ASSET PURCHASE AGREEMENT
BETWEEN
GEOGRAPHICS, INC.
AND
IDENTITY GROUP, INC.
DATED DECEMBER 23, 1997
TABLE OF CONTENTS
SECTION PAGE
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1. SALE AND PURCHASE OF ASSETS............................................................................ 1
1.1. Transfer of Assets.......................................................................... 1
1.2. No Assumption of Liabilities by Buyer; Responsibility for Customer Returns.................. 1
1.3. Excluded Assets............................................................................. 2
1.4. Employees................................................................................... 2
1.5. Inventory................................................................................... 2
1.6. Transition Period........................................................................... 3
2. PURCHASE PRICE; PAYMENT TERMS.......................................................................... 3
2.1. Purchase Price.............................................................................. 3
2.2. Payment of Purchase Price................................................................... 3
2.3. Allocation of Purchase Price................................................................ 3
3. CLOSING................................................................................................ 3
3.1. Time and Place of Closing; Escrow........................................................... 3
3.2. Items to be Delivered at the Closing........................................................ 3
3.3. Closing Costs............................................................................... 4
3.4. Further Assurances.......................................................................... 4
4. CONDITIONS TO CLOSING.................................................................................. 4
4.1. Conditions Precedent to Obligations of Buyer................................................ 4
5. REPRESENTATIONS AND WARRANTIES OF SELLER............................................................... 5
5.1. Organization, Standing and Authority of Seller.............................................. 5
5.2. Authorization of Agreement.................................................................. 5
5.3. No Conflict; Consents....................................................................... 5
5.4. Financial Statements........................................................................ 6
5.5. Absence of Certain Liabilities and Changes.................................................. 6
5.6. Title to Assets............................................................................. 6
5.7. Condition of Assets......................................................................... 6
5.8. Intellectual Property Rights................................................................ 6
5.9. Taxes....................................................................................... 6
5.10. Contracts................................................................................... 6
5.11. Employee Matters............................................................................ 7
5.12. Litigation; Compliance with Laws............................................................ 7
5.13. Insurance................................................................................... 7
5.14. Foreign Sales............................................................................... 7
5.15. Disclosure.................................................................................. 7
6. REPRESENTATIONS AND WARRANTIES OF BUYER................................................................ 7
6.1. Buyer's Organization........................................................................ 7
6.2. Authorization of Agreement.................................................................. 8
6.3. No Conflict, Consents....................................................................... 8
6.4. Litigation.................................................................................. 8
7. FURTHER COVENANTS OF THE PARTIES....................................................................... 8
7.1. Access to Information....................................................................... 8
7.2. Cooperation................................................................................. 8
7.3. Conduct of the Business Pending the Closing................................................. 8
7.4. Use of Packaging Material................................................................... 8
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SECTION PAGE
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7.5. Advice of Claims............................................................................ 9
7.6. Notice by Buyer............................................................................. 9
7.7. Publicity................................................................................... 9
7.8. Bulk Sales Compliance....................................................................... 9
7.9. Preservation of Records..................................................................... 9
7.10. Termination Fee............................................................................. 9
7.11. Brokers..................................................................................... 9
7.12. No Solicitation............................................................................. 9
7.13. Post-Closing Cooperation.................................................................... 10
7.14. Customer Orders............................................................................. 10
7.15. Post-Closing Payments....................................................................... 10
8. INDEMNIFICATION AND RELATED MATTER..................................................................... 10
8.1. Indemnification............................................................................. 10
8.2. Survival of Representations and Warranties Determination of Damages......................... 11
8.3. Claims Procedure............................................................................ 11
9. CONFIDENTIALITY........................................................................................ 11
10. TERMINATION............................................................................................ 12
10.1. Termination Events.......................................................................... 12
10.2. Effect of Termination....................................................................... 12
11. MISCELLANEOUS.......................................................................................... 12
11.1. Notices..................................................................................... 12
11.2. Full Understanding.......................................................................... 13
11.3. Entire Agreement............................................................................ 13
11.4. Modification................................................................................ 13
11.5. No Waiver................................................................................... 13
11.6. Captions and Construction................................................................... 13
11.7. Survival.................................................................................... 13
11.8. Governing Law............................................................................... 13
11.9. Expenses.................................................................................... 13
11.10. Execution in Counterparts................................................................... 13
11.11. Invalid Provisions.......................................................................... 14
11.12. Time of the Essence......................................................................... 14
11.13. Binding Effect, Assignment, No Third Party Rights........................................... 14
11.14. Arbitration................................................................................. 14
11.15. Non-Competition............................................................................. 14
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ASSET PURCHASE AGREEMENT
This ASSET PURCHASE AGREEMENT is entered into as of December 23, 1997 by and
between Geographics, Inc., a Wyoming corporation ("Seller"), and Identity Group,
Inc., a Tennessee corporation ("Buyer").
RECITALS
A. Seller, through its signage products business segment, is engaged in the
business of developing, manufacturing, marketing, supporting and distributing
various rub-on and stick-on lettering, stencils, graphic arts products,
non-electric and electric signs and other signage products (the "Business").
B. Buyer desires to purchase, and Seller desires to sell, substantially all
of the assets of Seller employed or held exclusively in connection with the
Business.
NOW THEREFORE, the parties agree as follows:
AGREEMENT
1. SALE AND PURCHASE OF ASSETS.
1.1. TRANSFER OF ASSETS. Subject to the terms and conditions of this
Agreement, at the closing referred to in Section 3 (the "Closing"), Seller shall
sell, assign, grant and transfer to Buyer, and Buyer shall purchase and accept
from Seller, free and clear of any liens, charges or encumbrances, all of
Seller's right, title and interest in and to the following assets (the
"Assets"), not including the Excluded Assets (as defined below):
(i) all of the furnishings, furniture, office supplies, tools, machinery
and equipment owned by Seller and used primarily in the operation of the
Business including without limitation the assets listed on SCHEDULE 1.1(i)
hereto (all of the foregoing being collectively referred to as the
"Equipment");
(ii) all quantities of inventory, including raw materials,
works-in-process, finished goods, stores and supplies, owned by Seller and
used primarily in the operation of the Business (the "Inventory");
(iii) all research, development, trade secrets, know-how, inventions, and
designs, and other technical information whether owned by Seller or licensed
from third parties by Seller, used primarily in the Business and all
records, reports and data relating thereto;
(iv) all trademarks, trade names and service marks, and registrations
and applications for such trademarks, trade names, service marks owned by
Seller and primarily used in the Business listed in SCHEDULE 1.1(iii)
(collectively, the "Intellectual Property");
(v) all contracts, purchase orders, arrangements and commitments of any
kind which relate to the Business or Assets, including, without limitation,
those contracts listed on SCHEDULE 5.10 (the "Contracts");
(vi) all customer and vendor lists relating to the Business and all
files and documents (including credit information) relating to customers and
vendors of the Business;
(vii) all other assets used by Seller primarily in the conduct of the
Business; and
(viii) all other business and financial records, files, books and
documents relating to the Assets or the Business, including without
limitation, all product and marketing plans, procedural and technical
manuals, user's guides, servicing routines, parts lists, advertisements,
brochures and promotional materials.
