SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K/A
AMENDMENT NO. 1
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): AUGUST 29, 1996
ARTISTIC GREETINGS INCORPORATED
(Exact Name of Registrant as specified in its Charter)
DELAWARE 0-7513 16-0909929
(State or other (Commission (IRS Employer
jurisdiction File Number) Identification No.)
of incorporation)
ONE KOMER CENTER, ELMIRA, NEW YORK 14902
(Address of Principal Executive Offices)
Telephone Number, including area code: (607) 737-5235
Former name or former address, if changed since last report: Not
Applicable.
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ITEM 5. OTHER EVENTS.
On August 29, 1996, Artistic Greetings Incorporated (the "Company")
completed an outsourcing transaction with John H. Harland Company
("Harland"). This transaction consisted of two parts: (1) the cash
purchase by Harland of the Company's check production assets for their book
value of approximately $3.48 million; and (2) the outsourcing of the
Company's check production to Harland at a fixed cost per box.
The Company used the proceeds received from the sale of its check
production assets to pay off two equipment term loans that had been used to
fund the purchase of those assets.
The Master Agreement, Fulfillment Agreement and Equipment Purchase
Agreement that collectively constitute this outsourcing transaction are
filed as exhibits to this Report.
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS.
(c) EXHIBITS. See Exhibit Index.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the Registrant has duly caused this Amendment No. 1 to be signed on its
behalf by the undersigned thereunto duly authorized.
ARTISTIC GREETINGS INCORPORATED
(Registrant)
Date: October 29, 1996 By: /s/ Thomas C. Wyckoff
Thomas C. Wyckoff
Title: Senior VP and General Counsel
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EXHIBIT INDEX
EXHIBIT
NUMBER DESCRIPTION PAGES
10-1 Master Agreement between Artistic Greetings Filed herewith
Incorporated and John H. Harland Company,
dated August 29, 1996
10-2 Fulfillment Agreement between Artistic Previously filed
Greetings Incorporated and John H. Harland [NOTE: This Exhibit
Company, dated August 29, 1996 is the subject of a
request for
Confidential Treatment
before the SEC]
10-3 Agreement for Purchase of Equipment between Previously filed
Artistic Greetings Incorporated and
John H. Harland Company, dated
August 29, 1996
Exhibit 10-1
MASTER AGREEMENT
THIS MASTER AGREEMENT (the "Agreement"), dated as of the 29th day
of August, 1996, by and among ARTISTIC GREETINGS INCORPORATED, a Delaware
corporation ("AGI") and JOHN H. HARLAND COMPANY, a Georgia corporation
("JHH").
W I T N E S S E T H :
WHEREAS, AGI and JHH desire to enter a series of transactions,
pursuant to which, among other things, (i) JHH will supply AGI's future
fulfillment requirements for certain check products and (ii) JHH will
purchase from AGI certain check production assets; and
WHEREAS, the parties are desirous of setting forth herein certain
terms and conditions pursuant to which such transactions shall be
consummated.
NOW, THEREFORE, in consideration of the premises and of the
mutual covenants and conditions herein contained, the parties hereto,
intending to be legally bound hereby, agree as follows:
1. DEFINITIONS
As used in this Agreement, the following terms shall have the
meanings set forth below:
"Affiliate" means with respect to any Person, any other Person
directly or indirectly controlling, controlled by or under direct or
indirect common control with such Person.
"Bridge Agreement" means the Bridge Agreement, dated as of July
8, 1996, by and between AGI and JHH.
"Business Day" means any day other than Saturday, Sunday or a
federal holiday.
"Common Stock" shall mean the Common Stock, $0.10 par value, of
AGI.
"Confidentiality Agreement" means the Confidentiality Agreement,
dated March 8, 1996, between AGI and JHH.
"Equipment Purchase Agreement" means the Agreement For Purchase
of Equipment, dated as of the date hereof, between AGI and JHH, in the form
of Exhibit B hereto.
"Fulfillment Agreement" means the Fulfillment Agreement, dated as
of the date hereof, between AGI and JHH, in the form of Exhibit A hereto.
"Other Agreements" means the Fulfillment Agreement and the
Equipment Purchase Agreement.
