES; PAYABLES.........................26
SECTION 4.23 RELATED PARTY TRANSACTIONS.................................27
SECTION 4.24 CUSTOMERS, SUPPLIERS AND SALES REPRESENTATIVES.............27
SECTION 4.25 RESTRICTED PAYMENTS........................................28
ARTICLE 5 REPRESENTATIONS AND WARRANTIES OF PARENT AND MERGERCO...............28
SECTION 5.1 ORGANIZATION...............................................28
SECTION 5.2 AUTHORITY RELATIVE TO THIS AGREEMENT.......................28
SECTION 5.3 NONCONTRAVENTION...........................................28
SECTION 5.4 GOVERNMENTAL APPROVALS.....................................29
SECTION 5.5 OWNERSHIP OF SHARES........................................29
SECTION 5.6 FUNDS; SOLVENCY............................................29
SECTION 5.7 NO OUTSIDE RELIANCE........................................30
ARTICLE 6 COVENANTS.......................................................... 30
SECTION 6.1 CONDUCT OF BUSINESS OF THE COMPANY.........................30
SECTION 6.2 SHAREHOLDER APPROVAL.......................................32
SECTION 6.3 ACCESS AND INFORMATION.....................................32
SECTION 6.4 GOVERNMENTAL FILINGS AND CONSENTS..........................32
SECTION 6.5 FUNDING; COOPERATION.......................................33
SECTION 6.6 PUBLIC ANNOUNCEMENTS.......................................34
SECTION 6.7 INDEMNIFICATION AND INSURANCE..............................34
SECTION 6.8 STOCK OPTION PLANS.........................................35
SECTION 6.9 SOLVENCY OPINION...........................................36
SECTION 6.10 NO SOLICITATION............................................36
SECTION 6.11 NOTIFICATION OF CERTAIN MATTERS............................36
SECTION 6.12 RELATED PARTY TRANSACTIONS WITH NON-MANAGEMENT AFFILIATES..36
SECTION 6.13 TRANSACTION EXPENSES.......................................37
ARTICLE 7 CONDITIONS TO CONSUMMATION OF THE MERGER............................37
SECTION 7.1 CONDITIONS TO OBLIGATIONS OF PARENT AND MERGERCO
TO EFFECT THE MERGER.......................................37
SECTION 7.2 CONDITIONS TO OBLIGATION OF THE COMPANY
TO EFFECT THE MERGER.......................................38
ARTICLE 8 TERMINATION.........................................................39
SECTION 8.1 TERMINATION................................................39
SECTION 8.2 FEES AND EXPENSES..........................................40
SECTION 8.3 EFFECT OF TERMINATION......................................40
ARTICLE 9 MISCELLANEOUS.......................................................41
SECTION 9.1 AMENDMENT AND MODIFICATION.................................41
SECTION 9.2 NON-SURVIVAL OF REPRESENTATIONS AND WARRANTIES.............41
SECTION 9.3 WAIVER OF COMPLIANCE; CONSENTS.............................41
SECTION 9.4 ASSIGNMENT.................................................41
SECTION 9.5 EXPENSES...................................................41
SECTION 9.6 GOVERNING LAW..............................................41
SECTION 9.7 NOTICES....................................................42
SECTION 9.8 INTERPRETATION.............................................43
SECTION 9.9 PARTIAL INVALIDITY.........................................43
SECTION 9.10 COUNTERPARTS...............................................43
SECTION 9.11 ENTIRE AGREEMENT...........................................43
SECTION 9.12 NO THIRD PARTY BENEFICIARIES...............................43
SECTION 9.13 JURISDICTION; FORUM........................................43
SECTION 9.14 NO IMPLIED REPRESENTATIONS.................................44
SECTION 9.15 CONSTRUCTION OF CERTAIN PROVISIONS.........................44
AGREEMENT AND PLAN OF MERGER
This AGREEMENT AND PLAN OF MERGER, dated as of June 17, 2003 (this
"Agreement"), is by and among Jostens, Inc., a Minnesota corporation (the
"Company"), Ring Holding Corp., a Delaware corporation ("Parent"), and Ring
Acquisition Corp., a Minnesota corporation and wholly-owned subsidiary of Parent
("MergerCo").
RECITALS
WHEREAS, Parent has formed MergerCo for the purpose of merging it with
and into the Company (the "Merger") in order to acquire the Company as a
wholly-owned subsidiary;
WHEREAS, the Board of Directors of the Company (the "Board") and the
Board of Directors of MergerCo have each determined that the Merger, in
accordance with the Minnesota Business Corporation Act (the "MBCA") and upon the
terms and subject to the conditions set forth in this Agreement, would be fair
to and in the best interests of their respective shareholders, and such Boards
of Directors have approved such Merger;
WHEREAS, (i) the Board has, in light of and subject to the terms and
conditions set forth herein, determined that the consideration to be paid in the
Merger is fair to the shareholders of the Company, and the Merger is otherwise
in the best interest of the Company and its shareholders, (ii) the Board and the
Board of Directors of MergerCo have approved this Agreement and the transactions
contemplated hereby, (iii) Parent, as the sole shareholder of MergerCo, has
approved this Agreement and the transactions contemplated hereby and (iv) the
Board has resolved to submit this Agreement to a vote of the shareholders of the
Company and, subject to the terms hereof, to recommend approval of this
Agreement by the shareholders of the Company entitled to vote thereon;
WHEREAS, certain shareholders of the Company have entered into support
agreements with Parent, dated the date hereof (the "Support Agreements"),
agreeing, among other things, to support the transactions contemplated by this
Agreement; and
WHEREAS, Parent, MergerCo and the Company desire to make certain
representations, warranties, covenants and agreements in connection with the
Merger and also to prescribe various conditions to the Merger.
AGREEMENT
NOW, THEREFORE, in consideration of the representations, warranties,
covenants and agreements contained in this Agreement, the parties agree as
follows:
article 1
DEFINITIONS
Section 1.1.......Definitions. In addition to the other words and terms
defined elsewhere in this Agreement, as used in this Agreement, the following
words and terms shall have the meanings specified or referred to below:
"Affiliate" means, as applied to any Person, (a) any other
Person directly or indirectly controlling, controlled by or under common control
with, that Person, (b) any other Person that owns or controls 10% or more of any
class of equity securities (including any equity securities issuable upon the
exercise of any option or convertible security) of that Person or any of its
Affiliates, or (c) any director, partner, officer, manager, agent, employee or
relative of such Person. For the purposes of this definition, "control"
(including with correlative meanings, the terms "controlling", "controlled by",
and "under common control with") as applied to any Person, means the possession,
directly or indirectly, of the power to direct or cause the direction of the
management and policies of that Person, whether through ownership of voting
securities or by contract or otherwise.
"Agreement" shall have the meaning specified in the preamble of this
Agreement.
"Alternative Transaction" shall have the meaning specified in Section 6.10.
"Articles of Merger" shall mean the articles of merger for the Merger.
"Board" shall have the meaning specified in the second recital of this
Agreement.
"Certificate of Designation" shall mean the Company's Certificate of
Designation of the Powers, Preferences and Rights of the 14% Senior Redeemable
Payment-in-Kind Preferred Stock, and Qualifications, Limitations and
Restrictions thereof dated as of May 10, 2000.
"Certificates" shall have the meaning specified in Section 3.2(c).
"Claim" shall have the meaning specified in Section 5.6(b).
"Class A Common Stock" shall mean the Class A Common Stock, par value $0.33
1/3 per share, of the Company
"Class B Common Stock" shall mean the Class B Common Stock, par value $0.01
per share, of the Company.
"Class C Common Stock" shall mean the Class C Common Stock, par value $0.01
per share, of the Company.
"Class D Common Stock" shall mean the Class D Common Stock, par value $0.01
per share, of the Company.
"Class E Common Stock" shall mean the Class E Common Stock, par value $0.01
per share, of the Company.
"Closing" shall mean the closing of the Merger.
"Closing Date" shall mean the date on which the Closing actually occurs.
"Code" shall mean the Internal Revenue Code of 1986, as amended.
"Common Amount" shall mean the Purchase Price plus the aggregate exercise
price of all unexercised Company Stock Options and Warrants outstanding
immediately prior to the Effective Time (for purposes of clarity, exclusive of
any Company Stock Options and Warrants referenced in clause (iii) of the
definition of Net Debt).
"Common Per Share Amount" shall mean an amount, rounded to the nearest
$0.01, equal to the Common Amount divided by the Fully Diluted Number.
"Common Stock" shall mean, collectively, the Class A Common Stock, the
Class B Common Stock, the Class C Common Stock, the Class D Common Stock and the
Class E Common Stock.
"Company" shall have the meaning specified in the preamble of this
Agreement.
"Company Permits" shall have the meaning specified in Section 4.13(b).
"Company Stock Options" shall mean options to purchase shares of Class A
Common Stock.
"Competition Act" shall mean the Competition Act (Canada), as amended.
"Confidentiality Agreement" shall mean the letter agreement, dated April 4,
2003, between DLJ Merchant Banking III, Inc., an Affiliate of Parent, and the
Company.
"Contracts," with respect to any Person, shall mean any note, bond,
mortgage, indenture, lease, agreement or other instrument or obligation, whether
written or oral, to which such Person or any of its Subsidiaries is a party or
by which any of them or any portion of their properties or assets may be bound.
"Credit Facility" shall mean the Company's credit facility under that
certain Second Amended and Restated Credit Agreement dated as of December 13,
2002, among the Company, the several lenders party thereto, DB, JPMorgan Chase
Bank and X.X. Xxxxxx Securities Inc.
"DB" means Deutsche Bank Securities Inc.
"Debt" shall have the meaning specified in Section 5.6(b).
"Disclosure Letter" shall mean the letter delivered by the Company to
Parent concurrently herewith.
"Dissenting Shares" shall have the meaning specified in Section 3.1(d).
"Effective Time" shall have the meaning specified in Section 2.2.
"Environmental Law" shall mean any law (including, without limitation,
common law), regulation, ordinance, guideline, code, decree, judgment, order,
permit or authorization or other legally enforceable requirement of any
Governmental Entity relating to toxic torts, worker or public safety or health
and the indoor and outdoor environment, including, without limitation,
pollution, contamination, Hazardous Substances, cleanup, regulation and
protection of the air, water or soils in the indoor or outdoor environment.
"Environmental Liabilities" shall mean all liabilities, responsibilities,
damages, penalties, obligations or clean-up costs, response, remedial and
removal costs, investigation and feasibility study costs, capital costs,
operation and maintenance costs, losses, punitive damages, property damages,
natural resource damages, consequential damages, treble damages, costs and
expenses (including all reasonable fees, disbursements and expenses of counsel,
experts and consultants), fines, sanctions and interest incurred as a result of
or related to any claim, suit, action, investigation, proceeding or demand by
any Person, assessed or levied pursuant to any Environmental Law or in
connection with any release of a Hazardous Substance whether on, at, in, under,
from or about or in the vicinity of any real or personal property.
"ERISA" shall mean the Employee Retirement Income Security Act of 1974, as
amended.
"ERISA Affiliate" shall mean any other entity that, together with the
Company, would be treated as a single employer under Section 414 of the Code.
"Exchange Act" shall mean the Securities Exchange Act of 1934, as amended.
"Former Real Property" shall mean any real property in which the Company or
any of its Subsidiaries previously held, but no longer holds, any legal,
beneficial, equitable or leasehold interest.
"Fully Diluted Number" shall mean (a) the aggregate number of issued and
outstanding Shares (excluding Shares owned by MergerCo, any Affiliate of
MergerCo or any Subsidiary of the Company) as of the Closing Date plus (b) the
aggregate number of Shares issuable upon exercise of all outstanding Company
Stock Options and Warrants as of the Closing Date.
"GAAP" shall mean generally accepted accounting principles in the United
States of America.
"Xxxxxxx Sachs" shall mean Xxxxxxx, Xxxxx & Co.
"Governmental Entity" shall mean any foreign, federal or state,
governmental department, commission, board, bureau, agency or instrumentality.
"Hazardous Substances" shall mean any material, substance or waste
classified, characterized or regulated as hazardous, toxic, pollutant or
contaminant under any Environmental Law, including, but not limited to,
petroleum products, asbestos, radioactive material, or hazardous or toxic
substances or wastes that pose a hazard to the health or safety of Persons.
"HSR Act" shall mean the Xxxx-Xxxxx-Xxxxxx Antitrust Improvements Act of
1976, as amended, and the rules and regulations promulgated thereunder.
"Indenture" shall mean that certain Indenture, dated as of May 10, 2000,
between the Company and The Bank of New York, a New York banking corporation.
"Intellectual Property" shall have the meaning specified in Section 4.18.
"IRS" shall mean the Internal Revenue Service.
"Leased Property" shall have the meaning specified in Section 4.19(a).
"Legal Proceeding" means any judicial, administrative or arbitral actions,
suits, proceedings (public or private), claims or governmental proceedings.
"Legal Requirements," with respect to any Person, shall mean any order,
judgment, writ, injunction, determination, award, decree, law, statute, rule or
regulation promulgated by any Governmental Entity applicable to such Person or
any of its Subsidiaries or any of their properties or assets.
"Letter of Transmittal" shall have the meaning specified in Section 3.2(c).
"Liens" shall have the meaning specified in Section 4.3.
"Management Accounts" shall have the meaning specified in Section 4.7(b).
"Material Adverse Effect," with respect to any Person, shall mean a
material adverse effect on (i) the business, assets, properties, or condition
(financial or otherwise) or results of operations of such Person and its
Subsidiaries taken as a whole or (ii) the ability of such Person to consummate
the transactions contemplated by this Agreement or perform its obligations
hereunder, excluding in the case of (i) above, the effect of any events or
conditions arising from changes in general business or economic conditions,
including any effects resulting from acts of war (whether or not declared) or
acts of terrorism.
"MBCA" shall have the meaning specified in the second recital of this
Agreement.
"Merger" shall have the meaning specified in the first recital of this
Agreement.
"MergerCo" shall have the meaning specified in the preamble of this
Agreement.
"Multi-Employer Plan" shall have the meaning set forth in Section 3(37) of
ERISA.
"Net Debt" shall mean an amount equal to (i) the sum of the following
(without duplication) as of May 31, 2003: (A) the principal amount outstanding
under the Credit Facility, together with accrued but unpaid interest thereon and
any other amounts owed thereunder (for purposes of clarity, including any
amounts owed (and less any amounts receivable) in connection with hedging
obligations or the termination thereof and excluding any amounts owed pursuant
to letters of credit issued thereunder); (B) the aggregate principal amount
outstanding under the Notes, together with any accrued but unpaid interest
thereon (for purposes of clarity, excluding prepayment and repurchase premiums
(including pursuant to Section 3.07(c) and Section 4.08 of the Indenture), fees
and expenses which may be incurred by the Company in connection with the
redemption of the Notes); (C) the aggregate principal amount, accrued but unpaid
interest thereon and the other amounts outstanding in respect of the
indebtedness evidenced by notes, debentures, bonds or other similar instruments
for the payment of which the Company or any Subsidiary is responsible or liable
other than the indebtedness evidenced by the Credit Facility and the Notes and
other than any amounts owed pursuant to any outstanding letters of credit; (D)
all obligations of the Company or any Subsidiary issued or assumed as the
deferred purchase price of property, all conditional sale obligations of the
Company or any Subsidiary and all obligations of the Company or any Subsidiary
under any title retention agreement (but excluding trade accounts payable and
other accrued current liabilities arising and paid in the ordinary course of
business in accordance with customary payment terms); (E) all obligations of the
Company or any Subsidiary under leases required to be capitalized in accordance
with GAAP; (F) all obligations of the type referred to in clauses (A) through
(E) of the Company or any Subsidiary for the payment of which the Company or any
Subsidiary is responsible or liable, directly or indirectly, as obligor,
guarantor, surety or otherwise, including guarantees of such obligations; and
(G) all obligations of the type referred to in clauses (A) through (E) of other
Persons secured by any Lien on any property or asset of the Company or any
Subsidiary (whether or not such obligation is assumed by the Company or any
Subsidiary); less (ii) the cash of the Company and its Subsidiaries as of May
31, 2003 less (iii) cash received by the Company in connection with the exercise
of Company Stock Options and Warrants after May 31, 2003 but on or before the
Closing Date.