The purchase and sale of the foregoing Assets on the terms and conditions
set forth in this Agreement is referred to herein as the "Acquisition."
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1.2. NO ASSUMPTION OF LIABILITIES BY BUYER; RESPONSIBILITY FOR CUSTOMER
RETURNS (a) Buyer is not assuming and does not agree to pay, perform or
discharge, any liabilities of Seller, other than ongoing obligations under any
executory contracts expressly assumed by Buyer. All liabilities shall be
retained by, and remain the sole responsibility of Seller, other than ongoing
obligations under any executory contracts expressly assumed by Buyer.
(b) Seller shall be responsible for all costs, liabilities and expenses
associated with any customer returns of goods shipped prior to the Transition
Date and shall promptly reimburse Buyer for any such costs, liabilities and
expenses incurred by Buyer.
1.3. EXCLUDED ASSETS. The parties to this Agreement expressly understand
and agree that Seller is not hereunder selling, assigning, transferring or
conveying to Buyer any assets, rights or properties of Seller not referred to in
Section 1.1 or as otherwise provided under this Agreement. Without limiting the
foregoing, the following assets, rights and properties (the "Excluded Assets")
shall be specifically excluded from the transactions contemplated by this
Agreement:
(a) cash;
(b) receivables, pension or other funded employee benefit plan assets,
or amounts owed to Seller by or claims by Seller against third parties,
including any right or claim to refund of any deposits, prepayments or tax
abatements for which Seller may have a claim with respect to the Assets or
Business conducted prior to the Transition Date; and
(c) any assets, rights or properties used primarily in connection with
Seller's paper products business segment.
1.4. EMPLOYEES. Buyer shall not be obligated to hire any employees of
Seller or the Business. Seller will be solely responsible for terminating
employees who work in the Business. All employee-related costs and expenses will
be retained by Seller, including without limitation all severance or separation
costs.
1.5. INVENTORY. The Purchase Price (as hereafter defined) will be adjusted
dollar-for-dollar as set forth herein, if, on the Closing Date, the value of the
Inventory that is good, usable and salable in the ordinary course of business,
as determined in accordance with generally accepted accounting principles (the
"Inventory Value"), on a cost basis is more or less than $974,572. In order to
assess Seller's Inventory Value, Buyer may, at its option, conduct a physical
count of the Inventory immediately prior to the Closing Date. The Inventory
Value will not be reduced prior to the Closing to account for Obsolete Inventory
unless Buyer and Seller mutually agree otherwise. The purchase price for the
Assets will be reduced or increased on the Closing Date by the amount of any
mutually agreed variation in Inventory Value based upon the physical count. Not
later than 45 days after the Closing (the "Determination Period"), Seller shall
deliver to Buyer the Seller's calculation of Obsolete Inventory (defined below)
value to the extent not previously taken into account in calculating Inventory
Value. For purposes of determining the Obsolete Inventory value, items which are
determined to not be good, useable or salable in the ordinary course of
business, the value of any amounts of finished goods inventory (based on unit
cost at September 30, 1997, as determined by Seller) which exceed the actual
sales of the Business for the 12 month period immediately preceding the Closing
(the "Obsolete FG Inventory") will be excluded. Any work in process inventory
which is mutually determined to be not salable in the ordinary course of
business (the "Obsolete WIP Inventory", and, collectively with the Obsolete FG
Inventory, the "Obsolete Inventory") will also be excluded. In the event that
Buyer disagrees with Seller's determination of the Obsolete Inventory value and
Buyer and Seller cannot agree as to the Obsolete Inventory value within 30
business days after the end of the Determination Period, then Buyer and Seller
shall select a firm of independent accountants reasonably acceptable to Buyer
and Seller and such firm shall be responsible for determining the Obsolete
Inventory value for purposes of this Section 1.5. The undisputed amount of any
downward adjustment for Obsolete Inventory shall be immediately paid to Buyer
out of the Escrow Fund (as hereafter defined). The
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balance of the Obsolete Inventory value, if any, as finally determined will be
promptly paid to Buyer out of the Escrow Fund or, if the Escrow Fund has been
fully disbursed, promptly paid by Seller to Buyer.
1.6. TRANSITION PERIOD. Title to all the Assets and risk of loss shall
pass to Buyer as of the Closing Date. However, in order to facilitate the
transfer of the Assets and Business, Seller shall permit Buyer to maintain the
Assets in Seller's plant after Closing for such period to be determined by Buyer
in its discretion but in any event not longer than 90 days after the Closing
Date (the "Transition Period"). During the Transition Period, manufacturing of
products for the Business shall continue to be performed in Seller's plant by
Seller's employees under the direction of Buyer. Buyer shall reimburse Seller
for (i) actual, direct labor costs, including, but not limited to direct
supervisory costs, the cost of one customer service representative, payroll
taxes and benefits incurred by Seller in manufacturing and shipping products for
Buyer and (ii) actual shipping expenses. Buyer shall pay to Seller the sum of
$1.00 as rent for the Transition Period in consideration for the use of a
portion of Seller's plant to manufacture, store and ship products for the
Business, which rent amount shall be the sole payment to Seller for all costs
(including without limitation utilities), other than direct labor costs and
actual shipping expenses associated with Buyer's use of Seller's manufacturing
plant during the Transition Period. During the Transition Period, Buyer shall be
named as an additional insured under Seller's casualty and liability insurance
policies.
2. PURCHASE PRICE; PAYMENT TERMS.
2.1. PURCHASE PRICE. Provided that the Closing occurs on or before March
23, 1998, the aggregate purchase price for the Assets shall be $7,500,000;
subject to adjustment in accordance with Section 1.5 above. Notwithstanding the
forgoing, the purchase price shall be reduced by $100,000 if the Closing occurs
after March 23, 1998 but before May 6, 1998. The purchase price as determined
pursuant to this Section 2.1 and subject to adjustment in accordance with
Section 1.5 is referred to herein as the "Purchase Price".
2.2. PAYMENT OF PURCHASE PRICE. At the Closing Buyer shall pay to Seller
the Purchase Price (less the amount of the Escrow Fund) by wire transfer of
immediately available funds to an account designated by Seller.