"Person" means an individual, partnership, corporation
(including, without limitation, a business trust), limited liability
company, trust, unincorporated association, joint venture or other entity,
government or governmental authority.
"Securities Exchange Act" shall mean the Securities Exchange Act
of 1934, as amended.
"Standstill Period" shall mean the period commencing on the date
hereof and continuing through the earlier of the tenth anniversary of the
date hereof or fifteen (15) months following the termination of the
Fulfillment Agreement.
"Voting Securities" shall mean the Common Stock and any other
voting securities of AGI now or hereafter authorized to be issued and any
option, warrant or other right to receive any such securities.
2. REPRESENTATIONS AND WARRANTIES OF AGI
AGI hereby represents and warrants to JHH as follows:
2.1 ORGANIZATION AND GOOD STANDING. AGI is a corporation duly
organized, validly existing and in good standing under the laws of the
State of Delaware.
2.2 AUTHORITY RELATIVE TO AGREEMENTS. AGI has all requisite
power and authority to execute, deliver and perform its obligations under
this Agreement and the Other Agreements. The execution and delivery by AGI
of this Agreement and the Other Agreements, and the consummation by AGI of
the transactions contemplated hereby and thereby (i) have been authorized
by all necessary action on the part of AGI, (ii) do not violate any
provision of law or regulation applicable to AGI and (iii) are not in
conflict or inconsistent with or do not result in a breach of any of the
terms, covenants, conditions or provisions of, or constitute a default
under, the certificate of incorporation or bylaws of AGI, or any indenture,
mortgage, deed of trust, agreement, order, judgment, decree or other
instrument binding upon AGI.
2.3 CONSENTS AND APPROVALS. No filing or registration with,
notification to, or authorization, consent or approval of, any
governmental entity or third party is required by AGI in connection with
the execution and delivery of this Agreement and the Other Agreements, or
the consummation of the transactions contemplated hereby or thereby.
2.4 EFFECT OF AGREEMENT. This Agreement and the Other
Agreements have been duly executed and delivered by AGI and (assuming the
due authorization, execution and delivery by JHH) constitute legal, valid
and binding obligations of AGI enforceable against AGI in accordance with
their respective terms.
2.5 BROKERS, FINDERS, ETC. AGI is not subject to the valid
claim of any broker, finder, consultant or other intermediary in connection
with the transactions contemplated hereby or by the Other Agreements.
3. REPRESENTATIONS AND WARRANTIES
OF JHH
JHH hereby represents and warrants to AGI as follows:
3.1 ORGANIZATION AND GOOD STANDING. JHH is a corporation duly
organized, validly existing and in good standing under the laws of the
State of Georgia.
3.2 AUTHORITY RELATIVE TO AGREEMENTS. JHH has all requisite
power and authority to execute, deliver and perform its obligations under
this Agreement and the Other Agreements. The execution and delivery by JHH
of this Agreement and the Other Agreements, and the consummation by JHH of
the transactions contemplated hereby and thereby (i) have been authorized
by all necessary action on the part of JHH, (ii) do not violate any
provision of law or regulation applicable to JHH and (iii) are not in
conflict or inconsistent with or do not result in a breach of any of the
terms, covenants, conditions or provisions of, or constitute a default
under, the certificate of incorporation or bylaws of JHH, or any indenture,
mortgage, deed of trust, agreement, order, judgment, decree or other
instrument binding upon JHH.
3.3 CONSENTS AND APPROVALS. No filing or registration with,
notification to, or authorization, consent or approval of, any governmental
entity or third party is required by JHH in connection with the execution
and delivery of this Agreement or the Other Agreements, or the consummation
of the transactions contemplated hereby and thereby.
3.4 EFFECT OF AGREEMENT. This Agreement and the Other
Agreements have been duly executed and delivered by JHH and (assuming the
due authorization, execution and delivery by AGI) constitute legal, valid
and binding obligations of JHH enforceable against JHH in accordance with
their respective terms.
3.5 BROKERS, FINDERS, ETC. JHH is not subject to the valid
claim of any broker, finder, consultant or other intermediary in connection
with the transactions contemplated hereby or by the Other Agreements.