"Notes" means the Company's 12 3/4% Senior Subordinated Notes due 2010.
"Owned Property" shall have the meaning specified in Section 4.19(a).
"Parent" shall have the meaning specified in the preamble of this
Agreement.
"Payment Agent" shall have the meaning specified in Section 3.2(a).
"Payment Fund" shall have the meaning specified in Section 3.2(i).
"Permitted Exceptions" means (i) all defects, exceptions, restrictions,
easements, covenants, reservations, encroachments, utility agreements, rights of
way and encumbrances disclosed in policies of title insurance which have been
made available to Parent and which have not had, nor would be reasonably
expected to have, with respect to any material property of the Company and its
Subsidiaries, taken as a whole, a material adverse effect on such affected
property; (ii) Liens for current taxes, assessments or other governmental
charges not yet delinquent or the amount or validity of which is being contested
in good faith by appropriate proceedings, provided an appropriate reserve is
established therefor on a balance sheet included in the SEC Filings in
accordance with GAAP; (iii) landlord's, warehouseman's, mechanics', carriers',
workers', repairers' and similar Liens arising or incurred in the ordinary
course of business in respect of obligations which are not yet due or which are
bonded or which are being contested in good faith and by appropriate proceedings
provided any required reserves with respect thereto are maintained on the books
of the Company or such Subsidiary, as the case may be, in accordance with GAAP;
(iv) zoning, entitlement and other land use and environmental regulations by any
Governmental Entity, the violation of which has not had, nor would be reasonably
expected to have with respect to any material property of the Company and its
Subsidiaries, taken as a whole, a material adverse effect on such property; (v)
such other imperfections in title, charges, easements, restrictions, covenants,
reservations, encroachments, utility agreements and encumbrances which do not
materially detract from the value of or materially interfere with the present
use of any property subject thereto or affected thereby; and (vi) Liens in
connection with or permitted by the Credit Facility.
"Person" shall mean and include an individual, a partnership, a joint
venture, a limited liability company, a corporation, a trust, an unincorporated
organization and a government or any department or agency thereof.
"Plans" shall have the meaning specified in Section 4.16(a).
"Preferred Stock" shall mean the Company's 14% Senior Redeemable
Payment-in-Kind Preferred Stock, par value $0.01 per share.
"Preferred Stock Liquidation Preference" shall mean the aggregate
liquidation preference attributable to the outstanding shares of Preferred Stock
(including the liquidation preference attributable to any accrued but unissued
dividends thereon) as of May 31, 2003.
"Present Fair Salable Value" shall have the meaning specified in Section
5.6(b).
"Purchase Price" shall mean $497,762,000; provided, however, that if the
Closing occurs on or after August 1, 2003, the Purchase Price shall increase by
an amount equal to $163,934 per day from and including August 1, 2003 up to and
including the Closing Date (but in any event shall not increase by more than
$10,000,000 as a result of the passage of time). In the event that it is
determined prior to the Effective Time that the sum of the Net Debt plus the
Preferred Stock Liquidation Preference plus the Transaction Expenses exceeds the
amount set forth on Exhibit A hereto, then the Purchase Price shall be decreased
by the amount of such excess. In the event that it is determined prior to the
Effective Time that the sum of the Net Debt plus the Preferred Stock Liquidation
Preference plus the Transaction Expenses is less than the amount set forth on
Exhibit A, then the Purchase Price shall be increased by the amount of such
shortfall.
"Real Property" shall have the meaning specified in Section 4.19(a).
"Real Property Leases" shall have the meaning specified in Section 4.19(a).
"Related Party Transaction" shall have the meaning specified in Section
4.23.
"SEC" shall mean the United States Securities and Exchange Commission.
"SEC Filings" means filings by the Company under the Exchange Act with the
SEC since January 1,
2000.
"Securities Act" shall mean the Securities Act of 1933, as amended.
"Securityholders" shall mean the holders of the Common Stock, Company Stock
Options and Warrants on the Closing Date.
"Share" or "Shares" shall mean the issued and outstanding shares of Common
Stock.
"Shareholders Meeting" shall have the meaning specified in Section 6.2.
"Solvent" or "Solvency" shall have the meaning specified in Section 5.6(b).
"Subsidiary," with respect to any Person, shall mean any corporation 50% or
more of the outstanding voting power of which, or any partnership, joint
venture, limited liability company or other entity 50% or more of the total
equity interest of which is, directly or indirectly, owned by such Person.
"Subsidiary Shares" shall have the meaning specified in Section 4.3.
"Support Agreements" shall have the meaning specified in the fourth recital
of this Agreement.
"Surviving Corporation" shall have the meaning specified in Section 2.1.
"Tax Return" shall mean any return, report or statement required to be
filed with any Governmental Entity with respect to Taxes.
"Taxes" shall mean (i) all federal, state, local or foreign taxes, charges,
fees, imposts, levies or other assessments, including but not limited to those
on or measured by or referred to as net income, gross receipts, capital, sales,
use, ad valorem, transfer, franchise, profits, inventory, capital stock,
license, withholding, payroll, employment, social security, unemployment,
excise, severance, stamp, occupation, premium, value added, real estate,
property, windfall profits and estimated taxes, customs duties, fees,
assessments and charges of any kind whatsoever, (ii) all interest, penalties,
fines, additions to tax or additional amounts imposed by any Governmental Entity
in connection with any item described in clause (i), and (iii) any liability in
respect of any items described in clauses (i) and/or (ii) as a transferee,
pursuant to Treasury Regulation Section 1.1502-6 (or a similar provision of
state, local or foreign law) or as an indemnitor, guarantor, surety or in a
similar capacity under any contract, arrangement, agreement, understanding or
commitment, whether oral or written.
"Title IV Plan" shall have the meaning specified in Section 4.16(d).
"Transaction Expenses" means the aggregate amount of fees and expenses and
other payment obligations incurred by or on behalf of the Company or any of its
Subsidiaries in connection with this Agreement or any of the transactions
contemplated hereby, including fees and expenses of counsel, advisors,
consultants (including environmental consultants), investment bankers, experts,
actuaries, auditors and accountants, all sale bonuses, "stay-around" or similar
bonuses, severance payments (but only to the extent arising directly from or as
a result of the Closing) and non-competition payments and similar expenses owed
to current or former directors, officers, employees, stockholders and
consultants (but only to the extent arising directly from or as a result of the
Closing). The Company has delivered to Parent on the date hereof a spreadsheet
setting forth the estimated Transaction Expenses.
"Undesignated Common Stock" shall mean the Common Stock, $0.01 par value
per share, of the Company.
"USRPHC" shall mean a United States Real Property Holding Corporation
within the meaning of Section 897 of the Code.
"Warrants" shall mean warrants to purchase shares of Class E Common Stock.
"Wire Transfer Recipients" shall mean (a) all holders of Class B Common
Stock, Class C Common Stock or Class D Common Stock and (b) any other holder of
Shares or Warrants designated by the Board (by written notice to Parent) as a
Wire Transfer Recipient.
ARTICLE 2
THE MERGER
Section 2.1..... The Merger; Effects of the Merger. At the Effective Time
and upon the terms and subject to the conditions of this Agreement and in
accordance with the provisions of the MBCA, MergerCo shall be merged with and
into the Company, whereupon the separate corporate existence of MergerCo shall
cease, and the Company shall continue as the surviving corporation (the
"Surviving Corporation"). The Merger shall have the effects set forth in the
MBCA. Without limiting the generality of the foregoing and subject thereto, from
and after the Effective Time the Surviving Corporation shall possess all of the
rights, privileges, immunities and powers, of a public as well as a private
nature, of each of the Company and MergerCo and be responsible and liable for
all of the duties and liabilities of each of the Company and MergerCo.
Section 2.2.......Closing; Effective Time. Subject to the provisions of
Article 7 and Section 6.13, the Closing shall take place at the offices of
Xxxxxx, Xxxx & Xxxxxxxx LLP, 000 Xxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, at 10:00
a.m. New York City time on July 25, 2003 (subject to the conditions set forth in
Article 7 having been satisfied or waived by the party or parties entitled to
the benefit of such conditions) or such later date (but no later than September
30, 2003) which shall be designated in writing by Parent to the Company;
provided, that any such later date shall be no earlier than the third business
day after such written notification by Parent to the Company. Each of the
parties hereto shall use its best efforts to effect the Closing by July 31,
2003, subject to Parent's right to designate a later date for the Closing (and
the parties shall use their best efforts to effect the Closing by any such
later-designated date). At the Closing, subject to the terms and conditions
hereof, MergerCo and the Company shall cause the Articles of Merger to be
executed and filed with the Secretary of State of the State of Minnesota in the
form required by and executed in accordance with the applicable provisions of
the MBCA. The Merger shall become effective as of the date and time of such
filings or such other date and time after such filings as MergerCo and the
Company shall specify in the Articles of Merger (the "Effective Time").
Section 2.3.......Articles of Incorporation. At the Effective Time, and
without any further action on the part of the Company or MergerCo, the articles
of incorporation of the Company shall be the articles of incorporation of the
Surviving Corporation and thereafter may be amended or repealed in accordance
with applicable law.
Section 2.4.......Bylaws. At the Effective Time, and without any further
action on the part of the Company or MergerCo, the bylaws of the Company, as in
effect immediately prior to the Effective Time, shall be the bylaws of the
Surviving Corporation and thereafter may be altered, amended or repealed as
provided therein or in the articles of incorporation of the Surviving
Corporation and in accordance with applicable law.
Section 2.5.......Directors. At the Effective Time, and without any further
action on the part of the Company or MergerCo, the directors of MergerCo,
immediately prior to the Effective Time, shall be the directors of the Surviving
Corporation, each to hold office in accordance with the articles of
incorporation and bylaws of the Surviving Corporation until such director's
successor is duly elected or appointed and qualified or earlier upon such
director's resignation or removal.
Section 2.6.......Officers. At the Effective Time, and without any further
action on the part of the Company or MergerCo, the officers of the Company,
immediately prior to the Effective Time, shall be the officers of the Surviving
Corporation, each to hold office in accordance with the articles of
incorporation and bylaws of the Surviving Corporation until such officer's
successor is duly elected or appointed and qualified or earlier upon such
officer's resignation or removal.
ARTICLE 3
CONVERSION OF SHARES
Section 3.1.......Effect on Capital Stock, Warrants and Company Stock
Options. At the Effective Time, by virtue of the Merger and without any action
on the part of the holders of any Shares, Company Stock Options, Warrants or any
shares of capital stock of MergerCo:
(a)......Capital Stock of MergerCo. Each share of common stock, par value
$0.01 per share, of MergerCo issued and outstanding immediately prior to the
Effective Time shall be converted into and become one share of common stock, par
value $0.01 per share, of the Surviving Corporation.
(b)......Common Stock, Warrants and Company Stock Options Owned by Company
Subsidiaries, Parent or MergerCo. Each Share, Warrant and Company Stock Option
that is held by any Subsidiary of the Company, and each Share, Warrant and
Company Stock Option that is held by Parent, MergerCo or any Affiliate of Parent
or MergerCo, shall automatically be canceled and retired and shall cease to
exist, and no consideration shall be delivered in exchange therefor.
(c)......Conversion of Common Stock. Except for Shares that are subject to
Section 3.1(b) or (d), each Share shall be canceled and extinguished and be
converted automatically into and become a right to receive the Common Per Share
Amount in cash.
(d)......Dissenting Shares. Notwithstanding anything in this Agreement to
the contrary, each Share that is issued and outstanding immediately prior to the
Effective Time and that is held by a shareholder who has properly demanded and
perfected such shareholder's rights to dissent from the Merger and to be paid
the fair value of such shares (the "Dissenting Shares") in accordance with
Sections 302A.471 and 302A.473 of the MBCA, shall not be converted into the
right to receive the Common Per Share Amount, but the holder thereof shall be
entitled only to such rights as are granted by Sections 302A.471 and 302A.473 of
the MBCA and the Surviving Corporation shall make all payments to the holders of
the Dissenting Shares with respect to such demands in accordance with the MBCA;
provided, however, that if such holder shall have failed to perfect or shall
have lost the right to dissent and payment under the MBCA, each Share held by
such holder shall thereupon be deemed to have been converted into, as of the
Effective Time, solely the right to receive the Common Per Share Amount, without
interest thereon. The Company shall give reasonably prompt notice to Parent of
any demands received by the Company for payment under Sections 302A.471 and
302A.473 of the MBCA, and Parent shall have the right to participate in all
negotiations and proceedings with respect to such demands. The Company shall
not, except with the prior written consent of MergerCo, make any payment with
respect to, or settle or offer to settle, such demands.
(e)......Conversion and Cancellation of Company Stock Options and Warrants.
Each Company Stock Option and Warrant outstanding immediately prior to the
Effective Time shall be canceled and extinguished and be converted automatically
into and become a right to receive from the Company cash in an amount equal to
the product of (i) the number of Shares for which such Company Stock Option or
Warrant, as applicable, is exercisable and (ii) the excess of the Common Per
Share Amount over the per share exercise price of such Company Stock Option or
Warrant, as applicable, less any applicable Taxes deducted or withheld pursuant
to Section 3.2(k).
Section 3.2.......Payment for Common Stock, Warrants and Company Stock
Options.
(a)......Payment Agent. No later than three business days prior to the
Effective Time, MergerCo shall designate a bank or trust company reasonably
acceptable to the Company to act as payment agent in connection with the Merger
(the "Payment Agent") for the purpose of disbursing the cash amounts payable to
holders of Shares and Warrants (other than Wire Transfer Recipients) subject to
the provisions of this Article 3.
(b)......Payment of Purchase Price; Deposit with Payment Agent. On the
Closing Date, Parent shall cause to be remitted to the Wire Transfer Recipients
the portion of the Purchase Price payable to such Wire Transfer Recipients, via
wire transfer of immediately available funds to the respective bank accounts
designated by such Wire Transfer Recipients by written notice to Parent and the
Company at least two business days prior to the Closing Date (provided that
certificates issued in the name of such Wire Transfer Recipients and
representing the Shares and Warrants held by such Wire Transfer Recipients have
been submitted to the Company to the reasonable satisfaction of Parent at least
two business days prior to the Closing Date for cancellation at the Effective
Time). Parent shall, at or prior to the Effective Time, deposit the remaining
portion of the Purchase Price attributable to the Shares and Warrants, via wire
transfer of immediately available funds, with the Payment Agent, for the benefit
of the holders of Shares and the Warrants (other than Wire Transfer Recipients).
(c)......Notice of Exchange. Promptly after the Effective Time, the
Surviving Corporation shall cause the Payment Agent to mail to each record
holder (other than Wire Transfer Recipients) as of the Effective Time, of any
outstanding certificate or certificates (the "Certificates") which immediately
prior to the Effective Time represented issued and outstanding Shares or
Warrants, a form letter of transmittal (which shall specify that delivery shall
be effected, and risk of loss and title to the Certificates shall pass, only
upon proper delivery of the Certificates to the Payment Agent) (a "Letter of
Transmittal") and instructions for use in effecting the surrender of the
Certificates for payment therefor.