2.3. ALLOCATION OF PURCHASE PRICE. The Purchase Price shall be allocated
among the Assets in accordance with SCHEDULE 2.3. The parties shall report
consistently with such allocations on all income tax returns and other
statements (including, without limitation, filing of Form 8594) and in the
course of any tax audit, tax review or tax litigation relating thereto.
3. CLOSING.
3.1. TIME AND PLACE OF CLOSING; ESCROW.
(a) The Closing of the sale and purchase of the Assets provided for in
Section 1 shall take place on such date and at such place as may be mutually
agreed by the parties but in no event later than three business days after all
of the conditions specified in Section 4 have been fulfilled. The date of the
Closing is herein referred to as the "Closing Date".
(b) On the date which is ten (10) days after the mailing of proxy materials
to all of Seller's shareholders in connection with the transactions contemplated
under the Agreement, $400,000 of the Purchase Price shall be placed in escrow
(the "Escrow Fund") in accordance with the terms and provisions of an escrow
agreement between Buyer, Seller and Lawyers Title Insurance Corporation, as
escrow agent (the "Escrow Agent") in the form attached hereto as EXHIBIT 3.1(b)
(the "Escrow Agreement"). The terms and conditions relating to disbursement of
the Escrow Fund will be as set forth in the Escrow Agreement.
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3.2. ITEMS TO BE DELIVERED AT THE CLOSING.
(a) ITEMS TO BE DELIVERED BY SELLER. At the Closing, Seller shall deliver
or cause to be delivered to Buyer:
(i) an executed Xxxx of Sale in the form of EXHIBIT 3.2(a)(i)(A)
attached hereto, an Assignment and Assumption Agreement in the form of
EXHIBIT 3.2(a)(i)(B) attached hereto, an Assignment of Intellectual Property
Rights in the form of EXHIBIT 3.2(a)(i)(C) attached hereto, and such other
assignments and other instruments or documents as may be requested by Buyer
as necessary to effect the transfer of all of Seller's right, title and
interest in and to the Assets to Buyer;
(ii) a copy of resolutions of the board of directors and shareholders of
Seller authorizing the execution, delivery and performance of this Agreement
by Seller, and an executed certificate of its secretary or assistant
secretary that such resolutions were duly adopted and are in full force and
effect as of the Closing Date;
(iii) an executed certificate of Seller, dated as of the Closing Date,
certifying that (A) all conditions and covenants which Seller was required
to have complied with prior to the Closing have been fulfilled and (B) all
of the representations and warranties of Seller contained in Section 5 are
true and accurate;
(iv) all third party consents and releases of liens necessary for the
consummation of the transactions contemplated hereby;
(v) an opinion of counsel to Seller as to those items identified on
EXHIBIT 3.2(a)(v) attached hereto; and
(vi) the Escrow Agreement and such other documents as Buyer shall
reasonably request.
(b) ITEMS TO BE DELIVERED BY BUYER. At the Closing, Buyer shall deliver or
cause to be delivered to Seller:
(i) evidence of the wire transfer referred to in Section 2.3;
(ii) a copy of resolutions of the board of directors of Buyer
authorizing the execution, delivery and performance of this Agreement by
Buyer, and an executed certificate of its secretary or assistant secretary
that such resolutions were duly adopted and are in full force and effect as
of the Closing Date;
(iii) an executed certificate of Buyer, dated as of the Closing Date,
certifying that (A) all conditions and covenants which Buyer was required to
have complied with prior to the Closing have been fulfilled and (B) all of
the representations and warranties of Buyer contained in Section 6 are true
and accurate;
(iv) an opinion of counsel to Buyer in substantially the form of EXHIBIT
3.2(b)(iv) attached hereto; and
(v) the Escrow Agreement and such other documents as Seller shall
reasonably request.
3.3. CLOSING COSTS. All sales, use or similar taxes, of any nature
whatsoever, applicable to, or resulting from, the sale and purchase of the
Assets shall be paid by Seller.
3.4. FURTHER ASSURANCES. On and after the Closing Date, each party shall
execute all certificates, instruments and documents and take all actions
reasonably requested by the other party to effectuate the purposes of this
Agreement and to consummate and evidence the consummation of the transactions
contemplated hereby.
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4. CONDITIONS TO CLOSING.
4.1. CONDITIONS PRECEDENT TO OBLIGATIONS OF BUYER. The obligations of
Buyer to consummate the purchase of the Assets under this Agreement is subject
to the fulfillment, prior to or at the Closing, of each of the following
conditions (any or all of which may be waived solely by Buyer):
(a) all representations and warranties of Seller shall be true and
correct as of the Closing Date with the same effect as though made again at
and as of the Closing Date;
(b) Seller shall have performed and complied with all obligations and
covenants required by this Agreement to be performed or complied with by
Seller prior to or at the Closing;
(c) Buyer shall have received, in form and substance satisfactory to
Buyer and its counsel, each and every other closing document required to be
delivered to it under this Agreement, including without limitation, copies
of all third party consents and releases of liens required for consummation
of the transactions contemplated hereby;
(d) there shall not have been commenced any action or proceeding in
state or federal court or by or before any administrative body challenging
or seeking to prevent the consummation of this Agreement, and there shall
not be in effect any injunction or restraining order issued by a court of
competent jurisdiction in an action or proceeding against the consummation
of the sale and purchase of the Assets pursuant to this Agreement;
(e) the transactions contemplated by this Agreement shall have been
approved by any federal, state, local and foreign governmental or regulatory
authority or self-regulatory body the approval of which is required to
permit consummation thereof;
(f) Buyer shall have received a certificate dated the Closing Date from
the Secretary of Seller as to bylaws and incumbency;
(g) Buyer shall have received (i) a copy, certified by the Secretary of
State of Wyoming, of the articles of incorporation of Seller and (ii) a good
standing certificate for Seller from the Secretary of State of Wyoming; and
(h) there shall not have occurred any material adverse change in the
Business or Assets since September 30, 1997.
5. REPRESENTATIONS AND WARRANTIES OF SELLER. Seller represents and
warrants to Buyer as follows:
5.1. ORGANIZATION, STANDING AND AUTHORITY OF SELLER. Seller is a
corporation duly organized, validly existing and in good standing under the laws
of the State of Wyoming and where the Business is now being conducted, except
where the failure to do so would not have a material adverse effect on Seller,
and has full corporate power and authority to enter into and perform this
Agreement.
