<PAGE> 1
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(D) OF
THE SECURITIES EXCHANGE ACT OF 1934
MAY 20, 1996
------------------------------------------------
Date of Report (Date of earliest event reported)
NASHUA CORPORATION
----------------------------------------------------
(Exact name of registrant as specified in its charter)
Delaware 1-5492-1 02-0170100
- ------------- ----------- ------------------
(State of (Commission (I.R.S. Employer
Incorporation) File Number) Identification No.)
44 Franklin Street
P.O. Box 2002
Nashua, New Hampshire 03061-2002
----------------------------------------------------
(Address of principal executive offices)
(603) 880-2323
----------------------------------------------------
(Registrant's telephone number, including area code)
<PAGE> 2
ITEM 2. ACQUISITION OR DISPOSITION OF ASSETS
On May 20, 1996, the Company completed the sale of its Tape Products Division,
a division which manufactures and sells tape products, such as duct tape and
masking tape for various industrial and consumer uses, to The Kendall Company
and received $28 million for the division's net assets. Chemical Securities,
Inc. assisted Nashua with bid solicitation from several prospective buyers. On
May 24, the Company and its indirect wholly-owned subsidiary Cerion
Technologies Inc. ("Cerion"), a manufacturer of precision-machined aluminum
disk substrates for use in computer storage devices, completed the initial
public stock offering of 3,840,000 shares of common stock, of which 2,225,000
shares were offered by Nashua and 1,615,000 shares by Cerion. In conjunction
with the offering, the underwriter exercised its over-allotment option and
purchased 576,000 additional shares of Cerion's common stock from Nashua. The
initial public offering price of Cerion Technologies common stock was $13 per
share. The initial public offering price was determined by negotiations among
the company, Cerion and William Blair and Company L.L.C., as representative of
the underwriters. As a result of the sale by Nashua of the original 2,225,000
shares and the over-allotment of 576,000 shares, Nashua Corporation will
receive approximately $36 million in gross proceeds. Nashua will continue to
own 37 percent of Cerion's common stock. The Company has agreed that, subject
to certain exceptions, for a period of 180 days following May 24, 1996,
without the prior written consent of William Blair and Company L.L.C., it will
not offer, sell, contract to sell, grant any option to purchase or otherwise
dispose of any Cerion common stock or securities convertible or exchangeable
into or exercisable for Cerion common stock or in any other manner transfer all
or a portion of the economic consequences associated with the ownership of any
such common stock, or file or cause to be filed any registration statement with
the Securities and Exchange Commission related to any of the foregoing.
Additionally, on May 31, 1996, Cerion Technologies repaid a $10 million note
payable to Nashua. Approximately $57 million of the net proceeds from these
transactions will be used for the repayment of debt.
ITEM 7. PRO FORMA FINANCIAL INFORMATION AND EXHIBITS
(A) Pro-Forma Financial Information
1. Unaudited Pro Forma Balance Sheet of Nashua Corporation as of
March 29, 1996.
2. Unaudited Pro Forma Statements of Operations of Nashua
Corporation for the year ended December 31, 1995 and for the
three month period ended March 29, 1996.
3. Notes to Unaudited Pro Forma Financial Information.
(B) Exhibits
1.1 Underwriting agreement dated May 23, 1996 between William Blair
and Company, L.L.C. and Cerion Technologies, Nashua Corporation
and Cerion Holdings, Inc.
2.1 Asset Purchase Agreement by and between Nashua Corporation and
The Kendall Company dated as of April 17, 1996.
99.1 Promissory Note dated March 29, 1996 made by Cerion Technologies,
Inc. to the Company. Exhibit to the Cerion Technology Inc.
registration statement on Form S-1 (No. 333-02590) as amended
dated April 26, 1996 incorporated herein by reference.
99.2 Press release, dated May 20, 1996, announcing completion of sale
of Nashua Tape Division.
99.3 Press release, dated May 24, 1996, announcing commencement of
initial public offering of Cerion common stock.
99.4 Press release, dated May 28, 1996, announcing underwriters'
exercise of over allotment option for Cerion common stock.
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<PAGE> 3
NASHUA CORPORATION
UNAUDITED PRO FORMA FINANCIAL INFORMATION
On May 20, 1996, the Company completed the sale of its Tape Products Division
and received $28 million for the division's net assets. On May 24, the Company
and Cerion Technologies Inc. completed the initial public stock offering of
3,840,000 shares of common stock, of which 2,225,000 shares were offered by
Nashua and 1,615,000 shares by Cerion. In conjunction with the offering, the
underwriter exercised its over-allotment option and purchased 576,000 additional
shares of Cerion's common stock from Nashua. The initial public offering price
of Cerion Technologies common stock was $13 per share. As a result of the sale
by Nashua of the original 2,225,000 shares and the over-allotment of 576,000
shares, Nashua Corporation will receive approximately $36 million in gross
proceeds. Nashua will continue to own 37 percent of Cerion's common stock. The
Company has agreed that, subject to certain exceptions, for a period of 180 days
following May 24, 1996, without prior written consent of William Blair and
Company L.L.C., it will not offer, sell, contract to sell, grant any option to
purchase or otherwise dispose of any Cerion common stock or securities
convertible or exchangeable into or exercisable for Cerion common stock or in
any other manner transfer all or a portion of the economic consequences
associated with the ownership of any such common stock or file or cause to be
filed any registration statement with the Securities and Exchange Commission
relating to any of the foregoing. Additionally, on May 31, 1996, Cerion
Technologies repaid a $10 million note payable to Nashua. A majority of the net
proceeds from these transactions will be used for the repayment of debt.
The Unaudited Pro Forma Statements of Operations for the three month period
ended March 29, 1996 and the year ended December 31, 1995 include the historical
results of Nashua. The historical results have been adjusted by giving effect to
assumptions and adjustments as described in the accompanying Notes to Unaudited
Pro Forma Financial Information, including adjustments to reflect the impact of
the divestitures as though they had occurred at the beginning of each period
presented.
The Unaudited Pro Forma Balance Sheet as of March 29, 1996 has been prepared
based on the balance sheet of Nashua as of March 29, 1996. The historical
amounts have been adjusted to give effect to the divestitures as though the
transactions had occurred as of the balance sheet date presented, as further
described in the accompanying Notes to Unaudited Pro Forma Financial
Information. In addition, the investment in Cerion Technologies has been
presented using the equity method of accounting.
The following unaudited pro forma financial information may not necessarily
reflect the results of operations or the financial position of Nashua which
would have actually resulted had the divestitures occurred as of the date and
for the periods indicated, or of future earnings or the future financial
position of the Company. The unaudited pro forma financial information should be
read in conjunction with the accompanying Notes to Unaudited Pro Forma Financial
Information and Nashua Corporation's Annual Report on Form 10-K as amended, and
Nashua Corporation's Quarterly Report on Form 10-Q.
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<TABLE>
NASHUA CORPORATION
UNAUDITED PRO FORMA BALANCE SHEET
AS OF MARCH 29, 1996
(IN THOUSANDS)
<CAPTION>
HISTORICAL PRO FORMA
---------- ---------------------------------------------
Nashua Adjustments (Note 2) Nashua
------ ----------- -------- ------
<S> <C> <C> <C> <C>
ASSETS
Current Assets
Cash and cash equivalents $ 11,064 $ 11,154 [A][B] $ 22,218
Accounts receivable 30,990 (7,394) [B] 23,596
Inventories 15,937 (673) [B] 15,264
Other current assets 31,370 (11,109) [B][D] 20,261
Net current assets of
discontinued operations 7,020 (7,020) [C] -
-------- -------- --------
96,381 (15,042) 81,339
Plant and equipment, net 68,138 (6,686) [B] 61,452
Other assets 52,704 6,879 [E] 59,583
Net non-current assets of
discontinued operations 5,227 (5,227) [C] -
-------- -------- --------
Total Assets $222,450 $(20,076) $202,374
======== ======== ========
LIABILITIES AND SHAREHOLDERS' EQUITY
Current Liabilities
Current maturities of long-term
debt $ 8,375 $ (7,130) [F] $ 1,245
Accounts payable and accrued
expenses 57,553 (4,295) [B] 53,258
Income taxes payable 4,588 7,652 [B][G] 12,240
-------- -------- --------
70,516 (3,773) 66,743
Long-term debt 60,475 (49,919) [F] 10,556
Other long-term liabilities 19,352 - 19,352
-------- -------- --------
79,827 (49,919) 29,908
Shareholders' Equity
Common stock and additional capital 18,681 - 18,681
Retained earnings 59,529 33,616 [H] 93,145
Cumulative translation adjustment (5,352) - (5,352)
Treasury stock, at cost (751) - (751)
-------- -------- --------
72,107 33,616 105,723
-------- -------- --------
Total Liabilities and Shareholders'
Equity $222,450 $(20,076) $202,374
======== ======== ========
</TABLE>
See Accompanying Notes to Unaudited Pro Forma Financial Information.
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NASHUA CORPORATION
<TABLE>
UNAUDITED PRO FORMA STATEMENT OF OPERATIONS
FOR THE YEAR ENDED DECEMBER 31, 1995
(IN THOUSANDS, EXCEPT PER SHARE DATA)
<CAPTION>
HISTORICAL PRO FORMA
---------- ---------------------------------------------
Nashua Adjustments (Note 2) Nashua
------ ----------- -------- ------
<S> <C> <C> <C> <C>
Net Sales $452,196 $(27,530) [I] $424,666
Cost of products sold 336,037 (19,023) [I] 317,014
Selling, distribution and
administrative expenses 105,977 (1,501) [I] 104,476
Research and development expenses 9,238 (739) [I] 8,499
Restructuring charges 16,247 - 16,247
Interest expense 5,532 (4,658) [I][J] 874
Interest and other income (686) - (686)
Income from equity investment - (1,275) [K] (1,275)
-------- -------- --------
Total costs and expenses 472,345 (27,196) 445,149
-------- -------- --------
Loss from continuing operations
before income taxes (20,149) (334) (20,483)
Income tax benefit (4,679) (196) [L] (4,875)
-------- -------- --------
Loss from continuing operations (15,470) (138) (15,608)
Income from discontinued
operations, net of tax 739 (739) [M] -
-------- -------- --------
Net loss $(14,731) $ (877) $(15,608)
======== ======== ========
Earnings per common and
common equivalent share:
Loss from continuing operations $ (2.43) $ (.02) $ (2.45)
Income from discontinued operations .12 (.12) -
-------- -------- --------
Net loss $ (2.31) $ (.14) $ (2.45)
======== ======== ========
Average outstanding common shares
plus common equivalents 6,374 6,374
======== ========
</TABLE>
See Accompanying Notes to Unaudited Pro Forma Financial Information.
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<TABLE>
NASHUA CORPORATION
UNAUDITED PRO FORMA STATEMENT OF OPERATIONS
THREE MONTH PERIOD ENDED MARCH 29, 1996
(IN THOUSANDS, EXCEPT PER SHARE DATA)
<CAPTION>
HISTORICAL PRO FORMA
---------- --------------------------------------------
Nashua Adjustments (Note 2) Nashua
------ ----------- -------- ------
<S> <C> <C> <C> <C>
Net Sales $101,497 $(11,774) [I] $89,723
Cost of products sold 75,297 (7,098) [I] 68,199
Selling, distribution and
administrative expenses 26,420 (1,012) [I] 25,408
Research and development expenses 2,344 (320) [I] 2,024
Interest expense 1,539 (1,275) [I][J] 264
Interest and other income (122) - (122)
Income from equity investment - (684) [K] (684)
-------- -------- -------
Total costs and expenses 105,478 (10,389) 95,089
-------- -------- -------
Loss from continuing
operations before income taxes (3,981) (1,385) (5,366)
Income tax benefit (1,741) (588) [L] (2,329)
-------- -------- -------
Loss from continuing
operations (2,240) (797) (3,037)
Income from discontinued
operations, net of tax 206 (206) [M] -
-------- -------- -------
Net loss $ (2,034) $ (1,003) $(3,037)
======== ======== =======
Earnings per common and
common equivalent share:
Loss from continuing
operations $ (.35) $ (.13) $ (.48)
Income from discontinued operations .03 (.03) -
-------- -------- -------
Net loss $ (.32) $ (.16) $ (.48)
======== ======== =======
Average outstanding common shares
plus common equivalents 6,374 6,374
======== =======
</TABLE>
See Accompanying Notes to Unaudited Pro Forma Financial Information.
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NASHUA CORPORATION
NOTES TO UNAUDITED PRO FORMA FINANCIAL INFORMATION
1. Basis of Presentation
The unaudited pro forma financial information is presented to give effect
to the disposition of the Tape Products Division, a discontinued operation,
the sale of 63% of Cerion Technologies Inc. ("Cerion"), formerly a
wholly-owned subsidiary of Nashua Corporation ("the Company") and the
repayment of a $10 million note from Cerion to Nashua. Under the terms of
the Tape Products Division sales agreement it is expected that the Company
will receive net proceeds before income taxes of approximately $26 million
for the net assets of the business. As a result of the sale of Cerion
common stock by the Company, it is estimated that the Company will receive
$32.6 million based on an initial stock price of $13 per share less the
costs of issuance.
The unaudited pro forma financial information should be read in conjunction
with the historical financial statements of the Company.
2. Adjustments
The following adjustments have been made in the preparation of the
unaudited pro forma financial information:
A. To record an increase in cash required to settle tax liabilities
resulting from gains incurred on the dispositions and sale and
repayment proceeds retained by the Company.
B. To deconsolidate the assets and liabilities of Cerion from the
Company's historical balance sheet.
C. To eliminate the Tape Products Division's net current assets and
net non-current assets from the Company's historical balance
sheet.
D. To record the use of tax assets totaling $11.6 million as
settlement of tax liabilities resulting from the gains incurred
on the dispositions and the tax benefit of $585,000 relating to
the prepayment penalty of debt.
E. To record the investment in Cerion under the equity method of
accounting of $6,879,000 and the repayment of a $10 million note
receivable to the Company from Cerion.
F. To record the prepayment of debt as the result of cash proceeds
from the dispositions.
G. To record the tax liability relating to the Cerion transaction
and the disposition of the Tape Products Division.
H. To record the gain, net of taxes, on the sales of common stock by
both the Company and Cerion, the disposition of the Tape Products
Division, and the $1.5 million prepayment penalty on debt.
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<PAGE> 8
NASHUA CORPORATION
NOTES TO UNAUDITED PRO FORMA FINANCIAL INFORMATION (CONTINUED)
<TABLE>
I. To deconsolidate the results of operations of Cerion, net of
certain intercompany adjustments as follows:
<CAPTION>
For the Three Month
For the Year Ended Period Ended
December 31, 1995 March 29, 1996
----------------- --------------
<S> <C> <C>
Intercompany sales and cost
of products sold $645,000 $ -
Allocated selling, distribution,
and administrative expenses 227,000 102,000
Allocated research and
development expenses 70,000 42,000
</TABLE>
J. To reduce interest expense due to the prepayment of debt from
cash flows generated from the dispositions.
K. To record income of Cerion under the equity method of accounting.
L. To record the income tax benefit due to the deconsolidation of
Cerion, less a reduction in the benefit due to the reduced
interest expense and the recording of the income of Cerion under
the equity method of accounting.
M. To eliminate the net income for the Tape Products Division.
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<PAGE> 9
SIGNATURES
Pursuant to the requirements of the Security Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
NASHUA CORPORATION
(Registrant)
Date: June 4, 1996 By /s/ Daniel M. Junius
------------ ---------------------------------
Daniel M. Junius
Vice President-Finance
and Chief Financial Officer
(principal financial and duly
authorized officer)
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<PAGE> 1
Exhibit 1.1
CERION TECHNOLOGIES INC.
3,840,000 SHARES COMMON STOCK*
UNDERWRITING AGREEMENT
----------------------
May 23, 1996
WILLIAM BLAIR & COMPANY, L.L.C.
As Representative of the Several
Underwriters Named in Schedule A
222 West Adams Street
Chicago, Illinois 60606
Ladies and Gentlemen:
SECTION 1. INTRODUCTION. Cerion Technologies Inc. (the "Company"), a
Delaware corporation, upon the closing of the transaction contemplated by this
Agreement will have an authorized capital stock consisting of 100,000 shares,
$.01 par value per share, of Preferred Stock, of which no shares will be
outstanding as of such date, and 20,000,000 shares, $.01 par value per share, of
Common Stock (the "Common Stock"), of which 7,016,540 shares will be outstanding
as of such date. The Company proposes, subject to the terms and conditions
stated herein, to issue and sell 1,615,000 shares of its authorized but unissued
Common Stock, and Cerion Holdings Inc., a Delaware corporation and the parent of
the Company (the "Selling Stockholder"), proposes to sell 2,225,000 shares of
the Company's issued and outstanding Common Stock owned by the Selling
Stockholder, to the several underwriters named in Schedule A as it may be
amended by the Pricing Agreement as hereinafter defined (the
"Underwriters"),which Underwriters are acting severally and not jointly. The
Selling Stockholder is a wholly owned subsidiary of Nashua Corporation, a
Delaware corporation ("Nashua Corporation," and together with the Selling
Stockholder, "Nashua"). Collectively, such total of 3,840,000 shares of Common
Stock proposed to be sold by the Company and Nashua is
________________________
* Plus an option to acquire up to 576,000 additional shares to cover
overallotments.
<PAGE> 2
hereinafter referred to as the "Firm Shares." In addition, Nashua proposes to
grant to the Underwriters an option to purchase up to an aggregate of 576,000
additional shares of Common Stock (the "Option Shares") for the purpose of
covering any over-allotments in connection with the sale of the Firm Shares as
provided in Section 5 hereof. The Firm Shares and, to the extent such option is
exercised, the Option Shares are hereinafter collectively referred to as the
"Shares."
You have advised the Company and Nashua that the Underwriters propose to
make a public offering of their respective portions of the Shares as soon as you
deem advisable after the registration statement hereinafter referred to becomes
effective, if as of the date hereof it has not yet become effective, and the
Pricing Agreement as hereinafter defined has been executed and delivered.
Prior to the purchase and public offering of the Shares by the several
Underwriters, the Company, Nashua and the Representative, acting on behalf of
the several Underwriters, shall enter into an agreement substantially in the
form of Exhibit A hereto (the "Pricing Agreement"). The Pricing Agreement may
take the form of an exchange of any standard form of written telecommunication
between the Company, Nashua and the Representative and shall specify such
applicable information as is indicated in Exhibit A hereto. The offering of the
Shares will be governed by this Agreement, as supplemented by the Pricing
Agreement. From and after the date of the execution and delivery of the Pricing
Agreement, this Agreement shall be deemed to incorporate the Pricing Agreement.
The Company and Nashua hereby confirm their respective agreements with the
Underwriters as follows:
SECTION 2. REPRESENTATIONS AND WARRANTIES OF THE COMPANY AND NASHUA. The
Company and Nashua, jointly and severally, represent and warrant to the several
Underwriters that:
(a) A registration statement on Form S-1 (File No. 333-2590) and a related
preliminary prospectus with respect to the Shares have been prepared and filed
with the Securities and Exchange Commission (the "Commission") by the Company in
conformity with the requirements of the Securities Act of 1933, as amended, and
the rules and regulations of the Commission thereunder (collectively, the "1933
Act;" all references herein to specific rules are to rules promulgated under the
1933 Act); and the Company has so prepared and has filed such amendments
thereto, if any, and such amended preliminary prospectuses as may have been
required to the date hereof. If the Company and the Underwriters have elected
not to rely upon Rule 430A, the Company has prepared and will promptly file an
amendment to the registration statement and an amended prospectus. If the
Company and the Underwriters have elected to rely upon Rule 430A, the Company
will prepare and file a prospectus pursuant to Rule 424(b) that discloses the
information previously omitted from the prospectus in reliance upon Rule 430A.
There have been or will promptly be delivered to you three signed copies of such
registration statement and all amendments, and three copies of each exhibit
filed therewith, and conformed
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<PAGE> 3
copies of such registration statement and amendments (but without exhibits) and
of the related preliminary prospectus or prospectuses and final forms of
prospectus for each of the Underwriters.
The registration statement and prospectus, each as amended, on file with
the Commission at the time the registration statement became or becomes
effective, including the information deemed to be part of the registration
statement at the time of effectiveness pursuant to Rule 430A(b), if applicable,
are hereinafter called the "Registration Statement" and the "Prospectus,"
respectively, except that if the prospectus filed by the Company pursuant to
Rule 424(b) differs from the prospectus on file at the time the Registration
Statement became or becomes effective, the term "Prospectus" shall refer to the
Rule 424(b) prospectus from and after the time it is filed with the Commission
or transmitted to the Commission for filing. The Securities Exchange Act of
1934, as amended, and the rules and regulations of the Commission thereunder are
hereinafter collectively referred to as the "Exchange Act."
(b) The Commission has not issued any order preventing or suspending the
use of any preliminary prospectus, and each preliminary prospectus, at the time
of filing thereof, has conformed in all material respects with the requirements
of the 1933 Act (except to the extent that, in conformity with the 1933 Act,
such preliminary prospectus is subject to completion), and, as of its date, has
not included any untrue statement of a material fact or omitted to state a
material fact necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading; and when the
Registration Statement and any amendment thereto became or becomes effective,
and at all times subsequent thereto, up to the First Closing Date or the Second
Closing Date, each as hereinafter defined, as the case may be, the Registration
Statement, or such amendment, including the information deemed to be part of the
Registration Statement at the time of effectiveness pursuant to Rule 430A(b), if
applicable, and the Prospectus and any amendments or supplements thereto,
contained or will contain all statements that are required to be stated therein
in accordance with the 1933 Act and in all material respects conformed or will
in all material respects conform to the requirements of the 1933 Act, and
neither the Registration Statement nor the Prospectus, nor any amendment or
supplement thereto, included or will include any untrue statement of a material
fact or omitted or will omit to state a material fact required to be stated
therein or necessary to make the statements therein not misleading; provided,
however, that the Company and Nashua make no representation or warranty as to
information contained in or omitted from any preliminary prospectus, the
Registration Statement, the Prospectus or any such amendment or supplement in
reliance upon and in conformity with written information furnished to the
Company by or on behalf of any Underwriter through the Representative regarding
the Underwriters specifically for use in the preparation thereof.
(c) The Company has been duly incorporated and is validly existing as a
corporation in good standing under the laws of the State of Delaware, with
corporate power and authority to own or lease its properties and conduct its
business as described in the Prospectus; the Company is duly qualified to do
business as a foreign corporation under the corporation law of, and is in good
standing as such in, each jurisdiction in which it owns or leases substantial
properties, has an office, or in which substantial business is conducted and
such qualification is
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<PAGE> 4
required, except in any such case where the failure to so qualify or be in good
standing would not have a material adverse effect on the Company's ability to
perform its obligations under this Agreement or on the condition (financial or
otherwise) or results of operations of the Company; and no proceeding has been
instituted in any such jurisdiction, revoking, limiting or curtailing, or
seeking to revoke, limit or curtail, such power and authority or qualification.