(d)......Payment by Payment Agent. Upon the surrender to the Payment Agent
of each Certificate and a duly executed Letter of Transmittal related thereto,
the holder of such Certificate shall be entitled to receive in exchange therefor
by check an amount in cash equal (x) in the case of Shares, to the product of
(i) the number of Shares held by such holder and (ii) the Common Per Share
Amount, and (y) in the case of Warrants, the consideration described in Section
3.1(e). All such Certificates shall, after such surrender, be marked as
canceled.
(e)......Payment to Holders of Company Stock Options. Parent shall, at or
prior to the Effective Time, deposit the portion of the Purchase Price
attributable to the Company Stock Options, via wire transfer of immediately
available funds, with the Company, for the benefit of the holders of Company
Stock Options. Promptly following the Effective Time, the Company shall pay to
holders of Company Stock Options the amounts set forth in Section 3.1(e).
(f)......No Further Ownership Rights in Shares. The cash paid to the
holders of Shares, Warrants and Company Stock Options in accordance with the
terms of Article 3 shall be deemed to have been paid in full satisfaction of all
rights pertaining to such Shares, Warrants and Company Stock Options, and there
shall be no further registration of transfers on the stock transfer books of the
Surviving Corporation of the Shares, Warrants or Company Stock Options which
were outstanding immediately prior to the Effective Time. If, after the
Effective Time, Certificates are presented to the Surviving Corporation for any
reason, they shall be canceled and exchanged as provided in this Article 3.
Until surrendered in accordance with the provisions of this Section 3.2, each
Certificate (other than Certificates representing (i) Dissenting Shares, (ii)
Shares or Warrants held by the Company or any of its Subsidiaries or (iii)
Shares or Warrants held by Parent, MergerCo or any Affiliate of Parent or
MergerCo) shall represent for all purposes only the right to receive the
consideration described in Section 3.1 applicable thereto, without any interest
thereon, subject to any required withholding taxes.
(g)......Transfers of Ownership. In the event of a transfer of ownership of
Shares or Warrants which is not registered in the transfer records of the
Company, payment of the consideration described in Section 3.1 applicable
thereto may be made to a transferee if the Certificate with respect thereto is
presented to the Payment Agent accompanied by all documents required to evidence
and effect such transfer and by evidence that any applicable stock transfer
taxes have been paid.
(h)......Lost, Stolen and Destroyed Certificates. In the event that any
Certificate shall have been lost, stolen or destroyed, the Payment Agent shall
issue in exchange therefor, upon the making of an affidavit of that fact by the
holder thereof, such consideration described in Section 3.1 applicable thereto
as may be required pursuant to this Agreement; provided, however, that Surviving
Corporation or the Payment Agent may, in their discretion, require the delivery
of a satisfactory indemnity.
(i)......Termination of Payment Fund. Any portion of the Purchase Price
deposited with the Payment Agent pursuant to this Section 3.2 (the "Payment
Fund") which remains undistributed to the holders of the Shares or Warrants for
six months after the Effective Time shall be delivered to the Surviving
Corporation, upon demand. Any holders of Shares or Warrants prior to the Merger
who have not exchanged all of their Shares or Warrants, as applicable, in
accordance with Articles 2 and 3 prior to that time shall thereafter look only
to the Surviving Corporation and only as general creditors thereof for payment
of their claim for cash, if any, for unexchanged Shares or Warrants, as
applicable, to which such holders may be entitled.
(j)......No Liability. None of Parent, MergerCo, the Surviving Corporation
nor the Payment Agent shall be liable to any Person in respect of cash from the
Payment Fund delivered to a public official pursuant to any applicable abandoned
property, escheat or similar law.
(k)......Withholding Taxes. Parent and the Surviving Corporation shall be
entitled to deduct and withhold, or cause the Payment Agent to deduct and
withhold, from any amounts payable pursuant to this Article 3, any withholding
or other Taxes as are required to be deducted or withheld under the Code, or any
applicable provision of state, local or foreign Tax law. To the extent that
amounts are so withheld by Parent, the Surviving Corporation or the Payment
Agent, such withheld amounts shall be treated for all purposes of this Agreement
as having been paid to the holder of Shares, Warrants or Company Stock Options,
as the case may be, in respect of which such deduction and withholding was made.
ARTICLE 4
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
The Company hereby represents and warrants to Parent and MergerCo as
follows:
Section 4.1.......Organization. Each of the Company and its Subsidiaries is
duly incorporated, validly existing and in good standing under the laws of the
jurisdiction of its incorporation and has requisite corporate power and
authority to own, lease and operate its properties and to carry on its business
as now being conducted. Each of the Company and its Subsidiaries is duly
qualified to do business and in good standing in each jurisdiction in which the
property owned, leased or operated by it or the nature of the business conducted
by it makes such qualification necessary, except where the failure to be so duly
qualified and in good standing has not had and would not reasonably be expected
to have a Material Adverse Effect with respect to the Company. The Company has
made available, or will make available prior to the Closing Date, to Parent
correct and complete copies of (i) the articles or certificates of incorporation
and bylaws (or equivalent governing instruments), as currently in effect, of the
Company and each of its Subsidiaries, (ii) the minute books of the Company and,
to the extent in existence, each Subsidiary covering the period beginning no
earlier than January 1, 2000 and (iii) to the extent in the Company's or any
Subsidiary's possession, the stock certificate books and stock transfer ledgers
of the Company and its Subsidiaries since January 1, 2000.
Section 4.2.......Capitalization. The authorized capital stock of the
Company consists of: (i) 4,200,000 shares of Class A Common Stock; (ii)
5,300,000 shares of Class B Common Stock; (iii) 2,500,000 shares of Class C
Common Stock; (iv) 20,000 shares of Class D Common Stock; (v) 1,900,000 shares
of Class E Common Stock; (vi) 12,020,000 shares of Undesignated Common Stock;
and (vii) 4,000,000 shares of Preferred Stock. As of the date hereof, there are
(i) 2,825,218 shares of Class A Common Stock issued and outstanding, (ii)
5,300,000 shares of Class B Common Stock issued and outstanding, (iii) 811,020
shares of Class C Common Stock issued and outstanding, (iv) 20,000 shares of
Class D Common Stock issued and outstanding, (v) no shares of Class E Common
Stock or Undesignated Common Stock issued and outstanding, (vi) 90,358 shares of
Preferred Stock issued and outstanding (excluding accrued but unpaid dividends)
and (vii) Warrants to purchase 807,113 shares of Class E Common Stock at an
exercise price of $0.01 per share. Section 4.2 of the Disclosure Letter sets
forth a complete and accurate schedule as of May 20, 2003 of all holders of
record of the issued and outstanding capital stock of the Company and all
holders of Company Stock Options and, as of May 14, 2003, all of the holders of
Warrants, identifying, in the case of Company Stock Options and Warrants, the
number of shares of Class A Common Stock and Class E Common Stock covered
thereby and the applicable exercise price. Since March 29, 2003, no additional
shares of capital stock have been issued by the Company (except shares of Class
A Common Stock, if any, that have been issued pursuant to the exercise of stock
options so identified in Section 4.2 of the Disclosure Letter and shares of
Class E Common Stock, if any, that have been issued pursuant to the exercise of
Warrants) and, no additional stock options or other stock rights have been
granted. No stock appreciation rights, phantom stock, profit participation or
other similar rights with respect to the Company or any capital stock of the
Company are authorized or outstanding. All of the issued and outstanding Shares
have been duly authorized and are validly issued, fully paid, nonassessable and
were not issued in violation of any preemptive rights or comparable rights of
any Person to acquire such shares. Except as disclosed in this Section 4.2 or in
Section 4.2 of the Disclosure Letter, as of the date hereof, (A) there are no
outstanding securities, options, warrants, calls, rights, commitments,
agreements, proxies, voting trusts, arrangements or undertakings of any kind to
which the Company or any of its Subsidiaries is a party or by which any of them
is bound obligating the Company or any of its Subsidiaries to issue, sell,
transfer, redeem or otherwise acquire, dispose or vote any shares of capital
stock or other equity securities of the Company or of any of its Subsidiaries
and (B) the Company is not a party to or bound by (x) any agreement or
commitment pursuant to which the Company is or could be required to register any
securities under the Securities Act or (y) any debt agreements or instruments
which grant any rights to vote (contingent or otherwise) on matters on which
shareholders of the Company may vote.
Section 4.3.......Subsidiaries. Except as disclosed in the SEC Filings or
in Section 4.3 of the Disclosure Letter, the Company does not own, directly or
indirectly, (a) any shares of capital stock of any corporation or (b) any other
equity interest in any Person, domestic or foreign. All of the outstanding
shares of capital stock and all equity interests of each of the Company's
Subsidiaries that are owned by the Company or any other Subsidiary of the
Company (collectively, the "Subsidiary Shares") have been duly authorized and
are validly issued, fully paid and nonassessable and were not issued in
violation of any preemptive rights or comparable rights. There are no
irrevocable proxies or similar obligations with respect to any of the Subsidiary
Shares and, except as set forth in the SEC Filings or in Section 4.3 of the
Disclosure Letter, all of the Subsidiary Shares are owned by the Company or
another Subsidiary of the Company free and clear of all liens, claims, pledges,
charges, options, security interests, encumbrances or restrictions of any kind
whatsoever (collectively, "Liens") with respect thereto. Except as disclosed in
Section 4.3 of the Disclosure Letter, the Company owns and has full voting and
disposition power over all of the equity interests of each of its Subsidiaries.
No stock appreciation rights, phantom stock, profit participation or other
similar rights with respect to any Subsidiary or any capital stock of any
Subsidiary are authorized or outstanding.
Section 4.4.......Authority Relative to this Agreement. The Company has the
requisite corporate power and authority to execute and deliver this Agreement
and, subject to obtaining the necessary approval of its shareholders in
accordance with the MBCA, to consummate the transactions contemplated hereby.
The Board, at a meeting duly called and held, has unanimously (i) determined
that this Agreement and the transactions contemplated hereby, including the
Merger, are fair to and in the best interests of the shareholders of the
Company, (ii) approved this Agreement and the transactions contemplated hereby,
including the Merger and (iii) resolved to recommend that the holders of the
Shares entitled to vote approve and adopt this Agreement and the transactions
contemplated hereby, including the Merger. No other corporate proceedings on the
part of the Company are necessary to authorize this Agreement or to consummate
the transactions so contemplated (other than the vote of the shareholders
required under the MBCA). Section 302A.673 of the MBCA is not applicable to the
transactions contemplated by this Agreement. This Agreement has been duly and
validly executed and delivered by the Company and, assuming the due
authorization, execution and delivery hereof by Parent and MergerCo, constitutes
a valid and binding agreement of the Company, enforceable against the Company in
accordance with its terms, except that such enforceability may be limited by (i)
bankruptcy, insolvency, moratorium or other similar laws affecting or relating
to enforcement of creditors' rights generally and (ii) general principles of
equity (regardless of whether enforceability is considered in a proceeding at
law or in equity).
Section 4.5.......Noncontravention. Neither the execution and delivery of
this Agreement nor the consummation of the transactions contemplated hereby will
(a) conflict with or result in any violation of any provision of the articles of
incorporation or bylaws (or equivalent governing instruments) of the Company or
any of its Subsidiaries, (b) except as set forth in Section 4.5 of the
Disclosure Letter, require any consent, approval or notice under, or conflict
with or result in a violation or breach of, or constitute (with or without
notice or lapse of time or both) a default (or give rise to any right of
termination, cancellation or acceleration) under any of the terms, conditions or
provisions of any Contracts of the Company or any of its Subsidiaries or (c)
subject to the approvals, filings and consents referred to in Section 4.6 or as
set forth in Section 4.5 of the Disclosure Letter, violate any Legal
Requirements applicable to the Company or any of its Subsidiaries, except in the
case of clauses (b) and (c), with respect to matters that are not reasonably
likely to (x) result in a Material Adverse Effect with respect to the Company,
(y) impair the ability of the Company to perform its obligations under this
Agreement in any material respect or (z) delay in any material respect or
prevent the consummation of any of the transactions contemplated by this
Agreement.
Section 4.6.......Governmental Approvals. No consent, approval or
authorization of, or declaration or filing with, any Governmental Entity on the
part of the Company or any of its Subsidiaries that has not been obtained or
made is required in connection with the execution or delivery by the Company of
this Agreement or the consummation by the Company of the transactions
contemplated hereby, other than (i) the filing of the Articles of Merger with
the Secretary of State of the State of Minnesota and compliance with Sections
302A.471 and 302A.473 of the MBCA regarding dissenters' rights, (ii) compliance
with the notification and waiting period requirements of the HSR Act, (iii) any
required filings under the Competition Act, (iv) such filings as may be required
by any applicable state securities or "blue sky" laws or state takeover laws and
(v) consents, approvals, authorizations, declarations or filings that, if not
obtained or made, are not reasonably likely to (x) result in a Material Adverse
Effect with respect to the Company, (y) impair the ability of the Company to
perform its obligations under this Agreement in any material respect or (z)
delay in any material respect or prevent the consummation of any of the
transactions contemplated hereby.
Section 4.7.......SEC Filings; Financial Statements.
(a)......The Company has made all required SEC Filings. As of their
respective dates, the SEC Filings complied as to form in all material respects
with the requirements of the Exchange Act, and the rules and regulations of the
SEC promulgated thereunder, applicable to such SEC Filings, and the SEC Filings
did not contain any untrue statement of a material fact or omit to state a
material fact required to be stated therein or necessary to make the statements
therein, in light of the circumstances under which they were made, not
misleading. The financial statements set forth in the SEC Filings comply as to
form in all material respects with applicable accounting requirements and the
published rules and regulations of the SEC promulgated under the Exchange Act
and have been prepared in accordance with GAAP applied on a consistent basis
during the periods involved (except as may be indicated in the notes to such
financial statements) and fairly present in all material respects the
consolidated financial position of the Company and its Subsidiaries at the
respective dates thereof and the consolidated results of operations and cash
flows for the respective periods then ended (subject, in the case of unaudited
interim financial statements, to exceptions permitted by Form 10-Q under the
Exchange Act).
(b)......Unaudited consolidated management accounts of the Company and its
Subsidiaries for the fiscal monthly period ending May 31, 2003 (the "Management
Accounts") have been furnished to Parent. The Management Accounts have been
prepared on a consistent basis with the unaudited interim financial statements
as of and for the fiscal quarter ended March 29, 2003 included in the SEC
Filings and fairly present in all material respects, in accordance with GAAP
applied on a consistent basis, the consolidated financial position of the
Company and its Subsidiaries at May 31, 2003 and the consolidated results of
operation for the fiscal monthly period then ended, subject, in each case, to
normal quarterly adjustments (including any adjustments under Staff Accounting
Bulletin No. 101) and the absence of notes to such Management Accounts.
(c)......Neither the Company nor any Subsidiary has any material
indebtedness, obligation or liability of any kind (whether accrued, absolute,
contingent or otherwise, and whether due or to become due) which would be
required to be reflected on a balance sheet prepared in accordance with GAAP
consistently applied in order that such balance sheet present fairly in all
material respects the consolidated financial position of the Company and its
Subsidiaries which was not fully reflected in, reserved against or otherwise
described in the most recent financial statements contained in the SEC Filings
or the Management Accounts, other than any such indebtedness, obligation or
liability incurred in the ordinary course of business since May 31, 2003 and
other than as contemplated by this Agreement.