5.2. AUTHORIZATION OF AGREEMENT. On the Closing Date, the execution,
delivery and performance of this Agreement by Seller shall have been duly
authorized by all necessary corporate and shareholder action of Seller. This
Agreement constitutes the valid and binding obligation of Seller enforceable
against it in accordance with its terms, except as may be limited by bankruptcy,
insolvency, reorganization, moratorium or other similar laws affecting the
enforcement of creditors' rights in general and subject to general principles of
equity (regardless of whether such enforceability is considered in a proceeding
in equity or at law).
5.3. NO CONFLICT; CONSENTS. The execution, delivery and performance of
this Agreement by Seller will not (i) conflict with its articles of
incorporation or by-laws; (ii) conflict with, or result in the breach or
termination of, or constitute a default under, any lease, agreement, commitment
or other instrument, or any order, judgment or decree, to which Seller is a
party or by which any of its properties is bound, except for any conflicts,
breaches, terminations or defaults that would not in the aggregate have a
material
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adverse effect on Seller's ability to consummate the sale of the Assets or on
the Business; (iii) violate any law or regulation applicable to Seller the
enforcement of which would have a material adverse effect on Seller's ability to
consummate the sale of the Assets pursuant to this Agreement or on the Business;
or (iv) result in the creation of any lien, charge or encumbrance upon any of
the Assets other than liens, charges or encumbrances that do not in the
aggregate materially detract from the value of, or materially interfere with,
the Business. No consent, approval or authorization of, or designation,
declaration or filing with, any governmental authority is required on the part
of Seller in connection with the execution, delivery and performance of this
Agreement.
5.4. FINANCIAL STATEMENTS. The unaudited statements of assets,
liabilities, revenue, direct labor costs and direct material purchases for the 6
month period ended on September 30, 1997 of the Business, a copy of which is
included in Schedule 5.4 (the "Financial Statement"), accurately represents the
financial position and the results of operations of the Business as at such date
and for the period then ended. Seller makes no representation as to, and
expressly disclaims, any forecast of future results, whether verbal or written.
5.5. ABSENCE OF CERTAIN LIABILITIES AND CHANGES. Since the date of the
Financial Statement, there has not been any material adverse change in the
Assets or in the financial condition, business or results of operations of
Seller. Without limiting the foregoing, since the date of the Financial
Statement, there has not occurred any:
(a) sale, mortgage, encumbrance, lease, license or other disposition of
any of the Assets, except for sales of inventory in the ordinary course of
business;
(b) damage, destruction or loss affecting the Assets; or
(c) any incurrence of indebtedness or other liabilities other than trade
payables in the ordinary course of business.
5.6. TITLE TO ASSETS. Seller has good title to the Assets, free and clear
of any and all liens, claims and encumbrances other than (i) minor imperfections
of title, if any, that are not substantial in character, amount or extent and do
not materially detract from the value of the property subject thereto, or
materially interfere with the manner in which it is currently being used by the
Business, or materially impair the operations of the Business and (ii) taxes and
general and special assessments not in default and payable without penalty or
interest.
5.7. CONDITION OF ASSETS. The Assets constitute all of the property, plant
and equipment necessary for the manufacture of the products sold in the Business
as currently conducted. The Inventory is of a quantity and quality usable in the
ordinary course of business. The Equipment is useful in the conduct of the
Business and is in good condition and working order, except for (i) normal wear
and tear and (ii) obsolete items or items below standard quality as to which
appropriate provision has been made on the books of the Business in accordance
with generally accepted accounting principles.
5.8. INTELLECTUAL PROPERTY RIGHTS. SCHEDULE 5.8 lists all trademarks,
service marks, service names, trade names, design rights, patents, copyrights,
trade secrets, inventions, processes, formulae, and other intellectual property
rights (collectively, the "Intellectual Property") which are owned, used or
licensed by Seller and used in the Business. To Seller's knowledge, except as
set forth in SCHEDULE 5.8, none of the Intellectual Property conflicts with or
infringes in any material respect any United States, Canadian or Australian
proprietary right of any third party, and no one has asserted a claim against
Seller alleging any such conflict or infringement.
5.9. TAXES. Seller has timely filed with the appropriate governmental
agencies all tax returns and reports required to have been filed by Seller on or
before the Closing Date. Seller has paid or adequately reserved for all taxes,
interest and other governmental charges which have become due pursuant to such
returns and all other taxes, interest and governmental charges which have become
due and payable on or
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before the Closing Date. To the best of Seller's knowledge, there are no audit
examination, deficiency, refund litigation or matter in controversy with respect
to which an adjustment to any tax item has been asserted in writing, except as
set forth in SCHEDULE 5.9.
5.10. CONTRACTS. SCHEDULE 5.10 contains a list of all Contracts, including
without limitation contracts, understandings, licenses or leases (written and
oral) that are material to the Assets or the Business, including (a) all
commitments and agreements for the purchase of any materials or supplies that
involve an expenditure by Seller of more than $25,000 for any one contract; (b)
all leases and other rental agreements under which Seller is either lessor or
lessee that involve annual payments or receipts of $25,000 or more; and (c) all
other orders, leases, commitments, agreements, instruments (including but not
limited to mortgages, indentures and other agreements and instruments relating
to indebtedness for borrowed money) to which Seller is a party or by which it or
the Assets are bound that require a payment by Seller of more than $25,000.
Seller has provided Buyer with copies of all material written Contracts. To the
best of Seller's knowledge, all Contracts are valid and binding and in full
force and effect, except as noted in SCHEDULE 5.10. Neither Seller nor, to
Seller's knowledge, any other party to such Contracts is in default, nor to the
knowledge of Seller is there any basis for any claim of default.
5.11. EMPLOYEE MATTERS. Seller is not a party to or bound by any
employment agreement or any collective bargaining or other labor agreement, or
any pension, retirement, stock option, stock purchase, savings, profit sharing,
deferred compensation, retainer, consultant, bonus, group insurance or other
incentive or welfare contract, plan or arrangement relating to the Business
except as set forth on SCHEDULE 5.11 (the "Plans"). Except as set forth on
SCHEDULE 5.11, Seller has (and upon consummation of the transactions
contemplated by this Agreement will have) no liability with respect to the
applicable provisions of the Employee Retirement Income Security Act of 1974, as
amended ("ERISA"), any other similar federal or state statute, or under the
Plans to the Pension Benefit Guarantee Corporation. None of the Plans is a
"multiemployer plan" as defined in Section 4001(a)(3) of ERISA. Except as set
forth on SCHEDULE 5.11, to the best knowledge of Seller, Seller has complied
with respect to the Plans in all material respects with the reporting and
disclosure requirements of ERISA.