(d) The Company does not, directly or indirectly, own, of record or
beneficially, any outstanding voting securities or other equity interests in or
control any corporation, limited liability company, partnership, trust, joint
venture or other entity.
(e) The issued and outstanding shares of capital stock of the Company are
as set forth in the Prospectus and such shares have been duly authorized and
validly issued, are fully paid and nonassessable, and conform to the description
thereof contained in the Prospectus and, except as disclosed in the Prospectus,
there are no options, rights or warrants for the purchase of Common Stock, or
securities convertible or exchangeable into, or exercisable for, Common Stock,
and there are no agreements with respect thereto.
(f) The Shares to be sold by the Company have been duly authorized and when
issued, delivered and paid for pursuant to this Agreement will be validly
issued, fully paid and nonassessable and will conform to the description thereof
contained in the Prospectus.
(g) The making and performance by the Company of this Agreement and the
Pricing Agreement have been duly authorized by all necessary corporate action
and (i) will not violate any provision of the Company's charter or bylaws and
(ii) will not result in the breach, or be in contravention, of any provision of
any agreement, franchise, license, indenture, mortgage, deed of trust or other
instrument to which the Company is a party or by which the Company or its
properties may be bound or affected, or any order, rule or regulation applicable
to the Company of any court or regulatory body, administrative agency or other
governmental body having jurisdiction over the Company or any of its properties,
or any order of any court or governmental agency or authority entered in any
proceeding to which the Company was or is now a party or by which it is bound.
No consent, approval, authorization or other order of any court, regulatory
body, administrative agency or other governmental body or of any other person is
required for the execution and delivery of this Agreement or the Pricing
Agreement or the consummation of the transactions contemplated herein or
therein, except for compliance with the 1933 Act and blue sky laws applicable to
the public offering of the Shares by the several Underwriters and clearance of
such offering with the National Association of Securities Dealers, Inc.
("NASD"). This Agreement has been, and the Pricing Agreement has been or will
be, duly executed and delivered by the Company.
(h) The accountants who have expressed their opinions with respect to
certain of the financial statements and schedules included in the Registration
Statement are independent accountants as required by the 1933 Act.
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<PAGE> 5
(i) The financial statements and schedules of the Company and its
predecessors included in the Registration Statement present fairly the financial
position of the Company and its predecessors as of the respective dates of such
financial statements, and the results of operations and cash flows of the
Company and its predecessors for the respective periods covered thereby, all in
conformity with generally accepted accounting principles consistently applied
throughout the periods involved, and the supporting schedules included in the
Registration Statement present fairly the information required to be stated
therein. The financial information set forth in the Prospectus under "Selected
Financial Data" presents fairly on the basis stated in the Prospectus the
information set forth therein. The pro forma financial statements and other pro
forma information included in the Prospectus present fairly the information
shown therein, have been prepared in accordance with generally accepted
accounting principles and the Commission's rules and guidelines with respect to
pro forma financial statements and other pro forma information, have been
properly compiled on the pro forma basis described therein, and, in the opinion
of the Company, the assumptions used in the preparation thereof are reasonable
and the adjustments used therein are appropriate under the circumstances.
(j) Neither Nashua, its subsidiaries nor the Company is in violation of its
charter or is in violation of any material provision of its bylaws or is in
default under any consent decree or order of any court or administrative body or
in default with respect to any material provision of any lease, loan agreement,
franchise, license, permit or other contractual obligation to which it is a
party; and there does not exist any state of facts which constitutes an event of
default as defined in such documents or which, with notice or lapse of time or
both, would constitute such an event of default, in each case, except for
defaults which neither singly nor in the aggregate are material to the Company.
(k) There are no legal or governmental proceedings pending or, to Nashua's
or the Company's knowledge, threatened to which Nashua, its subsidiaries or the
Company is or may be a party in which the Company or material properties or
assets owned or leased by the Company is or may be the subject, or related to
environmental or discrimination matters involving the Company, which are not
disclosed in the Prospectus, or which question the validity of this Agreement or
the Pricing Agreement or any action taken or to be taken pursuant hereto or
thereto.
(l) There are no holders of securities of the Company having rights,
contractual or otherwise, to cause registration thereof or preemptive rights to
purchase Common Stock, except as disclosed in the Prospectus.
(m) The Company has good and marketable title to (i) all the properties and
assets historically used in Nashua Precision Technologies business and (ii) all
the properties and assets reflected as owned in the financial statements
hereinabove described (or elsewhere in the Prospectus), subject to no lien,
mortgage, pledge, charge, security interest or encumbrance of any kind except
those, if any, reflected in such financial statements (or elsewhere in the
Prospectus) or such as are not material to the Company. The Company holds its
leased properties which are material to the Company under valid and binding
leases.
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(n) The Company has not taken and will not take, directly or indirectly,
any action designed to or which has constituted or which might reasonably be
expected to cause or result, under the Exchange Act or otherwise, in
stabilization or manipulation of the price of any security of the Company to
facilitate the sale or resale of the Shares.
(o) Subsequent to the respective dates as of which information is given in
the Registration Statement and Prospectus, and except as contemplated by the
Prospectus, the Company has not incurred any material liabilities or
obligations, direct or contingent, or entered into any material transactions not
in the ordinary course of business and there has not been any material adverse
change in its condition (financial or otherwise), business, assets, results of
operations or prospects or any material change in its capital stock, short-term
debt or long-term debt.
(p) The Company has obtained agreements from its directors and officers
that, for a period of 180 days after this Agreement becomes effective, each of
such directors and officers will not, without the prior written consent of the
Representative, offer, sell, contract to sell, grant any option to purchase or
otherwise dispose of any Common Stock or securities convertible or exchangeable
into, or exercisable for, Common Stock or in any other manner transfer all or a
portion of the economic consequences associated with the ownership of any such
Common Stock, or execute any registration rights with respect to any such Common
Stock or securities.
(q) There is no material document of a character required to be described
in the Registration Statement or the Prospectus or to be filed as an exhibit to
the Registration Statement which is not described or filed as required.
(r) The Company owns and possesses all right, title and interest in and to,
or has duly licensed from third parties a valid and enforceable right to use,
all trademarks, copyrights, patents, trade secrets and other proprietary rights
("Trade Rights") presently employed by the Company in connection with its
business or historically used by the Nashua Precision Technologies business,
whether such Trade Rights are registered or unregistered. Neither Nashua, its
subsidiaries nor the Company has received any notice of infringement,
misappropriation or conflict from any third party as to such Trade Rights which
has not been resolved or disposed of and neither the Company nor the Nashua
Precision Technologies business has infringed, misappropriated or otherwise
conflicted with Trade Rights of any third parties, which infringement,
misappropriation or conflict would have a material adverse effect upon the
condition (financial or otherwise) or results of operations of the Company.
(s) The Company is (1) in compliance with any and all applicable foreign,
federal, state and local laws and regulations relating to the protection of
human health and safety, the environment or hazardous or toxic substances or
wastes, pollutants or contaminants ("Environmental Laws"), (2) has received all
permits, licenses or other approvals required of it under applicable
Environmental Laws to conduct its business and (3) is in compliance with all
terms and conditions of any such permit, license or approval, except where such
noncompliance
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with Environmental Laws, failure to receive required permits, licenses or other
approvals or failure to comply with the terms and conditions of such permits,
licenses or approvals would not, singly or in the aggregate, have a material
adverse effect on the Company. In the ordinary course of its business, the
Company or Nashua conducts a periodic review of the effect of Environmental Laws
on the business, operations and properties of the Company, in the course of
which it identifies and evaluates associated costs and liabilities (including,
without limitation, any capital or operating expenditures required for clean-up,
closure of properties or compliance with Environmental Laws or any permit,
license or approval, any related constraints on operating activities and any
potential liabilities to third parties). On the basis of such review, the
Company and Nashua have reasonably concluded that such associated costs and
liabilities would not, singly or in the aggregate, have a material adverse
effect on the Company.
(t) The conduct of the business of the Company is in compliance in all
respects with applicable federal, state, local and foreign laws and regulations,
except where the failure to be in compliance would not have a material adverse
effect upon the condition (financial or otherwise), business, assets, results of
operations or prospects of the Company.
(u) All offers and sales of the Company's and its predecessor's capital
stock prior to the date hereof were at all relevant times exempt from the
registration requirements of the 1933 Act and were duly registered with or the
subject of an available exemption from the registration of the applicable state
securities or blue sky laws.
(v) Nashua, the Company and its predecessors have filed all necessary
federal and state income and franchise tax returns and have paid all taxes shown
as due thereon, and there is no tax deficiency that has been, or to the
knowledge of the Company might be, asserted against the Company or its
properties or assets that would or could be expected to adversely affect the
financial condition, assets, operations or prospects of the Company.
(w) At the time the Registration Statement becomes or became effective, the
Shares will be or were registered under the Exchange Act. The Shares have been
authorized for trading over-the-counter on the Nasdaq Stock Market's National
Market subject to notice of issuance or sale, as the case may be.
(x) The Company is not, and does not intend to conduct its business in a
manner in which it would become, an "investment company" as defined in Section
3(a) of the Investment Company Act of 1940, as amended (the "Investment Company
Act").
(y) The Company confirms as of the date hereof that it is in compliance
with all provisions of Section 1 of Laws of Florida, Chapter 92-198, AN ACT
RELATING TO DISCLOSURE OF DOING BUSINESS WITH CUBA, and the Company further
agrees that if it commences engaging in business with the government of Cuba or
with any person or affiliate located in Cuba after the date the Registration
Statement becomes or has become effective with the Commission or with the
Florida Department of Banking and Finance (the "Department"), whichever date is
later, or if the information reported in the Prospectus, if any, concerning the
Company's business with Cuba or
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<PAGE> 8
with any person or affiliate located in Cuba changes in any material way, the
Company will provide the Department with notice of such business or change, as
appropriate, in a form acceptable to the Department.
(z) No beneficial owner of the Company's unregistered securities,
regardless of the time acquired or the source from which derived, has any direct
or indirect affiliation or association with any member of the NASD. Nashua has
no direct or indirect affiliation or association with any member of the NASD.
SECTION 3. ADDITIONAL REPRESENTATIONS, WARRANTIES AND COVENANTS OF NASHUA.
(a) Nashua represents and warrants to, and agrees with, the Company and the
Underwriters that:
(i) Nashua will have on the First Closing Date and the Second Closing
Date (as hereinafter defined) valid marketable title to the Shares proposed
to be sold by Nashua hereunder on such date, and Nashua has full right,
power and authority to enter into this Agreement and the Pricing Agreement
and to sell, assign, transfer and deliver such Shares hereunder, free and
clear of all voting trust arrangements, liens, encumbrances, equities,
claims and rights of others; and upon delivery of and payment for such
Shares hereunder, the Underwriters will acquire valid marketable title
thereto, free and clear of all voting trust arrangements, liens,
encumbrances, equities, security interests, claims and rights of others.
The Selling Stockholder holds all of the outstanding capital stock of the
Company. Nashua Corporation holds all of the outstanding capital stock of
the Selling Stockholder.
(ii) The making and performance by Nashua of this Agreement and the
Pricing Agreement have been duly authorized by all necessary corporate
action and (A) will not violate any provision of Nashua's charter or
bylaws, and (B) will not result in the breach, or be in contravention, of
any provision of any agreement, franchise, license, indenture, mortgage,
deed of trust, or other instrument to which Nashua or any subsidiary
thereof is a party or by which Nashua, any subsidiary thereof or the
property of any of them may be bound or affected, or any order, rule or
regulation applicable to Nashua or any such subsidiary of any court or
regulatory body, administrative agency or other governmental body having
jurisdiction over Nashua or any such subsidiary or any of their respective
properties, or any order of any court or governmental agency or authority
entered in any proceeding to which Nashua or any such subsidiary was or is
now a party or by which it is bound. No consent, approval, authorization or
other order of any court, regulatory body, administrative agency or other
government body or of any other person is required for the execution and
delivery of this Agreement or the Pricing Agreement or the consummation of
the transactions contemplated herein or therein, except for compliance with
the 1933 Act and blue sky laws applicable to the public offering of the
Shares by the several Underwriters and clearance of such offering with the
NASD. This Agreement has
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<PAGE> 9
been, and the Pricing Agreement has been or will be, duly executed and
delivered by Nashua.
(iii) Nashua has not taken and will not take, directly or indirectly,
any action designed to or which might be reasonably expected to cause or
result, under the Exchange Act or otherwise, in the stabilization or
manipulation of the price of any security of the Company to facilitate the
sale or resale of the Shares.
(b) Nashua agrees with the Company and the Underwriters that, for a period
of 180 days after this Agreement becomes effective, Nashua will not, without the
prior written consent of the Representative, offer, sell, contract to sell,
grant any option to purchase or otherwise dispose of any Common Stock or
securities convertible or exchangeable into, or exercisable for, Common Stock or
in any other manner transfer all or a portion of the economic consequences
associated with the ownership of any such Common Stock, or cause the Company to
file with the Commission any registration statement related to any of the
foregoing. Notwithstanding the foregoing, Nashua shall be permitted to pledge
shares of Common Stock (including Shares until the sale thereof pursuant to this
Agreement) to an agent for its creditors so long as such agent agrees to be
bound by the terms of this paragraph with respect to the offer, sale or other
transfer of any such pledged Common Stock, and provided that such agent shall be
permitted to foreclose on and acquire ownership of such pledged Common Stock in
compliance with the terms of such pledge but shall not be permitted during the
180-day period referred to above to transfer any pledged Common Stock in a
manner prohibited by this paragraph to any person other than itself or its
nominee. Nashua represents and warrants to the Company and the Underwriters that
any pledge by it existing at the date hereof or entered into in the future of
any Common Stock complies and will comply with the requirements of the preceding
sentence.
(c) In order to document the Underwriter's compliance with the reporting
and withholding provisions of the Internal Revenue Code of 1986, as amended,
with respect to the transactions herein contemplated, Nashua agrees to deliver
to you prior to or on the First Closing Date, as hereinafter defined, a properly
completed and executed United States Treasury Department Form W-8 or W-9 (or
other applicable form of statement specified by Treasury Department regulations
in lieu thereof).
SECTION 4. REPRESENTATIONS AND WARRANTIES OF THE UNDERWRITERS. The
Representative, on behalf of the several Underwriters, represents and warrants
to the Company that the information set forth (a) in the last paragraph on the
cover page of the Prospectus, (b) in the stabilization paragraph on the bottom
of the inside front cover page of the Prospectus and (c) in the first and second
sentences of the second paragraph and the single sentence constituting the
seventh paragraph under the table of Underwriters under the caption
"Underwriting" in the Prospectus is correct and complete in all material
respects. The Company, Nashua and the Representative agree that the foregoing
items described in this Section 4 were the only information furnished to the
Company by and on behalf of the Underwriters for use in connection with the
preparation of the Registration Statement and the Prospectus.
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<PAGE> 10
SECTION 5. PURCHASE, SALE AND DELIVERY OF SHARES. On the basis of the
representations, warranties and agreements herein contained, but subject to the
terms and conditions herein set forth, the Company and Nashua, severally and not
jointly, agree to sell to the Underwriters named in Schedule A hereto, and the
Underwriters agree, severally and not jointly, to purchase 1,615,000 Firm Shares
from the Company and 2,225,000 Firm Shares from Nashua at the price per share
set forth in the Pricing Agreement. The obligation of each Underwriter to the
Company shall be to purchase from the Company that number of full shares which
(as nearly as practicable, as determined by you) bears to the number of Firm
Shares to be sold by the Company the same proportion as the number of Shares set
forth opposite the name of such Underwriter in Schedule A hereto bears to the
total number of Firm Shares to be purchased by all Underwriters under this
Agreement. The obligation of each Underwriter to Nashua shall be to purchase
from Nashua that number of full shares which (as nearly as practicable, as
determined by you) bears to the number of Firm Shares to be sold by Nashua the
same proportion as the number of Shares set forth opposite the name of such
Underwriter in Schedule A hereto bears to the total number of Firm Shares to be
purchased by all Underwriters under this Agreement. The initial public offering
price and the purchase price shall be set forth in the Pricing Agreement.
At 10:00 A.M., Boston Time, on the third full business day after the first
effective trade date of the initial public offering, or at such other time not
later than nine full business days after the initial public offering, as you and
the Company may agree, the Company and Nashua will deliver to you at the offices
of Bingham, Dana & Gould, LLP, Boston, Massachusetts, counsel for the Company,
or through the facilities of The Depository Trust Company for the accounts of
the several Underwriters, certificates representing the Firm Shares to be sold
by the Company and Nashua against payment of the purchase price therefor by wire
transfer of immediately available funds to the Company and Nashua (or, in the
case of Nashua, to an account designated by Nashua) as their interests appear.
Such time of delivery and payment is herein referred to as the "First Closing
Date." The certificates for the Firm Shares so to be delivered will be in such
denominations and registered in such names as you request by notice to the
Company prior to 10:00 A.M., Boston Time, on the second full business day
preceding the First Closing Date, and will be made available at the Company's
expense for checking and packaging by the Representative at 10:00 A.M., Boston
Time, on the first full business day preceding the First Closing Date.
In addition, on the basis of the representations, warranties and agreements
herein contained, but subject to the terms and conditions herein set forth,
Nashua hereby grants an option to the several Underwriters to purchase,
severally and not jointly, up to an aggregate of 576,000 Option Shares, at the
same purchase price per share to be paid for the Firm Shares, for use solely in
covering any over allotments made by the Underwriters in the sale and
distribution of the Firm Shares. The option granted hereunder may be exercised
at any time (but not more than once) within 30 days after the date of the
initial public offering upon notice by you to the Company and Nashua setting
forth the aggregate number of Option Shares as to which the Underwriters are
exercising the option, the names and denominations in which the certificates for
such shares are to be registered and the time and place at which such
certificates will be delivered. Such time of
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<PAGE> 11
delivery (which may not be earlier than the First Closing Date), being herein
referred to as the "Second Closing Date," shall be determined by you, but if at
any time other than the First Closing Date, shall not be earlier than three nor
later than ten full business days after delivery of such notice of exercise. The
number of Option Shares to be purchased by each Underwriter shall be determined
by multiplying the number of Option Shares to be sold by Nashua pursuant to such
notice of exercise by a fraction, the numerator of which is the number of Firm
Shares to be purchased by such Underwriter as set forth opposite its name in
Schedule A and the denominator of which is the total number of Firm Shares
(subject to such adjustments to eliminate any fractional share purchases as you
in your absolute discretion may make). Certificates for the Option Shares will
be made available at the Company's expense for checking and packaging at 10:00
A.M., Boston Time, on the first full business day preceding the Second Closing
Date. The manner of payment for and delivery of the Option Shares shall be the
same as for the Firm Shares as specified in the preceding paragraph, except that
payment shall be made to the order of Nashua.
You have advised the Company and Nashua that each Underwriter has
authorized you to accept delivery of its Shares, to make payment and to receipt
therefor. You, individually and not as the Representative of the Underwriters,
may make payment for any Shares to be purchased by any Underwriter whose funds
shall not have been received by you by the First Closing Date or the Second
Closing Date, as the case may be, for the account of such Underwriter, but any
such payment shall not relieve such Underwriter from any obligation hereunder.
SECTION 6. COVENANTS OF THE COMPANY AND NASHUA. The Company and Nashua
covenant and agree that:
(a) The Company will advise you promptly of the issuance by the Commission
of any stop order suspending the effectiveness of the Registration Statement or
of the institution of any proceedings for that purpose, or of any notification
of the suspension of qualification of the Shares for sale in any jurisdiction or
the initiation or threatening of any proceedings for that purpose, and will also
advise you promptly of any request of the Commission for an amendment or
supplement to the Registration Statement, to any preliminary prospectus or to
the Prospectus, or for additional information, and will not file any amendment
or supplement to the Registration Statement, any preliminary prospectus or the
Prospectus of which you have not been furnished with a copy prior to such filing
or to which you reasonably object.
(b) If at any time when a prospectus relating to the Shares is required to
be delivered under the 1933 Act, any event occurs as a result of which the
Prospectus, including any amendments or supplements thereto, would include an
untrue statement of a material fact, or omit to state any material fact required
to be stated therein or necessary to make the statements therein, in the light
of the circumstances under which they were made, not misleading, or if it is
necessary at any time to amend the Prospectus, including any amendments or
supplements thereto and including any revised prospectus which the Company
proposes for use by the Underwriters in connection with the offering of the
Shares which differs from the prospectus on file with the Commission at the time
of effectiveness of the Registration Statement, whether or not such revised
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<PAGE> 12
prospectus is required to be filed pursuant to Rule 424(b) to comply with the
1933 Act, the Company promptly will advise you thereof and will promptly prepare
and file with the Commission an amendment or supplement which will correct such
statement or omission or an amendment which will effect such compliance; and, in
case any Underwriter is required to deliver a prospectus nine months or more
after the effective date of the Registration Statement, the Company upon request
will prepare promptly such prospectus or prospectuses as may be necessary to
permit compliance with the requirements of Section 10(a)(3) of the 1933 Act.
(c) The Company will not, prior to the earlier of the Second Closing Date
or termination or expiration of the related option, incur any liability or
obligation, direct or contingent, or enter into any material transaction, other
than in the ordinary course of business, except as contemplated by the
Prospectus.
(d) The Company will not acquire any capital stock of the Company prior to
the earlier of the Second Closing Date or termination or expiration of the
related option, nor will the Company declare or pay any dividend or make any
other distribution upon the Common Stock payable to stockholders of record on a
date prior to the earlier of the Second Closing Date or termination or
expiration of the related option, except in either case as contemplated by the
Prospectus.
(e) As soon as practicable, but in any event not later than August 15,
1997, the Company will make generally available to its security holders an
earnings statement (which need not be audited) covering a period of at least 12
months beginning after the effective date of the Registration Statement, which
will satisfy the provisions of the last paragraph of Section 11(a) of the 1933
Act.
(f) During such period as a prospectus is required by law to be delivered
in connection with offers and sales of the Shares by an Underwriter or dealer,
the Company will furnish to you copies of the Registration Statement, the
Prospectus, each preliminary prospectus and all amendments and supplements to
any such documents, in each case as soon as available and in such quantities as
you may reasonably request, for the purposes contemplated by the 1933 Act.
(g) The Company and Nashua will cooperate with the Underwriters in
qualifying or registering the Shares for sale under the blue sky laws of such
jurisdictions as you designate and will continue such qualifications in effect
so long as reasonably required for the distribution of the Shares. The Company
shall not be required to qualify as a foreign corporation or to file a general
consent to service of process in any such jurisdiction where it is not currently
qualified.