4. CONDITIONS PRECEDENT TO OBLIGATIONS OF AGI
The obligations of AGI to effect the transactions contemplated by
this Agreement and the Other Agreements shall be subject to the
satisfaction, or waiver by AGI on the Closing Date, of the following
conditions:
4.1 ACCURACY OF REPRESENTATIONS AND WARRANTIES; COVENANTS. Each
of the representations and warranties of JHH contained herein and in the
Other Agreements shall be true and correct in all material respects on and
as of the Closing Date, and JHH shall have performed and complied in all
material respects with the covenants and provisions contained herein and in
the Other Agreements required to be performed or complied with at or prior
to the Closing.
4.2 NO PROCEEDING OR LITIGATION. Neither party hereto shall be
legally enjoined by a writ, order, decree or injunction from a court of
competent jurisdiction or governmental entity from consummating the
transactions contemplated by this Agreement or by the Other Agreements, and
no proceeding shall have been commenced by any governmental entity seeking
to enjoin the consummation of the transactions contemplated hereby or by
the Other Agreements.
4.3 OFFICER'S CERTIFICATE. AGI shall have received a
certificate from JHH to the effect set forth in Section 4.1 hereof, dated
the Closing Date, signed by a duly authorized officer of JHH.
4.4 CONSENTS AND APPROVALS. All necessary consents and
approvals of any United States or any other governmental authority or any
other third party required for the consummation of the transactions
contemplated by this Agreement and by the Other Agreements shall have been
obtained.
4.5 AGREEMENTS. Each of this Agreement and the Other Agreements
shall have been duly authorized, executed and delivered by each of the
parties signatory thereto.
4.6 OPINION OF COUNSEL. AGI shall have received an opinion of
internal counsel to JHH, containing customary qualifications reasonably
acceptable to AGI, to the effect of Sections 3.1, 3.2, 3.3 and 3.4 hereof.
5. CONDITIONS PRECEDENT TO OBLIGATIONS
OF JHH
The obligations of JHH to effect the transactions contemplated by
this Agreement and the Other Agreements shall be subject to the
satisfaction, or waiver on the Closing Date, of the following conditions:
5.1 ACCURACY OF REPRESENTATIONS AND WARRANTIES; COVENANTS. Each
of the representations and warranties of AGI contained herein and in the
Other Agreements shall be true and correct in all material respects on and
as of the Closing Date, and AGI shall have performed and complied in all
material respects with the covenants and provisions contained herein and in
the Other Agreements required to be performed or complied with at or prior
to the Closing.
5.2 NO PROCEEDING OR LITIGATION. Neither party hereto shall be
legally enjoined by a writ, order, decree or injunction from a court of
competent jurisdiction or governmental entity from consummating the
transactions contemplated by this Agreement or the Other Agreements, and
no proceeding shall have been commenced by any governmental entity seeking
to enjoin the consummation of the transactions contemplated hereby or by
the Other Agreements.
5.3 OFFICER'S CERTIFICATE. JHH shall have received a
certificate from AGI to the effect set forth in Section 5.1 hereof, dated
the Closing Date, signed by a duly authorized officer of AGI.
5.4 CONSENTS AND APPROVALS. All necessary consents and
approvals of any United States or any other governmental authority or any
other third party required for the consummation of the transactions
contemplated by this Agreement and by the Other Agreements shall have been
obtained.
5.5 AGREEMENTS. Each of this Agreement and the Other Agreements
shall have been duly authorized, executed and delivered by each of the
parties signatory thereto.
5.6 OPINION OF COUNSEL. JHH shall have received an opinion of
internal counsel to AGI, containing customary qualifications reasonably
acceptable to JHH to the effect of Sections 2.1, 2.2, 2.3 and 2.4. hereof.
6. CLOSING
6.1 CLOSING DATE. The closing with respect to the transactions
provided for in this Agreement (the "Closing") shall take place at the
offices of Cahill Gordon & Reindel, 80 Pine Street, New York, New York
10005, on the date hereof (or at such other time or location as AGI and JHH
may agree) (such date being herein referred to as the "Closing Date").