5.12. LITIGATION; COMPLIANCE WITH LAWS. There are no judicial or
administrative actions, proceedings or investigations pending or, to the best of
Seller's knowledge, threatened against Seller, the Assets or the Business or
that would enjoin, restrain, condition or prohibit consummation of this
Agreement or any of the transactions contemplated herein, or which, if adversely
determined, would have a material adverse effect upon the Business. (i) Seller
is not in violation of any applicable law, regulation, ordinance, or any other
applicable requirement of any governmental body or court, including, without
limitation, antitrust, environmental and securities laws, which violation would
have a material adverse effect upon the Business (ii) no notice has been
received by Seller alleging any such violation and (iii) Seller is not aware of
any allegation of any such violation.
5.13. INSURANCE. Seller maintains and will maintain through the Closing
Date levels of coverage under policies of insurance now in effect and which
Seller believes to be adequate with respect to the Business and the Assets.
SCHEDULE 5.13 sets forth all such policies of insurance which are in effect with
respect thereto.
5.14. FOREIGN SALES. To Seller's knowledge, part 1 of SCHEDULE 5.14 lists
all sales by Seller's foreign subsidiaries and affiliates for each of 1996 and
1997 (through October 31), categorized to provide monthly dollar equivalent and
unit sales by product and customer for each such year. Part 2 of SCHEDULE 5.14
sets forth current selling prices for each product by customer and current
rebates, advertising and/or other similar allowances, if any, for each customer.
5.15. DISCLOSURE. (a) No representation or warranty made by Seller in this
Agreement or any document delivered pursuant hereto or in connection herewith
omits to state a material fact necessary to make the statements contained herein
or therein not misleading.
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(b) There is no fact known to Seller (other than general economic or
industry conditions) that may materially adversely affect the Assets or the
Business that has not been disclosed in this Agreement.
6. REPRESENTATIONS AND WARRANTIES OF BUYER. Buyer represents and warrants
to Seller as follows:
6.1. BUYER'S ORGANIZATION. Buyer is a corporation duly organized, validly
existing and in good standing under the law of the State of Tennessee and has
the full corporate power and authority to enter into and to perform this
Agreement.
6.2. AUTHORIZATION OF AGREEMENT. The execution, delivery and performance
of this Agreement by Buyer have been duly authorized by all necessary corporate
action of Buyer and this Agreement constitutes the valid and binding obligation
of Buyer enforceable against it in accordance with its terms, except as may be
limited by bankruptcy, insolvency or other similar laws affecting the
enforcement of creditors' rights in general and subject to general principles of
equity (regardless of whether such enforceability is considered in a proceeding
in equity or at law).
6.3. NO CONFLICT, CONSENTS. The execution, delivery and performance of
this Agreement by Buyer will not (i) conflict with its charter or by-laws; (ii)
conflict with, or result in the breach or termination of, or constitute a
default under, any lease, agreement, commitment or other instrument, or any
order, judgment or decree, to which Buyer is a party or by which any of its
properties is bound, except for any conflicts, breaches, terminations or
defaults that would not in the aggregate have a material adverse effect on
Buyer's ability to consummate the purchase of the Assets; or (iii) violate any
law or regulation applicable to Buyer the enforcement of which would have a
material adverse effect on Buyer's ability to consummate the purchase of the
Assets pursuant to this Agreement. No consent, approval or authorization of, or
designation, declaration or filing with, any governmental authority is required
on the part of Buyer in connection with the execution, delivery and performance
of this Agreement.
6.4. LITIGATION. There are no judicial or administrative actions,
proceedings or investigations pending or, to the best of Buyer's knowledge,
threatened against or with respect to Buyer that question the validity of this
Agreement or any action taken or to be taken by Buyer in connection with this
Agreement or that, if adversely determined, would have a material adverse effect
upon Buyer's ability to perform its obligations under this Agreement.
7. FURTHER COVENANTS OF THE PARTIES.
7.1. ACCESS TO INFORMATION. From the date of this Agreement to and
including the Closing Date, Seller shall (a) give to Buyer and its counsel,
accountants and other representatives reasonable access during normal business
hours to examine and make copies of all books, agreements, records, files and
documents relating exclusively to the Business and the Assets and (b) cause its
employees, officers, attorneys and accountants to furnish such additional
information with respect to the Business and the Assets as Buyer may reasonably
request.
7.2. COOPERATION. From the date of this Agreement to and including the
Closing Date, each party shall cooperate with the other party and such other
party's counsel and accountants in connection with any steps required to be
taken as part of its obligations under this Agreement. Each party shall use its
best efforts to cause all conditions to the parties' obligations to effect the
Closing under this Agreement to be satisfied and to obtain all consents and
approvals necessary for the due and punctual performance of this Agreement and
for the satisfaction of the conditions hereof.
7.3. CONDUCT OF THE BUSINESS PENDING THE CLOSING. From the date of this
Agreement to and including the Closing Date, except as otherwise permitted in
SCHEDULE 7.3, Seller shall operate the Business in the ordinary course and so as
to maintain the value of the Business and the Assets. Without limiting the
generality of the foregoing, from the date of this Agreement to and including
the Closing Date Seller shall not (a) transfer, sell or dispose of the Assets to
or on account of any person, (b) make any changes (whether by sale, destruction,
pledge, lease or otherwise) in or with respect to the Assets or (c) establish or
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adopt any employee benefit plan, or pay any bonus or similar payment to, or
increase the compensation of any employee of the Business in each case except in
the ordinary course of business.
7.4. USE OF PACKAGING MATERIAL. Buyer shall have the right to use in the
ordinary conduct of the Business after the Closing all existing packaging and
printed materials included in the Assets. Buyer also shall have the right to
reorder similar packaging and printed materials to meet its needs during the
ninety days after the Closing. Seller hereby grants to Buyer a limited,
non-exclusive right to use any of Seller's trademarks and tradenames which
appear on any such presently existing or reordered packaging and materials in
the ordinary course of business for one year after the Closing.
7.5. ADVICE OF CLAIMS. From the date of this Agreement to and including
the Closing Date, Seller shall promptly advise Buyer of the commencement or
notice of any material litigation or proceeding affecting the Business or the
Assets of which Seller has knowledge.
7.6. NOTICE BY BUYER. From the date of this Agreement to and including the
Closing Date, Buyer shall promptly advise Seller of any material adverse change
in, or any event (other than one generally known to the public) that is
reasonably foreseeable may have a material adverse effect on, Buyer or that
would impair Buyer's ability to perform its obligations under this Agreement.
7.7. PUBLICITY. Neither party shall issue any press release or public
announcement of any kind concerning this Agreement or the transactions
contemplated hereby without the prior written consent of the other.
7.8. BULK SALES COMPLIANCE. Buyer hereby waives compliance by Seller with
the provisions of the Bulk Sales Law of any state.