(h) During the period of five years hereafter, the Company will furnish you
and the other Underwriters with a copy (i) as soon as practicable after the
filing thereof, of each report filed by the Company with the Commission, any
securities exchange or the NASD; (ii) as soon as available, of each report or
communication of the Company mailed to stockholders; (iii) every
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<PAGE> 13
material press release with respect to the Company; and (iv) any additional
information of a public nature concerning the Company or its business that you
may request.
(i) The Company will use the net proceeds received by it from the sale of
the Shares being sold by it in the manner specified in the Prospectus.
(j) If, at the time of effectiveness of the Registration Statement, any
information shall have been omitted therefrom in reliance upon Rule 430A, then
immediately following the execution and delivery of the Pricing Agreement, the
Company will prepare, and file or transmit for filing with the Commission in
accordance with such Rule 430A and Rule 424(b), copies of an amended prospectus,
or, if required by such Rule 430A, a post-effective amendment to the
Registration Statement (including an amended prospectus), containing all
information so omitted.
(k) The Company will file with the Commission in a timely manner all
reports on Form SR required by Rule 463 and will furnish you copies of any such
reports as soon as practicable after the filing thereof.
(l) The Company will not, for a period of 180 days after this Agreement
becomes effective, without the prior written consent of the Representative,
offer, sell, contract to sell, grant any option to purchase or otherwise dispose
of any Common Stock or securities convertible or exchangeable into, or
exercisable for, Common Stock (except Common Stock issued pursuant to the
employee or director stock plans described in the Prospectus), or file any
registration statement with the Commission related to any of the foregoing
(except for registration statements on Form S-8 in respect of an employee
benefit plan of the Company).
SECTION 7. PAYMENT OF EXPENSES. Whether or not the transactions
contemplated hereunder are consummated or this Agreement becomes effective as to
all of its provisions or is terminated, the Company and Nashua agree, jointly
and severally, to pay (i) all costs, fees and expenses (except legal fees and
disbursements of counsel for the Underwriters and the expenses incurred by the
Underwriters other than those contemplated by clause (ii) below) incurred in
connection with the performance of the Company's and Nashua's obligations
hereunder, including without limiting the generality of the foregoing, all fees
and expenses of legal counsel for the Company and of the Company's independent
accountants, all costs and expenses incurred in connection with the preparation,
printing, filing, shipping and distribution of the Registration Statement, each
preliminary prospectus and the Prospectus (including all exhibits and financial
statements) and all amendments and supplements provided for herein, this
Agreement, the Pricing Agreement and the blue sky memorandum, (ii) all costs,
fees and expenses (including all filing fees and the reasonable legal fees and
disbursements of counsel for the Underwriters relating to this clause (ii))
incurred by the Underwriters in connection with qualifying or registering all or
any part of the Shares for offer and sale under blue sky laws, including the
preparation of a blue sky memorandum relating to the Shares, and clearance of
such offering with the NASD; and (iii) all fees and expenses of the Company's
transfer agent, all fees and expenses in connection with the authorization and
listing of the Shares on the Nasdaq Stock
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<PAGE> 14
Market, the costs of printing the certificates for the Shares and all transfer
taxes, if any, with respect to the sale and delivery of the Shares to the
several Underwriters.
SECTION 8. CONDITIONS OF THE OBLIGATIONS OF THE UNDERWRITERS. The
obligations of the several Underwriters to purchase and pay for the Firm Shares
on the First Closing Date and the Option Shares on the Second Closing Date shall
be subject to the accuracy of the representations and warranties on the part of
the Company and Nashua herein set forth as of the date hereof and as of the
First Closing Date or the Second Closing Date, as the case may be, to the
accuracy of the statements of officers of the Company and Nashua made pursuant
to the provisions hereof, to the performance by the Company and Nashua of any of
its obligations hereunder, and to the following additional conditions:
(a) The Registration Statement shall have become effective either prior to
the execution of this Agreement or not later than 1:00 P.M., Chicago Time, on
the first full business day after the date of this Agreement, or such later time
as shall have been consented to by you but in no event later than 1:00 P.M.,
Chicago Time, on to the third full business day following the date hereof; and
prior to the First Closing Date or the Second Closing Date, as the case may be,
no stop order suspending the effectiveness of the Registration Statement shall
have been issued and no proceedings for that purpose shall have been instituted
or shall be pending or, to the knowledge of the Company, Nashua or you, shall be
contemplated by the Commission, and there shall not have come to the attention
of the Representative any facts that would cause it to believe that the
Prospectus, at the time it was required to be delivered to purchasers of the
Shares, contained any untrue statement of a material fact or omitted to state
any material fact necessary in order to make the statements therein, in the
light of the circumstances under which they were made, not misleading. If the
Company and the Underwriters have elected to rely upon Rule 430A, the
information concerning the initial public offering price of the Shares and
price-related information shall have been properly transmitted to the Commission
for filing pursuant to Rule 424(b) within the prescribed period and the Company
will provide evidence satisfactory to the Representative of such timely filing
(or a post-effective amendment providing such information shall have been filed
and declared effective in accordance with the requirements of Rules 430A and
424(b)).
(b) The Shares shall have been qualified for sale under the blue sky laws
of such states as shall have been specified by the Representative.
(c) The legality and sufficiency of the authorization, issuance and sale or
transfer and sale of the Shares hereunder, the validity and form of the
certificates representing the Shares, the execution and delivery of this
Agreement and the Pricing Agreement, and all corporate proceedings and other
legal matters incident thereto, and the form of the Registration Statement and
the Prospectus (except financial statements) shall have been approved by counsel
for the Underwriters exercising reasonable judgment.
(d) You shall not have advised the Company or Nashua that the Registration
Statement or the Prospectus or any amendment or supplement thereto contains an
untrue statement
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<PAGE> 15
of fact, which, in the opinion of counsel for the Underwriters, is material or
omits to state a fact which, in the opinion of such counsel, is material and is
required to be stated therein or necessary to make the statements therein not
misleading.
(e) Subsequent to the execution and delivery of this Agreement, there shall
not have occurred any change, or any development involving a prospective change,
in or affecting particularly the business or properties of the Company or its
subsidiaries, whether or not arising in the ordinary course of business, which,
in the judgment of the Representative, makes it impractical or inadvisable to
proceed with the public offering or purchase of the Shares as contemplated
hereby.
(f) There shall have been furnished to you, as the Representative of the
Underwriters, on the First Closing Date or the Second Closing Date, as the case
may be, except as otherwise expressly provided below:
(i) An opinion of Bingham, Dana & Gould LLP, counsel for the Company and
Nashua, addressed to the Underwriters and dated the First Closing Date or the
Second Closing Date, as the case may be, to the effect that:
(1) the Company has been duly incorporated and is validly existing as
a corporation in good standing under the laws of the State of Delaware with
corporate power and authority to own its properties and conduct its
business as described in the Prospectus; and the Company has been duly
qualified to do business as a foreign corporation under the corporation law
of, and is in good standing as such in, every jurisdiction where the
ownership or leasing of real property requires such qualification, except
where the failure so to qualify would not have a material adverse effect
upon the condition (financial or otherwise), business, assets, results of
operations or prospects of the Company;
(2) the authorized capital stock of the Company, of which there is
outstanding the amount set forth in the Registration Statement and
Prospectus (except for subsequent issuances, if any, pursuant to stock
options described in the Prospectus), conforms as to legal matters in all
material respects to the description thereof in the Registration Statement
and Prospectus; and the forms of certificates used to evidence the Common
Stock and the Shares comply with all applicable statutory and Nasdaq
National Market requirements;
(3) the issued and outstanding capital stock of the Company has been
duly authorized and validly issued and is fully paid and nonassessable and
free of statutory or, to the knowledge of such counsel, contractual
preemptive rights;
(4) the certificates for the Shares to be delivered hereunder are in
due and proper form, and when duly countersigned by the Company's transfer
agent and delivered to you or upon your order against payment of the agreed
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<PAGE> 16
consideration therefor in accordance with the provisions of this Agreement
and the Pricing Agreement, the Shares represented thereby will be duly
authorized and validly issued, fully paid and nonassessable and free of
preemptive rights and, to the knowledge of such counsel, will be free of
any pledge, lien, encumbrance, claim or preemptive rights of, or rights of
first refusal in favor of, stockholders with respect to any of the Shares
or the issuance or sale thereof, and, to such counsel's knowledge, there
are no contractual preemptive rights, rights of first refusal, rights of
co-sale or other similar rights which exist with respect to any of the
Shares or the issuance and sale thereof; and the Shares to be sold
hereunder have been registered under the Exchange Act and have been
authorized and qualified for inclusion on the Nasdaq Stock Market's
National Market, subject to notice of issuance;
(5) the Registration Statement has become effective under the 1933
Act, and, to the knowledge of such counsel, no stop order suspending the
effectiveness of the Registration Statement has been issued and no
proceedings for that purpose have been instituted or are pending or
contemplated under the 1933 Act, and the Registration Statement (including
the information deemed to be part of the Registration Statement at the time
of effectiveness pursuant to Rule 430A(b), if applicable), the Prospectus
and each amendment or supplement thereto (except for the financial
statements and notes thereto, the financial statement schedules and other
statistical or financial data included therein as to which such counsel
need express no opinion) comply as to form in all material respects with
the requirements of the 1933 Act;
(6) this Agreement and the Pricing Agreement and the performance of
the Company's and Nashua's obligations hereunder and thereunder have been
duly authorized by all necessary corporate action on the part of the
Company and Nashua, and this Agreement and the Pricing Agreement have been
duly executed and delivered by and on behalf of the Company and Nashua and,
assuming that the Company and Nashua have received the agreed to
consideration therefor and that such agreements are the binding obligation
of the Underwriters, are the legal, valid and binding agreements of the
Company and Nashua, except as enforceability of the same may be limited by
bankruptcy, insolvency, fraudulent conveyance, reorganization, moratorium,
marshalling or other laws and rules of law affecting the enforcement
generally of creditors' rights and remedies (including such as may deny
giving effect to waivers of debtors' or guarantors' rights), and that the
enforcement of any of the Underwriters' rights may in all cases be subject
to an implied duty of good faith and to general principles of equity
(regardless of whether such enforceability is considered in a proceeding at
law or in equity), and except as to those provisions relating to
indemnities or contribution for liabilities arising under the 1933 Act or
any other federal or state securities law as to which no opinion need be
expressed, it being understood that no opinion is given therein as to the
enforceability of any particular provision of the Agreement relating to
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<PAGE> 17
remedies after default or as to the availability of any specific or
equitable relief of any kind;
(7) no approval, order, authorization or consent of any public board,
agency or instrumentality of the United States or, to the knowledge of such
counsel, of any state or other jurisdiction or of any other person is
necessary in connection with the sale of Shares by Nashua or the issue or
sale of the Shares by the Company pursuant to this Agreement and the
Pricing Agreement (other than under the 1933 Act, applicable blue sky laws
and the rules of the NASD) or the consummation by the Company or Nashua of
any other transactions contemplated hereby or thereby, except such as have
been obtained;
(8) the statements in the Registration Statement and the Prospectus
under the caption "Business--Intellectual Property and Proprietary Rights,"
to such counsel's knowledge, are accurate summaries in all material
respects of the matters set forth therein; and such counsel is not aware of
any legal, governmental or administrative agency proceedings pending
relating to any Trade Rights of the Company, and to such counsel's
knowledge, no such proceedings are threatened or contemplated by such
agencies or others;
(9) to such counsel's knowledge, no person has the right, contractual
or otherwise, to cause the Company to register pursuant to the 1933 Act any
shares of capital stock of the Company upon the issue and sale of the
Shares to be sold by the Company to the Underwriters pursuant to this
Agreement;
(10) the Company is not an "investment company" or a person
"controlled by" an "investment company" within the meaning of the
Investment Company Act;
(11) to such counsel's knowledge, all sales of the Company's capital
stock prior to the date hereof were at all relevant times exempt from the
registration requirements of the 1933 Act;
(12) Nashua has full corporate right, power and authority to enter
into this Agreement and the Pricing Agreement and to sell, transfer and
deliver the Shares to be sold on the First Closing Date or the Second
Closing Date, as the case may be, by Nashua hereunder; upon delivery of
certificates registered in the name of the Underwriters of such Shares to
be sold by Nashua, each Underwriter that is a "bona fide purchaser" (as
defined in Section 8-302 of the Massachusetts Uniform Commercial Code) will
acquire valid marketable title to such Shares, free of any adverse claim,
liens, encumbrances, security interests, rights of others or any
restriction on transfer imposed on such Shares by Nashua or the Company;
and
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<PAGE> 18
(13) the execution and performance of this Agreement and the Pricing
Agreement, the issue and sale of the Shares, and the consummation by the
Company and Nashua of the transactions contemplated herein and therein,
will not contravene, conflict with any of the provisions of, or result in a
breach or default under, any of the terms or provisions of any agreement,
franchise, license, indenture, mortgage, deed of trust, note agreement or
other agreement or instrument of the Company, Nashua or its subsidiaries or
by which the property of any of them is bound known to such counsel; nor
will such actions violate any of the provisions of the charter or bylaws of
the Company, Nashua or its subsidiaries or, so far as is known to such
counsel, violate any statute, order, rule or regulation of any court or
regulatory or governmental body having jurisdiction over the Company,
Nashua or its subsidiaries.
In rendering such opinion, such counsel may rely upon the opinions of
other competent counsel and, as to factual matters, on certificates of
officers of the Company and Nashua and of state officials, in which case
their opinion is to state that they are so doing and copies of such
opinions or certificates are to be attached to the opinion.
In addition, such counsel shall state that such counsel have
participated in certain conferences with officers and other representatives
of the Company and Nashua, representatives of the Representative and
representatives of the independent accountants of the Company, at which
conferences the contents of the Registration Statement and Prospectus and
related matters were discussed and, although such counsel are not passing
upon and do not assume any responsibility for the accuracy, completeness or
fairness of the statements contained in the Registration Statement and
Prospectus, on the basis of the foregoing, no facts have come to their
attention that have caused them to believe that the Registration Statement
(including the information deemed to be part of the Registration Statement
at the time of effectiveness pursuant to Rule 430A(b), if applicable) as
amended or supplemented (except for the financial statements and notes
thereto, the financial statement schedules and other statistical or
financial data included therein as to which such counsel need express no
belief), as of its effective date, contained any untrue statement of a
material fact or omitted to state a material fact required to be stated
therein or necessary to make the statements therein not misleading or that,
as of its date, the Prospectus or any amendment or supplement thereto,
(except for the financial statements and notes thereto, the financial
statement schedules and other statistical or financial data included
therein as to which such counsel need express no belief) contained any
untrue statement of a material fact or omitted to state any material fact
necessary to make the statements therein not misleading in the light of the
circumstances under which they were made or that, as of the First Closing
Date or the Second Closing Date, as the case may be, the Prospectus or any
further amendment or supplement thereto made by the Company prior to the
First Closing Date or the Second Closing Date, as the
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<PAGE> 19
case may be, (except for the financial statements and notes thereto, the
financial statement schedules and other statistical or financial data
included therein to which such counsel need express no belief) contained an
untrue statement of a material fact or omitted to state any material fact
necessary to make the statements therein not misleading in the light of the
circumstances under which they were made; and such counsel do not know of
any legal or governmental proceedings pending or threatened required to be
described in the Prospectus which are not described as required, nor of any
contracts or documents of a character required to be described in the
Registration Statement or Prospectus or to be filed as exhibits to the
Registration Statement which are not described or filed as required.
(ii) Such opinion or opinions of Sidley & Austin, counsel for the
Underwriters, dated the First Closing Date or the Second Closing Date, as the
case may be, with respect to the incorporation of the Company, the validity of
the Shares to be sold by the Company, the form of the Registration Statement and
the Prospectus and other related matters as you may reasonably require, and the
Company shall have furnished to such counsel such documents and shall have
exhibited to them such papers and records as they may request for the purpose of
enabling them to pass upon such matters.
(iii) A certificate of the chief executive officer and the chief financial
officer of the Company, dated the First Closing Date or the Second Closing Date,
as the case may be, to the effect that:
(1) the representations and warranties of the Company set forth in
Section 2 of this Agreement are true and correct as of the date of this
Agreement and as of the First Closing Date or the Second Closing Date, as
the case may be, and the Company has complied with all the agreements and
satisfied all the conditions on its part to be performed or satisfied at or
prior to such Closing Date; and
(2) the Commission has not issued an order preventing or suspending
the use of the Prospectus or any preliminary prospectus filed as a part of
the Registration Statement or any amendment thereto; no stop order
suspending the effectiveness of the Registration Statement has been issued;
and, to the best knowledge of the respective signers, no proceedings for
that purpose have been instituted or are pending or contemplated under the
1933 Act.
The delivery of the certificate provided for in this subparagraph shall be
and constitute a representation and warranty of the Company as to the facts
required in the immediately foregoing clauses (1) and (2) of this subparagraph
to be set forth in said certificate.
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<PAGE> 20
(iv) A certificate of an executive officer of Nashua dated the First
Closing Date or the Second Closing Date, as the case may be, to the effect
that the representations and warranties of Nashua set forth in Sections 2
and 3 of this Agreement are true and correct as of such date and Nashua has
complied with all the agreements and satisfied all the conditions on the
part of Nashua to be performed or satisfied at or prior to such date. The
delivery of the certificate provided for in this subparagraph shall be and
constitute a representation and warranty of Nashua as to the facts required
in the immediately preceding sentence to be set forth in said certificate.
(v) Such further certificates and documents as you may reasonably
request.
(g) At the time the Pricing Agreement is executed and also on the First
Closing Date or the Second Closing Date, as the case may be, there shall be
delivered to you a letter addressed to you, as the Representative of the
Underwriters, from Price Waterhouse L.L.P., independent accountants, the first
one to be dated the date of the Pricing Agreement, the second one to be dated
the First Closing Date and the third one (in the event of a second closing) to
be dated the Second Closing Date, to the effect set forth in Schedule B. There
shall not have been any change or decrease specified in the letters referred to
in this subparagraph which makes it impractical or inadvisable in the judgment
of the Representative to proceed with the public offering or purchase of the
Shares as contemplated hereby.
(h) At the time the Pricing Agreement is executed, there shall be delivered
to you a letter from each of the Company's officers and directors, in which each
such person agrees for a period of 180 days after the date of the Prospectus,
without the prior written consent of the Representative, not to (1) offer, sell,
contract to sell, grant any option to purchase or otherwise dispose of any
Common Stock, or any securities convertible or exchangeable into, or exercisable
for, any Common Stock, or in any other manner transfer all or a portion of the
economic consequences associated with the ownership of any such Common Stock
(except for bona fide gifts to donees who agree to be bound by the restrictions
of this paragraph (h)) or (2) announce an intent to offer or sell any such
Common Stock or securities, or exercise any registration rights with respect to
any such Common Stock or securities.
All such opinions, certificates, letters and documents shall be in
compliance with the provisions hereof only if they are reasonably satisfactory
to you and to Sidley & Austin, counsel for the Underwriters. The Company shall
furnish you with such manually signed or conformed copies of such opinions,
certificates, letters and documents as you request.
If any condition to the Underwriters' obligations hereunder to be satisfied
prior to or at the First Closing Date is not so satisfied, this Agreement at
your election will terminate upon notification to the Company and Nashua without
liability on the part of any Underwriter or the Company or Nashua, except for
the expenses to be paid or reimbursed by the Company and Nashua pursuant to
Sections 7 and 9 hereof and except to the extent provided in Section 11 hereof.
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<PAGE> 21
SECTION 9. REIMBURSEMENT OF UNDERWRITERS' EXPENSES. If the sale to the
Underwriters of the Shares on the First Closing Date is not consummated because
any condition of the Underwriters' obligations hereunder is not satisfied or
because of any refusal, inability or failure on the part of the Company or
Nashua to perform any agreement herein or to comply with any provision hereof
(unless such failure to satisfy such condition or to comply with any provision
hereof is due to the default or omission of any Underwriter), the Company and
Nashua agree, jointly and severally, to reimburse you and the other Underwriters
upon demand for all out-of-pocket expenses (including the fees and expenses of
Sidley & Austin) that shall have been incurred by you and them in connection
with the proposed purchase and the sale of the Shares. Any such termination
shall be without liability of any party to any other party except that the
provisions of this Section, Section 7 and Section 11 shall at all times be
effective and shall continue to apply.
SECTION 10. EFFECTIVENESS OF REGISTRATION STATEMENT. You, the Company and
Nashua will use your and their best efforts to cause the Registration Statement
to become effective, if it has not yet become effective, and to prevent the
issuance of any stop order suspending the effectiveness of the Registration
Statement and, if such stop order be issued, to obtain as soon as possible the
lifting thereof.
SECTION 11. INDEMNIFICATION.
(a) The Company and Nashua, jointly and severally, agree to indemnify and
hold harmless each Underwriter and each person, if any, who controls any
Underwriter within the meaning of the 1933 Act or the Exchange Act against any
losses, claims, damages or liabilities, joint or several, to which such
Underwriter or such controlling person may become subject under the 1933 Act,
the Exchange Act or other federal or state statutory law or regulation, at
common law or otherwise (including in settlement of any litigation if such
settlement is effected with the written consent of the Company and/or Nashua, as
the case may be), insofar as such losses, claims, damages or liabilities (or
actions in respect thereof) arise out of or are based upon any untrue statement
or alleged untrue statement of any material fact contained in the Registration
Statement, including the information deemed to be part of the Registration
Statement at the time of effectiveness pursuant to Rule 430A, if applicable, any
preliminary prospectus, the Prospectus, or any amendment or supplement thereto,
or arise out of or are based upon the omission or alleged omission to state
therein a material fact required to be stated therein or necessary to make the
statements therein not misleading; and will reimburse, as incurred, each
Underwriter and each such controlling person for any legal or other expenses
reasonably incurred by such Underwriter or such controlling person in connection
with investigating or defending any such loss, claim, damage, liability or
action; PROVIDED, HOWEVER, that neither the Company nor Nashua will be liable in
any such case to the extent that (i) any such loss, claim, damage or liability
arises out of or is based upon an untrue statement or alleged untrue statement
or omission or alleged omission made in the Registration Statement, any
preliminary prospectus, the Prospectus or any amendment or supplement thereto in
reliance upon and in conformity with written information furnished to the
Company by or on behalf of any Underwriter through the Representatives regarding
the Underwriters and specifically for use therein or (ii) if such statement or
omission was contained or made in any preliminary prospectus and corrected in
the Prospectus and (1) any such loss,
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<PAGE> 22
claim, damage or liability suffered or incurred by any Underwriter (or any
person who controls any Underwriter) resulted from an action, claim or suit by
any person who purchased Shares which are the subject thereof from such
Underwriter in the offering and (2) such Underwriter failed to deliver or
provide a copy of the Prospectus to such person at or prior to the confirmation
of the sale of such Shares in any case where such delivery is required by the
1933 Act. In addition to their other obligations under this Section 11(a), the
Company and Nashua, jointly and severally, agree that, as an interim measure
during the pendency of any such claim, action, investigation, inquiry or other
proceeding arising out of or based upon any statement or omission, or any
alleged statement or omission, described in this Section 11(a), they will
reimburse the Underwriters on a monthly basis for all reasonable legal and other
expenses incurred in connection with investigating or defending any such claim,
action, investigation, inquiry or other proceeding, notwithstanding the absence
of a judicial determination as to the propriety and enforceability of the
Company's and Nashua's obligation to reimburse the Underwriters for such
expenses and the possibility that such payment might later be held to have been
improper by a court of competent jurisdiction. This indemnity agreement will be
in addition to any liability which the Company and Nashua may otherwise have.