Section 4.8.......Absence of Certain Changes. Except as set forth in the
SEC Filings or set forth in Section 4.8 of the Disclosure Letter, since December
28, 2002, except in connection with this Agreement, the Company and its
Subsidiaries have conducted their business in the ordinary course consistent
with past practice and there has not been (i) any change, condition, event or
occurrence which has had or would reasonably be expected to have a Material
Adverse Effect with respect to the Company, (ii) any declaration, setting aside
or payment of any dividend or other distribution (whether in cash, stock or
property) with respect to any of the Company's capital stock, except for
dividends payable with respect to the Preferred Stock in additional shares of
Preferred Stock pursuant to its terms, (iii) any split, combination or
reclassification of any of its capital stock or any issuance or the
authorization of any issuance of any other securities in respect of, in lieu of
or in substitution for shares of its capital stock, (iv) (x) any granting by the
Company or any of its Subsidiaries to any executive officer or other key
employee of the Company or any of its Subsidiaries of any increase in
compensation, except for normal increases in the ordinary course of business
consistent with past practice or as required under employment agreements in
effect as of the date hereof which have previously been provided or made
available to Parent and MergerCo, (y) any granting by the Company or any of its
Subsidiaries to any such executive officer of any increase in severance or
termination pay, except as was required under any employment, severance or
termination agreements in effect as of the date hereof which have previously
been provided or made available to Parent and MergerCo or (z) any entry by the
Company or any of its Subsidiaries into any employment, severance or termination
agreement with any such executive officer except in the ordinary course of
business consistent with past practice, (v) any material damage, destruction or
loss to any material property, whether or not covered by insurance, (vi) except
insofar as may have been disclosed in the SEC Filings or required by a change in
GAAP, any significant change in accounting methods, principles or practices (for
financial accounting or tax purposes), (vii) any making or revocation of any Tax
elections or any settlement or compromises of any federal, state, foreign or
local Tax liability or any waivers or extensions of the statute of limitations
in respect of such Taxes where the amount of such Taxes subject to settlement,
compromise or waiver or extension of the statute of limitations is greater than
$100,000 individually or $500,000 in the aggregate, (viii) any entry by the
Company or any of its Subsidiaries into any material transaction or Contract,
(ix) any failure to pay and discharge current liabilities in the ordinary course
of business consistent with past practice except where a liability is disputed
in good faith by appropriate proceedings or any significant change that is
adverse to the Company in policies or practices with respect to the collection
of accounts receivable or the payment of sales representative draws, (x) any
making of loans, advances or capital contributions to, or investments in, any
Person (other than by the Company in any wholly owned Subsidiary of the Company
or by any Subsidiary of the Company in a wholly owned Subsidiary of the Company
or other than advances by the Company and its Subsidiaries made to sales
representatives in the ordinary course of business) in excess of $1,000,000 in
the aggregate or payment of any fees or expenses to any of the Company's
shareholders or any Affiliate of any of such shareholders , except as required
under any management agreement in effect as of the date hereof which has
previously been provided or made available to Parent and MergerCo, (xi) the
incurrence of Lien on any of its assets with a value in excess of $500,000,
except for any Lien that is a Permitted Exception, or acquisition of any assets
or sale, assignment, transfer, conveyance, lease or other disposition of any
assets of the Company or any Subsidiary, except for assets acquired or sold,
assigned, transferred, conveyed, leased or otherwise disposed of (A) in the
ordinary course of business or (B) otherwise not in excess of $500,000 in the
aggregate, (xii) any incurrence of any indebtedness for borrowed money, other
than (A) borrowings under the Company's revolving credit facility in the
ordinary course of business consistent with past practice and (B) other
indebtedness for borrowed money in an amount not in excess of $1,000,000 in the
aggregate, (xiii) any cancellation or compromise of any debt or claim or
amendment, cancellation, termination, relinquishment, waiver or release of any
Contract or right except in the ordinary course of business and which, in the
aggregate, would not be material to the Company and its Subsidiaries taken as a
whole, (xiv) any material delay in making any capital expenditure for an
approved capital project as set forth in the Company's 2003 budget or the making
or commitment to make any capital expenditures or capital additions or
betterments materially in excess of amounts for such purposes set forth in the
Company's 2003 budget, (xv) any grant of any material license or sublicense of
any rights under or with respect to any Intellectual Property, (xvi) any
institution or settlement of any material Legal Proceeding, or (xvii) any
agreement to do anything set forth in this Section 4.8.
Section 4.9.......Finders and Investment Bankers. Neither the Company nor
any of its officers or directors has employed any investment banker, business
consultant, financial advisor, broker or finder in connection with the
transactions contemplated by this Agreement, except for Xxxxxxx Xxxxx and DB, or
obligated the Company or any of its Subsidiaries to pay any investment banking,
business consultancy, financial advisory, brokerage or finders' fees or
commissions in connection with the transactions contemplated hereby, except for
fees payable to Xxxxxxx Sachs and DB. The amount of such fees payable to Xxxxxxx
Xxxxx and DB and the terms related thereto have been previously and accurately
disclosed in writing to Parent.
Section 4.10......Voting Requirement. The affirmative vote of the
shareholders of the Company entitled to vote on the Merger as required by the
MBCA is the only vote of the Company's shareholders necessary to approve this
Agreement and the transactions contemplated hereby, including the Merger, under
any applicable law, rule or regulation, including the MBCA, or pursuant to the
requirements of the Company's articles of incorporation or bylaws.
Section 4.11......Litigation. Except as disclosed in the SEC Filings or in
Section 4.11 of the Disclosure Letter, there is no action, suit, investigation,
arbitration, claim, or proceeding pending or, to the knowledge of the Company,
threatened against the Company or any of its Subsidiaries before any court,
arbitral authority or Governmental Entity which, as of the date hereof, (i)
seeks damages (including compensatory, consequential and punitive damages) in
excess of $1,000,000 or seeks injunctive relief or (ii) would materially and
adversely affect the Company's ability to consummate the transactions
contemplated by this Agreement, nor is there any judgment, decree, injunction,
rule or order of any court, Governmental Entity or arbitrator outstanding
against the Company or any of its Subsidiaries that would materially and
adversely affect the Company's ability to consummate the transactions
contemplated by this Agreement.
Section 4.12......Taxes.
(a)......Each of the Company and its Subsidiaries and any consolidated,
combined, unitary or aggregate group for Tax purposes of which the Company or
any of its Subsidiaries is or has been a member has timely filed or caused to be
filed (or will file or cause to be filed) with the appropriate taxing
authorities in all jurisdictions in which such Tax returns are required to be
filed all income Tax Returns, and all other Tax Returns which, if properly
prepared and filed, would involve more than an immaterial amount of Taxes,
required to be filed by it (taking into account applicable extension periods)
for all taxable or reporting periods ending on or before the Closing Date, and
has paid all Taxes required to be paid and has made adequate provision on its
financial statements in accordance with GAAP for all Taxes which are not yet due
and payable. All such Tax Returns are true, correct and complete in all material
respects, and there are no liens on any of the assets of the Company or any of
its Subsidiaries that arose in connection with any failure (or alleged failure)
to pay any Tax. The Company and its Subsidiaries have complied in all material
respects with all applicable laws, rules and regulations relating to the payment
and withholding of Taxes and have duly and timely withheld and collected from
employee salaries, wages and other compensation and from all other amounts and
have paid over to the appropriate taxing authorities all amounts required to be
so withheld and paid over for all periods under all applicable laws.
(b)......Except as set forth on Section 4.12(b) of the Disclosure Letter,
neither the Company nor any of its Subsidiaries has (i) been notified in writing
that any Tax Return is currently under audit by the IRS or any state or local
taxing authority or that it intends to conduct such an audit and no action,
suit, investigation, claim or assessment is pending or, to the knowledge of the
Company, proposed with respect to any Taxes; (ii) made any agreement for the
extension of time or the waiver of the statute of limitations for the
assessment, collection or payment of any Taxes; (iii) been notified in writing
that any material claim for unpaid Taxes has become a lien or encumbrance of any
kind against the property of the Company or any of its Subsidiaries or is being
asserted against the Company or any of its Subsidiaries; or (iv) executed any
power of attorney with respect to any Tax matter that is currently in force.
(c)......Neither the Company nor any of its Subsidiaries has any liability
for Taxes as a result of Section 1.1502-6 of the Treasury Regulations or any
comparable provision of state, local or foreign law (other than as a result of
being in a group of which the Company is the common parent). The Company is not
a USRPHC and was not a USRPHC on any "determination date" (as defined in Section
1.897-2(c) of the Treasury Regulations) that occurred in the five-year period
preceding the Closing Date.
(d)......Except as set forth on Section 4.12(d) of the Disclosure Letter,
no claim has been made by a taxing authority in a jurisdiction where the Company
or any of its Subsidiaries does not file Tax Returns to the effect that such
entity is or may be subject to taxation by that jurisdiction.
(e)......Except as set forth on Section 4.12(e) of the Disclosure Letter,
Parent has been provided or given access to (i) all income Tax Returns of the
Company and its Subsidiaries for all taxable periods ending on or after December
31, 1999 and (ii) all United States and Canadian federal revenue agents' reports
and other similar reports relating to the audit or examination of the Tax
Returns of the Company and its Subsidiaries for all taxable periods ending on or
after December 31, 1999. No issue has been raised by a domestic or federal,
state, local or foreign taxing authority in any current or prior examination,
which, by application of the same or similar principles, could reasonably be
expected to result in a proposed deficiency for any subsequent taxable period.
(f)......Neither the Company nor any other Person (including any of its
Subsidiaries) on behalf of the Company or any of its Subsidiaries has (i) agreed
to or are required to make any adjustments pursuant to Section 481(a) of the
Code or any similar provision of state, local or foreign law by reason of a
change in accounting method or has any knowledge that the IRS has proposed any
such adjustment or change in accounting method, or has any application pending
with any taxing authority requesting permission for any changes in accounting
methods that relate to the business or operations of the Company or any of its
Subsidiaries, or (ii) filed a consent pursuant to Section 341(f) of the Code or
agreed to have Section 341(f)(2) of the Code apply to the disposition of a
subsection (f) asset (as such term is defined in Section 341(f) of the Code)
owned by the Company or any of its Subsidiaries.
(g)......Except as set forth on Section 4.12(g) of the Disclosure Letter,
no property owned by the Company or any of its Subsidiaries (i) is property
required to be treated as being owned by another Person pursuant to the
provisions of Section 168(f)(8) of the Internal Revenue Code of 1954, as amended
and in effect immediately prior to the enactment of the Tax Reform Act of 1986,
(ii) constitutes "tax-exempt use property" within the meaning of Section
168(h)(1) of the Code or (iii) is "tax-exempt bond financed property" within the
meaning of Section 168(g) of the Code.
(h)......Except as set forth on Section 4.12(h) of the Disclosure Letter,
neither the Company nor any of its Subsidiaries is a party to (i) any tax
sharing or similar agreement or arrangement (whether or not written) pursuant to
which they will have any obligation to make any payments after the Closing, (ii)
any agreement that could obligate it to make any payment in connection with the
transactions contemplated by this Agreement that will not be deductible by the
Company or any of its Subsidiaries by reason of Section 280G of the Code, (iii)
a closing agreement pursuant to Section 7121 of the Code or any predecessor
provision thereof or any similar provision of state, local or foreign law with
respect to the Company or any of its Subsidiaries involving more than $100,000
of Taxes or (iv) otherwise bound by any private letter ruling of the IRS or
comparable rulings or guidance issued by any other taxing authority. The Company
has provided to Parent all information which is necessary in order to accurately
determine the applicability of Section 280G of the Code to the contractual
arrangements between the Company or its Subsidiaries and their respective
employees.
(i)......Neither the Company nor any of its Subsidiaries (i) has
constituted either a "distributing corporation" or a "controlled corporation"
(within the meaning of Section 355(a)(1)(A) of the Code) in a distribution of
stock qualifying for tax-free treatment under Section 355 of the Code (x) in the
two years prior to the date of this Agreement or (y) in a distribution which
could otherwise constitute part of a "plan" or "series of related transactions"
(within the meaning of Section 355(e) of the Code) in conjunction with the
transactions contemplated by this Agreement or (ii) is or was a member of any
consolidated, combined, unitary or affiliated group of corporations that filed
or was required to file a consolidated, combined or unitary Tax Return, other
than the group of which it is now a member.
Section 4.13......Compliance with Laws.
(a)......Except as disclosed in Section 4.13(a) of the Disclosure Letter,
the conduct of business by the Company and its Subsidiaries since January 1,
2000 has not violated or breached and currently does not violate or breach (and
no event has occurred which with notice or the lapse of time, or both, would
constitute a violation or breach of) any laws, statutes, ordinances or
regulations of any Governmental Entity applicable to the Company or any of its
Subsidiaries or any of their respective properties or assets, except for
violations and breaches which have not given and would not reasonably be
expected to give rise to a material liability. Except as set forth in the SEC
Filings or in Section 4.13(a) of the Disclosure Letter, there are no unresolved
notices of deficiency or charges of violation with respect to the matters
covered by this Section 4.13(a) brought or, to the knowledge of the Company,
threatened or pending against the Company, which have given or would reasonably
be expected to give rise to a material liability.
(b)......Except as disclosed in Section 4.13(b) of the Disclosure Letter,
each of the Company and its Subsidiaries has all franchises, grants,
authorizations, licenses, establishment registrations, product listings,
permits, easements, variances, exceptions, consents, certificates,
identification and registration numbers, approvals and orders of any
Governmental Entity necessary for it to own or lease and to operate its
properties or otherwise to carry on its business as it is now being conducted
(all such matters are hereinafter referred to collectively as "Company
Permits"), except those the absence of which has not materially impaired and
would not reasonably be expected to materially impair the ability of the Company
or its Subsidiaries to conduct its business as currently conducted. Neither the
Company nor any of its Subsidiaries has received any notice or claim pertaining
to the failure to obtain any Company Permit, except for any such notice or claim
regarding any such failure that has not given and would not reasonably be
expected to give rise to a material liability.
Section 4.14......Environmental Matters. Except for such matters that are
disclosed in the SEC Filings or in Section 4.14 of the Disclosure Letter and for
such matters as have not resulted and would not reasonably be expected to result
in the Company or the Subsidiaries incurring any material Environmental
Liabilities (i) the assets, Real Property, Former Real Property, businesses and
operations of the Company and its Subsidiaries are and have been in compliance
with applicable Environmental Laws; (ii) the Company and its Subsidiaries have
obtained and, as currently operating, are and have been in compliance with all
Company Permits necessary under any Environmental Law for the conduct of the
business and operations of the Company and its Subsidiaries in the manner now
conducted; (iii) all Hazardous Substances generated at the Real Property or
Former Real Property or in connection with any operations of the Company have
been transported and otherwise handled, treated and disposed of in compliance
with all applicable Environmental Laws and in a manner that does not result in
liability under Environmental Laws; (iv) no Hazardous Substances have been
disposed of or otherwise released, handled or stored by the Company on the Real
Property or Former Real Property on which the Company's business is or has been
conducted or elsewhere in violation of applicable Environmental Laws or in a
manner that would reasonably be expected to result in the Company incurring
Environmental Liabilities and (v) neither the Company nor any of its
Subsidiaries nor any of their respective assets, Real Property, Former Real
Property, businesses or operations has received or is subject to any outstanding
order, decree, judgment, complaint, agreement, claim, citation, notice,
investigation, inquiry or proceeding indicating that the Company or any of its
Subsidiaries is or may be (a) liable for a violation of any Environmental Law or
(b) liable for any Environmental Liabilities (including, without limitation, any
such Environmental Liabilities incurred in connection with being designated as a
"potentially responsible party" pursuant to the Comprehensive Environmental
Response, Compensation and Liability Act or any analogous state law)
(collectively, "Environmental Claims"), and, to the knowledge of the Company, no
such Environmental Claims are threatened). Notwithstanding anything to the
contrary, any representation or warranty contained in this Section 4.14 that
relates to Former Real Property shall only apply to Former Real Property during
the periods such real property was owned or operated by the Company. The
transactions contemplated hereunder do not involve any property in Connecticut
or New Jersey that would require notification to the governmental authority with
jurisdiction over the environment and the possible obligation to investigate or
remediate such property under either the Connecticut Property Transfer Act or
the New Jersey Industrial Site Recovery Act.