7.9. PRESERVATION OF RECORDS. Buyer agrees that it shall preserve and keep
the records of the Business acquired by it pursuant to this Agreement for a
period consistent with its customary practice of record retention, or for any
longer period as may be required by any government agency or ongoing litigation,
and shall make such records available to Seller as may be reasonably required by
Seller in connection with, among other things, any insurance claims by, legal
proceedings against or governmental investigations of Seller or in connection
with any tax examination of or preparation of a tax return by Seller. In
particular, Buyer will permit Seller to have full access at any reasonable time
and on reasonable notice for one year after the Closing Date, to all tax returns
and supporting papers therefore acquired from Seller relating to the Business.
7.10. TERMINATION FEE. In the event that this Agreement is terminated by
Seller pursuant to Section 10.1(e) below, and, on or before December 31, 1998,
the Seller has entered into a definitive agreement with respect to such Superior
Offer (as defined in Section 7.12 below), Seller shall immediately pay to Buyer
a termination fee of $500,000 as compensation for Buyer's efforts in connection
with the Acquisition.
7.11. BROKERS. Each of the parties shall be solely responsible for its
respective costs and expenses of any broker or finder retained by it in
connection with the transactions contemplated by this Agreement.
7.12. NO SOLICITATION. Seller will not (i) initiate, solicit, or
encourage, directly or indirectly, any inquiries or the making of any proposals
that constitutes or is reasonably likely to lead to, any Acquisition Proposal
(as hereinafter defined), (ii) engage in negotiations or discussions with any
third party relating to an Acquisition Proposal, or (iii) enter into any
agreement with respect to any Acquisition Proposal. Notwithstanding anything to
the contrary contained herein, Seller and its Board of Directors may participate
in discussions or negotiations with, or furnish information to, any third party
making an unsolicited Acquisition Proposal (a "Potential Acquiror") if the
Seller's Board of Directors is advised by its financial advisor that such
Potential Acquiror is reasonably financially capable of consummating the
Acquisition Proposal, and the Board determines in good faith (A) after receiving
advice from its financial advisor that such Acquisition Proposal is a Superior
Proposal (as defined below), and (B) based upon the
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advice of outside legal counsel, that the failure to participate in such
discussions or negotiations or to approve an Acquisition Proposal would violate
the Board's fiduciary duties under applicable law. For purposes of this
Agreement, "Acquisition Proposal" shall mean any bona fide proposal, whether in
writing or otherwise, made by a third party to acquire all or a material portion
of the Business, pursuant to a merger, consolidation or other business
combination, sale of shares of capital stock, sale of assets, tender offer,
exchange offer or any similar transaction, including any single or multiple step
transaction or series of related transactions. The term "Superior Proposal"
means any "Acquisition Proposal" which the Board of Directors determines in good
faith to be more favorable to the Seller and its stockholders than the purchase
and sale pursuant to the terms of this Agreement (based on the advice of the
Seller's financial advisor that the value of the consideration provided for in
such proposal is superior to the value of the consideration provided for
herein), which, in the good faith reasonable judgment of the Board of Directors,
after receiving advice from its financial advisor, is reasonably capable of
being financed by such third party.
7.13. POST-CLOSING COOPERATION. After the Closing, without further
consideration: Seller shall take all such further actions and execute,
acknowledge and deliver all such further consents and other documents as Buyer
may reasonably request to facilitate or effect the transactions contemplated by
this Agreement, including without limitation and such further acts, deeds,
transfers, conveyances, assignments, powers of attorney or assurances as may be
required to transfer, assign, convey and grant to Buyer all of the Assets in
accordance with the terms hereof.
7.14. POST-CLOSING CUSTOMER ORDERS. (a) Seller shall transmit to Buyer,
promptly upon receipt, any customer orders for products relating to the Business
received by Seller after the Closing Date.
(b) With respect to any customer orders which are received by Seller
electronically or otherwise prior to conversion of customer ordering procedures
to reflect sale of the Business to Buyer, Seller will promptly transmit such
orders to Buyer for completion. During the Transition Period, if requested by
Buyer, the products will be shipped and invoiced to the customer by Seller.
Buyer shall invoice Seller daily (or at such other intervals not more frequently
than daily) as Buyer may elect and each invoice shall be payable in full not
later than 30 days after the invoice date.
7.15. POST-CLOSING PAYMENTS. After the Closing, Seller shall promptly
remit to Buyer any payments received for products relating to the Business
shipped after the Closing.
8. INDEMNIFICATION AND RELATED MATTERS.
8.1. INDEMNIFICATION.
(a) Seller agrees to indemnify, defend and hold Buyer harmless from and
against any and all liabilities, losses, damages, costs and expenses, including
reasonable attorneys' fees, incurred by Buyer resulting from any of the
following: (i) a breach of any of the representations and warranties of Seller
contained in this Agreement or in any written statement, agreement or
certificate delivered to Buyer in connection with this Agreement or the
transactions contemplated hereby, (ii) any breach of any covenants or agreements
made by Seller in this Agreement, (iii) any liabilities and obligations of
Seller, except for obligations under executory contracts expressly assumed by
Buyer, (iv) the conduct of the Business, or any occurrence in connection with
the Assets, prior to the Closing, including any injury or damage to person or
property resulting or arising from products manufactured or sold by Seller, (v)
failure by Seller to comply with any applicable bulk sales law, or (vi) any
costs or expenses related to employees of Seller or the Business, including
without limitation any severance or separation costs; (all of the foregoing
being collectively referred to as "Seller's Indemnified Liabilities") provided,
however, that Seller shall not have any liability under this Section 8.1(a)
until Seller's Indemnified Liabilities exceed in the aggregate $25,000, and then
only for the amount by which such Liabilities exceed $25,000; provided, however,
that the aggregate amount of Seller's Indemnified Liabilities under this Section
8.1(a) shall in no event exceed the
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Purchase Price. Any amounts payable by Seller pursuant to this Section 8.1(a)
shall be net of insurance proceeds, if any, received by Buyer in respect of
Seller's Indemnified Liabilities.