(b) Each Underwriter will severally indemnify and hold harmless the
Company, each of its directors, each of its officers who signed the Registration
Statement, and Nashua and each person, if any, who controls the Company within
the meaning of the 1933 Act or the Exchange Act, against any losses, claims,
damages or liabilities to which the Company, or any such director, officer,
Nashua or controlling person may become subject under the 1933 Act, the Exchange
Act or other federal or state statutory law or regulation, at common law or
otherwise (including in settlement of any litigation, if such settlement is
effected with the written consent of such Underwriter), insofar as such losses,
claims, damages or liabilities (or actions in respect thereof) arise out of or
are based upon any untrue or alleged untrue statement of any material fact
contained in the Registration Statement, any preliminary prospectus, the
Prospectus, or any amendment or supplement thereto, or arise out of or are based
upon the omission or alleged omission to state therein a material fact required
to be stated therein or necessary to make the statements therein not misleading,
in each case to the extent, but only to the extent, that such untrue statement
or alleged untrue statement or omission or alleged omission in the Registration
Statement, any preliminary prospectus, the Prospectus, or any amendment or
supplement relates the information furnished to the Company by and on behalf of
the Underwriters for use in the Registration Statement as set forth in Section 4
of this Agreement; and will reimburse, as incurred, any legal or other expenses
reasonably incurred by the Company, or any such director, officer, Nashua or
controlling person in connection with investigating or defending any such loss,
claim, damage, liability or action. In addition to their other obligations under
this Section 11(b), the Underwriters agree that, as an interim measure during
the pendency of any such claim, action, investigation, inquiry or other
proceeding arising out of or based upon any statement or omission, or any
alleged statement or omission, described in this Section 11(b), they will
reimburse the Company and Nashua on a monthly basis for all reasonable legal and
other expenses incurred in connection with investigating or defending any such
claim, action, investigation, inquiry or other proceeding, notwithstanding the
absence of a judicial determination as to the propriety and enforceability of
the Underwriters' obligation to reimburse the Company and Nashua for such
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<PAGE> 23
expenses and the possibility that such payments might later be held to have been
improper by a court of competent jurisdiction. This indemnity agreement will be
in addition to any liability which such Underwriter may otherwise have.
(c) Promptly after receipt by an indemnified party under this Section of
notice of the commencement of any action, such indemnified party will, if a
claim in respect thereof is to be made against an indemnifying party under this
Section, notify the indemnifying party of the commencement thereof; but the
omission so to notify the indemnifying party will not relieve it from any
liability which it may have to any indemnified party except to the extent that
the indemnifying party was prejudiced by such failure to notify. In case any
such action is brought against any indemnified party, and it notifies an
indemnifying party of the commencement thereof, the indemnifying party will be
entitled to participate in, and, to the extent that it may wish, jointly with
all other indemnifying parties similarly notified, to assume the defense
thereof, with counsel reasonably satisfactory to such indemnified party;
provided, however, if the defendants in any such action include both the
indemnified party and the indemnifying party and the indemnified party shall
have reasonably concluded that there may be legal defenses available to it
and/or other indemnified parties which are different from or additional to those
available to the indemnifying party, or the indemnified and indemnifying parties
may have conflicting interests which would make it inappropriate for the same
counsel to represent both of them, the indemnified party or parties shall have
the right to select separate counsel to assume such legal defense and otherwise
to participate in the defense of such action on behalf of such indemnified party
or parties. Upon receipt of notice from the indemnifying party to such
indemnified party of its election so to assume the defense of such action and
approval by the indemnified party of counsel, the indemnifying party will not be
liable to such indemnified party under this Section for any legal or other
expenses subsequently incurred by such indemnified party in connection with the
defense thereof unless (i) the indemnified party shall have employed such
counsel in connection with the assumption of legal defense in accordance with
the proviso to the next preceding sentence (it being understood, however, that
the indemnifying party shall not be liable for the expenses of more than one
separate counsel, approved by the Representative in the case of paragraph (a),
representing all indemnified parties not having different or additional defenses
or potential conflicting interest among themselves who are parties to such
action), (ii) the indemnifying party shall not have employed counsel
satisfactory to the indemnified party to represent the indemnified party within
a reasonable time after notice of commencement of the action or (iii) the
indemnifying party has authorized the employment of counsel for the indemnified
party at the expense of the indemnifying party. No indemnifying party shall,
without the prior written consent of the indemnified party (which consent shall
not be unreasonably withheld), effect any settlement of any pending or
threatened proceeding in respect of which any indemnified party is or could have
been a party and indemnity could have been sought hereunder by such indemnified
party, unless such settlement includes an unconditional release of such
indemnified party from all liability arising out of such proceeding. It is
agreed that any controversy arising out of the operation of the interim
reimbursement arrangements set forth in Section 11(a) or (b) hereof, including
the amount of any requested reimbursement payments, the method of determining
such amounts and the basis on which such amounts shall be apportioned among the
indemnifying parties, shall be settled by arbitration conducted pursuant to the
Code of Arbitration Procedure of the National Association
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<PAGE> 24
of Securities Dealers, Inc. Any such arbitration must be commenced by service of
a written demand for arbitration or a written notice of intention, therein
electing the arbitration tribunal. In the event the party demanding arbitration
does not make such designation of an arbitration tribunal in such demand or
notice, then the party responding to said demand or notice is authorized to do
so. Any such arbitration will be limited to the operation of the interim
reimbursement provisions contained in Section 11(a) or (b) hereof and will not
resolve the ultimate propriety or enforceability of the obligation to indemnify
for expenses that are created by the provisions of such Section 11(a) or (b)
hereof. No indemnifying party shall be liable for the expenses of any settlement
effected without its prior consent, which consent shall not be unreasonably
withheld.
(d) If the indemnification provided for in this Section is unavailable to
an indemnified party under paragraph (a) or (b) of this Section 11 in respect of
any losses, claims, damages or liabilities referred to therein, then each
applicable indemnifying party, in lieu of indemnifying such indemnified party,
shall contribute to the amount paid or payable by such indemnified party as a
result of such losses, claims, damages or liabilities (i) in such proportion as
is appropriate to reflect the relative benefits received by the Company, Nashua
and the Underwriters from the offering of the Shares or (ii) if the allocation
provided by clause (i) above is not permitted by applicable law, in such
proportion as is appropriate to reflect not only the relative benefits referred
to in clause (i) above but also the relative fault of the Company, Nashua and
the Underwriters in connection with the statements or omissions which resulted
in such losses, claims, damages or liabilities, as well as any other relevant
equitable considerations. The respective relative benefits received by the
Company, Nashua and the Underwriters shall be deemed to be in the same
proportion, in the case of the Company and Nashua, as the total price paid to
the Company and Nashua for the Shares by the Underwriters (net of underwriting
discount but before deducting expenses), and, in the case of the Underwriters,
as the underwriting discount received by them bears to the total of such amounts
paid to the Company and Nashua and received by the Underwriters as underwriting
discount, in each case as contemplated by the Prospectus. The relative fault of
the Company, Nashua and the Underwriters shall be determined by reference to,
among other things, whether the untrue or alleged untrue statement of a material
fact or the omission or alleged omission to state a material fact relates to
information supplied by the Company or Nashua, on the one hand, or by the
Underwriters as set forth in Section 4 hereof, on the other hand, and the
parties' relative intent, knowledge, access to information and opportunity to
correct or prevent such statement or omission. The amount paid or payable by a
party as a result of the losses, claims, damages and liabilities referred to
above shall be deemed to include any legal or other fees or expenses reasonably
incurred by such party in connection with investigating or defending any action
or claim.
The Company, Nashua and the Underwriters agree that it would not be just
and equitable if contribution pursuant to this Section were determined by pro
rata allocation, even if the Underwriters were considered as one person, or by
any other method of allocation which does not take account of the equitable
considerations referred to in the immediately preceding paragraph.
Notwithstanding the provisions of this Section, no Underwriter shall be required
to contribute any amount in excess of the amount by which the total price at
which the Shares
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<PAGE> 25
underwritten by it and distributed to the public were offered to the public
exceeds the amount of any damages which such Underwriter has otherwise been
required to pay by reason of such untrue or alleged untrue statement or omission
or alleged omission. No person guilty of fraudulent misrepresentation (within
the meaning of Section 11(f) of the 1933 Act) shall be entitled to contribution
from any person who was not guilty of such fraudulent misrepresentation. The
Underwriters' obligations to contribute pursuant to this Section are several in
proportion to their respective underwriting commitments and not joint.
(e) The provisions of this Section shall survive any termination of this
Agreement.
SECTION 12. DEFAULT OF UNDERWRITERS. It shall be a condition to the
agreement and obligation of the Company and Nashua to sell and deliver the
Shares hereunder, and of each Underwriter to purchase the Shares hereunder,
that, except as hereinafter in this paragraph provided, each of the Underwriters
shall purchase and pay for all Shares agreed to be purchased by such Underwriter
hereunder upon tender to the Representative of all such Shares in accordance
with the terms hereof. If any Underwriter or Underwriters default in their
obligations to purchase Shares hereunder on the First Closing Date and the
aggregate number of Shares which such defaulting Underwriter or Underwriters
agreed but failed to purchase does not exceed 10 percent of the total number of
Shares which the Underwriters are obligated to purchase on the First Closing
Date, the Representative may make arrangements satisfactory to the Company and
Nashua for the purchase of such Shares by other persons, including any of the
Underwriters, but if no such arrangements are made by such date the
nondefaulting Underwriters shall be obligated severally, in proportion to their
respective commitments hereunder, to purchase the Shares which such defaulting
Underwriters agreed but failed to purchase on such date. If any Underwriter or
Underwriters so default and the aggregate number of Shares with respect to which
such default or defaults occur is more than the above percentage and
arrangements satisfactory to the Representative, the Company and Nashua for the
purchase of such Shares by other persons are not made within 36 hours after such
default, this Agreement will terminate without liability on the part of any
nondefaulting Underwriter or the Company or Nashua, except for the expenses to
be paid by the Company and Nashua pursuant to Section 7 hereof and except to the
extent provided in Section 11 hereof.
In the event that Shares to which a default relates are to be purchased by
the nondefaulting Underwriters or by another party or parties, the
Representative or the Company shall have the right to postpone the First Closing
Date for not more than seven business days in order that the necessary changes
in the Registration Statement, Prospectus and any other documents, as well as
any other arrangements, may be effected. As used in this Agreement, the term
"Underwriters" includes any person substituted for an Underwriter under this
Section. Nothing herein will relieve a defaulting Underwriter from liability for
its default.
SECTION 13. EFFECTIVE DATE. This Agreement shall become effective
immediately as to Sections 7, 9, 11 and 14 and as to all other provisions at the
time at which the Pricing Agreement is executed and delivered, unless such a day
is a Saturday, Sunday or holiday
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<PAGE> 26
(and in that event this Agreement shall become effective at such hour on the
business day next succeeding such Saturday, Sunday or holiday); but this
Agreement shall nevertheless become effective at such earlier time after the
Pricing Agreement is executed and delivered as you may determine on and by
notice to the Company and Nashua or by release of any Shares for sale to the
public. For the purposes of this Section, the Shares shall be deemed to have
been so released upon the release for publication of any newspaper advertisement
relating to the Shares or upon the release by you of telegrams (i) advising
Underwriters that the Shares are released for public offering, or (ii) offering
the Shares for sale to securities dealers, whichever may occur first.
SECTION 14. TERMINATION. Without limiting the right to terminate this
Agreement pursuant to any other provision hereof:
(a) This Agreement may be terminated by the Company by notice to you or by
you by notice to the Company and Nashua at any time prior to the time this
Agreement shall become effective as to all its provisions, and any such
termination shall be without liability on the part of the Company or Nashua to
any Underwriter (except for the expenses to be paid or reimbursed pursuant to
Section 7 hereof and except to the extent provided in Section 11 hereof) or of
any Underwriter to the Company or Nashua.
(b) This Agreement may also be terminated by you prior to the First Closing
Date, and the option referred to in Section 5, if exercised, may be cancelled at
any time prior to the Second Closing Date, if (i) trading in securities on the
New York Stock Exchange shall have been suspended or minimum prices shall have
been established on such exchange, or (ii) a banking moratorium shall have been
declared by Illinois, New York, or United States authorities, or (iii) there
shall have been an outbreak of major armed hostilities between the United States
and any foreign power which in the opinion of the Representative makes it
impractical or inadvisable to offer or sell the Shares. Any termination pursuant
to this paragraph (b) shall be without liability on the part of any Underwriter
to the Company or Nashua or on the part of the Company or Nashua to any
Underwriter (except for expenses to be paid or reimbursed pursuant to Section 7
hereof and except to the extent provided in Section 11 hereof).
SECTION 15. REPRESENTATIONS AND INDEMNITIES TO SURVIVE DELIVERY. The
respective indemnities, agreements, representations, warranties and other
statements of the Company, of its officers, of Nashua and of the several
Underwriters set forth in or made pursuant to this Agreement will remain in full
force and effect, regardless of any investigation made by or on behalf of any
Underwriter or the Company or any of its or their partners, officers or
directors or any controlling person, or Nashua, as the case may be, and will
survive delivery of and payment for the Shares sold hereunder.
SECTION 16. NOTICES. All communications hereunder will be in writing and,
if sent to the Underwriters will be mailed, delivered or telegraphed and
confirmed to you c/o William Blair & Company L.L.C., 222 West Adams Street,
Chicago, Illinois 60606, with a copy to John J. Sabl, Sidley & Austin, One First
National Plaza, Chicago, Illinois 60603; if sent to the Company will be mailed,
delivered or telegraphed and confirmed to the Company at its corporate
-26-
<PAGE> 27
headquarters at 1401 Interstate Drive, Champaign, Illinois 61821-1090, with a
copy to Michael P. O'Brien, Bingham, Dana & Gould LLP, 150 Federal Street,
Boston, Massachusetts 02110; and if sent to Nashua will be mailed, delivered or
telegraphed and confirmed to Nashua at its corporate headquarters at 44 Franklin
Street, P.O. Box 2002, Nashua, New Hampshire 03061-2002.
SECTION 17. SUCCESSORS. This Agreement and the Pricing Agreement will inure
to the benefit of and be binding upon the parties hereto and their respective
successors, personal representatives and assigns, and to the benefit of the
officers and directors and controlling persons referred to in Section 11, and no
other person will have any right or obligation hereunder. The term "successors"
shall not include any purchaser of the Shares as such from any of the
Underwriters merely by reason of such purchase.
SECTION 18. REPRESENTATION OF UNDERWRITERS. You will act as the
Representative for the several Underwriters in connection with this financing,
and any action under or in respect of this Agreement taken by you will be
binding upon all the Underwriters.
SECTION 19. PARTIAL UNENFORCEABILITY. If any section, paragraph or
provision of this Agreement is for any reason determined to be invalid or
unenforceable, such determination shall not affect the validity or
enforceability of any other section, paragraph or provision hereof.
SECTION 20. APPLICABLE LAW. This Agreement and the Pricing Agreement shall
be governed by and construed in accordance with the laws of the State of
Illinois.
* * * * * *
-27-
<PAGE> 28
If the foregoing is in accordance with your understanding of our agreement,
kindly sign and return to us the enclosed duplicates hereof, whereupon it will
become a binding agreement among the Company, Nashua and the several
Underwriters, including you, all in accordance with its terms.
Very truly yours,
CERION TECHNOLOGIES INC.
By: /s/ David A. Peterson
-------------------------
Chief Executive Officer
NASHUA CORPORATION
By: /s/ Gerald G. Garbacz
-------------------------
CERION HOLDINGS INC.
By: /s/ Gerald G. Garbacz
-------------------------
The foregoing Agreement is hereby
confirmed and accepted as of the
date first above written.
WILLIAM BLAIR & COMPANY, L.L.C.
Acting as Representative of the
several Underwriters named in
Schedule A.
WILLIAM BLAIR & COMPANY, L.L.C.
By: /s/ Richard M. King
------------------------------
-28-
<PAGE> 29
EXHIBIT A
CERION TECHNOLOGIES INC.
3,840,000 SHARES COMMON STOCK*
PRICING AGREEMENT
-----------------
_______, 1996
WILLIAM BLAIR & COMPANY, L.L.C.
As Representative of the Several
Underwriters
222 West Adams Street
Chicago, Illinois 60606
Ladies and Gentlemen:
Reference is made to the Underwriting Agreement dated , ________ 1996 (the
"Underwriting Agreement") relating to the sale by the Company and Cerion
Holdings Inc., a Delaware corporation and the parent of the Company (the
"Selling Stockholder"), and the purchase by the several Underwriters for whom
William Blair & Company, L.L.C. is acting as the representative (the
"Representative"), of the above Shares. All terms herein shall have the
definitions contained in the Underwriting Agreement except as otherwise defined
herein.
Pursuant to Section 5 of the Underwriting Agreement, the Company and Nashua
agree with the Representative as follows:
1. The initial public offering price per share for the Shares shall be
$______.
2. The purchase price per share for the Shares to be paid by the several
Underwriters shall be $______, being an amount equal to the initial public
offering price set forth above less $_____ per share.
Schedule A is amended as follows:
[If Applicable]
_______________________________
* Plus an option to acquire up to 576,000 additional shares to cover over
allotments.
<PAGE> 30
If the foregoing is in accordance with your understanding of our agreement,
kindly sign and return to us the enclosed duplicates hereof, whereupon it will
become a binding agreement among the Company, Nashua and the several
Underwriters, including you, all in accordance with its terms.
Very truly yours,
CERION TECHNOLOGIES INC.
By:
--------------------------
Chief Executive Officer
NASHUA CORPORATION
By:
--------------------------
CERION HOLDINGS INC.
By:
--------------------------
The foregoing Agreement is hereby
confirmed and accepted as of the
date first above written.
WILLIAM BLAIR & COMPANY, L.L.C.
Acting as Representative of the
several Underwriters
WILLIAM BLAIR & COMPANY, L.L.C.
By:
------------------------------
-2-
<PAGE> 31
SCHEDULE A
Number of
Firm Shares
to be
Underwriter Purchased
- ----------- ---------
William Blair & Company, L.L.C. .............................. 1,700,000
Alex. Brown & Sons Incorporated .............................. 95,000
Dean Witter Reynolds Inc...................................... 95,000
Dillon, Read & Co. Inc........................................ 95,000
A.G. Edwards & Sons, Inc...................................... 95,000
Goldman, Sachs & Co........................................... 95,000
Hambrecht & Quist LLC......................................... 95,000
Merrill Lynch, Pierce, Fenner & Smith Incorporated ........... 95,000
Montgomery Securities......................................... 95,000
Morgan Stanley & Co. Incorporated ............................ 95,000
PaineWebber Incorporated...................................... 95,000
Prudential Securities Incorporated ........................... 95,000
Robertson, Stephens & Company LLC ............................ 95,000
Salomon Brothers Inc.......................................... 95,000
C.L. King & Associates, Inc. ................................. 95,000
George K. Baum & Company...................................... 45,000
Brean Murray, Foster Securities Inc. ......................... 45,000
The Chicago Corporation....................................... 45,000
Dain Bosworth Incorporated.................................... 45,000
First of Michigan Corporation ................................ 45,000
Gabelli & Company, Inc........................................ 45,000
J.J.B. Hilliard, W.L. Lyons, Inc. ............................ 45,000
Howe Barnes Investments, Inc. ................................ 45,000
EVEREN Securities, Inc........................................ 45,000
McDonald & Company Securities, Inc. .......................... 45,000
Mesirow Financial, Inc. ...................................... 45,000
Needham & Company, Inc. ...................................... 45,000
Piper Jaffray Inc............................................. 45,000
Principal Financial Securities, Inc........................... 45,000
Sutro & Co. Incorporated...................................... 45,000
Tucker Anthony Incorporated .................................. 45,000
Van Kasper & Company.......................................... 45,000
Wheat First Butcher Singer.................................... 45,000
---------
Total ............................................ 3,840,000
=========
<PAGE> 32
SCHEDULE B
Comfort Letter of Price Waterhouse, L.L.P.
(1) They are independent public accountants with respect to the Company
within the meaning of the 1933 Act.
(2) In their opinion the financial statements and schedules of the Company
included in the Registration Statement and Prospectus and the financial
statements of the Company from which the information presented under the caption
"Selected Financial Data" has been derived which are stated therein to have been
examined by them comply with the applicable accounting requirements of the 1933
Act.
(3) Based upon limited procedures set forth in detail in such letter,
nothing has come to their attention which causes them to believe that (a) the
unaudited financial information of the Company included in the Registration
Statement and Prospectus do not comply as to form in all material respects with
the applicable accounting requirements of the 1933 Act, or are not presented in
conformity with generally accepted accounting principles applied on a basis
substantially consistent with that of the audited financial statements included
in the Registration Statement and Prospectus or (B) at the date of the latest
available balance sheet read by such accountants, or at a subsequent specified
date not more than five days prior to the date of this Agreement (in the case of
the first letter of such accountants), there was any increase in long-term or
short-term (other than normal payments) debt or any decrease in total assets,
net current assets, stockholders's equity or common stock, as compared with
amounts shown on the latest balance sheet included in the Registration Statement
and Prospectus, or (C) for the period from the closing date of the latest income
statement included in the Registration Statement and Prospectus to the closing
date of the latest available income statement read by such accountants there
were any decreases, as compared with the corresponding period of the previous
year and with the period of corresponding length ended the date of the latest
income statement included in the Registration Statement and Prospectus, in the
amounts of net sales, income before income taxes or in the total or per share
amounts of net income, except in all cases set forth in this Paragraph 3 for
changes, increases or decreases which the Registration Statement and Prospectus
disclose have occurred or may occur or which are described in such letter.