6.2 PROCEEDINGS. All proceedings that shall be taken and all
documents that shall be executed and delivered by the parties hereto on the
Closing Date shall be deemed to have been taken and executed simultaneously
and no proceedings shall be deemed taken nor any documents executed or
delivered until all have been taken, executed and delivered. By a party's
proceeding with the Closing, the conditions to such party's obligations set
forth in Article 4 or 5 hereof, as the case may be, shall be deemed
satisfied or waived.
7. SURVIVAL OF REPRESENTATIONS AND
WARRANTIES; INDEMNIFICATION
7.1 GENERAL SURVIVAL. The representations and warranties
contained in this Agreement and the Other Agreements shall survive for a
period of two years following the Closing.
7.2 INDEMNIFICATION. JHH (on the one hand) or AGI (on the other
hand) (the "Indemnifying Party") shall indemnify AGI (on the one hand) or
JHH (on the other hand), respectively (the "Indemnified Party"), as the
case may be, and their respective directors, officers, agents and
affiliates, against and in respect of any liabilities, damages, losses,
costs and expenses (including reasonable expenses of investigation and
litigation and reasonable attorneys', accountants' and other professionals'
fees and costs incurred in the investigation or defense thereof or the
enforcement of rights hereunder) incurred by the Indemnified Party
("Losses") as a result or arising out of any breach of the Indemnifying
Party's representations and warranties or covenants and agreements set
forth in this Agreement or the Other Agreements.
7.3 METHOD OF ASSERTING CLAIMS, ETC. All claims for
indemnification by any Indemnified Party hereunder shall be asserted and
resolved as set forth in this Section 7.3.
(a) The Indemnified Party shall give prompt written notice (a
"Claim Notice") to the Indemnifying Party of any assertion of
liability which might give rise to a claim for indemnification based
on the provisions of Section 7.2 hereof, which notice shall state the
nature and basis of the assertion and the estimated amount thereof to
the extent then feasible (which amount shall not be conclusive of the
final amount), provided, however, that failure to give any such Claim
Notice shall not relieve the Indemnifying Party from any liability
hereunder to the extent it is not materially prejudiced as a result
thereof and in any event shall not relieve the Indemnifying Party from
any liability which it may have otherwise than on account of this
Agreement.
(b) If any claim is made or any action, suit or proceeding is
brought by a third party (a "Third Party Claim") against an
Indemnified Party with respect to which the Indemnifying Party may
have liability under the provisions of Section 7.2 hereof, the
Indemnifying Party shall have the right to defend such Third Party
Claim with counsel approved by the Indemnified Party, which approval
shall not be unreasonably withheld, provided that the Indemnifying
Party gives written notice to the Indemnified Party within 30 days
after its receipt of the related Claim Notice that such Third Party
Claim is covered by the provisions of Section 7.2 hereof.
(c) Notwithstanding the provision of the previous subsection,
until the Indemnifying Party shall have so assumed the defense of any
such Third Party Claim, the Indemnified Party shall retain the right
to handle the defense thereof. Furthermore, if (i) the Indemnified
Party shall have reasonably concluded that there are likely to be
defenses available to the Indemnified Party that are different from or
in addition to those available to the Indemnifying Party; or (ii) the
Third Party Claim involves other than money damages and seeks
injunctive or other equitable relief, the Indemnifying Party shall not
be entitled to assume the defense of such Third Party Claim and the
defense of the Third Party Claim shall be handled by the Indemnified
Party. If under any such circumstances the defense of the Third Party
Claim is handled by the Indemnified Party, the Indemnifying Party
shall pay all legal and other expenses reasonably incurred by the
Indemnified Party in conducting such defense in accordance with
Section 7.2 hereof.
(d) In any Third Party Claim initiated by a third party and
defended by the Indemnifying Party (i) the Indemnified Party shall
have the right to be represented by its own counsel and accountants,
at its own expense, (ii) the Indemnifying Party shall keep the
Indemnified Party fully informed as to the status of such Third Party
Claim, at all stages thereof, whether or not the Indemnified Party is
represented by its own counsel, (iii) the Indemnifying Party and the
Indemnified Party shall make available at its offices and at
reasonable times to the other, and its counsel, accountants and other
representatives, all of such party's books and records relating to
such Third Party Claim and (iv) the parties shall render to each other
such assistance, including the availability as consultants or
witnesses of its officers, agents and other employees, as may be
reasonably required in order to ensure the proper and adequate defense
of such Third Party Claim.