(b) Buyer agrees to indemnify, defend and hold Seller harmless from and
against any and all liabilities, losses, damages, costs and expenses, including
reasonable attorneys' fees, incurred by Seller resulting from any of the
following: (i) a breach of any of the representations and warranties of Buyer
contained in this Agreement or in any written statement, agreement or
certificate delivered to Seller in connection with this Agreement or the
transactions contemplated hereby, (ii) any breach of any covenants or agreements
made by Buyer in this Agreement, (iii) any gross negligence or willful
misconduct by Buyer in managing the Business during the Transition Period, or
(iv) the conduct of Buyer's business, or any occurrence in connection with the
Assets (other than injury or damage to person or property resulting or arising
from products manufactured or sold by Seller), after the Closing (all of the
foregoing being collectively referred to as "Buyer's Indemnified Liabilities");
provided, however that Buyer shall not have any liability under this Section
8.1(b) until Buyer's Indemnified Liabilities exceed in the aggregate $25,000,
and then only for the amount by which such Liabilities exceed $25,000; provided,
however that the aggregate amount of Buyer's Indemnified Liabilities under this
Section 8.1(b) shall in no event exceed the Purchase Price. Any amount payable
by Seller pursuant to this Section 8.1(b) shall be net of insurance proceeds, if
any, received by Seller in respect of Buyer's Indemnified Liabilities.
8.2. SURVIVAL OF REPRESENTATIONS AND WARRANTIES. All representations and
warranties of Seller or Buyer contained in this Agreement or any written
statement, certificate, instrument, schedule or other document delivered
pursuant hereto shall survive the Closing until the expiration of three years
from the Closing Date and any claim based upon said representations and
warranties shall thereupon be of no further force and effect, except to the
extent the claiming party shall have asserted in writing a specific claim prior
to the expiration of such rights, in which event the other party shall remain
liable with respect to such claim. Buyer acknowledges and agrees that it has
been furnished with or given adequate access to such information about the
Equipment as it shall have requested and that it has made its own investigation
into, and based thereon it has formed an independent judgment concerning, the
Equipment. It is therefore expressly understood and agreed that, except as
otherwise specifically set forth Section 5, 6 and 5.7, Buyer accepts the
condition of the Equipment "AS IS, WHERE IS" and Seller makes no
representations, warranties or guarantees as to the condition, size, extent,
quantity, type or value of the Equipment.
8.3. CLAIMS PROCEDURE. If a party (the "Indemnified Party") is threatened
in writing with any claim, or any claim is presented in writing to or any action
or proceeding formally commenced against such party, which may give rise to the
right of indemnification hereunder (a "Claim"), the Indemnified Party shall
promptly give written notice thereof (specifying in reasonable detail the basis
for the Claim and, to the extent known, the amount thereof) to the other party
(the "Indemnifying Party"). The Indemnifying Party shall have the right, at its
sole cost and expense, to participate, and, to the extent the Indemnifying Party
so desires, assume the defense of such Claim with counsel mutually satisfactory
to the parties upon prompt notice to the Indemnified Party of its intent to
defend such Claim. If the Indemnified Party requests in writing that such Claim
not be contested, then it shall not be contested but shall not be covered by the
indemnities provided herein. The Indemnifying Party may settle a Claim which it
has duly elected to contest without the consent of the Indemnified Party unless
such settlement will have a material adverse effect upon the Indemnified Party,
in which case such Claim shall be settled only with the consent of the
Indemnified Party. In the event that the Indemnified Party unreasonably declines
to consent to such settlement, then the Indemnified Party shall have no right to
indemnification beyond the amount of the proposed settlement. The Indemnified
Party shall cooperate with the Indemnifying Party in the defense of any Claim,
including, without limitation, by making records available to the Indemnifying
Party and its legal counsel and permitting interview, depositions and testimony
at trial of the Indemnified Party's employees. The Indemnifying Party shall keep
the Indemnified Party fully informed regarding the progress and status of any
Claim. In the event the Indemnified Party fails to follow the claim procedure
specified in this Section 8.3 with respect to a Claim by any third party against
the Indemnified Party, such failure shall
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not relieve the Indemnifying Party from liability hereunder except and solely to
the extent the Indemnifying Party shall have been actually prejudiced as a
result of such failure.
9. CONFIDENTIALITY.
The obligations of the parties set forth in that certain Confidentiality
Agreement dated July 11, 1997 between the parties shall survive the execution
and performance of this Agreement.
10. TERMINATION.
10.1. TERMINATION EVENTS. This Agreement may, by notice given prior to or
at the Closing, be terminated:
(a) by either Buyer or Seller if a material breach of any provision of
this Agreement has been committed by the other party and such breach has not
been waived;
(b) (i) by Buyer if any of the conditions in Section 4.1 has not been
satisfied as of the Closing Date or if satisfaction of such a condition is
or becomes impossible (other than through the failure of Buyer to comply
with its obligations under this Agreement) and Buyer has not waived such
condition on or before the Closing Date;
(c) by mutual consent of Buyer and Seller; or
(d) by Buyer if the Closing has not occurred (other than through the
failure of any party seeking to terminate this Agreement to comply fully
with its obligations under this Agreement) on or before May 6, 1998, or such
later date as the parties may agree upon;
(e) subject to Section 7.10 above, by Seller, if prior to the Closing,
(A) a third party shall have made an Acquisition Proposal that the Board of
Directors of the Company determines in good faith, after consultation with
its financial advisor, is a Superior Proposal, and (B) the Board of
Directors of the Seller shall have withdrawn its approval or recommendation
to its shareholders of this Agreement.
10.2. EFFECT OF TERMINATION. Each party's right of termination under
Section 10.1 is in addition to any other rights it may have under this Agreement
or otherwise, and the exercise of a right of termination will not be an election
of remedies. If this Agreement is terminated pursuant to Section 10.1, all
further obligations of the parties under this Agreement will terminate, except
that the obligations in Section 7.10 and Section 8 will survive; PROVIDED that
if this Agreement is terminated by a party because of the breach of the
Agreement by the other party or because one or more of the conditions to the
terminating party's obligations under this Agreement is not satisfied as a
result of the other party's failure to comply with its obligations under this
Agreement, the terminating party's right to pursue all legal remedies will
survive such termination unimpaired.
11. MISCELLANEOUS.
11.1. NOTICES. All notices, demands and other communications called for or
required by this Agreement shall be in writing and shall be addressed to the
parties at their respective addresses stated below or to such other address as a
party may subsequently designate by ten (10) days' advance written notice to the
other parties. Communications hereunder shall be deemed to have been received
(i) upon delivery in person, (ii) five (5) days after mailing by U.S. certified
mail, return receipt requested and postage prepaid, (iii) the second business
day after depositing it with a commercial overnight carrier which provides
written verification of delivery or (iv) the day of transmission by
telefacsimile if sent before 2:00 p.m. recipient's time provided that a copy of
such notice is sent on the same day by U.S. certified mail,
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return receipt requested and postage prepaid, with an indication that the
original was sent by facsimile and the date of its transmittal:
To: Geographics, Inc.