(4) Based upon the procedures set forth in Paragraph 3 above and Paragraph
5 below and a reading of the "Selected Financial Data," and the pro forma
financial information contained in the Prospectus and the information contained
under the caption "Management" included in the Registration Statement and
Prospectus, nothing has come to their attention that caused them to believe that
the "Selected Financial Data" and the pro forma financial information included
in the Registration Statement and Prospectus do not comply in all material
respects with the applicable requirements of Regulation S-K under the 1933 Act
and the Exchange Act (e.g. "Selected Financial Data" (Item 301) and
"Supplementary Financial Information" (Item 302)), or that the information set
forth therein is not fairly stated in relation to the financial statements from
<PAGE> 33
which it was derived, and nothing has come to their attention that caused them
to believe that the information under the caption "Management" contained in the
Registration Statement and Prospectus does not comply in all material respects
with the applicable requirements of Item 402 ("Executive Compensation") of such
Regulation S-K.
(5) They are unable to and do not express any opinion on the pro forma
financial information contained in the Prospectus or on the pro forma
adjustments applied to the historical amounts included in such information;
however, for purposes of such letter they have: (A) read the pro forma financial
information contained in the Prospectus, (B) made inquiries of certain officials
of the Company who have responsibility for financial and accounting matters
about the basis for their determination of the pro forma adjustments and whether
the pro forma financial information contained in the Prospectus comply in form
in all material respects with the applicable accounting requirements of
Regulation S-X and (C) proved the arithmetic accuracy of the application of the
pro forma adjustments to the historical amounts in the pro forma financial
information contained in the Prospectus. Nothing has come to their attention as
a result of such procedures, however, that caused them to believe that such pro
forma financial information does not comply as to form in all material respects
with the applicable requirements of Article XI of Regulation S-X and that the
pro forma adjustments have not been properly applied to the historical amounts
in the compilation of the pro forma financial information.
(6) In addition to the examination referred to in their opinions and the
limited procedures referred to in Paragraph 3 above, they have carried out
certain specified procedures, not constituting an audit, with respect to certain
amounts, percentages, ratios and financial information that has been derived
from the accounting and financial records of the Company that are subject to
internal accounting controls which are included in the Registration Statement
and Prospectus and which are specified by the Representative, and have found
such amounts, percentages, ratios and financial information to be in agreement
with the relevant accounting and financial records of the Company identified in
such letter.
(7) In the case of the second or third letter of such accountants, they
reaffirm the statements made pursuant to Paragraphs 1 through 6 above, except
that the specified date referred to shall be a date not more than two days prior
to the date of such letter and, if the Company has elected to rely on Rule 430A
under the 1933 Act, to the further effect that they have carried out procedures
as specified in Paragraph 6 with respect to certain amounts, percentages and
financial information specified by the Representative and deemed to be a part of
the Registration Statement pursuant to Rule 430(A)(b) and have found such
amounts, percentages and financial information to be in agreement with the
records specified in Paragraph 6.
-2-
<PAGE> 1
EXHIBIT 2.1
EXECUTION COPY
ASSET PURCHASE AGREEMENT
BY AND BETWEEN
NASHUA CORPORATION
AND
THE KENDALL COMPANY
DATED AS OF
APRIL 17, 1996
<PAGE> 2
<TABLE>
TABLE OF CONTENTS
-----------------
<CAPTION>
Page
----
<C> <S> <C>
1. SALE OF ASSETS; EXCLUDED ASSETS................................ 1
2. LIABILITIES OF SELLER.......................................... 3
3. PURCHASE PRICE................................................. 5
4. PAYMENT OF PURCHASE PRICE AND PURCHASE
PRICE ADJUSTMENT............................................. 5
5. ALLOCATION OF THE PURCHASE PRICE............................... 7
6. WARRANTY CLAIMS................................................ 7
7. SALE OF FACILITY............................................... 7
8. BILL OF SALE................................................... 8
9. ASSIGNMENT OF INTELLECTUAL PROPERTY............................ 8
10. INSTRUMENT OF ASSUMPTION....................................... 8
11. LICENSE OF NAME................................................ 8
12. WATER BASED ADHESIVE LICENSE................................... 8
13. UNION CONTRACTS................................................ 8
14. EMPLOYEES...................................................... 9
15. EMPLOYEE BENEFITS PLANS........................................ 9
16. SELLER'S REPRESENTATIONS AND WARRANTIES........................ 10
17. PRE-CLOSING COVENANTS OF SELLER................................ 18
18. ACCOUNTS RECEIVABLE............................................ 18
19. BUYER'S REPRESENTATIONS AND WARRANTIES......................... 19
20. CLOSING........................................................ 20
21. CONDITIONS TO CLOSING.......................................... 22
22. BEST EFFORTS TO CONSUMMATE; FURTHER ASSURANCES................. 24
23. PARTIES IN INTEREST; NO THIRD PARTY BENEFICIARIES.............. 25
24. BULK SALES ACT COMPLIANCE...................................... 25
25. NONCOMPETITION................................................. 25
26. RECORDS........................................................ 26
27. BROKERAGE COMMISSION........................................... 26
28. SURVIVAL OF REPRESENTATIONS AND WARRANTIES..................... 26
29. SELLER'S INDEMNIFICATION....................................... 26
30. SPECIAL ENVIRONMENTAL AGREEMENT................................ 30
31. BUYER'S INDEMNIFICATION........................................ 31
32. INDEMNIFICATION................................................ 32
33. EXCLUSIVE REMEDY............................................... 33
34. SEVERABILITY................................................... 33
35. COMPLETE AGREEMENT............................................. 34
36. STRICT CONSTRUCTION............................................ 34
37. KNOWLEDGE OF SELLER DEFINED.................................... 34
38. EXPENSES....................................................... 34
39. SALES TAX...................................................... 34
40. APPLICABLE LAW................................................. 34
41. LITIGATION RELATING TO THE BUSINESS............................ 34
42. SECTION HEADINGS............................................... 35
</TABLE>
-i-
<PAGE> 3
<TABLE>
<CAPTION>
Page
----
<S> <C> <C>
43. EXHIBITS....................................................... 35
44. WAIVER......................................................... 35
45. ASSIGNMENT..................................................... 35
46. NOTICES........................................................ 35
47. PRESS RELEASES AND ANNOUNCEMENTS; CONFIDENTIALITY.............. 36
48. SPECIFIC PERFORMANCE........................................... 36
49. COUNTERPARTS .................................................. 37
</TABLE>
Attachment I Product Lines
Schedule 1(c) Real Property
Schedule 1(f) Data Processing Assets
Schedule 1(g) Trademarks
Schedule 1(k) Equipment Leases
Schedule 4 December 31 Net Asset Disclosure
Schedule 4(b)(ii) Closing Date Net Asset Disclosure
Schedule 7 Sale of Facility
Schedule 13 Union Contracts
Schedule 16(d) Absence of Certain Changes or Events
Schedule 16(f) Suitability of Purchased Assets
Schedule 16(h) Intellectual Property
Schedule 16(i) Inventory
Schedule 16(j) Contracts
Schedule 16(k) Advance Payments and Deposits
Schedule 16(l) Employment Matters
Schedule 16(m) ERISA
Schedule 16(n) Litigation and Investigations
Schedule 16(o) Product Liability History
Schedule 16(q) Compliance with Laws; Permits
Schedule 16(r) Environmental Matters
Schedule 16(v) Consents of Third Parties
Schedule 37 Knowledge of Seller
Exhibit A Access Easement
Exhibit B Bill of Sale
Exhibit C Assignment of Intellectual Property
Exhibit D Instrument of Assumption
Exhibit E Trademark License Agreement
Exhibit F Temporary Services Agreement
Exhibit G Water Based Adhesive License
Exhibit H Opinion of Paul Buffum, Esq.
Exhibit I Guaranty of Tyco International Ltd.
Exhibit J-1 Opinion of John H. Masterson, Esq.
Exhibit J-2 Opinion of Byron S. Kalogerou, Esq.
-ii-
<PAGE> 4
ASSET PURCHASE AGREEMENT
------------------------
This Agreement made on or as of the 17th day of April, 1996, by and between
NASHUA CORPORATION ("Seller"), a Delaware corporation, having a principal place
of business at 44 Franklin Street, Nashua, New Hampshire 03061 and THE KENDALL
COMPANY ("Buyer"), a Delaware corporation, having a principal place of business
at 15 Hampshire Street, Mansfield, Massachusetts 02048.
W I T N E S S E T H
-------------------
WHEREAS, Seller is a diversified manufacturing company which has been
engaged, through its Nashua Tape Products Division ("Nashua Tape"), in the
business of selling a broad range of tape and adhesive products for various
industrial and commercial uses, which products are principally manufactured by
Nashua Tape ("Business"); and
WHEREAS, the Business of Nashua Tape has been principally conducted at a
facility located at 2600 7th Avenue, Watervliet, New York ("Facility"); and
WHEREAS, the Business manufactures and sells those products described on
ATTACHMENT I hereto ("Products"); and
WHEREAS, Seller desires to sell and Buyer desires to purchase certain
assets and assume certain liabilities of Nashua Tape relating to the Business as
more fully described herein; and
WHEREAS, the assets being purchased constitute a going concern.
NOW, THEREFORE, in consideration of the mutual promises herein contained
and for other good and valuable consideration, the receipt and sufficiency of
which is hereby acknowledged, the parties, intending to be bound, agree as
follows:
1. SALE OF ASSETS; EXCLUDED ASSETS.
--------------------------------
1.1 Subject to the terms and conditions hereinafter set forth, Seller
shall sell, transfer, convey and assign and deliver to Buyer, and Buyer shall
purchase at the Closing (as defined below), free and clear of all Liens (as
defined below) except as hereinafter described; all of Seller's right, title and
interest in and to certain of the property and assets relating to the Business
as set forth below:
(a) The Business as a going concern and all customer relations
and goodwill related thereto ("Goodwill");
<PAGE> 5
(b) All of Seller's tangible personal property used in the
conduct of the Business and located at the Facility or in the possession of
Nashua Tape's employees including Seller's furniture, fixtures, machinery,
equipment, computers and tools;
(c) Seller's land, buildings and building equipment located at
2600 7th Avenue, Watervliet, New York subject to any leasehold interests as more
particularly described in SCHEDULE 1(c) attached hereto ("Facility" or "Real
Property");
(d) Seller's accounts receivable existing on the Closing Date
(as defined below) relating to the Business ("Accounts Receivable");
(e) All of the inventory of the Business (finished goods, work
in process, raw materials and supplies) that exist on the Closing Date
("Inventory");
(f) Seller's data processing equipment and related software
used in the conduct of the Business and located at the Facility as more
particularly described in SCHEDULE 1(f) attached hereto ("Data Processing
Assets");
(g) Seller's right, title and interest in and to those
trademarks and tradenames used in the conduct of the Business which are set
forth in SCHEDULE 1(g) attached hereto ("Trademarks");
(h) To the extent necessary to make the Products, all of
Seller's rights to copyrights, and copyright applications; and, to the extent
documented, all trade secrets, processes, inventions, technical knowledge,
formulae, know-how and similar property which are used in the Business, and all
rights under patent and other intellectual property licenses with regard to the
Business, but, except as provided by the Water Based Adhesive License, as
hereinafter defined, excluding any and all proprietary information regarding the
manufacture and application of Seller's water based adhesive and water
dispersible release agent technology, included but not limited to formulations,
know-how, trade secrets, processes and related properties (collectively such
exceptions are referred to as "Seller's Water Based Technology" and where used
singularly referred to as "Seller's Water Based Adhesive Technology" or
"Seller's Water Based Release Agent Technology") ("Intellectual Property");
(i) All of Seller's oral and written contracts relating to the
Business, including open purchase and supply orders ("Contracts");
(j) Seller's customer lists relating to the Business ("Customer
Lists");
-2-
<PAGE> 6
(k) Seller's leasehold interests in equipment leases with
regard to the Business as set forth in SCHEDULE 1(k) attached hereto
("Equipment Leases");
(l) Seller's prepaid expenses existing on the Closing Date with
regard to the Business (other than the Seller's insurance policies) which are
transferable and of a benefit to Buyer;
(m) Seller's pre-printed forms and other documents possessed by
the Seller and used in the Business, including sales brochures, stationery,
advertising literature, etc. ("Forms and Brochures");
(n) Seller's business and operational records relating primarily
to the Business, including customer files, collection and credit records,
environmental compliance records, supplier lists, personnel records, accounting
records, bills of material and vendor lists (collectively "Records"); and
(o) All governmental licenses, permits, approvals, authorizations
and registrations ("Permits") that are held by Seller and necessary to the
operation of the Business, to the extent such Permits are freely transferable.
All of the foregoing being hereinafter referred to as the "Purchased
Assets" or the "Assets."
1.2 Notwithstanding the provisions of Section 1.1 above, the Purchased
Assets shall not include the following, regardless of whether such assets are
related to the Business (the "Excluded Assets"): cash, cash equivalents, notes
receivable, intercompany accounts, the Logistics Management Services Agreement
dated as of November 8, 1995 between Seller and Logicorp, a division of Ryder
Dedicated Logistics, Inc., the Employment Agreement dated July 5, 1989, with
Robert A. Geiger, Seller's obligations to any employee of the Business with
respect to incentive stay bonuses, rights under insurance policies of the
Seller, litigation awards and/or proceeds which relate to events occurring on or
prior to the Closing, investments, tax rebates and/or refunds, except as
provided by Section 11 hereof, all rights to the names "Nashua" and "Nashua
Tape," the logo and designs incorporating those names and all other assets of
the Seller not used in connection with the Business.
2. LIABILITIES OF SELLER. At the Closing, the Buyer, without further
action or the execution of any other instruments, shall assume and shall
perform, pay or discharge, as the same shall become due, the following
liabilities relating to the Business:
-3-
<PAGE> 7
(a) accounts payable and accrued expenses of Nashua Tape as and in
the amounts set forth on the December 31 Net Asset Disclosure, as hereinafter
defined, and all accounts payable and accrued expenses of Nashua Tape which are
incurred in the ordinary course of business after December 31, 1995 and prior
and up to the Closing Date and which are required to be set forth on the Closing
Date Net Asset Disclosure (as defined below) (the "Accrued Liabilities");
(b) the Warranty Claims (as defined in Section 6), all obligations
of the Seller arising under the Contracts from and after the Closing, the Union
Contracts (as defined, and subject to the conditions set forth, in Section 13)
and the employee benefit plan obligations referred to in Section 15 (together
with the Accrued Liabilities, the "Assumed Liabilities");
(c) Notwithstanding any implication to the contrary contained in
Sections 2(a) and (b) hereof, Buyer shall not assume, pay or in any way be
liable or responsible for any of the following debts, liabilities or obligations
(collectively, the "Excluded Liabilities"):
(i) any liability or obligation of Seller under this Agreement
or on account of any of the transactions contemplated hereby, including,
without limitation, any liability or obligation of Seller to attorneys,
accountants, brokers, or others for services rendered or expenses incurred
by or on behalf of Seller, and, except as otherwise provided herein, all
other expenses associated with the transfer of the Purchased Assets or the
Assumed Liabilities;
(ii) any wages, salaries, bonuses, commissions, vacation or
holiday pay, post retirement medical benefits, fringe benefits, long-term
disability benefits, life insurance benefits, any duties, obligations or
liabilities arising under any employee benefit plan, policy or practice,
whether defined by Section 3(3) of the Employee Retirement Income Security
Act of 1974, as amended and in effect ("ERISA") or otherwise, relating to
the employees of the Business or other amounts due to any employees or
former employees of the Business which accrue on or prior to the Closing
Date and which are not set forth on the Closing Date Net Asset Disclosure;
(iii) any liabilities and obligations of Seller for any federal,
state, provincial, local or foreign income, excise, sales, real estate,
personalty, payroll or other taxes of any kind whatsoever payable with
respect to the operations of the Business on or prior to the Closing Date
and which are not set forth on the Closing Date Net Asset Disclosure;
-4-
<PAGE> 8
(iv) any liability or obligation of Seller relating to,
resulting from, caused by, or arising out of the ownership, operation or
control of the Business by Seller on or prior to the Closing Date, and
which arises out of the following:
(A) any accident or occurrence occurring on or prior to the
Closing Date resulting in personal injury, sickness, death, property
damage, property destruction or loss of use of property arising out of or
resulting from the operation of the Business by Seller,
(B) any breach of contract (other than Warranty Claims),
workers' compensation claim or violation of any law or final order of any
federal, state, judicial, quasi-judicial or governmental body, or
(C) any personal injury, sickness, death or property damage
resulting from (i) occurrences occurring on or prior to the Closing Date
arising out of a defect or alleged defect of products manufactured or sold
by Seller prior to the Closing Date including, without limitation, any such
liabilities or obligations for defects or alleged defects in design or
failure to warn, or (ii) any negligence or alleged negligence in
inspection, maintenance or service;
(v) any liability or obligation of the Seller with respect to
the Excluded Assets; and
(vi) any and all claims, legal actions, suits, arbitrations,
government investigations or other legal proceedings relating to, resulting
from, caused by, or arising out of the ownership, operation, use or control
of the Business by Seller on or prior to the Closing Date, including,
without limitation, those identified on SCHEDULE 16(n).
(d) Any and all liabilities or obligations of which may be incurred by
Buyer following the Closing with respect to the Business which are neither
Assumed Liabilities nor Excluded Liabilities are hereinafter referred to as
"Unknown Liabilities."
3. PURCHASE PRICE. In consideration for the purchase of the Purchased
Assets and the assumption of the Assumed Liabilities, the Buyer shall pay to the
Seller an amount equal to $28,000,000, subject to the Purchase Price Adjustment,
as hereinafter defined (the "Purchase Price").
4. PAYMENT OF PURCHASE PRICE AND PURCHASE PRICE ADJUSTMENT.
--------------------------------------------------------
(a) The Purchase Price shall be paid by Buyer to Seller by federal
funds wire transfer at the Closing.
-5-
<PAGE> 9
(b). Purchase Price shall be adjusted subsequent to the Closing as
follows:
(i). The Seller has delivered to the Buyer an unaudited summary
of certain current assets and certain current liabilities of the
Business as of December 31, 1995 (the "December 31 Net Asset
Disclosure"). A copy of the December 31 Net Asset Disclosure is
attached hereto as SCHEDULE 4. The excess of current assets of the
Business over its current liabilities as set forth on the December 31
Net Asset Disclosure is referred to here in as the "December 31 Net
Assets."
(ii). Within forty-five (45) days following the Closing Date, the
Buyer shall prepare and deliver to the Seller an unaudited summary of
certain current assets and certain current liabilities of the Business
as of the Closing Date (the "Closing Date Net Asset Disclosure").
Except as set forth in SCHEDULE 4(b)(ii), the Closing Date Net Asset
Disclosure shall accurately reflect all Inventory, Accounts
Receivable, prepaids and other assets, accounts payable and accrued
expenses which are accrued on the books and records of the Seller,
shall be prepared in accordance with generally accepted accounting
principals ("GAAP") and shall in all material respects be prepared
consistently with the December 31 Net Asset Disclosure. The excess of
the current assets of the Business over its current liabilities as set
forth on the Closing Date Net Asset Disclosure is referred to herein
as the "Closing Date Net Assets." In the event that the Closing Date
Net Assets have either increased or decreased by any amount from the
December 31 Net Assets, the amount of the increase or decrease shall
be paid by Buyer to Seller, (if the Closing Date Net Assets exceed the
December 31 Net Assets) or by Seller to Buyer (if the December 31 Net
Assets exceed the Closing Date Net Assets) (the "Purchase Price
Adjustment"). The Purchase Price Adjustment shall be made by certified
or bank check or, at the payee's option, by wire transfer in
immediately available funds to a bank account designated by the payee
not later than the close of business on the third business day
immediately following the date on which the Purchase Price Adjustment
is finally determined, and shall include simple interest on such
amount at the prime rate or base rate of interest publicly quoted by
Chase Bank as of and commencing on the Closing Date and continuing
until the date of full payment hereunder. The Closing Date Net Asset
Disclosure delivered by Buyer and the calculation of the Purchase
Price Adjustment shall be final and binding on the parties hereto,
unless within thirty (30) days following Buyer's delivery of the
Closing Date Net Asset Disclosure to the Seller, Buyer receives from
Seller a written statement setting forth in reasonable detail Seller's
objections to such calculation. Seller and Buyer shall use
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reasonable efforts to resolve any such dispute, and such resolution
shall be in writing and shall be final and binding on the parties
hereto. Until the earlier to occur of (i) the mutual agreement of the
Buyer and Seller as to the appropriate amount of the Purchase Price
Adjustment, or (ii) the final determination of the Purchase Price
Adjustment by the Independent Accountants as set forth below, Buyer
shall allow Seller reasonable access to its books and records
pertaining to the Business and cooperate with Seller during normal
business hours for purposes of computing and/or verifying the
information set forth in the Closing Date Net Asset Disclosure. If
Seller and Buyer have not reached a final resolution of any dispute
within thirty (30) days following Buyer's receipt of Seller's
objections, such dispute shall be resolved by Ernst & Young LLP (the
"Independent Accountants"). The fees and expenses of the Independent
Accountants shall be paid one-half by Buyer and one-half by Seller.
The determination of the Purchase Price Adjustment by the Independent
Accountants shall be final and binding upon the parties hereto.
5. ALLOCATION OF THE PURCHASE PRICE. The allocation of the Purchase Price
among the Purchased Assets shall be mutually agreed upon between the Buyer and
the Seller no later than 90 days following the Closing Date in order to reflect
the fair market value of the Purchased Assets. The parties agree to use such
allocation on IRS Form 8594 to comply with the provisions of Section 1060 of the
Internal Revenue Code.
6. WARRANTY CLAIMS. Buyer shall assume Seller's obligation and liability
for warranty claims under Seller's written warranties covering Products
manufactured prior to the Closing Date (the "Warranty Claims").
7. SALE OF FACILITY. Seller shall convey title to the Facility by Bargain
and Sale Deed with Covenant against Grantor's Acts and Lien Coverage and Buyer
shall accept such title subject to all existing leasehold interests, all
covenants, conditions, restrictions and easements of record so long as the
Facility is not in violation thereof and any of the foregoing does not
materially impair the use of the Facility for industrial purposes and subject
further to an access easement to be reserved in the deed in the form of EXHIBIT
A attached hereto (the "Access Easement"). Except as set forth in SCHEDULE 7
attached hereto, Seller is selling the Facility in "as is" condition and makes
no other warranty, express or implied, with respect thereto. Buyer acknowledges
that the buildings comprising the Facility may contain asbestos-containing
materials on pipes and related areas. Buyer further acknowledges that it has
fully and completely inspected the Facility and is satisfied with its
conditions. This Section shall survive the delivery of the deed hereunder.