Section 4.15......Certain Employment Agreements.
(a)......Except as disclosed in Section 4.15(a) of the Disclosure Letter or
in the SEC Filings, neither the Company nor any of its Subsidiaries is a party
to or bound by any Contract regarding the employment, services, consulting,
termination or severance from employment of any director, officer or employee of
the Company or any of its Subsidiaries that provides for or could result in
payments in excess of $200,000 in any twelve month period.
(b)......Section 4.15(b) of the Disclosure Letter sets forth all
independent sales representatives whose service agreements with the Company or
its Subsidiaries have been involuntarily terminated by the Company since January
1, 2001.
Section 4.16......Employee Benefit Matters.
(a)......Each of the Company and its Subsidiaries since January 1, 2000 has
complied, and currently is in compliance with, the applicable provisions of
ERISA, the Code and all other applicable laws with respect to each compensation
or benefit plan, agreement, policy, practice, program, or arrangement (whether
or not subject to ERISA) maintained by the Company or any of its Subsidiaries
for the benefit of any employee, former employee, independent contractor or
director of the Company or any of its Subsidiaries (including, without
limitation, any employment agreements or any pension, savings, profit-sharing,
bonus, medical, insurance, disability, severance, executive compensation, fringe
benefit, incentive, stock option, performance pay, loan or loan guarantee, plant
closing, change of control, equity-based or deferred compensation plans)
(collectively, the "Plans"), except where such non-compliance has not given and
would not reasonably be expected to give rise to a material liability.
(b)......The Company has provided or made available to Parent a current,
accurate and complete copy of each Plan and, to the extent applicable, summary
plan descriptions, Forms 5500 for 2001 and actuarial reports. Section 4.16(b) of
the Disclosure Letter is a correct and complete list of all of the Plans.
(c)......Each Plan intended to qualify under Section 401 of the Code is so
qualified and each trust maintained pursuant thereto is exempt from federal
income taxation under Section 501 of the Code, and nothing has occurred with
respect to the operation of such Plans which would cause the loss of such
qualification or exemption or the imposition of any liability, penalty or tax
under ERISA or the Code, and, with respect to any such Plan for which an
application for a determination letter is pending, to the knowledge of the
Company, there are no facts that would reasonably be expected to result in the
non-issuance of such determination letter.
(d)......Except as set forth in Section 4.16(d) of the Disclosure Letter,
neither the Company, any of its Subsidiaries nor any ERISA Affiliate has since
January 1, 2000 maintained, adopted or established, contributed or been required
to contribute to, or otherwise participated in or been required to participate
in, any employee benefit plan or other program or arrangement subject to Title
IV of ERISA (including, without limitation, a Multi-Employer Plan) or any plan
otherwise subject to the minimum funding standards of Section 302 of ERISA or
Section 412 of the Code (a "Title IV Plan"). The Company has no liability
(contingent or otherwise) under Section 4069 of ERISA by reason of a transfer of
an underfunded Title IV Plan.
(e)......Except as set forth in the SEC Filings or Section 4.16(e) of the
Disclosure Letter, no Plan provides any health or medical benefits (whether or
not insured) with respect to current or former employees of the Company beyond
their retirement or other termination of service with the Company (other than
coverage mandated by Section 4980B of the Code or applicable law).
(f)......Except as set forth in Section 4.16(f) of the Disclosure Letter,
neither the Company nor any of its Subsidiaries has incurred any withdrawal
liability with respect to any Title IV Plan that is a Multi-Employer Plan. The
Company and its subsidiaries have not during the preceding six years had any
obligation or liability (contingent or otherwise) with respect to a Plan which
is described in Section 4(b)(4), 4063 or 4064 of ERISA.
(g)......No audit or investigation by any governmental authority is pending
or, to the knowledge of the Company, threatened, nor has any reportable event
(within the meaning of Section 4043 of ERISA) (other than an event for which the
30-day notice period is waived), prohibited transaction (within the meaning of
Section 4975 of the Code or Section 406 of ERISA) or breach of fiduciary duty
occurred with respect to any Plan has given or would reasonably be expected to
give rise to a material liability.
(h)......All benefits due under each Plan have been timely paid and there
is no lawsuit or claim, other than routine uncontested claims for benefits,
pending or, to the knowledge of the Company, threatened against any Plan or the
fiduciaries of any such plan or otherwise involving or pertaining to any such
Plan that has given or would be reasonably expected to give rise to a material
liability.
(i)......Except as set forth in Section 4.16(i) of the Disclosure Letter,
neither the execution and delivery of this Agreement nor the consummation of the
transactions contemplated hereby will (i) result in any payment becoming due to
any employee (current, former or retired) of the Company, (ii) increase any
benefits otherwise payable under any Plan, or (iii) result in the acceleration
of the time of payment or vesting of any such Benefits under any Plan.
(j)......No civil or criminal action brought pursuant to the provisions of
Title I, Subtitle B, Part 5 is pending or, to the knowledge of the Company,
threatened against any fiduciary of any Plan, and, to the knowledge of the
Company, none of the Plans nor any fiduciary thereof has been the direct or
indirect subject of an audit investigation or examination by any governmental or
quasi-governmental agency that has given or would be reasonably expected to give
rise to a material liability.
(k)......Except as set forth in Section 4.16(k) of the Disclosure letter,
no agreement, commitment or obligation on the part of the Company or any of its
Subsidiaries exists to increase materially any benefit under any Plan or to
adopt any new Plan.
(l)......No Plan has any material unfunded accrued benefits that are not
reflected in the SEC Filings. No "accumulated funding deficiency" as defined in
Section 412 of the Code, has been incurred with respect to any Title IV Plan
subject to Section 412 of the Code, whether or not waived, and remains
outstanding. The Company has not incurred, and does not reasonably expect to
incur (A) any liability under Title IV of ERISA arising in connection with the
termination of, or a complete or partial withdrawal from, any Title IV Plan or
(B) any liability under Section 4971 of the Code that in either case could
become a liability of the Company after the Closing Date.
(m)......The Company has provided to Parent with respect to each Plan
described in Section 3(2) of ERISA (other than a Multi-Employer Plan), each
other Plan that provides for the deferral of compensation, and each Plan
disclosed on Section 4.16(e) of the Disclosure Letter, true, accurate, and
complete copies of each such Plan's most recent financial statements and all
other financial information requested by Parent with respect to such Plans.
Since the date to which such financial information relates, there has been no
material amendment or modification to any such Plan or any of the financial
statements so provided.
(n)......The Executive Change in Control Severance Pay Plan has been
terminated and neither the Company nor any Subsidiary has any liability,
contingent or otherwise, with respect thereto.
Section 4.17......Labor Relations. Except as set forth in Section 4.17 of
the Disclosure Letter, there are: (i) no collective bargaining agreements to
which the Company or any of its Subsidiaries is a party or by which it is bound;
and (ii) no pending or, to the knowledge of the Company, threatened actions
concerning labor matters with respect to the Company or any of its Subsidiaries,
except for such actions which have not given and would not be reasonably
expected give rise to a material liability.
Section 4.18......Intellectual Property. Except as set forth in Section
4.18 of the Disclosure Letter, the Company or one of its Subsidiaries owns or
possesses adequate rights to use all material patents, trademarks, trade names,
inventions, processes, designs, formulas, know-how and other intellectual
property rights (collectively, "Intellectual Property") necessary for the
conduct of the business of the Company and its Subsidiaries as presently
conducted. Except as set forth in Section 4.18 of the Disclosure Letter, neither
the Company nor any of its Subsidiaries has received any written notice, nor, to
the knowledge of the Company, has the Company or any of its Subsidiaries
received since January 1, 2002 any written claim that any Intellectual Property
owned or used by the Company or any of its Subsidiaries infringes in any
material respect on similar rights owned or alleged to be owned by others. To
the knowledge of the Company, neither the execution and delivery of this
Agreement, nor the transactions contemplated hereby, nor the conduct of business
as currently conducted, will materially conflict with or result in a material
breach of the terms, conditions or provisions of, or constitute a material
default under, any contract relating to the Intellectual Property that is
material to the Company and its Subsidiaries, taken as a whole, under which the
Company or any of its Subsidiaries or any of the employees or officers of the
Company or any of its Subsidiaries are now obligated.
Section 4.19......Real Property.
(a)......Set forth in Section 4.19(a) of the Disclosure Letter is (i) a
complete list of all real property (the "Owned Property") owned by the Company
or any of its Subsidiaries, together with the principal use(s) for which each
such Owned Property is used, and (ii) a complete list of all real property with
respect to which the Company or any of its Subsidiaries is lessee, sublessee,
licensee or other occupant or user (the "Leased Property") together with the
principal use(s) for which each Leased Property is used. The Leased Property is
sometimes referred to collectively herein with the Owned Property as the "Real
Property." A true and complete copy of each material lease with all amendments
and modifications (the "Real Property Leases") has been delivered or made
available to Parent.
(b)......With respect to the Real Property Leases, (i) either the Company
or a Subsidiary has a valid leasehold interest in all Leased Property that is
material to the Company and its Subsidiaries, taken as a whole, in each case
free and clear of all Liens other than Permitted Exceptions, (ii) neither the
Company nor any of its Subsidiaries has sent or received written notice that,
and is not aware that, any party to a Real Property Lease has materially
breached or is in material default of any of its obligations thereunder, which
breach or default remains uncured, and no event has occurred that, with the
giving of notice or the passage of time or both, would constitute such a breach
or default thereunder; and (iii) all the material covenants to be performed by
the Company or any of its Subsidiaries or, to the knowledge of the Company, any
landlord under each material Real Property Lease have been performed in all
material respects.
(c)......Except as set forth in Section 4.19 of the Disclosure Letter, each
of the Company and its Subsidiaries, as applicable, has good and marketable
title in fee simple to the Owned Property, in each case free and clear of any
Liens, mortgages, deeds of trust, judgments, rights, encroachments, easements,
rights-of-way, ordinances, covenants, conditions, restrictions and other similar
matters, except, in each case, for Permitted Exceptions.
(d)......Each of the Company and its Subsidiaries has the right to use the
Owned Property, subject to Permitted Exceptions, in the manner and for the
purposes as each is currently being used by the Company or any Subsidiary, as
the case may be. Each of the Company and its Subsidiaries has the right to use
the Leased Properties, subject to Permitted Exceptions or the purposes as each
is currently being used by the Company or any Subsidiary, as the case may be,
except t for such matters as would not materially effect the use thereof.
Section 4.20......Contracts. Section 4.20 of the Disclosure Letter sets
forth a true and complete list of all Contracts to which (i) the Company or any
of its Subsidiaries is currently a party or by which it or any such Subsidiary
is currently bound which require payments to be made in excess of $2,000,000 per
year and are not terminable by the Company or any of its Subsidiaries on less
than sixty (60) days' notice, (ii) the Company or any of its Subsidiaries is a
party and which (x) in the fiscal year ended December 28, 2002 generated, or (y)
are expected to generate in any fiscal year thereafter, revenues in excess of
$2,000,000; or (iii) the Company or any of its Subsidiaries is bound and are of
a type described below:
(A) any material partnership, limited liability company, joint venture or
other similar agreement;
(B) any agreement (or group of directly related agreements with the same
third parties) under which the Company or any of its Subsidiaries created,
incurred, assumed or guaranteed any indebtedness which, individually or in the
aggregate, exceeds $1,000,000;
(C) any agreement that limits (or would limit after the date hereof) the
freedom or ability of the Company or any of its Subsidiaries to compete in any
material manner in any line of business or in any geographic area;
(D) any employment agreement which provides for annual compensation (salary
and bonus) that is in excess of $200,000 or which is not terminable within six
months without a penalty or premium; or
(E) any Contract that would constitute a Related Party Transaction.
Section 4.21......Insurance. Section 4.21 of the Disclosure Letter sets
forth a complete and accurate list of all material policies of insurance of any
kind or nature covering the Company or any of its Subsidiaries or any of their
respective employees, properties or assets, including, without limitation,
policies of life, disability, fire, theft, workers compensation, employee
fidelity and other casualty and liability insurance. With respect to each such
insurance policy and except as set forth in Section 4.21 of the Disclosure
Letter: (i) the policy is legal, valid, binding, enforceable in accordance with
standard practice in the insurance industry, and in full force and effect in all
material respects; (ii) neither the Company nor any of its Subsidiaries is in
material breach or default thereunder, and, to the knowledge of the Company, no
other party to any such agreement is in material breach or default thereunder
and no event has occurred that with notice or the lapse of time would reasonably
be expected to result in a material breach or default, or permit termination,
modification, or acceleration, under the policy; (iii) neither the Company nor
any of its Subsidiaries has repudiated any material provision thereof; and (iv)
all premiums due and payable thereon have been paid and none of the Company or
any of its Subsidiaries has received any written notice of cancellation,
amendment or dispute as to coverage with respect thereto.
Section 4.22......Inventories; Receivables; Payables.
(a)......The inventories of the Company and its Subsidiaries are in good
and marketable condition in all material respects, and are saleable in all
material respects in the ordinary course of business except for shorts, obsolete
or otherwise unusable inventory, for which adequate reserves have been reflected
in the most recent financial statements contained in the SEC Filings or the
Management Accounts, in accordance with GAAP consistently applied.
(b)......All accounts receivable, including salespersons overdrafts
representing receivables for sales representative draws paid in excess of earned
commissions, of the Company and its Subsidiaries reflected in the most recent
financial statements contained in the SEC Filings or the Management Accounts are
good and collectible in all material respects at the aggregate recorded amounts
thereof, net of any applicable reserve for returns, doubtful accounts or
uncollectible amounts reflected thereon, which reserves are adequate and were
calculated in a manner consistent with past practice and in accordance with GAAP
consistently applied. All accounts receivable arising after May 31, 2003 are
good and collectible in all material respects at the aggregate recorded amounts
thereof, net of any applicable reserve for returns, doubtful accounts or
uncollectible amounts, which reserves are adequate and were calculated in a
manner consistent with past practice and in accordance with GAAP consistently
applied, and since May 31, 2003, neither the Company nor any of its Subsidiaries
has made any significant change in its policies or practices regarding the
collection of its accounts receivable.
(c)......All accounts, commission and other trade payables of the Company
and its Subsidiaries reflected in the most recent financial statements contained
in the SEC Filings, the Management Accounts or arising after May 31, 2003 are
the result of bona fide transactions in the ordinary course of business in all
material respects and were calculated in a manner consistent with past practice
and in accordance with GAAP consistently applied and neither the Company nor any
of its Subsidiaries has adversely changed its policies or practices regarding
the payment of its accounts, commission and other trade payables since May 31,
2003.
Section 4.23......Related Party Transactions. Except as set forth in
Section 4.23 of the Disclosure Letter, none of the Company's nor any of its
Subsidiaries' directors, officers, employees or shareholders nor any of their
respective Affiliates (i) is involved in any material business arrangement or
other relationship with the Company or any of its Subsidiaries (whether written
or oral), (ii) owns any material property or right, tangible or intangible, that
is used by the Company or any of its Subsidiaries, (iii) is a party to any
Contract with the Company or its Subsidiaries with an aggregate value of
$200,000 per transaction or per annum, as applicable, or (iv) has borrowed any
money from, or has received the benefit of a guaranty from, the Company or any
of its Subsidiaries (each, a "Related Party Transaction").