Attention: Xxxxx Xxxxxxx
0000 Xxxxx Xxxx, X.X. Xxx
0000
Xxxxxx, XX 00000
Phone: (000) 000-0000
Facsimile: (000) 000-0000
To: Identity Group, Inc.
Attention: Xxxxxx X. Xxxxx
0000 Xxxxx Xxxxx
Xxxxxxxxxx, XX 00000
Phone: (000) 000-0000
Facsimile: (000) 000-0000
11.2. FULL UNDERSTANDING. In executing this Agreement, each member of each
party fully, completely and unconditionally acknowledges and agrees that it (a)
has had an equal opportunity to participate in drafting of this Agreement, (b)
has consulted with and had the advice and counsel of a duly licensed and
competent attorney and that it has executed this Agreement after independent
investigation, voluntarily and without fraud, duress or undue influence, (c)
expressly consents that this Agreement be given full force and effect according
to each and every of its express terms and provisions and (d) agrees that no
ambiguity shall be construed against any party based upon a claim that such
party drafted the applicable language.
11.3. ENTIRE AGREEMENT. This Agreement and all schedules and exhibits
hereto contain all of the terms and conditions agreed upon by the parties
relating to the subject matter hereof and supersede and cancel all prior
agreements, negotiations, correspondence, undertakings, communications and
understandings of the parties, whether written or oral, respecting that subject
matter other than the Confidentiality Agreement referred to in Section 9 hereof.
11.4. MODIFICATION. No waiver or modification of this Agreement or any
provision contained herein shall be valid unless in writing and duly executed by
all parties hereto.
11.5. NO WAIVER. Failure or delay on the part of any party in exercising
any rights, power or privileges under this Agreement shall not be deemed a
waiver of any exercise of any right, power or privilege.
11.6. CAPTIONS AND CONSTRUCTION. Captions in this Agreement are for the
convenience of the reader and are not to be considered in the interpretation of
the terms of this Agreement.
11.7. SURVIVAL. Neither the investigation by a party or the acceptance of
delivery of property hereunder shall constitute a waiver of any covenant,
representation, warranty, agreement, obligation or undertaking of a party
hereunder, and the same shall survive and continue after the date hereof.
11.8. GOVERNING LAW. This Agreement shall be governed by and construed in
accordance with the laws of the State of Tennessee, without regard to its
conflict of laws principles.
11.9. EXPENSES. Each of the parties shall pay its respective expenses,
costs and fees (including, without limitation, attorneys' and accountants' fees)
incurred in connection with the negotiation, preparation, execution and delivery
of this Agreement and the consummation of the transactions contemplated hereby.
11.10. EXECUTION IN COUNTERPARTS. This Agreement may be executed in one or
more counterparts, all of which shall be considered one and the same agreement,
and shall become a binding agreement when
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one or more counterparts have been signed by each of the parties and either
original or facsimile counterparts have been delivered to the other party.
11.11. INVALID PROVISIONS. If any one or more provisions of this
Agreement, or the applicability of any such provision to a specific situation,
shall be held invalid or unenforceable, such provision shall be modified to the
minimum extent necessary to make it or its application valid and enforceable,
and the validity and enforceability of all other provisions of this Agreement
and all other applications of any such provisions shall not be affected thereby.
11.12. TIME OF THE ESSENCE. Time is of the essence in the performance of
each of the terms hereof with respect to the obligations and rights of each
party hereto.
11.13. BINDING EFFECT, ASSIGNMENT, NO THIRD PARTY RIGHTS. None of the
parties shall assign or delegate or in any way transfer any rights, interests or
obligations hereunder without the prior written consent of the other party;
provided, however, that no such consent shall be required for Buyer to assign
part or all of its rights and duties hereunder to subsidiary of Buyer but no
such assignment by Buyer of its rights hereunder shall relieve Buyer of any of
its obligations under this Agreement to Seller. Subject to the foregoing
restrictions, this Agreement shall be binding upon and inure to the benefit of
each of Buyer, Seller and their respective successors and assigns. Nothing
expressed or referred to in this Agreement will be construed to give any person
or entity other than Seller and Buyer any legal or equitable right, remedy, or
claim under or with respect to this Agreement.
11.14. ARBITRATION. Any dispute, controversy or claim arising out of,
relating to, or in connection with this Agreement shall be finally settled by
binding arbitration before a single arbitrator in accordance with the Commercial
Arbitration Rules of the American Arbitration Association ("AAA") in effect at
the time of the arbitration. The arbitration shall be conducted in Chicago,
Illinois.
The arbitrator shall permit such discovery as he or she determines is
appropriate in the circumstances, taking into account the needs of the parties
and the desirability of making discovery expeditions and cost effective. The
arbitrator's award shall be in writing, shall set forth the findings and
conclusions upon which the arbitrator based the award, and shall be final and
binding on the parties. The arbitrator will have the authority to grant any
equitable and legal remedies that would be available in any judicial proceeding
instituted to resolve a dispute, controversy or claim hereunder. Each party will
bear its own costs and expenses in connection with any arbitration and 50% of
the compensation to be paid to the arbitrator. Judgment upon the arbitrator's
award may be entered in any federal or state court having jurisdiction thereof
or having jurisdiction over the parties or their assets.
Nothing contained in this Section 11.14 shall be construed to limit or
preclude a party from bringing any action in any court of competent jurisdiction
for injustice or other provisional relief to compel another party to comply with
its obligations under this Agreement during the pendency of the arbitration
proceedings.
11.15. NON-COMPETITION. Seller covenants and agrees that for a period of
five (5) years following the Closing, Seller shall not, directly or indirectly,
in the United States of America, Australia, Canada or in any other country of
the world in which the Seller has done business at any time during the last
three (3) years prior to the Closing, engage, whether as principal or as agent,
alone or in association with any other Person in a Competing Business. For
purposes of this Agreement, the term "Competing Business" shall mean any person,
corporation or other entity which sells or attempts to sell any products or
services which are the same or substantially similar to the products sold by
Seller at any time and from time to time during the last three (3) years prior
to the Closing in connection with the Business. Buyer acknowledges and agrees
that products or services currently offered for sale by Seller's paper products
business segment, and products and services that are substantially similar to
those currently offered for sale by the Seller's paper products business
segment, (including, without limitation, the products currently known as
geoposterboard, geopostersign and retailsign) are not competing products. Buyer
further agrees that it will not
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use the trademarks and tradenames purchased hereunder on paper products which
are substantially similar to paper products sold by Seller.
IN WITNESS WHEREOF, the parties have executed and delivered this Agreement
as of the date first set forth above.
GEOGRAPHICS, INC.
By:
---------------------
Name:
Title:
IDENTITY GROUP, INC.
By:
---------------------
Name:
Title:
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