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8. BILL OF SALE. At the Closing, Seller and Buyer shall execute and
deliver a bill of sale in the form of EXHIBIT B attached hereto (the "Bill of
Sale") whereby Seller shall sell, transfer, convey, assign and deliver to Buyer
all of Seller's right, title and interest in and to the Purchased Assets insofar
as such are assignable. To the extent that the assignment of any Contract or
Permit requires the consent of any other party, this Agreement shall not
constitute a contract to assign the same if an attempted assignment would cause
a breach of the same. If any such consent is not obtained prior to Closing, the
Seller shall cooperate with the Buyer in any reasonable arrangement requested by
the Buyer designed to provide the Buyer the benefits under any such Contract or
Permit, including enforcement of any and all rights of the Seller against the
other party thereto arising out of breach or cancellation thereof by such other
party or otherwise.
9. ASSIGNMENT OF INTELLECTUAL PROPERTY. At the Closing, Seller shall
execute assignments of the Intellectual Property in the form of EXHIBIT C
attached hereto.
10. INSTRUMENT OF ASSUMPTION. At the Closing, Seller and Buyer shall
execute and deliver an instrument of assumption in the form of EXHIBIT D
attached hereto (the "Assumption Agreement"), whereby Buyer shall assume full
responsibility from and after the Closing Date with respect to the Assumed
Liabilities. Buyer shall satisfy its obligations with respect to the Assumed
Liabilities by use of its best efforts and in a commercially reasonable manner.
11. LICENSE OF NAME. At the Closing Seller and Buyer shall enter into a
license agreement in the form of EXHIBIT E attached hereto (the "Trademark
License").
12. WATER BASED ADHESIVE LICENSE. At the Closing Seller and Buyer shall
enter into a license agreement in the form of EXHIBIT F attached hereto whereby
the Seller shall grant Buyer the right to use Seller's Water Based Adhesive
Technology (the "Water Based Adhesive License"). Nothing herein shall be
construed to provide Buyer with any rights to Seller's Water Based Release Agent
Technology.
13. UNION CONTRACTS. Nashua Tape is a party to those collective bargaining
agreements set forth in SCHEDULE 13 attached hereto ("Union Contracts"). Buyer
is a successor employer with respect to the Union Contracts. Buyer shall, as of
the Closing Date, assume all of Seller's obligations accruing from and after the
Closing Date with respect to the Union Contracts; PROVIDED, HOWEVER, that in
lieu of assuming the Nashua Hourly Defined Benefit Plan or establishing a
comparable defined benefit pension plan, Buyer may substitute a qualified
defined contribution plan with monthly contributions by Buyer which will provide
benefits
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equivalent to $40 per month per year of service (as determined on a reasonable
actuarial equivalent basis by Buyer's actuary).
14. EMPLOYEES. On or prior to the Closing Date, effective as of and
conditioned on the occurrence of the Closing, the Buyer shall offer employment
to all employees of Seller who are employed by Nashua Tape immediately prior to
Closing, except for employees who are on long-term disability as of the Closing
Date (the "Transferred Employees") and employees who are on short-term
disability as of the Closing Date and are reasonably likely to be candidates for
long-term disability. Seller agrees to encourage such employees to whom Buyer
offers employment to accept employment with Buyer. Buyer shall offer to employ
employees of Nashua Tape who are not union employees on terms and conditions,
including salary and benefits, which, in the aggregate, are substantially
equivalent to the terms and conditions of their employment by Seller immediately
prior to Closing. Buyer shall offer to employ employees of Nashua Tape who are
union employees pursuant to the terms and conditions of the Union Contracts.
15. EMPLOYEE BENEFITS PLANS.
------------------------
(a) The rights of all Nashua Tape employees under the Seller's
qualified defined benefit plans, to wit: Nashua Corporation's Retirement Plan
for Salaried Employees and Nashua Corporation's Hourly Retirement Plan (each a
"Defined Benefit Plan" and collectively the "Defined Benefit Plans") who become
employees of Buyer shall be governed by the provisions of the Defined Benefit
Plans as amended to the date of such employees' termination of employment with
Seller. If it is determined that the sale of the Business and the termination of
the employment of the employees of Nashua Tape as a result thereof did not
constitute a "partial termination" of the Defined Benefit Plans, or either of
them, within the meaning of Section 411(d)(3) of the Internal Revenue Code, then
Seller shall take such steps as are necessary to amend such Defined Benefit Plan
or Plans so that service with Buyer shall constitute service under such Defined
Benefit Plan or Plans but only for purposes of and only to the extent that such
service with Buyer would have constituted vesting service under such Defined
Benefit Plan or Plans if such service had been rendered to Seller rather than
Buyer.
Buyer shall cause each individual who was an employee of Nashua Tape and
who becomes an employee of Buyer within three (3) months of the Closing Date, to
receive credit under each qualified plan (as determined under Section 401(a) of
the Internal Revenue Code) maintained by Buyer for service with Nashua Tape for
purpose of eligibility and vesting (but not benefit accrual). Buyer and Seller
shall cooperate and exchange such information as may be necessary or appropriate
to carry out the intention of this Section.
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(b) As soon as possible following the Closing Date, Buyer shall
adopt a new section 401(K) savings plan and trust (or amend Buyer's existing
401(K) savings plans) ("Buyer's Plans") for the Transferred Employees. The level
of employer matching contribution under Buyer's Plans shall be at least
equivalent to the level of employer matching contribution under the Nashua
Corporation Employees' Savings Plan and Trust ("Seller's Plan"). Buyer agrees
that all service credited to the Transferred Employees under Seller's Plan for
purposes of eligibility and vesting shall be credited to the Transferred
Employees under Buyer's Plans. As soon as possible following Buyer's adoption of
Buyer's Plans (but in no event more than 60 days following such adoption),
Seller shall cause an amount in cash (or property acceptable to Buyer)
equivalent to the entire account balances of the Transferred Employees to be
transferred from the trust account maintained under Seller's Plan to the new
trust maintained pursuant to Buyer's Plans, provided, however, that no such
transfer shall be made until Buyer has received a favorable determination letter
from the IRS as to the tax qualified status of Buyer's Plans or Buyer's counsel
has provided an opinion reasonably satisfactory to Seller as to the tax
qualified status of Buyer's Plans. Buyer and Seller agree to cooperate with each
other to ensure the proper transfer of account balances as described above, and
Seller agrees to provide Buyer with such information under Seller's Plan with
respect to the Transferred Employees as Buyer shall reasonably request.
(c) At or prior to the Closing, Buyer shall assume from Seller, as
plan sponsor, all of the rights, duties and obligations of Seller with respect
to the Transferred Employees under the group welfare benefit plans maintained by
Seller for employees of the Business; PROVIDED, HOWEVER, that the Seller shall
remain liable and shall hold Buyer harmless for obligations with respect to
retirement medical benefits for all Nashua Tape employees who are not on active
employment status as of the Closing.
(d) Buyer shall assume all obligations of Seller accrued through the
Closing Date to Transferred Employees with respect to vacation, sick leave and
severance benefits. For all such assumed employee benefits and programs, Buyer
shall credit Transferred Employees with tenure for their employment by the
Seller and any predecessor to the Seller. If Buyer terminates the employment of
any employee of the Business after Closing, Buyer shall be responsible for all
obligations in connection with such termination, including, without limitation,
obligations under the Worker Adjustment and Retraining Notification Act of 1988
or COBRA.
16. SELLER'S REPRESENTATIONS AND WARRANTIES. Except as specifically set
forth in the Schedules referenced in this Section 16, as the same may be amended
prior to Closing, Seller represents and warrants to Buyer as follows:
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(a) ORGANIZATION AND GOOD STANDING. Seller has been duly organized
and is validly existing and in good standing under the laws of the State of
Delaware with full power and authority to own the Purchased Assets and operate
the Business in the manner and places where the Business is presently being
conducted.
(b) NO DEFAULTS. Except where waivers or consents have been obtained,
the consummation of the transactions contemplated herein will not violate or
result in the breach of any term or provision of or constitute a default under
the Certificate of Incorporation or By-Laws of Seller or constitute a default
under any indenture, mortgage, deed or trust or other agreement or instrument to
which Seller is a party, or by which it may be bound, nor will same result in
the acceleration of any debt or liability of, or the creation of any lien
against Seller, nor will same result in any violation of any other, writ,
injunction or decree of any court, administrative agency or governmental body.
Except where waivers or consents have been obtained, the execution of this
Agreement and the performance of the covenants herein contemplated do not result
in the creation of any lien, charge or encumbrance upon any of the Purchased
Assets pursuant to any indenture, agreement or other instrument to which the
Seller is a party, or by which the Seller is bound or by which the Business or
Purchased Assets may be affected.
(c) AUTHORIZATION. Seller's execution and delivery of this Agreement
and the consummation of the sale contemplated in accordance with all the terms
hereof have been duly authorized by all necessary corporate action of Seller.
This Agreement is a valid and enforceable obligation of the Seller, enforceable
in accordance with its terms except as such enforceability may be limited by
general principles of equity or by applicable bankruptcy, insolvency or similar
laws in effect which affect creditor's rights generally.
(d) ABSENCE OF CERTAIN CHANGES OR EVENTS. Except as set forth in
SCHEDULE 16(d) hereto, since December 31, 1995:
(i) The Business has been conducted in the usual, regular and
ordinary course in substantially the same manner as theretofore;
(ii) There has not been any material adverse change in the
corporate status, business, operations or financial or other condition of
the Business or in the assets, properties, obligations, or liabilities
thereof.
(iii) With respect to the Business, Seller has not incurred any
obligation or liability or made any disbursement or disposition of any of
its properties other than in the ordinary course of business and except as
fully reflected or
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reserved against on the books of account of Seller or Nashua Tape;
(iv) There has not been any material damage, destruction or
loss, whether or not covered by insurance, regarding the Business or
Purchased Assets;
(v) Except as contemplated by this Agreement, there has not
been any change in the accounting methods or practices followed by Seller
relating to the Business or any change in depreciation methods or rates
theretofore adopted;
(vi) There has not been any material increase in the
compensation or rate of compensation or commissions payable by Seller to
any of the officers, employees, salesmen or agents of the Business;
(vii) With respect to union labor relations, there has not been
any actual or threatened work interruption or actual or threatened unfair
labor practices in connection with any employees of the Business;
(viii) Seller has exerted its best efforts to preserve the
Business and to maintain the goodwill of the Business and its present
customers and suppliers.
(e). TITLE TO PURCHASED ASSETS. Seller has and shall convey to Buyer
good and marketable title to, or a valid leasehold interest in, all of the
Purchased Assets which do not constitute real property (the title to which shall
be as provided by Section 7 of this Agreement), free and clear of all liens,
claims, mortgages, security interests, pledges, conditional sales agreements,
restrictions and encumbrances, or charges whatsoever (collectively, "Liens"),
except for the Assumed Liabilities and such imperfections of title, liens and
encumbrances, if any, as do not, individually or in the aggregate, materially
detract from the value of or interfere with the present use of such properties
or otherwise impair the operations of the Business.
(f). SUITABILITY OF PURCHASED ASSETS. Except as set forth in SCHEDULE
16(f) hereto, the Purchased Assets and the Water Based Adhesive License include
all of the rights of the Seller in the Products and such rights will furnish
Buyer with all of the capacity and rights to formulate, manufacture, sell, ship
and deliver the Products and perform the same services in the same manner as
presently being manufactured or performed by the Seller with respect to the
Business, including the capacity and rights to manufacture, use and sell all
such Products and perform such services and conduct the Business in
substantially the same manner without incurring any liability for license fees,
royalties, claims of infringement of patents or trademark rights or claims or
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rights of others (except such claims or rights arising out of the Assumed
Liabilities).
(g) TANGIBLE PROPERTY. Seller has delivered to Buyer a true and
complete list of all material tangible personal property owned by Seller used in
the Business (other than Inventory) which list includes all material tangible
personal property used in the Business.
(h) INTELLECTUAL PROPERTY. The Seller does not own or otherwise use
any patents in connection with the Business. Seller owns or has, royalty-free,
the right to use all of the Intellectual Property. The property identified in
SCHEDULE 16(h) hereto constitutes all of the copyrights, copyright applications,
licenses and royalty rights within the Intellectual Property. Except as set
forth in SCHEDULE 16(h) hereto, Seller has not granted to any person, firm or
corporation, any right, license or privilege in any of the Intellectual Property
and, to the best knowledge of Seller, none of the Intellectual Property
infringes upon similar rights of others, nor is there infringement by others in
the rights represented thereby. Except as set forth in SCHEDULE 16(h) hereto,
Seller's rights in all the Intellectual Property are freely assignable to Buyer.
Seller possesses, and Buyer will obtain upon the transfers contemplated by this
Agreement, all such rights necessary to continue to conduct the Business, and to
utilize the processes and market the Products heretofore utilized and marketed
in the conduct of the Business, without payment of any royalties, fees or other
consideration. Provided, however, it is understood that Buyer is not obtaining
any rights to (i) the names Nashua and Nashua Tape and the logo and designs
incorporating those names except to the extent provided by the Trademark License
and (ii) Seller's Water Based Technology except to the extent provided by the
Water Based Adhesive License.
(i) INVENTORY. All items of Inventory are of a quality and quantity
salable or usable in the ordinary course of business, except for obsolete items
and items of below standard quality, all of which have been written-off or
written-down on the Seller's books and records. Except as set forth in SCHEDULE
16(i), all such inventories are valued on the Seller's books and records at the
lower of cost (calculated using the first-in, first-out valuation method) or
market and have net realizable market values in the ordinary course of business
of not less than their book value.
(j) CONTRACTS. SCHEDULE 16(j) sets forth a true and complete list of
each oral and written arrangement (or group of related written arrangements) for
the purchase or sale of raw materials, commodities, supplies, products or other
personal property or for the furnishing or receipt of services which by its
terms may not be terminated upon 30 days notice by the Seller
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without any premium, penalty or termination fee and (i) which calls for
performance over a period of more than one year, (ii) which involves more than
the sum of $1,000 or, in the case of open customer purchase orders or purchase
orders from any one purchaser or group of related purchasers, involves in the
aggregate more than $10,000 for any such one purchaser or group of related
purchasers, or (iii) in which the Seller has granted manufacturing rights, "most
favored nation" pricing provisions or marketing or distribution rights relating
to any products or territory or has agreed to purchase a minimum quantity of
goods or services or has agreed to purchase goods or services exclusively from a
certain party. Seller is not in default, to the best of Seller's knowledge no
other party to any Contract is in default, and no notices of default been
received by Seller with respect to the Contracts. All Contracts have been made
in the ordinary course of business consistent with past practice.
(k) ADVANCE PAYMENTS AND DEPOSITS. Except as set forth in SCHEDULE
16(k) attached hereto, no advance payments or deposits have been made to or with
Seller with respect to the Business on any contracts or accounts.
(l) EMPLOYMENT MATTERS. Except as set forth in SCHEDULE 16(l)
attached hereto, in connection with its operation of the Business Seller has
complied in all material respects with all applicable laws, rules and
regulations relating to the employment of labor, including those relating to
wages, hours, collective bargaining, health and safety and the payment or
withholding of taxes. Seller has withheld from amounts paid to employees of the
Business, and, to the extent due, have paid to the appropriate governmental
agencies, all taxes or other amounts required to be withheld by law or
agreement, including, without limitation, social security, federal, state and
local withholding taxes. Seller is not liable for any arrears of wages or of any
taxes or penalties for failure to comply with any of the foregoing. Except as
set forth in SCHEDULE 16(l) attached hereto, to the best knowledge of Seller,
the employment of all persons presently employed by Seller in the Business is
terminable at will without any penalty or severance obligation of any kind,
except as set forth in any written employment agreement referred to elsewhere
herein.
(m) ERISA. With respect to the Business and except as described in
SCHEDULE 16(m) hereto, Seller is not a party to any written or oral deferred or
incentive compensation agreement or employee welfare, benefit or pension plan
with or for the benefit of any employee of the Business (collectively "Employee
Benefit Plans"). Except as set forth in SCHEDULE 16(m), all Employee Benefit
Plans which are pension benefit plans within the meaning of the Employee
Retirement Income Security Act of 1974, as amended, ("ERISA") are qualified
plans within the meaning of Section 401(a) of the Internal Revenue Code and have
received a
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favorable determination letter from the Internal Revenue Service regarding their
qualification under such section. All Employee Benefit Plans are structured and
operated in material compliance with ERISA and the rules and regulations
promulgated pursuant thereto and in material compliance with all other
applicable laws and regulations. All contributions required to be paid by Seller
to any Employee Benefit Plan by the terms of the Plan and/or by reason of the
minimum funding standards of ERISA for periods ending on or before the Closing
Date have been paid by the Closing. All reporting, disclosure, fiduciary and
other requirements and limitations imposed by the Internal Revenue Code and
rulings and regulations thereunder, applicable to the Employee Benefit Plans
have been met in all material respects and no application for funding, waivers,
rulings, determination letters, advisory opinions or prohibited transaction
exemptions are pending before the United States Department of Labor, the
Internal Revenue Service or the Pension Benefit Guaranty Corporation with
respect to any of the Employee Benefit Plans. No Employee Benefit Plan is the
subject of any lawsuit, arbitration or other proceeding concerning any benefit
claim (other than actions seeking qualified domestic relations orders), breach
of fiduciary duty or other matter, whether brought by or against a participant,
a beneficiary, a trustee, a plan administrator, Seller or any officer, employee
or director thereof. With respect to the Business, Seller is not a contributing
employer to nor does it have any obligation under any "multi-employer plan"
within the meaning of ERISA.
(n) LITIGATION; INVESTIGATIONS. Except as set forth in SCHEDULE 16(n)
attached hereto, Seller is not engaged in or, to the best of Seller's knowledge,
threatened with any suit, action or proceeding which might give rise to any
claim against the Business or which might affect the Business; and Seller is not
subject to any outstanding judgment, order, decree or injunction of any court or
governmental body with respect to the Business.
(o) PRODUCT LIABILITY HISTORY. Except as set forth in SCHEDULE 16(o)
attached hereto, there has not been any material liability, claim or obligation
arising from or alleged to arise from any actual or alleged injury to persons or
property as a result of the ownership, possession, or use of any product
manufactured or sold by Nashua Tape.
(p) TAXES. Seller has timely and properly filed all federal, state,
county and local tax returns, reports and estimates for all years and periods
(and portions thereof) for which such returns and periods or estimates were due
with respect to the Business (including, without limitation, those taxes due in
respect of income, gross receipts, sales, use, withholding, employment,
franchise, transfer and property taxes) and has paid, accrued or withheld all
amounts required to be paid, accrued or withheld with respect to the Business.
Each such tax return and
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report required to be filed with respect to the Business was correct and
complete in all material respects.
Seller has properly withheld accurate amounts from its employees in
compliance with the tax withholding provisions of the Internal Revenue Code of
1986, as amended, and other applicable federal, state and local laws. All
payments due from Seller with respect to the Business on account of employee
income tax withholding or social security and unemployment taxes in respect of
years or periods ending on or prior to the Closing Date were duly paid prior to
the Closing Date, or are otherwise accrued on the Closing Date Net Asset
Disclosure.
(q) COMPLIANCE WITH LAWS; PERMITS. Except as set forth in
SCHEDULE 16(q) attached hereto, Seller has complied in all material respects
with all applicable statutes and regulations of the United States of America and
of all state, municipalities and agencies of any thereof, respecting the conduct
of the Business and the maintenance and operation of the Purchased Assets
(except for laws protecting the environment or relating to the storage or
disposal of hazardous waste materials which are the subject of the special
warranty set forth in Section (16)(r) hereof). Seller holds all Permits
necessary to conduct the Business in the same manner as it has been conducted
heretofore, except where the failure to hold such a Permit would not have a
material adverse effect on the business, assets, properties, condition
(financial or otherwise) or prospects of Nashua Tape (a "Material Adverse
Effect"). All Permits held by Nashua Tape are listed in SCHEDULE 16(q) attached
hereto. All of the Permits are up to date and in good standing, and no fees or
charges are currently due with respect thereto, except to the extent accrued on
the books and records of the Seller.
(r) ENVIRONMENTAL MATTERS. Except as set forth in SCHEDULE 16(r)
hereto:
(i) Seller has been and is conducting the Business in
substantial compliance with all federal, state and local laws, rules
and regulations governing environmental protection and with all
applicable pollution standards.
(ii) Seller has obtained and is in compliance with all permits
which it is required by law to have as of the Closing Date and which
are material to its ability to carry on the Business as it is
presently being conducted, relating to:
(A) pollution or protection of the environment, including,
without limitation, all permits relating to emissions, discharges,
pollutants, contaminants, or hazardous or toxic materials or wastes
into ambient air, surface water, ground water or land, or
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(B) the manufacture, processing, distribution, use,
treatment, storage, disposal, transport or handling of pollutants,
contaminants or hazardous or toxic materials or wastes, and the
transactions contemplated hereby will not alter or impair any such
permits.
(iii) In connection with the conduct of the Business:
(A) There are no conditions, circumstances, activities,
practices, incidents, actions or plans which would materially
interfere with or prevent compliance or continued compliance with any
existing environmental laws or with any existing regulation, code,
order, judgment, injunction, notice or demand letter issued, entered,
promulgated or approved thereunder relating to the manufacture,
processing, distribution, use, treatment, storage, disposal, transport
or handling, or the emission, discharge, release or threatened release
into the environment, of any pollutant, contaminant, chemical, or
industrial, toxic or hazardous material, substance or waste;
(B) No release, emission or discharge into the environment
of any hazardous substance (as that term is currently defined under
the Comprehensive Environmental Response, Compensation and Liability
Act ("CERCLA") or any applicable analogous state law) is currently
occurring in connection with the conduct of the Business beyond the
permissible levels provided for in any applicable permits; and
(C) There are no outstanding judicial or administrative
notices, demand letters, complaints, orders, judgments or decrees
concerning any federal, state and local laws, rules and regulations
governing environmental protection or applicable pollution standards.
Nothing in this Agreement shall render Seller liable in any way for
the consequences of any actions of Buyer in operating the Business after the
Closing.
(s) DECEMBER 31 NET ASSET DISCLOSURE. Except as set forth in
SCHEDULE 4(b)(ii), the items set forth on the December 31 Net Asset Disclosure
has been prepared in accordance and consistent with GAAP and with past
divisional reporting and accounting practices of Nashua Tape, and fairly
presents the financial information set forth therein and no adjustments are or
will be required to make such disclosures not misleading.