Section 4.24......Customers, Suppliers and Sales Representatives. Section
4.24 of the Disclosure Letter sets forth a list (for the Company and its
Subsidiaries taken as a whole) of the largest 30 educational institutions who
represented the largest sources of revenue to the Company and its Subsidiaries
based upon the Company's consolidated revenues during the fiscal year ended
December 28, 2002, each supplier from whom the Company purchased greater than
$5,000,000 of goods during the fiscal year ended December 28, 2002, and each
independent sales representative for whom net commissions were greater than
$500,000 during the fiscal year ended December 28, 2002. Since December 28,
2002, to the knowledge of the Company, there has not been any material adverse
change in the business relationship of the Company and its Subsidiaries with any
supplier or sales representative listed on Section 4.24 of the Disclosure
Letter.
Section 4.25......Restricted Payments. Section 4.25 of the Disclosure
Letter accurately sets forth the size of the restricted payments basket under
the Indenture for the periods set forth in Section 4.25 of the Disclosure Letter
(it being understood that the amounts shown in the column under "April/May 2003"
are shown on a pro forma basis assuming the end of May 2003 was the end of the
Company's fiscal quarter for testing purposes under the Indenture).
ARTICLE 5
REPRESENTATIONS AND WARRANTIES OF PARENT AND MERGERCO
Parent and MergerCo, jointly and severally, hereby represent and warrant to
the Company as follows:
Section 5.1.......Organization. Each of Parent and MergerCo is a
corporation duly incorporated, validly existing and in good standing under the
laws of its jurisdiction of incorporation. MergerCo is a newly formed
corporation and, except for activities incident to the Merger, has not engaged
in any business activities of any type or kind whatsoever. Parent holds all of
the equity securities of MergerCo. MergerCo has no direct or indirect
Subsidiaries. Each of Parent and MergerCo has delivered to the Company true and
correct copies of its articles of incorporation and bylaws as in effect on the
date hereof and as proposed to be in effect immediately prior to the Effective
Time.
Section 5.2.......Authority Relative to this Agreement. Each of Parent and
MergerCo has requisite corporate power and authority to execute and deliver this
Agreement and to consummate the transactions contemplated hereby. The execution
and delivery of this Agreement by Parent and MergerCo and the consummation of
the transactions contemplated hereby, have been duly and validly authorized and
approved by the respective Boards of Directors and shareholders of Parent and
MergerCo and no other corporate proceedings on the part of Parent or MergerCo
are necessary to authorize this Agreement or to consummate the transactions
contemplated hereby. This Agreement has been duly and validly executed and
delivered by each of Parent and MergerCo and, assuming the due authorization,
execution and delivery hereof by the Company, constitutes a valid and binding
agreement of each of Parent and MergerCo, enforceable against it in accordance
with its terms, except that such enforceability (a) may be limited by
bankruptcy, insolvency, moratorium or other similar laws affecting or relating
to enforcement of creditors' rights generally and (b) is subject to general
principles of equity (regardless of whether enforceability is considered in a
proceeding at law or in equity).
Section 5.3.......Noncontravention. Neither the execution and delivery of
this Agreement nor the consummation of the transactions contemplated hereby will
(a) conflict with or result in any violation of any provision of the articles of
incorporation or bylaws (or equivalent governing instruments) of Parent or any
of its Subsidiaries, (b) require any consent, approval or notice under, or
conflict with or result in a violation or breach of, or constitute (with or
without notice or lapse of time or both) a default (or give rise to any right of
termination, cancellation or acceleration) under, any of the terms, conditions
or provisions of any Contracts of Parent or any of its Subsidiaries or (c)
subject to the approvals, filings and consents referred to in Section 5.4,
violate any Legal Requirements applicable to Parent or any of its Subsidiaries,
except in the case of clauses (b) and (c), with respect to matters that are not
reasonably likely to (x) result in a Material Adverse Effect with respect to
Parent or MergerCo, (y) impair the ability of Parent or MergerCo to perform its
obligations under this Agreement in any material respect or (z) delay in any
material respect or prevent the consummation of any of the transactions
contemplated by this Agreement.
Section 5.4.......Governmental Approvals. No consent, approval or
authorization of, or declaration or filing with, any Governmental Entity on the
part of Parent or any of its Subsidiaries that has not been obtained or made is
required in connection with the execution or delivery by Parent or MergerCo of
this Agreement or the consummation by Parent or MergerCo of the transactions
contemplated hereby, other than (i) the filing of the Articles of Merger with
the Secretary of State of the State of Minnesota, (ii) compliance with the
notification and waiting period requirements of the HSR Act, (iii) such filings
as may be required by any applicable state securities or "blue sky" laws or
state takeover laws and (iv) consents, approvals, authorizations, declarations
or filings that, if not obtained or made, are not reasonably likely to (x)
result in a Material Adverse Effect with respect to Parent or MergerCo, (y)
impair the ability of Parent or MergerCo to perform its obligations under this
Agreement in any material respect or (z) delay in any material respect or
prevent the consummation of any of the transactions contemplated hereby.
Section 5.5.......Ownership of Shares. Neither Parent nor MergerCo own any
Shares, shares of Preferred Stock, Company Stock Options or Warrants.
Section 5.6.......Funds; Solvency.
(a)......At the Closing, Parent, MergerCo and/or the Company will have
sufficient cash funds on hand to fund all obligations of Parent, MergerCo and
the Company with respect to the Merger and all related fees and expenses.
(b)......Immediately following the Closing, the Surviving Corporation will
be Solvent. For purposes of this Agreement, "Solvent" when used with respect to
the Surviving Corporation, means that, immediately following the Closing Date,
(i) the amount of the Present Fair Salable Value of its assets will, as of such
date, exceed all of its liabilities, contingent or otherwise, as of such date,
(ii) the Surviving Corporation will not have, as of such date, an unreasonably
small amount of capital for the business in which it is engaged or will be
engaged and (iii) the Surviving Corporation will be able to pay its Debts as
they become absolute and mature, taking into account the timing of and amounts
of cash to be received by it and the timing of and amounts of cash to be payable
on or in respect of its indebtedness. The term "Solvency" shall have its
correlative meaning. For purposes of the definition of "Solvent," (A) "Debt"
means liability on a "Claim;" and (B) "Claim" means (i) any right to payment,
whether or not such a right is reduced to judgment, liquidated, unliquidated,
fixed, contingent, matured, unmatured, disputed, undisputed, legal, equitable,
secured or unsecured or (ii) the right to an equitable remedy for breach on
performance if such breach gives rise to a right to payment, whether or not such
equitable remedy is reduced to judgment, liquidated, unliquidated, fixed,
contingent, matured, unmatured, disputed, undisputed, legal, equitable, secured
or unsecured. "Present Fair Salable Value" means the amount that may be realized
if the aggregate assets of the Surviving Corporation (including goodwill) are
sold as an entirety with reasonable promptness in an arms-length transaction
under present conditions for the sale of comparable business enterprises.
Section 5.7.......No Outside Reliance. Neither Parent nor MergerCo has
relied on nor is either of them relying on any statement, representation or
warranty concerning the Company or any of its Subsidiaries other than those
expressly made in this Agreement.
ARTICLE 6
COVENANTS
Section 6.1.......Conduct of Business of the Company. Except as expressly
contemplated by this Agreement, during the period from the date of this
Agreement to the Effective Time, the Company will, and will cause each of its
Subsidiaries to, conduct its operations according to its ordinary and usual
course of business and consistent with past practices in all material respects,
and, the Company will, and will cause each of its Subsidiaries to, use their
respective reasonable best efforts, consistent with prudent business judgment,
to preserve intact its business organization, keep available the services of its
executive officers and key employees and maintain satisfactory relationships
with material licensors, suppliers, contractors, distributors, customers and
others having material business relationships with it. Without limiting the
foregoing, and except as otherwise expressly contemplated by this Agreement,
prior to the Effective Time, the Company will not, and will cause each of its
Subsidiaries not to, without the prior written consent of Parent:
(a)......amend their respective articles or certificates of incorporation
or bylaws (or equivalent governing instruments);
(b)......authorize for issuance, issue, sell, pledge, encumber or deliver
or agree or commit to issue, sell, pledge, encumber or deliver any shares of its
capital stock, or issue any securities convertible into, exchangeable for or
representing a right to purchase or receive, or enter into any Contract with
respect to the issuance of, shares of its capital stock, except in the ordinary
course of business under current employee benefit plans and other than Shares
issuable upon exercise of Company Stock Options or Warrants in accordance with
the terms thereof;
(c)......split, combine or reclassify any shares of its capital stock;
declare, set aside or pay any dividend or other distribution (whether in cash,
stock or property or any combination thereof) in respect of its capital stock,
except that any wholly-owned Subsidiary of the Company may pay dividends to the
Company or to another wholly-owned Subsidiary of the Company; or redeem or
otherwise acquire any of its securities;
(d)......except as set forth in Section 6.1(d) of the Disclosure Letter,
(i) incur any indebtedness for borrowed money or guarantee any such indebtedness
of another Person, issue or sell any debt securities or warrants or other rights
to acquire any debt securities of the Company or any of its Subsidiaries,
guarantee any debt securities of another Person, enter into any "keep well" or
other agreement to maintain any financial statement condition to another Person
or enter into any arrangement having the economic effect of any of the
foregoing, except for short-term borrowings incurred in the ordinary course of
business consistent with past practice and for other borrowings not exceeding
$1,000,000 in the aggregate, or (ii) make any loans, advances or capital
contributions to, or investments in, any other Person other than to or in the
Company or any direct or indirect wholly-owned Subsidiary of the Company;
(e)......except as set forth in Section 6.1(e) of the Disclosure Letter,
acquire or sell (whether by merger, consolidation or otherwise), or lease,
encumber, transfer or dispose of assets for aggregate consideration in excess of
$1,000,000, except in the ordinary course of business;
(f)......(i) make or revoke any Tax election, (ii) settle or compromise any
federal, state, foreign or local Tax liability (iii) waive or extend the statute
of limitations in respect of any such Taxes, in the case of (ii) or (iii) where
the amount of Taxes at issue is greater than $100,000 or (iv) prepare or file
any Tax Return (or any amendment thereof) (x) other than in a manner consistent
with past practice or (y) in the case of any Tax Return in respect of income or
similar Taxes (other than Tax Returns with respect to quarterly deposits,
deposits of employee payroll withholding, or similar Tax Returns), with respect
to the filing thereof, without having provided Parent with a copy (together with
supporting work papers) at least five (5) days before the due date thereof for
Parent's review and comment;
(g)......materially modify, amend or terminate any Contract material to the
Company and its Subsidiaries taken as a whole or waive, release or assign any
material rights or claims thereunder except in the ordinary course of business
consistent with the past practices of the Company and its Subsidiaries;
(h)......except as may be required as a result of a change in law or in
generally accepted accounting principles, change any of the accounting
principles, methods or practices used by it (for financial accounting or tax
purposes);
(i)......adopt a plan of complete or partial liquidation, dissolution,
consolidation, restructuring, recapitalization, reorganization or merger;
(j)......settle any suit or claim of liability against the Company, which
is reasonably likely to materially negatively impact the Company's position with
respect to any similar pending or threatened material suit or claim;
(k)......pay or agree to pay in settlement or compromise of any suits or
claims of liability against the Company, net of insurance recoveries, more than
$750,000 for any such suit or claim or more than an aggregate of $1,500,000 for
all such suits and claims;
(l)......change in any material respect its credit policy as to sales of
inventories or its policies or practices with respect to the payment of current
liabilities, the collection of accounts receivable or the payment of sales
representative draws;
(m)......enter into any commitment for capital expenditures of the Company
and its Subsidiaries in excess of $250,000 for any individual commitment and
$500,000 for all commitments in the aggregate other than for capital
expenditures contemplated by the capital budget for fiscal year 2003, a copy of
which has been made available to Parent and/or MergerCo;
(n)......enter into, materially modify or terminate any labor or collective
bargaining agreement of the Company or any of its Subsidiaries or, through
negotiation or otherwise, make any commitment or incur any liability to any
labor organization with respect to the Company or any of its Subsidiaries;
(o)......enter into any contract, agreement or commitment which restrains,
restricts, limits or impedes the ability of the Company or any Subsidiary to
compete with or conduct any business or line of business in any geographic area;
or
(p)......commit to do any of the foregoing, take, or agree in writing or
otherwise to take, any of the foregoing actions or intentionally and knowingly
take any action that would make any representation or warranty of the Company
contained in this Agreement untrue or incorrect in any material respect as of
the date when made or as if made as of the Effective Time.
Section 6.2.......Shareholder Approval. The Company will, within twenty
(20) days following the date of this Agreement, take all action necessary in
accordance with the MBCA to seek to obtain the requisite shareholder approval of
this Agreement and the transactions contemplated hereby, at a special meeting of
shareholders (the "Shareholders Meeting"). In connection with obtaining such
shareholder approval, the Company will include, with the notice of the special
meeting of shareholders, notice of the availability of dissenting rights to the
holders of the Shares along with a copy of Sections 302A.471 and 302A.473 of the
MBCA and a brief description of the procedure to be followed to assert
dissenting rights under Sections 302A.471 and 302A.473 of the MBCA.
Section 6.3.......Access and Information. Between the date of this
Agreement and the Effective Time, the Company shall, and shall cause each of its
Subsidiaries to, afford Parent, MergerCo and their respective authorized
representatives (including their financing sources, accountants, financial
advisors, legal counsel and environmental consultants) reasonable access during
normal business hours to the properties, personnel and books and records of the
Company and its Subsidiaries and shall furnish to Parent and MergerCo (i) a copy
of each report filed by the Company with the SEC, (ii) monthly financial
statements in the form currently produced for management review and (iii) all
other information concerning the business, properties, assets and personnel of
the Company and its Subsidiaries as Parent or MergerCo may from time to time
reasonably request. Parent and MergerCo agree on their own behalf and on behalf
of their Affiliates and their respective authorized representatives (including
their accountants, financial advisors, consultants and legal counsel) that any
information furnished pursuant to this Section 6.3 will be subject to the
provisions of the Confidentiality Agreement, the terms of which are incorporated
herein by reference. Nothing in this Section 6.3 shall be interpreted so as to
grant to Parent, MergerCo or any of their Affiliates or their respective
authorized representatives (including their accountants, financial advisors,
consultants and legal counsel) the right to perform invasive or subsurface
investigations of the properties or facilities of the Company or any of its
Subsidiaries.
Section 6.4.......Governmental Filings and Consents. Upon the terms and
subject to the conditions of this Agreement, each of the parties hereto shall
use all reasonable efforts to take, or cause to be taken, all action, and to do
or cause to be done, and to assist and cooperate with the other parties in
doing, all things necessary, proper or advisable to consummate and make
effective as promptly as practicable the transactions contemplated by this
Agreement, including using all reasonable efforts to (a) obtain all consents,
amendments to or waivers under the terms of any of the Company's Contracts
required by the transactions contemplated by this Agreement and (b) effect
promptly all necessary or appropriate registrations and filings with
Governmental Entities, including, without limitation, filings and submissions
pursuant to the HSR Act and, if required, the Competition Act. In addition, each
of the Company, the Parent and MergerCo shall (x) make or cause to be made all
filings required of each of them or any of its respective Subsidiaries or
Affiliates with respect to the transactions contemplated hereby as promptly as
practicable and, in any event, with respect to the HSR Act within seven (7)
Business Days after the date of this Agreement and, to the extent required with
respect to the Competition Act, within fifteen (15) days after the date of this
Agreement, (y) comply at the earliest practicable date with any request under
the HSR Act or the Competition Act for additional information, documents, or
other materials received by each of them or any of its respective Subsidiaries
from any Governmental Entity in respect of such filings or such transactions,
and (z) cooperate with each other in connection with any such filing (including,
to the extent permitted by applicable law, providing copies of all such
documents to the non-filing parties prior to filing and considering all
reasonable additions, deletions or changes suggested in connection therewith)
and in connection with resolving any investigation or other inquiry of any
Governmental Entity with respect to any such filing or any such transaction.