(e) With respect to any Third Party Claim for which indemnity
may be sought hereunder, neither party shall have the right to settle
or compromise such Third Party Claim without the prior written consent
of the other party, which consent shall not be unreasonably withheld.
8. COVENANTS
8.1 PUBLICITY. Except as required by law, each party hereto
agrees not to make any press release or public statement about the
transactions contemplated hereby or by the Other Agreements without the
prior approval of the other party hereto with respect to the form and
content of such disclosure, such approval not to be unreasonably withheld.
8.2 COVENANTS NOT TO COMPETE.
(a) For the period from the Closing Date to eighteen (18) months
following the termination of the Fulfillment Agreement, JHH agrees, subject
to Section 8.2(b) hereof, that neither JHH nor any of its Affiliates shall
engage, directly or indirectly, on its own account, or as a shareholder,
agent, officer, director, partner or joint venturer in any corporation or
business entity, in any business engaged in the direct mail marketing of
checks and/or the direct mail sale of checks from, at or into the United
States (a "Competing Business"); nor within the same area to lend money or
otherwise furnish services to any Competing Business or any proposed
Competing Business the purpose or effect of which would be to give to JHH
or any Affiliate of JHH effective control of such Competing Business or
proposed Competing Business; nor without the consent of AGI, directly or
indirectly discuss, publish or otherwise divulge any information regarding
the business of the direct marketing and sale of checks or its methods of
operation, unless such information is publicly known, other than by reason
of a violation of this Agreement or any Other Agreement by JHH; provided
that nothing contained in this Section 8.2 shall be construed as preventing
an investment in AGI by JHH in compliance with the other provisions of this
Agreement and the Other Agreements. If any of these restrictions shall for
any reason be held by a court of competent jurisdiction to be excessively
broad as to duration, geographical scope, activity or subject, such
restrictions shall be construed so as thereafter to be limited or reduced
to be enforceable to the extent compatible with the applicable law as it
shall then appear, it being understood that by the execution of this
Agreement the parties hereto regard such restrictions as reasonable and
compatible with their respective rights.
Notwithstanding the foregoing, nothing in this Agreement shall
restrict the right of JHH to continue to conduct its business as presently
conducted which involves relationships with (a) catalog companies which
place, and/or distribute catalogs containing, ads for distinctive, premium
priced checks which are produced and designed by JHH, (b) large affinity
groups which sell ad space in their publications in which JHH advertises
such affinity group's specialty checks, (c) third party marketing groups
which promote distinctive, premium priced checks and whereby JHH provides
entry, printing and customer service for such groups, (d) financial
software companies where JHH provides private label order fulfillment and
direct mail campaigns to those companies' customers and (e) direct mail
companies where JHH provides order fulfillment and/or provides supplies.
(b) In the event JHH or any of its Affiliates directly or
indirectly acquires any Person which is engaged in a Competing Business
through merger or purchase of assets or otherwise, JHH or its Affiliate, as
the case may be, shall within fifteen (15) days of acquiring such Competing
Business offer to sell such Competing Business to AGI at a price determined
by JHH (the "JHH Offer Price") by giving written notice to AGI (the "JHH
Notice"). After the JHH Notice, JHH shall promptly furnish to AGI all
information with respect to the Competing Business reasonably requested by
AGI. If the JHH Offer Price is not acceptable to AGI, AGI shall within
thirty (30) days of receiving the JHH Notice submit the JHH Offer Price and
a competing price determined by AGI (the "AGI Price") to a mutually agreed
upon independent appraiser. The independent appraiser shall choose either
the JHH Offer Price or the AGI Price as being closest to the fair market
value of such Competing Business. JHH and AGI shall promptly furnish to
the independent appraiser all information required by the independent
appraiser to determine such fair market value. The decision of the
independent appraiser shall be given no later than thirty (30) days after
its selection. In the event the independent appraiser chooses the AGI
Price, AGI shall be obligated to purchase the Competing Business at the AGI
Price, subject to customary conditions, including material adverse change
and regulatory approvals. In the event the independent appraiser chooses
the JHH Offer Price, AGI may purchase such Competing Business at the JHH
Offer Price by giving notice (the "Purchase Notice") to JHH within fifteen
(15) days of the decision of the independent appraiser. In the event that
AGI gives notice to JHH that it will not purchase such Competing Business
at the JHH Offer Price or has not given the Purchase Notice to JHH by the
fifteenth day after the decision of the independent appraiser, JHH or its
Affiliate, as the case may be, shall sell such Competing Business to a
third party within one year of the date JHH or its Affiliate, as the case
may be, acquired such Competing Business. In the event such Competing
Business has not been sold within such one year period, JHH may request
AGI's consent to an additional six month period to sell such Competing
Business, which such consent shall not be unreasonably withheld. The
expense of the independent appraiser shall be borne by the party that makes
the offer not chosen by the independent appraiser.