(t) FULL DISCLOSURE. The documents delivered or to be delivered
by Seller pursuant to this Agreement are true copies of all such documents. All
statements contained in any exhibit,
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schedule, certificate or other instrument delivered by or on behalf of Seller in
accordance with this Agreement shall be deemed representations and warranties of
the Seller when made. No representation, warranty, covenant or statement by
Seller in this Agreement (including any exhibits or schedules annexed hereto)
contains or will contain any untrue statement of a material fact, or omits or
will omit a material fact known to Seller, the omission of which will make the
statement contained herein or therein misleading.
(u) ACCOUNTS RECEIVABLE. All of the notes, accounts and royalties
receivable of Nashua Tape arose in the ordinary course of the business,
constitute valid and binding claims of Nashua Tape against independent third
parties and are collectible, in the aggregate, in amounts not less than as
reflected in Seller's books and records or financial statements. None of the
notes, accounts and royalties receivable are subject to any rights of set-off.
(v) CONSENTS OF THIRD PARTIES. Except as set forth in SCHEDULE 16(v),
no consent, approval or agreement of any person, party, court, government or
entity is required to be obtained by the Seller in connection with the execution
and delivery of this Agreement which has not already been obtained by Seller.
17. PRE-CLOSING COVENANTS OF THE SELLER. Seller hereby covenants with
Buyer as follows:
(a) Prior to Closing the Seller will use its best efforts to obtain:
(i) Consents of third parties to the assignment to Buyer of all
material contracts, permits, registrations, leases, licenses and agreements
relating to the Business that may be required in accordance with the terms
and conditions of such contracts, permits, registrations, leases, license
and agreements; and
(ii) Novation agreements to all such contracts, permits,
registrations, leases, licenses and agreements that may not be so
assignable.
(b) Immediately upon Closing, Seller will give over to Buyer all the
books, records, accounts, contracts, correspondence and other documents and all
files which have been regularly maintained by it with respect to the Business,
which books, records, etc. will be maintained by Buyer for the benefit of both
Buyer and Seller at its place of business in a safe, fireproof location.
18. ACCOUNTS RECEIVABLE. From and after the Closing Date, Seller may, from
time to time receive payments from Nashua Tape's
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customers which are on account of accounts receivable of Buyer. Seller shall
remit any such amount to Buyer within ten (10) business days of receipt.
19. BUYER'S REPRESENTATIONS AND WARRANTIES. Buyer represents and warrants
to Seller as follows:
(a) Buyer has been duly organized and is validly existing and in good
standing under the laws of the State of Delaware with full power and authority
to own its assets and operate its business in the manner and places where such
business is presently being conducted.
(b) Buyer is not engaged in or threatened with any suit, action,
proceeding, governmental investigation or other controversy, which might give
rise to any claim against it or which might materially affect any of its
contractual rights or its business, nor is there any basis for any such suit,
action, proceeding, governmental investigation or other controversy known to
Buyer; and Buyer is not subject to any outstanding judgment, order, decree or
injunction of any court or governmental body.
(c) Except for any filings pursuant to the Hart-Scott-Rodino
Antitrust Improvements Act of 1976, as amended, no consent, approval or
authorization of, or designation, declaration or filing with any governmental
authority or other third party on the part of Buyer is required in connection
with the execution and delivery of this Agreement or the consummation of the
transactions contemplated herein.
(d) This Agreement and the various documents, instruments and
agreements called for herein have been duly authorized, executed and delivered
by the Buyer, and constitute legal, valid, binding obligations of Buyer,
enforceable against Buyer in accordance with its terms except as such
enforceability may be limited by general principles of equity or by applicable
bankruptcy, insolvency or similar laws in effect which affect creditor's rights
generally.
(e) Subject to Seller's compliance with its obligations under this
Agreement, Buyer has the capability and facilities necessary to operate the
Business after the Closing.
(f) The documents delivered or to be delivered by or on behalf of
Buyer pursuant to this Agreement are true copies of all such documents. All
statements contained in any exhibit, schedule, certificate or other instrument
delivered by or on behalf of Buyer in accordance with this Agreement, shall be
deemed representations and warranties of Buyer when made. No representation,
warranty, covenant or statement by Buyer in this Agreement (including any
exhibits or schedules annexed hereto) contain any untrue statement of a material
fact, or omits or will
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omit a material fact known to Buyer, the omission of which will make the
statement contained herein or therein misleading.
(g) Buyer has been provided the opportunity to conduct due diligence
and to obtain such information about the Business and the Purchased Assets as
the Buyer deems relevant. The Buyer has not relied on any oral statement,
representation or warranty as to the Purchased Assets. Buyer understands and
acknowledges that no representation or warranty is being made by Seller, or any
of its affiliates or representatives, as to the future operations or prospects
of Nashua Tape and Buyer is not relying on any forecasted operating results or
budgets with respect to Nashua Tape prepared by or on behalf of Seller.
20. CLOSING. The time, place and manner of closing this transaction shall
be as follows:
(a) The closing of the transactions contemplated by this Agreement
and the payment of the Purchase Price shall take place on the third business day
following the date on which all conditions set forth in Section 21 have been
satisfied (the "Closing" or the "Closing Date") at the offices of Hale and Dorr,
60 State Street, Boston, Massachusetts, or such other date and place as may be
mutually agreed upon by the parties. The Closing shall be effective and the
transfer of ownership of the Purchased Assets and assumption of the Assumed
Liabilities shall be deemed to have occurred as of the close of business on the
date of the Closing.
(b) At the Closing, all transactions shall be conducted substantially
concurrently and no transaction shall be deemed to be completed until all are
completed.
(c) At the Closing, Seller shall execute, acknowledge and deliver to
Buyer necessary instruments, in form and substance reasonably satisfactory to
counsel for Buyer and Seller, as may be required or as may be appropriate to
transfer to Buyer title to the Purchased Assets as required by this Agreement,
including:
(i) The Bill of Sale;
(ii) The deed for the Facility, including the Access Easement;
(iii) The assignments described in Section 9 hereof;
(iv) The Trademark License;
(v) The Water Based Adhesive License;
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(vi) A temporary services agreement in the form of Exhibit G
attached hereto (the "Temporary Services Agreement");
(vii) An officer's certificate as to the accuracy of the
representations and warranties set forth herein and as to the absence of
material adverse changes; and
(viii) An opinion of Paul Buffum, Esq., dated the date of the
Closing and substantially in the form of Exhibit H attached hereto.
(d). At the Closing, Buyer shall, upon due performance by the Seller
of its obligations hereunder, execute, issue or deliver to Seller as the case
may be:
(i) An amount equal to the Purchase Price via federal funds
wire transfer;
(ii) The Assumption Agreement;
(iii) The assignment described in Section 9 hereof;
(iv) A guaranty of Tyco International Ltd. ("Tyco") in the form
of Exhibit I attached hereto;
(v) The Trademark License;
(vi) The Water Based Adhesive License;
(vii) Evidence of compliance with Sections 13, 14 and 15 hereof
(relating to collective bargaining agreements, employees and employee
benefits plans);
(viii) Opinions of Buyer's counsel, dated the date of the Closing,
and substantially in the form of EXHIBITS J-1 and J-2 attached hereto; and
(ix) The deed for the Facility, including the Access Easement;
(x) The Temporary Services Agreement; and
(xi) All necessary documents as counsel for Seller may
reasonably determine as required or appropriate to assume the obligations
which Buyer has agreed to assume hereunder.
(e) The parties shall deliver at the Closing such certificates and
other documents not theretofore delivered as may be required to be delivered by
this Agreement or the delivery of which is required to satisfy the conditions
herein expressed.
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21. CONDITIONS TO CLOSING.
21.1 CONDITIONS PRECEDENT TO THE OBLIGATION OF SELLER. The obligations
of Seller to consummate the transactions contemplated by this Agreement are
subject to the satisfaction (or waiver by the Seller) on or prior to the Closing
of the following conditions:
(a) All of the agreements and covenants contained in this
Agreement that are to be complied with, satisfied or performed by Buyer on or
before the Closing Date shall, in all material respects, have been complied
with, satisfied and performed;
(b) All of the representations and warranties made by Buyer in
this Agreement shall be true and correct in all respects both on and as of the
date of this Agreement and on and as of the Closing Date;
(c) The Seller shall have obtained all of the waivers, permits,
consents, approvals or other authorizations, and effected all of the
registrations, filings and notices, as may be required by or with respect to the
Seller in connection with the transactions contemplated by this Agreement,
except for any which if not obtained or effected would not have a Material
Adverse Effect or materially impair the ability of the parties to consummate the
transactions contemplated by this Agreement.
(d) No action, suit, investigation or proceeding shall be
threatened or pending before any court or governmental agency by any
governmental agency, entity or person to restrain, prohibit, collect damages as
a result of or otherwise challenge this Agreement or the transactions
contemplated hereby; and
(e) All releases of any liens, mortgages, pledges, security
interests, restrictions, charges of other similar encumbrances or consents of
lenders affecting the Business shall have been received.
21.2 CONDITIONS PRECEDENT TO THE OBLIGATION OF BUYER. The obligations
of Buyer to consummate the transactions contemplated by this Agreement are
subject to the satisfaction (or waiver by the Buyer) on or prior to the Closing
of the following conditions:
(a) All of the agreements and covenants contained in this
Agreement that are to be complied with, satisfied or performed by Seller on or
before the Closing Date shall, in all material respects, have been complied
with, satisfied and performed;
(b) All of the representations and warranties made by Seller in
this Agreement shall be true and correct in all
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<PAGE> 26
respects both on and as of the date of this Agreement and on and as of the
Closing Date. It is understood and agreed that all of the representations and
warranties contained in Section 16 of this Agreement that are not expressly
limited to some other date shall be deemed to state the facts contained therein
as they existed both as of the date of this Agreement and as of the Closing
Date; and
(c) The Seller shall have obtained all of the waivers, permits,
consents, approvals or other authorizations, and effected all of the
registrations, filings and notices, as may be required by or with respect to the
Seller in connection with the transactions contemplated by this Agreement,
except for any which if not obtained or effected would not have a Material
Adverse Effect or materially impair the ability of the parties to consummate the
transactions contemplated by this Agreement;
(d) No action, suit, investigation or proceeding shall be
threatened or pending before any court or governmental agency by any
governmental agency, entity or person to restrain, prohibit, collect damages as
a result of or otherwise challenge this Agreement or the transactions
contemplated hereby; and
(e) The Board of Directors of Tyco (the "Tyco Board") shall have
duly approved the transactions contemplated by this Agreement no later than
April 22, 1996. In the event the Seller does not receive written notice from
Buyer by the close of business on April 22, 1996 that the Tyco Board has not
given such approval, this condition shall be deemed satisfied.
21.3 HART-SCOTT-RODINO. The parties agree that the Closing is
expressly conditioned upon the waiting period under the Hart-Scott-Rodino
Antitrust Improvements Act of 1976 (the "HSR Act") having expired or the parties
having received written confirmation from the United States Government of the
early termination of the waiting period or other notification that the parties
may proceed with the Closing.
Buyer and Seller shall make an HSR Act filing no later than April 18, 1996
(the "HSR Filing Date"), and shall coordinate their filing dates to enable
contemporaneous filing. Buyer shall pay all fees required in connection with
such filings (other than Seller's legal fees). Both parties shall use reasonable
efforts to advance the HSR Act filing in good faith. Buyer and Seller shall
cooperate with each other and promptly take or cause to be taken all actions and
do or cause to be done all things necessary, proper or advisable to obtain
favorable review of the proposed transaction under the HSR Act, which efforts
shall include, without limitation, except as otherwise may be required by
applicable law, obtaining mutual agreement concerning agency appearances and
submissions and allowing each party or its attorneys to (1) assist in all
preparation for any agency
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<PAGE> 27
interviews, depositions or voluntary agency appearances and attend such
appearances to the extent permitted by agency rules and (2) review in advance of
submission any written materials to be submitted to the agency, all to the
extent consistent with applicable law. Each of the parties agrees to use
reasonable efforts to resolve any objections that may be asserted with respect
to the transaction hereunder by the Department of Justice, the Federal Trade
Commission, any State Attorney General or any other governmental entity
(including, without limitation, objections under any antitrust laws); PROVIDED,
HOWEVER, that neither party shall be required to comply with any condition or
restriction, including, without limitation, the disposition of assets, which
would materially adversely impact the economic or business benefits of the
transactions contemplated hereby. The parties agree to use reasonable efforts to
take such action as may be required: (a) by the Department of Justice, the
Federal Trade Commission, any State Attorney General or any other governmental
entity in order to resolve such objections as any of them may have to the
transaction hereunder, or (b) by any federal or state court of the United
States, in any suit brought by a private party or governmental entity
challenging the transaction hereunder as violative of the antitrust laws, in
order to avoid the entry of, or to cause the withdrawal or voiding of, any
injunction, temporary restraining order or other order which has the effect of
preventing the consummation of the Agreement.
21.4 TERMINATION. In the event a suit is instituted challenging the
transactions contemplated hereunder as violative of any antitrust laws, or if an
HSR Act investigation ensues which continues beyond the 30th day following the
HSR Filing Date (the "30th Day"), then at any time during the three (3) business
days following the 30th Day, the Buyer and the Seller shall each have the
unilateral right to cancel this Agreement and neither party shall have any
further obligations hereunder to the other, except for breach. In the event an
HSR Act investigation ensues which continues beyond the 60th day following the
HSR Filing Date (the "60th Day"), then at any time following the 60th day, the
Buyer and Seller shall each have the unilateral right to cancel this Agreement
and neither party shall have any further obligations hereunder to the other,
except for breach.
22. BEST EFFORTS TO CONSUMMATE; FURTHER ASSURANCES. Each of the parties
agrees to use its best efforts to complete the purchase and sale of assets as
contemplated by this Agreement, and in so doing, to satisfy each and all of the
conditions to the Closing set forth herein. From time to time on and after the
Closing Date, at Buyer's request, Seller will execute and deliver such further
instruments of conveyance, transfer and assignment and take such other action as
Buyer may require to more effectively convey and transfer to Buyer any of the
assets, property and rights to be sold hereunder and will assist Buyer in the
collection or reduction to possession of such assets and
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<PAGE> 28
property. Buyer shall deliver or cause to be delivered such additional
instruments and do and perform all such other acts as may reasonably be required
by Seller for the purpose of carrying out this Agreement.
23. PARTIES IN INTEREST; NO THIRD PARTY BENEFICIARIES. This Agreement
shall inure to the benefit of and be binding upon the parties named herein and
their respective successors and assigns. Nothing in this Agreement, express or
implied, is intended to confer upon any person other than the parties named
herein and their respective successors or assigns any rights or remedies under
or by reason of this Agreement.
24. BULK SALES ACT COMPLIANCE. Seller and Buyer mutually agree to waive
each other's compliance with any applicable bulk sales law.
25. NONCOMPETITION.
--------------
(a) Seller, by execution hereof, agrees that for a period of five (5)
years (the "Noncompetition Period") following the Closing, Seller will not for
itself or on behalf of any other person, partnership, trust, corporation or
other entity, other than Buyer, for whatever reason engage, directly or
indirectly, in the manufacture or sale of any tape product which is competitive
with any Product set forth on ATTACHMENT I.
(b) Seller agrees that Seller will not at any time during the
Noncompetition Period, directly or indirectly, for itself or any person or
entity, solicit, or endeavor to entice away from the Buyer any employee of the
Business.
(c) Seller agrees that this Section is necessary to maintain the
customer base and goodwill of the Business, and to assist Buyer in the orderly
transfer of the management of the Business.
(d) Notwithstanding anything contained in this Agreement to the
contrary, the Buyer acknowledges that Seller may be licensing or selling in the
same or similar industry Seller's Water Based Adhesive Technology to third
parties engaged in businesses which are competitive with the Business and such
future activities of Seller will not be deemed to violate the terms set forth in
this Section.
(e) If in any judicial proceeding, a court shall refuse to enforce
this Section, whether because the time limit is too long or because the
restrictions contained herein are more extensive (whether as to geographic area,
scope of business or otherwise) than is necessary to protect the business and
goodwill of the Buyer, it is expressly understood and agreed between the parties
hereto that this Agreement be modified to the extent
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necessary to permit this Agreement to be enforced in any such proceedings.
26. RECORDS. Buyer shall keep the Records for a period of eight (8) years
from the Closing Date. Buyer shall provide Seller with copies of any of the
Records requested by Seller and the original of any of the Records required by
Seller in any litigation, audit or other adversarial context within ten (10)
business days of any request by Seller and shall make its offices available for
Seller during normal business hours. Buyer shall provide the Seller with prompt
written notice if at any time the Records are moved to a new location, which
notice shall identify the new location.
27. BROKERAGE COMMISSION. Seller has engaged the firm of Chase Securities,
Inc. to assist it in connection with the transaction contemplated by this
Agreement. Seller shall be solely responsible for the fees and expenses of such
firm pursuant to its contract therewith. Except for the foregoing, Seller and
Buyer each represent and warrant to the other that they have dealt with no
brokers or finders in connection with this transaction.
28. SURVIVAL OF REPRESENTATIONS AND WARRANTIES. The parties hereto
acknowledge that all of the representations and warranties contained in Section
16 of this Agreement shall survive the Closing of this transaction for a period
of nine (9) months except for representations and warranties which relate to
Taxes (as defined below), title or environmental matters which representations
and warranties shall survive for as long as the applicable statute of
limitations.
29. SELLER'S INDEMNIFICATION.
------------------------
(a) Subject to the limitations set forth in subsections (c), (d), (e)
and (f) of this Section 29, Seller agrees to defend, indemnify, protect and hold
Buyer harmless from any and all suits, claims, defenses, proceedings, hearings
and any other actions (collectively referred to in this Section as "Claims") and
any and all expenditures, damages, losses, liabilities, judgments, expenses
(including, without limitation, expenses of litigation and reasonable legal
fees), costs and disbursements (collectively referred to in this Section as
"Costs") which may at any time be incurred by, imposed upon, or asserted or
awarded against Buyer with respect to or resulting from:
(i) any federal, state and/or local environmental and/or cleanup
statutes, laws, rules, regulations, ordinances, orders, decrees, which are
applicable to the Business or Purchased Assets and which arise from the
ownership, operation and/or the condition of the Business or Purchased
Assets prior to the Closing of the transactions contemplated by this
Agreement;
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(ii) Any breach of representation or warranty, omission from any
representation or warranty under Section 16 of this Agreement, or from any
misrepresentation in or omission from any schedule, certificate or other
instrument furnished under this Agreement (but only for the period such
warranty survives the Closing pursuant to Section 28 hereof);
(iii) Any failure by Seller to perform any obligation or duty
required to be performed by it under any provision of this Agreement;
(iv) Unknown Liabilities; and
(v) Excluded Liabilities.
(b) The obligations and liabilities of Seller with respect to Claims
resulting from the assertion of the matters to be indemnified against shall be
subject to the following terms and conditions:
(i) In the case of any assertion, claim or demand requiring the
incurring of any Costs in connection with the performance of investigatory,
removal or remedial work with respect to environmental conditions for which
Buyer may seek indemnification, Buyer shall permit Seller to conduct and
control such work (at its sole expense) in cooperation with Buyer, and
shall give Seller access to the Facility and to books and records in
Buyer's possession or control as may be required and will make available
relevant employees of Buyer as may be reasonably required.
(c) Notwithstanding anything contained in this Agreement, the
obligation of Seller to indemnify Buyer with respect to environmental
contamination of the Facility shall be subject to the limitations contained in
this subsection (c). The reports, studies and other investigation results
identified in SCHEDULE 16(r) hereto provide to the best of Seller's knowledge
the extent of the environmental contamination of the Facility as of the Closing
Date ("Existing Contamination"). Seller acknowledges and agrees that, as between
Buyer and Seller remediation of the Existing Contamination is not the
responsibility of Buyer. Seller shall, in a commercially reasonable manner, take
such steps as are necessary to remediate the Existing Contamination so as to
satisfy the requirements of either the New York State Department of
Environmental Conservation or the United States Environmental Protection Agency
or any other agency which asserts jurisdiction over the Existing Contamination
(the "Agency") and, in furtherance thereof, Seller shall reserve in the deed to
the Facility an easement for access to the Facility as set forth in the Access
Easement. Buyer shall be solely responsible for any and all environmental
contamination resulting from its operations or ownership and occurring after the
Closing.
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Seller's indemnity to Buyer with respect to the environmental contamination set
forth in this Section 29 shall inure solely to the benefit of Buyer and any
claim for such indemnity by Buyer shall be prohibited with respect to, and to
the extent of, any environmental contamination which was caused at any time by
any successor in title to Seller. For purposes of this Agreement environmental
contamination shall mean pollutants, contaminants and chemical, industrial and
hazardous materials and waste, and shall include, but not be limited to, all
substances regulated under all federal, state and local laws, statutes,
regulations and ordinances related to pollution or protection of the
environment.
(d) Notwithstanding anything in this Section 29 or elsewhere in this
Agreement to the contrary, the amount recoverable from the Indemnifying Party
(as defined below) in respect of any claim for indemnity shall be calculated
after taking into account:
(i) the extent to which, acting reasonably, the Indemnified
Party (as defined below) mitigates or should have mitigated the claim or
cost suffered including costs incurred in any settlement or arising out of
any legal proceedings; and
(ii). the value of any corresponding saving for the Buyer which
results from the matter giving rise to the claim.
(e) The Seller shall not be liable in respect of any claim for
indemnity under Sections 29(a)(ii) and (a)(iv) insofar as the amount recoverable
from the Seller under such claim, when added to all the other amounts
recoverable under all claims for indemnity under Sections 29(a)(ii) and (a)(iv)
made by the Buyer, exceeds $2,000,000.
(f) The Seller shall not be liable in respect of any claim of
indemnity under Sections 29(a)(ii) and (a)(iv) to the extent that:
(i) the amount recoverable in respect of the facts or matters
giving rise to any such claim shall be less than $10,000; or
(ii) the amount recoverable in respect of the facts or matters
giving rise to any claim under Sections 29(a)(ii) and (a)(iv) shall,
together with all other amounts recoverable from Seller with respect to all
other claims under Sections 29(a)(ii) and (a)(iv), be less than $175,000 in
the aggregate. For the avoidance of doubt no amount which would fail to be
recoverable against the Seller pursuant to (i) above shall be included for
the purpose of calculating the amount of $175,000 aforesaid.
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(g) Any payment by the Seller under this Agreement to Buyer shall
reduce by that amount any claim in respect of the same subject matter by the
Buyer and Buyer shall take all necessary action so far as it is able to ensure
that there shall be no duplication of any claim of indemnity relating to the
same subject matter under this Agreement.
(h) Upon payment by Seller of any claim for indemnification pursuant
to this Section 29, Seller shall be subrogated to the rights of Buyer, if any,
to receive payments from third parties with respect to such claim.