Each such party shall use its best efforts to furnish to each other all
information required for any application or other filing to be made pursuant to
any applicable law in connection with the transactions contemplated by this
Agreement. Each such party shall promptly inform the other parties hereto of any
oral communication with, and provide copies of written communications with, any
Governmental Entity regarding any such filings or any such transaction. No party
hereto shall independently participate in any formal meeting with any
Governmental Entity in respect of any such filings, investigation, or other
inquiry without giving the other parties hereto prior notice of the meeting and,
to the extent permitted by such Governmental Entity, the opportunity to attend
and/or participate. Subject to applicable law, the parties hereto will consult
and cooperate with one another in connection with any analyses, appearances,
presentations, memoranda, briefs, arguments, opinions and proposals made or
submitted by or on behalf of any party hereto relating to proceedings under the
HSR Act and the Competition Act. Each such party shall use its best efforts to
resolve such objections, if any, as may be asserted by any Governmental Entity
with respect to the transactions contemplated by this Agreement under the HSR
Act or the Competition Act.
Section 6.5.......Funding; Cooperation.
(a)......Parent and MergerCo hereby covenant that, subject to the
satisfaction of the conditions set forth in Section 7.1 and Section 7.2, they
will have on hand immediately prior to the Effective Time, cash funds that are
sufficient to fund all obligations of Parent, MergerCo and the Company with
respect to the Merger and all related fees and expenses.
(b)......The Company shall, to the extent Parent may reasonably request in
connection with any third-party financing Parent and MergerCo may seek to obtain
in order to fund the transactions contemplated hereby and to refinance the
existing indebtedness of the Company, use its best efforts, to: (i) cooperate in
the preparation of any offering memorandum or similar document, (ii) make senior
management of the Company reasonably available for customary "roadshow"
presentations, (iii) cooperate with prospective lenders, placement agents,
initial purchasers and their respective advisors in performing their due
diligence, including, without limitation, any environmental assessments, (iv)
enter into customary agreements with underwriters, initial purchasers or
placement agents, (v) enter into or help procure pledge and security documents,
other definitive financing documents or other requested certificates or
documents, including a customary certificate of the chief financial officer of
the Company with respect to solvency matters, comfort letters of accountants,
legal opinions and real estate title documentation and (vi) to the extent
permitted by the related Indenture or Certificate of Designations, cooperate
with Parent and MergerCo in connection with any change of control offers to be
made in respect of the Preferred Stock and/or the Notes in connection with the
transactions contemplated by this Agreement. In addition, in the event that
Parent and MergerCo elect to refinance the Credit Facility and/or the Notes
and/or redeem the Preferred Stock in connection with the transactions
contemplated hereby, the Company shall, at the request of Parent or MergerCo,
assist Parent and MergerCo in effecting any such redemption offer and call for
prepayment or redemption, or prepay, redeem and/or renegotiate, as the case may
be, the Credit Facility, the Notes and the Preferred Stock and to provide such
other commercially reasonable cooperation as Parent or MergerCo reasonably
requests with respect thereto, including, without limitation, obtaining pay-off
letters and terminating security interests under the Credit Facility, and in
connection with any debt tender offer and/or consent solicitation by Parent or
MergerCo with respect to the Notes. Notwithstanding the forgoing, nothing in
this Agreement shall require the Board of the Company to take any action to
approve (i) any third party financing provided in connection with the Merger
(including any refinancing of the Credit Facility, the Notes or the Preferred
Stock) or (ii) any offer to redeem or repurchase the Notes or the Preferred
Stock (it being understood that all such necessary approvals shall be obtained
from the board of directors of the Surviving Corporation).
Section 6.6.......Public Announcements. The initial press release or
releases with respect to the transactions contemplated by this Agreement, as
well as the press release or releases with respect to consummation of such
transactions, shall be in the form agreed to by Parent and the Company. Through
the Effective Time, Parent, on the one hand, and the Company, on the other hand,
shall not, and shall cause their Subsidiaries and Affiliates not to, issue or
cause the publication of any other press release or other announcement with
respect to the Merger, this Agreement or the other transactions contemplated
hereby without the consent of the other (which consent shall not be unreasonably
withheld or delayed), except where such release or announcement is required by
applicable law or pursuant to any listing agreement with, or the rules or
regulations of, any securities exchange or any other regulatory requirement.
Section 6.7.......Indemnification and Insurance.
(a)......Parent and MergerCo agree that (i) the articles of incorporation
or the bylaws of the Surviving Corporation and its Subsidiaries immediately
after the Effective Time shall contain provisions with respect to
indemnification and exculpation from liability that are at least as favorable to
the beneficiaries of such provisions as those provisions that are set forth in
the articles of incorporation and bylaws of the Company and its Subsidiaries,
respectively, on the date of this Agreement, which provisions shall not be
amended, repealed or otherwise modified for a period of six years following the
Effective Time in any manner that would adversely affect the rights thereunder
of Persons who at or prior to the Effective Time were directors, officers,
employees or agents of the Company or any of its Subsidiaries, unless such
modification is required by law and (ii) all rights to indemnification as
provided in any indemnification agreements with any current or former directors,
officers and employees of the Company or any of its Subsidiaries as in effect as
of the date hereof with respect to matters occurring at or prior to the
Effective Time shall survive the Merger.
(b)......For a period of six years after the Effective Time, the Surviving
Corporation shall maintain officers' and directors' liability insurance and
fiduciary liability insurance covering the Persons described in paragraph (a) of
this Section 6.7 (whether or not they are entitled to indemnification
thereunder) who are currently covered by the Company's existing officers' and
directors' or fiduciary liability insurance policies set forth on Section 6.7(b)
of the Disclosure Letter on terms no less advantageous to such indemnified
parties than such existing insurance; provided that the Surviving Corporation
shall not be obligated to pay annual premiums for such insurance in excess of
200% of the last annual premium paid prior to the date of this Agreement (which
premium is set forth on Section 6.7(b) of the Disclosure Letter).
(c)......The Surviving Corporation shall indemnify and hold harmless (and
shall advance expenses to), to the fullest extent permitted under applicable
law, each director, officer and employee of the Company or any Subsidiary of the
Company, including, without limitation, officers and directors, serving as such
on the date hereof, against any reasonable expenses (including reasonable
attorneys' fees and disbursements), judgments, penalties, fines and settlements
in connection with any threatened, pending or completed civil, criminal,
administrative, arbitration or investigative proceeding relating to any of the
transactions contemplated hereby, and in the event of any such proceeding
(whether arising before or after the Effective Time), the parties hereto will
cooperate in the defense of any such matter; provided, however, that the
Surviving Corporation shall not be liable for any settlement effected without
its prior written consent, which consent shall not unreasonably be withheld or
delayed.
(d)......The Surviving Corporation shall pay all reasonable expenses,
including attorneys' fees that may be incurred by any indemnified parties in
enforcing the indemnity and other obligations provided for in this Section 6.7
to the fullest extent permitted by applicable law.
(e)......In the event the Surviving Corporation or any of its respective
successors or assigns (i) consolidates with or merges into any other Person and
is not the continuing or surviving corporation or entity of such consolidation
or merger or (ii) transfers all or substantially all of its properties and
assets to any Person, proper provisions shall be made so that the successors and
assigns of the Surviving Corporation assume the obligations set forth in this
Section 6.7.
(f)......This Section 6.7, which shall survive the consummation of the
Merger at the Effective Time and shall continue for the periods specified
herein, is intended to benefit the Company, the Surviving Corporation, and any
Person or entity referenced in this Section 6.7 or indemnified hereunder, each
of whom may enforce the provisions of this Section 6.7 (whether or not parties
to this Agreement).
Section 6.8.......Stock Option Plans. Prior to the Effective Time, the
Company shall take all actions necessary within its reasonable control to ensure
that all of the Company's stock option or other equity-based plans shall
terminate as of the Effective Time and the provisions in any other compensation
or benefit plan providing for the issuance, transfer or grant of any capital
stock of the Company or any interest in respect of any capital stock of the
Company shall be terminated as of the Effective Time, and the Company shall use
its reasonable best efforts to ensure that following the Effective Time the
Company is not bound by any Company Stock Option which would entitle any Person,
other than Parent or its Affiliates, to beneficially own, or receive any
payments (other than as otherwise contemplated by Section 3.1) in respect of,
any capital stock of the Company or the Surviving Corporation.
Section 6.9.......Solvency Opinion. To the extent a written "solvency
opinion" is being obtained for any third-party financing source of Parent and
MergerCo, Parent shall deliver at the Closing copies of that opinion addressed
to the Company and significant shareholders of the Company as designated by the
Company.
Section 6.10......No Solicitation. Except as set forth below, the Company
shall not, directly or indirectly, solicit, participate in or initiate
discussions or negotiations with, or provide any information or access to, any
person or group (other than Parent, MergerCo or any of their Affiliates or
associates) concerning any merger, sale of assets, sale of shares of capital
stock or similar transaction involving the Company or any Subsidiary or division
of the Company. The Company will notify Parent promptly if any discussions or
negotiations are sought to be initiated, any inquiry or proposal is made, or any
such information is requested in respect of any such transaction and will
promptly communicate to Parent the terms of any material proposal, discussion,
negotiation or inquiry which it may receive in respect of any such transaction
and the identity of the offeror or potential offeror. The Company shall (and
shall cause its Subsidiaries to) immediately cease and cause to be terminated
any existing discussions or negotiations with any Persons (other than Parent,
MergerCo or any of their Affiliates or associates) conducted heretofore with
respect to any of the foregoing. Notwithstanding the foregoing, if (i) the
Company receives an unsolicited inquiry or proposal from any person or group for
the acquisition of all or substantially all of the assets or outstanding shares
of the Company which the Board reasonably believes in good faith is capable of
being completed, taking into account all legal, financial regulatory and other
aspects of the proposal and the person making the proposal and (ii) the Board
determines in good faith (after consultation with its outside counsel) that
failure to respond to such inquiry or proposal would be inconsistent with its
fiduciary duties to the Company's shareholders (an "Alternative Transaction"),
then the Company may, directly or indirectly, furnish information and access
pursuant to an appropriate confidentiality agreement and may participate in
discussions and negotiate with such person or group. The Company agrees not to
release any third party from, or waive any provisions of, any confidentiality or
standstill agreement to which the Company may be a party, unless the Board
determines in good faith (after consultation with its outside counsel) that
failing to release such third party or waive such provisions would be
inconsistent with its fiduciary duties to the Company's shareholders.
Section 6.11......Notification of Certain Matters. The Company shall give
notice to Parent and Parent shall give notice to the Company, promptly upon
becoming aware of (a) any occurrence, or failure to occur, of any event, which
occurrence or failure to occur has caused or is reasonably likely to cause any
representation or warranty in this Agreement to be untrue or inaccurate in any
material respect at any time after the date hereof and prior to the Effective
Time and (b) any material failure on its part to comply with or satisfy any
covenant, condition or agreement to be complied with or satisfied by it
hereunder; provided that the delivery of any notice pursuant to this Section
6.11 shall not limit or otherwise affect the remedies available hereunder to the
party receiving such notice.
Section 6.12......Related Party Transactions with Non-Management
Affiliates. On or prior to the Closing Date, the Company and its Subsidiaries
shall terminate all Contracts with Affiliates (other than Contracts between the
Company and its Subsidiaries, Contracts between the Company and its officers and
employees and Contracts whose continuance Parent has approved in writing) and
deliver releases executed by such Affiliates with whom the Company has
terminated such Contracts pursuant to this Section 6.12 providing that no
further payments are due, or may become due, under or in respect of any such
terminated Contracts.
Section 6.13......Transaction Expenses. No later than two (2) business days
prior to the Closing Date, the Company shall deliver to Parent pay-off letters
in respect of the Transaction Expenses from Xxxxxxx Xxxxx, XX,
PricewaterhouseCoopers, Xxxxxx, Xxxx & Xxxxxxxx LLP, Stikeman Elliott LLP,
Xxxxxx and Xxxxxxx LLP and any other third-party service provider with fees and
expenses exceeding $50,000 to whom payments are required to be made by the
Company in connection with the transactions contemplated by this Agreement. The
pay-off letters shall provide that the amounts set forth therein represent
payment in full for all fees and expenses payable by the Company in connection
with the transactions contemplated by this Agreement.
ARTICLE 7
CONDITIONS TO CONSUMMATION OF ThE MERGER
Section 7.1.......Conditions to Obligations of Parent and MergerCo to
Effect the Merger. The obligation of Parent and MergerCo to effect the Merger is
subject to the satisfaction (or waiver by Parent, on behalf of itself and
MergerCo) at or prior to the Effective Time of the following:
(a)......the representations and warranties contained in Article 4 shall be
true and correct as of the date of this Agreement and as of the Effective Time
as if made at and as of the Effective Time (except for representations and
warranties that speak as of a specific date prior to the Closing Date which need
only be true and correct as of such earlier date); provided, however, that this
condition shall be deemed satisfied unless any and all inaccuracies in the
representations and warranties, in the aggregate, result in a Material Adverse
Effect with respect to the Company (ignoring for the purposes of this proviso
any qualifications by Material Adverse Effect or otherwise by material adversity
and any materiality qualification or words of similar import contained in such
representations or warranties);
(b)......the Company shall have performed in all material respects all
agreements herein required to be performed by it at or prior to the Effective
Time;
(c)......as of the Closing Date there shall be no Legal Requirement
(including, for the sake of clarity, any temporary restraining order or
preliminary injunction) in effect that prohibits or materially restrains the
consummation of the transactions contemplated hereby;
(d)......the waiting period under the HSR Act and, if applicable, the
Competition Act, shall have expired;
(e)......this Agreement and the Merger shall have been duly approved and
adopted by the shareholders of the Company entitled to vote thereon and the
holders of not more than 5% of the outstanding shares of Common Stock shall have
exercised their dissenting rights in accordance with Sections 302A.471 and
302A.473 of the MBCA;
(f)......immediately prior to the Effective Time, no Default or Event of
Default (as defined in the Indenture) shall exist;
(g)......immediately prior to the Effective Time, no Redeemable Preferred
Triggering Event (as defined in the Certificate of Designation) shall exist; and
(h)......the Company shall have furnished to Parent and MergerCo the
following:
(i) A certificate (dated the Closing Date and in form
and substance reasonably satisfactory to Parent and MergerCo) executed by
the Company certifying as to the fulfillment of
the conditions specified in Sections 7.1(a) and 7.1(b) hereof;
(ii) Certified copies of the resolutions of the board of directors of the
Company and the shareholders of the Company, authorizing and approving this
Agreement and the consummation of the transactions contemplated hereby;
(iii) (A) a copy of the certificate of incorporation or any other similar
organizational or governing document of the Company and each of its material
Subsidiaries certified as of a recent date by the Secretary of State of the
jurisdiction of incorporation or organization of each such Person, (B) a copy of
the bylaws or any other similar organizational or governing document of the
Company and each of its Subsidiaries certified by the Secretary of the Company
or such Subsidiary and (C) certificates of good standing for the Company and
from the jurisdiction of incorporation or organization of each material
Subsidiary, in each case dated not more than five (5) days prior to the Closing
Date;
(iv) Incumbency certificates relating to each Person executing (as
corporate officer or otherwise on behalf of another Person) any document
executed by the Company and delivered to Parent or MergerCo pursuant to the
terms hereof; and
(v) A properly executed and acknowledged certification from the Company in
form and substance reasonably acceptable to Parent and MergerCo, which states
that shares of capital stock of the Company do not constitute "United States
real property interests" within the meaning of Section 897(c) of the Code and
otherwise satisfies the requirements of Treasury Regulations Section
1.1445-2(c)(3) to exempt the transactions contemplated hereunder from
withholding pursuant to the provisions of the Foreign Investment in Real
Property Tax Act.