(c) In connection with JHH's subsidiary, The Check Store, Inc.
("CSI"), the parties agree as follows: (i) notwithstanding the provisions
of clause (a) above, JHH may continue to own its interest in CSI, may
increase such interest to 100%, and CSI may continue to service initial
orders and reorders received; (ii) so long as JHH shall own a majority of
the voting stock of CSI, JHH shall cause CSI (x) to place only such
advertising as shall have been committed prior to the date of this
Agreement, which in any event shall not exceed $500,000, any other
advertising of any kind by CSI shall be prohibited and JHH will use its
reasonable best efforts to cause CSI to cancel and/or terminate any
committed advertising which can be cancelled without penalty; and (y) to
not expand its business in any way beyond the servicing of initial orders
and reorders as provided herein; (iii) if JHH shall receive a firm offer
for the sale of its interest in CSI or CSI shall receive a firm offer for
the sale of all or a portion of its customer list, trade names, trademarks
and/or associated rights (each, a "third party offer"), JHH shall, or shall
cause CSI to, offer to sell such interest or assets, as the case may be,
to AGI at the same price and in substantially the same form (i.e., cash or
securities or a combination thereof), as the offer received, and AGI shall
have thirty (30) days after receiving notice of such third party offer
specifying the details of such third party offer to accept such offer and
JHH shall promptly furnish to AGI all information with respect to CSI and
such third party offer reasonably requested by AGI; (iv) if AGI shall,
within such period, accept such offer, then, subject to customary
conditions, including material adverse change and regulatory approvals, the
closing on such sale (at which AGI shall be entitled to receive opinions,
certificates and other documents standard for such a transaction) shall
take place not later than thirty (30) days after the date of such
acceptance; and (v) if AGI shall not accept such offer within the
applicable 30-day period or the closing shall not occur within the
applicable 30-day period, JHH or CSI, as the case may be, shall be entitled
to sell such interest or assets in accordance with such third party offer,
provided, however, that if such transaction is not closed within six months
of the date of such third party offer, then any sale shall again become
subject to the provisions of this clause (c).
(d) For the period from the Closing Date to eighteen (18) months
following the termination of the Fulfillment Agreement, AGI agrees that,
without the consent of JHH, neither AGI nor any of its Affiliates shall
engage, directly or indirectly, on its own account, or as a shareholder,
agent, officer, director, partner or joint venturer in any corporation or
business entity, in any business engaged in the entering into of direct
contractual relationships with banking institutions (other than credit
unions or other banking institutions owned by their depositors which are
not doing business with JHH and which are located in the upstate New York
geographic area) to supply check products to customers of such banking
institutions in the United States (a "Banking Business"); nor within the
same area to lend money or otherwise furnish services to any Banking
Business or any proposed Banking Business the purpose or effect of which
would be to give to AGI or any Affiliate of AGI effective control of such
Banking Business or proposed Banking Business; nor without the consent of
JHH, directly or indirectly discuss, publish or otherwise divulge any
information regarding the Banking Business conducted by JHH or its methods
of operation, unless such information is publicly known, other than by
reason of a violation of this Agreement or any Other Agreement by AGI. If
any of these restrictions shall for any reason be held by a court of
competent jurisdiction to be excessively broad as to duration,
geographical scope, activity or subject, such restrictions shall be
construed so as thereafter to be limited or reduced to be enforceable to
the extent compatible with the applicable law as it shall then appear, it
being understood that by the execution of this Agreement the parties hereto
regard such restrictions as reasonable and compatible with their respective
rights.