(i) Any Costs actually paid by Buyer shall bear simple interest at
the prime or base rate of Chase Bank from the date Seller is notified of such
Costs, in accordance with Section 46 of this Agreement, until the date Seller
reimburses Buyer for such costs.
(j) Tax Matters.
(i) Taxes Through Closing Date.
--------------------------
(A) Seller shall be solely responsible for and shall
indemnify and hold harmless Buyer with respect to all taxes, fees, duties or
similar charges, including, without limitation, net income, gross income, gross
receipts, sales, use, occupancy, excise, ad valorem, payroll, profits,
withholding, employment or real or personal property taxes and any interest,
penalties or additional amounts with respect thereof imposed by any taxing
authority ("Taxes") with respect to the Business for or pertaining to all
periods up to an including the Closing Date except to the extent accrued for on
the Closing Date Net Asset Disclosure, and Buyer shall be responsible for an
indemnify and hold harmless the Seller for all Taxes with respect to the
Business for or pertaining to all periods thereafter. Any claim for
indemnification hereunder shall be subject to the procedures set forth in
Section 32 hereof.
(B) Buyer and Seller agree that, in accordance with the
"Alternative Procedure" provided in Section 5 of Revenue Procedure 84-77 1984-2
Cumulative Bulletin 753, with respect to filing and furnishing Internal Revenue
Service Forms W-2, W-3 and 941, from and after the Closing Date (i) Buyer and
Seller shall report on a "predecessor-successor" basis with respect to any of
Seller's employees which buyer employs after the Closing Date, (ii) Seller shall
be relieved of furnishing forms W-2 to such employees to whom it would have been
obligated to furnish such form for the present calendar year, and (iii) Buyer
shall assume the obligations of Seller to furnish such forms to employees for
the present calendar year.
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(ii) COOPERATION AND EXCHANGE OF INFORMATION. Each party hereto
shall provide the other with such cooperation and information as each may
reasonably request with respect to the filing of any tax return, amended return
or claim for refund, the determination of a liability for taxes, or a right to
refund of taxes, or the conduct of any audit or other proceeding in respect of
taxes. Such cooperation and information shall include providing copies of all
relevant tax returns, together with accompanying schedules and related work
papers, documents relating to rulings or other determinations by taxing
authorities, and records concerning the ownership and tax basis of property,
which either party may possess concerning the Business. Each party shall make
its employees available to the other on a mutually convenient basis to provide
explanation of any documents or information provided hereunder. Notwithstanding
the foregoing, neither party shall be required to prepare any documents, or
determine any information not then in its possession in response to a request
under this Section. Buyer shall retain all returns, schedules and work papers
and all material records or other documents relating thereto, until the
expiration of the period of time beginning on the Closing Date and ending on the
date on which taxes may no longer be assessed under the applicable statutes of
limitation, including the period of waivers or extensions thereof. Any
information obtained under this Section shall be kept confidential, except as
may be otherwise necessary in connection with the filing of returns or claims
for refund or in conducting any audit or other proceeding.
(k) The limitations on indemnity set forth in subsections (e) and (f)
of this Section 29 shall in no event be applicable to any claim for indemnity
under subsections (a)(i), (a)(iii) and (a)(v) of this Section 29.
30. SPECIAL ENVIRONMENTAL AGREEMENT.
-------------------------------
(a) Seller hereby represents to Buyer that with respect to the
Existing Contamination (i) Norton Company owned and operated the Facility before
such property was purchased by Seller (ii) that Seller is cooperating with the
Agency to investigate and remediate the Existing Contamination and has submitted
a workplan for Agency approval and (iii) that the Seller is presently engaged in
litigation in the United States District Court for the Northern District of New
York with Norton Company seeking a recovery of past investigative costs and a
court declaration of prospective liability under CERCLA, among other causes of
action ("the Norton Litigation").
(b) Buyer covenants and agrees that Seller shall solely be entitled
to any monetary recoveries or other equitable relief granted by the Court in the
Norton Litigation and such recoveries or relief shall inure to the Seller's sole
benefit and that it will permit Seller access at the Facility to the extent
provided
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in the Access Easement so as to allow Seller to further investigate and
remediate the Existing Contamination pursuant to the submitted workplan or
supplemental workplans as agreed between Seller and the Agency (the "Workplan").
Subject to Seller's obtaining Agency approval of the Workplan and satisfying
Seller's obligations pursuant thereto, with respect to the Existing
Contamination, the Buyer acknowledges that the Facility may contain residual
subsurface soil and groundwater environmental contamination after Seller's
performance of its obligations under the Workplan. Notwithstanding the
immediately preceding sentence, any liability with respect to such subsurface
soil and groundwater environmental contamination shall remain the exclusive
responsibility of Seller. Buyer further covenants and agrees that with respect
to the Existing Contamination, except as required by applicable law, Buyer shall
not request, demand or otherwise insist upon or attempt to influence, directly
or indirectly, the Agency to require any additional investigation or remediation
of the Existing Contamination other than to what Seller and the Agency may agree
in the Workplan. Except as required by applicable law, in the event that Buyer
requests, demands or otherwise insists upon or attempts to influence, directly
or indirectly, the Agency to require any additional investigation or remediation
over and above the remediation limits agreed to between Seller and the Agency so
as to create any additional liability or expense, Buyer shall indemnify and hold
harmless Seller against such liability and/or expense. In the event that a bona
fide prospective purchaser of the Facility (a "Bona Fide Purchaser") proposes to
conduct environmental due diligence at the Facility, the Buyer shall provide
Seller with ten (10) days notice prior to the commencement of such investigation
and shall promptly provide Seller with copies of all test results, reports and
any other materials prepared by the Bona Fide Purchaser or its agents with
respect to the Facility. If, as a result of such investigation, Buyer reasonably
determines that it is legally required to notify applicable regulatory
authorities with respect to the results of such investigation, such notification
shall not be deemed a breach of Buyer's obligations to Seller under this Section
30.
d
(c) Seller reserves the right to access the Facility for purposes of
remediating the Existing Contamination as set forth in the Access Easement.
31. BUYER'S INDEMNIFICATION.
-----------------------
(a) Buyer shall defend, indemnify, protect and hold Seller and any
of its directors, officers and employees harmless against and in respect of:
(i) Any loss, liability and costs arising out of or as a
consequence of, the ownership or operation of the Business or Purchased
Assets after the Closing;
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(ii) Any loss, liability, cost or expense resulting from any
material misrepresentation, breach of warranty, omission from any
representation or warranty or nonfulfillment of any agreement on the part
of Buyer under this Agreement, or from any material misrepresentation in or
omission from any schedule, certificate or other instrument furnished under
this Agreement;
(iii) Any material failure by Buyer to perform any obligation
or duty required to be performed by it under any provision of this
Agreement, including, without limitation, the Assumed Liabilities;
(iv) Any failure by Buyer to perform its obligations required
to be performed by it under Section 13; and
(v) All actions, suits, proceedings, claims, demands, judgments,
assessments, costs and expenses (including reasonable attorneys' fees) incident
to any of the foregoing.
32. INDEMNIFICATION.
---------------
32.1 CLAIMS FOR INDEMNIFICATION. Whenever any claim shall arise for
indemnification under Section 29 or 31, the party seeking indemnification (the
"Indemnified Party"), shall promptly notify the party from whom indemnification
is sought (the "Indemnifying Party") of the claim and, when known, the facts
constituting the basis for such claim; PROVIDED, HOWEVER, that any delay on the
part of the Indemnified Party in notifying any Indemnifying Party shall relieve
the Indemnifying Party from any liability or obligation hereunder to the extent
of any damage or liability caused by or arising out of such failure. In the
event of any such claim for indemnification hereunder resulting from or in
connection with any claim or legal proceeding by a third party, the notice shall
specify, if known, the amount or an estimate of the amount of the liability
arising therefrom. The Indemnified Party shall not settle or compromise any
claim by a third party for which it is entitled to indemnification hereunder
without the prior written consent, which shall not be unreasonably withheld or
delayed, of the Indemnifying Party; PROVIDED, HOWEVER, that if suit shall have
been instituted against an Indemnified Party and the Indemnifying Party shall
not have taken control of such suit after notification thereof as provided in
Section 32.2 of this Agreement, the Indemnified Party shall have the right to
settle or compromise such claim as provided in Section 32.2.
32.2 DEFENSE BY THE INDEMNIFYING PARTY. In connection with any claim
which may give rise to indemnity hereunder resulting from or arising out of any
claim or legal proceeding by a person other than the Indemnified Party, the
Indemnifying Party,
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<PAGE> 36
at its sole cost and expense, may, upon written notice to the Indemnified Party,
assume the defense of any such claim or legal proceeding if the Indemnifying
Party acknowledges to the Indemnified Party in writing the obligation of the
Indemnifying Party to indemnify the Indemnified Party with respect to all
elements of such claim. If the Indemnifying Party assumes the defense of any
such claim or legal proceeding, the Indemnifying Party shall select counsel
reasonably acceptable to the Indemnified Party to conduct the defense of such
claims or legal proceedings and at the sole cost and expense of the Indemnifying
Party shall take all steps necessary in the defense or settlement thereof. The
Indemnifying Party shall not consent to a settlement of, or the entry of any
judgment arising from, any such claim or legal proceeding that (i) involves any
non-monetary judgement affecting the Indemnified Party or (ii) does not involve
the delivery of a general release in favor of the Indemnified Party, without the
prior written consent of the Indemnified Party (which consent shall not be
unreasonably withheld or delayed). The Indemnified Party shall be entitled to
participate in (but not control) the defense of any such action, with its own
counsel and at its own expense (except that the Indemnifying Party will be
responsible for the fees and expenses of the separate co-counsel to the extent
the Indemnified Party reasonably concludes that the counsel the Indemnifying
Party has selected has a conflict of interest). If the Indemnifying Party does
not assume the defense of any such claim or litigation resulting therefrom as
provided in this Section 32 within 15 days after the date that the Indemnified
Party has given notice of the claim to the Indemnifying Party: (a) the
Indemnified Party may defend against such claim or litigation in such manner as
it may deem appropriate, including, but not limited to, settling such claim or
litigation on such terms as the Indemnified Party may deem appropriate; and (b)
the Indemnifying Party shall be entitled to participate in (but not control) the
defense of such action, with its counsel and at its own expense.
33. EXCLUSIVE REMEDY. The parties intend that the indemnification
provisions set forth herein shall be the exclusive remedy for a breach of a
representation, warranty and covenant contained herein. Notwithstanding the
foregoing, the Buyer shall be entitled to avail itself of remedies for fraud and
for specific performance which may be available to the Buyer under applicable
law.
34. SEVERABILITY. The provisions of this Agreement shall be interpreted in
such a manner as to comply with all applicable laws to the fullest extent
possible; but if, notwithstanding such interpretation, any provision is
determined to be illegal, invalid, or unenforceable, the remaining provisions of
this Agreement shall not be affected, shall remain in full force, and shall
continue to be binding upon the parties.
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<PAGE> 37
35. COMPLETE AGREEMENT. This Agreement contains the entire understanding
among the parties with respect to the transactions contemplated hereby and
supersedes all other agreements and understandings among the parties and their
officers, directors or employees. Except as expressly set forth in this
Agreement, none of the parties has relied upon any oral representation or oral
information given to it by any representative of either party.
36. STRICT CONSTRUCTION. The parties acknowledge that this Agreement is
the result of their joint efforts. Therefore, no party shall advance a position
that any provision should be more strictly construed against another party on
the basis that such other party was responsible for drafting any provision in
dispute.
37. KNOWLEDGE OF SELLER DEFINED. For purposes of this Agreement the terms
"best knowledge of Seller", "best of Seller's knowledge" and similar terms shall
mean the conscious awareness of any of the officers and employees of Seller set
forth in SCHEDULE 37 attached hereto.
38. EXPENSES. Whether or not the transactions contemplated herein shall be
consummated, except for HSR Act filing fees which shall be the responsibility of
the Buyer, each party hereto shall pay its own expenses incidental to the
preparation for carrying this Agreement into effect and consummating this
transaction. Seller shall be responsible for the payment of any "gains tax"
imposed by the State of New York with respect to the sale of the Facility.
39. SALES TAX. Buyer shall be responsible for the timely payment of New
York Sales and Use Taxes and similar taxes imposed on the transactions
contemplated hereby and Seller shall promptly remit to Buyer fifty percent (50%)
of all amounts so paid upon receipt of evidence of payment thereof. Seller
agrees to assist Buyer in any manner reasonably necessary to qualify for any New
York Sales Tax exemptions available with respect to this transaction.
40. APPLICABLE LAW. This Agreement shall be governed by and construed in
accordance with the laws of the State of New Hampshire without regard to the
conflicts of laws principles thereof and the parties agree that the exclusive
venue and jurisdiction shall be in the United States District Court in the State
of New Hampshire regarding any dispute, controversy or performance arising from
this Agreement, except for the calculation of the Purchase Price Adjustment as
set forth in Section 4(b).
41. LITIGATION RELATING TO THE BUSINESS. It is possible that in the
future, litigation may arise relating to the Business and which may relate
directly or indirectly to the period prior to the Closing or the period
subsequent to the Closing, or both.
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Each of the parties agrees, therefore, that to the extent reasonable under the
circumstances, it will fully cooperate with and provide information, records and
documents to the other party with respect to any such litigation or potential
litigation in which such other party or parties is or may be involved.
42. SECTION HEADINGS. The section headings contained in this Agreement are
for reference purposes only and shall not affect in any way the meaning or
interpretation of this Agreement.
43. EXHIBITS. The Exhibits and Schedules attached hereto are an integral
part of this Agreement and are incorporated herein by reference. The Schedule
numbers refer to the number of the Section of this Agreement to which they
relate.
44. WAIVER. Each party may, at its option, waive in writing any or all of
the conditions herein contained to which its obligations hereunder are subject.
45. ASSIGNMENT. Neither party shall assign or transfer or purport to
assign or transfer any of its rights or obligations under this Agreement without
the written consent of the other party.
46. NOTICES.
-------
(a) All notices, requests, demands and other communications hereunder
shall be in writing and shall be delivered personally or by facsimile or sent by
registered or certified mail, postage prepaid, addressed as follows:
(i) If to the Buyer:
The Kendall Company
15 Hampshire Street
Mansfield, MA 02048
Attention: General Counsel
Facsimile: (508) 261-8544
With a copy to:
Tyco International Ltd.
One Tyco Park
Exeter, NH 03833
Attention: General Counsel
Facsimile: (603) 778-7700
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<PAGE> 39
(ii) If to the Seller:
Nashua Corporation
44 Franklin Street
Nashua, New Hampshire 03061
Attention: Counsel
Facsimile: (603) 880-2747
With a copy to:
Hale and Dorr
60 State Street
Boston, MA 02109
Attention: John K. Stone III, Esq.
Facsimile: (617) 526-5000
or at such other addresses or to the attention of such other office, as either
party shall have designated in writing to the other.
(b) In the absence of evidence of earlier receipt, any notice or
other communication shall be deemed to have been duly given: (i) if delivered
personally, when left at the address referred to in this Section; (ii) if by
facsimile, on completion of its transmission; or (iii) if by registered or
certified mail, upon receipt.
47. PRESS RELEASES AND ANNOUNCEMENTS; CONFIDENTIALITY. The parties agree
that, promptly following the execution and delivery of this Agreement, Seller
shall issue a press release in mutually agreed upon form. Thereafter neither
party shall issue any press release or public disclosure relating to the subject
matter of this Agreement without the prior written approval of the other;
PROVIDED, HOWEVER, that the Seller or Buyer may make any public disclosure it
believes in good faith is required by law or regulation (in which case the
disclosing party shall advise the other parties and provide the non-disclosing
party with a copy of the proposed disclosure prior to making the disclosure).
Prior to the Closing, Buyer shall not contact, directly or indirectly, (i) any
existing or potential supplier, customer, creditor or competitor of Nashua Tape
with respect to the transactions contemplated by this Agreement without the
express prior written consent of the Seller; or (ii) any existing or former
employee of Nashua Tape with respect to the transactions contemplated by this
Agreement without the prior consent of the Seller.
48. SPECIFIC PERFORMANCE. Each of the parties acknowledges and agrees that
the other party would be damaged irreparably in the event any of the provisions
of this Agreement are not performed in accordance with their specific terms or
otherwise are breached. Accordingly, each of the parties agrees that the other
party shall be entitled to an injunction or injunctions to prevent
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breaches of the provisions of this Agreement and to enforce specifically this
Agreement and the terms and provisions hereof.
49. COUNTERPARTS. This Agreement may be executed simultaneously in two or
more counterparts, each of which shall be deemed an original, but all of which
shall constitute one and the same instrument.
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IN WITNESS WHEREOF, the parties hereto have executed or caused duly
authorized officers to execute this Agreement all as of the day first above
written.
BUYER: SELLER:
THE KENDALL COMPANY NASHUA CORPORATION
By: /s/ Mark H. Swartz By:
-------------------------------- ---------------------------
Mark H. Swartz
As Its: Vice President As Its:
--------------------------- -----------------------
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<PAGE> 42
IN WITNESS WHEREOF, the parties hereto have executed or caused duly
authorized officers to execute this Agreement all as of the day first above
written.
BUYER: SELLER:
THE KENDALL COMPANY NASHUA CORPORATION
By: By: /s/ ???????????????
-------------------------------- ---------------------------
As Its: As Its: Vice President
----------------------------- --------------------
<PAGE> 1
EXHIBIT 99.2
Nashua Corporation
44 Franklin Street
Nashua, NH 03061
603 880 2323
NEWS RELEASE
Contact: Daniel M. Junius For Immediate Release
Vice President-Finance & CFO May 20, 1996
(603) 880-2363
NASHUA CORPORATION COMPLETES SALE OF
TAPE PRODUCTS DIVISION
NASHUA, NH, May 20, 1996 -- Nashua Corporation (NYSE:NSH) today announced that
it has completed the sale of its Tape Products Division, formerly part of its
Commercial Products Group, to The Kendall Company, a wholly owned subsidiary of
Tyco International Ltd. Nashua received $28 million for the net assets of the
business which will be used to reduce Nashua's debt. The Company expects to
record a pretax gain of approximately $12 million on the sale.
As a result of the divestiture, Nashua's Commercial Products Group is now
composed of three divisions: Specialty Coated Products, Label Products and
Imaging Supplies.
Nashua Corporation offers a diverse mix of products including thermal papers,
pressure-sensitive labels, specialty papers, copier and laser printer supplies,
aluminum substrates and photofinishing services.
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EXHIBIT 99.3
Nashua Corporation
44 Franklin Street
Nashua, NH 03061
603-880-2323
NEWS RELEASE
<TABLE>
FOR IMMEDIATE RELEASE
<S> <C> <C>
Contact:
Richard Clark or Daniel M. Junius or Shez K. Bandukwala
Chief Financial Officer Chief Financial Officer William Blair & Co., L.L.C.
Cerion Technologies Nashua Corporation 312/236-1600
217/359-3700 603/880-2363
</TABLE>
CERION TECHNOLOGIES ANNOUNCES COMMENCEMENT
OF INITIAL PUBLIC OFFERING OR COMMON STOCK
NASHUA, N.H., May 24, 1996 -- Nashua Corporation (NYSE:NSH) and Cerion
Technologies Inc. today jointly announced the commencement of the initial public
offering of 3,840,000 shares of common stock of Cerion Technologies Inc.
(NASDAQ:CEON) at a price of $13.00 per share. Of the shares being offered,
1,615,000 are being sold by Cerion and 2,225,000 are being offered by Nashua as
the selling stockholder.
The Cerion common stock is being sold in an underwritten public offering
managed by William Blair & Company, L.L.C. Nashua Corporation has granted the
underwriters an option to purchase up to 576,000 additional shares to cover
over-allotments, if any. Upon completion of the public offering, Nashua will
continue to own approximately 45.3 percent of Cerion's common stock
(approximately 37.0 percent if the underwriters' over-allotment option is
exercised in full). The net proceeds to Cerion will be used for capital
expenditures, primarily in connection with an additional manufacturing facility,
repayment of certain indebtedness, working capital and other general corporate
purposes. The net proceeds from the sale of shares by Nashua in the offering
will be used for the repayment of indebtedness.
Headquartered in Champaign, Illinois, Cerion Technologies Inc. manufactures
precision-machined aluminum disk substrates, which are the metallic platforms of
magnetic thin film disks used in the hard drives of desktop computers, network
servers, add-on storage devices and storage upgrades. Cerion also uses its core
competencies in precision machining to produce aluminum photoconductor drum
substrates for laser printer cartridges.
Nashua Corporation offers a diverse mix of products, including thermal papers,
pressure-sensitive labels and specialty papers, copier and laser printer
supplies, and photofinishing services.
This press release shall not constitute an offer to sell or the solicitation of
an offer to buy nor shall there be any sale of these securities in any state in
which such an offer, solicitation or sale would be unlawful prior to
registration or qualification under the securities laws of any state.
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EXHIBIT 99.4
Nashua Corporation
44 Franklin Street
Nashua, NH 03061
603-880-2323
NEWS RELEASE
<TABLE>
FOR IMMEDIATE RELEASE
<S> <C> <C>
Contact:
Richard Clark or Daniel M. Junius or Shez K. Bandukwala
Chief Financial Officer Chief Financial Officer William Blair & Co., L.L.C.
Cerion Technologies Nashua Corporation 312/236-1600
217/359-3700 603/880-2363
</TABLE>
UNDERWRITER EXERCISES OVER-ALLOTMENT OPTION
FROM RECENT CERION TECHNOLOGIES PUBLIC OFFERING
NASHUA, N.H., May 28, 1996 -- Nashua Corporation (NYSE: NSH) and Cerion
Technologies Inc. (NASDAQ: CEON) today jointly announced that the underwriter of
Cerion's recently completed public stock offering, William Blair & Company,
L.L.C., has exercised its over-allotment option and purchased 576,000 additional
shares of Cerion's common stock from Nashua.
As a result of this over-allotment purchase, Nashua Corporation will receive
approximately $7.5 million in gross proceeds. The net proceeds from the
over-allotment sale by Nashua will be used principally for the repayment of
indebtedness. Nashua continues to own 37.1 percent of Cerion's common stock.
Headquartered in Champaign, Illinois, Cerion Technologies, Inc. manufactures
precision-machined aluminum disk substrates, which are the metallic platforms
of magnetic thin film disks used in the hard drives of desktop computers,
network servers, add-on storage devices and storage upgrades. Cerion also uses
its core competencies in precision machining to produce aluminum photoconductor
drum substrates for laser printer cartridges.
Nashua Corporation offers a diverse mix of products, including thermal papers,
pressure-sensitive labels and specialty papers, copier and laser printer
supplies, and photofinishing services.
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