Section 7.2.......Conditions to Obligation of the Company to Effect the
Merger. The obligation of the Company to effect the Merger is subject to the
satisfaction (or waiver by it) at or prior to the Effective Time of the
following:
(a)......the representations and warranties contained in Article 5 shall be
true and correct as of the date of this Agreement and as of the Effective Time
as if made at and as of the Effective Time (except for representations and
warranties that speak as of a specific date prior to the Closing Date which need
only be true and correct as of such earlier date); provided, however, that this
condition shall be deemed satisfied unless any and all inaccuracies in the
representations and warranties, in the aggregate, result in a Material Adverse
Effect with respect to Parent and/or MergerCo (ignoring for the purposes of this
proviso any qualifications by Material Adverse Effect or otherwise by material
adversity and any materiality qualification or words of similar import contained
in such representations or warranties);
(b)......each of Parent and MergerCo shall have performed in all material
respects all agreements herein required to be performed by such party at or
prior to the Effective Time;
(c)......as of the Closing Date there shall be no Legal Requirement in
effect that prohibits or materially restrains the consummation of the
transactions contemplated hereby;
(d)......the waiting period under the HSR Act and, if applicable, the
Competition Act, shall have expired; and
(e)......Parent shall have caused MergerCo and/or the Company, as
applicable, to have sufficient funds to consummate the Merger and related
obligations.
ARTICLE 8
TERMINATION
Section 8.1.......Termination. This Agreement may be terminated and the
Merger contemplated hereby may be abandoned at any time prior to the Effective
Time, whether before or after approval thereof by the shareholders of the
Company:
(a)......by unanimous written consent of Parent, MergerCo and the Company;
(b)......by Parent, MergerCo or the Company if:
(i) any court or other Governmental Entity of competent jurisdiction shall
have issued an order, decree or ruling or taken any other action restraining,
enjoining or otherwise prohibiting the Merger and such order, decree, ruling or
other action shall have become final and nonappealable; or
(ii) the Effective Time shall not have occurred on or prior to September
30, 2003; provided, however, that the right to terminate the Agreement under
this Section 8.1(b)(ii) shall not be available to any party whose failure to
fulfill any obligation under this Agreement has been the cause of, or resulted
in, the failure of the Effective Time to occur on or before such date;
(c)......by Parent or MergerCo in the event (i) of a material breach by the
Company of this Agreement which has not been cured within 30 days after the
giving of written notice to the Company or which is incapable of being cured
prior to September 30, 2003, (ii) since December 28, 2002, there has occurred an
event, change or condition that has had or would reasonably be expected to have
a Material Adverse Effect with respect to the Company, (iii) the Merger has not
been approved and adopted by the shareholders of the Company entitled to vote
thereon in accordance with the MBCA by the date which is 30 days after the date
hereof or (iv) a holder of the Class B Common Stock, Class C Common Stock or
Class D Common Stock that is a party to a Support Agreement materially breaches
Section 2 of its Support Agreement; or
(d)......by the Company in the event of a material breach by MergerCo or
Parent of this Agreement, which has not been cured within 30 days after the
giving of written notice to MergerCo or Parent, as the case may be, or which is
incapable of being cured prior to September, 2003.
Section 8.2.......Fees and Expenses. In the event that (1) this Agreement
is terminated by Parent and MergerCo pursuant to Section 8.1(c)(iii) or (2) this
Agreement is terminated by Parent and MergerCo pursuant to Section 8.1(c)(iv)
and, for purposes of this clause (2), at the time of termination, there is a
proposal for an Alternative Transaction and the Company enters into a definitive
agreement for such Alternative Transaction within 12 months following the date
of termination, then the Company shall pay MergerCo a fee in the amount of
$25,000,000 (the "Termination Fee"). In addition, in the event that the
Termination Fee becomes payable, the Company shall reimburse MergerCo for all
out-of-pocket fees and expenses actually incurred by MergerCo, or by its
Affiliates on behalf of Parent or Merger Co, in connection with the transactions
contemplated by this Agreement (for purposes of clarity, including, without
limitation, any refinancing costs incurred by Parent or MergerCo), the amount of
such reimbursement not to exceed $5,000,000. The Company acknowledges that the
Termination Fee and expense reimbursement provided for above are an integral
part of the transactions contemplated by this Agreement and not a penalty, and
that, without the Termination Fee and expense reimbursement provided for above,
MergerCo would not enter into this Agreement. If the Company fails to pay
promptly the Termination Fee and expense reimbursement due pursuant to this
Section 8.2, the Company shall also pay to MergerCo its costs and expenses
(including legal fees and expenses) in connection with any action, including the
filing of any lawsuit or other legal action, taken to collect payment, together
with interest on the amount of the unpaid fee under this section, accruing from
its due date, at an interest rate per annum equal to the prime commercial
lending rate quoted by The Wall Street Journal. Any change in the interest rate
hereunder resulting from a change in such prime rate shall be effective at the
beginning of the day of such change in such prime rate. The Termination Fee and
expense reimbursement shall be due within three business days after this
Agreement is terminated by Parent and MergerCo (it being understood that the
Company shall not be obligated to reimburse Parent and MergerCo for their
expenses until such time as the Company receives a detailed accounting of such
expenses).
Section 8.3.......Effect of Termination. In the event that this Agreement
is terminated and the Merger is abandoned pursuant to Section 8.1, written
notice of such termination and abandonment shall forthwith be given to the other
parties and this Agreement shall terminate and the Merger shall be abandoned
without further action. If this Agreement is terminated as provided herein, no
party hereto shall have any liability or further obligation to any other party
under the terms of this Agreement; provided, however, that no such termination
shall relieve any party for liability resulting from any breach of this
Agreement by such party; provided, further, that the provisions of Section 8.2,
this Section 8.3, Article 9 and the penultimate sentence of Section 6.3 shall
survive the termination of this Agreement.
ARTICLE 9
MISCELLANEOUS
Section 9.1.......Amendment and Modification. Subject to applicable law,
this Agreement may be amended, modified or supplemented only by a written
agreement signed by each of the parties hereto at any time prior to the
Effective Time with respect to any of the terms contained herein; provided,
however, that after this Agreement is approved by the Company's shareholders, no
such amendment or modification shall (a) alter or change the amount or kind of
the consideration to be delivered to the shareholders of the Company or (b)
alter or change any of the terms or conditions of this Agreement if such
alteration or change would adversely affect the shareholders of the Company.
Section 9.2.......Non-Survival of Representations and Warranties. The
respective representations and warranties of Parent, MergerCo and the Company
contained herein shall terminate upon, and not survive, the Closing.
Section 9.3.......Waiver of Compliance; Consents. Any failure of MergerCo
or Parent, on the one hand, or the Company, on the other hand, to comply with
any obligation, covenant, agreement or condition herein may, subject to Section
9.1, be waived by Parent (on behalf of itself and MergerCo) or the Company,
respectively, only by a written instrument signed by the party granting such
waiver, but such waiver or failure to insist upon strict compliance with such
obligation, covenant, agreement or condition shall not operate as a waiver of,
or estoppel with respect to, any subsequent or other failure. Whenever this
Agreement requires or permits consent by or on behalf of any party hereto, such
consent shall be given in writing in a manner consistent with the requirements
for a waiver of compliance as set forth in this Section 9.3.
Section 9.4.......Assignment. This Agreement and all of the provisions
hereof shall be binding upon and inure to the benefit of the parties hereto and
their respective successors and permitted assigns, but neither this Agreement
nor any of the rights, interests or obligations hereunder may be assigned by any
of the parties hereto without the prior written consent of the other parties;
provided, however, that Parent or MergerCo shall be entitled to assign its
rights and responsibilities to one or more of their Affiliates but no such
assignment shall relieve Parent or MergerCo from its obligations hereunder
Section 9.5.......Expenses. Except as otherwise provided herein, whether or
not the Merger is consummated, all fees, charges and expenses incurred in
connection with this Agreement and the transactions contemplated hereby shall be
paid by the party incurring such fees, charges or expenses. Notwithstanding the
foregoing, all HSR and Competition Act filing costs incurred by the parties in
connection with the transactions contemplated by this Agreement shall be borne
equally by Parent and the Company (it being understood that such filing costs
shall not reduce the Purchase Price).
Section 9.6.......GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF MINNESOTA APPLICABLE TO
AGREEMENTS MADE AND TO BE PERFORMED ENTIRELY WITHIN SUCH STATE, WITHOUT REGARD
TO THE CHOICE OF LAW PRINCIPLES THEREOF.
Section 9.7 ......Notices. All notices and other communications hereunder
shall be in writing and shall be deemed to have been duly given (a) upon receipt
if given by delivery in Person or by facsimile; or (b) on the next business day
when sent by overnight courier service, to the parties at the following
addresses (or such other address for a party as shall be specified by like
notice):
if to Parent or MergerCo:
Ring Holding Corp.
Ring Acquisition Corp.
c/o DLJ Merchant Banking III, Inc.
Eleven Xxxxxxx Xxxxxx
Xxx Xxxx, XX 00000
Attn: Xx. Xxxxx Xxxxxxx
with a copy to:
Weil, Gotshal & Xxxxxx LLP
000 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Facsimile: (000) 000-0000
Telephone: (000) 000-0000
Attention: Xxxxxxx X. Xxxxxx, Esq.
if to the Company:
Jostens, Inc.
0000 Xxxxxx Xxxxxx Xxxxx
Xxxxxxxxxxx, Xxxxxxxxx 00000
Facsimile: (000) 000-0000
Telephone: (000) 000-0000
Attention: General Counsel
with a copy to:
Investcorp International, Inc.
000 Xxxx Xxxxxx, 00xx Xxxxx Xxxx
Xxx Xxxx, Xxx Xxxx 00000
Facsimile: (000) 000-0000
Telephone: (000) 000-0000
Attention: Xxxxx Xxxxx
and
Xxxxxx, Xxxx & Xxxxxxxx LLP
000 Xxxx Xxxxxx
00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Facsimile: (000) 000-0000
Telephone: (000) 000-0000
Attention: E. Xxxxxxx Xxxxxxx
Section 9.8.......Interpretation. The table of contents and descriptive
headings herein are inserted for convenience of reference only and are not
intended to be part of or to affect the meaning or interpretation of this
Agreement. As used in this Agreement, (i) the term "includes" and the word
"including" and words of similar import shall be deemed to be followed by the
words "without limitation," (ii) references to "knowledge" in this Agreement, or
words of similar import, when used herein with respect to the Company, shall
mean the actual knowledge after due inquiry of the following persons: Xxx
Xxxxxxxxxx, Xxxx Xxxxxxx, Xxxxxxx Xxxxxx, Xxxx Xxxxxx, Xxxxx Xxxxxxx, Xxxxxx
Xxxxx, Xxxxxx Xxxxx and Xxxx Xxxxxx, (iii) the terms "hereof," "herein," and
"herewith" and words of similar import shall, unless otherwise stated, be
construed to refer to this Agreement as a whole and not to any particular
provision of this Agreement and (iv) the word "or" shall not be exclusive.
Section 9.9.......Partial Invalidity. Wherever possible, each provision
hereof shall be interpreted in such manner as to be effective and valid under
applicable law, but, in case any one or more of the provisions contained herein
shall, for any reason, be held to be invalid, illegal or unenforceable in any
respect, such invalidity, illegality or unenforceability shall not affect any
other provisions of this Agreement, and this Agreement shall be construed as if
such invalid, illegal or unenforceable provision or provisions had never been
contained herein, unless the deletion of such provision or provisions would
result in such a material change as to cause completion of the transactions
contemplated hereby to be unreasonable.
Section 9.10 .....Counterparts. This Agreement may be executed in two or
more counterparts, each of which shall he deemed to be an original, but all of
which shall constitute one and the same agreement.
Section 9.11......Entire Agreement. This Agreement (including the exhibits
and other documents referred to herein) and the Confidentiality Agreement embody
the entire agreement and understanding of the parties hereto in respect of the
subject matter hereof and thereof and supersede all prior agreements and
understandings, both written and oral, among the parties, or between any of
them, with respect to the subject matter hereof and thereof.
Section 9.12......No Third Party Beneficiaries. Except as expressly
provided in Section 6.7, this Agreement is not intended to, and does not, create
any rights or benefits of any party other than the parties hereto.
Section 9.13......Jurisdiction; Forum. Any case, proceeding or action
concerning any dispute arising out of or relating to this Agreement must be
brought in a court situated in Hennepin County in the State of Minnesota, and
each party hereto consents and submits to the jurisdiction of any state or
federal court sitting in Hennepin County in the State of Minnesota for any such
case, proceeding or action. Each party hereto waives any objection to the laying
of venue in such courts and any claim that any such action has been brought in
an inconvenient forum. To the extent permitted by law, any judgment in respect
of a dispute arising out of or relating to this Agreement may be enforced in any
other jurisdiction within or outside the United States by suit on the judgment,
a certified copy of such judgment being conclusive evidence of the fact and
amount of such judgment.
Section 9.14......No Implied Representations. Notwithstanding any other
provision of this Agreement, Parent and MergerCo acknowledge and agree that
neither the Company nor any other Person has made any representation or
warranty, express or implied, as to the accuracy or completeness of any
information regarding the Company and its Subsidiaries except as expressly set
forth in this Agreement, and neither Parent nor MergerCo is relying on any
information concerning the Company and its Subsidiaries except as so expressly
set forth in this Agreement. Without limiting the foregoing, it is further
expressly understood and agreed that any projections or estimates that may have
been furnished to Parent, MergerCo or their respective Affiliates or advisors
are not and shall not be deemed to be representations or warranties of the
Company or any other Person.
Section 9.15......Construction of Certain Provisions. It is understood and
agreed that the specification of any dollar amount in the representations and
warranties contained in this Agreement or the inclusion of any specific item in
the Disclosure Letter or any schedules or exhibits attached hereto is not
intended to imply that such amounts, or higher or lower amounts, or the items so
included or other items, are or are not material, and no party shall use the
fact of the setting of such amounts or the fact of the inclusion of any such
item herein or therein in any dispute or controversy between the parties as to
whether any obligation, item or matter not described herein or therein is or is
not material for purposes of this Agreement.
Signature Page to Merger Agreement
IN WITNESS WHEREOF, each of the parties has caused this Agreement to be
duly executed as of the day and year first above written.
RING HOLDING CORP.
By: /s/ Xxxxx Xxxxxxx
--------------------------------------
Name: Xxxxx Xxxxxxx
Title: President
RING ACQUISITION CORP.
By: /s/ Xxxxx Xxxxxxx
--------------------------------------
Name: Xxxxx Xxxxxxx
Title: President
JOSTENS, INC.
By: /s/ Xxxxxx X. Xxxxxxxxxx
--------------------------------------
Name: Xxxxxx X. Xxxxxxxxxx
Title: Chief Executive Officer