8.3 STAMPS. JHH and AGI agree to negotiate in good faith on
terms pursuant to which (i) AGI shall produce 100% of JHH's fulfillment
requirements of personalized stamps and (ii) AGI shall have the option to
acquire any or all of the stamp production assets of JHH.
8.4 ADVERTISING INSERTS. JHH and AGI agree to continue to
negotiate in good faith on terms pursuant to which AGI shall provide
advertising materials to be placed in outgoing check boxes of JHH and CSI
such that orders in connection therewith shall be received, processed,
manufactured and shipped by AGI.
9. CERTAIN STANDSTILL RESTRICTIONS
9.1 STANDSTILL. During the Standstill Period, neither JHH nor
any Affiliate of JHH shall:
(a) acquire, directly or indirectly, by purchase or otherwise,
any Common Stock, Voting Securities or securities of AGI convertible
into Common Stock or Voting Securities; or
(b) form, participate in or encourage the formation of or
participation in, directly or indirectly, any "Group" (as that term is
used in Section 13(d)(3) of the Securities Exchange Act) formed or to
be formed in respect of the securities of AGI, including the
acquisition or voting of securities of AGI or the acquisition, by
merger, consolidation, asset purchase or otherwise, of control of AGI.
9.2 JHH EXCEPTION. Notwithstanding Section 9.1 hereof, JHH may
acquire up to 5% of the Common Stock outstanding.
10. MISCELLANEOUS
10.1 WAIVERS AND AMENDMENTS.
(a) This Agreement may not be amended, modified or supplemented
except by a written instrument executed by AGI and JHH. The provisions of
this Agreement may be waived only by an instrument in writing executed by
the party granting the waiver. The waiver by any party hereto of
compliance with any provision of this Agreement shall not operate or be
construed as a further or continuing waiver of such noncompliance or as a
waiver of any other or subsequent noncompliance.
(b) No failure on the part of any party to exercise, and no
delay in exercising, any right, power or remedy hereunder shall operate as
a waiver thereof, nor shall any single or partial exercise of such right,
power or remedy by such party preclude any other or further exercise
thereof or the exercise of any other right, power or remedy. No course of
dealing between the parties will be deemed effective to modify, amend or
discharge any part of this Agreement or the rights or obligations of any
party hereunder.
10.2 FEES AND EXPENSES. Each party hereto shall be responsible
for its costs and expenses, including all fees and expenses of attorneys,
investment bankers, lenders, financial advisors and accountants, in
connection with the negotiation, execution and delivery of this Agreement
and the Other Agreements and the consummation of the transactions
contemplated hereby and by the Other Agreements, whether or not such
transactions are consummated.
10.3 NOTICES. All notices which are required or permitted to be
given pursuant to the terms of this Agreement shall be in writing and shall
be deemed effective (i) upon receipt if given in writing and delivered
personally or by facsimile transmission with receipt confirmed, (ii) five
(5) Business Days after it shall have been deposited in the United States
mails, registered or certified mail, postage prepaid or (iii) one (1)
Business Day after it shall have been delivered to an overnight courier
service, such as Federal Express, all charges prepaid, addressed as
follows:
If to AGI, to: Artistic Greetings Incorporated, One Komer
Center, Elmira, New York 14902, Attention: Thomas C. Wyckoff, Esq.; and
If to JHH, to: John H. Harland Company, 2939 Miller Road,
Decatur, Georgia 30035, Attention: John C. Walters, Esq.
Any of the addresses set forth above may be changed from time to
time by written notice from the party requesting the change.
10.4 ENTIRE AGREEMENT. This Agreement, the Other Agreements and
the Confidentiality Agreement set forth the entire agreement and
understanding between the parties hereto with respect to the subject
matter hereof and thereof and supersede any prior negotiations, agreements,
understandings or arrangements between the parties hereto (including the
Bridge Agreement) with respect to the subject matter hereof and thereof.
10.5 BINDING EFFECT; BENEFITS. This Agreement and the Other
Agreements shall inure to the benefit of and be binding upon the parties
hereto and their respective successors.
10.6 ASSIGNABILITY. This Agreement and any rights pursuant
hereto shall not be assignable by any party hereto without the prior
written consent of the other parties, provided that AGI may assign its
rights and obligations hereunder without the consent of the other parties
hereto in connection with a sale or transfer of all or substantially all of
the assets or business of either AGI or its direct mail check business.
10.7 APPLICABLE LAW. This Agreement shall be governed by and
construed in accordance with the laws of the State of New York without
regard to the conflicts of law principles thereof.
10.8 SECTION AND OTHER HEADINGS. The section and other headings
contained in this Agreement are for reference purposes only and shall not
affect the meaning or interpretation of this Agreement.
10.9 INJUNCTIVE RELIEF. In the event of a breach or threatened
breach by either party of any of the terms of Sections 9.1 and 9.2 of this
Agreement, the other shall be entitled to an injunction restraining the
breaching party from committing any breach of this Agreement, without
showing or proving any actual damages and without diminishing any other
right or remedy which the other may have at law or in equity to enforce the
provisions of this Agreement. Each party waives any right it may have to
require the other to post a bond or other security with respect to
obtaining or continuing any injunction or temporary restraining order.
10.10 SPECIFIC PERFORMANCE. Each party declares that it may be
impossible to measure in money the damages which will accrue to it or its
successors, assigns or legal representatives, by reason of the other's
failure to perform any of the obligations under Sections 9.1 and 9.2 of
this Agreement. Therefore, if either party, its successors, assigns or
legal representatives, shall institute any proceeding, to enforce the
provisions of Sections 9.1 and 9.2 of this Agreement, the party against
whom such action or proceeding is brought hereby waives the claim or
defense that money damages are an adequate remedy and that therefore the
party instituting the proceeding is not entitled to specific performance of
the terms of Sections 9.1 and 9.2 of this Agreement.
10.11 SUBMISSION TO JURISDICTION.
(a) Each of the parties hereto irrevocably consents that any
action or proceeding brought by the other party hereto in respect of the
transactions contemplated by this Agreement and by the Other Agreements may
be brought in the courts of the State of New York in the Borough of
Manhattan or of the United States of America for the Southern District of
New York and, by execution and delivery of this Agreement, the parties
hereto hereby irrevocably waive any objection, including, without
limitation, any objection to the laying of venue or based on the grounds of
FORUM NON CONVENIENS, which any of them may now or hereafter have to the
bringing of any such action or proceeding in such respective jurisdiction.
(b) Each of the parties hereto irrevocably consents to the
service of process of any of the aforesaid courts in any such action or
proceeding by the mailing of copies thereof by registered mail, postage
prepaid, to such party at its address provided herein.
10.12 COUNTERPARTS. This Agreement may be executed in any number
of counterparts, each of which shall be deemed an original, but all of
which together shall constitute one and the same instrument; provided,
however, that this Agreement shall not be effective unless and until at
least one counterpart is executed and delivered by each party hereto.
IN WITNESS WHEREOF, and intending to be legally bound hereby, the
parties have caused this Agreement to be duly executed on the day and year
first above written.
ARTISTIC GREETINGS INCORPORATED
By: /S/ THOMAS C. WYCKOFF
Name: Thomas C. Wyckoff
Title: Senior Vice President
JOHN H. HARLAND COMPANY
By: /S/ JOHN C. WALTERS
Name: John C. Walters
Title: Senior Vice President
EXHIBIT A TO MASTER AGREEMENT:
FULFILLMENT AGREEMENT
[FILED AS EXHIBIT 10-2 TO THIS FORM 8-K]
EXHIBIT B TO MASTER AGREEMENT:
AGREEMENT FOR PURCHASE OF EQUIPMENT
[FILED AS EXHIBIT 10-3 TO THIS FORM 8-K]
